It's probably the face cream your mother used. But J L Morison, the Indian maker of Nivea, has figured out that it needs more than face cream to smarten up the look of its balance sheet.
So, after years of lying low it's about to launch a multi-pronged offensive in the bitterly competitive cosmetics market.
JLM fired the first shot last month, by launching Nivea deodorants. And now it wants to introduce 100-odd products in categories as varied as sun care, hand and body care, hair care, baby care, face care and fairness products over the next three years.
Morison executives are hoping that the new products will push turnover from the current Rs 60 crore (Rs 600 million) to Rs 250 crore (Rs 2.5 billion).
Does that sound like a tall order? Probably, yes. JLM is making its moves at a time when the market is more competitive than ever before. And, after 30 years in business, its only big winner is still Nivea face cream.
JLM is slightly different from most other cosmetic companies. It's a marketing and distribution company owned by the Kolkata-based Raghu Mody Group (of Rasoi fame).
For three decades it has had a licensing arrangement with Beiersdorf, the family-owned German company, which owns Nivea worldwide.
Besides that, JLM also has licensing agreements with other foreign brands and distributes a range of oral care, foot care and child care products.
Over the years, its product portfolio has waxed and waned. At one point it had introduced 30 Nivea products but that fell back to six basic products last year. These included Nivea cold cream, a body lotion, talc and soap.
In addition there was Nivea Visage which included a cleanser, toner and moisturiser. Also, there was a range of mens' toiletries. Its newest additions include Nivea Soft -- a light cream -- and the deodorants.
All these beauty aids couldn't disguise the fact that the company depended heavily on the cream to make its visage presentable.
But even that never became a blockbuster brand. In the Rs 109-crore (Rs 1.09 billion) cold cream market, it grossed sales of about Rs 20 crore (Rs 200 million) in 2001.
With a market share of around 18 per cent, it trailed Hindustan Lever's Pond's cold cream, which had a dominant 38 per cent share of the market.
Even that has fallen and it now has a 16.9 per cent share of the market and herbal products like Delhi-based Ayur are blurring its sheen.
What had the company done wrong? Firstly, the product was poorly positioned. With its thick and oily consistency, it was perceived as a winter cream.
As a result, it developed the image of being more suited for older women. Says Jimmy Anklesaria, managing director, JLM, "In a country where half your states don't even have a winter, it was difficult to peddle the product with its existing image."
Also JLM was slow to leverage the cream's potential by extending into allied categories.
"We did not innovate fast enough. The market was driven by changing consumer needs but we did not keep pace with the changing times," says Raghu Mody, chairman, JLM.
In 1997, JLM did make feeble attempts to diversify. It launched a 100 gm Nivea soap retailed at Rs 31. However, when the product failed to pick up, Nivea came up with a three for the price of two offer, which shaved Rs 10 from the tag.
Not surprisingly, in 2000 it had barely 0.4 per cent of the soap market. It tried to clean up its act by constantly changing pack sizes and having special offers. Marketing experts say that this constant fiddling with size and price sent confusing signals to the consumers.
Nivea Talc followed next in a twist and turn pack. It helped JLM corner substantial shelf space in departmental stores.
Industry experts say that this was the turning point in the relationship between the licensee and Nivea's parent company Beiersdorf.
Both appeared to be chasing a different agenda. Beiersdorf's global priority has always been its basic skin care range. Skin care takes priority over other products like bath, sun care, baby care, hair care and colour cosmetics.
Managers who have worked with JLM say it erred by pushing what were low priority products for Beiersdorf, like the talc and the soap. So a chastened JLM was forced to backtrack and re-focus on skin care.
Anklesaria has a different take on the subject. "No, we had no such issues with Beiersdorf. We shifted focus only when we sensed that the growth in the talc market had flattened out. Deodorants have effectively replaced talcs and we were just moving with the times."
Another favourite accusation against JLM is that it never made enough effort to build the Nivea brand. "Every rupee invested in marketing and distribution had to translate into a rupee of sales but that didn't happen," said a source close to the company.
Now, it wants to make amends. It will dip into its international portfolio and bring all Beiersdorf's key products to India.
Is it too much too late in an already cluttered market? "We will bank on the quality of our products to help us break the clutter and emerge market leaders," says Mody.
JLM will import these products and test market them in India for a while before deciding on whether they should be produced locally.
Nivea cream is also being supplemented by an all-season lighter Nivea Soft, targeting a younger audience.
But the company's biggest hopes are pinned on the deodorants. Nivea deodorants have been a favourite for years in the Rs 100-crore (Rs 1 billion) grey market for deodorants.
JLM is also looking for ways to spruce up its other products besides Nivea. The Nivea range accounts for about 60 per cent of its turnover. The rest comes from other products that it markets like Emoform a dental care product from Germany's Dr Wild.
There is also the Rs 3-crore (Rs 30-billion) baby care business. It has also forayed into the footcare business with the recent launch of Carnation corn caps from the UK-based Cuxson Gerard.
JLM is even considering getting back into marketing therapeutic products as it did till the mid-'90s. For the moment though, cosmetics holds the key to the balance sheet.
In the first quarter of this fiscal the company made a Rs 31 lakh (Rs 3.1 million) profit on a turnover of Rs 9 crore (Rs 90 million).
JLM is already importing eight variants of Ulric De Varens perfumes retailing between Rs 500 and Rs 600. It hopes to garner Rs 10 crore (Rs 100 million) from this business in the first year.
Says Mody, "We have been dormant all this while. Now we have woken up and are ready to charge ahead. This is only the beginning." Can JLM be second time lucky?
