LOVELY PROFESSIONAL UNIVERSITY

TERM PAPER OF MARTETING OF IT PRODUCT DABUR INDIA

Submitted to: HARENDRA SINGH SIR

Submitted by: Anil Kumar Newar RS1906A21 10904838

DECLARATION

I, Anil Kumar Newar student of Lovely Professional University have completed my Term Paper:

DADUR INDIA Ltd

The information given in this project is true to the best of my knowledge.

Anil Kumar Newar MBA (IT) RS1906A21 10904838

ACKNOWLEDGEMENT
First of all I would like to thank the Lovely University and take the opportunity to do this project as a part of the M.B.A. Many people have influenced the shape and content of this project, and many supported me through it. I express my sincere gratitude to Mrs. Harendra Singh Sir for assigning me a project of Managerial Economics, which is an interesting and exhaustive subject. He has been an inspiration and role model for this topic. His guidance and active support has made it possible to complete the assignment. I also would like to thank my Friends who have helped and encouraged me throughout the working of the project. Last but not the least I would like to thank the Almighty for always helping me.

DABUR INDIA Limited
Dabur India Limited is a leading Indian consumer goods company with interests in Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods. From its humble beginnings in the by lanes of Calcutta way back in 1884 as an Ayurvedic medicines company, Dabur India Ltd has come a long way today to become a leading consumer products manufacturer in India. For the past 125 years, we have been dedicated to providing naturebased solutions for a healthy and holistic lifestyle. Through our comprehensive range of products, we touch the lives of all consumers, in all age groups, across all social boundaries. And this legacy has helped us develop a bond of trust with our consumers. That guarantees you the best in all products carrying the Dabur name .

Dabur India Limited is the fourth largest FMCG Company in India with Revenues of US$600 Million (Rs 2834 crore) & Market Capitalisation of over US$2.2 Billion (Rs 10,000 Crore). Building on a legacy of quality and experience for 125 years, Dabur operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care & Foods. Dabur India Limited has marked its presence with significant achievements and today commands a market leadership status. Our story of success is based on dedication to nature, corporate and process hygiene, dynamic leadership and commitment to our partners and stakeholders. The results of our policies and initiatives speak for themselves. 3 major strategic business units (SBU) - Consumer Care Division (CCD), Consumer Health Division (CHD) and International Business Division (IBD) 3 Subsidiary Group companies - Dabur International, Fem Care Pharma and newu and 8 step down subsidiaries: Dabur Nepal Pvt Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian Consumer Care (Bangladesh), Asian Consumer Care (Pakistan), African Consumer Care (Nigeria), Naturelle LLC (Ras Al Khaimah-UAE), Weikfield International (UAE) and Jaquline Inc. (USA). 17 ultra-modern manufacturing units spread around the globe Products marketed in over 60 countries Wide and deep market penetration with 50 C&F agents, more than 5000 distributors and over 2.8 million retail outlets all over India Consumer Care Division (CCD) adresses consumer needs across the entire FMCG spectrum through four distinct business portfolios of Personal Car e, Health Care, Home Care & Foods

Master brands:  Dabur - Ayurvedic healthcare products  Vatika - Premium hair care  Hajmola - Tasty digestives  Réal - Fruit juices & beverages  Fem - Fairness bleaches & skin care products

9 Billion-Rupee brands: Dabur Amla, Dabur Chyawanprash, Vatika, Réal, Dabur Red Toothpaste, Dabur Lal Dant Manjan, Babool, Hajmola and Dabur Honey Strategic positioning of Honey as food product, leading to market leadership (over 75%) in branded honey market

Dabur Chyawanprash the largest selling Ayurvedic medicine with over 65% market share.

