Rural Marketing by Cavinkare Pvt Ltd


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This presentation is about the rural marketing strategies adopted by the Cavienkare Pvt Ltd.

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Rural Marketing by Cavinkare Pvt Ltd

  1. 1. CavinKare Pvt. Ltd : “A way towards Rural Market” Presented By - Presented To- Zia Ahmad Mr. N.H Mullick R.N.-04 Faculty- ISMC PGPIMC (2008-08)
  2. 2. Rural Marketing- An Overview <ul><li>Trends indicate that the rural markets are coming up in a big way and growing twice as fast as the urban. </li></ul><ul><li>There are as many 'middle income and above' households in the rural areas as there are in the urban areas. </li></ul><ul><li>The share of FMCG products in rural markets is 53%, durables boasts of 59% market share. </li></ul>Source:- National Council for Applied Economic Research (NCAER).
  3. 3. Rural Marketing- An Overview <ul><li>The number of middle and high income households in rural India is expected to grow from 80 million to 111 million by 2008. </li></ul><ul><li>In urban India, the same is expected to grow from 46 million to 59 million. </li></ul><ul><li>Thus, the absolute size of rural India is expected to be double that of urban India. </li></ul>Source:- National Council for Applied Economic Research (NCAER).
  4. 4. Rural Marketing- “A world of opportunity” <ul><li>The Indian rural market with its vast size and demand base offers great opportunities to marketers. </li></ul><ul><li>Two-thirds of countries consumers live in rural areas and almost half of the national income is generated here. </li></ul>
  5. 5. Rural Marketing- Features <ul><li>Large and Scattered market : </li></ul><ul><li>It consists of over 63 crore consumers from 5,70,000 villages spread throughout the country. </li></ul><ul><li>Major income from agriculture : </li></ul><ul><li>Nearly 60 % of the rural income is from agriculture. </li></ul><ul><li>Traditional Outlook : </li></ul><ul><li>The rural consumer values old customs and tradition. They do not prefer changes. </li></ul>
  6. 6. Rural Marketing- Challenges <ul><li>Underdeveloped People : </li></ul><ul><li>Vast majorities of the rural people are tradition bound, and believe in old customs, traditions, habits. </li></ul><ul><li>Lack of Proper Physical Communication Facilities : </li></ul><ul><li>Physical communication of the villages is highly expensive. Even today most villages in the eastern parts of the country are inaccessible during the monsoon. </li></ul>
  7. 7. Rural Marketing- Challenges <ul><li>Many Languages and Dialects : </li></ul><ul><li>The number of languages and dialects vary </li></ul><ul><li>widely from state to state, region to region </li></ul><ul><li>and probably from district to district. The </li></ul><ul><li>messages have to be delivered in the local </li></ul><ul><li>languages and dialects. </li></ul><ul><li>Low Per Capita Income : </li></ul><ul><li>Even though about 33-35% of gross </li></ul><ul><li>domestic product is generated in the rural </li></ul><ul><li>areas it is shared by 74% of the population. </li></ul><ul><li>Hence the per capita incomes are low </li></ul><ul><li>compared to the urban areas. </li></ul>
  8. 8. Rural Marketing- Challenges <ul><li>Low Levels of Literacy : </li></ul><ul><li>The literacy rate is low in rural areas as compared to urban areas. This again leads to problem of communication for promotion purposes. </li></ul><ul><li>Prevalence of spurious brands and seasonal demand : For any branded product there are a multitude of 'local variants', which are cheaper, and, therefore, more desirable to villagers. </li></ul>
  9. 9. Rural Marketing- Challenges <ul><li>Different way of thinking : </li></ul><ul><li>The difference is also in the way </li></ul><ul><li>of thinking. The kind of choices of brands that an urban customer enjoys is different from the choices available to the rural customer. The rural customer has a fairly simple thinking as compared to the urban counterpart. </li></ul>
  10. 10. Introduction to Cavinkare Pvt. Ltd. CavinKare's Manufacturing Plant at Haridwar
  11. 11. <ul><li>In 1983 with a single product, CavinKare started out as a small partnership firm Chik India by Mr. C.K. Ranganathan. </li></ul><ul><li>Chik India, which was renamed as Beauty Cosmetics in 1990. </li></ul><ul><li>In 1998 the Company was renamed as CavinKare Pvt. Ltd (CKPL). </li></ul>Company’s Profile Mr . C. K. Ranganathan , CMD - CavinKare Pvt . Ltd .
