JOHNSON'S® baby oil contains Aloe Vera extract and Vitamin E acetate.

It is Clinically Proven Mild for use

on babies. It is a light, non-staining oil that can be used before bath and for moisturizing after bath.

Baby Hair oil

Johnson & Johnson® baby hair oil is the first hair oil to contain Pro-Vitamin B5. Its skin conditioning
properties helps prevent flaking of soft skin from baby's scalp. The Pro-Vitamin B-5 nourishes hair roots and
strengthens the hair.

Dabur India, the Rs 2,233 crore FMGC, with a keen interest in the oil and digestive
segments, is looking to make the concoction of herbal oils used in its Lal Tel, thereby
making it easier for the urban consumer to understand it and also identify with it. Having
a market share of 26% in the Rs 280 crore baby massage oil market, Dabur is now
planning to make a deeper penetration in the semi urban and rural market with a newly-
packaged Lal Tel. Speaking to FE, Parag Agarwal, AGM, marketing of Dabur India, said
this is the biggest challenge for Dabur in its baby massage oil segment. "This is still a
fairly nascent industry, what with organised baby massage oil industry having a paltry
6% market penetration. Our aim is to convert users in the rural areas, where people still
use open mustard oil to massage babies. And along with that, we shall also try and spruce
up the branding and marketing of the entire range of our baby care products to match the
best in the industry." Interestingly, Johnson and Johnson's baby oil, which has a 34%
market share, is the frontrunner in the segment. "Our strategy is to go back to our roots
and add value to traditional home made remedies," he added

I use Johnson and Johnson hair oil on my baby’s hair. I have been using this oil since her
birth. This oil is good and non-sticky. Its smell is also good. I did not found any side
effects by using this oil. My baby also did not get any irritation or allergy with this
product.She is quite comfortable with the product.Gentle massage on baby’s scalp with
this oil not only relaxes the baby but also helps in hair growth. It is available in the
market as 50ml and 200ml bottles.But it costs a bit high when compared to the ordinary
coconut oil.They say that this oil is enriched with Pro-vitamin B5 that helps in nourishing
the roots causing healthy hair.This is made in India.

She’s more about bellydancing than babies. But in a remarkable transformation of roles, last September,
popular South Indian actress Simran appeared on TV screens across the region, minus her characteristic
sashaying, promoting Sparsh, a new brand of baby oil. It was an unorthodox entry into baby care for Marico.

No other brand in the Rs 300-350 crore industry had roped in a brand ambassador, leave alone an actress.
Less than a year later, following the national launch of Sparsh oil and bathing bar, another film star, Sonali
Bendre, spoke up for Sparsh.

Why was Marico — owner of Parachute, the world’s largest packaged coconut oil brand — sprinkling
celluloid dust on baby products?

“Brand ambassadors build brand conspicuity, so why not extend that benefit to baby care? Besides, we’ve
chosen women who’ve made successful transitions to motherhood,” explains R Chandraseker, category
head, Sparsh.

Marico’s entry into babycare products is also a transition of sorts. The Rs 1,147-crore consumer goods
company has been attempting to change its profile from a hair oil and edible oil products company to a
personal and health care player, making forays into premium categories (such as value added hair creams
and wellness services) that deliver substantial value growth with higher margins.

The baby care segment offers operating margins that are 5-10 percentage points higher than adult personal
care. And, Marico has been striving to build up a healthy pipeline of new products and services, contribution
of which has increased from 5 per cent of total sales in 2000-01 to 16 per cent in 2005-06.

Marico’s official rationale for Sparsh? “It made sense to move into a product category that would benefit from
the Marico brand equity,” says Chandraseker.

Baby care still remains a niche product for personal care FMCG players. The adult personal care business is
valued at Rs 12,000-14,000 crore (organised and unorganised), and for most companies operating in both
spaces, revenue contribution from baby care is small.

According to Euromonitor 2005, India’s per capita consumption of baby care products amounted to barely
$0.05 in 2004 vis-à-vis $0.69 and $2.86 in Thailand and Singapore, respectively. Industry estimates the
baby care category grew in value by 8-9 per cent in FY05-06, but considering there are roughly 25 million
live births of babies each year in India (2003 census), this value growth is unimpressive.

That’s probably because the market isn’t easy. How do you build customer loyalty when the target audience
keeps shifting? Typically, after the first birthday, parents switch to regular skin and haircare products that the
rest of the family uses.

Repeat customers are another issue — women are having fewer babies these days and they tend to stick to
products they’ve used earlier or what their mothers recommend. The biggest obstacle to market growth in
India, though, comes from home remedies: uptans and herbal infusions are still popular, even in urban,
upper class homes.

There’s also the incumbency factor. This is a market where Johnson and Johnson (J&J), after 59 years, still
commands an overwhelming 68 per cent share (Euromonitor 2005).

