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New product Launches and Consumer

Insights-Application of Behavioural Insights in the
Marketplace (by S L Rao for IIMB Review)

ABSTRACT: In this paper I describe some experiences in launching new products

and some insights into consumer behaviour that drove them or arose from them. I
am describing events that took place in the period from 1957 to 1976. Product
launches in those years were centred round manufacturing capability. The
consumer had limited choice. So did the manufacturer who had limited options
in features that he could offer in the product. But most did consider what the
consumer wanted, her considerations in taking the purchase decision, and ways in
which it could be in favour of a particular product. The consumer’s attitudes, habits
and preferences were relevant and were studied. Today of course this is much more
the case. Production capacities, packaging, pricing, use instructions, distribution,
advertising and promotion, should usually have resulted from the understanding
and interpretation of these consumer attributes. Many products succeeded despite
the lack of such preparatory studies because of the monopoly that was conferred by
production and import licensing and the copying of products that had succeeded in
overseas markets. In the illustrations that I give, consciously and in a planned
manner or intuitively, consumer behaviour was at the core of all decisions that had
to do with the product. Over time, the consumer’s concerns began to be integrated
into all decisions relating to new products, and marketing strategy became business
strategy. I have some examples of the early application of this development.
Many products and brands that dominated consumer franchise for many years and
others that were successfully launched, have declined or disappeared now after
many years. The reasons have been varied: changing economic situation; new
consumer contexts, behaviours and preferences; competing products offering better
value choices to the consumer; lack of nimbleness of the company in adapting to
changing markets; and inability to change product images and product forms to
meet new directions in consumer behaviour. While product and brand lives have
been extended in some cases, there are many instances when life extension has not
worked. Even the most dominating brands seem to have limits to their lives. For any
chance of success, careful risk-taking, determination and courage are essential
______________________________________________________________________
A BACKGROUND:
From 1951 to 1985 India was an economy that discouraged consumption in
preference to saving and investment. Any kind of consumption, especially of
manufactured consumer products, was subjected to severe restrictions on:
• Factory location,
• Production capacity,
• Equipment that could be imported,
• Raw materials that could be used,
• Labour intensity (which had to be high),
• Pricing that was administered or controlled or subject to government
regulation,
• Line extensions,
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• Expenditures on advertising and promotion,

