1

ROLL NO: - MBA-307-2K9

MARKETING RESEARCH AT DABUR LTD. Submitted in Partial Fulfillment of the requirement For the Award of Degree of M.B.A (IT & MARKETING) Under the Supervision of Mrs. Roopali Madan Lecturer (MBA)

YMCA UNIVERSITY OF SCIENCE AND TECHNOLOGY, FARIDABAD

Submitted By:Neeraj Kumar MBA-307-2K9

2

PREFACE

Research project is one of the most vital and active part for the life of management students. The basic idea behind this is to give the Research project to the student and make them acquainted with actual method and procedures. As a part of P.G. course, I completed my Research project on MARKETING RESEARCH . This project report covers the corporate area of marketing, as it is my field of interest and area of specialization. The specific industry chosen is the upcoming, dynamic herbal product industry. This industry can be further be segmented into herbal drugs and herbal cosmetics sectors. This is an industry, which has suddenly proved to be a major threat to the conventional companies in this segment and is giving major companies, doing prolific business a run for their money.

3

DECLARATION

I NEERAJ KUMAR student of Post Graduation in YMCA University of Science and Technology, Faridabad hereby declare that I have completed the project on MARKETING RESEARCH AT DABUR in the academic year 2010-2011. The information provided is true and original to the best of my knowledge.

(NEERAJ KUMAR)

In MBA Department . YMCA University of Science and Technology Faridabad. Roopali Madan Lect. for the award of degree of Master of Business Administration has worked under my supervision and guidance for his project titled “MARKETING RESEARCH”. I wish him all the best in all his future endeavours.4 CERTIFICATE This is to certify that NEERAJ KUMAR (MBA-307-2K9) Department of Management studies. The matter embodied in this report is original and authentic to the best of my knowledge.

5 PROJECT REPORT ON DABUR INDIA LIMITED [MARKETING] i .e e x .

NO 1 2 3 4 5 6 7 8 9 TITLE SYNOPSIS INTRODUCTION ASSUMPTIONS COMPANY INFORMATION STRATEGY CONCLUSION RECOMMENDATIONS BIBLIOGRAPHY METHODOLOGY PAGE NO 7 9 10 11 38 47 50 53 56 .6 TABLE OF CONTENTS S.

but Dabur on the . started their business. to rise up to the occasion. India wants and takes the necessary steps it can be the leader in the herbal export segment. For collection of data together with taking company information from various primary and secondary sources. is still in its nascent stage in India. Dabur has been family held business. A deep insight into the company.7 SYNOPSIS This project report covers and brings to light the marketing strategies of Dabur India Limited. It is a strange co-incidence that both the companies in question. with its inheritance of abundant natural herbs and the Ayurvedic and Unani system of medicine. though based on the age old practice of Ayurveda. with the production an sale of Ayurvedic medicines. If. Today Dabur is the market leader in Ayurvedic segment (45%). The company has some well defined marketing strategies which suit their needs and requirement. peoples perception about it was available though this. But it is growing by leaps and bounds every year. nearly a century ago. Herbal product industry. The demand for herbal products is increasing worldwide and this provides an opportunity for India. This is because of the growing awareness of people for natural products and with the general tendency to revert back to nature. 25 consumers were also interviewed regarding their attitudes about herbal products and about Dabur. While Dabur grew with time and became a company with highly diversified product portfolio.

Dabur which has set his eyes on becoming a FMCG and of achieving a turnover of Rs.8 recommendation of McKinsey and company gave up its control in the management and appointed outside officials. . 2000 crore by the next century has brought in several changes.

The sudden inclination for herbal products due to increasing consumer awareness has suddenly brought this industry in the limelight. The objective of my study is to report and analyze the herbal product related marketing strategies of Dabur . This project report covers the corporate area of marketing. It is also required that the project should be done highlighting the area of specialization of the student. dynamic herbal product industry. as it is my field of interest and area of specialization. New companies offering ‘something new and extra’ to the consumers are mushrooming every day. As a prerequisite the companies should be registered in Delhi Stock Exchange and should have a minimum operational period of five year.9 INTRODUCTION This Project Report forms an integral part of the Post Graduate Diploma in marketing management. As such the industry provides an inexhaustible opportunity to study and analyse the marketing strategies of the different companies. . doing prolific business a run for their money. This industry can be further be segmented into herbal drugs and herbal cosmetics sectors. The herbal product industry is characterized by changes. which are brought directly in relation to customer preferences and awareness. The specific industry chosen is the upcoming. which has suddenly proved to be a major threat to the conventional companies in this segment and is giving major companies. This is an industry.

