1) Indian FMCG market is said to be very complex and dominated by the big players with

a sizeable market share. Do you think it was a well thought out marketing mix strategy
for rural segment adopted by Chik Shampoo as a main cause of success?

Indian FMCG market is said to be very complex and dominated by the big players with a
sizeable market share but these companies were targeting urban market which has market share
of 25.73%
and they have a strong distribution network in urban market but not in rural market. They didnt
find the opportunity laying in the rural market but Cavin Kare did very well by identifying that
majority of the population (74.27%) lives in the rural area, rural market contributed almost 60%
in GDP and size of middle class consumer in rural market was the same as in urban areas.In light
of that Cavin Kare developed business model which include serving of Chik Shampoo in rural
market and it was the main reason of success for Chik Shampoo. But main problems they faced
in rural areas were low income level of people and less awareness of shampoo. They were using
soap to wash their hair and they could not afford the shampoo with price of Rs.40 (lower per
capita income). By serving Chik Shampoo at lower price with good quality in the rural market
they changed the concept of FMGC in India. Main reasons for success of Chick Shampoo in
rural market were its strong distribution channel and marketing mix (4As). The strategies they
are using for serving Chick Shampoo in different market are as follows:

Semi Urban
Market
Small bottel
and Sachets

Urban
Market
Bigger bottel
Rural
Maket
Sachets

MARKETING MIX (4AS)

AVAILABILITY
Major challenges for serving Chik Shampoo in rural markets were villages in large numbers (in
India around 6,00,000 villages), poor infrastructure and low retail density. Chik Shampoo was
made available by tapping periodic markets like haats and melas.
Reasons for targeting haats were:

Periodic market ( held once in a week)

Attracting consumers living within a radius of 12-15 km (serve about 4000 rural
consumers)

Reasons for targeting melas were:

Generally held after the harvest season, so villagers had enough cash in hand

Attracted a large number of buyers from distant places also

As per rural marketing study, 58% of the villager gave preference to purchase from haats
over village retail outlet.

AFFORDABILITY
CavinKare was serving Chik Shampoo in rural market with good qualities and in lower price
because the company had been outsourcing its manufacturing operations which reduced
CavinKares overhead considerably or cost and working capital requirements. Competitor like
HUL initially viewed rural market as low margin, focused more on gross margin and less on
volumes but CavinKares on volume (mass production which reduce cost). Initially they gave
Chik Shampoo at the rate of Rs.2 but when they did calculation they realized that investment of
Rs.40 per week was unaffordable for rural consumer. After that without sacrificing quality and
efficiency Company launch a 4ml sachet of Chik Shampoo priced at 50 paise in September 1999.
Sachet helped in minimizing the risk of trial, offered convenience of buying the product only
when it was needed, available in low price. This led to shampoo usage growing in rural markets
at a rate almost twice that of the urban market result was the price reduction to shampoo bottle
also in 2000.
ACCEPTABILITY

Shampoo was viewed more as a glamour and lifestyle product and consumer liked to use only on
special occasions such as wedding, parties etc and hence first the company had put efforts behind
making Shampoo a necessity product and make it acceptable in competition to products like
soap and traditional alternatives heena. After that they leveraged product with popular movie
starts like Khushboo, Manorama and Amla for product acceptance.
AWARENESS
First problem the company faced was rural consumer used soap to bathe and wash their hair and
they solved by educating them, relied heavily on radio for mass media advertisement (radio
advertisement made use of popular movie dialogues supporting the brand) and leveraged brand
with popular movie stars like Amla, Khushboo and Manorama.
Second problem they faced was rural consumer had no idea about usage of Shampoo and they
solved this problem by road shows (to educate villagers how to lather, wash and comb hair),
travelled in vans in rural areas for live demonstration of shampoo usage and its benefits, gave fee
samples, door-to-door sampling and through wall painting & video on walls. At last they
introduced a novel consumer promotion scheme (for pull and induce trials).

SEGMENTATION
Consumer were segmented on the basis of:

Demographic Segmentation ( Income Level)

Geographic Segmentation (Rural-Urban)

TRAGETING
Targeted consumer were:

Lower middle class and semi-rural population with monthly income of Rs. 1500-3000.,

Rural People who liked to go in Haats and Melas

POSITIONING
Positioning of CavinKare company was value proposition company because of sachet revolution
through which customer were getting quality shampoo at lower price.