• penal taxation of incomes as well as on the end products available for
purchase by the consumer,
• And severely restricted disposable incomes with consumers.
Imported products were illegally available in limited quantities through smugglers.
Local quality of manufactured goods did not match the best in the world and even
multi national companies trying to standardize their product offerings globally,
found their Indian offerings inferior to what they would have preferred because the
desired ingredients, materials, packaging, equipment, etc had to be procured only
indigenously or from countries specified by government. The incidence of new
product launches and even upgradation or revamping of existing products was
infrequent. This was because of the requirement to get an industrial license from
government for any addition to capacity, expansion or extension. These were
difficult to get, especially for foreign companies or those belonging to ‘large’ Indian
groups. Volumes were also limited by the absence of television as an advertising
medium. Available media were press, magazines, cinema; outdoor, merchandising
and display using point of purchase materials and these had less immediacy and
limited reach. When television advertising did commence in the 1970’s it was for
many years available only in black and white; television sets were not freely
available and programming was poor in content and scheduling. There was limited
information on reach and readership of media and about multiple media exposures.
However new product launches and relaunches of existing ones did take place.
Companies sought to hold on to their customer bases, add new products to expand
their business, introduce line extensions, reduce costs and bring some excitement
into their products. New product plans of competitors were never a surprise because
everyone needed to submit detailed information to government to get industrial and
import licenses. This information was easily available to anyone for a price.
It was in this background that the product launches and the marketing methods
that are described in this paper, took place. Despite the restricted purchasing power
and choice, understanding consumer behaviour yielded good dividends to
companies in terms of sales volumes, market shares and profits.
There were conceptions about Indian consumer attitudes and behaviours that were
related to this context. Indians were considered to be uninterested in consumption.
Therefore it was thought that unlike in other developed markets, there was little
scope for the variety of manufactured consumer products for different uses and the
many brands between each of them. The Indian was believed to distrust the Indian
manufacturer and to prefer only the foreign one. This was proven by the
observation that a true or apparent ‘foreign’ label commanded premium prices.
Since production and sales volumes could never reach high levels because of
restrictions on production capacity, low purchasing power, and inadequate reach of
advertising, manufacturers were more likely to aim for high margins even if
volumes were low, to maximize profits.
PRODUCTS FOR THEIR TIMES:
When I started work as a management trainee in Hindustan Lever Ltd. in 1957, I
spent the first few months as a salesman selling soaps in the vicinity of Pune in small
towns and rural markets. It was a very educative experience. The product for which
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one did not have to do any selling was the ubiquitous ‘Sunlight’ soap. It had an
apparently solid customer base. Dealer loyalty was amazing. The retailers made a
small profit margin but were more than content because the volume was large. For
the wholesalers it was a loss leader. Retail customers would come from the remotest
villages to buy Sunlight and then go on to buy from him all their other requirements
including kirana items like grains, oil, etc, on which the wholesaler made good
margins. The retailer invariably reserved a large part of his shelf space for Sunlight
soap. The consumer was habituated to using Sunlight and trusted it. It was the first
packaged and branded washing tablet in India. It was good quality and the size and
price gave her good value for money. It had been in the market since the late 19th
century. Unlike later arrivals it guaranteed that it used only vegetable oils, though
animal fats were not in fact used by anyone in making soaps.
The label was apparently designed in the mid-nineteenth century in England and its
lack of modernity and contemporariness was striking. The name was quite
meaningless to a largely illiterate Indian population and for the many among the
low- income groups in small towns and villages who were its users. But the
consumer recognized it by its distinctive old-world wrapper and shape. The
consumer was just about anybody who had graduated to using washing soaps to
clean his clothes. I doubt if there was a defined “target consumer”.
When a relaunch did take place it was restricted to small changes in typeface and
softening of the edges of the soap. Even these changes were introduced after much
research and soul-searching. The company did not want to take any chances with a
successful formula; not knowing which part of it was responsible for its astonishing
consumer loyalty and success. For the consumer, using Sunlight for all the clothes
washing was a tradition. In parts of India, especially in the North, it was an all-
purpose soap, used even for the body.
The main competition was the 501 bar soap from TATA, a very different soap in
sophistication and appearance. It was a bar, not a cake, and had no wrapper. There
were also cottage washing soaps made in small quantities and very local in sale.
From the 1960’s, many varieties and brands of soap powders followed by detergent
powders, then detergent cakes, washing up liquids, many types of toilet soaps
(colours, perfumes, deodorants, etc), shampoos for different specialized uses, and
washing products designed for use in washing machines began to enter the market.
Sunlight began to lose users to these new product forms that were also easier to use
and more effective. It saw attempts at revival, soon forgotten, through offering the
new product forms like a washing powder under the same name. Today Sunlight is
a fast fading memory for most consumers except in Kerala and West Bengal.
Products have relevance within a socio-economic context. To prolong their life when
this context has radically changed is extremely challenging and I know of few
successful attempts at doing so. We might wonder why Lever did not at an
appropriate time add a synthetic detergent bar to Sunlight soap. Instead they
launched a soap powder, ‘Rinso’, followed by a synthetic detergent powder ‘Surf’
which they backed heavily with advertising, promotion and massive house-to-house
demonstrations and sampling. They launched a synthetic detergent cake ‘Rin’ only
much after Swastik Oil Mills were wildly successful with ‘Det', a blue detergent
cake, the first in India. One can speculate that Sunlight might have survived longer
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if it had a synthetic detergent based companion. But hindsight is easy. Sunlight was
a very large volume product and contributed much to Lever profits. Its consumer
base was very wide. Any innovation might disturb some part of it and drive away
many consumers. Lever was caught in a success trap. They launched other brands
that became very successful, Surf and Rin. But perhaps they created the conditions
for the inevitable decline and death of Sunlight. Risk-taking after careful evaluation
and preparation and courage are essential ingredients for extending product lives.