Vatika Shampoo has been the fastest selling shampoo brand in India for three years in a row

Hajmola tablets in command with 60% market share of digestive tablets category. About 2.5 crore Hajmola tablets are consumed in India every day Leader in herbal digestives with 90% market share Consumer Health Division (CHD) offers a range of classical Ayurvedic medicines and Ayurvedic OTC products that deliver the age-old benefits of Ayurveda in modern ready-to-use formats

Has more than 300 products sold through prescriptions as well as over the counter Major categories in traditional formulations include: - Asav Arishtas - Ras Rasayanas - Churnas - Medicated Oils Proprietary Ayurvedic medicines developed by Dabur include: - Nature Care Isabgol - Madhuvaani - Trifgol

Division also works for promotion of Ayurveda through organised community of traditional practitioners and developing fresh batches of students International Business Division (IBD) caters to the health and personal care needs of customers across different international markets, spanning the Middle East, North & West Africa, EU and the US with its brands Dabur & Vatika

  

f total sales Leveraging the 'Natural' preference among local consumers to increase share in perosnal care categories Focus markets: - GCC - Egypt - Nigeria - Bangladesh - Nepal - US

High level of localization of manufacturing and sales & marketing

Background
The story of Dabur began with a small, but visionary endeavour by Dr. S. K. Burman, a physician tucked away in Bengal. His mission was to provide effective and affordable cure for ordinary people in far-flung villages. With missionary zeal and fervour, Dr. Burman undertook the task of preparing natural cures for the killer diseases of those days, like cholera, malaria and plague. Soon the news of his medicines traveled, and he came to be known as the trusted 'Daktar' or Doctor who came up with effective cures. And that is how his venture Dabur got its name derived from the Devanagri rendition of Daktar Burman. Dr. Burman set up Dabur in 1884 to produce and dispense Ayurvedic medicines. Reaching out to a wide mass of people who had no access to proper treatment. Dr. S. K. Burman's commitment and ceaseless efforts resulted in the company growing from a fledgling medicine manufacturer in a small Calcutta house, to a household name that at once evokes trust and reliability.

Dabur (an acronym of the name Dr. SK Burman),was set up in West Bengal as a proprietary firm for manufacturing of ayurvedic drugs. It started off with a direct mailing system to send medicines to villages in Bengal. In 1896, Dr. Burman set up a small manufacturing plant at Garhia near Calcutta for mass production of chemicals and Ayurvedic drugs. In the early 1900s, the next generation of Burmans took a conscious decision to focus more on the Ayurvedic medicines market. In 1919, Dabur set up its Research & Development laboratory for Ayurvedic medicines. In 1936, Dabur India Pvt. Ltd., was incorporated to take over the business of the proprietary firm. In 1940, the company diversified into the personal care products business with the launch of its Dabur Amla Hair Oil. In 1949, Dabur launched Chyawanprash in a tin pack making it the first branded Chyawanprash in the country. It expanded its personal care portfolio by adding oral care products in 1970. Dabur Lal Dant Manjan was the first product to be launched. In 1972, Dabur shifted base to Delhi from Calcutta and started production from a hired manufacturing facility at Faridabad. In 1978, Dabur launched the Hajmola tablet. It set up ‘The Dabur Research Foundation (DRF),’ an independent company, in 1979 to spearhead Dabur’s research needs. In the same year, commercial production started at Sahibabad. In 1986, Dabur became a public limited company through a reverse merger with Vidogum Ltd. and was rechristened Dabur India Limited. The next year Dabur set up a facility at Noida Export Processing Zone to cater to the global markets. In 1990, it set up a branch office and warehousing operations in London to service the European markets. In 1991, it set up Dabur Overseas Ltd. in Cayman Islands to cater to its overseas investment needs. Dabur Overseas Ltd., later funded Dabur Egypt Ltd., in Cairo, which manufactured personal care and food products. In 1992, Dabur entered into 49:51 joint venture with the Spanish confectionery major Agrolimen group under the name General De Confeteria India Ltd. (GCI). The same year Dabur entered into a biscuit joint venture named Excelcia Foods with Nestle. Dabur came out with its initial public offer in November 1993, raising Rs. 541.5 mn (at Rs. 95 per share). The issue was oversubscribed 21 times. Dabur used the funds to expand and modernize its production bases and to develop new production facilities. In the same year Dabur roped in AF Ferguson to offer advice on a restructuring plan. Based on its recommendations, Dabur was broken up into seven profit centers and professionals were brought in.In 1997, Dabur launched its ‘Project STARS’ (Strive To Achieve Record Successes) to achieve accelerated growth in the coming years. The scope of this project was identified as the entire gamut of strategic, structural and operational changes to enable efficiencies and improve growth rates.

