ITC
We Also Make Cigarettes

Biscuits, anyone? Deveshwar has quickly created some top-selling brands in the FMCG market

In three years, ITC has attained 45 per cent share in the branded wheat flour segment. And it took just two years to garner 8 per cent of the biscuit market

Imagine getting into a fragmented and messy market for wheat flour (atta), where there's no supply chain, no consistency in quality, no brand loyalty, or even proper packaging. Kolkata-based tobacco giant, ITC, did just that more than three years ago, and far from get scared, it plunged right into the market. Result: Its Ashirwad Atta today boasts of a whopping 45 per cent share in the branded and packaged wheat flour segment. It did something similar in biscuits, where it took on two major players (Britannia and Parle) and has garnered 8 per cent of the market in just two years.

Sure, it helps that ITC is a marketing behemoth that spends a staggering Rs 226 crore on advertising. But that alone can't explain why ITC has been able to crack the staples and biscuits markets. "ITC's traditional strengths of brand building, trade marketing and distribution provide distinctive sources of competitive advantage in the marketplace-whatever may be the product or service," says ITC's Chairman, Y.C. Deveshwar. The company believes, say its executives, that at the heart of a great brand is a great product. That means investment in product development. Last year, for instance, ITC spent Rs 54 crore on research and development of various products. "For any leader in its field, innovation is a byword for success. ITC's marketing prowess has been significantly enhanced by a constant flow of innovations that have become benchmarks in the industry," says Kurush Grant, ITC's head of FMCG and tobacco businesses. Pre-printed vinyls instead of hand-painted hoardings, and planograms at points of sale are two such innovations.

Aggressive marketing has sent ITC's non-tobacco FMCG sales soaring. In 2004-05, that part of the business fetched a relatively modest Rs 564 crore (it's a Rs 16,510-crore company we are talking about here), but last year the figure almost doubled to Rs 1,013 crore. Agreed, ITC has some consumer products such as incense sticks, stationery and even apparel that aren't doing as well, but it is evident that with each passing year, the company is looking less and less like the tobacco giant it once was. "At the fundamental level, we haven't changed," says Grant. "We still retain our passion for obtaining consumer insights and understanding consumer behaviour," he says. At the end of the day, marketing is all about reading the consumer's mind.

-Ritwik Mukherjee

Numero Uno: But Khattar's MUL has hit roadblocks in recent months

Maruti sold a record 53,396 units in May this year. But, subsequently, sales dropped because it cut back on production of two B-segment cars, the Zen and WagonR

MARUTI UDYOG
Tenacious Leader

Marketing is about keeping customers happy," deadpans Jagdish Khattar, Managing Director of Suzuki-owned Maruti Udyog. How seriously does the small car-maker, which has a 45 per cent share of the market, believe in the motto? Enough for Khattar to cut his marketing budget and transfer it over to sales and service. No wonder, Maruti has been topping J.D. Power's customer satisfaction survey for six years now. But there are times when even the savvy market leader trips up. Like in the recent months. Maruti's sales peaked in May this year at a record 53,396 units, but have declined since. What went wrong? Production of its B-segment car, Zen, was stopped a couple of months ago to make room for the new Zen, due for launch in November. WagonR too went off the assembly lines for a few weeks as Maruti worked on a facelift. "Withdrawing the Zen has been one of the most difficult things we have ever done," says Khattar, a former IAS officer. "Not only did it make a 3,000-4,000 unit hole in sales, we should have launched the replacement model straight away." Needless to say, Khattar is a wiser man today. "We will not make the same mistakes next time," he promises. Rivals, take note.

