Holistic or Sustainable Marketing

Sustainability At Marico

A robust stakeholder engagement system is the foundation of Marico's sustainability approach. Being a value-driven organisation, we have always worked toward building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance, which are integrity, equity, transparency, fairness, disclosure, accountability and commitment to values.

In 2011-12, Marico started its journey towards a sustainability report, and is currently putting a Sustainability Management Framework in place.

A task force comprising members from various functions in the Company's corporate office as well as manufacturing locations has been formed.

The Company has already commenced capturing data for some of the environmental indicators. These include:

• GHG emissions
• Effluents
• Electricity consumption
• Energy conservation initiatives
• Water consumption
• Waste disposal etc.

Marico also has systems to collect information regarding labour as required for compliance by various authorities.

Marico will initially focus on Indian business's manufacturing plants as these locations are the most significant from sustainability risks point of view. The company will look to expand its reporting boundaries in the years to come.

Sustainability reporting initiative in Marico
Marico has been doing work in various areas related to sustainability over the past few years. There were a wide range of initiatives across energy conservation, water conservation, CSR and waste disposal apart from business initiatives involving communities such as farmers and associates.

Sustainability Report :

Associates

Farmer First - This program was launched in safflower growing belts in June 2012 with the vision "socially responsible growth by keeping farmers as the pivot"

A series of initiatives were launched to maximize the ROI of farmers in safflower growing areas by keeping farmers as the central pivot. The aim was to promote safflower as a very strong and viable alternative option in rabi season by adopting a win-win approach for farmers, Marico and society thus arresting the safflower area decline. Concentrated efforts were carried out in 325 villages spread across 6 states. Under the initiative, 12500 saplings were distributed among the farmers free of cost for plantation, 1300 quintals certified seeds were sown over 32000 acres of land which improved farmers yield by up to 15%. A PPP model with Government of Maharashtra was worked out in Solapur and Akola districts covering 49 villages, 495 farmers and 900 hectares. This initiative has benefited (a) Farmers by increasing their yield by 20%, (b) Marico by improved safflower buying surplus from domestic and (c) Society with a greener tomorrow.

Cluster Farming Program - The program was aimed at forming a cluster of coconut farms in an area without ignoring a single farmer in the designated area. The farmers then got together as a group and discussed the agriculture practices to be adopted under the help of a technical expert. Basis this, preparation of farm, fertilization, pest control, intercropping etc., were decided. Agri inputs were sourced through local cooperative societies and distributed to farmers. Marico's Copra Collection centers in Malappuram district partnered actively with the Coconut Development Board for the rollout and execution of the program in which the center uses its reach to farmers to form clusters to avail the benefit of the above program from Govt. of India.

Through the cluster program, Marico has coordinated for productivity improvement initiatives in 61 coconut clusters involving 7982 farmers covering 1737 Ha of coconut gardens. The 2 year intensive productivity improvement program by scientific fertilization, inter-cropping and pest control has given a yield improvement close to 20% in coconut gardens covering over 3 lakh coconut palms. The program has benefited - (a) Farmers by increasing their income by 20% and (b) Marico by improving its productivity by 20%.

Members

Member well-being has a direct impact on the Member Engagement with the organization. Marico gives importance to the overall well-being of a member and offers workshops and seminars in the areas of emotional, financial, health and community well-being. This year, Financial Planning workshops were conducted across the organization to educate and create awareness amongst members on how they can achieve higher financial security. Conducted by an expert in financial planning, the workshop covered the topics such as Understanding one's life phase and Pillars of Financial Planning - Accumulation, Preservation, Protection and Distribution.

In the area of health and well-being, Marico participated in the Stepathlon, a unique, pedometer-based, mass participation event which takes place over 100 consecutive days. It encourages participants to take 10,000 steps a day to remain fit. A total of 35 members from across Mumbai participated in this event.

In the area of community well-being, Marico participated in the Joy of Giving Week, an initiative that promotes giving. During the Joy of Giving Week, the 'Member Volunteering Opportunities' initiative was launched as a prototype in Mumbai. Through this initiative, members were offered a platform to offer their expertise to a not for profit organization. One our members has successfully completed content creation for the annual report for Maharashtra Dyslexia Association While other projects are going on. Marico also offers counseling services through an expert counseling agency. Members can avail counseling for themselves as well as their immediate family.