In April 1997, Dabur hired consultants McKinsey & Co to strengthen its competitive position. Dabur introduced Samara range of herbal skin and hair care products in early 1997. In 1998, the Burman family handed over management of the company to a professional CEO and limited their role to strategic inputs at Board level. Ninu Khanna joined Dabur as CEO in November 1998 on a three-year contract. In the same year, Dabur entered into a 50:50 joint venture with Bongrain of France, a Fortune 500 company in processed and specialty cheeses. The venture was named Dabon International and began manufacturing cheese products in Noida (UP). In 1999, the company implemented a restructuring template prepared by McKinsey & Co. It withdrew from the low margin businesses like merchant exports, veterinary drugs and herbal intermediates. It also exited from two joint ventures in Excelcia Foods with Nestle and General De Confiteria Ltd., with Agrolimen. It discontinued its Samara line of herbal cosmetics and pulled out of veterinary products and bulk drugs. In 2001, Dabur set up a manufacturing facility in UK for oncology injectibles at an investment of $15 mn where commercial production is slated for late 2004. The stateofthe- art plant and laboratory in UK have approval from the MCA of UK. They follow FDA guidelines for production of drugs specifically for European and American markets. In 2001, Dabur roped in Accenture to define clear roles and responsibilities of its board of directors and the chief executive officer to prevent any overlap. In the same year, Family Council was constituted for formalizing the promoter family’s role in managing the business interests encompassing all group companies. The roles of Management Committee, Board of Directors and Family Council were defined and formalized. In December 2001 Dabur restructured its Pharmaceutical business and separated it from its FMCG business. Now, Dabur is busy with restructuring its operations in line with the recommendations. As a first step in this exercise, Dabur identified six Over-the-counter (OTC) brands under the ayurvedic specialities division, which will be moved to the healthcare division. These include Isabgol, Nature’s Cure, Madhuvani and Stresscom. IT initiatives, the company now plans to take the battle to its competitors with an entry into the FMCG sector and believes IT to be an indispensable weapon in this war. Says Gopal Shukla, chief information officer, Dabur, “Most industries use IT in certain distinct phases before evolving into a complete e-business enabled organisation. We are currently in one of those phases and believe it to be the fourth major asset of the company (other three being strong brand image, new product development strengths and an extensive distribution network).” In an

effort to establish itself as a strong player in the FMCG sector, Dabur has already started implementing IT systems and processes all across the company. Says Shukla, “The distribution network is the lifeline for an FMCG company and is a greater value add in terms of IT returns than manufacturing. In line with this, we have outlined our IT focus on streamlining complete outward logistics of the company in the true spirit of an FMCG.” With IT assisting in the very build-up of its new image, it surely is an exciting time for IT at Dabur. According to Shukla, the IT department of the company will have important role to play in its IT initiatives. From its early beginnings, the implementation of simple COBOL and Foxpro based applications to the implementation of the manufacturing ERP system, intranet and extranet based applications and establishment of a robust communication and networking system, the team has played an active role in ensuring that the IT infrastructure lives up to expectations and perform its task. After successfully implementing Baan ERP and MFG/PRO Dabur at present is undergoing process of implementing SAP to work along with aforementioned systems.
.Dabur Vision

Dedicated to the health and well Being of every household
The vision is intertwined with below mentioned core values of the company:Ownership: This is our company. We accept personal responsibility, and

accountability to meet business needs Passion for Winning: We all are leaders in our area of responsibility, with a deep commitment to deliver results. We are determined to be the best at doing what matters most People Development: People are our most important asset. We add value through result driven training, and we encourage & reward excellence Consumer Focus: We have superior understanding of consumer needs and develop products to fulfill them better

Team Work: We work together on the principle of mutual trust & transparency in a boundary-less organization. We are intellectually honest in advocating proposals, including recognizing risks Innovation: Continuous innovation in products & processes is the basis of our success