Same is the case with the information gathered through the consumer questionnaire. The information given by the company officials is taken as correct at face value. which are as follows: I. III.10 ASSUMPTIONS The analysis and the reporting of the information gathered from these two companies would be based on certain assumptions. promotion and other aspects is not disclosed suitably. This is also to a great extent the basis of any conclusion. . The information from the secondary sources is accepted to be correct and authentic. II. The perception of the consumers regarding the product regarding the product quality.

Dabur India Limited. McKinsey & Co. The company. 1997 to look into the health of the company and to come up with suggestions which will help turn Dabur into one of the largest fast moving consumer goods company of the country. Breaking over a century of tradition. which has always shown a signs of a visionary had set its rights on becoming the country’s largest home grown FMCG Company. has identified the areas of improvement and suggested initiatives required in them. This remained true till November 2. Over the years the company passed down amongst the descendents of Dr. . it needs to be the best in all areas and have to be benchmarked with the best industry practices. 1998. In April. old Dabur India reinvested itself. The company realized that to be the industry leader. SK Burman and remained a closely held family business. As such the company appointed McKinsey and Co. Neenu Khanna.11 DABUR INDIA LTD. SK Burman as a small mail order business for Ayurvedic medicines. Dabur at this particular instance is going through a period of transition. was started in 1884 by Dr. This transformation is going to result in the emergence of the largest Indian fast moving consumer goods Company. executive powers of running the company were handed over to an outsider appointed as CEO Mr. COMPANY INFORMATION The company. That day the 114 yr. ‘Pudin Hara’ was the first medicine to be mail ordered.

C. Burman Sales Health & Marketing family Operations Personnel and HR quality Assurance purchase packaging development diversification care product Ayurvedic spl. The existing and proposed organization structure of the company as follows: ORGANISATION STRUCTURE (EXISTING) CHAIRMAN Managing Director Managing director G. All business units’ heads and functional heads will report to the CEO. Foods and cosmetics.C.12 The company has decided to leave the day to day management in the hands of professionals. Burman V. The promoters (the Burman family) will withdraw themselves from the routine functions and will concentrate on giving strategic direction to the company. The major step in this direction is the decision to appoint a CEO to head the company management. Pharmaceuticals Oncology R&D IT. Director Veterinary Director Overseas .

13 Bulk Drug and Natural Gums operations Chemicals Finance Exports Corporate Communicati on ORGANISATION STRUCTURE (PROPOSED) Board of Directors Management Committee CEO BUSINESS UNITS HEADS Health care Personal Care Ayurvedic Spl. Ayurvedic Veterinary Pharmaceutical FUNCTIONAL HEADS Operations supply Chain Purchase IT HR .

Dabur India Limited SBUs Health Care Personal Care Foods Global Oncology Ayurvedic Specialties .14 Oncology Food Packaging Dev. R&D Quality Assurance Finance & Accounts Corporate Comm.

Dabur Overseas Ltd. Dabur Nepal Pvt.15 Dabur Group Cos. Dabur Egypt Ltd. Dabon International Excelcia Foods Ltd. Ltd. Joint Venture Coufiteria de General India Ltd. Dabur India Limited Dabur Finance Ltd. . Dabur International Ltd.

The joint ventures with Agrolimen of Spain. in a market that spans the sevencontinents: Middle East. manufacturer confectioneries Dabur International Limited. Dabur has collaborated with Osem Israel to manufacturer bakery specialties and other food products under the name of Excelcia Food Pvt. Russia and CIS. North Africa. Dabur India Ltd.. is poised to become the true Indian multinational.16 The biggest Indian FMCG Company. The company today is a multi-location enterprise employing a dedicated task force of over 5000 people. Central and South America. New York. East and West Europe. Ltd. Dabur has 12 manufacturing plants in India. Dabur also has a manufacturing license in Middle East. South East Asia (Japan. Dabur Exports. Nepal and Egypt. General De Confiteria India Limited. Besides this Dabur has collaborated with leaders in their fields to set up joint ventures in India. Singapore. Moscow and its products are now available in over fifty countries. the joint ventures with Bongrain of France manufactures specialty cheese. London. USA and Canada. Malaysia. Thailand). . It has a transnational network of 19 offices servicing both sales and marketing offices have been set up in Dabur. Dabur products have found appreciation across the globe. Bangladesh & Sri Lanka.

