To avoid being swamped by its rivals, the company must unleash a marketing blitz and cash in on synergies.

By Rakhi Mazumdar

Tanya Sharma still vividly recollects her father's single-line directive. ''You will not sit in the managing director's chair until you have proved yourself.'' That was in 1996.

Three years later, armed with a degree in business management from the S.P. Jain Institute Of Management in Mumbai and a diploma in International Business Strategy from the London School of Economics, the 23-year-old daughter of the Calcutta-based Baidyanath Ayurved's CEO, Ram K. Sharma, is trying to do just that.

From her swanky headquarters in Delhi's Ishwar Nagar, Tanya is spearheading the 80-year-old Baidyanath Group's foray into natural healthcare products through GoodCare Pharma, a healthcare products firm promoted jointly by Tanya, Sharma, and his wife, Rashmi. Although the company is just 2 products young-Stress Guard, a stress-relieving capsule, and Neem Guard, a blood-purifier and skin rejuvenator-GoodCare has already relieved its financial performance from stress, and purified it too. In its first year of operations, it posted sales of Rs 1 crore, an impressive 10 per cent from exports.

Coming up: a blitzkrieg of brands. For, Tanya plans to launch a product every 2-3 months for the next 2 years to take its repertoire from 2 to 10. Explains Tanya: ''Globally, food and lifestyles are being marked by a return-to-nature wave. This market is dormant at present.'' Two more products are scheduled for launch in December, 1999. Their value propositions? ''All I can say is that they will improve the quality of life,'' says Sharma, 48, who expects the 4 products to together notch up sales of Rs 10 crore by 2002-03.

Playing The Premium Card

However, GoodCare has to take good care that it isn't swamped by the competition that has preceded it. After all, for every Stress Guard, there's a Stresscom from Dabur which, to the latter's advantage, has been in the market for 4 years now. And, for every Neem Guard, there's a Greneem from Dabur, which has been around for 5 years. Indeed, both Dabur and Himalaya Drugs have flooded the market with their Sunova and Ayurvedic Concepts ranges of therapeutic products, respectively. Points out Ravi Prasad, 39, CEO, Himalaya Drugs: ''When we wanted to reach out to up-market consumers directly, instead of going through doctors, we realised we needed a separate identity.''

What is Sharma's prescription for differentiating GoodCare's products? ''Better products with minimum side-effects,'' he claims. For instance, Stress Guard is marketed with an accent on its ability to relieve stress without inducing drowsiness. Although both Stresscom and Geriforte (from Himalaya Drugs) claim to have the same properties, Stress Guard is sold over the counter while the other 2 are sold on doctor's references. And, although Neem Guard is positioned as a skin-rejuvenator, its use is that it is also anti-diabetic, anti-viral, anti-obesity, and boosts immunity.

The second differentiation strategy hinges around price. Both the GoodCare products are targeted at the premium segment of the market. The Sharmas have, however, taken care to ensure that their products cost less than comparable products from Dabur. So, while Neem Guard costs Rs 73 for a pack of 60 capsules and the price of Stress Guard is Rs 91 for a pack of 60, Dabur's Stresscom and Greneem capsules cost Rs 18 each for a pack of 10. This difference is crucial for the chances of GoodCare's success. Being a late entrant, it is trying to position itself as the choice of the discerning user of ayurvedic medicines-and also the more conscious first-level convert.

''A typical customer would be one who is willing to pay a premium for our product after being convinced of the quality,'' says Sharma. Accordingly, GoodCare is positioning all its brands as essential ingredients for coping with the demands of life in the cities. So, its advertising focuses squarely on the symptoms of punishing urban lifestyles. Explains Sharma: ''These are aimed at the upper middle-class, and targeted at the problems arising out of their lifestyle.''