There are other examples of such products. There was a time when record players
and changers and complicated spool tape recorders were the only way to listen to
music. Cassettes have made them redundant and exploded the market because of
the ease of use, portability and lower cost. Few of the dominant names in the earlier
forms now survive. Slide rules are now of antique value. So also are typewriters,
even the electric and electronic ones that substituted for them for a while only a few
years ago. Others have replaced teleprinters, telex machines and a host of such
products. Few of the original brands of such products that were popular in their
heyday have made a successful transition to new product forms. The best example
of success came out of an apparent failure when ‘Coke’ relaunched a tried and
tested popular product with a new flavour. There was overwhelming consumer
resistance and the old product was brought back. But strangely, the new flavour
also showed some consumer preference and was retained, adding overall to Coke’s
sales and market shares.
THE POOR AS MASS MARKET
In 1959 I was Sales Manager in Andhra. Lever was the first company to organize
itself for rural markets. I managed 17 salesmen, 2 supervisors, four sales vans and
two cinema vans. Levers were the pioneers in organized rural marketing and were a
model for many who followed them into rural markets. The vans were for
redistributing products from redistribution stockists to villages still being developed
as markets. The cinema vans were to advertise, sample and sell to consumers so as
to build these undeveloped markets that would in due course have their own
redistribution stockists to develop more remote village markets. The washing habit
was to use bar soaps with serrations for being cut at home into twelve smaller pieces
for use, as well as washing cakes, cottage soaps made into round balls and soap
liquids.
The washing bar soap that was commonly in use in Andhra was TATA’s ‘501’ bar
soap, an unwrapped washing soap that was very popular. Lever had a relatively
unknown and poor selling bar soap with a distinctive green colour as against the
creamy brown of 501. But retailers were not interested in buying ‘Wheel’ bar soap
because the consumer asked for 501. Going to villages and small towns I could see
that there were very many poor consumers who could not find at one time the
amount of money needed to buy a full bar of 501. Many however, did use locally
made cottage soap of indifferent quality and might be persuaded to switch to good
quality soap, at least for their treasured finery. They were poor, mostly on daily
wages and in casual employment. And they could find the cash at any one time, for
only a portion and not for the full bar. However, wholesalers would not sell the bar
in smaller cut pieces to retailers. Retailers had to buy full bars and cut them into
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smaller pieces to enable the soap to be priced at amounts that poor consumers could
find at one time. I saw this as an opportunity for Wheel to bypass the competition
(501 bar) and reach out to a new underclass of potential retailers and their
consumers among the rural and small town poor. I started to have it sold by our
salesmen through the wholesalers in half and quarter bar pieces after prior cutting.
The retailers were the bottom stratums themselves with poor resources to purchase
and hold stocks, located in small roadside outlets in small towns and village shandy
(market) outlets. As we covered these poor retailers in many small markets with cut
Wheel bar soap, we soon built sales to some volume. These retailers reached this
lower income stratum of consumers. Soon those retailers who bought less than a full
bar began buying more than one. The retailer and the consumer asked for Wheel as
the “green” soap. There was no other of that colour in the market. Wheel bar began
to reach respectable volumes.
Years later in the 1980’s when Rajiv Gandhi had started the opening up of Indian
markets by “broad-banding” industrial licensing, a Tamilnadu medical practitioner
exploded the shampoo market. He did a “Wheel bar” by packing a good quality
shampoo in sachets that retailed for one rupee each, branded as “Velvette”.
Consumers who could not dream of finding an outlay of Rupees 30 and much more
for a full bottle of shampoo, the only packaging till then available, could now buy
and use shampoo. A change in pack size had opened the gates to a huge and hidden
underclass of consumers, the poor. Since then shampoos have become a major
product category whose usage has penetrated deep into low-income households and
rural India as NCAER surveys every year through the 1990’s have shown.
From 1991 I pointed out the lessons from the “Velvette” experience in articles and
books explaining the NCAER consumer market demographic data. I pointed out the
existence of a large consuming class if the products were priced at levels for which
consumers could find the funds at one time. Perhaps this even caused some
misunderstanding among foreign companies who took these low-income buyers as
the Indian “middle class”. But the lesson was clear. Even the poorest and illiterate
Indian family was interested in using manufactured products, if they were offered in
a form that the family could pay for without difficulty. “No frills” products that
offered more function than form, smaller sizes, cheaper packaging, definitely
branded and possibly also advertised, aiming at large volumes and low margins per
unit for the manufacturers, these were what aiming at the Indian mass market
required. This was a lesson that I had learnt from “Wheel” bar and that many
manufacturers learnt from the NCAER data and analysis. Supporting this was some
research I did at NCAER for the Indian Society of Advertisers that showed
decisively that the urban (and somewhat more) the rural consumer trusted
advertised products and associated them with quality. Branding a good product and
offering it at an affordable price even in a special small pack size was the ‘Velvette’
lesson to manufacturers of fast moving consumer goods as well as consumer durable
products.
Today we do not see “Wheel” bar in the market but Lever used the same brand to
successfully counter the low price competition to their “Surf” detergent powder
from “Nirma” in the late 1970’s. “Nirma” at that time had pushed Lever’s “Surf” to
the wall. The same old bar soap strategy worked again in weaning consumers back
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to a Lever brand. A few years later Lever introduced a Wheel detergent bar as a
shorter bar soap that had a bright wrapper, and did very well with it. The name
“Wheel retained an association with clothes-washing using a product that was good
value at a low price.
THE END OF DOMINANCE
In 1963 I was for a while the Product Manager for Lifebuoy, already the largest
selling toilet soap in the world. My predecessor who had come from the U.K. had
persuaded the company that we must launch a line extension to the popular
Lifebuoy with its strong medicinal carbolic smell Special’. Lifebuoy at this time was
the most popular body soap in India and a major contributor to company profits. A
line extension tom it would have merited more research insights into the consumer’s
attitudes and perceptions to the regular Lifebuoy. The new soap was to be called
‘Lifebuoy Special’ and would be more of mainstream toilet soap with a perfume
that would convey its deodorant properties. It would also be different from the
regular Lifebuoy soap by being machined so that it had the rounded edges and the
smooth feel of any other toilet soap. It would not have the large brick shape, extra
large size and somewhat rough feel of the traditional Lifebuoy. It would be wrapped
in a more colourful wrapper like any other toilet soap, not the wax paper in which
Lifebuoy was wrapped. I took over after these decisions had been taken. I planned a
test market in Lucknow.
The product was not a success. Partly this was due to the inability to use a really
good deodorant perfume, a glossy wrapper and a better shape because of the then
restrictions on imports of materials and equipment.
But I always thought that the consumer at that time was happy with the powerful
smell, the economy because of the large size and the confidence that the original
Lifebuoy soap gave him in using it. He was not ready to change. We had not thought
through whom were the people buying Lifebuoy and how they regarded it. That
would be learnt in later years when Lever identified them as blue-collar workers
and other “active” people and aimed the soap at them, thus building the soap into
greater sales volumes. It was originally an adult soap but tried to expand its usage
by targeting children as well, but never women. It probably did not have any limits
on income levels of its users, the only consumer characteristics that mattered being
their consciousness and need for health and fitness, and the rough or ‘dirty’ work in
which they were engaged. For this type of consumer group to have been offered the
same name in an entirely different form at the same time was confusing. Thankfully
for Levers the consumer decisively rejected Lifebuoy Special. The problems for
Lifebuoy were to come later when TATA with ‘Nahan’ for a while managed to take
some market share. Lever fought back by improving Lifebuoy, expanding its
consumer reach as described earlier and with greater and better advertising. It was
the entrance of ‘Nirma’ in this category that gave a real fright to the Lever product
in the market.
I notice that in the years since, the original Lifebuoy lost sales and market share. It
has (in 2002) been reintroduced after a major makeover. Perhaps this should have
been done earlier. It is easy to say this but difficult to decide to do when the product
is a long time favourite, bestseller and major contributor to profits. The
reintroduction came when the old Lifebuoy was in a ‘do or die’ situation. It has
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replaced the old Lifebuoy and the change seems to have worked in the market.
Perhaps now the consumer was looking for change.
PRODUCTS BEFORE THEIR TIME: THE HIMA EXPERIENCE:
By 1963 I had already spent six years in Hindustan Lever in India and the UK in
various sales and product management assignments. That year Unilever came out
with a document called the “Unilever Plan For Good Advertising” (UPGA) that
sought to codify the process for developing marketing strategies to create good
advertising. It started with preparing a document called the “ Brand Marketing
Strategy”. This had to cover many aspects that were quantitative and qualitative,
fact and market research based as well as some opinion and argument. The
document would go to the advertising agency that would then prepare an “Agency
Brief” that incorporated their understanding of the strategy. In turn this would lead
to the “Advertising strategy” and then to documents setting out the “Creative” and
“Media” strategies. In retrospect the focus of brand marketing strategies at this
time was on creating advertising that would result in a desired image for the brand.

