Restructuring by Dabur India Ltd.

(2002-2006)

SUPERVISED BY: SUBMITTED BY:

RESPECTED SHALINI SINGH
RAJ KUMAR SIR MBA 1ST YEAR
 Introduction

This case of Dabur is concerned with

the restructuring exercise that took
place in the company from 2002-2006
resulting in positive results making
company the 4th largest FMCG
company of India.
This case relates to marketing.
Problem:
Problem of the case was that Dabur
was unable to maintain profitable stand
in the market and to overcome the
same Dabur conducted a research and
found that earlier, their positioning
strategy which focused on age group of
35+ was not reeping fruitful results and
their command over the youth market
was declining gradually so they
restructured their positioning strategy.
Areas of Restructuring By Dabur

Market Expansion
Coupons

Distribution Strategy
Samples

Pricing
Premiums

Promotion
Contests/Sweepstakes
Product & Branding Strategy
Refunds/Rebates

Bonus PacksStrategy
Positioning

Loyalty Markets
Target Programs

Segmentation of Markets
Events

Restructuring
Areas
Bases of Market Segmentation Used
by Marketers

Geographic
Geographic

Demographic
Demographic

Psychographic
Psychographic

Behavioral
Behavioral
Dabur Used All the Criteria

Geographic
Geographic

Demographic
Demographic

Psychographic
Psychographic

Behavioral
Behavioral
 Changed Market Segmentation Strategy of Dabur
Segmentation Criteria Logic
Geographic Country wise Countries where
people have +ve
inclination for Herbal
Products
Demographic Children, Young people Different products for
(Age wise) below 35, Above 35 different age groups

Psychographic Herbal/Ayurveda/Synth People have different

etic opinion for these three
criteria
Behavioural Benefit, Attitude and There are people who
loyalty towards Herbal have +ve attitude for
Herbal Products and
find it beneficial and
are loyal.
 Changed Target Market Strategy

From
From To
To

35
35 plus
plus People
People Kids,
Kids, Youths
Youths below
below 35,
35, 35+
35+

India
India India
India and
and Abroad
Abroad

North,
North, East
East ,, West
West India
India Special
Special Focus
Focus on
on South
South India
India

Consumer Consumer
Consumer and
and Institutional
Institutional
Consumer Markets
Markets
Markets
Markets
 Changed Positioning Strategy

From
From To
To

Ayurveda
Ayurveda Herbal
Herbal

Convenience
Convenience Naturalness
Naturalness

Heritage
Heritage ,, Commitment,
Commitment, Heritage,
Heritage, Commitment,
Commitment,
and
and Stability
Stability Stability
Stability and
and Wellness
Wellness
Change in Logo
 Purpose of Change in Logo

Dabur redesigned the age-old brand logo

in order to give it a more contemporary
and relevant feel.
The new identity the tree in a younger
look, in form and colour was in
alignment with a new brand essence line
"celebrate life,"
The new logo was designed by DMA,
part of the Delhi-based Aalia Group.
 New Branding Strategy Logic of
Dabur
One brand could not support so many
categories.
Earlier for all brands, Dabur was the
umbrella brand ie. In all brands Dabur
was used in the name of the product.
Dabur changed this brand strategy.
Brand Naming Strategies used by
Companies
Individual
Individual names
names
(Ariel,
(Ariel, Tide)
Tide)

Blanket
Blanket family
family names
names
(Tata)
(Tata)

Separate
Separate family
family names
names
(Aditya
(Aditya Birla
Birla Group
Group Strategy-Ultra
Strategy-Ultra
Tech,
Tech, Grasim)
Grasim)

Corporate
Corporate name-
name-
individual
individual name
name combo
combo
(Kellogs)
(Kellogs)
 Dabur used the Strategy of Separate
Family names for Different Categories
Dabur
Dabur for
for Healthcare
Healthcare

Vatika
Vatika for
for upmarket
upmarket Herbal
Herbal
Beauty
Beauty Products
Products

Anmol
Anmol for
for personal
personal care
care value
value for
for
money
money market
market

Real
Real for
for Food
Food Products
Products

Coolers
Coolers for
for Traditional
Traditional
Products
Products like
like Aam
Aam Panna
Panna
PRODUCT STRATEGY OF
DABUR
 Major Product Decisions of
Companies
Marketers make product and service
decisions at three levels:

1.Individual Product and Service

Decisions
2.Product Mix Decisions
3.Product Line Decisions
Product Line Strategy Undertaken
by Dabur
In Food line, a new range of juice was
added by the name coolers where
traditional preparations like Aam ka
Panna. Coolers were 15% cheaper than
Real because of its lower pulp content.
In food line, soup market was focussed
through Homemade brand and tomato
soup was launched.
Product Line Strategy Undertaken
by Dabur
In toothpaste category, Dabur Red was
launched in gel category also.
New brands in toothpaste category were
added by taking over the Balsara
Hygiene and Home Products. Babool
and Meswak of Balsara became the
brands of Dabur and fitted Dabur
strategy of focussing on Herbal
products.
 Individual Product Strategy
Undertaken by Dabur
One rupee sachet of Vatika shampoo
was launched to target rural markets.
Binaca toothpate was discontinued as it
was not fitting the Dabur positioning
strategy.
Real Activ was lunched as premium
juice brand,
Real Junior was lunched in 125 ml for
children below six years.
CHANGED PROMOTION
STRATEGY OF DABUR
 Traditional Approach to Promotion by Dabur-
Fragmented Approach

