Vicco Legal Fight | How Did Vicco Turn A Legal Crisis Into Its Biggest Marketing Strategy?
🔍Insights
The story of Vicco began in the 1950s. It started at such a time when people did not have much idea about beauty creams. But the launch of Vicco products in the market lead to a trend. People went crazy over these fairness and beauty creams. Vicco became every female’s favorite brand in that era. Vicco marked a place in everyone’s minds and hearts not only with its products but also with its fun jingles. Vicco used to have some really catchy jingles in its TV commercials. These jingles were so melodic and captivating that they were known by almost everybody. Today, let’s dive deep into the story of Vicco’s struggles. We will see how Vicco not only faced struggles but used them as a tool to come out stronger.
The Beginning Of Vicco
Vicco’s Entry into the Global Market
Unique Selling Point of Vicco
The Downfall of Vicco
Legal Issue
- Case: Vicco Laboratories Vs Commissioner Of Central Excise, Goa and Thane
- Bombay High Court’s Decision
- Supreme Court’s Order
- How Did The New “Central Excise Tariff Act, 1985” Come as Trouble to Vicco?
The Beginning Of Vicco
Vicco was started by Late Mr. Keshav V Pendharkar in 1952. Commercial production of Vicco started in 1955 with a mere annual turnover of ten thousand rupees. With consistency and efforts, the company grew so well in no time, that it reached its maximum production levels. Because of this, Vicco had to look for alternatives for more production. At that point, they had only one factory which could not suffice the increasing demand for its products in the market. That is why it decided to take up a better and bigger space to grow its business. To manage and fulfill the increasing demands, Vicco started another factory.
Muskaan Kapoor
Vicco’s Entry into the Global Market
With two factories working towards production, it ensured that there was no shortage, keeping the supply smooth. Vicco not only worked hard but took smart decisions and made the right moves at the right time which helped tremendously. Apart from India, Vicco now had enough space and capacity to produce products for other countries as well. To take the growth forward, Vicco Stepped into the global market. Seeing the scope of its development, Vicco started exporting its products to various countries like Europe, Canada, Australia, The USA, The Middle East countries, etc. With the growing interest of the people in the products by Vicco, the exports kept on increasing.
Unique Selling Point of Vicco
The main aim of Vicco was to promote Ayurveda and to show the world all the benefits Ayurveda can offer. Vicco was the first one in the market to make an ayurvedic toothpaste. They were also the first to make turmeric cream, known as Vicco turmeric skin cream. Vicco sells many other products such as Vicco Vajradanti paste, Vicco turmeric WSO cream, etc. The specialty of Vicco was that all its products were made using various ayurvedic herbs. Although Vicco was started by Late Mr. Keshav V Pendharkar, after his death, his descents took forward the business and brought it to where it stands today.
The Downfall of Vicco
Vicco has been in the market for many years now. It has started gaining recognition as one very well-known brand. But to get to this stage, Vicco had to go through a lot of ups and downs. Seeing the growth of Vicco, there were many new companies that started selling products replicating that of Vicco. This stood as a huge threat to the Ayurveda-based company. All of a sudden, there were a lot of competitors in the market. Apart from these, Vicco had to face a huge downfall when a case was filed against them. The Company had to face questions and doubts about its authenticity. The case that was filed against Vicco, contained complaints doubting the use of real Ayurvedic products and hence should be considered just a cosmetic brand.
Legal Issue
Case: Vicco Laboratories Vs Commissioner Of Central Excise, Goa and Thane
In the year 1978, Central Excise Authorities held that Vicco should not term its products “Vicco Vajradanti” and “Vicco Turmeric Skin Cream” as ayurvedic and rather be classified as cosmetics. The Central Excise department claimed that both the products of Vicco laboratories cannot be categorized as “ayurvedic” and shall actually come under the “cosmetics”. The authorities wanted these two products of Vicco to be taxed under cosmetics and not under ayurvedic products. However, Vicco challenged this claim made by the Central Excise authorities in court before the Civil Judge, Senior Division. The decision was in the favour of Vicco. It was held that both of these products shall come under the “ayurvedic” category as the process of preparing these two products involved using ayurvedic medicines.
Bombay High Court’s Decision
Later on, the Central Excise authorities challenged this decision and filed an appeal in the Bombay High Court. The Bombay High Court held that these two products are not considered cosmetics. But at the same time, the High Court also held that these products cannot exclusively be termed ayurvedic too. Both Vicco and Central Excise Authorities further went ahead and filed a special leave petition before the Supreme Court. The leave petition filed by the Central Excise Authorities was dismissed by the Supreme Court. Later on, Central Excise Authorities consented that the products were rightly classified by the Bombay High Court, on the basis of which the Supreme Court passed a consent order.
