Académique Documents
Professionnel Documents
Culture Documents
Case Objectives
To understand Indian rural dynamics & consumer behaviour Highlight successful strategies that made Chik Shampoo the biggest shampoo brand in rural India
amitrangnekar@gmail.com
amitrangnekar@gmail.com
Snippet
Took me 3 years to get my first loan as banks asked for collateral, I had none. One bank gave me a 25,000 loan, which we rotated & upgraded to 4 lakh & then 15 lakh. The bank manager wrote on my loan application that this person has no collateral, but something interesting about this SSI unit is that unlike others, this company pays income tax!
amitrangnekar@gmail.com
MNC Brands
Shampoo Bottles
Price
Local Players
Chik
Low
Poor
Need Gap
Good
Quality
amitrangnekar@gmail.com
Chik Targeting
High
Cost to Consumer
Chik
The right distribution strategy must make the brand available to the rural consumer at a cost he is Willing to pay High
Low
Availability of Product
amitrangnekar@gmail.com
Target audience
Lower middle-class/ semi-rural (Sec B2,C,D) MHHI Rs 1,5003,000 Females Age group of 16-plus
amitrangnekar@gmail.com
amitrangnekar@gmail.com
amitrangnekar@gmail.com
Chik Launch
1983- Chik shampoo launched by CavinKare Initial launch in 10 ml pack Later launched in sachet form Market cluttered with low-cost shampoos But there was a clear opportunity for a good quality shampoo with appealing perfume at a price to delight the consumer Chik endeavoured to provide to the masses a significantly superior product than those available at similar price points Chik shampoo used French perfume to differentiate itself on the plank of superior fragrance
amitrangnekar@gmail.com
Promotion
Ad strategy- harness powerful appeal of cinema among common masses Innovative radio ads based on popular cinema dialogues, unlike plain radio jingles of competitors Cinema is the most cherished means of family entertainment and cine stars have cult following in the south. Therefore, the communication strategy was to leverage popular cinema dialogues to drive home the message Popular southern cine stars endorsed Chik- Amala, Khushboo, Manorama and Charlie Radio used as the sole mass advertising medium Annual ad spends about Rs 2 lakh
amitrangnekar@gmail.com
Trials
Shampoos- poor penetration levels Many people had no clue how to use a shampoo Encouraging trials, key to rural success CavinKares team travelled deep in rural pockets Trials on schoolboys Demonstrate how to lather and wash, comb hair Show the difference We were as thrilled & excited as the volunteers during the demonstrations. This exercise had a significant impact in breaking ice & made people comfortable with the concept
amitrangnekar@gmail.com
School Demo
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Champi on schoolboys
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Promotion
We also encouraged trial through a consumer scheme, where anyone could take any 4 empty shampoo sachets to a retailer and take home a Chik sachet free. Though more risky, this scheme paid off and more and more people began asking for Chik at their local retail outlet Later, we altered the scheme- we started giving 1 free Chik Shampoo sachet in lieu of 5 Chik Shampoo sachets only. Soon, consumers started asking for Chik sachets only Sales rose from Rs 35,000 to Rs 10 lakh a month
amitrangnekar@gmail.com
Innovation
Consumer insights in the Southern markets conveyed that women keep flowers in the hair for fragrance. We introduced for the 1st time, floral fragrances (rose, jasmine) in shampoos. The concept was a hit, and sales jumped three times from Rs 10 lakhs to Rs 30 lakhs a month
amitrangnekar@gmail.com
1990s
Chic, quite popular in the southern markets Shampoo market growing at a healthy 15% When Amala endorsed, sales rose to Rs 1 crore a month! Each idea was rewarded by our customers Chic continued with popular cinema actors 1992: extended celebrity endorsement to TV amitrangnekar@gmail.com 1992: No 1 in South India
Growth strategy
Chik sponsored shows of Rajniknath's films Flashed Chik ads in between Followed up with live demonstrations Distributed free sachets to audience after every show Tremendous response in rural TN & AP Shampoo sales went up 3-4 times after every show
amitrangnekar@gmail.com
amitrangnekar@gmail.com
National Footprint
1993- Chik mulled a national presence Objective: Expand the market, attract new consumers in the category Focus- largely rural, value-conscious sections in urban Distribution- innovative trade schemes & consumer offerings
amitrangnekar@gmail.com
Rural dynamics
Population size < 1000 1000-5000 >5000 Villages 459465 58029 143248 % 70 9 21
1993-Indian rural market barely outgrew urban 70% villages in India have population < 1,000 Low accessibility, undeveloped local markets How do you market your products to these villages?