  12. 12. <ul><li>The reason behind the name is, Cavin means beauty in Tamil and ‘care’ is spelt as Kare. </li></ul><ul><li>The name is also a special one as it denotes the initials C and K of Mr. Ranganathan. </li></ul><ul><li>The company offers quality Personal care (hair care, skin care, home care) and Food products. </li></ul>Company’s Profile
  13. 13. <ul><li>The Company, which primarily relied on contract manufacturing for many years has now set up its own world class plant at Haridwar to cater to the demand of both domestic and international market. </li></ul><ul><li>The Company has employee strength of 576, an all India network of 1300 Stockists catering to about 25 lakh outlets nationally. </li></ul><ul><li>CavinKare has touched a turnover of over 5000 million INR in 2006-2007. </li></ul>Company’s Profile
  14. 14. Products Range <ul><li>Personal Care </li></ul><ul><li>Hair Care : </li></ul><ul><ul><li>Chik Shampoo </li></ul></ul><ul><ul><li>Nyle Herbal Shampoo </li></ul></ul><ul><ul><li>Meera Badam Shampoo </li></ul></ul><ul><ul><li>Indica Hair Colorant </li></ul></ul>
  15. 15. Products Range <ul><li>Personal Care </li></ul><ul><li>Ethnic Care : </li></ul><ul><ul><li>Meera Hair Wash Powder </li></ul></ul><ul><ul><li>Karthika Hair Wash Powder </li></ul></ul><ul><ul><li>Meera Herbal Hair Oil </li></ul></ul>
  16. 16. Products Range <ul><li>Personal Care </li></ul><ul><li>Skin Care : </li></ul><ul><ul><li>Fairever </li></ul></ul><ul><ul><li>Spinz Talc </li></ul></ul><ul><ul><li>Spinz Deodorants </li></ul></ul><ul><ul><li>Nyle Cold cream and lotion </li></ul></ul>
  17. 17. Products Range <ul><li>Home Care : </li></ul><ul><li>Tex </li></ul>
  18. 18. Products Range <ul><li>Food Division : </li></ul><ul><ul><li>Ruchi Pickles </li></ul></ul><ul><ul><li>Chinni's Pickles </li></ul></ul><ul><ul><li>Chinni's Masala </li></ul></ul><ul><ul><li>Chinni's Vermicelli </li></ul></ul><ul><ul><li>Ruchi Gulab Jamun Mix </li></ul></ul>
  19. 19. Milestones <ul><li>Awards </li></ul><ul><li>CavinKare Pvt Ltd. Won ability award for 5 consecutive years : </li></ul><ul><ul><li>Ability Awards- 2007 </li></ul></ul><ul><ul><li>Ability Awards- 2006 </li></ul></ul><ul><ul><li>Ability Awards- 2005 </li></ul></ul><ul><ul><li>Ability Awards- 2004 </li></ul></ul><ul><ul><li>Ability Awards - 2003 </li></ul></ul>
  20. 20. Competitive Analysis <ul><li>Major Competitors : </li></ul><ul><ul><li>HUL </li></ul></ul><ul><ul><li>P&G </li></ul></ul><ul><ul><li>Dabur </li></ul></ul><ul><ul><li>Himalaya health care </li></ul></ul><ul><ul><li>Colgate-Palmolive </li></ul></ul>
  21. 21. <ul><li>Market Share - </li></ul><ul><li>Chik shampoo with a 21.4 per cent share is the second largest selling shampoo in the Rs 1,200-crore (Rs 12 billion) shampoo market while its other brand Nyle has a 4.6 per cent share. </li></ul><ul><li>It has a 9 per cent share in the Rs 750-crore (Rs 7.50 billion) fairness cream market with the Fairever brand. </li></ul><ul><li>Others like Meera hair wash and Nyle moisturizing lotion have national shares of 23.4 per cent and 4.2 per cent, respectively. </li></ul><ul><li>But they are the largest brand in rural Uttar Pradesh, Andhra Pradesh, etc. </li></ul><ul><li>(Source: - 33k -) </li></ul>Competitive Analysis
  22. 22. <ul><li>The company has six major brands - Fairever, Chik, Nyle, Meera, Indica and Spinz. </li></ul><ul><li>While its shampoo brands (Chik and Nyle) contribute 50 per cent to the company's turnover. </li></ul><ul><li>The Fairever cream contributes 30 per cent. </li></ul><ul><li>The balance is from Spinz (deodorant, perfume) Indica hair dye and other products. </li></ul>Important Facts