J&J continues to enjoy near-monopoly status within the niche baby hair care and toiletries sub-segments
and has a 50 per cent value share within the largest sub-category of baby skin care (Euromonitor 2005).
J&J’s unshakeable dominance has only been stirred by Dabur and Wipro, currently at No. 2 and No. 3.

Most players agree the only way to loosen J&J’s stranglehold over the market is by expanding the consumer
base: converting non-users to branded baby care. Wipro is trying to achieve that with price propositions.
Others like J&J (“skin same to same”) and Biotique (“safe for baby, safe for mother”) are expanding the
market through recommended usage to adults.

Sparsh’s strategy involves piggybacking on the Parachute “promise” of “long-lasting natural goodness”,
publicising its ingredients — tulsi, turmeric and coconut oil, the traditional choices for home concoctions.
Even the yellow packaging, signifying the healing properties of turmeric, reinforces traditional perceptions.

Says Chandraseker, “Sparsh addresses an unmet consumer need for products based on traditional
ingredients, in modern packaging.”

Of course, Sparsh isn’t the first to play the “natural goodness” card. Thirty years ago, Dabur India extended
its brand equity in Ayurveda to launch Lal Tail baby oil; it’s now the leader in the baby oil (skin care)
category with 22 per cent value share (Euromonitor 2005), with an overtly mass positioning.

And a few months before Sparsh’s launch in South India last year, herbal healthcare provider Himalaya
Drug Company established its herbal baby care division. Its theme is “new age parenting is safe parenting”,
and its success is banking on a new wave of urban consumers that pays a premium for perceived safety.

While Dabur and Marico are going head to head for the mass market, Himalaya, at a marginal price
premium to J&J, believes there is enough potential to grab the upper end of the mass segment and the
lower end of the niche market. Marico’s first task will be to create brand differentiation within this basket.

Significantly, Sparsh isn’t doing that with price adjustments, which could have helped it drive volumes and
perhaps penetrate deeper into the market — the brand is priced on par with J&J in soap and just below par
in baby oil.
“You can either play the volumes or the value game. In a segment where perceived quality governs decision
making, value is often a better choice,” says Rajeshwari Sheth, an FMCG consultant.

Marico’s stance is in stark contrast to Wipro Baby Soft, a player since 1991. At retail, a buy-one-get-one-free
offer runs indefinitely on Baby Soft oil. And there’s a free soap dish with every bar of Baby Soft soap. A year
ago, Wipro rolled out its value engineered tulsi and almond baby soap, slashing prices from Rs 25 to Rs 16
by changing packaging and also taking a hit on margins.

“Baby Soft’s goal has always been to take baby care to every mother through price arbitrage and value
proposition,” explains Kumar Chander, vice-president (marketing), Wipro Consumer Care and Lighting.

Value propositions are central to Sparsh’s marketing strategies, too. And it’s emphasising them through
advertising . The catchphrase in the tv commercial (TVC) “Zaroor maa ne banaya hoga” suggests
generations of wisdom and the media buying pattern is skewed towards regional channels in South India
and Maharshtra, traditionally high penetration baby care markets.

Numbers don’t come easy for ad spends on Sparsh, but Marico has traditionally followed a strategy of brand
building where it spends a larger portion of its advertising and sales promotions budget on advertising,
rather than on promotional incentives. So Marico used a two-pronged advertising approach, adding
advertorial testimonials to the attack.

“Thematic TVCs establish brand values but testimonials cut through clutter,” says Ramanuj Shastry, Senior
Creative Director, McCann Erickson, the creative agency for Sparsh. Other baby care brands have shown
similar reliance on advertising. AdEx India 2006 recorded a 58 per cent growth in 2005 in baby care TV
advertising, and a whopping 162 per cent growth in print advertising.

Sparsh is also reaching out to doctors and paediatricians to help influence consumers, targeting parents
through brand promotions in paediatric clinics and maternity homes.

Says Chandraseker, “Establishing word-of-mouth credibility for Sparsh is more critical than wooing the
trade.” That may have been spoken in haste. An FMCG brand — even in a sub-category where brand
loyalty is among the strongest — can ill afford to ignore trade influence over consumer behaviour.

Especially in the early days of the brand, when demand-push, and not demand-pull will drive sales. Even in
Mumbai’s largest examples of modern trade, Sparsh is lost in an absence of any introductory sales
promotions. And despite Chandraseker’s claims that the distribution of Sparsh is skewed towards modern
trade and chemists, at an OTC chemist and personal care chain of stores, Sparsh is unrepresented. So is
Himalaya. But then again, its distribution strategy is confined largely to Himalaya’s 100 exclusive outlets and
800 shop-in-shops in India’s top 42 cities.

In a quick run-through of six stores (modern trade, chemist and neighbourhood general stores), Sparsh was
available in two. One of the two, a general store, stocked Sparsh, but didn’t recommend it until prompted
repeatedly.