Today. Russia and the Far East also offer tremendous potential. Egypt.17 Dabur Overseas Offices: London. USA. Activities Dabur products span the seven continents and over 50 countries. Though Dabur starting its exports way back in the early 1900s. Kenya Production Base Overseas: United Kingdom (Work in progress). it has also helped in making Dabur a household brand in that region. the . Presently. Moscow & Kathmandu. Dabur set up its office and warehouse in UK to service this burgeoning market. Dabur Nepal Private Limited is yet another subsidiary that has done exceedingly well since its inception. Nepal & UAE (franchisee under technology transfer agreement). it gathered momentum in the seventies with the Middle East market. Dabur also has a franchisee for manufacturing its products in the Middle East. the demand for Dabur products has seen a steady increase in the last one decade. Yet another major market for Dabur is Europe. Dabur Amla Hair Oil is not only the largest hair oil brand. Africa. Apart from this. Dabur Representatives Overseas: Dubai. With increasing awareness about the natural goodness of herbal products. Dabur Egypt Limited is a subsidiary of Dabur and was set up to manufacture and market Dabur products in Egypt and other parts of Africa.

From a closely held conservative company. Dabur India Ltd. The company has set up an apiculture centre to develop Honeybee Products in Nepal for exports. It has also set up a greenhouse for developing saplings of medicinal plants. Hair Oils and Honey. • • • • Induction of more professionals streamlining of supply chain Setting up a centralized material procurement cell and Updating its management process will take Dabur to a new era of faster growth. Is all set to become a . The changed focus is not only on strategic front but also on operational issues.18 company is one of the largest exporters of Nepal. The turnover which in 1993-94 a mere 61602 lakhs rose to 81136 lakhs in 1997-98. Dabur Nepal manufactures an stounding variety of Dabur products like Fruit Juices. The turnover of Dabur India Ltd. Dabur Nepal is the only manufacturing base for Real Fruit Juices. In fact. Each division at Dabur functions as a SBU (Strategic Business Unit) where the head is responsible for the cost and revenue and ultimately the profit of the unit. which accounts for 80% of the group’s total turnover has steadily grown between 1992-93 and 1996-97 by 25-26%. Digestives. As per McKinsey’s suggestions several changes are being brought in the company.. Tooth powders. The various companies of the Dabur group are as below.

The mission is to offer superior quality nature based products. Dabur has set itself a new mission.19 modern FMCG company not shy of taking the competition head-on. health care and processing foods. As such the mission statement of the country is as follows. . that offer value for money and contribute in improving the quality of consumer’s lifestyle in the areas of personal care. As it enters a new millennium.

Together with this the company has set itself the target of being best in the industry and plans to achieve a turnover of Rs. . There is a sense of urgency in all actions which suggests a new dynamism.20 MISSION: To fully export our core competencies in the field of Ayurvedic and Herbal products by identifying the consumer needs and aiming for full consumer satisfaction. The company is at present bringing in major changes which have remarkably altered their marketing mix strategies. All of them have been discussed in the following pages. 20 million by the year 2003.

• Foods Division: The of the youngest division of the company markets a range of services. anti-flatulence and laxatives. fruit juices with nothing-artificial non-preservative. • Family Products Division: Markets a range of beauty is a product. restoratives. digestive. tonics and mother and child care products. These included Herbal immune modulators. . honey and rosewater are market leaders with nearly 70% market share in their respective categories. These were as below: • Healthcare Products Division: Marketed a range of OTC Healthcare products based on Ayurveda.21 PRODUCT PRODUCT RANGE: Till a year and halfback Dabur had over 500 products covering around 10 categories in all. herbal hair care products and select goods. Hair oils. no colour and no flavourer added. Real fruit juices gave Indian consumer for the first time. Ethically promoted these include classical Ayurvedic medicines as well as products developed through in-house R&D. ethnic pastes and foods. red tooth powder. toiletries. Some of its products had over 65% market share in their respective categories. This had a range of over 400 medicines. • Ayurvedic specialties: Based on the ancient holistic system of healthcare.