Supreme Court’s Order
The Supreme Court also held that products of Vicco cannot be considered under the cosmetics category. It said that Vicco shall still be categorized under ayurvedic products. With smart strategies and diligently fighting the matter legally, Vicco managed to keep its reputation undamaged.
How Did The New “Central Excise Tariff Act, 1985” Come as Trouble to Vicco?
After the Bombay High Court passed the order, The new Central Excise Tariff Act, 1985 came into existence and the Central Excise Authorities again went ahead to claim that as per the new act, the above-mentioned products of Vicco come under the cosmetics category. Such a claim was made to the Excise tribunal and even this time, the result was in the favour of Vicco. Further, many show-cause notices were sent by the Central Excise Authorities to Vicco. Central Excise Authorities required Vicco to pay taxes for its products under the “cosmetics” category as per the new act.
However, during all this time, Vicco was all over the news and there were doubts being raised in the minds of the people. The consumers and customers of Vicco were starting to question the products and were in a state of confusion with regards to whether the products of Vicco really were ayurvedic or not. Vicco was in the market for such a long time and had gained the trust of a huge number of people. But such an incident pushed Vicco's customer base into two minds regarding its products.
It takes years to build a good reputation in the market and takes merely a few days for that reputation to be squashed down. It is very normal that when questions are raised about a company, even though there might be a customer base that is loyal, there will definitely be a certain percentage of people who might get hesitant and doubtful about the company. In the same way, even though there were a lot of people who had trust in Vicco, it was important for the company to ensure that the people in the market didn't lose trust and that its reputation stayed intact.
Vicco’s Marketing Strategy
The mode through which a brand is marketed is very important. Vicco was a brand that was marketed through various mediums including newspapers, magazines, radio, TV, and Word of Mouth. Out of all the strategies, TV commercials worked the best for Vicco. As per the stats, 76% of people got to know about Vicco through TV commercials.
Vicco wanted to assert to its buying public about its products were ayurvedic and not cosmetic, while it legally fights the tax claims. Vicco came up with the best marketing strategy possible to clear all the doubts in the minds of people. Vicco launched the most genius advertisement that had a jingle “Vicco Turmeric nahi cosmetic, Vicco Turmeric ayurvedic cream”. Yes, I am sure you did not just read that line but also sang it in your head. That is the kind of impact it had on the public.
The jingles had the crux of what Vicco exactly wanted to convey. Incorporating a catchy jingle in the advertisement is always a good idea as it gets stuck in the heads of the people watching it. On top of it, if the jingle involves such words that have the capability to clear all the doubts in people’s minds, which worked like the “Cherry on the cake”. In the same way, the jingle used by Vicco had exactly those words that had the potential to remove all the doubts about its authenticity. In no time, this jingle made its place in a lot of people’s minds. Vicco came up with various jingles in its advertisements that could prove to the audiences that its products are ayurvedic in nature. These jingles did not just seem like clarification to the audiences but were also a subtle mockery towards the Central Excise Authorities.
These jingles were used in every advertisement for Vicco. Those were the times when TV was watched by almost everybody on an everyday basis. These commercials of Vicco were telecasted on various Indian channels. The Vicco ads were heard on almost every other channel. This strategy of Vicco was so successful. The jingles used in the commercials were stuck in everyone’s heads. People know the tune and exact lines of those jingles even today. Such was the impact these advertisements had.
Shalini Rath
Conclusion
With this, we can understand that marketing strategies do not mean something very complicated and it does not have to be complex for it to actually have an effect or influence. It is just about understanding human psychology. If a person understands how a human brain works, it is really not that hard to come up with a strategy that can help in product branding, marketing, sales, etc. As we have seen with Vicco, something as subtle and simple as a jingle can also have a huge impact if done rightly.
FAQs
Who founded Vicco?
Vicco was started by Late Mr. Keshav V Pendharkar in 1952.
When did Vicco start its commercial production?
Commercial production of Vicco started in 1955 with a mere annual turnover of ten thousand rupees.
Where is Vicco's headquarters located?
The headquarters of Vicco is located in Nagpur, Maharashtra.
What are the main Vicco products?
Vicco is mostly based on Ayurvedic products. Its main products are “Vicco Vajradanti” and “Vicco Turmeric Skin Cream”.
What was the famous jingle Vicco developed to counter their legal situation?
Vicco came up with the best marketing strategy possible to clear all the doubts in the minds of people. Vicco launched a very famous jingle “Vicco Turmeric nahi cosmetic, Vicco Turmeric ayurvedic cream”.
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