FOGG DEODORANT

AXING THE AXE EFFECT - MARKETING

STUDY
If everyone else is doing it one way you can find your niche
by going exactly in opposite direction

Sam Wilton
 TABLE OF CONTENTS

Company Profile 4
AXE in India 5
Deodorant Market in India 5
Game Changer Fogg 6
Fogg Vs AXE 7
Why Fogg succeeded? 10
Future Prospects 12
References 13
 Introduction
Company Profile
Vini Cosmetics began it’s operations in 2010 by investing about ₹70 crore in a talcum
powder manufacturing facility, and launched a White Tone face powder. Talcum
powders were facing stiff competition from rising shift of consumers towards deodor-
ants. The growth rate of Talcum powders was estimated at 1-2 percent viz a viz De-
odorant which were growing at 20-30 percent. The shift was largely attributed to the
growth in income, leading to growth people’s aspirations. So, they started moving to
better products like Deos from talc. The convenience of applying a deodorant as
compared to talc was also a reason for this shift. Vini cosmetics used the Talcum pow-
der to launch 2 more products the 18+ deospray and, Glam-up cream for Indian
youth. The initial brands helped in strengthening the dealer network in India.

Fogg Deo was launched in December 2011 when the market was around Rs. 1,000
crores. Till then the market had one clear leader; Axe. Axe was leading for a over a
decade (it was launched in 1999) and had built the category in India. Thanks to HUL,
it obviously had the widest distribution reach. When Fogg was launched, it was the
network built by initial products that backed its success. The company focussed entire-
ly on marketing and rejigged it’s strategy by outsourcing manufacturing of all it’s
products.

Before Fogg came along, everyone copied Axe. The product was similar and the
communication too. Hence, no one could dent the leadership enjoyed by Axe. Fogg
changed the game by using non-aerosol pumps, so they didn't require gas. A bottle
lasted about 40 days for an average user, as against 15-20 days in the case of a normal
deo. This made it a value-for-money proposition.

Vini is a unique FMCG company to achieve a turnover of over ₹200 crore within
three years of starting from scratch.
 AXE in India

AXE was launched in India in 1999 by HUL. Axe was positioned as a cool, iconic,
youth brand since its launch in India in 1999 and it soon became the largest selling
Men’s Deodorant in the country. Perceived as a brand with a very strong fragrance,
Axe enjoyed the position of a fashionable, stylish and naughty deodorant. Axe was the
naughtiest brand in the Indian market. The brand targeted at male aged 16-25. The
brand had its brand values of Cool, Fashionable and Stylish. And world over, the
brand sticks to its core values. The biggest strength of this brand was the underlying
message or the DNA which is that the brand users are High on Confidence and al-
ways for the Axe users, Girls Makes The First Move. All its campaigns revolved round
this central theme of Seduction where Girl makes the first move.

Deodorant Market in India

The market was pegged at 283 crores in 2007 and it grew by a whopping 40% per
annum to 1,521 crores by 2012 (Source: Outlook Business). Deodorants sees current value
growth of 23% in 2014, to reach INR24.0 billion. Deodorant pumps increases by
70% in current value terms in 2014, driving growth in deodorants The average price
of deodorant sprays increases by 1% and deodorant pumps by 7% in 2014, which is
attributed to the premiumisation of mass deodorants. Vini Cosmetics replaces Hin-
dustan Unilever as the leader in deodorants in 2014, with a 17% value share. Deodor-
ants is expected to increase by a value CAGR of 14% at constant 2014 prices in the
forecast period, to reach INR45.2 billion in 2019. (source: Euromonitor report: Deodorants in
India)
Only 16 out of 100 people use deo in metros and overall urban penetration is 10 out
of 100. This offer a huge scope of growth in future. This is the reason every big and
small company is entering this space. Male deo make up 70% of the market. Deo is
still a man's product since men go out to work more than women. Deo for men are
also costlier priced. The deo market is still a very urban phenomenon with almost
75% of sales taking place in top 20 cities of India.
Deodorant Market Size in India

