Patanjali STP Analysis

Contents
INTRODUCTION.................................................................................................. 3
OBJECTIVES OF THE ASSIGNMENT.......................................................................3
PESTLE ANALYSIS............................................................................................... 4
SWOT ANALYSIS................................................................................................. 5
SEGMENTATON, TARGETING AND POSITIONING....................................................7
ISSUES MARKETING NEEDS TO RESOLVE............................................................10
GROWTH PATH................................................................................................. 10
REFERENCES.................................................................................................... 11
Introduction
In regards to the MCRM Group Assignment, we have selected Patanjali Ayurved Ltd.,
also known as PAL - a Haridwar based Indian FMCG, which has registered
phenomenal growth in the last 5 years.
Yoga Guru- Baba Ramdev forms this company in 1997 by collaborating with Acharya
Balkrishna, a scholar of Ayurveda, Sanskrit and Vedas in 1990s to manufacture
Ayurvedic medicines. Ramdev focused on Yoga while Balkrishna assumed
responsibility of spreading Ayurveda medicine. An unlikely combination of - YOGA
for inner peace and FMCG for external beauty - but Baba Ramdev appears to have
struck the right pose in both. Acharya Balkrishna is currently the Managing Director
and major stake holder of Patanjali Ayurved Ltd (92%) but the driving force behind
Patanjali Ayurved Ltd is Baba Ramdev, an ascetic and yoga guru of Indian origin.
The Company was originally formed as a private limited company on 13 th January,
2006 and consequently converted into public limited company on 25 th June, 2007. It
manufacturers almost 800 world class, healthy products. Currently, Patanjali is
present in almost all categories of personal care and food products ranging from
soaps, shampoos, dental care, balms, skin creams, biscuits, ghee, juices, honey,
mustard oil, sugar and much more. After launching toothbrush, toothpaste, honey,
face creams and other products in North India's open market, Patanjali Ayurved
Limited launched its products in South India beginning with Hyderabad. Compared
to other multi-national company products, these products would be cheaper by at
least 30 per cent. The company sources products directly from farmers and cuts on
intermediaries to boost profits. The objective
Year Revenue (In
was to empower people, particularly farmers
Crores)
economically through the promotion of these
2009-10 163
products.
2010-11 317
Baba Ramdev and Acharya BalKrishna knew 2011-12 446
that they have created a captive market with 2012-13 850
their efforts since last one and a half decade, 2013-14 1,200
which values health, yoga, pranayama and 2014-15 2,006
above all brand Baba Ramdev. This captive 2015-16 5,000
market is health conscious, looks out for affordable products, believes in the
philosophy of swadeshi (home grown) and above all considers Baba Ramdev as
their ideal. When Patanjali Ayurved Ltd launched its products in the Indian retail
sector, this captive market was among the first to buy and use its products. This
captive market developed instant loyalty to Brand Patanjali.
The company currently has a market valuation of 30 billion (US$450 million). For
fiscal year 2015-16, Patanjali Ayurved Ltd, clocked a turnover of about Rs 5000
crore, up from about Rs 2000 crore a year earlier and Rs 1200 crore in fiscal 2013,
as per the company filings and industry sources. During the current fiscal, Patanjali
expects to clock a turnover of over Rs 10,000 crore; according to Aditya Pittie, CEO,
Pittie Group. This marks a phenomenal 67% jump from the previous fiscal year.
Objectives of the Assignment
To conduct PESTLE Analysis for Patanjali Ayurved Ltd.
To analyse the current STP for Patanjali Ayurved Ltd.
To identify the gaps/opportunities that the company can target fresh.
To propose positioning strategy for the chosen target segment(s).

PESTLE Analysis
Patanjali Ayurved Ltd (PAL) has grown since its inception. Some of the factors or
forces, which affected or might affect in future are analysed below using the famous
PESTLE analysis.

