Madhuram’s ‘Tough Love’ Partnership Strategy to Play the Long-Term Game

The ‘Customer is King’ mantra may be a good sales policy that looks great on paper, but the real question remains – does an old adage stand true against a company principle? A company must have strong foundations and principles. Onboarding the right customer and building relationships based on mutual respect are part of building such a foundation. Ultimately, it is the organization that decides who their customer is.

Everyone talks about how the customer is always right. It is understood, in most cases, that customers love to maintain the norm due to this misconception. Incremental changes, however, are necessary for any business to succeed eventually. Sure, a company that is not afraid to lose business will receive some backlash in the beginning, but that is considerably better than attracting the wrong customer or retailer in the food business.

The ‘tough love’ strategy

The consumer business segment overall so far has been tainted by various companies that run businesses based on discounts. However, in the long run, this strategy would fall short. And it most definitely does not work for WayCool. Our company’s idea of customer love is different. For us, the appreciation is mutual – We appreciate and respect the customer as much as they respect us.

WayCool, and its CPG brands namely KitchenJi, Madhuram, Freshey’s and L’exotique, have staunchly believed in the idea of “tough love” when it comes to dealing with customers. Tough love is a way of dealing with something sternly, without giving many concessions, that results in responsible behaviour from the concerned party. In business, this leads to giving and earning respect without having to compromise on principles. Madhuram, in this regard, has earned the respect of vendors for following the tough love strategy unwaveringly.

Retailers are no exception to this. Understanding that not all customers and retailers operate in the same manner, WayCool expects them to clear all KYCs in order to become associated with the brands under its banner. Even with kirana stores, it is expected that these establishments will submit all the necessary documents to be onboarded with the company. Knowing your customers, suppliers and partners has become a necessity in today’s food supply ecosystem.

Rhinos not unicorns

At WayCool, the goal is to ultimately build salience, engagement and trials with a mix of consumer offers, house-to-house sampling, localized BTL marketing and ATL mass media. To start off, WayCool understands that retailers play a pivotal role in the last mile of the food supply chain – reaching the end consumer. With a vision to understand the demographics and the consumer, the CPG team identified retail stores (annachi stores and kirana stores) and decided to reach out to them in clusters using our in-house products. Another major initiative was the trade marketing schemes and Magic Point programme, which were conducted on a regular basis. Led by priority stores called Magic Points (MPs) in each cluster, the brand improved brand salience with semi-permanent displays. The Madhuram team also identified key outlets - out of 1,000 outlets, Madhuram identified around 200-250 outlets weighted stores per cluster and rebranded them as signature Madhuram stores and named them ‘Madhuram Magic Points’.

WayCool not just focused on weighted distribution with the Magic Point programme but also decided to sell before putting up the open sign. Initially, using the Madhuram brand, the company established a distinct positioning in the market through massive house-to-house sampling with the objective of reaching as many homes as possible. Each identified cluster household received half a kg pack of either Ponni (Chennai, Guduvanchery, Coimbatore) or HMT (Hyderabad) or Sona Masoori rice (Bengaluru), a trifold leaflet showcasing our entire range of rice and dals, and a list of Madhuram Magic Points (MMPs) nearby where they can pick up a larger pack of Madhuram rice.

Impact

Madhuram’s massive house-to-house sampling enabled brand entry directly into households and managed to grab the attention and interest of the homemaker. The packaging was revamped and included a QR code to guide her to the magic point store, making Madhuram the lead brand for outlet penetration. On the retailer front, the brand also became the first of its kind in conducting large-scale meetings in the FMCG category, with experts sharing their knowledge and post-event activities to engage retailers and their families.

Madhuram is now INR 100 crore power brand – a first in WayCool. This incredible milestone makes Madhuram one of the fastest-growing brands in the Indian FMCG space. Madhuram reached over 100 households in the first 5 clusters; with 1,60,000 samples delivered in 8 remaining clusters through the Magic Points.