Cavinkare Ltd Sachet Revolution

Purpose of the case

To discover need of rural market To find out channels to penetrate rural market To implement products feature suitable for rural market To discuss advertising strategy used in rural market

Problem of the case study

Low penetration level of shampoo in rural market in comparison with other beauty products. It is not a problem only for cavinkare but also for other company.

About Cavinkare limited

In 1983 with a single product cavinkare started out as a small partnership firm chin India by Mr. C.k. Ranganathan. Chik India which was renamed as beauty cosmetics in 1990. In 1998 the company was renamed as cavinkare pvt. Ltd.(ckpl)

Cont.
The reason behind the name is, cavin means beauty in Tamil and care is spelt as kare. The name is also special one as the initials c and k of Mr. ranganathan The company offers quality personal care(hair care, skin care, home care) and food products

Cont.
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. CavinKare Group has crossed a turnover of 7000 million INR in 2008-2009

Major barriers to shampoo use in india

High price. view that the shampoo is more of a glamour product rather than a hygiene product. Low Levels of Literacy : The literacy rate is low in rural areas as compared to urban areas. This leads to problem of communication for promotion purposes. 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

INNOVATION OF SACHETS

History of sachet
Cavinkare was the company responsible for the small sachet revolution in India. It was an important insight for marketing to rural India, at the time. When cavinkare entered the rural areas in south India, people used to wash their hair with soap.

Cont
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 sachet at fairs This strategy worked wonders in the rural areas of tamilnadu and Andhra Pradesh.

How Chik Shampoo was born?

This idea came in the mind of Mr. Ranganathans father when Epsom salt came in 100 gm packets. They wanted that coolies and the rickshaw pullers to use products. But due to the lack of marketing strategies they could not market the concept well. It renamed as Chik Shampoo after the death of father.

How Chik Shampoo conquered the rural market ?

They altered the scheme, they started giving one free Chik Shampoo sachet in lieu of five Chik Shampoo sachets only. They sold shampoo in 50 paisa sachets at a time when other shampoo sachets were selling at Rs. 2. Soon, consumers started asking for Chik sachets only. The sales went up from Rs 35,000 to Rs 12 lakh (Rs 1.2 million) a month.

Cont
They went to the rural areas of South India where people hardly used shampoo. They showed them how to use it. They did live demonstration on a young boy. They asked those assembled to feel and smell his hair. Next they planned Chik Shampoo-sponsored shows of Rajniknath's films

Communication Strategy
Cavin Kare discovered that soap usage was the biggest barrier and people did not see the need for using Shampoo. 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. Finally customers agreed that Shampoo usage gave soft and silky hair.

Cont
To build a local and regional presence, they advertised in local print and television, before taking the brands nationally. They advertised more often and hired well qualified professionals to compete with the competitors. The iconic Chik Girl in every Chik Shampoo commercial showcased the possibility of soft and manageable hair for the customers.

Marketing strategy
They associated with people of similer wavelength in thinking, who will definitely take care of quality first and foremost and besides, they have a strong system of quality monitoring. As a part of their strategy, they lay down all the ground rules for manufacturing in maintaining their standards.

Cont..
Outsourcing is one of the cardinal rule of cavinkare corporate strategy. Direct media promotion have helped build knowledge of product categories and change long-entrenched living habits.

Cont.
By the help of effective communication they tried to understand the fears, aspiration and hopes of the rural consumers. Cavinkares believes that its core competencies are research and development, brand building, and distribution management.

Distribution strategy
Instead of using the conventional distribution route, they have created a sachet sales force that sells only sachet packets to small retailers including cigarette and paan shops. Separate hawkers' channel is being created that has moves from neighborhood to neighborhood.

Cont.
The hawkers channels exist in all cities where they have a distribution network Apart from unconventional method, the company hired professionals for sales and distribution and expanded its network beyond south India.

Competitive analysis
Major competitorso Hindustan unilever limited o Procter $ gamble o Dabur o Himalaya health care

Cont
Market shareo Chik shampoo with a 21.4% share is the second largest selling shampoo in the rs. 1200 crore(rs.12 billion) shampoo market while its other brand nyle has a 4.6% share. o Other like meera hair wash has national share of 23.4% o But they are largest brand in rural u.p., Andhra Pradesh etc.

Overall shampoo market share

HUL CAVINKARE OTHERS P&G
15%

16%

50%

19%

Conclusion
The rural market were unaware of the benefits of using shampoo but several strategy used by Calvinkare made it easily known and available It is all about how they approach the market, takes up the challenge of selling products and concepts through innovative media design and more importantly interactively.