Shri Vile Parle Kelavani Mandal’s

Narsee Monjee College of Commerce and Economics

(Autonomous)

Department of Commerce
2020-21

Export Marketing
TYBCOM
Semester 6

Study of International Product Strategy with Reference to Marico Ltd.

Submitted by:
Risha Lodha
SAP No - 45208180368
Contact Number - 9829089494

Roll No:

E 101
Table of Contents

DECLARATION 3

PLAGIARISM REPORT 4

INTRODUCTION 5

CORE CONTENT 7

SEGMENTATION 8
DEMOGRAPHIC SEGMENTATION 8
GEOGRAPHIC SEGMENTATION 8
PSYCHOGRAPHIC SEGMENTATION 8
BRAND POSITIONING 9
COMMUNICATION STRATEGY 9
DISTRIBUTION NETWORK 9
EXPORT FIGURES FOR PARACHUTE OIL 10
MARICO IN INTERNATIONAL MARKETS 11

CONCLUSION 12

LEARNINGS 12

WEBLIOGRAPHY AND BIBLIOGRAPHY 13

 Declaration
I Risha Lodha declare that this project/assignment titled ‘Study of International Product Strategy
with Reference to Marico Ltd.’ is entirely my own work and any additional sources of information
have been duly cited.

All the internet sources published or unpublished from which I have quoted or drawn reference
have been referenced fully in the webliography and bibliography list. I understand that failure to
do so will lead to plagiarism and any similarity found with other work elsewhere will result in
severe disciplinary action.

I also understand that I will be called for viva/presentation (Online/Offline) and must attend. I
acknowledge it is my responsibility to keep myself updated with the schedule of viva and I will
make myself available during the same.

Risha Lodha

Digital Signature
 Plagiarism Report
13%

https://smallseotools.com/view-report/ca5dee0b6562842852edf5e2fbe9b9ca/

https://smallseotools.com/view-report/ac0587833fcd8970a4b66422033e2a2c/
 Introduction

Marico Limited is one of India’s leading consumer goods companies operating in the health,
beauty and wellness space. Headquartered in Mumbai, Marico is present in over 25 countries
across the emerging markets of Asia and Africa. In FY 2019-20, the company generated a
turnover of $1.03 billion through its products sold in Asia and Africa. During 2019-20, Marico
recorded a turnover of INR 73 billion through sales in India and other chosen emerging markets
of Asia and Africa. It has nurtured over 25 brands in the categories of hair care, skin care, edible
oils, healthy foods, male grooming, fabric care and hygiene. Its brand portfolio includes
household names like Parachute, Saffola, Saffola FITTIFY Gourmet, Nihar Naturals, Livon, Set
Wet, Set Wet Studio X, Veggie Clean, Kaya Youth, Travel Protect, Coco Soul,
Parachute Advanced, Hair & Care, House Protect, Mediker, Revive, and Beardo.

The company's history can be traced back to 1948 when the Mumbai-based Mariwala family set
up Bombay Oil Industries Ltd (BOIL). BOIL comprised of a chemical plant, coconut oil
extraction plant and vegetable oil refinery. In 1988, when BOIL expanded and diversified into
branded consumer products, the family went on to incorporate a company which later came to
known as Marico Limited and transferred BOIL's consumer products division to it. Marico
subsequently entered into an agreement with BOIL for the use of its coconut oil brand Parachute
and vegetable oil brand Saffola in 1990. In the next few years, the company made several
acquisitions to add to its product portfolio. The prominent amongst these was the acquisition of
anti-lice treatment brand Mediker in 1999, the acquisition of the facilities for manufacture of
jams, sauces and other fruit and vegetable products in the 2000. In 2001, Marico acquired the
Parachute and Saffola brands from BOIL.
Over the next few years, Marico established itself into a consumer focused FMCG company in
the beauty and wellness space through 12 well-established brands. It’s three business segments
include - Consumer Products (comprising the consumer products business of Marico Limited,
Marico Bangladesh Limited and MBL Industries Limited), Skin Care (services and products
retailed through Kaya Skin Clinics) and Global Ayurvedics (Sundari). The acquisition of Sundari
LLC in the US, a manufacturer of luxury ayurvedic products, in 2003 marked Marico’s first
foray into skin care products. In 2004, Marico started Kaya Skin Clinics - offering scientific,
unisex dermatological procedures as well as skin care products.