I think I prepared the first of these documents in India, for a range of ‘instant’
dehydrated food products under the brand name “HIMA”. The Brand Marketing
Strategy document discussed the future development of the brand including
extensions, pack sizes, distribution strategy and objectives, etc. At the time I wrote
the strategy document we had done some developmental work to market a
dehydrated pea that when reconstituted would be a perfect sweet pea. It had been
tested at different prices in the market and consumers seemed to like it. The
company had a strong agricultural research and extension programme (the first
corporate “agribusiness” initiative in India apart from tobacco for cigarettes). This
initiative was intended to ensure that the quality of the peas that were grown and
used for processing was perfect, based on carefully selected seeds, predetermined
doses of chosen fertilizers and pesticides, frequent inspections and monitoring of
weather conditions before the peas were plucked and rushed to the factory for
processing.
I decided that as the Product Manager, I was responsible for what went to the
consumer and insisted that I personally saw and tasted samples from each batch
before it was processed. I ate a lot of peas! But I was sure that the product that we
were offering was of a standard quality and met our high specifications for size,
tenderness, taste and flavour when reconstituted.
We charted the wide variation in the prices of fresh peas in the Delhi wholesale and
retail markets over the year, in the winter when it was in season and low in price,
and in summer when it was out of season and came from distant hilly tracts, with
the price shooting to 20 to 25 times the low prices in winter. We determined through
research that the consumer would buy fresh peas if they were available through the
year. There were few other vegetables of this nature that the consumer would like
fresh and tender through the year and at affordable prices. We determined that
these included potatoes, bhindis, cauliflower, and onions. Exotic vegetables like
sarson-ka-saag (the stem of the mustard plant and the spinach leaves) that the
Punjabi peasant ate in winter would have a local ethnic niche in urban India
wherever the Punjabi lived, even out of winter season. Rich and heavy after cooking,
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it perhaps brought back memories of a lost pastoral life to sedentary urban livers.
The characteristic of almost all these vegetables was that they were in glut for part
of the year when prices were very low and in extreme shortage for the rest when
prices went to levels unaffordable by most families.
HIMA peas and other vegetables could expect maximum sales in the off-season for
the fresh version and when the fresh version was expensive and not as good as the
best available in season. Our pricing aimed at levels somewhere between the peak
and the trough for the retail prices of the fresh vegetable. We realized that market
research was not very reliable when asking consumers as to how much they would
pay. We found that they invariably under estimated what they would pay. They also
recalled the prices that they actually paid as being much higher than they had paid
in fact. So we had to arrive at an end price through logic and our need to cover cost
and make a profit. Having determined an end price, and estimated volumes we
worked backwards. After allowing for profit margins, advertising, distribution,
processing, etc, we arrived at the prices at which we could afford to contract acreage
with farmers. Our limit on acreage was the availability of suitable land and willing
farmers who we could trust to honour their contracts to supply us. In the event the
farmers let us down by selling at high prices in the market when the crop was poor
and offering huge quantities to us when the wholesale market was depressed and
market prices for fresh peas had gone down.
In this way we arrived at the product proposition that HIMA vegetables would offer
the consumer. It was to offer a quality that on rehydration would be a tender pea, as
good as the best in season, at a price that would be far lower than the ruling prices
out of season. At the same time we had to ensure that our processed vegetables
would ensure that this quality was retained over much handling and a reasonable
length of stay on the shelf. During this period the product had to match its promise.
The packaging had to withstand the handling over long distance transportation and
the flies, mice, ants and other insects that infested a typical kirana retail shelf. The
dirt and the flies sitting on the packets must not detract from its appearance. The
package had to be striking enough in its appearance that it would attract consumer
attention, interest and a desire to buy.

