Blame it on a collapse of the hygiene-habit, or on a return to our unwashed roots, but fewer Indians had a bath, used toothbrushes (now you know what happened to those neem trees), or shaved in 2001. Before you let righteous indignation overwhelm your ability to make sense of numbers, read on: in 2001, the shaving blades market shrunk by 2 per cent; detergent cakes by 9 per cent (fewer Indians washed clothes, too); and toilet soaps by 12 per cent. The malaise extended to consumer durables too: the refrigerator market shrunk by 11 per cent in 2001; washing machines by 9 per cent; and audio systems by 5 per cent. Even that most resilient of products, the colour television (imagine life without the tube) grew by a mere 8 per cent, a far cry from the boom-boom nineties when a growth rate of anything less than 20 per cent was considered marginal.

The finest marketing minds in the country's best companies couldn't find a note of hope in this tragic aria. In a country of a billion potential customers, marketers found few. Nothing worked: new campaigns bombed; new products sank without a trace; promotions failed to excite weary customers; even radical marketing strategies proved effete.

Track the history of the country's best-known marketer Hindustan Lever Ltd: for some time, the company was content to wring out better efficiencies from its production and distribution processes; then it embarked on a power-brand strategy (throwing its considerable marketing might behind 30 'power' brands). For a while, it looked like the ploy would work: sales increased by 7 per cent between July and December 2001, resulting in a 26 per cent growth in the company's bottomline for 2001 (its year ends December 31). ''Lever's done it again,'' exclaimed the pundits. The hosannas came too soon: HLL saw an erosion of 10 per cent in its sales in the January-March quarter of this year. And it wasn't just Lever.

THOSE THAT BUCKED THE TREND They're new, they're hot, and they have been untouched by those mean old bazaar blues.

Reverse sweep: Defining individuality Quick, what's common to motorcycles, mobile phones, and shampoos? All three are product categories that bucked the trend and grew. And how: the market for motorcycles grew some 40 per cent from 2.1 million units in 2000-2001 to 2.9 million units in 2001-2002; that for mobiles (and this includes the handset as well as connections), over 50 per cent in the same period. It isn't that these categories were born under a lucky star. Nor is it merely a question of substitution, although some part of the growth in the motorcycle segment can be ascribed to customers moving from mopeds and scooters to motorcycles. ''Motorcycles and mobiles are defining individuality within the larger set of consumer relevance,'' says Sonia Pall, Branch Head, A.C. Nielsen, Delhi. That's true. And the companies have been fairly active too: the concepts of style and power in motorcycles is fairly new; and most mobile phone companies (handset makers and operators) average a dozen innovations a month. Expectedly, every company in these markets-Bajaj, Hero Honda, TVS in motorcycles; Airtel, Hutch, BPL, Birla-Tata-AT&T in cellular-has benefited.

Gillette suffered the same fate in blades, Reckitt Benckiser in household care products, Titan in watches, Tata Tea in tea, Raymond in garments, and Ford in cars. ''(There has been) Down trading and negative growth across categories,'' says Harsh Mariwala, Chairman and Managing Director, Marico Industries.

Things look better this year, but they looked even better in 1997-98, which saw the first of the great Indian mini-revivals, fleeting phases of super-growth, not sustainable in the long term. And even the not-so-impressive forecast on how penetration of consumer products will increase in the next five years (See Reach Isn't The Answer, Innovation Is) is based on the assumption that the economy will grow at an average of 6.43 per cent in the future.

Who moved the cheese?

The customer is spending less-by one full percentage point according to a recent survey by consulting firm KSA Technopak-and on newer categories (mobile phones, entertainment, education), but that alone can't explain the sad stories being scripted across categories. Not when per capita income actually increased 3 per cent in 2001-2002. ''Growth is out because there are no virgin markets left,'' rues B.B. Bhattacharya, the Director of the New Delhi-based Institute of Economic Growth, proferring an explanation that marketers seem to like. Bhattacharya is right: penetration levels (marketing lingo for the number of households that actually use the product or have access to it) are high in several categories: 100 per cent for toilet soaps and 70 per cent for detergent powders, even in rural markets. And almost all urban households have a television, even if its is a B&W set.

EMPTY SHOPS Nothing seems to attract customers and more. And unless marketers come up with innovative products and value propositions, nothing will

That still doesn't explain why people should drink less tea or use less of toilet soap. Nor does it explain why per capita consumption of aerated soft drinks (the Coke and Pepsi type), already a low 1.5 litres should fall a further 5 per cent in 2001. And whatever happened to the great white hope of consumer durable companies: the replacement market? Even some marketers find that argument hard to buy. ''The Chinese watch market is five times the size of the Indian one,'' points out Bijou Kurien, the Chief Operating Officer of Titan. ''I do not accept the argument that the market is saturated.''

Fact is, marketers messed up. As long as growing a market was about selling to willing customers, they managed to give a good account of themselves. The minute the market changed to one where they would need to create customers from non-users-this happened sometime in the mid-nineties for most categories-they floundered. ''For too long, marketers have taken customers for granted,'' accepts one of the breed, Anand Narasimha, the Head of Corporate Brand Management at BPL.

FAILED PROMOTIONS Promotion failed to break the deadlock. Overall, a 24 per cent growth in marketing spends in FMCG in 2001, resulted in a 2 per cent growth in the category

Promotions (buy a toothbrush and win a chance to holiday in Jamaica; or, simply, buy one, get one free), that growth-panacea failed to break the deadlock. Despite 152 distinct promotional offers, the market for toilet soaps shrunk 12 per cent in 2001. Overall, a 24 per cent growth in marketing spends in fast moving consumer goods in 2001, resulted in a 2 per cent growth. ''This is the result of marketing spends, over time, being targeted at short-term objectives like sales,'' explains Rajan Chhibba, Managing Director of KSA Technopak. ''They don't spur adoption or usage.''

