Focus Is On Categories Where We Have Right To Win In Channels & With Consumers: Pidilite | CNBC TV18

Summary

In an exclusive conversation with Bharat Puri and Sudanchu Watz, the leadership at Pilite discusses their growth strategies and approach to category innovation. With a focus on pioneering emerging categories, the company uses a patient, feedback-driven approach to develop products. They highlight the importance of evolving core categories, such as waterproofing and tile adhesives, and expanding into new markets. The conversation reveals Pilite's commitment to continuous improvement, international expansion, and maintaining a balance between core, growth, and pioneering categories for long-term success.

Takeaways

• 😀 Pilite's growth strategy focuses on both core and pioneering categories, with an emphasis on expanding beyond traditional markets.
• 😀 The company uses a rigorous process to explore emerging markets and categories, involving senior managers who actively scout for growth opportunities.
• 😀 Pilite's approach to category creation involves testing products through pilot programs, with the goal of transitioning successful products into growth categories.
• 😀 Growth categories can eventually become core categories, but this requires long-term innovation, premiumization, and increased distribution efforts.
• 😀 Core categories, although considered mature by some, continue to experience growth if managed properly, with Pilite's strategy emphasizing innovation and market expansion.
• 😀 Pilite has achieved a shift in its portfolio, moving from an 80-20 split between core and growth categories to a more balanced 55-45 split.
• 😀 The company has a culture of patience during the piloting stage, consistently focusing on feedback and continuous improvement to enhance product offerings.
• 😀 Pilite's commitment to 'do, learn, do' enables a high level of flexibility and adaptation during the product development process.
• 😀 The company has successfully transitioned several pioneering categories, like rough products, into growth categories, showcasing the effectiveness of their approach.
• 😀 Pilite plans to expand internationally, with a focus on emerging markets in South Asia, Africa, Southeast Asia, and the Middle East, aiming to replicate the success seen in India.

Q & A

What is Pilite's strategy for expanding into pioneer categories?

Pilite's strategy for expanding into pioneer categories involves a simple approach focused on channel and consumer needs. They prioritize categories where they can win with at least three out of four critical factors, such as right to win and customer demand. Once identified, they pilot test products before launching them as growth categories, aiming for 100 crores in three years.

How does Pilite decide which categories to pursue for growth?

Pilite evaluates potential categories by looking at markets a few years ahead and identifying emerging trends. The decision-making process involves scouting the world for affinity markets and testing ideas with a continuous feedback loop. The company is patient during the pilot stage, learning and iterating before making a final decision.

What is the role of innovation in Pilite's category growth?

Innovation plays a significant role in Pilite's category growth by providing a multiplier effect for existing core categories. This includes premiumization, new product innovations, and improving sales and distribution strategies to expand core and growth categories.

How does Pilite maintain patience during the piloting phase?

Pilite takes a 'do-learn-do' approach during the piloting phase, which emphasizes continuous learning and feedback. They are never in a rush to shut down a project but instead focus on improving execution and refining ideas based on what has or hasn't worked.

What is Pilite's approach to managing failure in their innovation efforts?

Pilite maintains an approach focused on learning from failures. Rather than blaming external factors like market sluggishness, the company asks what they could have done better in terms of execution. This philosophy has been key in turning many pioneering categories into successful growth areas.

How has Pilite's portfolio shifted over the past 10 years?

Over the past 10 years, Pilite's portfolio has shifted from an 80% focus on core categories and 20% on growth and pioneer categories to a more balanced 55% core and 45% growth/pioneer. This shift has created a growth flywheel for the company.

What is the revenue mix of Pilite, and how is it expected to evolve?

Currently, Pilite's revenue mix is 55% core categories and 45% growth and pioneer categories. Looking ahead, they expect this mix to remain balanced with a slight shift towards growth and pioneer categories, reflecting their focus on innovation and category development.

How does Pilite plan to expand internationally?

Pilite plans to strengthen its presence in emerging markets where they can replicate their successful model from India. This includes regions such as South Asia, Africa, parts of Southeast Asia, and the Middle East. They aim to gradually increase their international revenue, which is currently around 10%.

What is Pilite's philosophy on mature categories?

Pilite believes that there are no truly 'mature' categories, only tired managers. This philosophy drives the company to continually innovate and push for growth in their core categories, ensuring they do not stagnate despite their success.

How does Pilite measure success when moving from a pilot to a growth category?

Pilite measures success through continuous feedback and iteration. They assess whether the product meets certain performance standards in the market and then decide whether to scale it as a growth category. Their approach focuses on execution and ongoing improvement rather than immediate results.