SAFFOLA OIL Saffola, the flagship brand of fmcg major Marico in the cooking oil space has over

the years become well-entrenched in the minds of the consumers as a health and wellness brand. This led the company to extend this brand name to its other offerings in the packaged foods category. The company sought to leverage the positioning of Saffola as a health brand for other products in this category. The obvious logic behind this was that in a fiercely competitive market with players like HUL, Pepsico, Conagra and Nestle, it was essential to use the health plank for positioning as consumers became more health conscious. It first started with Saffola low sodium salt and atta for diabetics which did reasonably well and created a niche market segment. In feb 2010, Saffola Arise, a low calorie and low carbohydrate packaged rice brand was launched after being successfully test marketed in the high rice consuming states of Maharashtra and Andhra pradesh. So far the response has been good and according to company sources there are a good number of instances of repeat purchases. Seeing the good response the company has also started test marketing Saffola oats from june 2010 in some select cities especially in southern states where oat consumption is high. But in this brand extension spree there was one launch which failed miserably and that was Saffola Zest, a salty snack with different flavours. It was launched in mid 2009 but was withdrawn from the market in dec 2009 after it registered low sales and could not generate good consumer response. What could have gone wrong ? Brand extension works well when there are certain core similarities that seamlessly connect two or more products via the brand being used for extension. This basically means when a consumer buys a new product with brand name borrowed from an existing product, he/she should be able to connect this product to the existing one through some core value propositions. In case of Saffola Arise and atta this value proposition was firmly pronounced , just as we consume cooking oil everyday in some or the other food item and yearn for fried food items , in the same way we prefer to consume rice everyday and yearn for it, and in both the case health concerns should be taken care of and saffola brand name reassured consumers about this. But in the case of salty snacks it is the taste of the product which is the overriding factor since snacks are not consumed in bulk and thrive on impulse buying, so health concerns take a backseat. This could have rendered Saffola brand name irrelevant to a certain extent. So the lesson that could be learnt from this is that brand extension exercises have to be undertaken while taking into account the synergies that would be created as a result of this and not merely a common umbrella name. Q What is meant by "grown without pesticides"? A "Grown without pesticides" means that no pesticides are used on the farm to grow the

crop. In addition, pesticides are not used throughout harvesting, processing, and storage of the seed or oil. Q How is the Saffola "grown without pesticides" standard validated? A There are four levels of control to validate the standard. (1) Each farmer gives a written statement of compliance both in their production contract and in their statement to the local county agricultural commissioner. (2) Each grain company contracting for Saffola follows the crop throughout the growing season. Field personnel work with the farmers to ensure that the standard is followed. (3) Field Crops Auditing (sm) of Davis, California independently inspects and reviews all aspects of the program, including every field and facility, following the crop from seed to harvesting to bottling. The verification assures the consumer that Saffola has lived up to its environmental promise. (4) In addition, Saffola makes use of the State of California mandated Pesticide Use Reporting (PUR) program to further substantiate the "grown without pesticides" compliance. Q How does this differ from "organic"? A Organic farming has a strict and complex definition, that varies from Saffola is harvested state to state; but organic production does allow use of certain organic in early September pesticides, none of which are allowed in Saffola's "grown without pesticides" claim. Saffola's farming methods share one of the major goals of organic farming, to reduce environmental damage from chemical pesticides. And, since Saffola's farming is large-scale and highly productive, Saffola Oil does not carry the super-premium price of organic products. Q How are pests and weeds kept from harming the safflower crop if pesticides are not applied? A Saffola's farmers use a variety of methods to control damage to the crop. Some examples include: crop rotations that limit disease and weed build-up, innovative and conventional tillage practices; choosing crop varieties and developing new varieties that are better adapted to a pesticide-free production system; and choosing farm locations, field topography, and climate zones advantageous to pesticide-free production. In addition, time of planting, rate of seeding and control of irrigation play important roles. These methods may result in the risk of slightly lower yields per acre: however, Saffola believes that the social and ecological returns more than offset these factors. Q What environmental benefits does Saffola Oil "grown without pesticides" provide? A Saffola's farming methods do not pollute the crop, soil, underground water or the air. In