The product line included a range of generic and branded formulations in wide-therapeutic segments. Dubai and Egypt. gum kanaya. anti migraine therapy and radio opaque rays. cooking oils and other items. Dubai and Kenya service the overseas markets. These include soaps and shampoos. The products for global markets are manufactured in Nepal. tamarind-based gums and psyllium husk. bulk natural compounds and intermediaries.22 • Cosmetics: Marketed range of beauty therapies under the brand name Samara Sanskrit for “to meet”. • Product for global markets: Dabur products are available in over 50 countries. • Ayurvedic Veterinary: This division dealt exclusively in Animal healthcare. These products are manufactured according to traditional Ayurvedic formulation. • Bulk Drugs & Chemicals: Dabur manufactured synthetic and semi synthetic bulk pharmaceutical substances. • Natural Gums: This division manufactured and processed guar gums. . shaving creams. This range of hair and skin care products is a fusion of chemical Indian Ayurvedic recipes and contemporary cosmetology. the division produced a range of industrial and food grade natural gums as per exacting customer specification. Market safe and non-toxic herbal veterinary products for poultry large and companion animals. Isolation of pure natural compounds and customs synthesis was focus areas. • Pharmaceutical Division: This division has a major presence in anti cancer products and focuses on niche markets like anti-thrombolytic. Company personnel in London.

lines that gave the company a very diverse portfolio. The major areas of company’s business activity today comprises the following: A. The turnover from the division is expected it rise from the current RS. On the recommendation of McKinsey and Co. Over the years.. Guided by the philosophy of “Doing Fewer things but doing them better”. Although these new businesses have been profitable. This rationalization of product portfolio will make the company a true FMCG. Dabur’s products are positioned at the varied socio-economic cross section. has decided to restructure its product portfolio.. The major products lines and brands of this division are :- . McKinsey also identified 5 pillars of strength Product lines which will give maximum benefits to the company. As such the revised product portfolio has 5 product lines. some are unrelated to the core competence .23 The above mentioned product lines were there at Dabur till 1½ years back. 350 crore to about RS. Dabur had added many new product. the company plans to concentrate on 1215 major brands and add a few new products under these brands each year. 430 crore next year growth in this division is attributed to come largely from eight key brands. These include eight brands having market shares of over 65%. thus providing products for literally every Indian. Personal care products: This division accounts for 40 percent of Dabur’s total sales and is the largest business in terms of turnover. The company has decided to hive off such unrelated businesses to separate companies under the Dabur group. Some previously marketed brands of this category will be dropped and others will be added on. Dabur India Ltd.that of manufacturing herbal or Ayurvedic based medicines.

Henna. Foods . Some major brands are Anmol coconut oil.This division accounts for 36% of the total turnover of Dabur India Ltd. This business unit has some of the best known brands of • • • • B. Dabur Amla Hair Oil . II. Vatika Shampoo . . Gulabari . Hair care: .e Azam .Dabur introduced premium natural shampoo under the brand name ‘Vatika’ in 1997. Shikakai. Henna. Amla hair oil. and green almonds. Branded Vatika Henna cream conditioning shampoo. which Dabur acquired few years back.rose water kewra water Healthcare products . III. it provides natural conditioning and nourishment without harmful chemicals. 100 crore (RS 1000 million).a sweet rose flavored syrup.including Dabur honey Sharbath . Ayurved based hair oil and shampoos. Vatika hair oil and shampoo. The product is confluence of the best of natural ingredients with modern day care. Vatika shampoo has received tremendous response since its launch and is all set to be one of the leading brands in Dabur range of products.This grand old product of Dabur has a turnover in excess of RS. The shampoo has as its main ingredients .These include herbal. Oral Care: Red tooth powder and the Binaca range.24 I.

two new brands will be added to the portfolio.25 Dabur. . only 12 will be in the limelight. III. S. Mother & child care . Herbal Tonics . major product lines are I. The Hajmola candy has tamarind pulp. While Restora brand helps in restoring as well as building up the digestive system of the body.including Chyawanprash and Restora. Pudin Hara is claimedly a natural stomach remedy. Pudin Hara. Its Hajmola brand which has both plain and candy variations as well as Pudin Hara and Hingoli have a strong Ayurvedic essence to them. Hajmola Tablets and Hajmola Candy. which stimulates the digestive glands to secrete more digestive juices.Hingoli. From all the 16 brands of this division. Burman. Dabur Chyawanprash is a herbal tonic for general well being.this include Janam Gaunt All Tail Gripe Water Digestives .K. This division is also the oldest division as Pudin Hara was one of the three original formulations marketed by Dr. the three brands hold a major chunk of the herbal digestive market of which Dabur has an overwhelming chunk. Together. while Hingoli has added its asafetida blend to the after meal digestive market. • • • II. Dabur is the largest digestive brand in India. free of side effects. thanks to its Ayurvedic competence.

