Marico – Out Innovating the Industry GiantBreaking Through Boundaries to unleash an ORBIT-SHIFT

Marico
Marico is one the leading company in FMCG sector incepted in year 1988. The company has created one of biggest brands in India .

During 2015, the company generated a turnover of Rs. 5,733 crore. Marico has 8 factories in India located at Pondicherry, Perundurai, Kanjikode, Jalgaon, Paldhi, Dehradun, Baddi and Paonta Sahib.

The Challenge

At a crucial juncture in its growth journey, Marico faced an extreme threat from Unilever .. It was no secret back then that the single largest contributor to Marico’ s portfolio was Parachute, their coconut hair oil brand. Hindustan Unilever had launched and started to aggressively advertise their own brand Nihar, with the intention of wrestling the market away from Parachute.

Hindustan Unilever’s aggressiveness was visible in its extensive advertising campaign, outspending Marico at every step, its deafening voice drowning Marico out in the media. This was followed by worrying news from the field, where Marico sales personnel reported, ‘Walls of green in retail stores’. Nihar was a green coloured brand, while Parachute was blue. Visions of green walls became nightmares for Mariconians.

It was here that Marico chose to partner with Erehwon and apply Orbit-Shifting Innovation to overcome this onslaught from an Industry Giant.

Aware of the fact that Marico at that time was considered a prime takeover target in industry circles, and that the collapse of Parachute would almost certainly take down Marico with it, Erehwon mobilized the Oragnisation to treat it like an Innovation Challenge and not a Business as Usual Project. Along with Marico, Erehwon put together a high-level team from Marico to devise a new response strategy. This team had previously been trained extensively in creativity with lateral thinking skills, so they should have been able to come up with creative strategies.

The team members came together for a two-day workshop and generated a host of ideas, but none them pointed to a breakthrough. They were clearly hitting the wall of diminishing returns. There was by now, a growing sense of despair, ‘What can we do, Hindustan Unilever is a giant; they have much more resources than we do’ was the common refrain.

The Transformation

The Turning point was a ‘Breakthrough Dialogue’. This Dialogue was initiated with the question ‘Let’s face it we are all scared, the fact that we are sitting in this room, late in the evening looking like this! We are afraid of what this might do to us.’  This triggered the Mental Model Boundary that had been boxing-in the team’s thinking and holding it and the organization back; The team was struck with the realisation, that in their minds, they had already lost. They were thinking like a Defender! This was the invisible box that had virtually paralyzed them.

This Mindset had become the Gravity that had reduced them to being defensive. They doubted their own ability to take on and win against a Multinational Giant. No wonder most of the ideas that had been generated over the last two days were driven by a defensive but invisible question, ‘How to prevent encroachment, how to minimise loss?’ Finally, that evening they confronted and broke through this Mental Model Boundary that is unleashed a Mindset-Shift ‘from Defender to Attacker’.  This lead of to a wave of new thought.

While the MNC may be the more heavily muscled player in the FMCG industry, Marico was currently the king in the coconut hair oil market. Marico’s focus had successfully shifted from “minimizing loss” to “maximizing our market share” and the new mantra became “While we cannot beat them with resources, so we will beat them with ideas”.

New, Breakthrough possibilities come through – one of them focussed on ‘expanding the distribution network’ made a big impact.

The Impact – Defeating the Giant

  • Instead of losing market share to HUL’s aggressive campaigning, Marico actually gained its highest market share ever that year.
  • Nihar was successfully fended off year after year, and after four years, the battle ended after HUL sold Nihar to Marico.
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“At SLIC, we are very pleased with our association with Erehwon. They have taken on the challenge of “orbit shifting” Shriram Life Insurance with a lot of passion and we were able to form a strong multi-disciplinary team who could work together seamlessly and with a strong focus. Erehwon brings a unique blend of structure and creativity which helps to inspire breakthrough innovation. It ensures that we stay on course but also allows for powerful solutions to emerge. Also, their experience and network have helped us to tie up with good partners that will help us take our solutions forward. We are looking to great results from the initiatives that are now being piloted and also more good solutions ahead”.

Casparus Jacobus Hendrik Kromhout
Casparus JH Kromhout
MD and CEO, Shriram Life Insurance