 "The consumer should be at the centre of innovation: Chander Mohan Sethi")
Trust comes when a consumer believes that what is being promised will be delivered to her again and again, Chander Mohan Sethi tells Ankita Rai
Reckitt Benckiser has re-positioned itself to focus on high-end health and hygiene products. Why this change in strategy - from a household cleaning company to health, hygiene and home?
In India, we are among the fastest growing companies of the last decade. However, as markets change and consumer preferences change, we also review our overall strategy accordingly. Globally, it was felt that health and hygiene are areas which get more attention as consumers evolve. Even as the healthcare and hygiene portfolio takes much longer to grow because it has to be backed with medical science, doctor endorsement and right communication etc, it is seen that once the consumers buy in they stay with that for long.
Healthcare and homecare segments call for different sensibilities and approaches, especially in India where, unlike the developed markets, over-the counter healthcare products cannot be sold through channels other than chemists/pharmacies.?
Over-the-counter drugs are sold in the Western world also and they have very clear requirements in terms how to store them and so on. Much larger range of such products are also sold through large pharmacy chains such as Boots and Guardian. These stores not only keep health products but also nutrition and beauty products. In India, most of healthcare products are sold only in pharmacies. Many products dispensed by the pharmacy are over-the-counter. The important thing is that consumers should get the relevant product irrespective of the channel. As consumers evolve, you will have modern chains with a separate section for over-the-counter drugs.
Typically, an MNC works around three strategies: product, channel and geography...
While strategically we are saying that we are in health, hygiene and homecare, this does not mean that we have changed our strategy of innovation being at the base of whatever we do. Innovation is all about understanding and reading the consumer much better. So if you take our healthcare products for example, we have Gaviscon normal, advance, infant and so on. In case of hygiene products, our greatest innovation is Dettol with its various extensions. Disinfectant cleaner Lysol comes in different variants and sizes. Depletion cream Veet is another big innovation by us. We launched it in 2004 when hair depletion market was only Rs 50 crore in India. It proved to be a game-changer. We believe in constant innovation.
As consumers evolve, the channel becomes more challenging and demanding in terms of how she would like to buy a product. At present in India, there are the following channels at play: neighbourhood kirana, smaller modified grocery stores, modern trade, and pharmacies. The modern trade is an evolving channel and we work in partnership with Spencer's, Reliance and Walmart for joint business planning. The second is pharmacy. While we have a limited pharma range as of now, we have many products that are sold in pharmacies such as Nurofen, Strepsils Gaviscon, Veet, D'Cold, etc. In fact, there is a fundamental change in our strategy. Earlier the same distributor or representative used to go to all kind of stores, now we have a standalone focused distribution system for each channel.
In terms of geography, it is important to segment the market clearly. As we go to small towns and rural markets, the challenge in the FMCG category is how do you cover and ensure the availability of your products in smaller stores. To address this issue, we have a hub and spoke model. We cover more than 3,000 towns out of that. Also, we are doing various tests to serve the rural markets.
With developed markets being stagnant, MNCs are now focusing on emerging markets for growth. Reckitt Benckiser also elevated India to regional headquarters for southeast Asia. Why this higher focus on India?
With slower market growth and increased competition, we had to reshape our strategy. Earlier for Reckitt Benckiser, the business was divided into three geographies: America, Europe and all emerging markets. Today we have combined Europe and America business as one and split the emerging markets into two: one based out of the hub in Dubai and second based out of Singapore known as LAPAC (Latin America and Asia Pacific). It includes Latin America, North Asia, Australia, New Zealand and Southeast Asia. India is one of the biggest markets. In Southeast Asia, there are other very important power markets (focus markets) such as Indonesia, Thailand, Vietnam and Cambodia. Around 42 per cent revenues are now coming from emerging markets.
Experts say, MNCs need to localise their leaderships to counter the cultural challenges posed by emerging markets. Do you agree?
It is the question of understanding the long-term strategy of a business, the geography of a country and the portfolio of a country. I believe in two things: first bring the best resource into a geography with lot of experience. So you could have a French marketing director in India. A pure marketer should be able to read anyconsumer. Second, it gives an opportunity to lot of people to grow their career around the world. People need to be good at their work and they can be successful anywhere in the world.
THE LOYALIST
Reckitt Benckiser has re-positioned itself to focus on high-end health and hygiene products. Why this change in strategy - from a household cleaning company to health, hygiene and home?