Integrity: We are committed to the achievement of business success
with integrity. We are honest with consumers, with business partners and with each other

Strategic intent
Following are the defined means to achieve that intent:-

Focus on growing our core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology Be the preferred company to meet the health and personal grooming needs of our target consumers with safe, efficacious, natural solutions by synthesizing our deep knowledge of ayurveda and herbs with modern science Provide our consumers with innovative products within easy reach Build a platform to enable Dabur to become a global ayurvedic leader Be a professionally managed employer of choice, attracting, developing and retaining quality personnel Be responsible citizens with a commitment to environmental protection Provide superior returns, relative to our peer group, to our shareholders

Marketing strategies

Focus on growing our core brands across categories, reaching out to new geographies, within and outside India, and improve operational efficiencies by leveraging technology Be the preferred company to meet the health and personal grooming needs of our target consumers with safe, efficacious, natural solutions by synthesizing our deep knowledge of ayurveda and herbs with modern science Provide our consumers with innovative products within easy reachBuild a platform to enable Dabur to become a global ayurvedic leader Be a professionally managed employer of choice, attracting, developing and retaining quality personnel Be responsible citizens with a commitment to environmental protection Provide superior returns, relative to our peer group, to our shareholders

Market Position -Dabur India
Dabur India Limited is an Indian trans-national with a turnover o approximately US$255 million which is engaged in the manufacturing and marketing of a variety of natural and herb based products in the categories of Personal care, Oral care, Health care, Foods and Pharmaceuticals such as Dabur Amla Hair oil, Dabur Vatika Hair oil and Shampoos, Dabur Honey,Dabur Chyavanprash, Dabur Real Fruit Juice, etc. As summarized in the Annual Report (2000-01), the company’s story is that of a more than a century old partnership with nature using the theories of Ayurveda (the ancient Indian system of alternative therapies), to create a wide range of products. In contrast, the leading multinational players in the fast moving consumer goods sector such as Unilevers, SmithKline Beecham, Proctor and Gamble, Johnson and Johnson, etc. are known for manufacturing and marketing primarily chemical based

products in each of the product categories whether hair oils, shampoos, toothpowders, baby care or healthcare products. Differentiation is the name of the game The operations of Dabur India Limited are a story of continuous differentiation through a variety of means discussed by Alderson (1965) as the bases of differential advantage including product differentiation, market segmentation, differentiated appeals, transvection re-engineering and continuing advancements in technology and processes. Market segmentation is the policy of selecting a group of customers with relatively homogenous demands and deriving production economies from that selection (Alderson, 1965). Dabur’s 2000 launch of Vatika Anti Dandruff Shampoo, which has natural lemon extracts for fighting dandruff, is a prime example of this. By focusing its marketing efforts towards targeting women suffering from dandruff but who are scared to use chemicals for dandruff control, Dabur created a sizeable sub segment of natural anti-dandruff shampoos. The advantage is attested to by response of Head and Shoulders who launched a variant with lemon extracts to win back consumers. Similarly, Dabur’s Vatika Henna Conditioning Shampoo tapped the market segment of people who use shampoo very rarely as they are scared of the harmful effects of chemicals on their hair. Marketing efforts are concentrated on promoting its key herbal ingredient, henna, as many Indian consumers have grown up using homemade henna paste on their hair. This marketing campaign yielded unprecedented results with sales of the brand now over AU $14 million. And Dubar is confident of retaining this advantage. In response to a query on the likely counter attack by the leading multinational brands such as Pantene and Sunsilk a member of the marketing teamhead replied, “They may be multinationals, but we have the mother of all Indian conditioners – henna, on our side.” Differentiation by selection of appeals implies the use of advertising to situate products in market preference niches (Blair and Uhl, 1976) without any physical change in the product (Alderson, 1965). Dabur Honey, has been built as the leading brand of honey in India entirely through the use of mass media advertising. Traditionally in India honey occupied an image of a medicinal tonic for coughs and colds during winter. Dabur used advertising to position Dabur Honey as a taste enhancer and additive housewives could use with their everyday food. ``While that effort yielded results…the brand needed to find a way to increase the width and depth of usage to continue the pace of growth,'' says Sunil Duggal, vice-president, sales and marketing (c.f. Kaul, 2000). To maintain the advantage, advertising appeals now target