If the rural markets didn't grow then, it was because companies didn't invest enough in growing them. Britannia India has just one product targeting the rural market, Tiger; Nestlé has none; and even HLL does not reach nine out of every 10 Indian villages directly.

Obsessed as they are with reaching rural markets, most marketers overlook the usage bit: even in categories with very high penetration such as washing powders, shows a recent study by the National Council for Applied Economic Research (NCAER), increase in usage will account for a third of the growth till 2006. So there, ''it is not the failure of the rural markets, but of the companies that didn't grow it,'' scoffs Pradeep Kashyap, President, mart, a Delhi-based rural marketing consulting firm.

It isn't that marketers haven't been active: in 2001, over 10 companies, together, launched 136 new models of CTVs (these accounted for 13 per cent of sales); eight companies, 44 new models of refrigerators (17 per cent of sales). None of the new offerings were targeted at the urban households that didn't own a TV (black & white or colour). ''The need is for innovative products, at lower prices, especially in durables,'' says Arvind Mahajan, Executive Director at Pricewaterhouse Coopers. ''I think there is a huge market waiting to happen below Rs 10,000 for a 21-inch TV,'' adds Amit Roy, President (Retail Audit), A.C. Nielsen ORG-Marg.

THE MINNOWS HAVE IT A clutch of unlikely companies have succeeded where most transnationals have failed.

C.K. Ranganathan, CMD, CavinKare: Strategic moves Why just transnationals, even heavy-weight local companies haven't been able to achieve the kind of growth some of India's lesser-known consumer product companies have. In the past three years, Chennai-based CavinKare has seen the marketshare of its flagship shampoo brand Chik increase from 6 per cent to 21 per cent; that of its fairness cream Fairever Fairness Cream, go from practically zero to 12 per cent. And while brands like Clinic, Sunsilk, Pantene, and Head & Shoulders would balk at selling at 50 paise (that's how much it costs for a sachet of Chik), CavinKare has just gone on and done the virtually unthinkable. ''Smaller Indian players address strategic issues better,'' says KSA's Chhibba. Not just because they are entrepreneur driven, but also because they have a much lesser management attrition compared to MNCs, something that encourages long-term strategic consistency. Still, it would be foolish to attribute the success of companies such as CavinKare and Jyoti Labs (the maker of Ujala) to just price. Says C.K. Ranganathan, Chairman & Managing Director, CavinKare: ''We are more tuned to our markets compared to any MNC. That gives us a leg-up in identifying consumer needs and gaps.'' Thus, lesser garment makers like Dwarka Men's Wear (brand: TNG) and Charlie Creations (brand: Koutons) echo the look and style of their premium cousins, but at a fraction the price.

If transnational marketers have been slow to play the price card, Indian companies have benefited at their expense. Companies such as CavinKare, Jyoti Labs, Kalisuri Oil Mills, and Kanpur Detergents mimic the brand-strategies of the MNCs, but operate at lower price points. Cavin Kare, for instance, retails a shampoo sachet for 50 paise (See The Minnows Have It).

Moving with the cheese

It isn't that companies haven't realised their failure. Filled as they are, with smart people, (and helped by even smarter consultants), they have. The result is a far more pragmatic approach to marketing. The cola majors have announced the launch of a lower priced 200 ml offering.

Coca-Cola India saw its aerated soft drink sales zoom 34 per cent in the January-March quarter purely on the strength of this launch. And both Coca-Cola, with its SunFill brand, and HLL, with an extension of Kissan, have entered the lucrative powdered soft drink offering, a la market leader Rasna. ''Recession,'' says Rajeev Karwal, Senior Vice President, Philips India, ''provides the biggest opportunity for a marketer to grow.'' With innovative offerings like a mp-3 player bundled into the audio-system-with-VCD capability that has become the standard in the Indian market, Philips grew its share of the audio systems market from 27 per cent in 2000 to 40 per cent in 2001. This, when the market shrunk 5 per cent.

Innovation cuts both ways. ''None of the three (Adidas, Nike, Reebok) has captured people's imagination in India,'' admits Muktesh Pant, the Chief Marketing Officer of Reebok. Only now have the trio junked the fitness platform (the fitness culture doesn't exist in India, not, at least, in numbers that would make marketers salivate) and moved into hawking shoes targeted at women and children (apart from the fitness stuff they do).

JUST COOKING Per capita income increased marginally in 2001; and the economy did grow. Still, customers didn't buy; they looked

With a marketshare of around 18 per cent (HLL with 36 per cent is the leader), Tata Tea knows it needs to, Avis-like try harder.

To the company, that means targeting an emerging generation of customers, even moving closer to them-Tata tea has a strategic stake in the Barista chain of coffee bars. ''We expect the younger generation flocking Barista to grow the franchise for our tea and coffee (brands),'' explains Percy Siganporia, Deputy Managing Director, Tata Tea. Indeed, across categories, several marketers are striving to do the same-move closer to the customer. Thus, Tata Tea and Tata Coffee have Barista, Nestlé has Nescafe Parlour, HLL, its Sunsilk Saloons and its much written-about (and much-denied) plans for a nation-wide coffee café chain.

If marketers can overcome their fixation with promotions and get down to really developing the market, things could change. If they don't, those shelves will continue to creak under the weight of unsold inventory. Ouch!

-with inputs from Moinak Mitra, Vinod Mahanta, Abha Bakaya, Abir Pal, Nitya Varadarajan, Venkatesha Babu, & Debojyoti Chatterjee