"I'm not ready to process how these organizations can be bringing about immense misfortunes yet the valuation actually continues to climb” - Harsh Mariwala's take on new-age businesses

Entrepreneurship is not about bombastic ideas; it's about living those ideas and turning them into a sustainable reality. Harsh Mariwala, the founder and chairman of the $1 billion FMCG company Marico is a staunch supporter of the fact that "If you are a new and bubbling entrepreneur, don't expect to get all the answers in the beginning. No amount of market research will give you all the answers and secrets to a long-term business-building strategy. It takes time, patience, flexibility, and focus."

Harsh Mariwala established Marico in the transforming 90s and became a renowned name in the industry for brands like Parachute coconut oil and Saffola edible oils, even with rivalry from behemoths like Hindustan Unilever Ltd. In this new era of digitization and revolutionized business strategies, he still has undeterred faith in building organizations "the old and inveterate way".

Let's try to decode the art of establishing sustainable businesses from the experiences and learnings of the veterinary's remarkable entrepreneurship journey in the dearth of sufficient technological awareness -at a time of rapid industrialization that had given rise to certain entry barriers for the budding entrepreneurs back then.

A restrictive vision could be a big loophole!

A majority of people are surrounded by the misbelief that a business is started with a specific vision in mind. Though some people might have a properly laid out plan for their entrepreneurship regimen, it's not a hard-and-fast rule.

"I didn't have any such sign back then. At that time, we were involved in the mass production and selling of edible oil when I captured an opportunity to transform that market into an established brand. Yet, I didn't have a dream of Marico… The vision advances as you progress." recalls Harsh Mariwala

His initial business of edible oils was completely a family-oversaw company, situated amidst the various commodity markets in Masjid Bandar in Mumbai.

"Being a simple commerce graduate with no expert guidance around me, I was quite apprehensive of succeeding at first. It was an arena of pure experimentation for me and in those circumstances of trial and tribulations, I committed a ton of errors. At last, as the business began growing and Parachute and Saffola created a niche in the market, then over a period of 5-10 years, better ideas began striking my mind that now I could launch more similar brands…”

Indeed ideas and visions continually evolve with experience. A dream project carved out in stone might be restrictive in the unpredictable market. It's better to be adaptable to changing circumstances and be flexible in one's approach. Proceeding with a sense of business direction will keep you aware of your steps.

Evolution of a brand occurs in phases

As the brand started gaining momentum in the market, Marico started increasing the size of its distribution network and even timed a few deals. But, in terms of its market share in Parachute, the company reached a flat line.

“Due to the expanded distribution network and the unmatched quality of our product compared to our competitors, our market share was more than 15%. Afterward, we incorporated certain innovative changes in our packaging style- replaced tin with plastic- and that is the point at which the sales began sky-rocketing. Furthermore, we turned into a market leader. Along these lines, I think in stages, we began getting certainty. It doesn't occur at the very first moment." says Harsh Mariwala

The first phase of gaining conviction was through expanding the distribution network and building other networks.
The subsequent stages involved advancement and innovation in packaging.
The entire process of the brand establishment didn't stop once Parachute became a market leader- instead-Harsh's further plan of action included expanding the market size. Again, confidence evolves with time and experience.

But, how did changing the packaging from tin to plastic make so much of a difference in Parachute's market share?

Ease of usage and application: Applying oil from a tin container is messy as you have to dip your fingers or use a spoon to take out the oil. A plastic bottle is convenient as you simply have to squeeze it to pour out the oil.
Looks attractive and appealing to the consumers: Tin isn't as appealing on the racks as plastic. Again, you can easily model a plastic container to make slender and sleek bottles.
The cost factor: Plastic is way cheaper than tin. So, it also gives a good margin on production costs.

"We took a gander at all the three benefits- easy usability, engaging quality, and cost. Then when we decided to change to plastic packaging, certain issues with the retailers crept up, however, we settled it. The act of surrendering is not known to an entrepreneur. Keeping an eye for any opportunity and grabbing it the moment it passes by is vital to becoming a market leader. You must work tirelessly to discover the appropriate responses to spontaneous circumstances."

Challenges faced by Marico in the 90s

"As the first and foremost step, we shifted our office from Masjid Bandar to Bandra. It was a key choice in shaping Marico as we wished to have our work area in a much better environment. "

Also, one of the most common concerns that arise in the mind of a prospective candidate about any family-managed company is the fear of dealing with in-grained nepotism.

"We had to assure our prospective employees that we aren't biased, encourage actual talent, and will be different from other family-run businesses. It will be a professionally managed firm, where I will be the sole relative in the administration. All the functions will be legitimately dealt with and the influence factor won't work which is a common practice in most family-run organizations.”

“We had to give a lot of affirmation to potential candidates that we are a decent organization to work with, and furthermore have elevated expectations of administration. Obviously, no professional would prefer to risk it all with a privately-run company that starts scrimping.” says Harsh Mariwala

Setbacks and failures faced by Harsh while building Marico

The fear of failure grips almost everyone, especially when one is about to embark on a new venture. In the case of Marico, the lack of a solid legitimate interaction and stringent quality assurance measures led to the development of certain issues within the business.

