Question: What Value Proposition should FoI follow to differentiate its offerings in the B2B space from those of its competitors and strengthen its position with its core base of consumer product companies?
Fragrances of India (FoI)
The company was established in Bombay (Mumbai) in the year 1950. It manufactures food flavours (42 % of sales) and fragrances (58% of sales) for use in a wide range of consumer products. Flavours are used in consumer products like soft drinks, sweets and toffees, pharmaceuticals, snack foods and alcoholic beverages. The fragrances segment is focused on providing functional fragrances for personal care and household products which includes personal deodorants, perfumes, room and car fresheners and floor cleaners.
Large and established companies are reluctant to put their brands at risk, so they favour suppliers who they can trust to ensure safety and quality of their products. Despite being an Indian company, FoI has competed with MNC suppliers to become a valued partner of companies like Pepsi, Coke, Procter and Gamble (P&G), HUL etc. who are 45 % of its market. Since its inception the company initially focused on Indian companies like Godrej and Dabur. It also was successful with MNCs operating in India like HUL, Colgate, and Glaxo etc. In 1991, when India opened its economy, FoI was well positioned to service new entrants like Pepsi, Kelloggs , P&G etc. Of course global suppliers also entered the market, but FoI was able to hold its own due its superior knowledge, experience of Indian conditions and its track record with companies.
When a consumer products company wants to launch a new flavor or fragrance, FoI and two or three rivals are offered the opportunity to develop a new one. Therefore it is difficult to lock in customer relationships, especially with MNCs who are very demanding.
Since the value that FoI contributes to a consumer product is “hidden inside” and its brand name not well known to end customers, some challenging questions for managing its brand arise.
Question:
What Value Proposition should FoI follow to differentiate its offerings in the B2B space from those of its competitors and strengthen its position with its core base of consumer product companies?
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