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Namrata Singh
Mumbai, Dec 21: Shower them with brands, or open up the big umbrella? Marico Industries has opted for the latter, with an extension of the Saffola brand equity, a 30-year old kardi oil brand associated with "the heart of a healthy family", to salt which forms part of a larger purpose: to develop Saffola into a strong umbrella brand riding on its age-old USP of "good for the heart".
"There was a need in the marketplace for such a product which cannot be directly compared to other branded salts because of the price premium that Saffola salt commands," says Marico Industries Ltd chief executive officer (health care) Pranab Datta.
Saffola salt is priced at Rs 25 for a one kg jar (this is the first time that the most common food ingredient salt is being introduced in a jar form. The price premium is partly due to this additional cost). The company has launched the salt in select towns like Mumbai, Delhi, Chandigarh, Calcutta and Pune at a special price of Rs 20. The pricing may, however, put off a consumer whois used to paying Rs 6 to Rs 7 for a kg of common salt.
Datta defends the move as "a complete value to the consumer who gets a re-usable jar along with the salt. The company may later look at introducing other sizes and try to cut down on the cost which would eventually bring down the price to the consumer. However, this price would still be at a slight premium over other branded salts in the market due to its unique qualities," said Datta. Saffola edible oil, the original successful product of Marico under the brand name, is also priced at a premium of 10 per cent to 15 per cent over competitor brands. Saffola contributes 18 per cent to the company's Rs 490 crore turnover.
While the company's cost on the product is not known, it is a general trend to keep the maximum retail price in the initial launch stage at a cost-plus- minimum margin.
Marico Ltd has been on a brand extension spree since it successfully extended the equity of `Parachute', its flaghsip brand last year in the value-added hair oilsmarket. The company is known for taking a lead in creating new product segments, as Datta puts it, "We do not want to be in the me-too segments."
But why salt for Saffola, well known among those health conscious consumers? The thinking behind extending the brand to the common salt was simple: "Because salt is the main intake most consumers suffering from hypertension, a common heart ailment, are asked to cut down on. We have tested the salt with doctors and have been introspecting on the concept for over a year now. It involves, in addition to iodising the salt, a reduction of around 25 per cent of sodium which has been substituted by an equivalent amount of potassium. Further, we have not compromised on the taste element," says Datta.
The company has not yet launched any conventional modes of promotions like advertising. Datta feels that the Saffola-conscious consumer is the company's primary target and that would mean four lakh households. Saffola oil has been tagged on towards educating the Saffolauser about the salt which would act as a direct promotion to reach out to the primary consumer. This acts as a twin offer, while Saffola oil is for cholesterol, the salt is for hypertension.
As far as penetration is concerned, Saffola salt, like the oil, will be an urban phenomenon. Although Saffola salt has been launched without much fanfare, Datta claims that repeat purchases since its launch a few days back are commendable.
Branded salt accounts for 20 per cent of a five-million tonne market, say some industry analysts. Valued at Rs 500 crore, the market is growing at 20 per cent per annum. Tata Salt leads the market with around 30 per cent market share followed by Hindustan Lever's Annapurna and DCW's Captain Cook at around 15 per cent.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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