The production capacity that had been already decided upon by the production
management was many times larger than our demand forecasts of how much peas
we could sell in the market. This was due to minimum plant size conditions laid
down by the technology. There would be a considerable unused capacity outside the
peas season. We had to plan for it to be utilized quickly. The Brand Marketing
Strategy therefore had to deal with this problem as well and propose a range of line
extensions that would fall into the same category of promises. After some market
research we focused on a range of vegetables (as mentioned earlier), ready mixes for
a variety of soups (tomato, French onion, and others), mixes for savouries (idli,
dosa, sambar, etc), and sweet mixes (gulab jamun, kheer and others).
The determining factor was that the product had to be of mass appeal, consumed
often and not easy to make in a consistent quality at home. With more women going
to work we expected that there would be growing demand. However we also
innovated in market research by devising and conducting ‘product concept’ tests.
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We wrote detailed descriptions of what we would offer the consumer, how it was to
be used and the nature of the end product after cooking (consistent quality, time
taken, etc). These concept tests enabled us to give a research brief to the laboratory
that specified the essential features of the product and also the number of helpings
(for example, how many idlis or gulab jamuns could be made out of a packet of
ready-mix) that could come out of a packet. This would determine the size of the
package. After our research laboratory had developed the formulae we conducted
repeated end product tests in the company kitchen, then market researched the
products with consumers.
We hypothesized that the consumer would be a salaried professional and from
households with two income families in which the woman went out to work. This
was for the vegetables, though the ‘exotic’ ones would largely be confined to people
from one background like the Punjabis for sarson-ka-saag. The market would be
urban and in metropolitan cities and other large cities and towns. For soup mixes
we were more selective within the same consumer group. We targeted households
that spoke English, were College educated and the heavy users would be those with
some strong Western influence in eating habits like the Parsis and the Anglo-
Indians. The sweet mixes and savouries were all India in potential because of the
increasing homogenization in food habits around India. Butter chicken and masala
dosas were eaten all over India and so we thought that our idli and dosa mixes or
vada and sambar mixes would be nationally popular. To make it possible to
consistently make these savouries at home using ready mixes that were easy to use
would create a large national consumer base over the years.
The products in the range conformed to some common characteristics. One was the
difficulty in making them because of the skill, labour and time required, essential
expertise or because raw materials were not always available. The other was that
they had to be in demand through the year and be reasonably known and demanded
products over the country. The third was that the process had to deliver a
consistently good product each time to the consumer after she cooked it at home by
reconstituting it. Instructions for use had to be simple enough so that anyone could
easily understand and follow them. The price had to be between the prices of the
ready product in restaurants and those made at home from fresh ingredients. The
promise of course was that the housewife could get a consistently good result each
time that she bought a packet and used it. The taste had to be acceptable to
consumers everywhere in India and this required considerable product testing. To
ensure consistent quality we sampled each batch and developed a ‘taste panel’ of
consumers so that we had a uniform taste standard to apply to each batch.
Thus consumer behaviour for HIMA had to be seen in many different dimensions,
not merely in relation to the product that resulted from it, but the many stages
before purchase.
In retrospect it perhaps was unwise to have set up a large plant for peas without
having worked out plans for utilizing the capacity. We should have found a way to
ensure that our contracts with farmers would be honoured in any season. The
company later integrated the sales forces so that the same sales force that used high-
pressure salesmanship to sell talcum powders was now also selling food products.
Food products required a more methodical approach since they had limited shelf
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life. Blocking the retailer’s shelf space with more stocks than he could sell to
consumers in a given period would result in the products becoming sub-standard.
In product accounting the Hima products were loaded with full overheads even
before they had reached acceptable sales levels, leading to their becoming apparent
loss-makers. Consumer needs and preferences could have been studied in advance
and plant capacity related to the best forecasts of future sales. Any product launch
in a market that is not fully ready for it requires readiness to invest in market
development for many years. Unless the company is ready to do so, it might be
creating a recipe for failure.
Today HIMA is a memory for some ageing consumers and those who marketed it.
Other manufacturers have entered and there is a wide range of ready mixes. There
are many other frozen foods as well. Ready to eat meals have begun to take off in
the market. HIMA was the first national brand, of first-rate consistency in quality,
formulated after high quality scientific and consumer research and development. It
took account of demographic and socio-economic trends that were yet to become
dominant-a large youthful working population, urbanization and increasing
number of nuclear families, a growing educated female work force, more disposable
income because of two income families and lower direct taxation, time pressures on
matching the meals that mothers had produced for their sons who were now
husbands, and the need for speed, convenience and consistency in each dish that was
prepared. HIMA was the right set of products for this new and emerging consumer
class but it was before its time.
THE DECLINE OF THE ROCK SOLID BRAND:
Dalda vanaspati (a hydrogenated cooking fat) was introduced in 1936 as a cheap
substitute for ghee. Prakash Tandon describes its early marketing vividly in his
“Punjab Trilogy” (Viking). Until Dalda was introduced, the hard fat used for
cooking all over India in addition to various edible oils was ‘ghee’, clarified butter
from cow and buffalo milk whose graininess, colour, odour, were preferred in
different ways over the country. Ghee was the traditional fat. Originally based on
cow’s milk it had been substituted in many places by the more easily available and
cheaper buffalo milk. Ghee was the traditional formula for good health and had
religious connotations for the Hindu. It was a blessing for any Hindu to be eating
food cooked in ghee. It was thought to ensure health, vigour and longevity as well as
being the food of the Gods. Government would not permit Dalda to be coloured and
flavoured to more closely resemble ghee as was margarine permitted in the West to
look and smell like butter.
The target consumer population was everyone in all socio-economic classes. But
given that usage depended on styles of cooking, it was in North India that there was
the largest potential because they deep fried much of their food and so used much
more hard fat in their cooking. The challenge was to persuade Indian mothers that
they were not sacrificing their family’s health but in fact enhancing it by not using
ghee but using the cheaper substitute, Dalda. Dalda was of course much cheaper
than the milk based fat and so made it possible for many who had moved away from
ghee or had reduced its use to increase it with Dalda. The other challenge was to
persuade consumers that in terms of cooking characteristics, taste and flavour of the
food, Dalda would perform as well as ghee.
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Its marketing had some distinctive features. It was perhaps the first consumer
product in India to be introduced with countrywide demonstrations of use along
with sampling of products cooked in it. Demonstrations were needed to show that it
could be used exactly like ghee and that its texture, graininess and melting points on
heating during cooking were the same. The sampling of items cooked in the presence
of prospective customers showed them that this was indeed the case. It was
supported by national distribution and display of the product so that customers
could not pass a shop without seeing Dalda tins. The tins were kept clean and wiped
every time by the salespersons of the company and the distributors so that
customers were reminded of the clean kitchens of their mothers. The advertising
reinforced this theme. It was to the effect that using Dalda was an expression of a
mother’s love for her family and for her children.
For over half a century Dalda dominated Indian markets and was possibly the first
example of an Indian brand that became a major product in India and many
overseas markets. But Dalda could not extend its appeal to line extensions. Cooking
oils that were added under the same name did not have similar success. As far as
Dalda vanaspati was concerned, price control by government, government
regulations on which oils could be used in making hydrogenated fats and to what
extent, continuing restrictions on adding any colours or flavours to vanaspati, many
regional competitors, all had an adverse effect on consistent product quality,
margins and also restricted marketing expenditures. The brand began to decline.

