Fevicol - Product

Product Positioning & Promotional Strategy of Fevicol INTRODUCTION Fevicol, the flagship adhesive brand of Pidilite Industries Limited (Pidilite), enjoyed a dominant position in the adhesive business in India with a market share of 70% as of 2015. Reportedly, Fevicol was the largest selling adhesives brand in Asia with a presence in over 50 countries. In 2015, Pidilite reported a turnover of Rs 46.52 billion, of which 40% came from sales of Fevicol1. According to some analysts, Fevicol’s dominance in the Indian adhesive market could be attributed not only to the brand’s inherent strength and quality but also to a series of advertising campaigns launched by the company over the years to promote the Fevicol brand. “Although Fevicol is not a consumer product, but it has managed to reach out to every Indian thanks to the brilliance and humour of the campaigns,”1 said Abhijit Avasthi (Avasthi), former National Creative Director of Ogilvy & Mather India a (O&M). Launched in 1959, Fevicol was promoted as easy to use glue for carpenters, as an alternative to fat and collagen-based adhesive which had to be boiled before application. Over the years, the brand had proved its mettle in terms of consistency, quality, and strong distribution method and customer relationship. It had become a generic name in the adhesive category in India. According to industry experts, Fevicol had strong brand equity and remained embedded in the minds and hearts of the customers. Since adhesive was a low involvement category, Pidilite adopted creative marketing strategies to increase the sales of the adhesive, they said. Over the years, Fevicol’s simple, creative, and humorous advertisements clicked with customers and contributed to the success of the brand, opined industry experts. Despite the success of Fevicol, Pidilite faced competition from other adhesive brands such as Vamicol, Henkel, and Sika India. According to industry experts, one of the biggest threats for the company was the entry of new players who could enter the market very easily as entry barriers for the adhesives sector were low. Whether the uniqueness of its advertising strategy would help Fevicol beat the competition and maintain its lead in the Indian adhesives market remained to be seen, said analysts.

BACKGROUND NOTE The journey of Fevicol could be traced back to 1954 when Balvant Parekh, founder of Pidilite, along with his brother, Sushil Parekh, started manufacturing pigment emulsions that were used for textile printing. In 1959, the brothers spotted an opportunity to make synthetic glue to replace the natural glue that carpenters were using during that time. The Parekh brothers figured they would have a ready market if they could make a cheaper product locally. Thus, Fevicol was launched. As the trade was used to glues based on natural products, selling synthetic glue was a difficult proposition. In order to shift end-users from natural glues and other synthetic adhesives available at the time, Fevicol embarked on a bold marketing game plan. Instead of selling through stores Fevicol approached carpenters directly. This direct marketing initiative was one of the most successful strategies employed by the company and helped the brand gain a strong foothold in the white glue market. With its signature white and blue packing, Fevicol was marketed directly to consumers, largely to carpenters, unlike competitor products like Movicol, which were only available at hardware stores. Initially, Fevicol was primarily meant to be used as glue for woodworking while its secondary applications included uses in flooring, footwear, and upholstery. The company primarily targeted interior decorators, carpenters, dealers, and architects as consumers for the brand. The unique selling proposition of Fevicol was its ease of application as it was a synthetic resin adhesive. To the carpenters, this meant they were free from the sticky animal fat-based glue colloquially called Saresh. Saresh had to be boiled before being applied and the fumes had a peculiar stench. As Fevicol could be applied easily, it became an instant hit with carpenters. Reportedly, the company’s sales increased form Rs. 10 million in 1960 to Rs. 100 million in 1983.

Pidilite kept alive the freshness quotient of Fevicol brand by consistently innovating and introducing new variants at regular intervals, keeping customer needs in mind. The introduction of various formats of Fevicol transformed the brand from an industrial product to an all-purpose glue. The company targeted both B2B and B2C segments that included wholesalers, retailers, stationery stores, carpenters, housewives, and students. Riding high on the success of Fevicol, the company launched other customized Fevicol products packaged for educational and professional purposes such as Dr.Fixit, Fevikwik, MotoMax, M-Seal, and Fevi Stick. (See Exhibit I). To capture the mass market, Fevicol was launched in collapsible tubes at an affordable price of Rs 5. In 2008, Pidilite introduced Fevicol craft adhesive at Rs 2 and Fevigum at Re 1. This made high quality adhesives available to consumers at very affordable prices. In 2010, Pidilte launched coloured glue sticks such as Fevistik Blue and Fevistik Purple. Over a period of time, Fevicol became synonymous with glue in India, making the brand a generic name in the Indian adhesives market2. As of 2013, Fevicol was the largest selling adhesive in Asia. The product was available in nearly 54 countries including Japan, China, South Africa, Thailand, Singapore, and Indonesia. Fevicol was ranked number one in the Household Care segment of the Most Trusted Brands in India for 2007-08 by Brand Equity (The Economic Times) and overall was ranked the 20th Most Trusted Brand.

