Extending Vatika

Daburs first experiment with shampoos was a disappointment. This time, it is not taking any chances. Instead of a new brand, it chose to exploit the franchise of a highly successful brand (Vatika Hair oil is a Rs 35-crore brand for Dabur today.) Further, the new brand extension of Vatika hair oil has been eased into a less competitive market segment. As a herbal shampoo, Vatika would avoid getting into a bruising warfare with megabrands from P&G, HLL and Colgate-Palmolive which operate in more traditional segments of the shampoo market. Not initially, at any rate.

Daburs circumspection is not unusual given the highly competitive dynamics of this market. The cost of launching a new shampoo brand today is considerable, feels Sanjeev Duggal, general manager, sales and marketing, family products, Dabur. At last count, the market was crowded with over 50 brands and some 345 variants vying for a sliver of the 19,000-tonne market. The aggression could well be gauged from the enormous media spends, estimated to be over Rs 30 crore last year.

 

The intensive marketing efforts kick-started growth in the shampoo market. According to ORG-MARG, the market recorded a volume growth of 18.77 per cent and a value growth of 24.33 per cent in 1996. This is almost double of the growth rate figures recorded the year before.

This was the market opportunity that Dabur wants to tap into. Vatika herbal shampoo, priced at Rs 42 for a 100-ml bottle (available in three other sizes of 50 ml, 200 ml and an 8-ml sachet), was launched early this month. As an introductory offer, the Rs 2-sachet will be retailed at Rs 1.75 for three-six months. Besides, early buyers can enrol for a free trip to Mauritius contest.

Launched in Delhi, Vatika will gradually be taken to 40 cities nationally in the first phase that ends this month. That should cover 50,000 outlets. It will then be introduced in another 40 cities next month in the second phase. February 1998 should see Vatika herbal shampoo available nationally at a projected 3 lakh retail outlets, claims the company.

How does Dabur plan to crack open this market then? The primary of course, is by leveraging on Vatikas brand equity, says Duggal. Vatika, which in its over two-and-a-half years of existence as a coconut-base hair oil, has become a Rs 35-crore brand today, is described by Duggal as the fastest growing brand of hair oil in the country.

Vatika was conceived with an eye on the potential for hair care products, he recounts. This necessitated that the brand be established in a bigger market before it could take on the competition in diverse hair care markets. The hair oil market, valued at Rs 800 crore (as against the present Rs 450-crore shampoo market), was big enough. Coconut oil was the biggest segment within that and we knew that Indian women were used to mixing henna for nourishing their hair. So we decided to offer them precisely that, in a convenient form, explains Duggal. Since then, Vatika hair oil has attracted a claimed 1.6 million women in its fold.

Dabur has chalked out a similar strategy for its shampoo foray. The green-coloured Vatika shampoo, a blend of henna, shikakai and almonds, is expected to earn a considerable part of its business from this existing clientele, believes Duggal.

Interestingly, these users also buy non-herbal offerings like Organics and Sunsilk from HLL, Head & Shoulders and Pantene from P&G and Optima from Colgate-Palmolive. But that doesnt bother herbal marketers much. Girls are realising the harmful effects of chemicals for their hair and the awareness levels have been increasing over the last three-four years, says Vinita Jain, managing director, IRL Marketing Pvt Ltd. Duggal believes that after price, it is the notion of chemically-treating hair that has restricted the usage of shampoos in India.

So while synthetic shampoos have evolved over the last 20 years from cleansers to complete nourishers-cum-conditioners, herbal shampoos have always existed as treatment shampoos. For instance, Jains company, which sells high-priced herbal products under the Biotique brand (a 210-ml shampoo bottle is for Rs 120), has a line-up of 13 hair-care products for four hair problems - falling hair, dandruff hair, greying hair and chemically-treated hair. In direct competition with Shahnaz Herbals, they contribute in excess of 20 per cent to Biotiques domestic sales of Rs 45 crore last year.

But Biotique operates in a small, speciality segment (see pie). The bigger segment economy has seen Nyle and Ayur grab an estimated 47 per cent and 41 per cent of the herbal shampoo market respectively. That leaves the mid-priced segment still vacant. Laboratoires Garnier, with Ultra Doux (priced at about Rs 75 for 200 ml), has been making some headway in this category. But Indian women are not so accustomed to foreign-sounding herbs like marigold or apricot as henna or shikakai, argues Duggal.

So why didnt any Indian company target it before? The boutique labels are high-margin players, and at the lower end, the product price overshadows other considerations to a large extent. But at the mid-priced segment, a customer seeks reliability that can prod him to shift from non-herbal competitors, believes Duggal.

Vatika, coming from Dabur, offers that reliability. To achieve this, on a first-year ad budget of Rs 2 crore, Dabur will use the hair oil equity in its communication for the shampoo. The ads will have a sign-off: From the house of Vatika hair oil. And with a premium look pack a shrunk sleeve label which gives it a no-label look ensuring complete product visibility from the outside the company hopes to win over customers from the top-end herbal segment. It took two years and considerable money in perfecting this packaging, says Duggal.

Dabur expects Vatika to capture about five per cent of the shampoo market by a year or so. This is based on the belief that the herbal shampoo market would grow by about 30 per cent next year, in excess of the overall shampoo market, according to Duggal. The North, which accounts for both 40 per cent of total shampoo sales (see pie) and 40 per cent of herbal shampoo sales, is expected to contribute the most to Vatikas kitty.

Will the similarities between the strategies for hair oil and herbal shampoo extend to the performance of the two products? The answer should be evident in the next one year.

Dabur is sneaking afresh into the shampoo market with a brand extension of Vatika hair oil. Its gameplan for breaking into this increasingly competitive category