"We had disappointments since we had not set foot in the right portions in the FMCG market. We entered segments where we were a me-too item and subsequently needed to battle a solid contender."

Another setback was in terms of buyer understanding. Initially, the company was not as canny on consumer needs and insights as it ought to have been.

"We were more focused on the inside-out aspects than outside-in. As was on account of Saffola Snacks- when we launched the item in the market-we were more inclined towards the health considerations as it was under the brand name Saffola. Yet buyers yearn for a mouth-watering taste first. Thus, we had to deal with a mishap there. We utilized this understanding in the dispatch of Saffola Oats, which was a scrumptious product. "

While different setbacks will continue to creep up, the key thing is, it's okay to fall flat. As goes the saying- failure is the stepping stone to success - each failure comes with a long-lasting learning package.

"Well, we very well may, in any case, come up short on the grounds that the general success rate in FMCG is a couple out of 10 all across the globe."

Individuals ought not to have a dread of failure within a firm. If one doesn't take good risks, how will one move ahead in life? Fear of setbacks will hamper your growth, especially when you are a new entrepreneur.

Handing over family business to professionals

Harsh Mariwala passed the baton and affairs of his business to Saugata Gupta in 2014, who is now the current Managing Director and CEO of Marico Limited. When asked what made him choose this least travelled path? He gave a really practical and beautiful answer:

"I have a perspective that my business must not cease to exist at some point. It has to continue to lead the market in its domain whether I am there or not. Obviously, it relies upon the knowledge and type of the business visionary who runs the association."

There are two basic categories of entrepreneurs:

Some resemble money-minded hunters, who see a lucrative chance, grab it and auction it, and afterward take a gander at some other golden opportunity.
Then there are the ones who think like farmers. They run businesses as per a drawn-out perspective and long-term strategy.

“I have more qualities of the latter-the semblance of Procter & Gamble and Unilever-which have now become an establishment.”

One should move towards a circumstance where coherence is guaranteed taking everything into account. “That is where we discovered that it's an ideal opportunity to give up the reins to an expert and furthermore, fortify the deck of the organization. All this will assist in sustaining, evolving, and expanding the business. “

Also, it is vital that once you venture down, you need to completely venture down. You can't venture down on paper and afterward, meddle with the tasks.

"I did one exercise with my overseeing chief: we distinguished what is my job and what is his part to ensure there isn't any interference and overlap of roles… This even included minor subtleties, for example, what we will discuss in our media collaborations. I talk about full-scale issues, yet if you were to get some information about 'Marico business' I will direct you to the current MD. This lucidity as far as the job and control have assumed a significant part.” Says Harsh Mariwala

It's imperative for promoters to select a virtuous representative and encourage transparency and lucidity so that both can work together in a mutually beneficial and healthy environment and turn out to be successful.

What are the most important tenets of building a brand name?

Getting answers to question like:

What is the consumer looking for? How can a brand satisfy that demand both rationally and emotionally? - are the crucial factors in building a name in the market.

As per Mariwala, building an emotional bond with your consumer base is imperative to becoming a market leader. Brands have to have an ultimate purpose. "For example, in Saffola, we not just sell edible oil but we also try to influence the Saffola consumers and non-consumers to lead a healthy lifestyle."
Also, it's important to be contemporary in terms of packaging and advertising, so that the brand remains ahead and far superior in any competition.
For new entrepreneurs, the key is to be open to consumers' insights and ideas. It's advised that you must stay flexible in the business model until you arrive at a model which appeases the consumers. The solution must cover everything ranging from brand name and pricing to packaging and products. "Build a small prototype, test it, and scale it up!"

"I am an apostle of age-old practices of doing Business"

Marico Limited was built uniquely in contrast to the new businesses of today. Today, the emphasis is more on scaling a business and less on profitability.

“I'm a solid adherent to the old way of doing business. I'm not ready to process how these organizations can be bringing about immense misfortunes yet the valuation actually continues to climb. I think there has been some level of mental soundness around here due to the pandemic that has prompted a large portion of the financial backers to inquire about the profits. “

The size of a business is significant but at a certain stage, it should yield profits and add value to a company.

“I don't think I would ever think about constructing a business with this new mentality.” concludes Harsh Mariwala

Talking about the sunshine segments in the start-up sector, Harsh Mariwala says "I see an exceptionally brilliant future for direct to consumer (D2C)businesses. In early times, some entry obstructions were there as far as dissemination, branding, and publicizing was concerned. These have gone down now in view of the chance given by the rapid digitization of the markets and the D2C course."

They say learnings must be shared. That's why Professor Ram Charan & I have co-authored a book about the long and enriching journey of Marico.

We hope this book turns out to be a meaningful resource and makes a difference in your lives.#HarshRealities pic.twitter.com/PuNEqT4c1j
— Harsh Mariwala (@hcmariwala) July 9, 2021

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