children, who have been classified by research as the primary consumers of honey in the Indian household, while simultaneously zeroing in on breakfast as the key consumption occasion. Similarly Dabur Gulabari, a pure rose water has, successfully used mass media advertising since the past 2 years to move to a the position of a skin care product and has expanded its sales two fold from the earlier days when it was being sold as just another rose water in the market. Differential appeals can also occur in the intermediate rather than final market. Dabur’s Anmol Coconut Oil was differentiated by transvection. It occupied a commodity position in a crowded coconut oil market containing larger competitors. Dabur decided to stop all advertising and spend the money saved on attractive bulk purchase discounts for retailers. The brand now occupies a leadership position in the northern part of the country with steady sales from the rest of India. As a marketing team participant put it Another example of transvectional differentiation is that of Dabur Honey who has managed to establish semi-exclusive relationships with some of the leading suppliers of raw honey in the country. This has helped it maintain its image of the ‘best quality’ honey. To further consolidate their position of leadership, Dabur has now also started a venture called Honey Bee Products, which undertakes activities such as manufacturing of beekeeping equipment and management of an apiculture center that rears high breed queen bees. Differentiation by product improvement occurs when improvements to an already existing product are done, either to be used as the basis for product promotion, or for further product development without being communicated externally (Alderson 1965). Several products and brands in Dabur have been through either a gradual or a more comprehensive and noticeable product improvement program. When Dabur Red Tooth Powder, which is the second largest brand marketed by the company, experienced an large decline in sales a couple of years ago, research revealed that the target consumers relied mainly on herbal ingredients for dental care, were not sure of the ingredients in Dabur’s toothpowder and their efficacy for dental care. The company not only reformulated the product by increasing the existing herbal extracts and adding new ones known to be beneficial for the teeth, but to also highlighted this fact in the packaging as well as advertising. This not only stemmed the decline but also led to healthy growth figures. Dabur Vatika Henna Conditioning shampoo on the other hand, has followed a more gradual and subtle program of product improvements in key product aspects such as lathering, conditioning and fragrance. These product improvements have not been communicated to the consumers through the brand’s advertising, but are simply part of the company’s effort to

continually deliver a consistently better product to the consumer in line with the brand promise of a superior natural conditioning shampoo. Differentiation by process improvement pertains to production processes rather than the product. Alderson (1965) suggests that by employing process improvement the producer enjoys a very favored position with a generic difference between the product and anything else available. Unlike advantage attained by product differentiation it does not involve sacrificing all other segments of a market in order to have a more secure position in the target segment. There are some brands in Dabur such as Dabur Honey and Dabur Anmol Coconut Oil where there is no manufacturing involved and the products are simply processed and packed by the company. In the case of Dabur Honey, constant improvements in processing capabilities coupled with systematic research to understand consumer perceptions of product quality, have ensured that Dabur has been able to deliver a more consistent, superior and international quality blend of honey.

Products & Services—
Dabur provides its products into various segments. Dabur presents range of herbal personal care products. Bringing together the gentle touch of nature and Ayurveda’s wisdom. Backed by the unfailing quality of Dabur Products. Hair oil, Fairness face pack, Shampoo, Tooth paste, red gel, lal dant manjan, dabur binaca toothbrush, vatika hair oil, anmol sarso aawla, vatika heena conditioning shampoo, vatika anti-dandruff shampoo. Instead of this in food range of REAL active natural juice, dabur homemade, dabur honey etc., are the few Successful brands of company. After demerging its consumer and pharmaceutical businesses in FY04, Dabur laid out a growth strategy -- new product introductions, brand extensions to new segments, and focus on new geographies. This strategy has paid rich dividends for Dabur and has delivered sales growth ahead of the consumer non-durable sector average. Balsara’s acquisition

