Brand diversification is a curial decision as it can lead to make or kill a brand. Brand dilution is often hazardous for the entire spectrum of products but it seems Marico knows the formula to lead. Marico’s “uncommon sense” shaped into a skin care centre, not into mundane beauty parlours. ‘Kaya Skin Clinic’ aided Marico to diversify from products to services.

1. LEVERAGING GOODWILL: MARICO‟S KAYA
By Bhawna Sajwani, Welingkar Institute of Management Research and Development
Brand diversification is a curial decision as it can lead to make or kill a brand. Brand dilution is often hazardous for
the entire spectrum of products but it seems Marico knows the formula to lead. Marico‟s “uncommon sense” shaped
into a skin care centre, not into mundane beauty parlours. „Kaya Skin Clinic‟ aided Marico to diversify from products
to services.
Marico markets well-known brands such as Jasmine etc. But for their organic growth, they
Parachute, Saffola, Hair & Care, Shanti, Mediker needed to look out of the fish pot .The annual audit
and Revive. This completely product oriented report by Ernst & Young (2007 reports), Indian Spa
company has leveraged its product-led consumer & Wellness, estimated 110,000 Mn INR and growth
insight into consumer insight for services. In 2002, at 25-30 per cent per annum. Indian markets were
Marico Industries ventured into skin care services. flooded with unorganized beauty parlours and few
organized players like Lakme and L‟Oreal. But,
Kaya Skin Clinic services provided were well-worn methods like
For years, Harsh Mariwala, the Chairman and painful waxing, threading etc. Sensing the hidden
Managing director of Marico Industries, wanted to patterns of trends, Marico grabbed the opportunity
have a presence in the skincare business where and got the advantage of being the first movers in
several other FMCG companies were already the market.
present. But he was looking for the right product to
enter the high-margin skincare segment. In late Winning Strategies
2002, a New York-based company asked Mariwala Marico just didn‟t stop at the concept, but also
if he would be interested in selling laser hair wanted to make sure that their brand delivers. The
removal machines. Initially, Mariwala was not very biggest challenge for Kaya was to not only ensure
keen because he felt the product could be customer satisfaction but also provide state of the
commoditised easily. But what surfaced was the art services as well as safety.
idea of a service offered around such machines.
That was how the skincare business got identified; Kaya embarked on a massive training exercise.
finally they scaled this idea into a chain of skin care So, while the clinic's skin practitioners were trained
clinics. From incubating the idea till execution, all for about 60 days, the 250-odd dermatologists had
was done within a year. undergone at least 30 days of training. In fact,
"skin practitioners" were required to be trained for
Widening the Horizons a mandatory 500 hours before they were allowed to
Selling a product is like selling a hope but service face a customer.
gives the experience. Marico opted for blue ocean
strategy , they took a decision to enter in the novel The next step then was to establish a standardized
area of skin care service distinguishing from the way of working, which is where the relevance of
overly crowed product market (Red ocean) .Kaya training, audit, timely solutions all comes in.
was designed to endow with holistic and customized
result-oriented skincare solutions/treatments to its What followed later was customer awareness
clients. Important facet was that their brand campaign, as a significant number of people were
extension from products to skin care services was still unaware of cosmetic dermatology. Moreover,
relevant to their core business. The move marked there was a taboo associated with using machines
the FMCG major's foray into the branded services on skin.
category, entering a nascent market untapped by
other players. Kaya came out with a 360 degree advertisement
approach; where it heavily emphasised on digital
Tapping the Trends media. It also introduced a digital campaign where
Marico had 50% of market share in hair oil key words could be linked from Google to the Kaya
segment, which made it a market leader in the website. Moreover, dermatologists in the company
category. Marico was trying to capture more responded to Tweets, Yahoo Q&A‟s and live chats
market share by providing innovative products like on the company's website (popularly known as
Parachute Therapy, Parachute Lite, and Parachute
Bhawna Sajwani Welingkar Institute of Management Development and Research Strategic Analysis

2. Kaya Interactive). It had also launched a clinic The graph below shows that Kaya contributes
group on social networking site Facebook. significantly to Marico‟s Revenue mix. This tells the
Not just advertisements, Marico created awareness success story of Kaya!
through celebrity endorsements and publicity in
health and wellness magazine.
Competition
In India, Kaya faces competition from smaller
neighbourhood beauty parlours and smaller chains
like VLCC. The small parlours have a better reach
to local market in tier-1 as well tier-2 cities; which
ensure a larger coverage but Kaya has its defined
targets. Considering the fact that population they
could not access is not their target; Kaya is much
ahead of its competition.
Revenue mix Marico
Expansion Plans
Given the discretionary nature of consumer Renovations and Innovations
spending at Kaya, most of the growth during the Marico is incrementally evolving the Kaya with
quarter has come from new clinic expansion. interesting concepts like “KAYA FOR MEN”. Men had
Started as a prototype clinic in Mumbai in become appearance-conscious and „Metro-Sexual‟
September 2003, Kaya has grown at an men make the trends. KAYA FOR MEN has
unprecedented pace. Today, Kaya has 85 clinics presented the concept that men need “what women
across 26 cities in India and 13 clinics in the Middle want”!!
East. To capture the various occasions where
appearance matters, Kaya has introduced packages
Diversifying and expanding at such a fast pace is like bridal package, hair care package, summer
making the roads for rivals difficult to enter into the package and many more customized solutions.
same segment. During the year, Kaya clocked
revenues of 1000 Mn INR. But more than its Further enjoying the brand Kaya Marico has
increasing contribution to group revenues, Kaya launched KAYA PRODUCTS in skin care segment.
holds the promise of boosting the company‟s Kaya includes contribution from product sales,
bottom lines, thanks to its distinct service model. which accounts for ~13% of its revenues. Marico
has further en-cashed the
brand with KAYA LIFE,
Rest is History... which provides weight
To boost its product revenue stream, Kaya began management services.
prototyping its “shop-in-shop” model through
kiosks at malls. They are now also present in To renovate itself, Kaya
locations like Shoppers‟ Stop, Hypercity and keeps on adding new
Lifestyle. Typically, kick-starting a Kaya a clinic machines and technology to
takes 10-13 Mn INR (including technology provide complete solutions to its clients.
investments and interiors) in a metro city. Future ahead
The clinic breaks even in about nine months in a Kaya is at right place, in the right time. Marico‟s
metro and takes a little bit longer in smaller cities. strategy has been shaped into a perfect solution,
Kaya attributes the success of the brand to two key which is working for well for the brand. But Kaya
factors. The first is its approach of offering still has to penetrate in the market. Competitors
solutions to consumers through the best technology are far behind but extraordinary customer service is
available. It claims to possess over 20 new the key as today‟s customers are aware and
technologies in the Indian market. The second is its negative „word of mouth‟ can ruin the brand.
unique selling proposition of the real skin expert However, this market is growing and Kaya has
working towards making women look their beautiful potential to become the cash cow for Marico!
best every day.
Bhawna Sajwani Welingkar Institute of Management Development and Research Strategic Analysis