Page 110 - DMGT547_INTERNATIONAL_MARKETING

Unit 5: International Market Research

Notes
Within a year, sales had exceeded even Shah’s wildest imagination. He then went on to
become the Chairman and Managing Director of Angar Ltd, which he floated with a
public issue of ` 10 crore, in which his associates and he chipped in with ` 3 crore. However,
the credit for strengthening the Glow brand and helping it go national went to Ranganathan.
Joining Angar as sales executive based in Mumbai in 1982, during one of the early marketing
conferences at the head office, Ranganathan had suggested the idea of introducing a baseline
running through all the company’s communications.
This, he argued, would sharpen the key attribute of the Glow product range in the future.
Recognising the importance of a distribution network in retailing a mass consumer product,
Ranganathan had then successfully negotiated to deal with a leading Mumbai-based
transnational, which marketed over-the-counter products, that gave Angar access to its
4,000 strong dealer network. In less than three years, Angar was in a position to snap the
alliance and tie up with over half the dealers who were selling its products on a non-
exclusive basis. Thus, Ranganathan had managed to prune both the time and the costs
involved in setting up a distributors system for Angar from scratch, while simultaneously
securing long-term distributor loyalty and commitment.
By the middle of 1986, when Ranganathan was tranferred to the headquarters in Madras as
marketing manager, Glow had cornered five per cent of the toilet soaps market. With a
turnover of ` 90 crore for the year ended March 1986, Angar had constructed a 50,000
tonnes per annum manufacturing capacity, some of which was used to produce soaps for
its competitors which they marketed under their brand names. More importantly, the
R&D division — comprising mostly of technocrats from Shah’s alma mater — had
developed several new products for the personal wash segment, such as a translucent
bathing bar, a pearlescent shower gel, and a face wash.

Despite the beauty and complexion care segment being characterised by fragmented market
shares — thanks to well-known competitors like Lux, Mysore Sandal, Moti, Evita, Margo
and Pears — Glow had managed to garner 10 per cent of the market by 1990, which was the
largest among its peers. It was at that time that Ranganathan, who had risen to become
Vice President (Marketing) at Angar, decided to plan a new foray in this segment through
some brand extensions. According to his calculations, Ranganathan estimated that Angar
could save upto 80 per cent of the cost of entry through brand extensions instead of
launching new products. That also meant Angar could sustain a quick pace of launches
without elaborate trials, and thus, respond to changing customer needs faster than its
rivals.
That was how, by March 1994, Angar had slotted six extensions of Glow in the beauty and
complexion care segment, which together accounted for a turnover of ` 250 crore.
By comparison, Angar’s major competitors had barely managed to introduce a couple of
brand extensions each. It was in June the same year that the R&D team — which now
reported directly to Ranganathan — developed soap with an anti-infection ingredient of
therapeutic value that could be used as bath soap. “The health platform is the obvious
choice for this product,” Ranganathan had told Shah at a closed-door meeting a few weeks
after the new soap had been perfected.
“As you know, there are only three popular brands in this category as of now: Nirma Bath,
Protex and Lifebuoy. Most developing countries are witnessing a growth in the hygiene,
or health, segment. According to one study, the market in this country is expected to grow
to ` 300 crore in the next two years. Although we have not explored the health platform
until now, I feel it makes sense to launch the product as an extension of the Glow brand
name,” Ranganathan had said, providing figures to show that such an extension would be
the most cost-effective option at that point of time.

Contd...

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