BRAND POSITIONING & ADVERTISING STRATEGY According to industry observers, Fevicol had managed to ensure a high recall value in the minds of consumers in spite of belonging to a largely B2B product category. Although Fevicol was a low involvement product, it had managed to reach out to every household in India due to the brilliance and humor behind its ad campaigns, said some industry observers. According to them, Fevicol had always used humor to reach out to the audience and had been successful in leaving a lasting impression on the minds of consumer through its hilarious ads. Its witty ads played an important role in making Fevicol a household name with tremendous brand recall. The ads were so successful that they managed to make an adhesive product like Fevicol into an FMCG item, said experts. Pidilite appointed O&M as its advertising agency for the promotion of brand Fevicol in the 1970s. The ads showcased the main purpose of Fevicol, which was bonding in a metaphorical form. O&M used both emotional as well rational appeals to bring out the main attribute of Fevicol in the eyes of its potential consumers. The strategy adopted by O&M for Fevicol was to make bonding a Fevicol attribute and the agency successfully used intelligent humor to convey this meaning. The brand’s logo of two elephants too denoted strength and a strong bond. The marketing strategy of the brand involved innovative ads in the electronic media, print media, and social media. Fevicol’s creatives and TV campaigns helped to reinforce the big idea about Fevicol’s bonding strength. The Fevicol ads focused on the “chutkimein chipkaye” (sticks in an instant) feature of the brand. For instance, a Fevicol ad released in 1988 with the tagline Fevicol ka majbooti jod hain….tutega nahi (Fevicol’s strong bond that will not break) showed a worker at a roadside restaurant trying hard to crack open an egg, even going to the extent of hitting it with a hammer. But the egg refuses to crack. Why? Because the hen that laid it had been fed from a Fevicol container! Another ad featured a bus overloaded with passengers passing through a bumpy road with the signage ‘Fevicol: The Ultimate Adhesive’ written on the back of the bus. O&M had reportedly come out with a mix of 15 ads, which were aired in rotation (See Exhibit II). In fact, the first Fevicol ad that was aired in 1988 was being aired even two decades later. Fevicol ads used a minimal audio component like dialogue. According to Piyush Pandey, creative director, South Asia, Ogilvy India, who had been associated with the brand for over 27 years, “The success of Fevicol lies in its earthiness and its ability to connect with the consumers across segments. All communication designed for Fevicol exploits the traditions and culture of India and carries with it a sense of ‘ghar ka banaya hua Fevicol’ (home grown).”3 Experts felt that Fevicol’s innovative approach to bonding through a mix of communication strategies imbued with humor and peppered with the typical Indian flavor in catch phrases like Dum “Dum laga kar haisa, zor lagakar haisya” (put all your might into it) and “Pakaderehna, chhodananahi”(hold tight, do not leave), helped the brand in building an emotional bond with consumers. Reportedly, O&M regularly received emails and feedback from its consumers in which they shared ideas for Fevicol commercials. For instance, the Fevicol shadow ad released in 2000 which showed a man’s shadow refusing to follow him as it had got stuck to the Fevicol logo was not created by the agency but by a film editor.

