Case Study- CavinKare

7/28/2019 Case Study- CavinKare

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Cavinkare LtdSachet Revolution


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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 forcavinkare but also

for other company.


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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)


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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


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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


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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 'localvariants', which are cheaper, and, therefore, more

desirable to villagers


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INNOVATION OF SACHETS


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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.


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ContWhen 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.


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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 Rs35,000 to Rs 12 lakh (Rs 1.2 million) a month.


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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 askedthose assembled to feel and smell his hair.

Next they planned Chik Shampoo-sponsored

shows of Rajniknath's films


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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 agreedthat Shampoo usage gave soft and silky hair.


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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 wellqualified professionals to compete with the

competitors. The iconic Chik Girl in every Chik

Shampoo commercial showcased the possibilityof soft and manageable hair for the customers.


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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 qualitymonitoring.

As a part of their strategy, they lay down all

the ground rules for manufacturing inmaintaining their standards.


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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.


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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.


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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.


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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.


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Competitive analysis

Major competitors-

o Hindustan unilever limited

o

Procter $ gambleo Dabur

o Himalaya health care


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Cont

Market share-o Chikshampoo with a 21.4% share is the

second largest selling shampoo in the rs. 1200

crore(rs.12 billion) shampoo market while itsother brand nyle has a 4.6% share.

o Other like meera hair wash has national shareof 23.4%

o But they are largest brand in rural u.p., AndhraPradesh etc.


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Overall shampoo market share

50%

19%

16%

15%

HUL CAVINKARE OTHERS P&G


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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.


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Documents

Case Study- CavinKare