CavinKarre- its inception and it evolvolution Strategies of CavinKare actions helped CavinKare succeed

1. Adaptive Market Leadership
Individual Assignment
Submitted by -
Akanksha Gohil

2.  My understanding about CavinKarre at its inceptionand as it evolved: -
CavinKare is a successful company serving in the field of cosmetics. Itd portfolio included
brands like Chick (Shampoo, talc), Meera (Herbal powder, liquid hair wash, shampoo, hair oil),
Nyle (Herbal shampoo), Fairever (Fairness cream), Spinz (perfumes, deodrants and talc), Indica
(Hair dye), Raaga Cool (Cooling hair oil) and Karthika (Hair wash powder).
C. K. Ranganathan was the Managing Director of CavinKare. Earlier he had a family business of
small-scale pharma packaging and cosmetics in Cuddadlore, Tamil Nadu. In 1983, after
completing his graduation he started his own company in a small boarding room with a modest
capital of Rs. 15000.
The company was first named as Chick India, but it changed its identity two times after that:-
n
CavinKare was able to identify a very vast untapped market – Rural Market. They were able to
identify that the size of middle class consumers in rural areas was the same as in urban areas,
which further became one of the major reason for the success of CavinKare.
CavinKare is one of the sparkling example that showcases that if the penetration of a certain
commodity is less in an area, that does not mean a company should not enter in that segment,
rather it means that the company should try to tap that market.
CavinKare has always interpreted its market research’s result well, and have taken meticulous
decision based on its analysis. They found out that in rural area, households with monthly
income of Rs. 1500- Rs. 3000 were the consumers of cosmetics products and tried to attract
these customers by proposing Chick Shampoo as a better quality and superior fragrance
product.
Although the idea of launching Chick shampoo in rural untapped market was brilliant, but the
major hurdle was unawareness of the product and its usage among the consumers. Their
consumers were more inclined towards using soap to wash their hair and also they never saw
any visible damage to their hairs by using soap. So the company decided to solve this problem
by making every possible effort to educate its customer about the product. They did the
following to overcome this issue: -
 Mass media marketing – Radio
 Roped in famous celebrities – Amla, Khusboo and Manorama
 Personal live demonstrations – Company officials travelled in vans and gave live
demonstration of shampoo and answered Whats’ and Whys’ about the product.
Chick India
(1983)
Beauty Cosmetics
Private Ltd
(1990)
CavinKare
Private Ltd
(1998)

3.  Wall paintings
 Video-On-Wheel
 Free Screening of movie followed by free distribution of samples
 Door-To-Door sample distribution
All these activities helped CavinKare’s sales jump from Rs. 0.5 Million, 1984 to Rs 3.8 Million,
1985.
The sachet technique worked for CavinKare because of – Low cost, Convenience to buy when
needed and ability to try out different brands. From 1997-2002 sachet showed 5 times more
sales growth with respect to shampoo bottles.
One of the ingest hurdle faced by CavinKare was the distribution reach. There was a thinly
distributed i.ie 82% of the rural population lived in villages with population less than 5000. This
lead to challenges like logistics, product shipment, delivery of stocks and reaching out to
retailers.
To overcome this challenge CavinKare started focusing of Haat Bazar and Melas(fairs) – periodic
marketing function in rural ares. These two functions would attract customers froma radius of
12-15 Km (nearly 4000 people), therefore it was a great opportunity to showcase their product
to the customer and convince them to buy it. After marketing and selling its products in Haat
and Melas, CavinKare was successful in increasing its penetration in rural market. From this
CavinKare understood one thing very clearly – for this company distribution was the key to
success.
One good thing about CavinKare is that they have always been revisiting their decisions and
analyzing there research result very well. They analyzed that a Rs. 2 sachet was too costly for a
rural household to use weekly, especially where the competitor was a Rs. 8 soap, which could
be used by the entire family. Therefore, they decided to launch a cheaper version of their
shampoo. Their R&D team came up with a better formula which was low in cost and of the
same quality, this product was prices at Rs. 0.5 for 4ml quantity. This product was a great
success for CavinKare. Their market share increased from 5.61% in 1999 to 23% in 2003.
Another big reason for CavinKare’s success was that they were successful in breaking the notion
that shampoo bottles can only be afforded by rich people – They made sure that for Chick
shampoo cost/ml was same for both sachet and bottle, whereas for other brands it was 10-20
Paisa more, which is a big thing for a rural customer.

4.  Following choices andactions helpedCavinKare succeed: -
1. Focus of the untapped rural market – As in this segment none of the competitor was
concentrating upon.
2. Introduction of Sachet – provides customer with – Convenience to buy when needed
and ability to try out different brands, and enjoy the Low price.
3. Educating their customer(rural market) about their product- Once the customer knows
about the benefit of the product, they will automatically pull the product.
4. Heavy marketing – Radio, Celebrities, Video-On-wheels, Free distribution of samples etc.
5. Constant engagement with customer to gain insights.
6. Performing R&D well, and analyzing their results correctly and effectively.
7. Constant monitoring of their actions – taking consumer/ employee feedback and
insights.
8. Motivating employees to come up with innovative ideas.
9. Outsourcing the manufacturing operations – helped it become nimbler and agile.
10. Always making sure that quality of the product should not get compromised.
==============================================================================