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  1. 1. 2012Assignment on “Repositioning Dabur” Sudeep Bir Tuladhar Marketing Management Second Semester, EMBA Fall 2011 8/20/2012
  2. 2. 1. Analyse the reasons that impeeled Dabur to refine its Ayurvedic image to that of a herbal FMCG company?Dabur India Limited was set up in 1884 by Dr. S.K Burman in West Bengal as a proprietary firmfor the manufacture of Ayurvedic drugs. Later, the firm expanded its business in other sectorslike family products, health care products, medicines etc. However, the image of the organizationcould not be diversified from its original Ayurvedic image despite having specialized in othersectors as well. The organization had to refine its Ayurvedic image to herbal FMCG Companybecause of the following reasons. As explained above, Daburs image was known to the public as an Ayurvedic company although it specialized in many other areas and segments that include personal care, food products, and health products. This caused people to know only about the Ayurvedic products Dabur produced and the people had very limited information on other products such as family products, health care products and food products. Moreover, Daburs image was associated with the age group of over 35, and with a very high percentage of youth in India which make up around 70% of the population, This meant that Dabur was definitely missing out on a massive market which are potential customers having high disposable incomes. This was considered a second driver that pushed Dabur to reposition itself so that it can target consumer of all age group. Thirdly, Dabur also witnessed low sales and profits which indicated slowing growth for the company. This encouraged Dabur to reposition itself and it also appointed a consulting firm to propose recommendations to boost the sales and growth of the company. 2
  3. 3. Besides, the FMCG herbal market is considered a huge market that is booming and is believed to be valued at around $40 billion. Also this market is considered to be the fastest growing product category within FMCG s with plenty of support from youth and Dabur wanted to position itself as specialist in this sector. Finally, Daburs product range was diversified into many and did not have one specific product line. So the customers were confused as to what exactly Dabur specializes in and hence got the wrong perception and image.2. What were the action plans Dabur undertook as part of its restructuring? How did they help close the chinks in its marketing armour?Various action plans Dabur undertook for its restructuring are as follows:Dabur identified growth drivers such as personal and healthcare products that would leverage theherbal brand equity of the company. This would position Dabur as an Herbal specialist in theFMCG sector. Besides, they also set the scale very high targeting at least a strong double digitgrowth i.e. annual growth of 15-20 percent. Also, Dabur intended in cutting down its lowcontribution brand as it was slowing its growth. For example its skin care range was growingvery slowly and its product in the segment like Gulabari did not hold a strong appeal for theyouth. Moreover, Dabur had to fill in some missing products in the oral care and hair caremarket. It also had to set for itself a new brand strategy and enter new potential areas and targetyouth and students.The branding strategy for Dabur was moved from the Umbrella Strategy to Key Brand Strategyand categorized itself into five power brand that include: Dabur (Healthcare products), Vatika 3
  4. 4. (hair care products), Anmol (personal care products), Real (juices), and Hajmola (digestivesupplements). This strategy was to restrict Dabur to healthcare items and gradually distance itfrom other product categories. In order to reach out to new students and youth Dabur had aproduct line extension in the juice range by introducing new products. It introduced Coolers (lowpulp), Real (high pulp), Real ACTIV (for the health conscious youth customers), and RealJuniors (for under 6 years kids).Dabur’s earlier logo of banyan tree conveyed the message of healthy life but since Dabur wantedto have different images to different people according to their need, the logo was also changed.The company decided to follow up the logo change initiative with a complete redesign inpackaging for Dabur products and also launched new products and fresh variants for existingbrands.All these strategies helped overcome the difficulties faced by Dabur. Firstly, the brandingstrategy which categorized the brand into five power brands restricted Dabur to only health careitems and distanced itself from other products. This made people realize that Dabur specializes inproducts other than Ayurved products and it also reduced the confusion among people regardingwhat Dabur actually specializes in. Daburs image was associated with the age group of over 35but its diversified brands have helped tapping various target segments like Youth, HealthConscious People, School Children, Mothers and Existing Old age group. The branding strategyalso helped to position Dabur as an Herbal specialist in the lucrative FMCG sector which wasone of the objectives of Dabur before its restructuring. 4