Society

Assistance is provided to neighbouring communities through various health and education programs, help to underprivileged and deprived children and support to differently abled & destitutes.

A unique project 'Pratyek Themb Mahatwacha' - Each Drop Counts was undertaken in Jalgaon to educate the school children, their parents, teachers and society in general about the importance of water conservation. 5000 plus students were connected directly across 8 major schools and 10000 booklets on water conservation were printed and distributed to many schools around Jalgaon rural areas.

Green Initiatives

Several initiatives were taken to reduce GHG emission in Kanzikode, Dehradun and Baddi. Rain water harvesting and Tree plantation activity were undertaken at Paonta Sahib. Reduction in power consumption was reported in in Kanzikode, Paonta Sahib, Dehradun, Baddi and Pondicherry through various initiatives.

Awards

Kanzikode won the Kerala State Safety Award for the 3rd consecutive year for the safety initiatives.

Marico Sustainability Slogan :

Segmentation, Targeting and Positioning

Segmentation, Targeting and Positioning

Saffola Active sells products well among the health conscious Target Group. The idea that influences these people or organizations are its product categories, since it there are different types of products in different categories, the market is more likely to buy the products because there are different varieties to choose from. 

 Within a market, a market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. Another process that Saffola Active goes through is a market segmentation, which is the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups. All of these definitions make up a market.

There are 5 basic segmentations that marketers follow. Geographic Segmentation: dividing markets by region of a country or world, market size, market density, or climate; Saffola Active follows this segmentation because they have their products all around the world for marketers to grab their attention and make more profits out of them. 

Demographic Segmentation: Segmenting market on the basis of  age, gender, income, ethnic background, and family life cycle; Saffola Active products aim for marketers who were born in the Y generation because they tend to buy their products more other than the X generation and baby boomers. They also make their products cheaper than other brand names that sell similar products. 

Psychographic Segmentation: Deals with personality, motives, lifestyles, and geo demographics; this is when Saffola Active gathers information about people and this determines how they should sell their products and what products should they sell. 

Benefit Segmentation is the process of grouping customers into market segments according to the benefits they seek from the product; Saffola Active will examine what their customers require of the product and develop communication strategy accordingly.

Usage-Rate Segmentation divides a market by the amount of product bought or consumed; TRESemmé keeps track on which one of their products are having the most sales. 

Saffola Active business market consists of 4 broad segments: producers, resellers, government, and institutions. 

Marico company characteristics are reasonable since they are available across all retail stores in India and many buyers prefer to purchase from local suppliers. 

Saffola Active buying processes segments customers and prospective customers on the basis of how they buy. This allows them to become better sellers for their markets.

After segmentation, the next task is to choose one or more target markets. Saffola Active deals with one specific target market because this way they can attract customers with a single marketing mix. 

Saffola Active way of targeting is the concentrated targeting method. They select a specific consumer segment for targeting its marketing efforts. Saffola Active needs to know where they should position their products so that they create a place in the consumer's mind. 

Distribution SpiderWeb Network

Distribution Channels

Marico, the parent company of the brand Saffola Active, has an elaborate distribution network. The products are distributed by a network of 4,000 redistribution stockists, covering 6.3 million retail outlets. The model is described as follows:

The rural distribution model is shown in the following diagram:

Marico's TIO and PAT : 

Promotions - Need of Every Heart Beat

Promotions

Saffola Active is heavily promoted through brand activation and a strong online presence, along with traditional forms of advertising such as print and TV advertisements. Saffola Active has managed to strike a chord with its audience with its emotional Quotient. Saffola Active is available between Rs 115-130 across retail outlets

Here are some ways in which it has marketed itself to become such a hugely popular in the high-end Cooking Oil category:

These were one of the first TVCs that were launched in India for the introduction of its Healthy Quotient.

The Happy B'day Heart TVC which made people celebrate the age of their heart.

Print Ads to spread awareness about the Happy Birthday Dear Heart Campaign.

Other Print Ads to Celebrate Young Hearts

 Campaign Launched published by Campaign India

Saffola Active Facebook Page

Know your Heart Age Page

Saffola Life - Find your Age Hoardings

 World Heart Day Radio Conference

World Heart Day Cinema Hall Healthy Pledge 

Random Ads By Saffola Life.