One of the ads which became widely popular was Fevicol’s ‘Dahi Handi’ TV ad that reinforced the brand promise of ‘The Strongest Bond’, featuring a several-storey high human pyramid formed during the ‘Dahi Handi’b celebrations. The ad created 78 million impressions on Twitter, generated 10,000 tweets, and garnered a total of 2.4 million views on Facebook and YouTube. On the brand’s 50th anniversary, O&M created a new ‘moustache' ad. The campaign told the story of a girl who had a moustache attached to her face during a school play in her childhood, which stuck to her all through her life. The Indian rusticity stood out in Fevicol ads with a dose of humor to support it. The ads borrowed scenes or instances from daily life. Over the years, the ads evoked in people the sense of what an adhesive was supposed to deliver – offer the best bond. “Ogilvy as well as Fevicol believe in keeping people laughing. We believe that this way consumer remember the brand better. The ads are not just humorous but they also have an accompanying sensibility that help to better appreciate and understand the message. But a viewer has to make the final interpretation on his own. Picking out simple events of life, marrying these with the brand’s message and picturizing it in such a manner that the audience can find a connect with the brand’s message has been the philosophy of all the campaigns that we have done for Fevicol, ”4 said Avasthi. Apart from TVC, Pidilite also effectively used posters and billboards to promote the Fevicol brand. In 2010, Pidilite signed a marketing and promotional deal with the makers of the Hindi film Dabangg 2 for an item song which used the word ‘Fevicol’ in its lyrics. Reportedly, the brand’s core proposition of bonding and sticking came out well in the song. As part of this deal, the company co-promoted the song through television commercials and hoardings. Pidilite also went in for in-film placement in some Hindi movies. Besides, Fevicol sponsored events such as the Star Sports Pro Kabaddi League held in July 2014. During the tournament, the line “Fevicol ki pakad chootegi nahin” (Fevicol’s strong hold that will not break) was used for on-air and on-ground promotions every time a kabaddi player was caught. According to analysts, it turned out to be a good strategy for Fevicol for its brand promotion as the league’s viewership was around 128 million in 2014. The brand was extensively promoted in schools through craft contests, in a bid to attract students. In 2011, Pidilite under the aegis of its Arts, Stationery, and Fabrics division, launched the Fevicol Science Project Challenge, an annual nationwide competition that identified talent from across schools. The contest encouraged students to think about topics that were related to their everyday life and futuristic concepts and make 3-D models of their interpretations of the subject/topic. In order to build a strong bond with carpenters who had been its major end users over the years, Pidilite launched Fevicol Furniture Books which showcased furniture designs with illustrations and measurements, and assisted carpenters on new styles and trends in the furniture market, apart from building awareness for the brand. Reportedly, the company launched 31 successful volumes of this book riding high on numerous design variants, a user-friendly approach, easy-to-follow furniture diagrams, and an affordable price. Pidilite also organized seminars and product awareness sessions with carpenters on a regular basis in various regions. The Fevicol Champion’s Club (FCC) was another initiative launched by the company that served as a platform for carpenters to build their social contacts and be part of a social network. Through various club activities, carpenters were encouraged to boost their lifestyles. FCC also organized free dental check-ups and blood donation camps on Independence Day and during some important Indian festivals like Diwali. In September 2016, Fevicol launched a specialized website aimed at providing end-to-end home décor solutions for customers across India. The website, www.fevicoldesignideas.com, served as platform for customers to interact with architects and interior designers who offered them tips on interior designing and home decor. About 10,000 interior designers and 15,000 contractors registered their profiles on the website while over 40,000 designs were uploaded on it. Brand Fevicol had a strong rural focus as well. Pidilite had built up a separate team for selling the product in ‘rurban’c markets comprising population of about 5,000 to 50,000. The company even set up a separate distribution network and a dedicated sales team for this segment.

RESULTS

As of 2011, Fevicol had a market share of over 75% in the adhesives category with a presence across 80% of India. Because of the new initiatives by Fevicol, its year on year CAGR showed an incremental growth. Net sales of branded Adhesives and Sealants grew by 14.1 % and contributed 50% of the total sales of the Pidilite in 2014-155. Fevicol was the single largest contributor to Pidilite’s total revenue. According to analysts, Fevicol’s sustainable brand success was due to continuous innovation and the introduction of new and effective products across segments. With the introduction of new small-sized SKUs (Stock Keeping Units), deepening of the distribution network, and a series of brilliant advertisements, the company was able to create a pull for its brand that led to a strong increase in its sales from Rs. 100 million in 1983 to Rs. 10 billion in 2006, 100 times sales in 23 years.6 In fiscal 2015-16, the company’s profits were Rs 7.47 billion (See Exhibit III). According to analysts, every piece of communication developed by Fevicol broke clutter, increased sales, and entertained the viewer. The Fevicol campaigns over the years had resulted in making it the 'numero-uno' brand in a segment dominated by unbranded, unorganized, low involvement, and low-cost products, they added. According to some industry observers, it was the consistent and innovative approach to 'bonding' and the retention of the Indian flavor in the ads laced with a touch of humor that had made Fevicol a power brand. Fevicol was ranked 2nd in the Buzziest Brand 2014, an annual poll conducted by India’s largest marketing and advertising portal afaqs.com. Fevicol was also ranked the 45th Most Trusted Brand in 2012 in Brand Equity’s Most Trusted Brand survey. Experts attributed the success of Fevicol to its ads. “The earthy humour in Fevicol ads brings a smile to everyone's face. The ads have even made our other clients think of life beyond selling products and ending up connecting with the audience better,”d said Piyush Pandey, executive chairman of O&M (India and South Asia). According to industry observers, Fevicol’s consistent quality, efficient distribution network, and commendable customer relationship management practices, helped in establishing the brand firmly in the minds of consumers. Fevicol’s overriding dominance in the glue market looked unshakable, they said. “Fevicol is now a 53-year-old brand. The first 30 years, in fact, was all about winning the trust of consumers. Thanks to the quality of the product, Fevicol has successfully established itself as the first choice in the adhesive market. This phase, of building trust, continued from 1959 to the mid- 1980s, or till the late ’80s. The next 20 years were all about building the brand proposition, which lasted from the 1990s to 2009/2010. That describes the journey Fevicol had for first 30 years and for the next 20. Thereafter, we have adopted the approach of strengthening the brand and at the same time offering more specialised variants to consumers. But the mother brand remains most critical to our business and you will get to see a lot of initiatives and a lot of creative work happening on the mother brand in the days ahead,”e said Vishal Malhan, Chief of Marketing, Fevicol .