addition, farm workers are not exposed to any pesticides while working with Saffola "grown without pesticides" crops. Q How is Saffola Oil made? A Saffola Oil is made from the seeds of the safflower plant. The plants (of the thistle family) are very hardy and drought resistant, with an aggressive tap root that can search up to 12 feet for water. The safflower plant can capture necessary moisture better than soybean, corn, and canola crops. In the Western states, safflower is a favorite crop for rotation with field crops such as wheat, barley, and processing tomatoes. The West has the perfect climate for growing safflower due to the hot and dry summer months. Safflower blooming in mid-summer Safflower is planted from late January through early May and harvested from mid-August to mid-September. In early summer, the flowering thistles at the tops of the four foot plants produce brilliant yellow, orange, and gold blossoms. By mid-summer, these thistles become dry and turn brown in color. Combines mow the safflower fields at harvest time and separate the seeds from the plant. The seeds go through a crushing process where safflower oil is extracted. High protein meal remains after the safflower oil is removed. The meal is used for animal feed. Q What are the nutritional benefits of Saffola Oil? A Saffola Oil is higher in monounsaturates than any leading vegetable oil and lower in saturates than soybean oil, corn oil, sunflower oil or olive oil. Monounsaturates have been shown to help lower cholesterol levels when used as part of a cholesterol-reducing diet. 1985 Study by Mattson & Grundy (Journal of Lipid Research 26:194 1985) demonstrated that a high monounsaturated diet was equally as effective as a high polyunsaturated diet in lowering undesirable LDL cholesterol; and, unlike the polyunsaturated diet, the monounsaturated diet conserved the desirable HDL-cholesterol. Like all vegetable oils, Saffola Oil is naturally cholesterol free.

Q How can Saffola Oil be used? A Saffola Oil is an all purpose cooking oil. Its light, clear color and mild, delicate flavor make it excellent for salads, sauteing, and baking. And because Saffola Oil is high in monounsaturates, it is extremely heat stable, excellent for frying, and can be used in place of any cooking oil. Q What else is Saffola doing for the environment? A Saffola has taken further steps with their packaging to provide an environmentally responsible product. Saffola purchases plastic packaging from plastics suppliers that are taking part in voluntary recycling programs. All of Saffola's plastic packaging carries the triangular arrow recycling symbol on the bottom of each bottle. The new retail-size bottles are made of PET plastic and take up less shelf space, and require less packaging in their shipping cartons. What about Marico's cooking oil brand-Saffola? A. On Saffola we have leveraged the current leaning towards the health trend, the wellness concept in an innovative manner. The busy executives and professionals, today, are looking for lifestyle interventions necessary to counter the stresses of personal and professional life; and all of them are in a search mode for solutions.

Saffola has taken initiatives to bring solutions to their doorsteps, and what better place to do this but the office itself. Hence the Saffola, 'Direct to Office' initiative. In this programme, interesting information is shared by an eminent cardiologist, on the lifestyle interventions. Diet forms an important part of this lifestyle intervention and which is where the brand Saffola fits in. For the same insight, we also have a Direct to Consumer Programme where the wives of executives and professionals are addressed. So Saffola this times goes to their homes. This programme though involves sharing interesting information through a dietician on the food. This is done because housewives interest lie in practical interventions (recipes, cooking tips, etc.) necessary to counter the stresses life. Here the housewives are addressed through talks and recipe shows World Heart Day as a concept existed, however, Saffola recognised the potential and leveraged it as an opportunity to involve audiences with the message of Heart Care. There were ' 2000 free heart check ups' offered by Saffola at key locations on the World Heart Day in various metroes (e.g. Churchgate Station in Mumbai). While through the check ups, only a few people were reached, it was the messages in media which touched millions endearing Saffola to them all and also inextricably linking Saffola to 'Healthy heart', which is the brand message we want to spread. The fabulous response on our website was a testimony to it all - we had 26,000 visitors to the website in 15 days.