Introduced in late sixties in tin packs. and focus on their growth. This year the strategy of Dabur. Dabur Chyawanprash is one of the leading brands in Dabur’s product portfolio. Dabur Chyawanprash is available in two variants . These product are divided in 16 categories.Ashtavarg and special. But this will be more of a test market lab. 100 crores in terms of turnover in last financial year.Arishta II. It has a range of over 400 generic and proprietary Ayurvedic medicines in its portfolio. regarding this product range is to pick on 7 promising products of its portfolio of 401. the brands has come a long way to be the market leader with market share above 70%. This division includes ethically produced traditional Ayurvedic medicines sold ethically through Ayurvedic practitioners. Ras Rasayana . It is the third brand after Dabur Lal Dant Manjan and Dabur Amla hair oil to reach the coveted mark of RS. The product is exported to more than 25 countries worldwide. Dabur Chyawanprash not only builds immunity against cold and infections but also improves the blood supply to a person’s lungs thus providing beneficial for smokes and asthmatic patients. The major product lines are: I. Asav . CAyurvedic Specialties: This is a 60 crore division which grew by 20 per cent last year.26 A herbal immunomodulator.

Real Fruit Juices. Dabur’s Homemade brand of ethnic pastes (ginger. has been well received by its target segment. Proprietary Medicines D. It handles a range of ethnic Indian food products and a range of 33 skin care and Hair Care products sold under the brand name Samara. hair wash and cleansers. Capsico chilli sauces. . garlic. Samara beauty therapies which includes of skin nourishers and toners. The brand. Nutrasalt low sodium salt. Moisturizers and sun protectors. & green chilli) which was launched just last year has a turnover of 3. Dabur has identified this brand as one of the pillars for growth over the next millennium.5 crore and has successfully made a place in today’s urban homes. Major product lines are I. cleansers. II. which was brought into the market after much research on the psychographic profile of today’s urban women. Foods & Cosmetic: This is the youngest business unit of Dabur. Home made Ethnic cloaking pastes and sauces. onion. face masks hair oils and vitalizers. Churnas III. III.27 I. IV. Medicated Oils II. V.

besides and additional capital investment of Rs. Dabur is the only second company in the world to manufacture these drugs. Dabur is also concentrating on few other businesses. which has been recognized. as the pillar of growth for the company is that of oncological products.both derived from Asian Yew Tree. Over the next three years. Oncology: The last product line. 20 crore. Some . Ltd. 60 crore in advertising in foods. all a result of the efforts at Dabur Research Foundation.28 Dabur already has a well-etched out strategy for its foods division. Dabur’s joint venture with Agrolimen of Spain is manufacturing Bubble gums under the brand name of Boomer and candies by the name of Bonkers. Dabur will spend close to Rs. DRF developed the unique Eco-friendly process for extraction of these drugs from leaves of the tree. Major products are intanel (paelitanel) and Eotel (Docetanel) .. Dabur’s joint venture with Osem of Israel has stated marketing cream filled crisps under the brand name of Creamwich. Excelcia Foods Pvt. Dabur has diversified in confectioneries and foods in collaboration with leading international companies. On the anvil: some more pastes and a range of other culinary products. E. This business of Dabur has a huge future potential in India and abroad. Dabur is the only company in India to manufacture anti-cancer drugs. This product line at present has a range of 10 products. Besides the above 5 product lines.

delivering consumer perceptible and demonstrable benefits. Bongrain of France. Besides this Dabur also has 3rd party manufacturing for some of its products. several new products in the form of ethnic paste have been developed. All this has been a result of the efforts of Dabur Research Foundation. Baddi (H. A new low sodium salt combination which has been recommended as a cooking salt for health conscious people has been developed. Research and Development Research and Development of the company continues to support the company’s business by developing innovative products and process to cater to consumer needs and preferences. Research and Development activities in health care and other products were aimed at developing value added products. Major factories of Dabur are located at Shahibabad. A new formulation for their protective drugs has been developed which has shown efficacies against hepatitis virus A. A range of new generation products with improved financial and sensing properties was developed. New variants of fruit juice namely tomato and mixed juice have been developed. is the partner with Dabur for another JV set up for manufacture and sale of specialty cheese and other dairy products. one of the world’s biggest cheese companies. C & E. an independent organization. which has over 125 scientists working full time on . DRF. Daburgram (Bihar) and Nasndrapur (Bengal).P)Maksi (KP).29 new products are ready to be introduced in the market shortly.