In the international markets, the company's product offerings include Parachute coconut oil and
its extensions (Parachute Gold, Parachute Lite, Parachute Sampoorna, Parachute Amla,
Parachute Jasmine, Parachute Beliphool), after shower cream (Parachute Advansed), hair cream
(Style On), hair conditioner (Silk-n-Shine), Refined edible oils (Sweekar and Saffola) and
functional foods aimed at prevention of chronic lifestyle disorders like diabetes (Saffola Daily
Health).

Core Content

Marico makes two kinds of coconut oil, Parachute edible grade hair oil, and Parachute Advansed
hair oil. Parachute edible oil contains 100% coconut oil, whereas Advansed hair oil contains
coconut oil along with fragrance and Vitamin E. Over the years, Marico’s name has become
synonymous with Parachute. Marico made its first serious entry into foreign markets by setting
up a manufacturing plant in Bangladesh in the 1990’s. The expansion saw Parachute's market
share rise to 70% within ten years and become one of the most recognized and trusted brands in
the country. Over time it has become the gold standard for purity.

Parachute Hair Oil

Synonymous with pure coconut oil in the market, Parachute positioned itself on the platform of
purity. It established itself as a natural product for healthy hair which made the brand the a
household name in the hair oil segment. The brand has continued to stick to its core values and
position of being a coconut hair oil brand that offers purity and quality and building on that
credibility, keeps pivoting around its position to modernizes its appeal according to demand.
It is available in pouch packs, plastic bottles and tin cans, and is available in both the rural and
urban areas. Over time, the communication for the brand has evolved to appeal to different
consumer sets. It has sought to remain relevant and differentiated from competition through a
slew of initiatives in packaging (user-friendliness or aesthetics) & communication like the
“weight-test”. Parachute has thus ensured that it enjoys tremendous equity and trust with every
passing generation. The brand has a huge loyalty, not only in the urban sectors but also in the
rural sector of India.

Segmentation
Market segmentation of Parachute is based on three factors.

Demographic Segmentation
Demographic segmentation is the most popular basis for segmentation and divides the market
into groups based on variables such as age, gender, family size, income, occupation, education,
religion, race and nationality. The demographic variables that Parachute takes into account are –
age, gender, and socio-economic class. Although the aim is to target customers of any age group,
primary focus remains on women of all age groups. The user age group indicates that parachute
is used more by young and middle-aged women. Parachute is accessible to all socio-economic
classes as sachets of Re.1, small, medium, and big bottles are available in the market

Geographic Segmentation
Geographic segmentation refers to dividing a market into different geographical units such as
nations, states, regions, cities, or neighbourhoods, urban and rural areas. Parachute is present in
rural and urban areas. In the international market, parachute is available in the Gulf, Bangladesh,
South-East, Egypt, and UAE.

Psychographic Segmentation
This segmentation approach involves an understanding of a consumer’s lifestyle, interests, and
opinions. Lifestyle and personality can determine the kind of product that an individual chooses.
The present generation is more conscious of the products they use and how they affect the
environment and society.
Brand Positioning
Different parachute products are positioned differently in the market owing to their respective
target audience. For example, Parachute Jasmine focuses upon the fragrance aspect of the oil and
aims to target the young and appearance conscious consumer. Parachute Natural Shampoo has
positioned itself on the platform of Naturals, for healthier hair. With the tagline ‘Baalon mein
sehat ka jadoo’, Parachute Natural Shampoo’s uses natural ingredients for natural looking
healthy hair. Parachute Therapy is recommended as a hair fall control solution and is made using
traditional herbal remedies.

Communication Strategy
For every litre of branded coconut oil sold in the market, three litres of loose oil (priced at almost
50% less than branded oils) is sold. In order to reach its intended target audience, that is, all the
women in the country who believe that application of coconut oil nourishes hair, Parachute based
its communication strategy on the platform of a mother’s love and care thus endearing it to
generations of women.

To increase the brand’s penetration in rural areas, where the competition is much greater from
loosely available coconut oil, Parachute came up with small oil pouches which became very
popular. It made use of a van campaign to create awareness for Parachute Coconut Oil Pouch in
towns with less than 20000 populations in Tamil Nadu aiming to convert loose oil buyers into
Parachute pouch customers. The strategy was to get women folk out of their homes and
participate in a van campaign, which are usually dominated by men and children. According to
Marico, the van campaigns led to a substantial increase in sales reported from the campaign
areas. A study showed a 25% conversion from loose coconut oil usage to Parachute Pouch Pack
post the campaign. The success of the campaign motivated Marico to repeat the campaign the
following year in towns with a population of more than 1 lakh.

