Godrej Consumer Industry Case Study

INORGANIC GROWTH MANAGEMENT AT GODREJ CONSUMER PRODUCT LIMITED.

______________________________________________________________________________

1Amarpreet Singh Ghura – Student of EPGDHRM at Tata Institute of Social Science.

2Jenny B Mathew – Research scholar at Tata Institute of Social Science.

Abstract –

Since 1991 Indian Industries have been increasingly exposed to both domestic and international competition. Soon after Vivek Gambhir took over as Managing Director of Godrej Consumer Products in 2013, he traveled to Kurukshetra, Haryana, on a market visit and when he went inside into a small Kirana store (mom and pop store), the owner of the shop walked up to him with a sachet of godrej expert Rich Hair Crème, a hair colour. Gambhir was surprised

The FMCG landscape is seeing a transformation as new players enter the scene. For long, the branded FMCG sector was dominated by multinational like Hindustan Lever Ltd, Cadbury India, Colgate Palmolive, Nestle and Reckitt Benckiser on one hand and large domestic groups like Godrej (toilet soaps and hair dye) and Tata’s (cosmetics and edible oils) on the other. The two fastest-growing categories in the FMCG sector are food and personal and beauty care products. Many companies have also introduced innovative strategies that have rewritten the rules of marketing. One such strategy is the introduction of small sachet packs of shampoos, conditioners and detergents for as low as Rs. 1 or Rs. 2, which has helped FMCG majors popularize their branded products even among price and value conscious customers. While advertising and promotion costs are high, companies have to frequently launch new products to expand their market share. Leading FMCG players are in a rush to give their brands a premium status. For many FMCG companies a large chunk of their revenues up to about 60 per cent comes from new product launches. It takes anywhere between six months to a year for a company to introduce a new product more over it also has challenges such as importing the technology for new product development from

to have presence in three business categories (personal wash, hair care and home care) in three geographies (Asia, Africa and Latin America). The company decided to play only in categories where it was the market leader or on the path of becoming one. So the company stuck to hair colour. But unlike rival companies, which were rushing to give their brands premium status, Godrej Consumer took a calibrated approach. It decided to upgrade consumption habits at the bottom of the pyramids by offering quality products at value prices. The idea was to delight customers with an affordable product without compromising on quality. For this the company had to gain access to the latest technology being used in other countries, via inorganic route. This required GCPL to go