However, in going for the premium end, Tanya is also taking a risk. Contends Jagdeep Kapoor, 37, CEO, Samsika Marketing Consultants: ''The high-end ayurvedic products segment is only just beginning to find customers. It may be too soon for a super-premium brand to come in.'' Adds Vandana Gangwar, 24, Senior Analyst, ICRA: ''GoodCare's products cannot be priced too high. The operating margins are likely to stay between 10 and 15 per cent in the initial years.'' And that is going to pressurise profitability.

The only solution, then, would be for GoodCare not to pussyfoot its way into the market, but to unleash a marketing mega-drive that will yoke its brands to the very concept of herbal lifestyle-enhancers. ''A lot of promotional and brand-development activity will be involved,'' says Tanya, who will spend Rs 2 crore on product promotion in 2000-01.

Of course, GoodCare can expect to ride the disenchantment that people are beginning to experience with conventional allopathic medicine in relieving problems like stress. That's why the Sharmas plan to expand their presence across the Continent, the US, and Australia. Reveals Tanya: ''Our products will be sold over the counter.'' These drugs are being positioned as health foods, which will help the company bypass the US Food & Drugs Administration norms, unlike Ayurvedic Concepts' products, which are registered as medicines.

For the US, GoodCare has forged an alliance with Good Earth, a Saint Cloud (Minnesota)-based company that markets products under its own brands. Sharma admits: ''This means GoodCare cannot sell under its own brandname.'' But it will give the company a beachhead. In Italy, the company has a marketing alliance with EuroVeda, and is scouting for similar partners elsewhere. Since GoodCare has also set up an e-Commerce Website, claims Sharma: ''Between 20 and 30 per cent of our sales are expected to come from the Net.'' Since the Sharmas expect 25 per of their turnover to come from exports, all these strategies must deliver results-fast.

Tackling The Parent's Problems

If GoodCare's global ambitions appear to be in sharp contrast to Baidyanath's stay-at-home strategy, that's because the Sharmas are intent on breaking new ground. Although it manufactures and markets 700 of the 1,000-odd universe of ayurvedic medicines, Baidyanath is heavily dependent on its 10 largest-selling products-led by Chywanaprash, Vita-Ex (Gold) revitaliser, Lal Dant Manjan toothpowder, and Kabzhar laxative-which contributed nearly 60 per cent to its 1998-99 turnover of Rs 150 crore.

Unfortunately, as the rural and semi-urban customers-at whom the products are targeted-earn more, they are migrating to mainstream vitamin pills, toothpastes, et al. Acknowledges Sharma: ''We need to ensure that our products and packaging evolve continuously.'' But who would think of buying lifestyle drugs from a company that also sells Lal Dant Manjan? That explains the need for a separate company.

That doesn't mean GoodCare isn't aware of the synergies. For instance, although the company is revving up its distribution network-increasing the number of its distributors from 20 to 200, with a target of growing to 1,000 by 2001-it is using the Baidyanath network in the urban areas. After all, Baidyanath covers 2 lakh retail outlets in urban India, 3,500 of which are exclusive, with doctors in attendance. A common R&D facility is being set up at Joka near Calcutta, with an annual budget of Rs 1 crore, to add to the existing centres at Patna and Nagpur.

In moving up the value-added scale from orthodox ayurvedic medicines to designer herbal drugs for smarter lifestyles, the Sharmas are following the logic of moving into areas that have greater potential for profits. The problem, however, is their late entry into what remains-and is likely to stay-a niche. For, the first-mover advantage in such segments is, often, too powerful to erode. Unless Tanya can prove that her brands are not merely a set of ayurvedic me-too products, the back-to-nature slogan may have to be changed to a back-to-the-labs one. And that will not improve GoodCare's health-or its lifestyle.

Issue Contents  Write to us   Subscriptions   Syndication 

INDIA TODAY |  INDIA TODAY PLUS | COMPUTERS TODAY
TEENS TODAY | NEWS TODAY | MUSIC TODAY | ART TODAY

© Living Media India Ltd