Latest Slogan of Saffola Life.

The Price Game - Cake Walk or Cut Throats

The Pricing Agenda 

Price is the key deciding factor in the customer's purchase process. This is why it is the second most important P in the four Ps of marketing. 

There are six different types of pricing generally available to the marketer while setting prices in the product mix: 

PRODUCT LINE PRICING:

Marico is one of those companies that have product line pricing. Every line of product/Brand is priced differently to suit different target customer segment.
For example, a Saffola Active will cost lesser than a Saffola Gold which costs lesser than a Saffola Tasty.
Even within the product line, there exist different price points for each SKU.

For Saffola Active, the pricing is as follows:
1 Ltr – 115-130 Rs

5 Ltr – 580 Rs
The quality of the brand, the positioning along with product benefits, as well as the packaging should justify the pricing differences.

OPTIONAL FEATURE PRICING will not exist for Saffola Active as it is a FMCG good.
Optional Feature pricing is widely used in consumer durable segments, the automobile industry and the entertainment and hospitality/travel industry. They come with a base fare and upon that, on availing of an optional feature/benefit, the company charges extra price.

CAPTIVE PRODUCT PRICING is mostly followed in those products which are initially sold at a lower rate, but their additional and essential components are priced at a premium which has to be purchased by the customer since he would not be able to use the product without them. Examples of captive product pricing are: Printers (Cost of the cartridge), Razor blades (Cost of the blade is higher than the stick but the blade is an important part) and cameras (the lenses, stands and other necessary equipment cost much more than the camera itself).

TWO-PART PRICING is essentially a pricing where there is a fixed price as well as a variable price. Mobile operators use this commonly. The fixed fees is the price of the SIM card or registration fees and the variable usage fees is the amount of calls one makes, the data (2G/3G) used. Higher-end pubs and restaurants charge an admission/reservation fee and the usage cost is the quantity of food/drinks ordered.

BY-PRODUCT PRICING is done in those cases where the manufacture of one product causes manufacture of by-products and these are then priced according to their usability. For example, in a petroleum refinery, there are many by-products at different stages of the process (petrol, diesel, kerosene, naphtha etc). These are then priced according to their usage and demand.

PRODUCT-BUNDLING PRICING happens at most promotional schemes. You would have seen the deodorants/soaps/toothpastes bundled together and sold at a much reasonable price than if you would have purchased them separately. A bundled data package in a mobile plan is a monthly/annual scheme wherein one gets all benefits at a comparatively lower price than if these were purchased separately.

In the case of Saffola Active, the pricing can be as a Product Line pricing and/or the Product-Bundling.

Product - Saffola Active Oil

Saffola Active

• Unique blend of fatty acids with Omega 3 to help give you a balance of MUFA and PUFA 
• With an added advantage of antioxidants such as Oryzanol & Vitamin E
• Designed to bring you benefits of rice bran and soybean oil

Ingredients

 Refined Rice bran Oil - 80%

 Refined Soybean Oil - 20%

Benefits

• Saffola oils are suitable for all types of cooking, frying, grilling, seasoning etc. Even the deep fried food does not seem sticky with oil.
• Saffola Oil is light, clear colour and mild, delicate flavour make it excellent for salads and baking. Saffola Oil is high in monounsaturated, it is extremely heat stable, excellent for frying, and can be used in place of any cooking oil.
• Saffola Active provides Omega 3 & Oryzanol, two useful compounds known for promoting heart health. It's an omega 3 fatty acid, which is required for the brain's development and other important body functions.
• Omega-3 also helps in lowering cardiovascular risk factors along with several other health benefits.
• Saffola active contains vitamin E which keeps the immune system strong.
• The heart healthy nutrients in Rice Bran Oil such as oryzanol are known for their cholesterol lowering ability. Saffola Active also contains Vitamin E.
• Saffola Active has the right composition of 80% rice bran oil and 20% soyabean oil. It is more effective in reducing cholesterol than each of the oils singly.
• Rice bran oil is known as the world's healthiest edible oil. It is light, mild and sweet tasting providing a variety of healthful benefits.
• Rice bran can be beneficial in the fight against heart disease by reducing total cholesterol levels, including the bad LDL cholesterol and triglycerides by 20 percent. Studies have shown that snacks prepared in rice bran oil absorb 12-25 % less oil than those prepared in groundnut oil.
• The safflower Oil has the highest levels of Linoleic acid, which is an essential fatty acid required for the proper functioning of body systems & omega 6 polyunsaturated fatty acid, which is well known in reducing cholesterol levels.