Q:Marico is also planning to launch products into the health foods category under the existing brand of 'Saffola.' Do think a market gap exists? If yes, then what are the reasons, which have led to this gap in the market? A. 'Health' and 'wellness' in the context of the FMCG category is becoming an increasingly important need area for today's consumers. Increasing health consciousness, pollution, stress, and a host of other lifestyle-related factors have led to this trend gaining prominence - and this is a trend that is not restricted to only large metros. A number of products (some of them even non-FMCG) are now talking about health in different ways - durable companies, Malted Food Drinks, Beverages, Tea, Water Purifiers, are some of them. In the context of Indian food products, the need for "healthy" foods is becoming even more important. Saffola has a very strong healthy heart equity, and is a trusted brand that has gone from strength to strength over the years. It thus provides us with an ideal platform to capitalize on this trend of increasing health consciousness by offering a number of new food products that are able to cater to this need area. And of course, the food products have to be in sync with the Saffola imagery and values.

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Case Code : MKTA005 Case Length : 14 Pages << Previous Period : 1990-2004 Pub Date : 2004 Saffola provides us with an ideal platform to capitalize on the trend of increasing health consciousness by offering a number of Teaching Note :Not Available new food products that are able to cater to needs in this area. Organization : Marico - Arvind Mediratta, Erstwhile Head-Marketing, Marico Industries Industries Ltd.1 Industry : FMCG, Fast Moving Consumer Goods Introduction Countries : India Marico Industries, a well-known Indian Fast Moving Consumer Goods (FMCG) company, offered unique and ethnic Indian To download Marico products. Marico was famous for its 'Parachute' and 'Saffola' Managing 'Saffola' case brands. In a survey carried out by 'Brand Equity' of The Economic study (Case Code: Times in early 2003, for India's 100 most trusted brands, Saffola MKTA005) click on the ranked 75th and Parachute ranked 29th. Marico's brands had button below, and select shown resilience against competition and maintained their the case from the list of market shares over the years. Marico had maintained a steady available cases: sales and profit growth over the years with a consistent Return On Capital Employed (ROCE) of over 30%. In a survey of 500 companies conducted by 'Businessworld' in 2003, Marico ranked 16th in terms of ROCE while it ranked fourth among FMCG companies. Marico's products reached around 100 million Indians every month through 17 lakh retail outlets, which were serviced by its nation-wide distribution

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network comprising six regional offices, 32 Carrying and Forwarding Agents (CFAs) and 3600 distributors and stockists2. Marico entered two new lines of business in the year 2002-03 Skin Care services through its 'Kaya Skin Clinics', and Ayurvedic Skin Care Products business in the US by its acquisition of a controlling stake in 'Sundari LLC', which owned the Sundari line of skin care products. Background Note Marico's origin went back to 1862, when Kanji Morarji, set up a small trading business for spices sourced from Kerala, in Bombay. In the early 20th century, he inducted his cousin Vallabhdas Vasanji into the business. Together they exported pepper and ginger to Europe. The title of 'Mariwala' ('mari' meant pepper in Gujarati, an Indian language) was attached to Vallabhdas Vasanji, owing to his expertise in pepper trade.

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Please note: This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary

