Wednesday, November 21, 2012

Going national: Can Mother Dairy ‘milk’ success in new markets?

Mother Dairy, which has been a central player in the branded milk segment in Delhi and NCR for over three decades now, is all set to expand its market base in the country. Thus, the company has gone aggressive in its communication and marketing strategy. For instance, it recently introduced its milk packs in contemporary packaging. The six variants of the milk brand, which were earlier differentiated on the basis of colour, are now available in a single colour but with varying designs to display brand uniformity across markets. This has been followed by a new campaign launched in early October.

Created by Ogilvy India, the campaign titled ‘Maa Jaisa Koin Nahi’ is a considerable shift from the existing corporate tagline of ‘Sehat ka Saathi’. Describing the tribute that the brand intends to pay to mothers, Amitava Mukherjee, Business Head, Milk Division, Mother Dairy Fruit and Vegetable, says, “We thought it was time for Mother Dairy to celebrate the biggest part of its name and pay a befitting tribute to the mothers of this country.”

Amitava Mukherjee, Business Head, Milk Division, Mother Dairy Fruit and Vegetable

He also explains that the objective behind putting the communications strategy on active mode has been to reach out to the national audience. “As is the case with any organisation, we have an aspiration to expand our scale of operations and reach out to people outside the capital. Since, we are covering many cities outside Delhi, we felt that it is the right time to reach out nationally through a TVC,” he says.

Hence, during the course of the last four-five years, the brand has paved its way beyond the Delhi and NCR belt. As far as existing markets are concerned, the brand has a presence in Uttar Pradesh, Uttarakhand, Haryana, Rajasthan, Andhra Pradesh and Tamil Nadu, and is soon to be launched in cities like Pune.

Entering the contest
However, moving out to newer terrains may mean tackling competition from brands that have had a strong regional foothold. And, this could qualify as a considerable trial even for a brand like Mother Dairy, which leads in the capital with a market share of 50 to 70 per cent across categories. Complementing this is a robust distribution channel, where the product is available to the consumer via 15,000 retail points and almost 3,000 exclusive booths.

Ramanujam Sridhar, Founder CEO, brand-comm

But how does consumer behaviour drive response to a new entrant for a product like milk, which is largely necessity based? Ramanujam Sridhar, Founder CEO, Brand Comm, highlights the temperament of a consumer for a high involvement product like milk, when he says that consumers are usually ‘locked into’ what they drink and might not see a real reason to look for an alternative unless, there is an unavailability of the preferred brand. “While operating in a category as crowded as milk, the only challenge lies in the fact that the customer should not reject your brand,” he says.

DS Rawat, Secretary General, ASSOCHAM, points out yet another significant trend. He says that consumers today are becoming increasingly cautious of adulteration. An analysis by Tata Strategic Management Group, on the dairy sector, also lists out increased food safety and hygiene and high adulteration concerns as one of the primary causes pushing consumers away from unorganised sources to branded or packaged sources. “Mother Dairy has a great sense of credibility backing it owing to the support, which has been rendered by the government itself. Challenges are limited and all efforts need to be channeled towards aggressive visibility,” Rawat says.

Ashoo Advani, Brand Expert, Chlorophyll Brand & Communications Consultancy

According to Ashoo Advani of Chlorophyll Brand and Communications Consultancy, for milk and milk products, the primary virtues that consumers look for are purity and freshness. These are the table stakes in this space. “Most brands operating in this space will try to own these associations, but owning these will not create any differentiation,” says Advani while declaring the real test for the brands in this category.

Winning it?
In a milieu, where the dairy sector in India is transforming from a commoditised-low margin liquid milk business to a branded value added play, dairy products also need to begin to start building aspirational brands. And, this is akin to marketing and brand creation in other packaged food and beverages. Running parallel is obviously a cluttered channel of competition. The dairy industry in India is largely dominated by the cooperative sector and approximately 60 per cent of the installed processing capacity lies in this sector. A key national player in Mother Dairy is accompanied by native brands like Amul and global counterparts like Nestle, at the national level, there is also a strong existence of competitors like Indiana Dairy Specialities, Jagatjit Industries and the Karnataka Milk Federation, at the state level.

Pankaj Gupta, Practice Head- Consumer & Retail, TATA Strategic Management Group, feels that for a brand, which moves beyond its regional domination into other geographies, it is imperative to offer a differentiated proposition that is relevant to consumers in these new geographies. “In some cases the proposition may have to be different from that offered by the regional brand in its home market,” he adds. Another key challenge also lies in distribution for brands, which traverse beyond their native boundaries. Gupta explains that there is usually a gap in access to exclusive dairy outlets that are owned or managed by local brands and have to vie for presence in the local grocery stores along with other local brands.

DS Rawat, Secretary General, ASSOCHAM

But what works in favour of a brand like Mother Dairy is the fact that it has steadily built equity over the past three decades, thereby creating an active opportunity in semi-urban and rural areas. DS Rawat says, “In the rural sector, the sale of milk is growing at a CAGR of more than 17 per cent. With higher disposable incomes and the wish to procure packaged milk, Mother Dairy has a great chance if it intensifies its networks in these areas by milking the already existing distribution channels.”

Needless to say there is only a glorious prospect to unlock with the Indian dairy industry expected to reach Rs. 5 lakh crore by 2015 (Source: ASSOCHAM). Therefore, for existing contestants in this market, efforts need to be guided towards inducing consumer trial and loyalty in new geographies, to win the race not only against regional giants, but also against players who have expertise in the growing segment of value added dairy products.

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