complements Dabur’s growth strategy as it provides entry to a new product segment (household care), extends Dabur’s oral care portfolio (‘white’ toothpaste), and improves its distribution muscle in Western and Southern India (focus areas for Dabur), as well as strengthening its international business because Balsara exports to Middle East markets where Dabur is trying to grow its business. Balsara is Dabur’s first major acquisition and marks its first departure from the herbal platform, it remains to be seen how Dabur will integrate the non-herbal brands into its product portfolio. Balsara operates in the oral care and household product segments. In oral care, Balsara has a 6% market share and has three brands, Promise, Babool and Meswak based on herbal formulations. In the household care segment, Balsara’s product range includes air fresheners under the Odonil brand, insect repellant branded Odomos, toilet cleaners under the Sanifresh brand and dishwashers under the Odopic brand. All of these have fairly strong brand equity and Balsara has invested significantly behind these brands over the years. All these product segments have significant growth potential, owing to low penetration levels. Dabur’s international business is profitable and has operating margins only slightly below those of the domestic business. According to management, there is further potential for expanding margins for the international business. International operations have a footprint in 25 countries spread over six continents; however, a major part of its business is concentrated in the Middle East. The company also has four manufacturing facilities located in UAE, Bangladesh and Egypt. According to management, the company is looking to expand its presence in the Middle East, the Indian Subcontinent, Russia and Africa. For the developed markets in the US and Europe, Dabur is looking at alliances with distributors, focusing mainly on over-the counter herbal healthcare products.

Product mix Dabur’s product range encompasses health care, personal care, ayurvedic specialities and food segments Dabur's Health Care range brings for you a wide selection of Ayurvedic and natural products that offer complete care for varying individual needs. Our products are derived from the time-tested heritage of Ayurveda, and backed by the most modern scientific test & trials that ensure unfailing quality and safety in anything you pick.

.HAIR CARE AMLA HAIR OIL AMLA LITE HAIR OIL AMLA LITE HAIR OIL VATIKA HAIR OIL VATIKA HAIR OIL ANTI-DANDRUFF SHAMPOO ANTI-DANDRUFF SHAMPOO ANMOL SARSON AMLA

ANMOL SARSON AMLA ANMOL SHAMPOO ANMOL SHAMPOO ANMOL SILKY BLACK SHAMPOO ANMOL SILKY BLACK SHAMPOO HEENA CONDITIONING SHAMPOO

ANMOL NATURAL SHINE SHAMPOO

SKIN CARE GULABARI HEENA CONDITIONING SHAMPOO VATIKA FAIRNESS FACE PACK VATIKA SAFFRON GLOW SOAP WITH SANDAL

HEALTH CARE PRODUCT RANGE HEALTH SUPPLEMENTS DABUR CHYAWANPRASH DABUR CHYAWANSHAKTI GLUSOSE D

DIGESTIVES HAJMOLA YUMSTICK ANARDANA CANDY HAJMOLA HAJMOLA MAST MASALA HAJMOLA CANDY FUN 2HAJMOLA PUDIN HARA G DABUR HINGOLI

PUDIN HARA HAJMOLA CANDY FUN 2

NATURAL CURES SHILAJIT GOLD DABUR BALM SHILAJIT ITCH CARE SHANKH PUSHPI NATURE CARE SAT ISABGOL RING-RING BACK AID SARBYNA STRONG

BABY CARE DABUR LAL TAIL DABUR BABY OLIVE OIL DABUR JANMA GHUTTI

ORAL CARE RED TOOTHPASTE BINACA TOOTHBRUSH RED GEL BALSARA BABOOL TOOTHPASTE LAL DANT MANJAN MESWAK TOOTHPASTE PROMISE TOOTHPASTE

HOME CARE ODOMOS ODOPIC ODONIL SANI FRESH

FOODS REAL REAL ACTIV DABUR HONEY DABUR HOMMADE LEMONEEZ CAPSICO PEPPER SAUCE
Culinary

Pricing strategies

Dabur India Ltd has decided to cut Vatika shampoo prices by 20 per cent from next month besides launching the brand in one-rupee sachets to gain volumes. Babool has lost considerable share due to aggressive pricing by market leaders. What Dabur wants is to give Babool new pricing, improved packaging and fresh communication.”