Sl. No. Year Deodorant Market

Size(In Rs. Crore)
1 2007 283
2 2008 393
3 2009 567
4 2010 793
5 2011 1129
6 2012 1521
7 2014 2100

Source : Euromonior International

Game Changer Fogg

Businesses are successful if they prioritize consumer behavior and innovation. When
all the Deodorants brands were coming with the same type of product, Vini cosmetics
came up with a different type of product, a liquid based product instead of gas. The
people of India have a common mindset of getting more for less capital. Fogg under-
stood this human behavior and delivered a product in Indian market with demonstrat-
ing this product with only liquid and no gas. Axe, on the other hand was concentrat-
ing on more fragrances by keeping an image of cool and iconic brand. Most of the
brands in deodorant market tried to position products in the quadrant of Long Last-
ing to short and strong fragrance to mild. Fogg with it’s unique tag line
“Bina  gas  wala  body-spray”. It also gelled with mindset of people when Maruti
launched the campaign “Kitna deti hai”. Fogg scored with a new value proposition
— number of sprays per pack, Gas vs No-gas. It was disruptive and value-for-money.
The positioning map transformed and a new parameter got added for the newer
product launches.

Fogg Vs AXE

Fogg AXE
Parent
Vini Cosmetics Hindustan Unilever
Company
The Axe Effect - Gets
Tag Line Bina gas wala body-spray
you more than before!
Doesn’t get blown away
Unique selling With Best Quality
like other deodorants,
proposition Fragrance
lasts longer
Outdoor-oriented,
Segmentation Deodorants for Men
Fashion oriented, Trendy
Targets the male urban
Young urban upper
Targeting youth – mass urban
middle class
product
 Fogg AXE
AXE is a cool, iconic,
youth brand available
Positioning A body spray without gas which is the largest
which hence lasts longer selling Male Deodorant
in the country
1. Had a differentiated 1. Each of the fra-
value proposition grances created by
from its competitors international fra-
2. Effective advertising grance diva Ann
and branding target- Gottlieb
ing the youth 2. The formulation is a
3. Good distribution, base with higher re-
Strength Promotions and cam- sults
paigns for luring cus- 3. Excellent advertis-
tomers ing and branding
4. Unique selling propo- targeting the youth
sition of having more 4. Backed by HUL dis-
spray liquid tribution channel
5. Available in different
variants
 Fogg AXE
1. New entrant can not
play price war with
1. Only an urban mar-
likes of HUL
ket phenomenon
2. Strategy can be
2. High pricing re-
copied easily by com-
duces the target
Weakness petitors
market
3. No celebrity brand
3. Controversial adver-
endorsements
tising often leads to
4. Priced higher then
legal issues
most of the Deos in
segment
1. Coming up with Lim- 1. Women Deo market
ited Edition fra- is 30% and AXE
grances doesn’t have a prod-
2. Come up with innova- uct
tive products for rural 2. Image make over
segment from female attract-
Opportunity 3. Fragrance based on ing deodorant to a
the geographical loca- Quality product
tions within India
4. Export to markets like
Nepal, Bangladesh,
Bhutan
5.
 Fogg AXE
1. Deodorants sales are 1. Marketing strategy
seasonal. Maximum focussing on Women
sales happen in the 2. Market share is al-
summer months ready down for
2. Competition from AXE. It could fur-
Premium Segment ther reduce with
Deodorants and Price new products from
Threats wars competitors
3. Funding for launching
of new products
4. Very less online pres-
ence. Company
doesn’t have a website
to showcase it’s prod-
uct portfolio

Why Fogg succeeded?

