silky routers rural marketing casestudy on product strategy

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Silky Routers

Silky RoutersRural marketing case study-Product strategyPresented by Deepak.RP2MBA 13022 Amrita School of Business, Amritapuri

1

Started in 1983 by C.K Ranganathan Based in Chennai- distinct player in shampoo market 170 crore products player ( 2000) Cavin the word denotes beauty & fairness in Tamil

29-11-20142Amrita School of Business,Amritapuri

Shampoo Market

CavinKare Shampoo business has grown 34 % in 2000 , faster than the overall marketThe current size of shampoo market according to ORG-MARG is Rs. 850 crore, equivalent to 30,000 tonnes in vol. Unit The present penetration is only 18%

Market share

Company Market share CavinKare19.8%HLL 65%P&G and others45.2 29-11-20143Amrita School of Business,AmritapuriAim of the company Achieve Rs.5000 turnover in the next 10 years!!

29-11-20144Amrita School of Business,AmritapuriMajor players in Market (2000)

29-11-20145Amrita School of Business,Amritapuri

National level Competitors

National level products

Regional players29-11-20146Amrita School of Business,AmritapuriEntry barriers to new entrantsNew entrants are discouraged by formidable task of establishing a distribution channel from scratch.HLLs long established ties with retailers and extensive distribution reach act as a entry barrier.

29-11-20147Amrita School of Business,AmritapuriMajor barriers to shampoo use

Shampoo contains harsh chemicals Glamour product rather than a hygiene productThe high price

29-11-20148Amrita School of Business,AmritapuriSuccess routes of While other products are at 2 Rs. Introduced sachet at 50 paisa Brand expanded 40% after this Trimmed HLLs volume share by 2-3%

Smaller sachet of Chik @ 1 Rs.Scaled down versions of its brands

Rural market is the key driver for sachets ,which makes up to 70 % of total shampoo sale !! HLL has the highest market share at rural market of 80%

29-11-20149Amrita School of Business,AmritapuriSuccess routes of

Introduced - Herbal shampoo Nyle

Was one of the earlier entrants in Indian herbal shampoo marketOne among top 5 herbal shampoo brands in the countryAccounts for 10% of market size HLL do not have a presence in this segment !!29-11-201410Amrita School of Business,AmritapuriBut ....HLL came up with LUX shampoo at 50 paisa

Bubbled packet of 30ml clinic plus

29-11-201411Amrita School of Business,Amritapuri Distribution of

CavinKare has 2,200 stockist , and have presence in 6 lakhs out lets including Kiranas in small villagesCompany has been concentrating on few pockets in south and North class 1 and 2 townCompany is trying to improve its distribution in metros in one hand and rural in other hand.Company has decided to strengthen its distribution structure by using **SAP R/3 packageHas also undertaken special rural drive with exclusive stockist for rural

29-11-201412Amrita School of Business,Amritapuri**SAP R/3is the former name of theenterprise resource planningsoftware produced by the German corporationSAP AG. It is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to completebusinessprocesses such asorder fulfilment,billing,human resource management, andproduction planning

12Promotion of

As 50 % of the people in rural market do not have television CaviKare uses

Video on wheels

Sample distribution

29-11-201413Amrita School of Business,AmritapuriWays to expand the shampoo market Bring the perception that shampoo is a not glamorous product Example: antidandruff, oil clearOffer premium Product: offer more functional benefits , add-ons helps to increase the price and position the brand as premiumMoving across category barriers: Medicated anti dandruff shampoo by Johnson and Johnson

29-11-201414Amrita School of Business,AmritapuriPhilosophy of Mr.Raghunathan It is not good enough to know how to play the game properly. Sometimes a win is possible only is you change the rules of the game!!As a result of this philosophy Low unit packs was introducedSaffron and milk combination in Fare EverBrand extensions are research based- Incorporate new findings and re launch the brand

29-11-201415Amrita School of Business,AmritapuriCorporate Strategy of

CavinKare will never venture in to marketing will only focus on brand building, R&D , and distribution management, Company have 3 rd party manufacturers.CavinKare will never undertake to distribute products of other manufacturer. They will not let their products to be distributed by other people.

29-11-201416Amrita School of Business,AmritapuriIn shampoo market crowded with varieties , how could CavinKare make its mark? How can CavinKare gain larger share in shampoo market in future?

29-11-201417Amrita School of Business,Amritapuri

29-11-201418Amrita School of Business,Amritapuri