ADAPTIVE MARKET LEADERSHIP

A REPORT ON
CavinKare Pvt Ltd: Serving Low Income Consumers

Submitted to: Submitted By:

Prof. S. Tagare Dhurjoti Chaudhuri

201601332

Section C
Q1. Explain the context facing CavinKare at inception and as it evolved.

A. The case is about how C. K. Ranganathan adapted to the market scenario where
big players like HUL captured the major mar share, and made innovative changes
in his company Cavinkare which helped him to grow his company from a small
scale firm to a multi-million dollar company. C. K. Ranganathan started off with
his family business after which he separated from the family business(Velvette
shampoos) and started his own company on a very small scale with only Rs 15000
as the starting capital. His entrepreneurial zeal and single-minded commitment to
business helped him in his pursuit.

Cavinkare grew with time because of the innovative ways taken to tap the
untapped market. CavinKare took a huge leap from turnover of Rs. 850 million in
1998-99 to Rs. 2640 million in 2003, even after having big sharks like P&G and
HUL in the market.

CavinKare increased the brand portfolio to numerous products. The products

rapidly captured market and became leaders.C.K. Ranganathan made it an
example how by tapping the bottom of the pyramid would be the smartest thing
to do in that time, which was preached by C.K. Prahlad , abig name in the business
world . He understood that most of the population of India lived in rural areas and
those untapped markets would help to generate revenues that would match or even
out-do that of their competitors.

Problems faced by CavinKare:

1. Educating the low Income group about the shampoo, who used normal soap.

2.Establish cost effective distribution in rural areas where a single village can have
a total population of 15-100.

3.Establishing cost effective SKUs which would be affordable to the low income
group

4.Matching the cost of Sachets and Bottles of shampoos(low volume vs bulk).

Q2.What choices and actions helped CavinKare succeed and why?

A. Innovation done by Cavin Kare to solve the problems.

1. To tap the rural market they came with affordabl packing of shampoos which
were one time use packing called Sachets, they succeeded in this because they
solved the problem of bulk affordability by the rural masses.

2. They increased the reach by tapping the Haats and melas as the distribution
channel against the retail outlets where the footfall is more than 1000 as against
15-100 people in a single village.

3. Established R&D department which formulated an alternative which was cost

effective and hence reduced the price and people could afford in bulk as the prices
for sachets and bottles were same by volume.

4. Another major innovation was outsourcing the manufacturing and packaging to

firms with a clause of exclusivity i.e. they cannot produce any product other than
chik shampoos or other products of CavinKare.

Conclusion:

From the case study and Ups and Downs in the path of success that CavinKare
faced, we can conclude some points which helped them to grow at healthy rate are:

Continuous engagement with customers to gain valuable insights.

Screening customer insights for their potential and translating them into
meaningful products.
Challenging all conventional ways while translating them into meaningful
products.
Constant Innovation in product.
Filling the gap by introducing new products.
In the case of problems, going back to the customer again to refine products
and re launching improved areas.