Today there are newspaper reports that Lever is trying to sell Dalda to another
company. It contributed a great deal to Lever’s profits for many years, to Lever’s
importance in the Indian market and to its significance as a food products company.
Consumer behaviour has changed to the extent that there is greater emphasis on
cheaper refined edible oils and healthy low cholesterol oils. Hydrogenated fats still
have a place in deep-frying but it is not as it used to be. The company was unable to
leverage the strength of Dalda into other products.
TRANSPLANTING PRODUCT HABITS:
‘Chiclets’ (from Warner Hindustan) was the first chewing gum to be made to
international standards and marketed in India. It was a sugarcoated gum. Other
forms were stick and ball gums and bubble gums. Till its entry in 1970 there were
some poorly marketed locally manufactured chewing gums of indifferent quality,
selling small volumes. There were also imported smuggled products selling mainly
in port cities. The introduction of Chiclets into the Indian markets was also perhaps
the first time that consumer and marketing considerations determined plant size,
package size, pricing, and other decisions.
The American owners of the brand (Warner-Lambert) advised us that the principal
consuming group in North America, the largest market, was aged in its 30’s.
However the habit was almost a century old in those countries (much longer in
Mexico) and I felt that possibly it had grown with the same users as they grew older.
India had a paan chewing habit that was national in scope but not that of chewing
gum. Paan had mild addictive alkaloids in the betel nut and the paan leaves, and a
sugarcoated chewing gum could not substitute for it. If we had developed a good
paan substitute we could have aimed at an adult consumer target group. We did
 12