“Sparsh’s distribution strategy,” defends Chandraseker, “does not rely on kirana stores.” But if Sparsh is
operating in the mass market based on its price points, alongside Wipro, Dabur and J&J, all of which rely
heavily on the neighbourhood general store to generate volume sales, wouldn’t capturing market share be
reliant on at least being present as an alternative?

Meanwhile, Marico’s competition attempts to sounds spirited about its entry. According to Wipro’s Kumar
Chander, greater competition will increase the value of the market.

“Heightened overall activity could drive consumers,” he says. Besides, predicts a marketing consultant, 70
per cent marketshare (such as J&J’s) is “unsustainable in a mature market. Consumer needs will get more
diverse and the market is bound to get fragmented.”

Sparsh believes it has identified one of those diverse needs. But, operating in categories where it will directly
compete with J&J’s brand heritage and distribution network, Wipro’s pricing and the democratic popularity of
Dabur’s Lal Tail, Sparsh will have to convince mothers it is the one to meet that need.

Importantly, it will have to reflect carefully on which slot it eventually wants to occupy, the volumes through
pricing and distribution game, or the differentiated product proposition and value game.

Brand managers are struggling to get the baby care products off the shelves. A year ago,
Marico launched Sparsh baby care oil and soap. Now it has cut investments in the portfolio,
which brings it revenues of Rs 2 crore.
Marico CEO-Consumer Products Saugata Gupta said, “It's a very difficult segment and we
perhaps underestimated it. The reason for this is twofold. First, as far as a baby is
concerned, mothers want only something, which is completely trusted and safe. Even a new
product which is differentiated may not click, as she is unwilling to try it.”
No player has managed to break Johnson and Johnson's hold on baby products. It
commands 80 per cent of the market in all categories except baby oil. That's because
mothers pay a premium for this iconic brand.

But Wipro Babysoft, which accounts for 7 per cent market share, believes it can play the
price card.
It's test-marketing a baby soap in Andhra Pradesh, and hopes to convince customers that a
lower price need not mean lower quality.
Wipro Consumer Care & Lighting VP marketing Kumar Chander said, “Price is still a big
deterrent, the diaper segment where lower pricing can lead to expansion of markets as we
have seen in last four years prices down by 30-40 per cent, Market also exploded, we
believe that can work in other segments too.”
An estimate suggests that in urban households parents buy baby care products until babies
are 9-and-a-half months old. Then, they use their own personal care products on children.
And that cross use of non-baby brands has restricted the category's growth to 7 per cent.
Even so, companies are betting on stores. They expect better visibility; competitive pricing
and branding will help to grow the market and their market share.

Marico, whose flagship brands include Parachute coconut oil and Saffola, has lined up a
multi-pronged growth strategy.

It is looking at more acquisitions. It also plans to test new product prototypes to

expand the existing portfolio. Besides, an overhaul of the baby care brand "Sparsh" and
repackaging of Shanti Badam Amla are also on the cards.
Saugata Gupta, CEO, Marico's Consumer Products Business, told DNA Money:
"Acquisitions are key growth drivers for a profitable and sustainable growth. We are
looking at the inorganic route to grow both the domestic and international businesses."

In February last year, Marico acquired the Nihar coconut hair oil brand and in September,
the company went on to make two successive acquisitions in a bid to enter the Egyptian
market.

Gupta said the Nihar acquisition offered synergies through its strong franchise in markets
across east India; other brands in Marico's portfolio have also been able to get better
distribution support by piggybacking on Nihar's strength.

Similar synergies would be key for any future acquisitions, too. But what about slow-
moving SKUs or brands that are not performing as per expectations?

Gupta said the baby care range under "Sparsh" has been facing difficulties. Sparsh, which
was launched last year, comprises baby oil, bathing bar and cream and has not delivered
on expected lines.

The baby products category, which is dominated by Johnson & Johnson, is typical in
many ways: consumers are generally averse to trying out new brands and the category is
difficult for trial of new products since baby care products are used for only the first two-
three years of a baby's birth.

Gupta said anothern issue was getting recommendations from paediatricians and
chemists. "We have decided to go back to the drawing board stage for Sparsh.

We will revamp the brand completely, there are no plans of exiting the baby care space".
He said Shanti Badam Alma, another product which did not perform up to expectations,
has already been revamped. Marico has been testing various new product prototypes in
the market.

Already, a liquid fabric stiffener under brand name "Revive" and functional foods under
"Saffola" have been launched in select markets across the country.

Marico's domestic business includes the hair care portfolio of Parachute, Silk-n-Shine,
Mediker and Revive brands, Saffola and Sweekar cooking oils besides the Kaya Skin Clinic
portfolio.
The international basket includes many of these brands besides the Sundari Skin Care
clinics