Fogg’s Fragrance in Indian Deodorant Market: Category Challenger with Unique Marketing Mix

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

Fogg’s Fragrance in Indian Deodorant Market: Category Challenger with Unique Marketing Mix

Synopsis

This case study enables a discussion on how marketing mix can be tweaked to create a differentiated product. Fogg was a late entrant, but within 2 years it became a category challenger in the Indian deodorant market, giving tough competition to the market leader Hindustan Unilever’s Axe (men’s deodorant).

The creator of Fogg, the Founder CEO of Vini Cosmetics Pvt. Ltd. (Vini), Darshan Patel (Patel), had earlier created market disruptive products like Moov and ItchGuard for Paras Pharmaceuticals (also owned by his family). However, with Paras being sold to Reckitt Benckiser in 2010, Patel started Vini and launched personal care brands like 18+ deodorant and Jinjola Talc. But the category challenger came as a result of the consumer feedback received for 18+. Patel tweaked the marketing mix to create a differentiated product that consumers wanted – Fogg, which promised ‘No Gas and More Sprays’. By 2014, Fogg was ₹2 billion brand. The case study analyses how Fogg could become a 2 billion brand in 2 years? With competitors coming up with various value propositions, how long would Fogg’s winning streak continue? Would Patel be able to recreate the magic of Paras at Vini?

Prerequisite Conceptual Understanding

This case study presupposes a conceptual understanding of the following. A working knowledge along with the business implications of the following concepts would enable an effective discussion leading to more practical solutions than a mere intellectual exercise. The participants were asked to read the following concepts to help them better connect the concepts:

• • Product Differentiation –– Philip Kotler, et al., “Chapter 11- Setting Product Strategy”, Marketing Management, 14^th Edition (Indian adaptation), Pearson Education, Inc., 2013
• • Segmenting, Targeting and Positioning –– Philip Kotler, et al., “Chapter 7- Identifying Market Segments”, Marketing Management, 14^th Edition (Indian adaptation), Pearson Education, Inc., 2013
• • Segmenting, Targeting and Positioning –– Philip Kotler, et al., “Chapter 9 - Crafting the Brand Positioning”, Marketing Management, 14^th Edition (Indian adaptation), Pearson Education, Inc., 2013
• • Marketing Mix –– Philip Kotler, et al., “Chapter 1 - Defining Marketing for the 21^st Century”, Marketing Management, 14^th Edition (Indian adaptation), Pearson Education, Inc., 2013

In addition, the students were asked to bring the perfumes/deodorants they use, so that a comparative analysis of different brands from the standpoint of product  form, packaging, functionality, price, and other product attributes could be carried out in the classroom.

Expected Learning Outcomes

• • How the marketing mix can be tweaked to offer a differentiated product
• • How Fogg undermined the Indian deodorant market’s incumbents and became an 200 crore brand in 2 years or how a disruptor can dislodge the entrenched players
• • Measures that Fogg should undertake to increase and sustain its market position
• • How Darshan Patel’s products have been category challengers with unique customer value propositions

Positioning/Setting

This case study can be used for the following modules/topics in the Marketing Management Course:

• • Product Differentiation
• • STP – Market Segmentation, Target Customers and Positioning the product; or
• • Marketing Mix

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 of the case study)? 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. .....................

Case Analysis

The classroom discussion and analysis for this case study could be summarized through the Board Plan [Exhibit (TN)-I]. However, the classroom discussion was facilitated under three broad sections as explained below..........

Exhibits

Exhibit (TN)-I: The Board Plan

Exhibit (TN)-II: Products vs Value Proposition Matrix