-Kushan Mitra

Well oiled: Marico's image has been overhauled by Mariwala

Advertising and packaging innovations have changed Marico's image from a fuddy-duddy one to a modern brand. Plus, the company has stayed focussed on its key brands

MARICO
Marketer Of Wellness

Harsh Mariwala has a name for the strategy he has been employing at Marico ever since he joined the family business way back in the 70s. He calls it 'discontinuous growth and the philosophy of wellness'. It was discontinuous growth when he led a small family-owned business from (oil) wholesale to retail, it was discontinuous once more when he dumped (after a seven year-long battle) tin for plastic as the packaging medium. "The shift to plastics resulted in huge gains in market share to about 30-40 per cent, from the pre-plastic days of 10-15 per cent," says Mariwala, Chairman and MD.

Over the years, Mariwala has kept ploughing profits back into advertising and packaging innovations to change the image of the company from a fuddy-duddy one to a modern brand. And that's how products like Parachute Jasmine and Parachute hair cream were born. Another thing that Marico has done is to stay focussed on its key brands and emphasise the wellness quotient. Saffola, for instance, has retained the "good for heart" essence of the brand over the years. "It is very tempting to cross the boundary to extend market size, but it should not dilute the brand," says Mariwala. Therefore, all brand extensions (into salt, wheat flour, and three varieties of oil) have kept the touchstone in mind. "We have always been in the business of wellness and Kaya is just an extension of that philosophy," says Mariwala, referring to Marico's newest diversification into skin care clinics. It took Mariwala 15 years to hit Rs 1,000 crore in annual revenues. He expects going from here to Rs 2,000 crore to take just three years.

-Shivani Lath

PARAS PHARMACEUTICAL
FMCG's Serial Brand Builder

What's in a name? Patel has made a successful foray into the FMCG market

Perhaps it's time Paras dropped or changed the second part of its name. In the five years since the Ahmedabad-based company started focussing on FMCG products, it has amassed an enviable portfolio of brands. Dermicool (talcum powder), Afterbath (freshness cream), Livon (hair protection), Set Wet (hair styling gel) are just some of its well-known FMCG brands. "I think the quality of our distribution has made us more an FMCG company than a pharmaceuticals company," quips Chairman & CEO, Girish Patel, who also believes in advertising like an FMCG company. In the market for over-the-counter pharma products, Paras has top-selling brands such as D'Cold, Borosoft, ItchGuard, Krack, and Moov, to name a few. Evidently, going from otc to fmcg hasn't been too hard for the family-managed company. "Our USP lies in having products that are specifically targeted at the consumer," points out Patel.

Wide range: Paras has portfolio of small but well-known brands

Today, Paras is a Rs 250-crore company with a Rs 50 crore bottom line, but Patel is thinking big. "By 2011, we want to be a Rs 1,000-crore company," he states. Raising money to fund the growth won't be a problem for this closely-held company. It recently sold a 23 per cent stake to private equity investor Actis (which also owns 41 per cent in Paras-promoted Sterling Hospitals) for about Rs 200 crore. Paras already has a manufacturing unit at Kalol, near Ahmedabad, and is building another one at Baddi in Himachal Pradesh. The logic behind the new plant is simple: about half of the company's products are outsourced, and Patel is keen to reduce that percentage. By 2011, Patel also wants a fifth of his revenues to come from exports (currently it is 8 per cent). In other words, the show has just begun at Paras.

-Krishna Gopalan

IIM AHMEDABAD
Simply the Best

Class apart: Dholakia (standing) and his school are in the A-league

IIM-A has worked consistently to deliver on the brand promise. It's no wonder that Wall Street firms and big MNCs make a beeline to recruit from the school

Its rivals pooh-pooh its Numero Uno status in the business of management education ("it's only a perception," says the director of a rival IIM), but that doesn't really bother Bakul Dholakia, the man who runs India's best-known B-school, IIM Ahmedabad. The numbers speak for themselves. Out of every 680 candidates who apply for admission via the gruelling Common Admission Test (CAT), IIM-A admits only one. Big recruiters who queue up every year to hire from A often go back empty-handed because bigger Wall Street firms and MNCs have cleaned out the graduating class.

