Case Analysis on Saffola

Case Analysis on THE SAFFOLA JOURNEY

Submitted To: Dr. Dindayal Swain

Submitted By: Shiva Krishna Padhi

Date: 20THAugust 2012

DECLARATION

I hereby declare that the Case Write Up on The Saffola Journey , submitted to Dr. Dindayal Swain, is a record of an original work done by me based on its case reading.

Shiva Krishna Padhi

Index 1.

Case Summary/Introduction

2.

Basic Issues

3.

SWOT Analysis

4.

Strategies

5.

Reference

1. Introduction: This case critically analyzes the positioning journey traversed by Saffola, one of India's leading cooking oils. For nearly half a century, Saffola was strongly associated with the health of the human heart, with its visual language, communication strategy, and brand positioning, all revolving around heart-related risks. With changing trends and market sentiments, Saffola became painfully cognizant of its shrinking relevance as a brand, indicated by stagnating sales, thus posing a unique conundrum: how should Saffola expand its user base to include non-heart patients, while still being relevant to its current, loyal user base? In order to address this, the marketing team at Saffola undertook two re-positioning exercises, one in 2001 and the other in 2004. 1.1.history Harsh Mariwala, the Managing Director of Marico Ltd, had joined his family business. The company was Bombay Oil Industries Ltd. In 1983, BOIL formed three divisions: the Consumer Products Division, the Fatty Acids and chemicals Division, and the Spice Extracts Division. Harsh Developed Consumer Products Division and functioned as Executive Director from 1980 to 1990. In April 1990, Boil was resurrected; the Consumer Products division was made into a separate entity named Marico Industries Limited. Harsh took over as the Managing Director of Marico in 1990. Marico was transformed into high quality consumer Product Company.

The major operating divisions were Nature Care and Health Care. Marico pioneered the introduction of branded products in the markets that were until then entirely commoditized in India. Parachute and Saffola were Marico’s flagship brands in the hair oil and edible oil categories, respectively. Marico made its initial public offer in March 1996. Saffola launched as edible oil in 1960s. After a couple of decades, Saffola had carved a niche for itself in the edible oil category. Marico recognized that there is a huge potential for edible oil in India and initiated a strategic focus to develop the Saffola brand. 1.2. Healthy decade •

Higher PuFA (poly unsaturated fatty acid) used in marketing efforts.

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Consumers were mostly urban dwellers who belongs to SEC A.

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Doctors recommendation to use this brand.

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Above the line promotions to strengthen its position within the heart patient.

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Indirect methods to reinforce the brand as therapeutic for the heart.

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The twin-pronged strategy i.e heart patients were increasing in india and people were thinking that they were taking some precautionary action.

1.3. new challenges to the new century •

Sales had begun to stagnate

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Brand variants were Saffola and Saffola tasty.

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Increase intensity of competition.

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Narrow segment of consumers i.e. heart patients.

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Premium price.

1.4. Consumer study In 2001, Marico used a market research agency to find the root cause of stagnation of sales and for brand repositioning. Quantitative research was done on eight families on in three metropolitan areas. The objective of the study was to understand the customer and the homemaker’s reaction to the brand, evaluate the brand’s marketing mix, assess competition and develop cues to adjust the positioning and overall strategy. Cooking oils were mainly of two types: Heavy and Light. In second type, Sundrop was competing brand and clear leader and having high recall value and later Saffola almost near. The Key highlights were: •

Saffola had higher recall values

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Perceived as light, refined and healthy cooking oil

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It is viewed as problem-solution brand

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Customers were forced to spend more than they would have preferred.

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Saffola Tasty had a low recall value.

1.5. repositioning for growth The objective of the ad campaign hired by Marico Ltd was to reposition such that the franchise would be broadened without losing the price premium. The agency decided to evaluate pros and cons of Saffola’s current brand image, and consider whether to leverage its existing strengths or reposition the brand altogether. Saffola brand was studied using Kapferer’s brand prism framework. In this prism a brand is evaluated on six dimensions: three internal (physique, personality, and culture) and three external (customer self-image, relationship, and customer reflection). Through this model, the team exposed to a clear articulation of what Saffola stood for.

Some elements were detaching the Saffola’s long term goals. Physical facets such as heart imagery, strong brand name benefited Saffola. The brands personality was viewed as detached and authoritative, akin to customers’ likely referral source. The brand lack direct emotional involvement with the customer. It had built a culture of fear around itself.

