1NIELSEN CXO SERIES Copyright © 2013 The Nielsen Company

WITH SAUGATA GUPTA, CEO-CONSUMER PRODUCTS BUSINESS, MARICO

NIELSEN CXO SERIES

CONVERSATIONS IN LEADERSHIP

J U L Y 2 0 1 3

2 NIELSEN CXO SERIES

IT’S BETTER TO DO A FEW THINGS, BUT DO THEM WELL.

India’s leading consumer products brand and a rapidly growing global

name, Marico is also a hub for innovation in its own right. Over the

years, Marico has set the bar high in the FMCG category and its ‘be

more, every day’ philosophy continues to work towards higher goals

like sustainability and the ‘virtual cycle of innovation’.

Saugata Gupta, CEO-Consumer Products Business, Marico, shares

some insights on the company’s strategies, challenges and outlook in

a tête-à-tête with Piyush Mathur, President, Nielsen, India Region.

SAUGATA GUPTA, CEO-CONSUMER PRODUCTS BUSINESS, MARICO

3NIELSEN CXO SERIES Copyright © 2013 The Nielsen Company

A LONG-TERM STRATEGY IN PLACE CAN HELP COMPANIES COPE WITH THE EXISTING VOLATILITY IN THE MARKET.

CONSUMER CONFIDENCE IS NO LONGER AS HIGH AS IT USED TO BE. IN SUCH AN ECONOMIC ENVIRONMENT, HOW DO YOU VIEW THE GROWTH OPPORTUNITY AT MARICO?

There has been a hiccup as far as growth is concerned and the

government has realised that it has to step-in to reassure the

economy. If the fiscal deficit trend continues, we will not be able to

fund important programmes that can drive economic growth. The

long-term growth story of India remains intact and the country is

expected to remain the third largest consumption economy. However,

volatility and uncertainty are here to stay. At Marico, we are in the

process of accepting this volatility. Managing this volatility will ensure

that we have a long-term strategy in place so that we can continue to

develop a strong consumer franchise.

HOW DO YOU FACTOR IN THIS KIND OF VOLATILITY?

Fortunately for us, the consumer goods category is the least volatile

of all the sectors. However, organisations need to be far more agile

and have a plan B or plan C in place. As long as the long-term strategy

is consistent, the company is bound to survive. Organisations that

continue to do well and deliver sustainable and profitable growth year

after year have a consistent thought process in their strategy. The

need of the hour, therefore, is a repeatable model of growth.

INNOVATION IS A KEY POINT ACROSS MARICO’S BUSINESS UNIVERSE. IN FACT THE MARICO INNOVATION FOUNDATION HAS MADE SIGNIFICANT STRIDES SINCE ITS SET UP IN 2003. WHAT ARE YOUR STRATEGIES FOR SUCCESSFUL INNOVATION? We believe that innovation is the biggest source of competitive

advantage for any organisation. However, it is essential to invest in

the best innovation capabilities. We realised that a lot of people are

entering emerging markets based solely on its attractiveness. They

fail to look at another factor, which we call the ‘right to win’. It is all

about the capability to win in segments with respect to customers,

consumers, supply chain model etc.

Secondly, in any emerging market, it is better to do a few things, but

do them well. Focus is very important when it comes to innovation.

4 NIELSEN CXO SERIES

IT IS NOT ALWAYS POSSIBLE TO USE GLOBAL CONSUMER INSIGHTS IN INDIA AS IT IS UNIQUE AND CONSUMERS THINK DIFFERENTLY HERE.

ARE THERE ANY SPECIFIC CATEGORIES WHERE YOU SEE A HIGHER INNOVATION POTENTIAL?

We have forayed into the breakfast category and we believe that we

have the ‘right to win’ in the category with brands like Saffola, which

is a big brand in health. We have also taken Parachute Advansed into

the skincare segment. The key learning is that one needs to have a

differentiated product. Equally important today are sharp consumer

insights. However in India, it is not possible to use most global

consumer insights as the market is quite unique and consumers here

think differently.

THERE IS A LOT OF TALK ABOUT MIDDLE INDIA, A SEGMENT MADE UP OF APPROXIMATELY 400 TOWNS, EACH WITH A POPULATION OF ONE TO TEN LAKH. WITH EASE OF ACCESS AND RAPID GROWTH, HOW DOES MARICO VIEW THIS SPACE? Middle India is a low-hanging fruit in the immediate term. We view it

as an opportunity where one can buy distribution at the very top end

as the market develops. However, in both middle and rural India, long-

term investment behind distribution will bring a long-term competitive

advantage. It also depends on the size and critical mass of the

portfolio. If one has significant size and scale advantages, penetrating

rural India in terms of incremental cost versus incremental gain is not

a definite proposition. Though it is not an odd strategy, one needs to

have an end strategy. For medium-sized companies, the first strategy

should be to saturate Middle India and then drive into rural India,

since the risk and reward ratio in rural India is higher.

