Fogg’s Fragrance in Indian Deodorant Market: Category Challenger with Unique Marketing Mix
“We were studying the deodorant market prior to launch and found that there was space for a product such as Fogg. People were actually looking for a product which had no waste when applied.”
– Darshan Patel, Founder CEO, Vini Cosmetics Pvt. Ltd.
Fogg, a late entrant into the Indian deodorant market, has created quite a stir since its launch in December 2011. It had emerged as a strong contender in the 20 billion Indian deodorant market and commanded an overall market share of 17% (deodorant for men and women) by early 2014, giving tough competition to the market leader Hindustan Unilever’s Axe (deodorant for men).
The Founder CEO of Vini Cosmetics Pvt. Ltd. (Vini), Darshan Patel (Patel), earlier (as a co-founder of Paras Pharmaceuticals) had created market disruptive products for the Indian FMCG, especially in the OTC (Over-the-Counter) personal care segment. He had come up with successful products like Moov and ItchGuard. After Paras Pharmaceuticals was sold to Reckitt Benckiser in 2010, Patel soon started Vini and launched products like 18+ and Jinjola Talc. With the consumer feedback from the launch of 18+, Patel identified a latent gap and created a product to fill the gap. He tweaked the marketing mix to create a differentiated product and redefined the rules of the game with his category challenger – Fogg, which promised ‘No Gas and More Sprays’. By 2014, Fogg was ₹2 billion brand and the company was valued at ₹11 billion. However, with competition growing with the entry of various brands like Layer’r and Shot, offering similar propositions, how long would this winning streak continue? Would Patel be able to recreate the Paras’ magic of being a market disruptor at Vini Cosmetics as well?................
Darshan Patel: The Category Catalyst
Darshan N. Patel, along with his brothers Devendra Patel and Girish Patel, from Gujarat, was the co-founder of Paras Pharmaceuticals and owned one-third stake in the company. While at Paras, Patel had built a reputation of being a market disruptor with his innovative OTC products and brands.
Despite the lack of a formal grounding in the basics of branding and marketing, Patel had strong business acumen. He asserted on creating a place in consumer’s mind for the brand which he backed through market research..........
Indian Deodorant Market: Facades of Fragrance
History of Deodorants in the World
Deodorants had been in use in the world for many thousands of years. However, the methods used to deodorise were a little less convenient and at times weird. Ancient techniques included taking a scented bath, application of scented oils on the underarms, shaving underarm hair, applying perfumed fat on the scalp and using mineral salts/rock salt that killed off underarm bacteria and prevented bad smell.......
Indian Deodorant Market
The deodorant market is divided into two segments – men and women – which are further categorized as anti-perspirant, long lasting fragrance, attention seeker, etc. With increasing disposable incomes, India has witnessed growth in the deodorant sales during the last decade. “Where 10 years ago, soaps or creams were driving growth for FMCG companies, today, deodorants are driving the growth,” says Anand Ramanathan, Associate Director, KPMG.............
FOGG: A New Fragrance in Indian Deodorant Market
In 2006, Patel sold his stake in Paras to a Private Equity (PE) company Actis for $43 million. In 2010, he formally launched Vini Cosmetics (Vini) by investing about 700 million16 in a talcum powder manufacturing facility. During the gap of 4 years, he studied the market and worked on new product ideas. He identified that the talc market grew only by 1%-2% in the past few years, but the deodorant segment grew 20%- 30%. Patel said, “As income grows, people’s aspirations grow too. So, they move to better products like deos from talc. Also, deos are considered more user-friendly.”...........
Challenges
While Patel expected revenues of ₹3 billion by the close of 2013-2014 accompanied by some profits, investors were lining up to make investments in the company. Sequoia Capital, a venture capital firm, pumped in ₹1.1 billion into Vini in August 2013 for a 9% stake in the company to drive growth.............
Assignment Questions
I. What do you understand by a category challenger? Do you think Darshan Patel’s Paras Pharmaceuticals has been a category challenger in respective categories (Exhibit I)? While many admit that Fogg has largely been a category challenger in Indian deodorant market, do you think Vini Cosmetics’ other products like the talcum powder, face creams, etc., were category challengers? Why?
II. How do you think the CAB (Consumer Insight, Advertising and Branding) principles were transformed into unique marketing mix? How were the 4P’s tweaked for Fogg, to deliver a unique customer value proposition? How did this contribute to product differentiation?
III. ................
Exhibits
Exhibit I: Paras’ Products as Market Competitors
Exhibit II: Rise of Darshan Patel
Exhibit III: Deodorant Ads of 1920s and 1930s
Exhibit IV: Deodorant Brands in India
Exhibit V: Fogg’s Promotional Ads
Exhibit VI: Fogg’s Market Share