Marico vs HUL, the clash of titans
In the late ’90s, Harsh Mariwala, separated the consumer product segment from his hereditary business called Bombay Oil industry limited (BOIL) and formed MARICO. Parachute oil was one of the major products under them. Marico was incorporated in 1993 and by 1996 its sales and profits were doubling. Parachute oil had a 48% market share in the coconut oil segment and was driving the growth.
In 1996, Hindustan lever, the FMCG shark was looking for expansion under newly appointed Keki Dadiseth. HUL did takeovers & acquisitions left and right. Brands such as Brooke Bond, Ponds, Kwality, and more were all results of mergers & acquisitions. HUL had a similar product named Nihar Coconut oil which it acquired from an oil company called TAMCO in 1993. Nihar Coconut oil had only a 7% market share whereas Parachute had a whopping 48%.
Hul had a deep pocket and the largest sales & distribution network. HUL started aggressive advertising for Nihar and acquired another coconut oil brand Cococare to fight with Parachute.
Nihar was also advertised heavily to fight with HUL, they improved distribution and matched Nihar’s price. Further, they did rebranding and redesigned their packaging, campaigned as “Shuddhata ki seal”. Marico began an advertising campaign on the importance of sacred coconut in Hindu tradition and emotionally connected to people.
It resulted in an increase in the market share of Parachute to 52%. Hul's Nihar also gained a market share from 7% to 15%.
This clash went on for six long years. Marico won more market share than Nihar. Besides, HUL had tough competition from several other FMCG brands in other product categories. So, Nihar lost focus and HUL decided to sell it.
In the year 2006, Harsh Mariwala, of MARICO bought the Nihar from HUL !!!!
Book: Harsh Realities: The Making of Marico by Harsh Mariwala and Prof. Ram Charan, published by Penguin Portfolio.
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