CavinKare success story started with the great idea of launching Chik Shampoo in sachets at a low

price of 50 paisa , and then going on to introduce Meera,Nyle,Spinz,Indica and Fairever , one by one
– all based on the understanding of consumer behaviour.

Market Analysis:

In 1983, when CavinKare decide to launch its first product – Chik shampoo – the shampoo market
had over 20 players with the HUL being the market leader with its Clinic Plus brand that was
positioned as a health shampoo. Multinational companies sold products in big bottles and not in
sachets and they sold only from fancy store. They did not look at the small Kirana stores, nor they
look at the rural market.

Consumer Research:

CavinKare found that many rural consumers were using bathing soap to wash their hair. The
company field force found the reasons- the rural consumer had not heard of soaps damaging hair,
and in any case, hair had been washed by soaps for generations. Interestingly the rural consumer
was aware that shampoos cleansed hair better, but the product was expensive at Rs-2 per sachet.
Given that India has a tropical climate round the year; women find it hard to maintain the softness
and shine of their hair. They often complain about the tangled hair. Based on these identified needs
and problems, Cavin Kare conceptualized the 50 paisa Chick shampoo.

The research and development team was entrusted with the task of finding a solution to this nagging
problem. It came up with a unique formula – Active Double Conditioners.

Targeting and Marketing

Chik Shampoo has targeted both girls and women in rural and semi-urban India.

It used innovative sachet packing and a sachet was priced at Re 1 and 50 paisa. When Chik entered
the market, Velvette Shampoo was being marketed aggressively by Godrej.

Brand Communication

The new product was launched with extensive communication targeted at the rural and semi-urban
masses. It showcased the possibility of soft and manageable hair. The girl in the commercial treated
her hair with Chik shampoo and untangled her hair with a single motion of running her fingers
through her hair. The advertisement communicated confidence and style along with ease in
managing hair. As a result, the communication cut across all social groups.
Sales Promotion

An incentive exchange scheme – “five sachets of any shampoo for a Chik shampoo sachet, free”-was
introduced. Later, it was altered. This exchange scheme was introduced to increase the patronage of
Chik. With this, consumers started asking only for Chik sachets and sales showed a considerable rise.

Expansion for growth

Today among the rural and semi urban population of India, chik is preferred as a daily shampoo.
Being the second largest selling shampoo. The brand has gained confidence of its consumers and
became a household name by catering to their continuous requirement and preference. The
company delighted customers with a range of 4 refreshing fragrances- chik black, chik jasmine, chik
egg and chik cool. Further the company expanded its market share with the introduction of bottles
sized at 60ml, 120ml, 250ml and 500ml. Its new variant chik anti- dandruff shampoo contains
climbazole and lemon extracts that act on dandruff and itching caused by damage.

Meera Herbal Powder

Shaw Wallace had introduced a herbal product, however it was marketed very poorly. Cavin Kare
introduced Meera herbal powder and topped the market by gaining 95% market share within
6months of launching

Spinz- The poor man’s perfume

Good perfumes came at a huge price and were beyond the means of ordinary people. So the
company came out with a 10rs Spinz pack.

Fairever

In 1977, the company saw a huge demand of fairness creams. However fair and lovely had a very
strong market presence. Research indicates that when a product is good, consumers do not shift to a
new brand. However the company went on to launch Fairever. It contains saffron which is
traditionally used to acquire a fair complexion.

Ruchi pickles

Food is a huge market. The company decided to make an entry into it and launched Ruchi pickles in
sachets. It became number one there too.

The new initiative

The overall market for shampoos in India is estimated to be at Rs 20 billion a year. The popular
segments where chik Satin has been positioned, commands are estimated 25% of this market.
According to CavinKare executives 75% of chik’s sales come from the rural market, while its
competitors in the industry sell only 52% of their shampoo brands in the rural markets. In the Indian
shampoo market, where sachet (7ml) format accounts for 75% of total sales, chik has been bringing
90% of its sales in this format. With new players and new marketing strategy the shampoo market
has become hyperactive and intensely competitive. As a leader in key southern markets the
company has decided to prove its acumen in the bottled shampoo segment. Affluent customers
comprise the target market and the competitors are HUL’s Clinic plus and sun silk brands. Currently
chik is being sold in sachets format positioned as an economy brand consumes largely in the rural
market. Entering the new market segment that chik is targeting requires changing the image as well.
Cavin kare’s executive director Ramesh Vishwanathan chik satin is not a premium or niche segment
product. It is slightly higher in the value chain.

For Discussion

1. What in your view are the key contributing factors to the success of Cavin Kare?
2. Is the company right in launching chik Satin- an upward extension ?Substantiate on your
answer by (i) profiling target customers and their expectations and
(ii) probable reactions of its current and potential consumers.