What's the secret of A's enduring success? Rama Bijapurkar, a marketing consultant and an IIM-A alumna herself, says it is the school's focus on the four Ps of marketing. "The school stands for the best and affordable business education in the country," she says, pointing out the first two Ps: Product and pricing.

Dholakia, on his part, says that the brand perception is not based on nothing. "The custodians of IIM-A have worked consistently over the years to keep the institute's brand essence alive and to deliver on the brand promise without fail," he says. And when you have brand ambassadors (read: alumni) such as Unilever's M.S. Banga, ICICI Bank's K.V. Kamath, and management guru C.K. Prahalad, promotion takes care of itself.

-Archna Shukla

On track: That was just a sneak preview, says Yadav

Yadav took simple steps like reducing the wagon turnaround time and raising the capacity of goods trains. His turnaround story has become subject of case studies

LALU PRASAD YADAV
Mass Marketer

"Remind people that profit is the difference between revenue and expense. This makes you look smart"
Scott Adams

Chances are, union railways Minister Lalu Prasad Yadav, India's newest 'management guru', may never have heard of Scott Adams, the legendary creator of the Dilbert comic strips. But ask him how he made the Indian Railways, a Rs 55,000-crore behemoth tottering at the brink when he took over in May 2004, into a money- spinner (it had a fund balance of Rs 11,000 crore in 2005-06), and Lalu, revelling in his trademark rusticity, espouses, "Dekho railway bhi to ek dhanda hai, to bas dhande ke jaisa chalaayaa, aur kya." ("See, the railways is just another business, and we ran it like one. That's all.") Yadav has managed to market the turnaround story so well that it's now the subject of management case studies at some top B-schools, including IIM-A and Paris' HEC School of Management. Yadav is scheduled to speak at IIM-A on September 18 over the finer points of the turnaround.

So, just how did the turnaround happen? Simple. Yadav asked for an increase in throughputs and a reduction in costs. Simple steps such as reducing the wagon turnaround time from seven to five days and raising the capacity of goods trains from 3,200 tonnes to 4,000 tonnes have resulted in an improvement of 25 per cent in the total carrying capacity. Moreover, the diesel price hike of Rs 12 per litre proved favourable for the railways, as diesel accounts for just 8 per cent of the railways' transportation costs, compared to 60 per cent for trucks. "The need of the hour was to redefine ourselves as just a carrier of people and goods," says Sudhir Kumar, an Officer on Special Duty in the Rail Ministry, and a Lalu confidante. "The new business environment offered no room for complacency."

Lalu claims he'll have a fund balance of Rs 20,000 crore this fiscal. Rail Bhawan mandarins have even more ambitious plans: a Rs 3,00,000 crore target for the 11th Plan-a five-fold increase over the 10th Plan. Also, reports indicate that retail major Pantaloon may soon form a joint venture to develop some prime railway properties into retail destinations. "Abhi to aap ne trailer hi dekha hai," says the 'turnaround man', "film to abhi shuru bhi nahin hui hai." ("All that you have seen so far is the trailer. The film hasn't even begun."). We'll be watching, for sure.

-Aman Malik

ICICI BANK
One-stop Financial Shop

Reflecting success: Kamath's bank has the largest retail banking portfolio of Rs 1,00,000 crore

ICICI Bank is today the market leader in every product segment, be it auto loans or personal loans. And the key to its marketing strategy has been smart cross-selling

Would India's retail banking have been the same without ICICI Bank? Perhaps not. The Mumbai-based development-institution-turned-bank was probably the first domestic banker to spot a retail boom as well as tap customers before others could sense an opportunity. The results tell the rest of the story: ICICI Bank enjoys a 40 per cent market share in auto loans, 31 per cent in home loans, 28 per cent in personal loans and 29 per cent in credit cards-that makes it the market leader in every product segment. ICICI's story is also the story of a marketer who learnt how to cross-sell well. "We follow a marketing mantra of presenting an identical image across all our products," says Chanda Kochhar, Deputy Managing Director, ICICI Bank.

