Innovate to Lead

Lately, new-age start-ups and entrepreneurs have brought disruptive products and business models to the market and have been successful in attaining reasonable scale by adopting a focused channel and niche market approach with a significantly shorter lead time between launching products.

The emergence of these brands has made it imperative for brand owners to exhibit a higher degree of agility and nimbler decision-making to stay ahead and continue to expand the consumer franchise. Hence, innovation in core categories and portfolio expansion into the identified categories of the future remains one of the key pillars of Marico’s long-term strategy.

Marico invests in Research & Development (R&D) to drive cutting edge research, product development and clinical studies, endeavouring to create innovative and efficacious products for the consumer. We have a dedicated R&D team working in various streams of Advanced Technology, Product Development, Packaging, Quality, Clinical Studies and Nutrition. The Company has also been leveraging Digital and Analytical tools such as trendspotting, social listening, and design thinking, among others, to bring an outside-in perspective to new product development. Further, the strategic investment in Zed Lifestyle (who owns the brand 'Beardo') has enabled the Company to enhance its capabilities in digital marketing.

For over two years now, the Company has been following a streamlined new product development process and has effectively shortened the idea-to-market lifecycle. The Company has constituted an Innovation Council, a committee comprising functional CXOs and headed by the MD & CEO, which undertakes a structured review and scrutiny of all big-ticket new product ideas along a detailed stage-gated process. Separately, introduction of new variants of existing products or simpler product line extensions are not required to go through the Innovation Council, thereby allowing them to be rolled out in a shorter span of time.

Given the Company’s focus on driving premiumisation, new product ideas, other than those targeted at the bottom of the pyramid segment, are mandated to have a healthier gross margin profile than the current portfolio. In order to ascertain if the product is meeting action standards, the Company monitors performance parameters such as turnover, market share, reach, share of voice, penetration, number of new trials, etc., against benchmarks that have been set prior to launch, subject to the play envisaged for the particular offering.

New product ideas are driven by cross functional teams (comprising members from R&D, Marketing, Supply Chain, Sales and Finance) right from conception through to its potential national scale-up. With a view to foster an  entrepreneurial mindset and bootstrapped approach to building new brands, the Company has sought to build a culture that accepts failure as a stepping stone to success. By setting multi-year Key Result Areas (KRAs) with a built-in safety net, the Company has ensured the performance management criteria of these dedicated cross functional teams encourages measured risk-taking.

The Company has always adopted the prototyping approach to new product introductions that helps maintain a healthy pipeline and at the same time limits the downside risks with its fail fast approach.

With the rising salience of e-commerce, premium offerings are being launched exclusively on the digital platform to  gauge consumer response on a real-time basis prior to scale up. During the year, Marico introduced its first digital brand, Set Wet Studio X, a premium male grooming range, which was extended to Modern Trade only on gaining encouraging online traction. The Company undertook a similar approach with subsequent premium launches namely, Saffola FITTIFY Gourmet, Coco Soul, True Roots Botanical Hair Tonic, Parachute Advansed Coconut Crème Oil and Kaya Youth O2.

In FY19, there was a visible acceleration in the new product launches across portfolios by the Company. The Company has upped its efforts to identify and invest behind big-ticket new ideas in its chosen categories of Premium Hair Care, Healthy Foods, Male Grooming and Premium Skin Care for driving growth. The Company aims to double the revenue contribution of new products in the next three to four years on the back of these efforts.