THE ROAD AHEAD Analysts opined that volume growth would be more important for Fevicol going forward since the company had increased prices to counter rising raw material costs. Focusing on the semi-urban and rural areas could open up newer revenue streams through more volumes for Fevicol, they added. However, the main threat to Fevicol was from the unorganized sector, which was growing rapidly. Commenting on the competition, “As for competition, at any given time, there will be brands which will be priced lower than ours in the B2B space. That is all the more reason why we try and differentiate our product and build trust even for a low involvement category,” f said Madhukar B Parekh, Managing Director of Pidilite. According to industry experts, one of the biggest threats for the company was the entry of new players who could enter the market very easily as entry barriers for the adhesives sector were low. Analysts said that going forward, Fevicol would have to maintain its quality, strength, and reliability. In order to capture more of the market and maintain its leadership position, the brand had to continue to innovate with its marketing mix and focus on promotions through social media, they added. Another challenge would be to reach out to people whom the brand might have had missed out on so far and remain successful, said experts. Talking about the challenges, Avasthi remarked, “Of course, there are challenges. To be able to make people laugh and surprise them year after year is not easy. With every passing campaign, this becomes tougher.”g

Exhibit I

Fevicol Product Portfolio* Product Name

Use/Property

Product Name

Use/Property

Fevicol SH

White glue based adhesive

Fevicol Marble Glue

Glue for marble & Granite

Fevicol Speed X

Fast Setting synthetic adhesive

Fevicol Foam Fix

Adhesive for foam

Fevicol Marine

Water resistant adhesive

Favicol SR 505

Synthetic rubber adhesive

Fevicol WRA

Wood reinforced adhesive

Fevicol VC 31

Water based adhesive for flooring

Fevicol SR 998

Quick bonding adhesive

Fevicol DDL

Adhesive for superior wall finish

Fevicol SR X PRES

Fast bonding for tough conditions

Fevicol Glue drops

Glue drops for instant bonding

*

The list is not exhaustive

Source:https://simconblog.wordpress.com/2015/04/01/fevicol-brand-analysis/

Exhibit II

Some Iconic Fevicol Ads

Source: https://madovermarketing.com

Exhibit III

Key Financials of Pidilite In billions of Indian Rupees

Highlights

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Operating Results Sales and other Incomes

20.51

25.30

30.17

36.15

41.69

47.24

51.34

54.09

Manufacturin g & Other Expenses

16.38

20.36

24.83

29.39

34.48

39.18

39.42

40.70

Operating Profit

4.13

4.94

5.34

6.76

7.21

8.06

11.92

13.39

Interest(Net)

0.29

0.27

0.21

0.08

0.10

0.10

0.06

0.06

Depreciation

0.46

0.44

0.48

0.53

0.69

1.08

0.88

0.90

Profit from Ordinary Activities

3.38

4.23

4.65

6.15

6.42

6.88

10.98

12.43

Exceptional Items

-

0.25

0.13

(0.06)

0.06

0.18

0.27

0.94

Foreign Exchange Difference Expense/ (income)

0.09

0.01

0.08

0.01

0.05

0.02

0.01

0.04

Profit Before Tax

3.29

3.97

4.44

6.20

6.31

6.68

10.70

11.45

Current Tax

0.42

0.94

1.05

1.56

1.60

1.56

2.99

3.63

(0.03)

(0.01)

0.04

0.03

0.02

0.11

0.24

0.08

2.90

3.04

3.35

4.61

4.69

5.01

7.47

7.74

Deferred Tax Profit after Tax for the year

Source: http://www.pidilite.com/wp-content/uploads/2017/07/Annual-Report-2016-17.pdf