Marico Bangladesh: Meeting the Value-Added Hair Oil (VAHO) challenge

• Main Authors: RAMASWAMI, Seshan, VENKAT, S. N., CHAN, Chi Wei
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2020
• Subjects: Branding; Consumer behaviour; Product management; Brand extension; Advertising; Market research; Marketing
• Online Access: https://ink.library.smu.edu.sg/cases_coll_all/285; https://smu.sharepoint.com/sites/admin/CMP/cases/SMU-19-BATCH%20%5BPDF-Pic%5D/SMU-19-0039%20%5BMarico%5D/SMU-19-0039%20%5BMarico%5D.pdf
• Institution: Singapore Management University

Aditya Shome is the executive director of Marico Bangladesh Limited (MBL) who has to chart the firm’s future strategy. MBL, whose parent company Marico is based in India, oversaw the rapid rise of the Parachute brand of coconut oil in Bangladesh. Within a decade of introduction to the Bangladesh market, the brand had risen to the status of the #1 consumer brand beating long established multinational brands like Nokia, and Sunsilk and local behemoth Grameen bank. Even as Parachute oil is the clear brand leader in the branded regular coconut oil market, having rapidly taken away share from the loose oil market, there is a threat emerging. The fastest growing segment in this category is the Value Added Hair Oil (VAHO) market which is further divided into four sub-segments – perfumed, cooling, Coconut Oil + and non-coconut oil. In each of these four categories, Marico’s offerings are laggards. Not only are their shares a lot lower than the individual brand leaders in these four categories, some of these brands are actually directly comparing themselves (in television advertisements) to the flagship Parachute coconut oil brand. Shome thus has to balance maintenance of the leading position in the coconut oil market, to minimise cannibalisation in promoting the various VAHO offerings of Marico, and to gain on the leaders in these other categories. There are many ways in which this case could be used in the undergraduate or MBA classroom. It was designed for a course on Consumer Behaviour – as there is a lot of marketing research data and insights throughout the case. It could also be used in a course on Introductory Marketing (to show how a brand was built from scratch), and in Brand Management (to appreciate the complexities of expanding a product line into brand extensions).