initiate a programme to develop a paan-flavoured chewing gum. Some other

company later introduced it, but with little market success possibly because it had
the flavour but not the addictive properties of paan and betel nut.
I felt intuitively and observing my then six-year old son and his friends that the
primary target consumer would be the five to ten year olds. The secondary target
group would be from among teenagers in schools and colleges. This was not based
on any research but merely from analysis and observation. The marketing
programme was designed to go after this primary target population. We established
that for children, the most common and easily available coin in those years in almost
any income group in urban India (around 1970) was likely to be a 10 paise coin. We
decided that we must have a package that offered the gum at a price to the
consumer anywhere in India of 10 paise. With varying sales taxes and octroi in
many major cities, this meant that we had to have a range of invoice prices tailored
for different markets that would offer the trade an adequate margin to stock and
push the product. We had to innovate packaging that would protect the product for
a desired shelf life of six months from manufacture, but cheap enough to allow us a
profit. The size of the pellets and their number in the package also had to meet our
cost targets for the desired end price and a margin for the company. For the older
children for whom the same funds constraints did not apply, we could go for the
international carton package and price it accordingly. We offered 10 pellets to a
carton for an end price of 50 paise, another round coin.
Our American principals gave us literature to show that chewing gum is relaxing,
aids concentration, etc. However we were clear that rational considerations could
not appeal to the children who were our target. We decided to offer them the
promise that chewing of gum was ‘fun’. We developed the idea of associating
Chiclets with a recognizable circus clown, a figure that all children would associate
with, but which would also not put off older children and adults because it was
‘childish’. We neither wanted to lose any possible sales to the older population nor
to lose user children as they grew up and then sought to get away from what was a
‘childish’ habit. The clown was a figure that would bring a smile to the face of
anyone and could bridge age groups.
We knew that the small child that was our target group had to be able to see the
product at his height and at the front of the shop. We designed special glass jars
with the clown featured on it that were traditionally kept with other jars containing
confectionary in the front of most shops and so easily visible to the child. The child
did not have to read the name. The clown was distinctive and we wanted it to
symbolize the product. We developed point of sale material including life size
cutouts of the clown, again to attract the attention of the target child. We also
organized massive sampling programmes in schools with the help of school
Principals who were happy that we told the children of civil chewing habits and how
to dispose off the residues after chewing. Chiclets was a major success from its
launch and reached target volumes while attracting many other new entrants.
Chiclets understood its market and target consumers. But it was a product in a
pharmaceutical company. It required high advertising and promotional
expenditures without the high profit margins that pharmaceutical products could
give the company. The company duly discarded the strategies underlying the
 13

product’s approach to the consumer like price strategies, the ‘fun’ image, etc. As it
slashed marketing expenditures, new entrants built on the Chiclets strategy to
achieve substantial volumes and profits. Its owners, Warner-Lambert, a
pharmaceutical company with many over-the-counter and consumer products, were
bought by Pfizer who sold the confectionary and candy businesses to another
confectionary company.
CHANGING PERCEPTIONS ABOUT A TRADITIONAL PRODUCT HABIT:
‘Halls Mentholyptus’ (from Warner Hindustan) was another major new product
launched in the Indian market in 1972. Its immediate competitor was Vicks cough
lozenges (by Richardson Hindustan, now P & G), which had been in the Indian
market for almost as long as Sunlight soap. There were other such products but
they were of minor importance. Halls unlike Vicks was shaped and twist wrapped
like any other candy. Unlike ordinary sugar candy it had enough eucalyptus and
menthol in it to be very soothing to the throat and to relieve sore throats. We could
have launched it directly to face Vicks in the market on the same platform. But
Vicks was well established for years and had a strong trade and customer franchise.
We thought we could encash on the similarity of Halls to other candy. Some
psychologists advised us that adults consume a great many more cough drops than
was warranted by the need to soothe sore throats. They suggested that this might be
because adults liked to suck candy but saw it as a childish habit. Perhaps they also
had some other Freudian satisfactions from the act of sucking candy. Our first
advertising campaign therefore focused on a typical boy-girl situation and brought
Halls in to it as a way for each to get closer to the other. In a society that had not
reached the state of permissiveness that it has today, this was a bold move. The
advertising film was considered by the censors initially for an‘adults only’
certificate, and if it had been given that, would have been the first advertising film
in India to have got it!
It was soon realized that this did not give consumers sufficient reason to purchase
Halls. It perhaps placed too much reliance on the Freudian motivation for adults to
buy and suck more candy than their sore throats warranted. They would do so in
any case, but had to have a throat problem to start with. Hence the appeal had to be
that Halls was a good throat soother and leaves it to the user to use more than he
needed. The theme was changed to focus on the ‘vapour action’ of Halls as a reason
why it would give fast soothing relief because of the menthol and eucalytptus in it.
Thus we moved from a psychological approach to a rational one, showing a definite
problem, a solution and the reason why the solution would work. Halls is now a
strong competitor to Vicks and marketed as an over-the –counter pharmaceutical
product. The candy shape and packing must be helping adult purchase and overuse.
But I do not have research data for this. Interestingly, Warner-Lambert, the owners
of the brand, has now sold it to a pure confectionary company.
OTHER NEW PRODUCT LAUNCHES AND CONSUMER REPONSES:
‘Saxon’ (Beardsell Ltd) was a new brand of men’s undergarments introduced in
1976. The name was carefully chosen to take advantage of the Indian consumers’
preference in those days for foreign brands. The name was shown by research as
conveying durability. The label was unlike other Indian undergarments at the time,
printed clearly, in bold type and with long lasting ink. The main competitor was
 14