Political Present political climate is favourable to Patanjali as it is close

to government and it is following government initiative like
Make in India campaign.
Government is promoting Ayurveda through Ayush
Ministry to promote Yoga, Ayurved and other traditional and
complementary medicines. That gives Patanjali a huge boost
as it itself claims it to be an Ayurvedic company.
Governments taxation policies affect the cost of the input
products, hence affecting the final price of the products. PAL
input costs increases or decreases based on the taxation
policies of the government.

Economic Inflation rate affects the buying nature of consumer. With

inflation rate increasing continuously, people are looking for
cheaper and effective substitutes. With the brand and trust of
Patanjali, it has formed the potential substitute.
Since the raw materials for the manufacturing are from the
natural environment and the company focuses only in
retailing in India alone, the factors like fluctuating global
economy and currency fluctuations have no significant
impact.
Implementation of Goods and Services Tax GST) will also help
PAL.
Higher tax rates and interest rates affect the cost of capital
adversely increasing the manufacturing cost. This makes the
products costly in the market.

Social The people of India are becoming more health conscious; and
want to consume organic products. Rise in healthy FMCG
products from 2284.4 US $ million in 2003 to 9000 US $
million in 2016 acknowledges the above statement. This
particular trend opens up the market for PAL, which offers
trusted Ayurvedic products. The affordable price also helps
 them to cover the whole market size.
In India, average life expectancy, which used to be around 42
in 1960, steadily climbed to around 48 in 1980, 58.5 in 1990
and around 62s in 2000. The improvement in life expectancy
attributes to better diet and health consciousness among
people. This particular trends enhance the scope of
companies like PAL.
Technologic Government has created favourable climate for R&D work in
al country. Patanjali has in house R&D facility; using which they
are developing new products in Ayurvedic way. Few examples
are as below:
o For the manufacturing unit in the company, it has high
frequency drier unit for quick liquefaction a fluid wed
processor.
o Tablet compressing device with the capacity for
preparing one lac tablet per hour
o High speed auto coater for coating the tablets
o Utility centre has been set up in the production unit
has two generators with boilers and compressors
o Company has PLC controlled packing machine having
capacity of 300-400 volts with automatic blister
packing equipment
With the help of biologists and technology, better options are
being created in the company. With the help of the available
technology, new herbs are being notified and being used in
the new medicines.
Company is also working for new farming ways.
Legal There are several rules and laws for Ayurvedic medicines and
the process by which medicines are prepared:
o The Medicine Central Council Act-1970,
o The Drugs and Cosmetics Act 1940 and rules made
thereunder
o The Drugs and Magic Remedies Act 1954 and the rules
made thereunder.
Quality assurance needs to be fulfilled by those medicines,
which are being prepared and laws are there for this process
as well.
Environmen The main problem, which Ayurveda has to confront, is
tal seasonable herbs and their locations. There are many herbs,
which are available in winter season, autumn season or in
summer season. Some herbs are available only on the
mountains at very high location and some of them are not
easily identifiable.
Technology can help to construct area where we can do the
artificial farming for those herbs by maintaining temperature
according to the herbs.
 As the company itself calls itself a Ayurvedic company, it is
favourable to environment and has no side effects to people
nor environment.

SWOT Analysis
Strength Weakness
Low Operational Cost Strong global competition.
Large Distribution Network Low export levels
Good relation with Government. Less promotion
Huge dependency on Baba
Ramdev
Opportunity Threat
Untapped rural markets Replication of product
Rising income and Purchasing power Infamous political attacks.
of people Policies related to Cultivated
Export Potential herbs