  23. 23. <ul><li>They associate with people of similar wavelength in thinking, who will definitely take care of quality first and foremost and besides, they have a strong system of quality monitoring. </li></ul><ul><li>As part of their strategy, they lay down all the ground rules for the manufacturers in maintaining their standards. </li></ul><ul><li>Outsourcing is one of the three cardinal rules of CavinKare's corporate strategy. </li></ul>Marketing Strategy
  24. 24. <ul><li>Direct media promotions have helped build knowledge of product categories and change long-entrenched living habits. </li></ul><ul><li>By the help of effective communication they tried to understand the fears, aspirations, and hopes of the rural consumers. </li></ul><ul><li>CavinKare believes that its core competencies are research and development, brand building, and distribution management. </li></ul>Marketing Strategy
  25. 25. <ul><li>The company is taking some tips from its shampoo experience. </li></ul><ul><li>The Chinni pickles are available in single-use sachets that cost Re 1 to Rs 3, as well as low-priced, upright pouches. </li></ul><ul><li>The rationale is simple: home-made pickle aside, the market is flooded with local brands. Consumers, therefore, have little incentive to upgrade to a branded product. </li></ul>Promotional Strategy
  26. 26. <ul><li>Single-serve packaging will also serving in the institutional sales. </li></ul><ul><li>CavinKare is hoping the low price point and convenience of sachets will help rope in hotels and restaurants as bulk customers. </li></ul><ul><li>CavinKare also introduced single-use sachets for its Spinz Singiez perfumes in two fragrances priced at 1.50 each. </li></ul>Promotional Strategy
  27. 27. <ul><li>CavinKare Pvt Ltd is also running mobile beauty parlours. </li></ul><ul><li>The mobile parlour exercise aims to provide a complete brand experience by having hair stylists use Chik on volunteers and distribute its Re 1 sachets as samples. </li></ul><ul><li>The mobile parlours are targeting- girls' colleges, market places and residential localities. </li></ul>Promotional Strategy
  28. 28. <ul><li>CavinKare have shown that communication is key when it comes to building brands in rural markets. </li></ul><ul><li>CavinKare, which enabled its product brands to compete directly with market leaders such as HLL, P&G, Godrej and Henkel successfully. </li></ul><ul><li>CavinKare's successful brands such as Chik, Nyle, Meera, Fairever and Spinz are good example. </li></ul>Step towards Rural Marketing
  29. 29. <ul><li>CavinKare was the company responsible for the small sachet revolution in India. </li></ul><ul><li>It was an important insight for marketing to rural India, at the time.  </li></ul><ul><li>That’s why C. K. Ranganathan was declared the Marketing Professional of the Year in the India Brand Summit-2003 . </li></ul><ul><li>The awards were given for Leadership Excellence and Pioneer of sachet packing and mass marketing in rural areas. </li></ul>Step towards Rural Marketing
  30. 30. <ul><li>When CavinKare entered the rural areas in South India, people used to wash their hair with soap. </li></ul><ul><li>When it launched the ‘Chik’ brand of shampoo they educated the people on how to use it through live ‘touch and feel’ demonstrations and also distributed free sachets at fairs. </li></ul><ul><li>This strategy worked wonders in the rural areas of Tamil- Nadu and Andhra Pradesh. </li></ul>Step towards Rural Marketing
  31. 31. <ul><li>This idea came in the mind of Mr. Ranganathan’s father when Epsom salt came in 100 gm packets.  </li></ul><ul><li>They wanted that coolies and the rickshaw pullers to use products. </li></ul><ul><li>But due to the lack of marketing strategies they could not market the concept well. </li></ul><ul><li>It renamed as Chik Shampoo after the death of father. </li></ul>How Chik Shampoo was born?