Few will disagree that the K.V. Kamath-led bank today is the most aggressive marketer, with the largest retail banking portfolio of Rs 1,00,000 crore. And the marketing philosophy is not so much to sell just another loan product, as to deepen the relationship with customers and, in turn, save on marketing costs. Today, such an approach brings a fee income for the bank that shows in the 55 per cent jump in its fee-based income-up from Rs 2,098 crore in 2004-05 to Rs 3,259 crore in 2005-06. "Cross-selling has been one of the very important themes in our marketing strategy," says Kochhar, adding that, "cross-selling originates from the fact that the bank has the largest customer base and an array of products to offer."

ICICI was the first to introduce innovative marketing schemes like pre-approved loans for its 6 million 'good' borrowers out of a total 17 million. "We also tapped customers by discovering their latent needs. We are quick to tap a customer for a personal loan if a card customer crosses overdraft limit," says V. Vaidyanathan, ICICI's retail head. Similarly, a young auto loan customer is tapped for a home loan product once he or she is close to repaying the auto loan. "We have seen a success rate of 10 per cent in such initiatives," reveals Vaidyanathan.

From urban India, ICICI's Kamath is taking banking into the heart of rural markets. Shunning high-cost brick-n-mortar marketing, Kamath plans to employ franchisees and kiosks to sell banking products to rich farmers and rural middle-class. By 2008, he wants ICICI to cover 600,000 villages in 600 districts. Small-town India, get ready to say hello to ICICI.

-Anand Adhikari

Let the good times roll: Mallya's gamble in the face of low-cost carriers has paid off

All its planes are new and it pampers its customers with gourmet meals and in-flight entertainment. In less than two years, Kingfisher has cornered 8 per cent of the market

KINGFISHER AIRLINES
Flying Against The Low-fare Wind

Trust Vijay Mallya, the flamboyant Chairman of UB Group and Kingfisher Airlines, to make a contrarian bet. About 15 months ago when he launched Kingfisher Airline as a 'true value carrier' and positioned it between a low-cost (Air Deccan) and full-service carriers (Jet Airways and Indian), there were sceptics who predicted that it would fall between the two stools. Neither here nor there.

While Kingfisher, with 16 aircraft and 102 flights per day, has some way to go before it can be hailed as a complete success, Mallya can rightfully claim that his decision to pamper customers with good service and care was a considered one. His airline has cornered more than 8 per cent of the market in less than two years. "We felt that the discerning Indian consumer would pay the right price for good service, and that is the reason why we call ourselves a true value carrier," says Hitesh Patel, Executive Vice President, Kingfisher.

From gourmet meals-featuring six different vegetarian and non-vegetarian options, apart from low-sugar, low-fat and Jain meals-to in-flight entertainment, Kingfisher has tried hard to differentiate itself from its competitors. It is not just meals and entertainment, but Kingfisher says it is the first private carrier to have advanced airborne communications addressing and reporting system that continuously monitors and tracks every aircraft, even when it is in flight. Also, all the planes are new, resulting in greater technical reliability, claims the airline. Girish Shah, Head (Marketing), Kingfisher, asserts that sec A and sec B+ consumers in the age group of 22-45 years are the airline's target. "We never aimed at low-cost carrier audience. We created a new niche for ourselves," he says.

However, the airline has had to make a few adjustments to meet the requirements of the customer. At the time of launch, Mallya had declared that there would be just one class called 'Kingfisher Class'. The airline has quickly realised that there are corporate customers, mostly flying on expense accounts, who would not mind paying a premium for additional facilities. Admits Patel: "Yes, there is some learning from the marketplace." As a result, the airline has launched Kingfisher First. He adds that starting November, Kingfisher First would offer satellite TV, besides personalised valet service that is already available. "With Kingfisher Airlines, the good times never stop," he beams. The challenge for Mallya is to extend the good times to UB's shareholders.

