Digitization, Premiumization, and Innovation: How this company builds bridges between its portfolio brands and customers! [Monday: Marketing Marvels]
Digital marketing plays an important role in increasing a brand’s online visibility.
Some key elements of this strategy include content marketing, video marketing, web design, etc.
… but does digital marketing only help boost your brand’s online presence?
The answer is NO.
You may also use this strategy to connect with your target market and expand your business’ reach!
Let’s take a look at how one company used digital marketing to communicate with its customers and reach out to next-generation consumers.
Marico Limited is an Indian company that provides consumer products and services in the areas of health, beauty, and wellness.
The company owns brands in the categories of hair care, skin care, edible oils, health foods, male grooming, and fabric care.
Some of these portfolio brands include:
- Hair & Care
- Parachute Advanced
- Nihar Naturals
At present, Marico distributes its products in over 25 countries across Asia and Africa.
What are some of the marketing strategies the company uses to reach its target market?
In 2014, Marico started using this strategy as customers increasingly spent more time surfing the Internet.
One form of digital marketing that the company focused on?
Marico believes as technology continues to advance, digital marketing will also evolve. That’s why the company taps into the power of demographic-specific digital content.
According to Girish Rao, Marico’s former Head of IT and Business Analytics,
“As consumers are becoming IT savvy and mobility is getting more penetration, the only way to reach out to consumers is in the social and digital way. Digital media is everywhere and consumers can access the information from anywhere. It helps you find out what’s working and what isn’t in real time.”
Rao also said there are two more reasons why Marico values content marketing:
The more people see the company’s content online, the more familiar they will be with the brand. This will enable Marico to:
– Develop trust and rapport with its target market.
– Generate ROI (return on investment).
– Experience business growth.
– Sustain competency in the digital age.
- Content marketing provides insights about a consumer’s buying patterns and online behavior. This allows Marico to further improve its customer-centric strategies and gather a consolidated view of customer preferences and expectations across the Web, social media, etc.
Here’s one type of content that the company launched in 2014:
The Fit Foodie!
Initially, The Fit Foodie was just a series of videos on YouTube where Michelin star chef Vikas Khanna talks about and cooks some healthy recipes using Marico’s Saffola Masala Oats.
Since Marico is all about beauty, health, and wellness, it wanted to get online users’ attention through healthy and delicious recipes that help maintain or improve their body shape.
When The Fit Foodie started gaining popularity on the Internet (thanks to Chef Khanna’s appeal, too), Marico upgraded this type of content by creating a website for it.
This made a lot of Chef Khanna’s fans and other health-conscious consumers flock to the website and search for various recipes… and that’s also added exposure to Marico’s Saffola brand!
See? By creating content that’s relevant to its core business, Marico made digital marketing fun and consumable for its target market!
What other marketing strategies does the company use to connect with its customers?
Premiumization and Innovation
According to an article from Advertising and Media Insider India, premiumization helps bridge the gap between luxury products and products with more mass appeal.
This strategy also makes products more attractive to millennials and other younger audiences, making them want to even pay for more to get a better customer experience.
… and for Marico, premiumization and innovation have been part of its growth area since 2019.
Chief Marketing Officer (CMO) Koshy George said these are some of the things Marico is looking at to create more value for consumers.
In his words,
“There is obviously some price or promotions we have initiated in the market that ensure people get the right value. Moreover, if you look at the other spectrum, there are channels like modern trade and e-commerce that continue to grow and premiumize. So at the end of the spectrum, we are looking at getting more premium innovations to drive growth.”
One of the brands where Marico used its premiumization and innovation strategy was Livon.
According to George, the brand currently dominates around 70% of the hair serum sector.
So… how did Marico raise market awareness for this hair care brand?
By driving relevance and consistently building the Livon category!
Since most Indians are still rooted to using oils for their hair, the company uses the brand to educate consumers about the importance and benefits of serum as a hair care product.
Marico constantly works on its upgrades for the Livon portfolio while promoting the products around the proposition of salon finish hair!
Additionally, the company launched Livon Colour Protect, which is designed to protect colored hair.
Thanks to its premium and innovative products, Marico is able to encourage and convince its target market to try its offerings.
In the past five years, Marico Limited has recorded revenues of:
- INR 60.2 billion in 2016
- INR 59.1 billion in 2017
- INR 63.0 billion in 2018
- INR 72.8 billion in 2019
- INR 72.6 billion in 2020
By looking at these numbers, we can see that the company’s digital marketing, premiumization, and innovation strategies had positive contributions as Marico recorded a higher revenue in 2019 compared to the past three years.
Marico Limited’s Earning Power: Valens Research vs. As-reported numbers
Marico Limited (531642:IND) makes for a great case study that we come back to regularly. One great reason?
The company has proven itself to be a better earning power generator than investors might think.
So, how well has Marico been growing its business in the past years?
The research doesn’t lie—nor do the results. Earning power (the blue bars) continues to show results higher on average than what traditional databases show.
The blue bars in the chart above represent Marico’s earning power (Uniform Return On Assets). Marico has seen generally robust profitability. Its Uniform ROA ranged from 16% to 53% in the past sixteen years, or an average of 35%. Uniform ROA is at 39% in 2020.
The global ROA is just 6%.
The orange bars are the company’s as-reported financial information. If you relied on these numbers, you will see a company with understated profitability. As-reported ROA (return on assets, a measure of earning power) only ranged from 11% to 20% in the past sixteen years. Its as-reported ROA in 2020 was only at 17%, which is over 2 times lower than its Uniform ROA in 2020.
That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.
The company’s stock price also performed better than the rest of the stock market over the decade, which we can see in the blue line in the chart below. Its returns have been well above the market.
The numbers show that Marico has been doing well and making a profit.
According to CMO Koshy George, there is a huge opportunity in premiumization in the personal care category.
… and the company will focus on that in the coming years by investing in new brands, formats, and benefits for customers.
As Marico does that, it will also consistently tap into the power of digital marketing.
To expand the company’s customer base not only in Asia and Africa, but also across other continents in the world!
About The Dynamic Marketing Communiqué’s
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.
…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.
However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).
By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Head of Marketing
Valens Dynamic Marketing Capabilities
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