Godrej’s success in FMCG will depend a lot on its push strategy
Guess what Adi Godrej (Chairman of the Rs.75 billion Godrej Group) is eying these days? The Rs.450 billion Indian FMCG industry. This was visible when he revealed his plan on April 26, 2008 to garner Rs.80 billion from the FMCG sector by 2012. So what’s his contention? “Last year, food was driving the FMCG sector, but this year there will be growth in all segments of FMCG, the highest among all the other sectors,” reasons Adi. With an aggressive profit growth target of 25-30% ahead of him, he’s coupling a brand makeover exercise with a plan to roll-out oodles of products from Godrej’s stable. Sources from the company also confirm that Godrej has set its eyes on foreign acquisitions during 2008. The multi- billion dollar question is: will just portfolio expansion & M&As make the day for Godrej?
There is a rough patch on its path, though, as analysts argue that as compared to others, Godrej has missed out on supporting its new launches with 360 degree promotion in the past. However, with a budget of Rs.1 billion per year for ‘big’ promotional activities hereon (like a logo change), Godrej wants to make up for years lost. Also, assuming its acquisitions to be healthy (like Rapidol, which contributes to 20% of its turnover), Godrej could spring surprises to its competitors.
Guess what Adi Godrej (Chairman of the Rs.75 billion Godrej Group) is eying these days? The Rs.450 billion Indian FMCG industry. This was visible when he revealed his plan on April 26, 2008 to garner Rs.80 billion from the FMCG sector by 2012. So what’s his contention? “Last year, food was driving the FMCG sector, but this year there will be growth in all segments of FMCG, the highest among all the other sectors,” reasons Adi. With an aggressive profit growth target of 25-30% ahead of him, he’s coupling a brand makeover exercise with a plan to roll-out oodles of products from Godrej’s stable. Sources from the company also confirm that Godrej has set its eyes on foreign acquisitions during 2008. The multi- billion dollar question is: will just portfolio expansion & M&As make the day for Godrej?
There is a rough patch on its path, though, as analysts argue that as compared to others, Godrej has missed out on supporting its new launches with 360 degree promotion in the past. However, with a budget of Rs.1 billion per year for ‘big’ promotional activities hereon (like a logo change), Godrej wants to make up for years lost. Also, assuming its acquisitions to be healthy (like Rapidol, which contributes to 20% of its turnover), Godrej could spring surprises to its competitors.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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