-Venkatesha Babu

FUTURE GROUP
A Retailer For All Seasons

Maverick retailer: Biyani is completely focussed on the customer wallet

Here's the first thing you need to know about Kishore Biyani. The man isn't in the business of retail. Rather, he's in the business of getting the consumer to spend-on anything and everything. And Biyani, CEO of Future Group, which includes Pantaloon stores and Big Bazaar hypermarkets, will do just about anything to get customers into his stores and keep them. Consider Future Group's most recent format, Chamosa. The exotic-sounding name is actually a compound word for chai (tea) and samosa (a popular snack). True to their name, the Chamosa kiosks (see photo next page) sell 12 different varieties of samosas. "The most popular snack in India, chai and samosa, is served here in a modern format," says Biyani. "We are a mass retailer and want to cater to everyone," adds Sanjeev Agrawal, President (Marketing), Pantaloon Retail.

Snack time: Chamosa may not be hi-tech, but it works

That's precisely the reason why Future's retail empire looks like nothing else on earth. At one end, it has the Big Bazaar chain that stocks everything from loose rice and wheat flour to electronics to jewellery to footwear. At the other end, there's a joint venture with Italy's Generali Group for life and non-life insurance that hopes to leverage the retailer's access to consumers. In between, Future has several other things, including Pantaloon fashion stores, malls (Central Mall), and a tie-up with Blue Foods (which runs three restaurants, Copper Chimney, Bombay Blues and Noodle Bar in Mumbai) for food and beverages retail. The plan is to open restaurants, food courts, coffee shops and lounges in all Pantaloon stores across Mumbai, Bangalore, Ahmedabad, and Hyderabad, among others. "We want to offer the best brands under one roof in eateries," explains Agrawal.

With Biyani moving in all directions, Pantaloon's revenues are clipping. For nine months ended March 31, 2005, Pantaloon (which has a June year-ending) had revenues of Rs 714.29 crore; same period this year, the figure stood at Rs 1,292.61 crore-an 81 per cent jump. Apparently, Biyani plans to up revenues to $7 billion by 2010. That's Rs 32,900 crore at today's exchange rate. Biyani may miss his target by a wide margin, but you can be sure about one thing: He'll give it his best shot.

-Ahona Ghosh

NAUKRI.COM
Guess Who's Getting Heard Now?

Two to tango: Bikhchandani (below) and Oberoi built a brand on a budget

Marketers who focus only on enhancing their share of voice to be heard and bought must listen to Sanjeev Bikhchandani, Co-founder and CEO, Info Edge India, the company that runs well-known online businesses like Naukri.com, 99acres.com and Jeevansaathi.com. Naukri.com is the second-youngest marketer on our list, yet Bikhchandani could teach his seniors a lesson or two on how to create brand awareness and build one's equity without spending a penny on it. "My understanding of the business was that it needed to get into a virtuous cycle to take off," says the IIM-A alumnus, explaining why Naukri let companies list jobs cheaply in a bid to draw job seekers and thus trigger a 'virtuous cycle'. "When we started off in 1997, we had no money. Hence, we had to rely on our product to create noise for itself and hence, it was crucial for it to be good," says Hitesh Oberoi, coo, Info Edge.

Today, Naukri, best remembered for its controversial 'Hari Sadu' TV commercial that still airs, gets more than 15 million page views a month and has in excess of seven million registered users. Over the past five years, over 24,000 clients have used the site to recruit people and over a million have found jobs through the web site, says Bikhchandani. Not surprisingly, the company's revenues have grown more than nine times to Rs 84 crore in 2005-06 from Rs 90 lakh in 2000-01 and profit-after-tax, last year, was Rs 13.5 crore. Bikhchandani and his team, meanwhile, have also got investors such as KPCB and Sherpalo, two of Silicon Valley's most renowned venture firms, who picked up a 5 per cent stake in the company for $6 million (Rs 28 crore at today's exchange rate). That means Bikhchandani needn't fear having to post his own resume on Naukri-ever.

-Archna Shukla