Environmental Benefits: Saffola's farming bring environmental benefits, farming methods do not pollute the crop, soil, underground water or the air. In addition, farmers are not exposed to any pesticides while working with Saffola, grown without pesticides crops.

Marketing Mix Elements

Landing on the thick cloud of Marketing Mix

The above five concepts are interlinked and hence give rise to the marketing mix which consists of the four “Ps” of marketing viz. Product, Price, Place and Promotion.

These four Ps stem from the customer value construct, encompassing the cost-benefit analysis and also give a fairly clear picture of where the product/service stands in the context of market, industry and also in its life cycle (within the brand as well as the category). It helps the marketer to understand the key areas where the product needs to improve and assess the strengths of the promotional schemes employed.  The 4 Ps help answer the following questions precisely.

In the context of Saffola Active, the four P’s answer these questions as follows:

PRODUCT:

Customer Requirements: Economical, Less absorbent, and Healthy.

Features: Low Absorb Technology, Cholesterol and Trans Fat Free, Healthy Oil.

How and where will customer use it? : To cook healthy food.

What does it look like? Pouch/Can

Colour: Golden (connotes luxury)

Size: 1Ltr, 5Ltr.

What is it called? Saffola Active – Saffola Aaj se

How is it branded? A healthy product, premium quality

Differentiated as: Marico promise to deliver exceptional quality as always

PRICE:

Monetary value: 1Ltr – 115-130Rs, 5Ltr – 580Rs

Price Point: Price at par with nearest competitors and its other variants.

Discounts to traders/retailers: Attractive trade discounts to retailers 

Price Sensitivity: Product caters to high-end customer- therefore lesser price sensitivity.

PLACE:

Location of product: Small Kirana Shop in locality, Large retail stores (Big Bazaar, Reliance, DMart)

Distribution Channels: Distribution Channels include wholesalers, agents

Sales force used or not? Sales force not used to reach the customer but aggressive sales promotion in the context of retail stores (pushing for maximum shelf space)

Competitor Strategy: Competitors follow more or less the same distribution channels.

PROMOTION:

Where to promote? Promotion on TV, Print, PoP display and persuasion.

Best time to promote- all through the year as it is a daily use product. Cannot be promoted seasonally, but special occasions like Valentine's Day, World’s Heart Day etc can be tapped

Competitors' strategy: Neck to neck. Similar strategy. Key differentiator is that Saffola Active positions itself as a premium and healthy quality.

Product ( Industry ) Life Cycle

 

 Basically, there are four stages in a product’s life cycle:
 1) Introduction- the product is introduced, slow sales, no profits;

2) Growth- rapid market acceptance and substantial profit improvement;

3) Maturity- slowdown in sales growth because of widespread acceptance, stabilization;

4) Decline- downward drift in sales, erosion of profits.

A sample PLC(Product Life Cycle) curve is shown above 

Saffola, Marico’s second flagship brand, is positioned strongly on“good for the heart” equity.
Saffola constantly urges consumers to adopt a healthy lifestyle (its “Walk” campaign).
Saffola has been innovating to come up with products to support the trend of an improved lifestyle that consumers want to adopt.

During FY09, Saffola’s turnover still comprised primarily of refined edible oils. The oils franchise of Saffola grew by 11% over FY08.
The growth during the second half of the year was much slower, even though the growth rate picked
up to 5% during Q4FY09.

Saffola retails at a significant premium to other refined edible oils in the market.

In anticipation of lower average prices of safflower and other oils during FY10, the company has taken some price reductions in Saffola. (Saffola Gold from Rs 120 to Rs 110, Saffola Tasty from Rs 99 to Rs 94 and Saffola Active from Rs 99 to Rs 89 (all prices per litre)) and achieved a growth rate of 10% in FY10.