Promotion strategies
Dabur’s promotional campaigns include leading Bollywood actors and sport stars. IN 2005-2006, key brand endorsements by celebrities included Amitabh Bachhan for chyawanprash and Rani Mukherjee for vatika hair oil and dabur anmol. The company also signed up Vivek Oberoi to endorse babool toothpaste and Dabur chyawanprash.

They plan to reach out to our consumers through not only the conventional methods of television and print advertisements but they also plan to do a lot of outdoor activities that will include stockists, doctors and the consumer himself. To strengthen its presence in the southern market, FMCG company Dabur India is all set to localise some of its products through regional names and advertising campaigns. The company is going the whole hog from re-christening its brands in local languages like Tamil to creating special products with a distinct local flavour and even roping in local celebrities as brand ambassadors. The idea being to make the brands more easily understood to the Tamil-speaking populace.

Distribution strategies

When Dabur India Ltd (DIL) announced its intention to acquire brands positioned on the herbal plank in the personal and healthcare segments in September last year, the announcement left many in the industry wondering. Where were brands that had perceived equity and potential for further growth? And if such brands were there in the fast moving consumer goods (FMCG) space, wouldn't they be already spoken for? What about ticklish issues such as brand valuation and deal size? These doubts lingered as no announcement came from the company for more than three months thereafter. And the general lack of acquisitions and mergers in the FMCG segment seemed to prove the sceptics rights — that though DIL was on the prowl, it would find acquisition a tricky business. But when the company finally announced the acquisition of three Balsara group companies in an all-cash deal last week for Rs 143 crore, industry watchers could not help nodding their approval. After all, the acquisition is not only synergistic with Dabur's present product mix, it also comes at a time when the company is trying to occupy each price point in the oral care market. The deal also allows DIL

to enter the high-growth household product area. According to industry estimates, the toothpaste market is estimated at Rs 1,900 crore, whereas the combined pie for utensil and toilet cleaners, mosquito repellents and air fresheners is at Rs 2,000 crore. So, in one stroke, the company has gained entry into the latter while consolidating its position in the oral care market, analysts say.

whether the company's appetite for acquisitions was sated, DIL is open to more acquisitions in areas where the company already operates — personal care, healthcare, foods and now household care. Dabur expects 10 per cent growth immediately in revenues after this acquisition. Balsara's businesses recorded sales of Rs 199.6 crore in 2003-04 with losses of about Rs 8 crore, Duggal says, adding that the three acquired companies will become DIL's subsidiaries. These could be merged into DIL at a later date. Pointing out the synergies with DIL, he says this acquisition brings not only a complementary brand portfolio but also economies of scale in marketing, sales and distribution. Balsara has three manufacturing sites at Kanpur, Silvassa and Baddi. Duggal says there are no plans to rationalise manpower at Balsara companies where the total headcount is 600. This acquisition brings DIL toothpaste brands Promise, Babool and Meswak; Odonil air freshener and Sanifresh toilet cleaner, Odopic dishwashing detergent and Odomos insect repellent. Terming the acquisition of Balsara's herbal oral care as a "good strategic fit," Duggal says the acquired brands will strengthen the company's existing oral care portfolio and provide DIL with regional saliency. While 45 per cent of Balsara's revenues come from the West and South of the country, DIL's strength lies in servicing the Northern and Eastern markets. Also, the manufacturing facilities of Balsara are expected to provide significant cost synergies and economies of scale to Dabur India.

But while this acquisition makes sense for Dabur, why would Balsara want to divest all its well-known brands? Duggal explains that this was necessitated as the brands needed large-scale investments that the

promoters of Balsara were unable to make. Despite several attempts, Balsara officials remained unavailable for comments. In addition to the oral care and household care businesses, Balsara also operates in the high-growth private label and herbal extracts and complexes businesses. The fate of these two businesses after DIL's acquisition also could not be ascertained. Company Dabur India Ltd mark a good impact in india of FMCG product the target is cover to all rural or urban area’s because 80% in India Supply there product is a chain FACTORY  DISTRUBITER  WOHESALLER RETAILER KIRANAWALA