Ghari Detergent

Hi All,

Wish You all a Very Happy New Year

Recently Ghari detergent has surpassed several multinational brands to become the second largest-selling detergent in the country. Three years ago, Ghari had a share of 10 per cent which now stands at 17%, second largest in Indian market. Out of Rohit Surfactants’ (Parent Company) Rs 1,940-crore turnover in 2009-10, Ghari contributed as much as Rs 1,825 crore.

Question arises how Ghari Detergent, a Kanpur based brand with low advertising and promotional activities managed to defeat brands such as Tide and Nirma.

The answer lies in beautifully carfted strategy, but before that let’s have a look on some industry statistics to gain a better understanding

Strategy:

1. Select a Profitable and Force Concentration: In military terminology Force concentration is the practice of concentrating a military force, so as to bring to bear such overwhelming force against a portion of an enemy force that the disparity between the two forces alone acts as a force multiplier, in favour of the concentrated forces. Ghari also realized that it can not beat Giants like HU and P&G due to their financial muscle. So it selected Uttar Pradesh, with a population of 167 million (highest in India) and accounts for over 12% of the country’s FMCG sales. Ghari also implemented extensive dealer network throughout the state. Thus, of the 3,000 Ghari dealers in the country, 900 are in Uttar Pradesh — 25 of them in Kanpur alone. Furthermore, nine of the company’s 18 manufacturing units are in Uttar Pradesh
2. Know your consumer and reason to people consumer your product: Ghari focused on housewives in small town and villages which are extremely value conscious buyer and willing to switch brands. Ghari realized that the only differentiating factor it can offer is the value of money. To offer value for money Ghari management settles the net profit margin of 9% against the industry standard of 12 to 13% for the premium brands. What may work in Ghari’s favour is the higher profit margin of 9% the company offers its dealers; rivals seldom offer better than 6% or 7
3. Be innovative in reaching the consumers:With only 35 crores of budget allotted to Marketing and promotional activities. Ghari detergent goes to train.

• The first campaign was the Ghari Detergent Express (a summer special) in 2008 that ran between Lucknow and Guwahati for two month
• Taking the cue from there, Ghari has now advertised in Pushpak Express that runs between Lucknow and Mumbai. The brand can also be seen on railway crossings in West Bengal and Uttar Pradesh. Advertisements also being displayed inside the bogies of Swarna Jayanti Express (from Trivandrum to Hazrat Nizamuddin in Delhi) last year that cuts across three or four states in south India

In addition, Rohit Surfactants promotes Ghari at roadside shows, magic shows and exhibitions in smaller towns and cities. Customers are unlikely to see other brands at these places — an innovative idea to break the clutter. The magic shows have given Ghari good visibility in cities like Jaipur, Indore, Kota, Alwar and Kanpur. About 30 company-owned vehicles are used for out-of-home advertising. Of late, the company has taken some tentative steps towards the popular media. It has sponsored a show, Rakt Sambandh, on NDTV Imagine.

Case of Ghari detergent highlights that how a mediocre brand can compete successfully with big brands with a clear strategy and vision.

But in the same time sacrificing your margin and competing on the basis of price alone are not the part of sustainable competitive advantage and journey ahead is not going to be a cakewalk for Ghari Detergent.

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Bye for now Guys