The Indian Kitchen Salt Market - Brand Wars


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Case Details:

Case Code : MKTG044
Case Length : 10 Pages
Period : 1991 - 2002
Pub Date : 2003
Teaching Note :Not Available
Organization : Kuwar Ajay Group of Industries, HLL, Tata Group
Industry : FMCG
Countries : India

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Salt Battles (I) - Companies Entering The Market

In January 1998, Dabur India Ltd. (Dabur), the owner of popular FMCG brands in the country such as Dabur Amla, Hajmola, Dabur Chyawanprash and Vatika, launched salt under the brand Nutrasalt. Dabur advertised Nutrasalt as a salt with low sodium content and positioned it on the health platform.

Claiming that the excess amount of sodium in other salt brands was not good for health, Dabur priced the brand at a premium over other brands in the country. While the other brands retailed for around Rs 6-7 per kg, Dabur surprised industry observers by pricing Nutrasalt as high as Rs 20 per kg. In November 1998, Marico Industries, which owned the popular Parachute (hair oil) and Saffola (cooking oil) brands, launched Saffola salt.

Marico joined the Nutrasalt category of premium salts by pricing Saffola salt at Rs 20 per kg. Saffola salt was packaged in a reusable jar and was also positioned on the health platform with its mineral enriched low sodium salt...

Salt Battles (II) - Companies Fight it Out

As Table II clearly indicates, despite the hectic activity in the market, there was a huge gap between the first two players and the rest of the brands. Though Tata Salt and Annapurna were well established brands, they could not turn a blind eye to the success of new brands. Both Tata Salt and Annapurna realized that in order to hold on to their market shares, they would have to put in place measures to help their brands remain the 'salt of choice.'...

The Future

Despite the fact that the number of players in the branded salt market had increased by the end of the 1990s, 70% of the total market (17 million tonnes) was in the hands of the unorganized sector even at the end of 2002.

Except for companies like KAG, most of the organized sector players were FMCG giants with strong financial and marketing muscle, and even their number was also very less. Though the market had minimal production costs and entry barriers, not many seemed to be willing to enter the fray...

Exhibits

Exhibit I: The Kunvar Ajay Group



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