1. Launch a differentiated product: Fogg understood the gap in market where people
needed a product that lasted longer both in terms of Fragrance and usage. No Gas
deodorant was the answer to the gap that existed
2. Communicate something new and something that furthers your cause. When
every one was talking about babe magnet, Fogg talked about value for money;
wastage when you buy deos with gas. Fogg had a differentiated product and it did
a great job in communicating the difference in a manner that caught the con-
sumers attention. Fogg went functional and talked about 800 sprays and value for
money. Finally, the product seems to have delivered on the promise.
3. Get Noticed beyond the leader of Segment: As a new brand, if your product is
differentiated go ahead and talk about it. If not, at least do not follow the leader.
Differentiate your packaging, your communication and your overall strategy.
While every new product was talking about opposite sex attraction Fogg went
ahead with a new mantra.
4. Fogg priced the product above Axe. A bold move. As a new product, if you have a
different product and you charge more, you create a positive impression. The suc-
cess led to competition to move the prices up rather than Fogg bringing them
down
5. Fogg launch was timed when Vini cosmetics had built a good distribution network.
There are two battles in marketing. One fought in the minds of the consumer and
the second in the market.

The results of success are visible in below data:

% retail Company 2011 2012 2013 2014

value rsp
Fogg Vini Cos- - 7.9 12.4 16.6
metics Pvt
Ltd
Wild Stone McNroe 10.7 10.8 10.8 10.7
Chemicals
Pvt Ltd
Park Avenue Helene Cur- 1.7 2.3 3.8 7.7
tis India
Ltd, J K
Axe Hindustan 25.1 17.8 11.4 7.1
Unilever Ltd
Engage ITC Ltd - - 4.5 6.6
Set Wet Marico Ltd - 7.1 6.7 5.3
Eva TTK 5.6 5.1 5.0 5.1
Healthcare
Ltd
Nike Sport Nike India 3.4 3.6 3.8 3.8
Perfor - Pvt Ltd
mance
Spinz CavinKare 5.4 5.1 3.4 2.7
Pvt Ltd
 % retail Company 2011 2012 2013 2014
value rsp
Nivea De- Nivea India 2.7 2.7 2.5 2.6
odorant Pvt Ltd
Dove Hindustan 3.0 2.7 2.5 2.5
Unilever Ltd
Nivea De- Nivea India 2.2 2.4 2.2 2.2
odorant for Pvt Ltd
Men
Old Spice Menezes 2.0 1.9 1.6 2.0
Cosmetics
Pvt Ltd
Fa Jyothy Lab- 3.5 3.2 2.5 2.0
oratories Ltd
Fa Men Jyothy Lab- 2.1 2.0 1.7 1.4
oratories Ltd
Yardley of Wipro Ltd 1.6 1.6 1.5 1.4
London
adidas adidas India 0.7 0.8 0.8 0.9
Marketing
Pvt Ltd

Source : Euromonior International

Future Prospects

Deodorant pumps is expected to see the fastest CAGR of 23% at constant 2014
prices, and will drive sales of deodorants in India. This is mainly because of its func-
tional characteristic of delivering more sprays per can than aerosol based sprays. This
is expected to suit consumers’ requirements in the prevailing inflationary environment.
Deodorants, as a relatively new category in India, with low entry barriers and fair
margins, will attract new smaller players. Success of Vini Cosmetics and few others
will encourage the competition.
A major product mix contributor could be perfumes with good fragrances based on
different regions in India. Vine cosmetics should also strengthen with Rural segment
by launching products with smaller price points and smaller packaging.
 References

1. Marketing Management (15th Edition) by Philip T. Kotler, Kevin Lane Keller

2. Deodorants in India: http://www.euromonitor.com/deodorants-in-india/report
3. http://www.thehindubusinessline.com/catalyst/the-scent-of-a-man/arti-
cle5685230.ece
4. http://www.livemint.com/Companies/V7vd4tYEaEiUp3iNtDzhEK/Darshan-
Patels-passion-for-products.html

MARKETING MANAGEMENT - I GROUP 5 !13