Brand launch: The more the merrier

A slew of new products and extensions hit the market as the shadow of the pandemic receded

For obvious reasons, the health and immunity segment also buzzed with activity.
For obvious reasons, the health and immunity segment also buzzed with activity.

A random scan of newspaper reports showed that there were at least 87 new brand launches and extensions in the three-month period between April and June this year across categories (excluding those that didn’t make noise on social or traditional media). That’s 29 a month or almost one every day. The segments that saw the most buzz were mobile handsets and snack foods.

As the shadow of the pandemic began to recede, firms across sectors unveiled new products or upgrades of existing ones, placing a strong emphasis on innovation, while making them more accessible to their target audience. So are we in the middle of a “revenge launch” phase à la revenge tourism and revenge shopping?

The trend started last year itself. In the six-month period between March and August (2021), FMCG companies alone had logged 1,897 product launches in the health and hygiene category according to an estimate by Nielsen. In the April-September (2021) period, as many as 9,700 new products were launched by FMCG companies, recording a jump of almost 35% compared to 7,200 launches in the same period of 2020.

Here’s the paradox: The wholesale price index (WPI)-based price rise surged to a 30-year high of 12.96% in FY22, on rising commodity prices and a low base of 1.3% in FY21. Didn’t that pinch?
Rajat Wahi, partner, Deloitte India, believes that launching new brands when prices are going up and consumers are likely to cut back on spending and consumption is not easy and also not a great idea. But companies may decide to launch cheaper versions of their range or even smaller pack sizes to continue to drive trial and consumption. On the flip side, when the chips are down, it costs 20-25% less to drum up noise around a new launch.

Innovation is the key

The tech space—be it edtech, fintech or gaming—saw the largest number of launches in the full year 2021. While there were fewer new FMCG brand launches last year, there were quite a few variants and line extensions, aimed largely to drive trials, says Vanita Keswani, CEO, Madison Media Sigma.

For obvious reasons, the health and immunity segment also buzzed with activity. Dabur India launched new variants of its existing brands such as  Shilajit, Hajmola and Honitus. Ajay Singh Parihar, marketing head, healthcare, OTC, Dabur India, says, “To reduce cost without sacrificing the quality of the product, we are also working at novel packaging.”

For its part, Bombay Shaving Company has moved to recyclable packaging and introduced products at lower price points such as `99. It launched smaller SKUs in some of its core categories like shaving and skincare (available in 50gm packs) while also offering value combos.

Similarly, Bikano has started offering over 60 SKU variants at the `5 price point; 80 SKUs at the `10 price point, and around 25 SKUs at the `20 price point. Dawinder Pal, head of marketing, Bikano, says, “Due to inflationary pressure we did some grammage reduction, that is, downsize some of our products while ensuring we did not increase the price. We registered a sharp spike in demand for the low-value packs the last quarter.”

Taking the innovation game one step ahead, Godrej Consumer Products recently unveiled its Magic Bodywash (ready-to-mix) at the pricing of `45 per sachet — the same price as that of a 120-125-gm soap bar. The timing of the launch was perfect, said Somasree Bose Awasthi, CMO, Godrej Consumer Products, adding the brand allowed people to upgrade to a body wash during a tough time.

Defining the launch time

A key questions is, when is a good time to launch a brand? New brand launches are a good way to revive consumer sentiment when economic conditions put a strain on the consumer’s wallet, says Rutu Mody-Kamdar, founder, Jigsaw Brand Consultants.  An added advantage, she says, is that firms can experiment with flexible payment options vis-a-vis suppliers, besides working on more efficient packaging and delivery options.

Siladitya Sarangi, country manager, Deoleo India (Figaro Olive Oil), notes that many marketers time launches to coincide with the festive season or a popular sporting event. But that isn’t always a great idea because cutting through clutter becomes a key concern rather than creating space in the consumer’s mind. Launching a new brand in an inflationary environment is only advisable if the company is looking to secure a foothold at a particular price point/range or if that price point proves strategically unsuitable during normal times, says Vishal· Nicholas, EVP and head, planning and strategy, dentsuMB India. Else, one can always launch a low unit pack (LUP) to address the need for customers to cut back on their monthly expenditure.

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