  5. 5. Besides product line extension strategy adopted by Dabur also had the following benefits. Itattracted different target audience, renewed interest and liking for the brand by introducing newvariants, increased its market share, diversified without much risk and it moved from its corestrategy and hence gave customers something better and different.Thus we can clearly see that the restructuring of Dabur has been successful in achieving all itsobjectives of closing the chinks in its marketing armour.3. Dabur targeted sales of Rs 200 billion by 2006. Hence it needed to grow annually at a rate of 15-20 percent in years 2004, 2005 and 2006. Comment on the growth strategies adopted by Dabur.As a part of restructuring the image of Dabur, they targeted sales of Rs 200 billion by 2006which would be possible only by annual growth rate of 15-20 percent in years 2004, 2005 and2006. Following are the growth strategies adopted by Dabur.Price:Competitive pricing was one of the growth strategies adopted by Dabur. Dabur maintained verycompetitive prices for selling their products. As, Dabur had different sub-categories it came outwith variable pricing to reach each and every target segment For example, one litre of cooler waspriced at Rs. 50 and this was 15% cheaper that its other premium product Real which targetshigher income people. Moreover, Dabur could have charged high prices in their Ayuvedicproducts but they kept their prices competitive with other players in the market. To increasedemand, Dabur introduced Rs. 5 smaller pack segments which included baby oil, toothpaste, hair 5
  6. 6. oil etc. It also slashed the price of Vatika shampoo by 20% after proper planning. Dabur alsointroduced Rs 1 Vatika shampoo sachet in order to reach people in the rural areas and increasemarket share by doubling the volume of usage. Thus, Dabur chose to stand out against itscompetitors by cutting prices.Product:As explained earlier, all the products were divided into five power brands of high qualityavailable in different sizes. This gave many benefits like Dabur could specialize in non Ayurvedproducts, tap consumers of various age groups, position itself as an Herbal specialist in thelucrative FMCG sector etc. Dabur also introduced new products looking at demand and differenttrends in the market. Dabur already had 55 percent market share in packaged fruit juice marketbut it still wanted to launch more flavors of fruits and vegetables Similarly, Dabur also targetedRs 19 billion toothpaste market by introducing Dabur Lal Dant Manjan, Dabur Red Toothpaste,Babool, Meswak etc and increased its market share from 1.8 percent to 8 percent. Besides, theyalso produced products in various sizes like they introduced small packs of baby oil, tooth paste,hair oil etc. They produced different products for different class of people like Real Activ astargeted for consumer belonging to SEC A while Real was target for SEC B and C consumers.Place:Dabur constantly kept on increasing its geographical spread to increase its sales revenue. From 8percent of Dabur sales from South Indian Market in 2003, Dabur improved its sales to 10 percentin 2004. It has expanded its market in the international arena very successfully. Dabur has itsbranches in over 50 countries with subsidiaries being established in Nepal, Nigeria, Bangladeshand Pakistan and this international business has added Rs 1.28 billion to Dabur’s turnover in 6
  7. 7. 2003-04. Main focus areas include countries like Afganisthan, Russia, Asia Pacific and other CIScountries.Promotion:Dabur is well known for its promotional campaigns. Dabur signed Mr. Bachchan for a sum of Rs80 million for advertising campaigns undertaken by Dabur. Dabur also signed cricketer VirendraSehwag and his wife for Oral, Hair and Healthcare products. Moreover, different brands havetheir own marketing and advertising teams for example Dabur Foods marketed fruit juices,cooking pastes and tea. Besides, redesigning the packages of Real, communicating throughadvertising capsule of Real are some of the promotional activities of Dabur. Apart from thisDabur also adopted integrated marketing communication program which included groundpromotion, sampling exercise, mass media advertising, institutional promotion etc.Thus it can be seen that Dabur has done well in all four P’s of marketing mix. No wonder theyhave achieved their objectives successfully. However, they just cannot relax with this success buthave to continue their relentless effort of striving for success. With proper combination ofmarketing mix, Dabur will be able to compete with the established players in the market likeHindustan Lever, Proctor and Gamble, Godrej Consumer Products etc. 7