Strength

Low Operational Costs: - The Company enjoys low operational costs and more
operational profit percentage compared to many other big players like
Ranbaxy and Sun pharmaceuticals.
Sl # Company Operating Cost(Rs)
1 Patanjali Ayurved Ltd 72,06,071
2 Sun Pharmaceuticals 7,14,70,400
3 Cipla Ltd 6,16,14,800
4 Dabur Ltd 5,22, 83,000
Large Distribution Network:
o PAL has an extensive distribution network spread across the country
with more than 3,790 Patanjali Arogya Kendra, 1,088 Patanjali
Chikitsalya and 11,000 Patanjali Swadeshi Kendra. These outlets
operate as franchisee stores opened by third parties.
o Patanjali Chikitsalya works as miniature clinics with specialized
consultant available, which further enhances the value proposition of
the outlets.
o In the last few years, the company has changed its sales pattern and
its products are available in the open market through more than
70,000 retail outlets across India. The wide distribution network
ensures ample visibility and availability of products throughout the
country augmenting the sales of the company.
o The company has appointed around 60 super distributors across the
country. The super distributors route the products to distributors who
sells the products to retail shops. The change in the supply chain has
led to a positive impact on the business profile of the company as
 reflected in increasing sales through ensuring wider availability of the
products.
Government Support: Central Government is promoting Ayurved and Yoga.
Government of India has a separate Ayush Ministry to promote Yoga,
Ayurved and other traditional and complementary medicines.

Weakness

Strong Global Competition: PAL has been extensively doing well in India but
to establish it globally, needs a lot of strategy and hard work, due to the
presence of well-established players in the market like BACFO, Himalaya etc.
Low Export Levels: - Presently the company is focused only in India. Extensive
growth globally has many hindrances from export policies, to international
rules in the field of medicines etc.
Less Promotion: - Where the major companies depend on promotion for its
sales, PAL has kept itself out for some anonymous reasons. The trendz and
statistics have proven that many companies have helped due to promotion.
Promotion will help increase its visibility in the market.
Huge dependency on Baba Ramdev.

Opportunity

Untapped Rural Market: Though the company associates itself with rural India
the market penetration of PAL is weak in such areas. The major visibility of
the company is in urban areas where the people are more health conscious. A
rural market share is always there to be penetrated.
Rising Income and Purchasing Power: The purchasing power of people have
increased. So, PAL can take a bit of liberty to increase the price. Especially in
the sector where they are doing business, people can pay a bit more than
what it is being sold now.
Export Potential: Europe and America have always looked towards India for
effective Ayurvedic products. PAL can expand globally by establishing its
market even outside India. Neighbouring countries can also be a good
potential.

Threats

Political attacks: There have always been attacks from the political parties on
companies for adulteration. This can hamper their main USP i.e. trust.
Replication of Product: Since the product are general in recipe or components,
they can be easily replicated. This can lead to many small companies to
emerge and can increase competition.
 Policies: Since the company uses cultivated herbs as raw materials, any
policies in future related to them can create hindrance in the growth of the
company.

Segmentaton, Targeting and Positioning

Patanjali Ayurveda Ltd is targeting the value conscious customers with positioning
based on natural, healthy & ayurvedic product.
There is no specific segmentation for Patanjali Ayurved Limited. It follows MASS
CUSTOMIZATION. Mass customization is a marketing and manufacturing technique
that combines the flexibility and personalization of "custom-made" with the low unit
costs associated with mass production.
Customer expectations of the service can be divided into two types:

Desired service: Desired service is the service that a customer desires and
expects to get.
Adequate service: Adequate service is one in which the minimal level of
service which a customer is willing to accept based on his perception of
service acceptability.
The service provided by Baba Ramdevs Patanjali is synchronizing well with the
desired service expectations.

