Dabur is a leading consumer goods company in India that is looking to strategically expand its product portfolio and global presence. In Nigeria, Dabur has traditionally focused on oral care, skin care, hair care, health care, and home care products. However, to be successful in Nigeria, Dabur will need to adapt its strategy to local consumer markets and avoid over-standardization. It is recommended that Dabur focus on oral care, health care, and home care in Nigeria, leveraging its herbal platform to develop new product categories tailored to local needs and consumer preferences.
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Cadbury has been around people's life from decades now and it only becomes younger & younger. Be it their Communications, Content Marketing, Advertising or Public Relations, Cadbury seems to excel in everything they do. Here's what we, as students of Symbiosis School of Media & Communication, Bengaluru (Batch 2015-17) think of Cadbury.
*NOTE* This case study has been prepared for internal evaluations and thus references are taken from various case studies, articles, news publications and Cadbury's global website.
In August 2000, P&G introduced one of its kind product Crest Whitestrips, readily available online and through dentist offices
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2. Agenda
The Indian CPG market and industry
Dabur in India
Dabur globally
Dabur in Nigeria
Recommendation
3. India’sCPGmarket is attractiveand among the
fastestgrowingin the world
Total market size 2006:
$13.1 billion
Food (incl. groceries) Non-Food
44%56%
CAGR previous
3 years
Forecast growth
2007-2008
+8.6% +9.2%
Total market size 2015:
$33.4 billion
Growth categories:
• Personal care
• Food
• Beverages
• Household care
50%
Percentage of India’s
1 billion people under
the age of 20:
160mteens
4. TheCPGindustryis still fragmented, presenting
anopportunityfor consolidation
of CPG sales come from mom-and-pop
outfits making and selling unbranded
and unpackaged goods
>50%
Rank Company
Net sales
(INR million)
1 Hindustan Lever (Unilever) 110,800
2 ITC 97,860
3 Nestle India 24,750
4 Asian Paints 24,410
5 Nirma 19,170
6 Nirma Consumer Care 18,140
7 Britannia Industries 17,130
8 Dabur India 13,430
9 Johnson & Johnson 13,300
5. However,building nationalscale in Indiais a key
challenge
Market heterogeneity: High
• National coverage:
• Millions of retail outlets
• Majority in rural areas
• People-intensive operations
• Underdeveloped supply chain
• Costly logistics
• Marketing:
• Diverse consumer base
• Many small individual transactions,
unremunerative for marketers
6 millionRetail outlets
4 million
rural
2 million
urban
6. Daburhas built a successfulbusinessin India,
achievingsignificantscale by 2007
1884
Established
450
Number of products
in 2007:
1.5m
National coverage:
retail outlets
47 clearing & forwarding locations
1,500 distributors
22.6 billion
Consolidated sales:
7. Dabur’sassets span4 businessunits and several
productionfacilities in Indiaand abroad
4 business units:
• Consumer care
• Hair care
• Oral care
• Health supplements
• Digestives and candies
• Baby and skin care products
• Consumer healthcare
• Prescription medicines
• Over-the-counter medicines
• Foods
• Fruit juices
• Cooking pastes
• Sauces
• Bulk items for institutions
• International
8 manufacturing plants in India
5Production units outside India:
Birganj (Nepal)
Dhaka (Bangladesh)
Dubai (UAE)
Cairo (Egypt)
Lagos (Nigeria)
8. Dabur’sherbal image and mass market pricing
helpedit becomea top 10 playerin India
Core capabilities:
• Identify consumer needs
• Develop localized products
• Create niches to drive long-term
growth
Niche categories:
• Underpenetrated and high-
growth categories
Differentiated herbal image:
• Unique positioning: Ayurveda
platform
Mass market pricing
• Capturing the large rural market
in India
9. Daburis well-positionedto captureshare
domestically,but risingcompetitionis a threat
Strengths Weaknesses
• Local consumer knowledge
• Indian heritage
• Ayurvedic (herbal) platform
• Product engineering (R&D)
• New product introductions (5-7% of revenue
annually)
• Targeted and priced at mass market
• Strong rural presence (50% of sales)
• Focus on channels (loyalty programs,
software)
• Niche market
• Expensive raw materials (natural ingredients)
• Focused on therapeutic (rather than higher
margin cosmetic) products
Opportunities Threats
• Young, dynamic population
• Fast growing domestic market
• Brand extensions (herbal platform)
• Rise in competitive intensity in its core
categories like hair care, putting pressure on
volumes
• Slowdown in rural demand
10. HowshouldDaburstrategically expandits
productportfolioin India?
Strategic choice: Pros: Cons:
Target an herbal niche in
oral care?
• Differentiated herbal product
and branding possible
• Builds on expertise in traditional
medicine
• Use competency gained through
2003 acquisition of Balsara
Hygiene Products
• Large market size (in value)
• Strong, established competition
(Colgate , HLL – 67% of market)
• No home-grown competencies
Extend herbal equity to
skin care and soap?
• Differentiated herbal product
and branding possible in
medicated soaps
• Builds on expertise in traditional
medicine, especially for baby
care
• Higher margin categories
• Highly competitive, crowded in
soaps
• Medicated soaps present only
25% of the category
• Strong MNC competitors (Reckitt
Benckiser’s Dettol)
Leverage strengths in
hair care to the cosmetic
segment?