Kapferer’s brand prism Brand Saffola was studied under above framework. Through this model the team was exposed to a clear articulation of what Saffola stood for including the positive and negative attributes. The team felt to position itself as an optimistic, forward looking brand. Saffola should reposition itself as a brand for healthy living, rather than just for a healthy heart, thereby including all the family members. In the brand prism fear was replaced with care and happiness, therapeutic was replaced with proactive, and heart was replaced with health. To communicate this new positioning it launched Saffola Nutriblend. Saffola positioned itself as the choice for healthy living. An ad was released with title ‘Sehat Se Jeena Hai’. The 30 second ad resulted in drastic shift from the negative imagery that it had employed in the past. The commercial ended with a byline “SaffolaThe heart of a healthy family”. In order to drive the new positioning platform, Saffola engaged below-the-line marketing activities. Saffola used doctors to promote the brand. It made a step further by initiating tie-ups with sports clubs, health clubs and gyms.

Saffola experienced 15% growth initially and the Saffola team was happy about the results. But after the end of campaign the sales were again stagnated. Again analysis was done on the dip of sales. It was found that most of the users were old users, and they were experimenting the new variant. The repositioning had not worked.

1.6. Back to the drawing board Saffola hired a new ad agency to analyze what had gone wrong. Two main sources were used to obtain the information. •

Series of interviews were conducted with the customer base. This revealed that consumers still believed it is specifically related with heart. About 35 to 40% of volumes were achieved through doctor advice. About 85% of consumers were suffering with heart ailment (random sample of 20 users).

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The second source was a study conducted by the Saffola Healthy Heart Foundation. It revealed that 1 out of 4 adults at a risk of heart problem. This clearly indicated that there is a chance for improving sales by the Saffola.

Saffola gained a strong market share and became a brand of choice in its existing market segment. It had managed to establish the cognitive brand of meaning as “the best heart care oil”. It had this segment in its pocket. It was trying to grab non-heart related segment. It had decided to broaden its appeal to include whole new segment mainly women or couples in the age group of 25 to 45 years and living in metros. Individuals of this segment had basic health consciousness. Most individuals in this group were busy with their packed lives. They even don’t have time to take care of their health but they are worried. These individuals know the need of healthier lives. But it didn’t turned into action. Saffola decided to include this “hopefully healthful” lifestyle segment into its ambit. It recognized that, to this group, the idea of healthy living is so important, and a healthy heart was just the starting point. In order to combine its core competence with this segment, agency arrived at “first step to healthy start” positioning strategy. The aim was also to draw the user’s attention on how heart plays a crucial role. The idea of this strategy is to place from wrong side of the heart to right side of the heart. It decided to position this strategy through sub product Saffola Gold. Saffola Nutriblend was discontinued. Agency believed that Saffola needed to shift from the culture of fear to culture of trust. The customer self image was redefined as health-conscious but carefree. The ad agency put together a brand new campaign for the Saffola marketing team titled “Kal Se”. The ad portrayed a protagonist as constantly making a symbolic effort to become healthier, but

falling short on determination each time. Recognizing her husband’s complacency, the lady decides to take matters into her hands and switches over to Saffola Gold. The team decided to above-the-line marketing, in addition to this it decided to employ a 360degree marketing approach, with a strong below-the-line plan. It sponsored Laughter Olympics, Dial a Dietician programs, TV shows such as Jassi Jaisi Koi Nahin, and Astitva. In order to rejuvenate its older customer segments, Saffola extended its brand product line in rice, oats, salt, and atta under the brand name “Saffola Functional Foods”.

2. Issues: •

Analyzing the dynamics of the brand's image, identity.

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Positioning in tandem with changing consumer trends and market conditions.

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Brand’s marketing mix.

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Would they be able to connect with their consumers in a relevant manner?

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How far the 360-degree marketing plan helps Saffola brand?

3. Swot analysis: STRENGTH •

Higher PuFA

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Higher recall value

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Most trusted brand in cooking oils.

WEAKNESS •

Prescription brand tag

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Fear factor

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Higher premium

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Taste indifference

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Cannibalism

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No direct emotional connection with customers

OPPORTUNITY •

Compromise in premium

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Research and Development on the taste extracts.

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Smart segmentation strategy i.e. psychographic segmentation and non demographic segmentation.

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360 degree marketing- it means bringing a brand into life, using all possible contact points

THREAT •

Sundrop competition

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Health Consciousness of the people.

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People reception of the brand.

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Repetition of 2001 scenario.

3. Recommended strategy:

1. Process narrows down from broad opportunities to specific strategy. 2. Segmentation helps in pin pointing the market. 3. Narrow down to a superior market marketing mix. 4. SWOT analysis highlights advantages and disadvantages.

What is narrowing down to target market:

What dimensions are use to segment market:

4. Reference: 1. http://tutor2u.net/business/marketing/segmentation-targeting-strategies.html. 2. http://outtoown.com/2010/11/02/strategic-marketing-segmentation-the-6-consumersegments/.