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MARKETING Are Himalaya's Ayurvedic Concepts Only For Dadima? They'd better not be if the born-again Ayurvedic drugs and cosmetics-maker is to survive in its new markets. By Dilip Maitra Suitor: I should be glad to marry your daughter, Sir,
provided... That's an original Mohammed Manal concept. The legendary founder of the Rs 140-crore Himalaya Drug Co. (Himalaya) was a firm believer in, apart from Ayurveda, the curative power of humour. In fact, he published several volumes of a book, Laughter: The Best Medicine, in 1962. Well, whichever mountain he's now watching from, Manal must still be smiling from ear to ear. For, in its 69th year, even Himalaya is waking up. Under the benign stewardship of his son, Meeraj Manal, a 54-year-old non-resident Indian operating from the US, the closely-held partnership firm has established itself as one of the largest manufacturers of Ayurvedic medicines in the country. Its sales have grown at an average of 14 per cent over the last 5 years. And its range of 20 products includes Liv 52-which, according to audit firm IMS Health Care, is the country's third-largest pharma brand.
These products fit into 4 categories: healthcare, bodycare, haircare, and skincare. While Himalaya plans to offer at least one product for each type of soft health ailment, in the next 2 months, it also intends to launch 13 new products in 2 more categories: oralcare and bathing soaps. Explains Ravi Prasad, 39, CEO, Himalaya: ''We entered the consumer products segment with a long-term plan. We are not here to make a quick buck.'' Neither, unfortunately for him, are the other Ayurveda companies, which have branched out into herbal cosmetics over the last 5 years. Once upmarket brands like Shehnaz Hussain and Biotique created the beachheads, middle-market companies like 3N Products (Ayur) and Dabur (Vatika and Samara) were quick to follow suit. ''The market is still small, and developing slowly,'' complains Vinita Jain, 37, CEO, Ishaan Research Labs, which makes the Biotique range. Although the segment is estimated to be Rs 800 crore in size, the competition is intense. Adds Sudhir Sharma, 48, Marketing Manager, 3N Products: ''The biggest challenge facing the organised market is the humungous mass of low-cost unorganised players.'' Moreover, even as the consumer product companies fight the Ayurvedic substitutes, they are also reacting: Laboratoires Garnier's Synergie range uses extracts from natural products, and Hindustan Lever Ltd's (HLL) Sunsilk shampoo now has a natural variant, Fruitamins. Will Ayurvedic Concepts then be able to make as big a splash as its Dadima has? As per the company, the sales of the new line touched Rs 1.50 crore in February and March, 1999. Backed by a Rs 5-crore ad budget, Ayurvedic Concepts expects its sales to touch Rs 20 crore in this financial year. BT evaluates its marketing strategy: THE POSITIONING. Himalaya, which exported products worth Rs 15 crore to over 40 countries in 1998, knows which side of its globe is buttered. Which is why it chose to first launch its Ayurvedic Concepts range in the US in 1996 through a subsidiary, also called Ayurvedic Concepts, based in Houston, which runs a chain of 12 stores. Says S.K. Mitra, 48, Executive Director (Research), Himalaya: ''The US is the most developed Ayurvedic market in the world.'' Now, the company has taken the plunge in the local market too. The logic: rising disposable incomes and a growing concern for the environment will cause consumer preferences to, naturally, shift to natural products. In fact, Himalaya expects sales-growth of between 50 and 60 per cent in the first 3 years (of course, on a tiny base). But it isn't going to be easy, and not just because of the competition. Warns Raghavan Srinivasan, 45, Executive Director (South), Mode Consumer Research Agency: ''Only after 18 months or so will we see whether Ayurvedic Concepts is successful. Normally, it is difficult to get repeat sales for prophylactic products, and the long-term success-rates are low.'' THE PRICING. Traditionally, natural lifestyle products have been positioned at the premium end of the market. No longer; now, the action is in the mid-price segments. Says V.C. Burman, 63, Chairman, Dabur, which is regrouping under the Vatika umbrella: ''Dabur is a v-f-m brand. So, for all our brands, we have middle-of-the-road pricing.'' Similarly, Ayurvedic Concepts has priced its products close to the popular brands in its segment. For instance, Ayurvedic Concepts' anti-dandruff shampoo is priced at Rs 95 for 200 ml as opposed to HLL's Organics (Rs 81 for 180 ml), Procter & Gamble's Pantene (Rs 115 for 200 ml), and Dabur's Samara (Rs 100 for 200 ml). Says Nagasimha B. Kanagal, 36, Assistant Professor, iim-Bangalore: ''Ayurvedic Concepts is using the prices of FMCG products as the reference-price.'' In that sense, the brand does have a mild premium pitch, which is logical. THE DISTRIBUTION. Within 3 months of Ayurvedic Concepts' launch in the 5 metros, it has reached 70 cities and 20,000 retail outlets. Such rapid penetration was possible because of Himalaya's distribution network for its drugs, which are available in most chemist shops in India. Says Soumitra Banerji, 42, Vice-President (Consumer Products), Himalaya: ''Eventually, we want to make our products available through hundreds of medium and large grocery shops.'' Of course, Himalaya has a long way to go before it can match the distribution of Dabur, which reaches 400,000 outlets. THE PITCH. Himalaya decided to go in for a distinct umbrella brand to differentiate its consumer products from its therapeutic brands. Its market research showed that Ayurveda is perceived as an ancient science that, though respected, is old-fashioned. Says Banerji: ''The challenge was to make adults accept advice by carefully avoiding sermons and preaching.'' Therefore, to communicate its key brand message to a younger audience, the advertising was designed to offer playful encouragement. Adds Suresh Manian, 33, Creative Director, Contract, Bangalore, which handles the account: ''The response to the ad has been tremendous.'' Agrees Gullu Sen, 38, Vice-President (Creative), Rediffusion-DY&R: ''Himalaya has already taken the first step in building a relevant proposition for its brand-an updated, smart, English-speaking granny. This campaign can go on and on.'' Himalaya's marketing-mix is a combination of the quirky and the conservative. The product-benefit of ''natural goodness'' is distinctly New Age, but its pricing strategy-an ever-so-minimal premium over established competitors-is conventional. Besides, its existing distribution network of pharmacies is certain to prove to be a handicap in vending FMCGs. The only 'P' where the company scores over the competition is promotion. And, even there, the company faces the challenge of converting high recall into sales. Strategically, although Himalaya has taken a sound decision by diversifying out of its traditional product-base, it is puzzling that it took the company seven decades years to figure that out. Now, the company must quickly adapt to the dynamics of turning into an FMCG company. And that, as Manal will tell his managers as Himalaya tries to climb that mountain, is no joke. --additional reporting by Shailesh Dobhal
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Father: Provided what?
And Manal would definitely
have been tickled by the Dadima ad campaign for Himalaya's belated foray into (Ayurvedic)
health and personal care products. Under a new umbrella brand, Ayurvedic Concepts-which is
a division of the company-has launched 21 products since February this year. Says Meeraj
Manal, Chairman, Himalaya: ''We want to deliver well-researched Ayurvedic products at
affordable prices.'' Will the customer want them? 