Sales
Publicity promotion
Point of
purchase

Media Word of Mouth

Special Adver-
events tising Direct
response
Public
relations
Interactive
Direct marketing
marketing
 New Promotion Strategy of Dabur- Integrated
Marketing Communications Approach

Sales Direct
Word of Mouth
promotion response

Media
Point of
purchase Adver-
Public
tising relations
Publicity

Interactive
marketing Direct
Special
marketing
events
 Initiatives in Promotion Strategy
Amitabh Bachchan was used as Brand
Ambassador.
Dabur wanted to capitalize on the
popularity of Amitabh Bachchan in
countries like Bangladesh, UAE, Saudi
Arabia, Kuwait, Bahrain etc.
Yash Raj Films Ad Cell was hired to
make commercials.
Most expensive Ad campaign was done
by Dabur
 Initiatives in Promotion Strategy
Virender Sehwag was used as Brand
Ambassador for select oral, hair care, and
healthcare products.
Advertising budget for Real Juice was
increased by 40% and mothers and
children were targeted through advertising.
To enhance institutional sales,
advertisements were give in trade
magazines.
 Initiatives in Promotion Strategy
Further, training sessions and workshops
were conducted for food and beverages
professionals for enhancing the
institutional sales.
Dabur also worked with the product
development teams of hotels and
restaurants to help them create new
recipes using Dabur products.
To increase business in South India, point-
of-sale promotion was done at large scale.
 Initiatives in Promotion Strategy
Dabur acquired Balsara company in
2005.
Dabur paid only one-fifth of what Balsara
was paying to T.V. Channels for ads.
Simultaneously, the advertising spend on
the Balsara range was increased to 20%
of the turnover. This, coupled with
reduced rates, increased the visibility of
Balsaras advertising manifold.
 CHANGE IN PRICING
STRATEGY OF DABUR
 Pricing Strategy of Dabur
Dabur could have charged a slightly
high price for being selling Ayurveda
Products.
However, Dabur wanted to be
competitive in FMCG Sector.
They followed selective Price Reduction
Strategy.
They also introduced small packs of Rs.
5 for toothpaste, shampoo, hair oil, and
baby massage oil
 Pricing Strategy of Dabur
Dabur also slashed the price of Vatika
shampoo by 20% as a price-adjustment
startegy.
Vatika shampoo sachet of Rs. One was
also introduced.
DISTRIBUTION STRATEGY OF
DABUR
 Distribution Strategy
Balsara Company was taken over by
Dabur in 2005 which had around 500
distributors.
Very few distributors of Balsara were
retained by Dabur.
The business of Balsara came in the
hands of Dabur distributors giving them
the higher business.
This brought more bargaining power in the
hands of Dabur regarding margins.
 Distribution Strategy
Dabur reduced the margins for
distributors.
Further, the change in distribution also
increased the penetration of Balsara
products.
MARKET EXPANSION
STRATEGY OF DABUR
 Key Markets Targeted for Expansion

Market
Market
Expansion
Expansion

Young
Young
International
International South
South Indian
Indian
People
People below
below Kids
Kids
Markets
Markets Market
Market
35
35
 International Market Expansion
Strategy
Dabur expanded in international
markets through acquisitions and joint
ventures where consumer behaviour
was similar to that in India or where
there was strong Ayurveda platform to
be tapped.
 International Market Expansion
Strategy
Dabur acquired the business of its
franchisee, Redrock Ltd. for the Middle East.
The acquisition gave Dabur control over
Redrocks manufacturing facilities at Dubai
and Sharjah.
The acquired company was renamed Dabur
International Ltd., and this company was
made responsible for investments in all
Daburs global ventures.
 International Market Expansion
Strategy
In 2003, subsidiaries were established in Nepal,
Nigeria, Bangladesh and Pakistan.
Company launched some export specific brands like
Dr. Burman for Russia, CIS Countries, and
Afghanistan.
In 2002-03, Dabur Boro Glow was introduced for
Russian Market and Vegecaps in the nature care
range for the European market.
In 2002-03, the company entered North American
market by appointing distributors and initiating
marketing of Products to the ethnic India segment.
 Other Market Expansion
Strategies
For youths below 35, new products like
Real Activ and Dabur Red in gel were
launched. Positioning strategy was
changed where herbal instead of
Ayurveda was promoted to appeal the
youths.
For kids, new products were launched
like Real Junior.
For South India, a new cell was was set-
up for boosting sales.
 RESULTS OF DABUR
RESTRUCTURING EXERCISE
Sales of Dabur
Profitability of Dabur
 Results of Dabur Restructuring
Exercise
Dabur Foods Real and Homemade grew at
36% and 25% respectively in 2003.
Dabur Red toothpaste lunched in April, 2003,
became a Rs. 400-450 million brand within a
year.
Balsara Home products were turnaround.
Sales in South India contributed to 10% of
total Dabur sales in 2004 in comparison to
8% in previous year.
 Results of Dabur Restructuring
Exercise
Dabur Lal Dant Manjan grew by 9.6% in
2003-04 when overall toothpowder sales in
India decreased by 8%.
Majority of growth targets were achieved.
 Future Target of 2009-10

During the restructuring exercise, in this

case, I found that Dabur was eyeing for
turnover of Rs. 4,000 crore by 2009-10.

The sale of Dabur in 2010-11 was Rs.

4077 Crores.
So, Dabur almost achieved what they
planned for in the restructuring exercise.
 REFERENCE-

MARKETING MANAGEMENT BY
ARUN KUMAR
N. MEENAKSHI
PUBLICATION- VIKAS
PUBLISHING HOUSE PVT. LTD.
THANKS