information source. Background Note Contd... In 1948, Bombay Oil Industries Limited (BOIL) was established, by the family with facilities for coconut oil extraction, crushing and refining of vegetable oils. BOIL set up four manufacturing plants between 1947 and 1971- at Sewree for coconut oil extraction, at Mazgaon for refining vegetable oils, a chemical plant at Bhandup, all the three in Bombay and a spice extraction plant near Cochin, Kerala. Vallabhdas had four sons Charandas, Jayasinh, Hansraj and Kishore, all of whom were engaged in the family business. The eldest, Charandas was the Chairman and Managing Director of BOIL while his younger brothers were on the Boards of Directors of BOIL and its subsidiaries. In 1983, BOIL formed three divisions - the Consumer products division, Fatty acids and Chemicals division and the Spice Extracts division. Harsh, the only son of Charandas, who joined the family business in 1971, developed the Consumer Products business in BOIL and functioned as Executive Director from 1980 to 1990. In the 1980s, the next generation of Mariwalas entered the business. In April 1990, BOIL was restructured from a single corporate entity into a multi-corporate entity. Accordingly, five companies commenced business by taking over the various businesses of BOIL. (Exhibit: I). The Consumer Products division was hived off as a separate company and the newborn entity was named Marico Industries Limited (Marico). Harsh took over as the Managing Director of Marico in 1990. The major operating divisions of Marico were Nature Care, which had products like coconut oil, hair oils and fabric care, Health Care with edible oils and processed foods and International Business and Distribution, to take care of overseas business. Marico made its Initial Public Offer in March 1996.

Marico had its own manufacturing facilities at Goa, Kanjikode (Kerala), Jalgaon (Maharashtra), Saswad (Maharashtra), Pondicherry and Daman. These facilities were supported by subcontracting units. Marico also planned to set up a manufacturing division for its hair care products in Uttaranchal, in 2004... Brand Building In April 2003, Marico reorganized its business and brought Nature Care, Health Care and the International Business Group under a single division - Consumer Products. This profit center comprised the operations of Marico Industries and Marico Bangladesh Ltd. (MBL), a 100% subsidiary of Marico. It manufactured and marketed ten brands'Parachute', 'Saffola', 'Hair & Care', 'Shanti', 'Sweekar', 'Sil', 'Mealmaker', 'Oil Of Malabar', 'Mediker' and 'Revive'... Saffola Edible Oil Edible oils could broadly be categorized into vegetable refined oil, hydrogenated oil (vanaspati) and bakery fats. The major edible oils produced and consumed in India were groundnut, sunflower, safflower, soya, castor seed, cottonseed, mustard and sesame seed. While pure groundnut oil could be directly consumed or refined to have higher purity, oils such as soya had to be refined to make them edible grade. Groundnut oil was the most widely consumed oil in India. But groundnut was a monsoon crop (Kharif), vulnerable to the vagaries of monsoon. In 1986, the Government of India set up a Technology Mission for Oil, to increase production of oil seeds and oil and reduce dependence on imports. Oil seed production witnessed a sharp increase from around six million tonnes in the 1980s to around 22 million tonnes in the early 2000s.

The late 1980s marked a period of intensifying competition in the refined edible oil category. ITC - the Indian offspring of British American Tobacco Company and National Dairy development Board (NDDB) began extensive cultivation of oil seed crops... Saffola Salt The five million tonne Indian salt industry was mainly an unorganised business. Branded salt accounted for only a fifth of the market valued at Rs. 500 crore. Launched in 1983, Tata Salt held the Number One position in the country, with a 37% share of the branded-salt market and an 18% share of the total salt market. Tata Salt was positioned as a pure salt with the tagline 'Desh ka namak'. The first competitive challenge to Tata Salt came in the early 1990s with the launch of DCW Home Products' Captain Cook... Looking Ahead Saffola had always focused on the heart. The brand's image had suffered a setback in the early 2000s with the ambulance commercial, which portrayed that one had to rush to the hospital if he did not use Saffola. Later, Marico changed Saffola's positioning, focusing on the health of the entire family with its 'Sehat se jeena hai' campaign. Since the overall health positioning did not yield results, Saffola was moved from the family health positioning, once again to the original heart care positioning in 2004. In February 2004, Marico launched a fresh advertising campaign for Saffola, after a gap of two years. The campaign by Grey Worldwide had a new tagline, Aaj se jeene ka andaaz sudhariye (Improve your lifestyle today), urging every Indian to take up a healthy lifestyle.