  32. 32. <ul><li>Flavours : </li></ul>Chik Shampoo: “An Overview”
  33. 33. <ul><li>Girls and women of rural and </li></ul><ul><li>semi urban population of India. </li></ul>Target Audiences
  34. 34. Chik v/s Clinic Plus Sachets- 50 paisa Sachets- 4ml and 6ml. and Rs.1 Bottles- Rs.6, Rs10 Bottles - 25ml, 60ml, Rs.20, Rs. 35 and 100ml,150ml,&500ml. Rs. 75 21.4% Sachets- 50 paisa, Sachets- 4ml, 6ml and Rs.1 and Rs2. 10 ml. Bottels- Rs.6, Rs.30 Bottles- 25ml 100 ml Rs.55 and Rs.90. 200 ml and 300 ml. 29.15% Price Size Market Share Shampoo
  35. 35. Overall Shampoo Market Share- <ul><li>HUL's (Clinic Plus, Sunsilk, Clinic All Clear, Lux and Ayush). </li></ul><ul><li>CavinKare (Chik and Nyle). </li></ul><ul><li>P&G (Pantene, Rejoice, Head and Shoulders). </li></ul>Source:-
  36. 36. <ul><li>First Shampoo to launch variants such as Rose, Jasmine etc. </li></ul><ul><li>First Brand to introduce &quot; Cream Conditioning Shampoo&quot; in a sachet, at 50 paisa per sachet. </li></ul><ul><li>Second largest selling brand of Shampoo in the Rural market. </li></ul>Magic of Chik
  37. 37. <ul><li>Cavin Kare discovered that soap usage was the biggest barrier and people did not see the need for using Shampoo. </li></ul><ul><li>Company tried to convey the message to the consumer that soap usage was bad for the hair and when a product exists specifically for hair it should be used. </li></ul><ul><li>Finally customers agreed that Shampoo usage gave soft and silky hair. </li></ul>Communication Strategy
  38. 38. <ul><li>To build a local and regional presence, they advertised in local print and television, before taking the brands nationally. </li></ul><ul><li>They advertised more often and hired well qualified professionals to compete with the competitors. </li></ul><ul><li>“ The iconic Chik Girl in every Chik Shampoo” commercial showcased the possibility of soft and manageable hair for the customers. </li></ul>Communication Strategy
  39. 39. <ul><li>They went to the rural areas of South India where people hardly used shampoo. </li></ul><ul><li>They showed them how to use it. </li></ul><ul><li>They did  live demonstration on a young boy. </li></ul><ul><li>They asked those assembled to feel and smell his hair. </li></ul><ul><li>Next they planned Chik Shampoo-sponsored shows of Rajniknath's films. </li></ul>How Chik Shampoo conquered the rural market?
  40. 40. <ul><li>They showed their advertisements in between, followed by live demonstrations.  </li></ul><ul><li>They also distributed free sachets among the audience after these shows. </li></ul><ul><li>This worked wonders in rural Tamil Nadu and Andhra Pradesh. </li></ul><ul><li>After every show, their shampoo sales went up three to four times. </li></ul>How Chik Shampoo conquered the rural market?
  41. 41. <ul><li>They altered the scheme, they started giving one free Chik Shampoo sachet in lieu of five Chik Shampoo sachets only. </li></ul><ul><li>They sold shampoo in 50 paisa sachets at a time when other shampoo sachets were selling at Rs. 2. </li></ul><ul><li>Soon, consumers started asking for Chik sachets only. </li></ul><ul><li>The sales went up from Rs 35,000 to Rs 12 lakh (Rs 1.2 million) a month. </li></ul>How Chik Shampoo conquered the rural market?
  42. 42. <ul><li>Instead of using the conventional distribution route, they have created a `sachet' sales force that sells only sachet packs to small retailers including cigarette and paan shops. </li></ul><ul><li>Separate hawkers' channel is being created that has moved from neighborhood to neighborhood. </li></ul><ul><li>The hawker channels exist in all cities where they have a distribution network. </li></ul>Distribution Strategy
  43. 43. <ul><li>CavinKare's personal products division is moving towards post offices. </li></ul><ul><li>They are placing products at post offices, products such as shikakai powder, shampoo and hair dye. </li></ul><ul><li>They are using such channels to expand product reach and gain accessibility. </li></ul><ul><li>Because the unconventional route is not expected to become a major revenue generator in the coming years. </li></ul>Distribution Strategy
  44. 44. <ul><li>Apart from unconventional method, the company hired professionals for sales and distribution and expanded its network beyond South India. </li></ul><ul><li>CavinKare has its offices in Chennai, Pondicherry, New Delhi, Mumbai and Kolkata along with 2000 stockists, which supply to six lakh outlets. </li></ul>Distribution Strategy
  45. 45. <ul><li>Apart from the service charges Cavinkare also gave retailers a Chik Sachet free for every 15 empty sachets they get from the consumer. </li></ul><ul><li>They give special gift if dealer sale more products in a particular season. </li></ul><ul><li>They also give discount on bulk purchasing. </li></ul>Retailer Promotion
  46. 46. <ul><li>So the fact remains that the rural market in India has great potential, which is just waiting to be tapped. </li></ul><ul><li>Ultimately, the ball lies in the court of Cavinkare’s marketeers . </li></ul><ul><li>It's all about how they approaches the market, takes up the challenge of selling products and concepts through innovative media design and more importantly interactivity. </li></ul>Conclusion
  47. 47. Thank You! Presented By- Zia Ahmad