“Tantex” and a new brand introduced a little while earlier called “VIP”. We could
not see how this new brand with such a vulgar name could succeed. For a while
‘Saxon” sold well. However, third-party manufacturing, somewhat variable quality
and frequent increases in costs and hence in prices, made the product unviable.
‘VIP’ is today a dominant brand all over India. Consumers were interested in a
product that gave consistent quality and at a steady price. The name was something
they could get used to. We have seen this in recent days. Unpronounceable names
like ‘Hyundai’ and initials with no significance like consumers have accepted ‘L.G.’.
Similar was the reason for ‘Sunlight’ or ‘Lifebuoy” to have been accepted by the
consumer, not because of the suitability or otherwise of the name but because of
what they offered the consumer.
Another example of consumer perceptions was in the case of baby foods. For a long
time, ‘Glaxo’ and ‘Ostermilk’ were the leading brands. Generations of mothers had
used one or the other for their babies. When one was not available in the market
and the mother had to use the other brand, there would be complaints that the baby
was not tolerating the changed brand. Yet the two were the same products, merely
fed from the same line during production into different tins.
END WORD:
This narration of some old marketing experiences appears to lead us to some
directions.
• Test marketing may not be feasible in today’s world, though there is ample
data and many techniques to simulate consumer reaction to new ideas and
products without having to actually go to market.
• Quantitative data and market research are important but being “in touch”
with the consumer through personal observation is even more so, to identify
new product opportunities.
• Observation, being “in touch” and research are vital to identify the
prospective consumer for a new product and to evaluate the market size and
how it might develop.
• It is no longer as important to be first in the market as it is to have the right
mix at the right time.
• The ‘right’ marketing mix must be accompanied by risk evaluation and risk
taking. This calls for management courage.
• There is a right time for a new product or idea. If introduced before its time,
it will require the company to support it till the market is fully ready for it.
Companies must have the determination and the financial muscle to do so.
• Companies must periodically review the stage at which the product is placed
in its life cycle. They must be ready to implement life extension plans even
when the product is apparently doing well in the market.
• The poor constitute a huge mass market but the product must be tailored to
suit their disposable funds.
Test markets today are difficult to mount because of the speed with which
competitors are able to react and either spoil the test market or learn their own
lessons from it. But there are many market research techniques available today that
permit simulating consumer behaviour without going to market with the product.
There is also a great deal of reliable socio-economic, behavioural, psychographic
 15

and other information available about consumers. Speed from product concept to
national market is important. Companies have to find organizational systems and
processes to harness ideas and then have the determination to put resources behind
them in the market.
But the “first mover advantage” is not as useful today. Before liberalization in 1985
and the opening of the economy in 1991, being first could mean preempting another
new entry. The restrictions imposed by government licensing meant that being first
conferred a quasi-monopoly status. At a time when the consumer was denied choice
and was starved of additional product features and quality, the consumer welcomed
any innovation. The consumer identified foreign products with quality and
preferred them to domestically made ones. The possible sales volumes were limited
because of limited reach of advertising and less numbers that could buy
manufactured products. Few manufacturers aimed to reach mass markets and
instead tried to get into premium niche areas. These conditions no longer apply.

Determining who will be your consumers is a delicate task that combines intuition
and observation with meticulous market research. Demographics and sociology are
good guides as is an understanding of the directions of the economy and its
consequent impact on consumer attitudes and behaviour. I am reminded of Akio
Morita’s description of how he got the idea for the hugely successful ‘Walkman’ for
Sony by noticing how his usually affectionate daughter dashed in to the house after
a short trip away from home, went up to switch on her blaring rock music, and then
came to hug her parents. Morita thought loud rock music was a waste of acoustic
energy and also forced unwilling listening on others who were not interested in
hearing rock music. His solution was to design a personal tape player, the
Walkman, one of the most successful consumer products in the world. The idea was
based on observation on top of much hoarded information on the developing socio-
economic changes.
There is a correct time in the development of markets when a product is acceptable
to the consumer and will give the desired volume. What is correct at one time may
not remain so after some time, and vice versa. Extending product lives can be done
in many ways. Redesign, extending the name and logo and image to other uses,
changing to a different target consumer group are some of them. But they must fit
with the consumer’s mental image of the product and the brand. Constant attention
must be paid to keep products up to date with changing consumer contexts,
attitudes, needs and behaviours. Product forms must alter to meet consumer needs.

Introducing innovative products into markets is tricky. It becomes risky and

expensive when the consumers are not yet ready for it and the sales volumes remain
low while they are being made ready by advertising and promotion. The company
must have a commitment to support the product through these years, as appears to
have been the case when Dalda was introduced. Chiclets and Hima were examples
where the determination to succeed and hence the needed support were lacking.
‘Kellog’s’ corn flakes were placed in a similar situation but over time, with
determination to succeed and changing product design and marketing, they
succeeded in becoming viable.
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Products and Brands do not have a permanent life. They can take some life
extension but it is unlikely to be forever. Life extension will be determined by the
nature and extent of change in the social, cultural and economic environment of the
consumer. But this is not easy to do. It must be done at an early enough stage. The
correct time is many times when the product is still doing well. But no one likes to
take risks with a profitable and successful product. At the same time, to do it when
the purpose for the product’s existence is already on the wane might be too late. The
trick is to recognize the correct moment. After all is said about marketing tools and
techniques, the ability to evaluate and take risks requires courage and
determination.
NCAER surveys and other subsequent studies including the Census have shown a
huge mass market among the very poor. But these are high-risk markets. They
demand special techniques to be reached. The sales volumes, required production
capacities and the consequent investments in plant and machinery, are likely to be
large. The costs of failure will be high. But they can give dominant market positions
on which premium niches can be built. (8873)