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Rural Dynamics
Opportunity- 47,000 haats & 25,000 melas organised in such villages Average daily business in these haats was Rs 2 lakh Strategy: created rural wholesale network, ensure availability The right marketing strategy for the rural market is to balance the conflicting dimensions of availability on the one hand and affordability on the other
amitrangnekar@gmail.com
Mid 1990s
The shampoo market surged by 25% Small packs contributed 40% of total shampoo volumes Rural markets grew much faster than urban Key challenge- rural reach and recall Packaging critical for rural marketing 1999- Chik, second largest shampoo brand in India(also in rural markets)- next only to HLLs Clinic Plus
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Looking at the wrapper Retailer recommends Looking at the price Logo identification Doesnt bother to check
60 25 4 2 9
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Chiks response
Make packaging & branding prominent to enable quick identification by the rural consumer Create Chik- Mnemonic Change pack to bring in design & colour elements Enable onshelf differentiation and aided recall
amitrangnekar@gmail.com
Shampoo-nomics
Years back, a rural consumer recalled he used soap to wash his hair for ages, and had no visible damage to his hair. Though the hair felt rough, he was fine with that. So why should he start paying for shampoos? There were 5 adults per household in rural India, & @ Rs2 per sachet & 4 washes per month meant Rs40 for hair wash alone. They couldnt spend such money on hair wash every month. If the cost of hair wash could be cut to Rs2 per person per month they would try a shampoo This meant he wanted something as marginal as a 50-paise shampoo pack. The initial thought sounded ridiculous
amitrangnekar@gmail.com
amitrangnekar@gmail.com
amitrangnekar@gmail.com
Rural Chik
Chiks value proposition helped us become No.1 in many states in rural India. Recruiting customers is the key issue as the rural consumer is rational & value conscious. To be successful, the marketing mix must deliver superior value to the rural consumer at a price point he is comfortable with
Rural Hold of Chik
States UP Bihar AP TN No. of Villages 107440 45113 28123 16870 MS % (Volume) 67 32 39 46 Rank 1 1 1 1
MP
Orissa
55392
55352
amitrangnekar@gmail.com
22
19
2
2
amitrangnekar@gmail.com
amitrangnekar@gmail.com
amitrangnekar@gmail.com
amitrangnekar@gmail.com
Current status
In the last 2-3 years, our market share has come down though we are growing. It is mainly due to the anti-dandruff shampoos in the market which from 0% have taken over 25% of the market. We do not have an anti-dandruff shampoo yet Ordinary shampoos constitute only 75% of the market, of which we hold 20% market share. But we are the largest brand in rural UP, AP, etc. and the number one in many other states as well
amitrangnekar@gmail.com
Range
Chik penetrated the Indian market with a wide range, 4 refreshing fragrances, sensistive pricing and right sizing Chik Black Chik Jasmine Chik Egg Chik cool Sachet packing and pricing at Re.1 and 50p Bottles sized-60 ml, 120 ml (Rs 20) 250 ml & 500ml Anti Dandruff Shampoo, containing climbazole and lemon extracts for dandruff and itching
amitrangnekar@gmail.com
Other successes
We focused only on Chik for 7 years Meera Herbal powder-95% share Spinz perfumes @ Rs 10, a runaway hit Nyle- Herbal Shampoo- Transparent packaging Fairever fairness cream (1997)- 2nd largest player, with saffron, traditionally used for fair complexion Indica Hair dye- Baalon ko de dil ki umar Ruchi Pickle sachets (2004)- No.1, 5000 tpa pickles Chinnis Masala range
amitrangnekar@gmail.com
2006-2007- CavinKare 500 crores 11% value share of Rs 1,500-crore shampoo market 19 per cent volume share of 63,000 tonne market No 2 to Clinic Plus, 29% market share 576 employees All India network of 1300 Stockists catering to about 25 lakh outlets nationally Manufacturing plant at Haridwar (Uttaranchal) Third Party manufacturing at Pondicherry, Noida, Assam and Faridabad Exports- Nepal, Srilanka, Malaysia, Singapore, Bangladesh, US and the GCC region Target- 1500 crore company by 2010
amitrangnekar@gmail.com
amitrangnekar@gmail.com