Due to the Mass Customization, Patanjali targets:

Everyone who wants to live healthy

Anyone suffering from any disease

The most important promotional activity involves yoga campaign by Baba Ramdev
and the Patanjali trust. It has taken up the Social Responsibility to make people
healthy. The organization is engaged in various good activities which are of great
benefit to the society. Baba Ramdev has been giving importance on pranayam and
yoga dimensions to target the mass population worldwide. Patanjali Yogpeeth is fully
utilizing the historical Indian roots i.e. spirituality to competitive advantage, created
by Baba Ramdev, to sell its own products in the market. Baba Ramdev's Patanjali
Ayurved employs penetration strategy and cost of goods is very less. He tells people
not to lose hope and not to depend on costly treatments marketed by various
foreign brands. The diseases for which Indian population spends is much more in
hospitals. On the other side, pranayam and yoga, treat all the ailments completely
with cheap and quality medicines. It is amazing, but it is claimed to be true that this
is the cheapest and the only complete cure to most of the so called incurable
diseases.
Patanjali as a brand Talks about Being healthy is my birth right. It helps in
improving life at low cost. Patanjali aims at providing excellent quality and safe
medicines at a very cheap price compared to other foreign brands. They want
people to make our country economically stronger by making them purchase
medicines made in India by Patanjali and not medicines made abroad. It is a well-
established fact that advertising affects consumers. The literature on advertising
has traditionally emphasized the persuasive nature of advertising: its purpose is to
alter consumers' tastes for established brand names or company reputations.
Hence, a more-advertised good is preferred over a less-advertised good. Whatever
be the case, Baba Ramdevs popular opinions of advertising and at the same time
not advertising is unique in its nature. Baba Ramdev's live yoga classes have
become a passion to not only citizens of India but all around the globe. This is the
positioning strategy used by Patanjali.

Baba Ramdev's Patanjali Medicines are claimed to be completely natural, which are
made by potent herbs that are available in the Himalayas, with no or very little side
effects. They have proven extremely effective in fighting all forms of sickness and
diseases. Besides medicines, Swamiji recommends patients to also do pranayam,
which will strengthen the immune system and quicken the healing process. Baba
Ramdev has declared on Indian and International TV Channels that pranayam and
yoga are the complete and natural cure for all kinds of ailments. Incase medicines
are still required then, they are available at the Patanjali Ayurved and these
packages of medicines are cheaply available. The medicines can cure most of the
diseases from a simple cold to cancer.

Therefore, within a very short span of time, Patanjali is a huge success and is well
known not only at national but also at international level. They have a presence now
in international market. Patanjali Yogpeeth is not only selling its ayurvedic
medicines, but also diversifying itself through selling of FMCG products. Moreover,
the organization is engaged in various good activities which are of great benefit to
the society. It is trying to imbibe good character in masses with good health through
yoga and ayurveda. Hence, it can be said that Patanjali Yogpeeth has succeeded in
creating a positive image through ancient Indian roots and using it to sell the
products in the market. With UN declaring official World Yoga Day the
Patanjali products can only expect to grow in India and Internationally .

Issues Marketing Needs to Resolve

USER COMPLAINTS: There are numerous complaint unattended on the
complaints forums, which are bringing negative recognition to the brand and
thus can result in loose of trust and bad public relations. Marketers need to
take up those forums, reply to the people's concerns and provide a solution to
maintain a healthy relationship with them.
MISLEADING AND MISBRANDING: Recently few irregularities have been found
in noodles packaging where some firms declared the Patanjali Noodles are
unsafe to use.
INTENSIVE MARKET RESEARCH: Apart from the common health issues which
are addressed by PAL products for middle age people, it is very important to
get a clear idea about customer's expectations from a product they are
willing to consume. Intensive market research is the key to improve the
existing products or to introduce new products into the market.
BIG PLANS BUT FEW RESOURCES: Big plan is to make Patanjali a global Indian
Brand also aiming to acquire big market share of FMCG in India. But with
 limited resources and lack of guidance PAL is already struggling hard to
maintain existing online store, unsatisfied whole sale retailers and many legal
cases pointing the branding and patent issues. A good marketing strategy to
convince and compel everyone involved from distributors to consumers with
a good skill set and right use of technology is the need of the hour.
USING SOCIAL MEDIA TO GENERATE CUSTOMERS AND REVENUE: In this era
where major players like Himalaya, Johnson & Johnson, and HUL etc. are
ruling over the social media and continuously connecting with consumers via
various forums or promotional campaigns, it is hazardous for PAL for
underestimating the power of social media. Relying on mere Yoga
Programmes for nationwide recognition is quiet impractical. PAL should come
up with similar promotional campaigns and increase the number of
customers. They should invest more in digital marketing.