Distribution Network
Marico’s distribution network is acknowledged as one of the best in the industry and is a
leverageable strength for the company. Every month, 56 million consumer packs are sold to
about 1.8 million households through 1.6 million retail outlets spread across the country. The
company’s distribution network covers almost every Indian town with a population of over
20,000. 1 out of every 10 Indians is a Marico consumer. Marico’s parallel rural sales and
distribution network ranks among the top three in the industry and contributes 24% to the
company’s top line. Their infrastructure comprises 882 direct distributors, 153 super distributors,
catering to 2393 small stockists and 4523 van markets. A dedicated team of territory Sales
executives and pilot sales representatives distribute Marico’s as well as alliance brands through
this vibrant network.

Export figures for Parachute

Marico in international markets
Marico has a significant franchise across countries in the Middle East, Asia, Australia and USA.
The company’s initial globalisation efforts were targeted at the Indian diaspora in the Gulf. Its
International Business Group formed in early 1990's currently more than US$ 20 million in size.
It represents 10% of the company's turnover and is ranked among the top three export divisions
amongst Indian consumer goods companies. Marico has also gone on to obtain Export House
status. While it commenced its export business with only Parachute coconut oil, it currently
exports a wide offering in hair oils, hair creams etc. To enable country focus, Marico
incorporated a 100% subsidiary in Bangladesh called Marico Bangladesh Limited in the year
1999. Marico Bangladesh has a retail reach of more than 2600 thousand outlets. To focus further
on its business in Bangladesh, Marico Bangladesh floated MBL Industries Limited as a wholly
owned subsidiary in 2003. MBL's principal activities are to manufacture, market and sell coconut
oils, hair oils and other consumer products.

Marico's market share overseas has been rising over the years. Parachute coconut oil remains the
market leader in Bangladesh with almost half the market share. The company further
strengthened its position in Bangladesh by acquiring soap brand, Aromatic, which had a 5%
market share and annual sales of US$ 4.8 million. This complemented the company’s earlier
acquisitions of soap brands, Camelia and Magnolia in Bangladesh.
In the Gulf, hair cream has increasingly grown into a big brand. The acquisition of the Sundari
range of beauty products in the backdrop of the back-to-nature movement in the US and
developed markets provided a huge opportunity to target the spa market. Sundari products and
treatments are retailed in USA, Canada, UK, New Zealand, Spain, Philippines and Japan and are
available at some of the leading spas.

Conclusion
In the domestic market, Marico’s Parachute and Saffola are among the two most widely known
brands. Marico has leveraged its success in the domestic market to target the Indian diaspora in
the global markets. It was the first company to brand coconut oil, which was historically sold
loose, with Parachute. The brand extensions of Parachute in the value-added coconut oil segment
have grown to command 34% market share in India and are also extremely popular with users in
the international markets. To attract customers in the international markets, Marico strategically
catered to diverse cultures and consumer habits by customising its products. For example, it
offers perfumed oils to consumers in Bangladesh, less sticky hair creams and hair oils in the Gulf
etc. It has also been able create new niche categories for growth by identifying categories that do
not have any product offerings to serve the customer's need. For example, Indians have a habit of
starching fabric in hot water, which led to the creation of a new category of instant cold water
starch called Revive. Similarly the company created a new category of anti-lice oil with Mediker.
Today, both Revive and Mediker have become dominant players in their respective categories
and face limited competition.

Marico’s investment in the international markets is focused on capitalising their present

opportunities. In Bangladesh, the company has and will continue to drive penetration in coconut
oil through brand building and go-to-market transformation, while also continuing to focus on
diversification into value-added hair oils, baby care and other personal care segments. Vietnam,
the business is investing in the sales and distribution systems and in the Middle East and North
Africa, the focus is on judiciously investing behind brands and go-to-market initiatives.

Learnings
Even in the highly saturated branded coconut oil market, Parachute maintains a market share of
around 50 per cent owing to regular packaging innovations, increasing user base with low-cost
packs targeting lower income classes and with the help of focused micro-marketing initiatives.
Marico has adopted a methodical approach towards building its business with first strengthening
its core business and then concentrating on building new growth drivers. Marico's core
competence lies in its ability to innovatively brand and package commodity items

Overall, Marico remains committed towards sustainable value creation through a consumer and
community-centric strategy. Being a market leader in nearly 90% of business segments, the
company’s main is focus is on maintaining its leadership status and driving category growth by
bringing value to their consumers in the form of superior product at the right price.

Webliography and Bibliography

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