"The Godrej group is getting more contemporary" says Adi Godrej

One of the oldest business houses in the country, the Godrej Group has over the recent past increased its external communications radically, infusion of new colours, brand relaunch and makeover etc point out to the fact that the group is getting more contemporary. Sonali Krishna of Brand Equity, ET NOW caught up with the Adi Godrej, Chairman to find out more about the developments in the group.

On being asked on the benefits of the brand makeover, Adi Godrej said that it has worked very well. Consumers were associating the brand as one for their grandfather and products like soaps & locks. Therefore we felt that it’s time to make the brand more contemporary as we are associated with many modern products – we supply to the space and the nuclear programme etc. A major study by us indicated that the brand needs to be repositioned. Hence the logo has been redesigned, the shape remains identical but we have used different colours. The logo has been standardized and stands out very well.

Responding to a query on infusion of a lot of young blood in the organization, Godrej said, “We have always recruited a lot of management trainees, but what we have done now is to get people rise much faster in the organisational hierarchy. The group is expanding very fast and needs manpower. We have hired senior executives from outside, some of whom are leading our businesses today. For instance Vivek Gambhir joined as Strategy Head and is today the MD of Godrej Consumer Products. Our HR strategy has been changed over period both in terms of motivation and objectives for our people, all of which has fitted well.”  

Godrej further added that the groups’ international business is growing impressively and about 48 per cent of sales are 

When asked about plans for Godrej Properties and Godrej Interio so that they become a destination of choice, Godrej said that Godrej Interio was earlier servicing commercial offices in the furniture & interiors space and in the home segment only had a presence through the ‘Storewell’ cupboard brand. Today, we serve commercial as well as home segments with increasing focus on the latter. As for Godrej Properties, the group has leveraged its brand very strongly in business. It is one of the fastest growing businesses in the group and the expectation is that there is high scope for growth. Godrej said, “We think it will end up much larger, in fact the largest business in the next 10 years. So we are positioning the brand very strongly in properties business.”

The group has been one of the highest advertising spenders and has Aamir Khan as its brand ambassador. Justifying the high ad spend, Godrej said it has worked well in a tough economic condition and they like to be counter cyclical. While their ad spend in first quarter of FY 2013-14 has increased by 70 per cent as compared to the corresponding previous quarter, the benefits is that sales  has registered a 23 per cent growth which is the highest amongst peer categories. Also the fact that leveraging Aamir Khan as brand ambassador has implied spending higher on advertising.” Godrej emphasized that the ad spend will continue to remain high in future as well as they are aiming for a 10 times growth in 10 years. This means growing at 26 per cent compounded annually but in the three years of the 10 year period, the compounded annual growth rate (CAGR) has been 30 per cent and it means that they are ahead of the curve.

Despite the economy not doing well and FMCG’s registering a muted growth, Godrej has been an exception. Said Godrej, “while the consumers have restrained their expenditure, we are growing well in almost all categories. Consumers down trading on buying products are good for us as we have products across all price categories. Now that monsoons have been good, we expect higher agricultural income will translate into higher rural spends on consumer categories from October onwards.”

Finally to a question on rupee depreciation affecting raw material prices and the need for a price hike, Godrej said that it will have to be done, and FMCGs will have to go for it.

Tune in to Brand Equity with Sonali Krishna on ET NOW every Saturday at 2:30pm & Sunday at 11:00am