Growth Path
Yoga and Ayurveda together as a combination is the trend seen in the health
conscious population of the world. Patanjali brings these two together as a daily way
of life into the world population. It is trying to set Yoga as a trend not only in India,
but around the world. It is also setting a new trend of marketing with digital
marketing.
The opportunities that Patanjali sees in the marketing environment, is the presence
of a health conscious world, where people are fed up with medicines that cause side
effects, worse than the actual disease that they are supposed to cure. Ayurveda and
Yoga do not have any side effects. Capitalising on this opportunity, Patanjali can
expand its operations around the world where Yoga is followed; and in place where
herbal medicines are becoming the trend.
Its best approach to market the existing products would be Integrative Growth
Strategy and Market Development. Such kind of strategy stresses the
importance of a consistent, seamless, multi-dimensional brand experience for the
consumer.
Apart from yoga programmes in which Baba Ramdev promotes the Patanjali
products, other branding efforts like TV advertisements, print ads, radio etc. will
help in reinforcement of the brand's ultimate message. Moreover, while continuing
with the intensive marketing strategy, Patanjali should target particular segments
where chances of recognition are high. After successful awareness of ayurveda and
Patanjali among people, PAL should sub-divide the current segment-Middle Aged
people (Generally in age group 30-65) into further classes as well as introduce more
segments and products related to these segments. Some of the segments, which
can easily grasp attention, are:

Infant & Kids Care: A whole range of baby cosmetics, baby health drinks, kids
medicines can be an eye catcher and with this range Patanjali can grab a
good market share from its big players like Johnson & Johnson, Himalaya etc.
 Middle age women: Falling health and their increasing incurable diseases is
an attractive segment where investing time and money can reap good
results.
Healthy & Ready-to-eat snacks: After the fall of Nestle's Maggi, market is
open for new entrants. In such a scenario, healthy &ready-to-eat snacks
would be a big success in the cities where there is lack of time and for
students.
Pregnant women or post-natal care: Entire range of products, which can aid
the women in healthy delivery and post-natal care, is also an attractive
sector.
Teenagers: Various Health Supplements required at the crucial growing age
which can easily replace markets of Protein Shakes or other supplements
preferred for good body building, Ayurvedic tonics for teenagers to cure acne
and puberty related problems will also attract numerous customers who are
looking for herbal options.
Patanjali has made its mark in the Indian market of ayurveda medicines but the
brand is familiar only in the Northern parts of the country. Patanjali stores are hardly
visible in other parts of the country. Moreover, people are unaware of such a brand.
Store visibility and placing their products in normal retail and pharmaceutical shops
will increase the awareness as well as accessibility to the consumers.

References
Patanjali Yogpeeth - Divya Yog Mandir (Trust), available:
http://www.divyayoga.com
http://www.slideshare.net/RaghuvendraSinghPari/presentation-for-
launchingpatanjali-yogpeeth-2
http://www.scribd.com/doc/61780413/Study-on-Patanjali-Yogpeeth-With-
OtherPharmaceutical-Companies#scribd
http://www.slideshare.net/kumardevk/marketing-stretegies-by-babaramdev?
next_slideshow=1
http://timesofindia.indiatimes.com/business/india-business/Ramdev-expands-
empirebeyond-yoga-to-FMCG-business-poised-to-touch-Rs-2000cr-
thisfiscal/articleshow/45861809.cms
http://www.thehindubusinessline.com/companies/ramdevs-patanjali-plans-
asplash/article5414874.ece