Dabur India plans to begin its product portfolio reallocation drive from April 1, 2002. Under the initiative, the Rs 1100-crore ayurvedic and fast moving consumer goods major will review its product range and decide on the reallocation of products to different business divisions.
The company has three business divisions -- family products division (FPD), healthcare products division and Dabur ayurvedic specialities division (DASL).
As a first step in this exercise, the company has identified six over the counter (OTC) brands under the ayurvedic specialities division which will be moved to the healthcare division. These include Isabgol, Nature's Cure, Madhuvani and Stresscom. These four brands put together contribute around Rs 15 crore to Dabur's sales. DASL will be a purely classical ayurvedics business.
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The move has been prompted by greater promise that OTC products have shown during the last year. While FMCG products grew at 2-3 per cent, OTCs notched up a growth of 10-13 per cent, according to Sunil Duggal, Dabur's director - sales & marketing. "OTC products will be a key driver of growth for the company and we are looking at a 25-30 per cent growth for our OTC products," he said.
Without getting into the details, Duggal hinted at the possibility of bringing all OTC products under one umbrella brand name which he feels would make their marketing more cost effective.
The company feels by moving these brands to the healthcare products division, they would get a better consumer focus in terms of marketing efforts.
Depending on how well this initiative works, Dabur would then look at other products in its portfolio. For now, according to Duggal, Dabur will see a continued reliance on FMCG products as they contribute around 90 per cent of the company's sales. "We will strengthen each element of marketing for our FMCG portfolio," he said.
The FPD contributes 55 per cent of Dabur's turnover, with HCPD (35 per cent) and DASL offering the remaining 10 per cent.
Dabur has been highly active during the last few years to give a different direction to its business using structural changes within the organisation and brand marketing approach. Its former CEO, Ninu Khanna was actually brought into the company three years back to spearhead such a move.
After Khanna's exit, a management committee is looking after the affairs of Dabur. Earlier each of the division had a business head reporting to the CEO. This has changed now. Each of these division report to the director marketing (Sunil Duggal) who is a member of the managing committee.