5NIELSEN CXO SERIES Copyright © 2013 The Nielsen Company

WHILE INNOVATING, ORGANISATIONS ALSO NEED TO LOOK AT THE ‘RIGHT TO WIN’ FACTOR – THE CAPABILITY TO WIN IN SPECIFIC SEGMENTS AND CATEGORIES.

WITH ALMOST 95 PERCENT OF RETAIL CHANNELS BEING ENGAGED IN TRADITIONAL TRADE, HOW DO YOU STRATEGISE IN AN ENVIRONMENT WHERE TRADITIONAL TRADE AND MODERN TRADE ARE RAPIDLY EVOLVING, WITH SHOPPERS PATRONISING BOTH CHANNELS?

Modern trade and top-end general trade are being driven today by

premiumization. It demands far bigger investment in shopper insights

and a better range of products. In the long-term, I see a differentiated

portfolio emerging for modern trade and certain new channels. For

example, we expect the cosmetics and chemists channel to drive

new trends in personal care especially in urban parts. There are food

specialist outlets driving trends in food. These outlets offer a different

experience as they are operated by modern traders, and in some

cases by the top-end general traders. There is a lot of potential for

innovation in new categories with low penetration. In fact, there is

even scope for category creation in these channels.

A LOT OF BRAND PERCEPTION AND SUCCESS IS TAKING PLACE ON SOCIAL MEDIA PLATFORMS. WHAT IS THE DIGITAL STRATEGY FOR MARICO GOING FORWARD?

Digital is emerging as a standalone and critical part of marketing. If

we look at today’s youngsters, not only in India but also in emerging

global markets, they spend a huge amount of time in this medium

and it has become key to driving behavioural change. However, it

is important to ensure that it does not sound like manufacturer-

speak. The digital medium is used to generate views - one can get

a far better perspective on what the consumer is thinking, leading

edge practices, sharper insights and innovation ideas from online

consumer behaviour and chatter, than any other medium. Digital is

therefore essential in the marketing plan and companies need to have

specialists in the category.

6 NIELSEN CXO SERIES

OUR MOST IMPORTANT PHILOSOPHY REMAINS THAT WE DELIVER WHAT WE PROMISE AND WE PROMISE WHAT WE DELIVER.

MARICO STANDS FOR ‘DOING MORE’ EVERY DAY. HOW DOES THAT TRANSLATE INTO YOUR BUSINESS WHEN IT COMES TO HIRING TALENT, GOING GREEN AND CSR ACTIVITIES?

Our purpose is not just doing more for ourselves but also for

our stakeholders, the society, our members, our own talents, our

associates and our consumers. All our relationships with our

associates are built with a purpose, which is a win-win and long-term

relationship. This automatically translates into talent as we have a

unique talent value proposition of challenging, fulfilling work.

The Marico Innovation Foundation is driving and championing

the cause of innovation among Indian entrepreneurs, sharing best

practices, awarding them and recognising them in order to include

them in the virtuous cycle of innovation.

Sustainability is also a critical aspect of our business. We ensure

that all our products are natural, and our most important philosophy

remains that we deliver what we promise and we promise what we

deliver.

7NIELSEN CXO SERIES Copyright © 2013 The Nielsen Company

ABOUT NIELSEN Nielsen Holdings N.V. (NYSE: NLSN) is a global information and

measurement company with leading market positions in marketing

and consumer information, television and other media measurement,

online intelligence, mobile measurement, trade shows and related

properties. Nielsen has a presence in approximately 100 countries,

with headquarters in New York, USA and Diemen, the Netherlands.

For more information, visit www.nielsen.com.

Copyright © 2013 The Nielsen Company. All rights reserved. Nielsen

and the Nielsen logo are trademarks or registered trademarks of

CZT/ACN Trademarks, L.L.C. Other product and service names are

trademarks or registered trademarks of their respective companies.

The views and opinions expressed in this article are those of the client

and do not necessarily reflect those of Nielsen. All data provided in

this article is for informational purposes only.

8 NIELSEN CXO SERIES