Abstract
Talking about the potential of oral health care market in a country with an outstanding population figure surely makes a whole lot of business sense. An additional dimension of unleashing the wealth in the rural markets further complements the uniqueness of the case. The rural phenomenon in India with an evidently astounding 800+ million residents and their rising levels of disposable income as well as growing affinity towards branded goods comes with its own challenges. Tricky situations in the form of underdeveloped infrastructure, unreliable communication and electricity, or inadequate distribution networks pose serious threat to the ambitious plans of many business giants including the Tata, ITC, Vodafone, Coca-Cola or the likes. Nevertheless, mixed results in most cases keep encouraging corporations to come up with ruralized stepping-up ideas in search of the real gold.
With this in the backdrop, the present case focuses on the acceptability of Hindustan Unilever Limited’s Pepsodent
Discussion
Considering the case in the light of Porter’s five forces framework offers a whole new dimension in understanding the competitive intensity of the market specific to toothpastes in rural India and gives a strategic direction on the basis of the existing attractiveness of the market. Looking at the industry as a whole, the product category of toothpastes accounted for a distinctly major share of the oral care market in India, claiming a close to 74 per cent of ₹4200 crores (2012) worth pie and with toothbrush, toothpowder and mouthwash, together completing the rest quarter. Colgate,
Lack of awareness about personal health and hygiene among consumers or buyers in the rural areas kept per capita consumption of toothpaste significantly lower than that in the developed markets, with only 27 per cent penetration in rural India that holds 69 per cent of the total Indian population. In terms of brand penetration, Colgate
In the context of the suppliers, it would be important to note that in the case of ruralizing urban brand, the suppliers in most cases remained the same with which the company was comfortable with. Especially for HUL, its major competitive advantage was in terms of its local manufacturing capacity and supply chain. Therefore, a discussion around the distributors who exercise a lot of power and control in making the brand reach their target rural markets makes a whole lot of sense to understand the power of channel partners in this case. In this regard, pieces of evidence showed that HUL was pretty much successful in leveraging its very strong distribution network to penetrate the rural market of toothpaste in India. Specifically, initiatives such as Project Bharat, which focused on direct marketing and personal selling, and Project Streamline, which focused on extending the distribution network of HUL by including re-distributors and star sellers as channel partners, were particularly helpful. These not only helped in developing the competence of ensuring the availability of each and every product of the brand in each and every outlet at all times, but also enhanced the relationship with the channel intermediaries by providing lucrative incentives to the retailers, thereby motivating them to influence the end consumers more towards the products of HUL.
The threat of new entrants especially from the already established domestic brands as well as foreign players foraying into India was considerably high. With a trend of consumers shifting majorly from toothpowder to national or internationally branded toothpastes, many new players identified the demand landscape and thus entered the opportunity space. At the local level threat from unorganized and unbranded substitutes were equally threatening. Whatsoever the tall task of creating an extensive distribution network did lend some respite to the mighty influx of innumerable new brands.
Concluding Remarks
Where the oral health care market in rural India is almost synonymous with the toothpaste market, the existing competitive intensity surely is not a cakewalk even for established national brands. The fight between brands who are striving hard to create their own distinct space in the evolving minds of the mostly unaware and little personal-health conscious consumers has been the evident outcome. To top it up, the enviable first-mover advantage exercised by Colgate loom like a big handicap for Pepsodent. For the brand, the priority seeking areas are clearly that of ensuring awareness and availability of the brand followed by the much needed acceptability of Pepsodent as the chosen oral health care option for the rural masses. However, this needs to be based on the affordability quotient of the product measured against its value over the much economical traditional options.
Evidently, the stagnant market conditions in the urban markets pushed brands to go rural with a vengeance and the case for Pepsodent is no exception to that. Hence, Pepsodent that has been successful in creating its generic ‘germ fighting’ as a strong positioning statement had to be pushed aggressively in rural markets. On the awareness front, the HUL partnership with the Indian Dental Association to increase awareness about oral care through free dental check-ups, audio-visual demonstrations and educational materials distributed in schools and rural self-help groups was definitely useful. Initiatives such as Project Bharat using HUL’s varied product line associations alongside awareness adverts through Khushiyon Ki Doli seems to be working well to induce trial among consumers as well as retailers. On the contrary, the availability factor was also well handled with the support project such as Streamline and Shakti.The smart pricing and packaging strategies in the form of smaller packs with competitive price points as opposed to premium price points of ₹30 or ₹54 for a 100 g and 200 g packs, respectively, seems like a great roll out opportunity to take care of the acceptability part.
While the measures already taken up by HUL seem to be moving in the right direction, it would be prudent to note that in future also, special care in devising innovative marketing strategies alongside localized offerings of the products needs to be ensured. Using tried and tested techniques of free dental check-ups, organizing health camps, sales promotion through free sample distribution and discount schemes to promote the brand also has the risk of getting flank cloned by competitors. Hence, the route through brand salience offers the more inimitable solution to take advantage of the massive growth potential. The increasing awareness about personal hygiene pushed by the ticking literacy metre and average income figures comes as a blessing to support the quintessential win–win initiatives of a global brand going rural.