• Differentiated herbal product
and branding possible
• Leverages equity in therapeutic
value to higher margin
categories
• Competition
• Traditional mass market
targeting and pricing a problem
in more aspirational cosmetic
segment
11. Forcontinuedlongtermgrowth,internationalmarketsare
becomingmoreandmorerelevant
2003 2004 2005 2006 2007
Domestic Sales International Sales
Global Revenue
GCC
Egypt
Pakistan
Bangladesh
Nigeria
US
UK
Initial Global Business Model
Follow Indian diaspora to Persian Gulf
o Primary demand generation
o Minimal product adaptation
Follow existing manufacturing locations
Expand to other target segments
Long-term Global Business Model
Target local mainstream population
o Explore cost of existing products adaptation
o Explore products most easily adapted to new
market
Adopt necessary heterogeneity
o Introduce country specific products
Key external environment considerations
o Product fit
o Integration
o Alien nature of market
o Supply chain considerations
o Costly logistics
12. DaburInternationalhas traditionally focusedon
differentcategorieswithAfrican consumers
Arab consumer Asian consumer African consumer
Footprints Middle East & North Africa South Asia, UK & US East, West & South Africa
Target customer Arab female Asian male African male & female
Core categories
Hair oils
Hair creams
Shampoos
Oral care
Hair oils
Shampoos
Digestives
Oral care
Oral care
Personal wash
Home care (insect repellent)
Core market Dubai India Nigeria
Total market size (INR
mil.)
1,340 1,500 320
Regional split (INR mil.)
GCC – 760
North Africa – 460
Iran, Iraq - 120
Pakistan – 440
Nepal – 640
Bangladesh – 200
UAE - 210
Central Africa – 10
East Africa – 60
South Africa – 10
West Africa – 240
Key market attributes
• 80% of population is
Arabic
• High purchasing power
• Replicating Indian brand
architecture and
product portfolio
• Leveraging learning
from Indian marketing
mix and media strategy
• High oral care penetration
• English speaking
• Medium competitive
intensity
vs.
13. Daburneeds to adaptstrategy to local
consumermarkets in Nigeria
Oral Care Skin Care Hair Care Health Care Home Care
Market Size
(INR Million)
5,000 6,000 N/A 350 N/A
Products Toothpaste Soap Relaxers
Hair pomade
Glucose Mosquito
repellent cream
Strategic Intent To become
second largest
player
To become the
third largest
player in soaps
To create a market
for hair oils
To become a
strong player in
glucose market
To replicate the
Indian product
portfolio
Imperatives -Become a leader
in herbal niche
-Launch herbal gel
Launch a herbal
soap with
localized
ingredients
Launch Dabur
Glucose
-Leverage India
competency
-Launch Odomos
cream
Strategic Issues -Unilever and P&G
strong
-Herbal niche not
crowded
-Fragmented
market, small
players
-Soap is not core
category for
Dabur
-Hair care is
beauty related
and cosmetic
-Dabur has
therapeutic and
not cosmetic
equity
One player play -Coil is the
predominant
product form
-No market for
cream
14. Oral Care Skin Care Hair Care Health
Care
Home Care
Market Size
(INR Million)
5,000 6,000 N/A 350 N/A
Products Toothpaste Soap Relaxers
Hair pomade
Glucose Mosquito
repellent cream
Strategic Intent To become
second largest
player
To become the
third largest
player in soaps
To create a
market for hair
oils
To become a
strong player
in glucose
market
To replicate the
Indian product
portfolio
Challenge Can Dabur
successfully
target herbal
niche and
establish a
strong market
presence
Can Dabur
operate in soap
successfully?
Can it extend
herbal equity to
soap?
Can Dabur
leverage it’s
strengths?
Can Dabur
become No.2
player?
Should Dabur
create a new
cream category
in Nigeria?
Recommendation Yes
High potential
market
Maybe
Therapeutic, not
cosmetic
No
Cosmetic not
therapeutic
consumer focus
Yes
Potential
expansion into
food category
Yes
Keep natural
product value
proposition
Daburshouldfocusonoral,healthandhomecare
marketsinNigeria
15. Avoidproductstandardizationand adaptto
local markets herbal platformin Nigeria
Build up the a new product category market focused on local consumer needs
• Perform a deep dive market analysis on Nigerian consumer
• Target consumer directly
• Keep herbal platform and transfer herbal value proposition to mosquito repellents
• Use product expertise to expand into oral care
External dynamics
• Geopolitical risk: variation in government (state) support
• Production infrastructure: ability to accommodate
new product production
16. Final Recommendations
Dual strategy
Consolidate the domestic market and expand internationally in selected
growth markets
Leverage core therapeutic herbal/ ayurvedic platform
Build a platform to enable Dabur to become a global ayurvedic leader
Although requiring an adaptive strategy, Nigeria can be an
attractive market for Dabur International
17. Where is Dabur now?
Leading consumer goods company in India (Turnover $1 billion)
2Strategic Divisions:
• Consumer Care Business: Addresses consumer needs across FMCG spectrum
• International Business Division: Addresses health and personal care needs of international
customers
2subsidiary group companies and 8 step-down subsidiaries
Product presence in over 60 countries
17international manufacturing locations
12Billion-Rupee brands (over $18M)
18. 2012 Dabur product representation
5 Master Brands
Dabur, Vatika, Hajmola, Real, Fem
Dabur Chyawanprash is the largest selling ayurvedic medicine (65% share)
Market leader in herbal digestives (90% share)
Hajmola market leader in digestive tablets category (60% share)
25 M Hajmolas consumed in a day in India
Strategically positioned Honey as a food product- Resulted in market leadership
(75%) of branded honey market
Separate Consumer Health Division (CHD) that builds on the Ayurvedic heritage
Offers a range of classic medicines
19. Global Market
• International Business Division (IBD) caters to markets in Nepal, Bangladesh,
Middle East, North and West Africa, EU and US
• Contributes to 30% of total sales
• Promoting Dabur and Vatika in these markets
• Vatika is the fastest growing hair-care brand in the Middle East
• Leveraging the ‘natural’ preference among local customers.