In India, we are among the fastest growing companies of the last decade. However, as markets change and consumer preferences change, we also review our overall strategy accordingly. Globally, it was felt that health and hygiene are areas which get more attention as consumers evolve. Even as the healthcare and hygiene portfolio takes much longer to grow because it has to be backed with medical science, doctor endorsement and right communication etc, it is seen that once the consumers buy in they stay with that for long.
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Health has become our core focus, followed by hygiene and home. Even our recent acquisitions are aligned with our focus on healthcare. The strategy is that one-third of our business will come from healthcare globally.
Healthcare and homecare segments call for different sensibilities and approaches, especially in India where, unlike the developed markets, over-the counter healthcare products cannot be sold through channels other than chemists/pharmacies.?
Over-the-counter drugs are sold in the Western world also and they have very clear requirements in terms how to store them and so on. Much larger range of such products are also sold through large pharmacy chains such as Boots and Guardian. These stores not only keep health products but also nutrition and beauty products. In India, most of healthcare products are sold only in pharmacies. Many products dispensed by the pharmacy are over-the-counter. The important thing is that consumers should get the relevant product irrespective of the channel. As consumers evolve, you will have modern chains with a separate section for over-the-counter drugs.
Typically, an MNC works around three strategies: product, channel and geography...
While strategically we are saying that we are in health, hygiene and homecare, this does not mean that we have changed our strategy of innovation being at the base of whatever we do. Innovation is all about understanding and reading the consumer much better. So if you take our healthcare products for example, we have Gaviscon normal, advance, infant and so on. In case of hygiene products, our greatest innovation is Dettol with its various extensions. Disinfectant cleaner Lysol comes in different variants and sizes. Depletion cream Veet is another big innovation by us. We launched it in 2004 when hair depletion market was only Rs 50 crore in India. It proved to be a game-changer. We believe in constant innovation.
As consumers evolve, the channel becomes more challenging and demanding in terms of how she would like to buy a product. At present in India, there are the following channels at play: neighbourhood kirana, smaller modified grocery stores, modern trade, and pharmacies. The modern trade is an evolving channel and we work in partnership with Spencer's, Reliance and Walmart for joint business planning. The second is pharmacy. While we have a limited pharma range as of now, we have many products that are sold in pharmacies such as Nurofen, Strepsils Gaviscon, Veet, D'Cold, etc. In fact, there is a fundamental change in our strategy. Earlier the same distributor or representative used to go to all kind of stores, now we have a standalone focused distribution system for each channel.
In terms of geography, it is important to segment the market clearly. As we go to small towns and rural markets, the challenge in the FMCG category is how do you cover and ensure the availability of your products in smaller stores. To address this issue, we have a hub and spoke model. We cover more than 3,000 towns out of that. Also, we are doing various tests to serve the rural markets.
With developed markets being stagnant, MNCs are now focusing on emerging markets for growth. Reckitt Benckiser also elevated India to regional headquarters for southeast Asia. Why this higher focus on India?
With slower market growth and increased competition, we had to reshape our strategy. Earlier for Reckitt Benckiser, the business was divided into three geographies: America, Europe and all emerging markets. Today we have combined Europe and America business as one and split the emerging markets into two: one based out of the hub in Dubai and second based out of Singapore known as LAPAC (Latin America and Asia Pacific). It includes Latin America, North Asia, Australia, New Zealand and Southeast Asia. India is one of the biggest markets. In Southeast Asia, there are other very important power markets (focus markets) such as Indonesia, Thailand, Vietnam and Cambodia. Around 42 per cent revenues are now coming from emerging markets.
Experts say, MNCs need to localise their leaderships to counter the cultural challenges posed by emerging markets. Do you agree?
It is the question of understanding the long-term strategy of a business, the geography of a country and the portfolio of a country. I believe in two things: first bring the best resource into a geography with lot of experience. So you could have a French marketing director in India. A pure marketer should be able to read anyconsumer. Second, it gives an opportunity to lot of people to grow their career around the world. People need to be good at their work and they can be successful anywhere in the world.
THE LOYALIST
- Sethi began his career at erstwhile Reckitt & Colman in 1984 and took on the role of national sales manager by 1987. He was promoted to the role of head of marketing and sales in 1990 before moving to RB Nigeria and West Africa as managing director in 1994
- In 2002, Sethi moved back to India as the managing director for RB India and regional director of RB South East Asia. He has been instrumental in establishing RB's strong foothold in household and personal care segment
- Sethi began his career as a management trainee with Glaxo SmithKline Consumer Products. After taking on various roles in sales and marketing in India, he moved to the company headquarters in United Kingdom