The TV Commercial focused on a little girl approaching various groups of people to pass on the message of heart care. The new campaign was based on research done by SHHF... Exhibits Exhibits I: BOIL in 1990 Exhibits II: Marico: A Comparison in 1991 and in 2003 Exhibits III: An Overview of Marico's Brands -2003 Exhibits IV: TVC for Saffola Exhibits V: TVC for Saffola Nutriblend Saffola oil spill by Preeti Khicha March 16, 2009 Saffola, a leading brand of commodity products in India, knows that it must pay attention to online customer engagement to ensure that visitors stick around for more than just a few minutes as they do at a supermarket shelf. The Saffola brand, owned by Marico Industries, retails a portfolio of products like salt and flour, but the brand name is popularly associated with its core productcooking oil. In the cooking oil segment, the brand has garnered tremendous trust and is practically a generic name among homemakers. The brand has been very successful in promoting health as a central theme throughout its messagingespecially on its website, where a diverse selection of products is featured. On the brands homepage, the sites color scheme is reminiscent of the brands bright yellow packaging that stands out in grocery stores. The center of the homepage is dedicated to promoting the brands latest offering in the marketa salty baked snack called Saffola Zest. The imagery of a happy Indian family grabbing a bowl of snacks conveys that the product is a healthy snack meant for everyone. Given the health controversies revolving around the oil and salt content of potato crisps, the launch of this healthy optionwith its call to Say No To Fried Snacks. Say Yes To Baked Goodness.is well timed, and should garner sales

among health-conscious consumers. Details on the product are displayed in a simple mannerflavor, price and some bullet points on its healthy aspects. There are no overwrought or glitzy descriptionsperhaps to compel visitors to stay curious and take the extra effort to learn about the product. The rest of the homepage follows a clean layout and is focused on other relevant details about Saffolas brandits products and recipes and its commitment to health and wellness. Clicking on the Products section leads to a page that explains how Saffola flour is beneficial for diabetics. Sadly, other products are somewhat hiddenfor no apparent reasonon the left menu bar of the page. In terms of layout, the brand could definitely take a few pointers from Wessona brand of vegetable oil produced by ConAgra foods. Rather than scattered content, the Wesson site has a well-structured products page where color and layout blend beautifully together to create a page that is visually appealing. Sticking to its objective, the site has all the necessary tools to effectively characterize Saffola as a health-conscious brand. The Eating Right section educates the reader about nutrition myths, beverages, health benefits from particular plants and other pertinent health topics. Also, accompanying images break any content monotony and make the page more reader friendly. The Healthy Heart link on the homepage transports the web user to a section that outlines the initiatives the brand has taken in the community. The company has organized several outreach programs, and details on such events are available online. Corporate social responsibility is an important facet of any brand today, and Saffola does an admirable job describing these initiatives on its site. A more prominent header, however, would ensure that visitors dont miss this section while browsing. Given that Saffola is in the food business, the Recipes section is important. Saffola keeps its target audience (housewives) happy with an extensive roster of recipes but could exhibit more business savvy by weaving Saffola products into the recipessimilar to what Bertolli has done. Another value addition to the site could be a section on quotes from the experts, where leading Indian doctors can give their opinion on the benefits of Saffola products. From health tips to the Dial-a-Dietician feature, the site successfully conveys the message that Saffola is a health-conscious brand that cares about its consumers. Yet the website could expand its online presence by providing information detailing its parent company's plans to leverage Saffolas brand equity. The Saffola website is a wise place to execute this endeavor.

Edible Oil market: In the premium refined edible oil market, Maricos Saffola faces fierce competition from Sundrop in terms of volume, with the former holding close to 50% share. Safollas message has been clear. By showcasing mild fear, its commercials aim to introduce heart care through the edible oil. Its approach is preventive. The kal se campaign brought a quantum leap in sales while the thief ad, and dil ka haal reinforced the same idea to slightly varying targets- ranging from heart patients to the 30 year old man, who is likely to face heart problems with the kind of lifestyle he is leading. The Prayaschit/repent ad (guilt after indulgence in food) directly targets the housewife who is, most often, the buyer in this case. Having established Saffola as a healthcare product, Marico continues to leverage its positioning into segments like packaged wheat flour, rice, and breakfast cereals with a strong health quotient.