is a premier research organization recognized by Department of Scientific and Industrial Research. incorporated in 1979. The Foundation is at the forefront of oncology research. Situated at Sahibabad. without harming the source tree. DRF is a independent profit center of Dabur and is another major strength of Dabur. The Research and Development center has successfully completed a project on Ayurveda on CD-ROM. . DRF was the first organization in the world to develop a process for extraction of paclitaxel. DRF is today a known name for its pathbreaking research in the field of healthcare and personal care. Herbal health care is an area where Dabur Research Foundation has made immense contribution by doing research and development work using modern pharmaceutical protocols. Ayurvedic herbs and products. Government of India. Dabur Research Foundation (DRF). The foundation has been doing clinical trials on traditional herbal drugs to validate the claims made in age-old scriptures of Ayurveda. This is a comprehensive multimedia CD which gives information of Ayurveda. and is in the process of developing many new molecules to fight this dreaded disease. philosophy. In fact.30 developing and scientific validation of products through clinical trails. expert system related to Doshas. history. guidance to daily healthy living styles in a very user friendly interactive way. The foundation has also done the standardization of around 200 herbal ingredients using marker compounds. The process is now followed worldwide. a drug for cancer.

has substantially reduced per unit energy consumption and improved yields. developing safe. Honey grading facilities at Baddi have been modernized as a strategic initiative to deliver the goodness of honey to the consumer. apart from underwriting assured quality of the products. Special Hair Oil. Expansion/Modernization/Diversification A new manufacturing unit with high degree of automation came into operation in Baddi (HP) during 1998 to produce Dabur’s well known brands Chyawanprash. To become the leading research organization of the country. Janma Ghunti Ayurvedic oils and Asav-Arishtas. effective. Samara range of herbal skin and hair care products. The environment control system at this plant and GMP standards are world class. . This. consumer friendly health care products. a modern unit has been constructed to produce a range of softgel products. To complete the expansion plans at Baddi for the branded products. DRF’s R&D thrust is towards the development of new formulations with improved levels of efficacy and safety.31 DRF has also developed some of the well-known personal care products like Vatika Hair Oil and Shampoo.

32 The bulk pharmaceutical compounds manufacturing facilities at Kalyani (WB) became fully operational during 1998 under review for producing oncology and non-oncology products for both national and international market. . These bottles will be used for packing of hair oils. A new corporate office at Sahibabad is at an advance stage of finalization and will be operational by the end of this financial year. The fruit and fruit processing facility at Katni and Sahibabad have been further modernized to allow high volume hygienic process of natural materials. The project is likely to commence its commercial production during the current year. This process allows mechanical handling throughout the process using equipment used in the best European factories. A modern air-conditioned packing line has been commissioned at Sahibabad for Dabur’s hommade brands of ethnic pastes and lime juices. A new PET project to manufacture PET bottles is being set up at Sahibabad. A new state of the art plant for manufacturing of hair oils at Sahibabad started commercial production during the year 1997-98.

The products from its Health care products division are alone available in 4.000 outlets.25.300.33 PRODUCT PLACEMENT STRATEGY Distribution is said to be one of the major strengths of the company. has a transnational network of more than 5500 distributors.50. which range from grocery stores to chemists to confections. Dabur India Ltd.000 outlets which include paan shops. 21 sales office and 19 branch offices service these.Dabur Branch Warehouse or C & F agent . This strong network ensures availability of Dabur products in more the 1. The distribution set up for Dabur is as follows: Factory . roadside kiosks and also large department shops besides the smaller general merchants. Company people directly cover these outlets.000 retail outlets in India. One of the product -Hajmola candy is available in 1.

which were. . Feedback from the company’s sales department would be discussed with its marketing cell and the branch heads would request for fresh stocks based on estimates. This. But unfortunately there had been some loopholes.34 Stockist Wholesaler Retailer Consumer Thus it can be seen that Dabur has a significant coverage of the market. part statistical and part out of gut feel. There forecasts were many-a-times inadequate and often lead to stock out or inventory pile ups. The forecasts were made on a historical basis on statistics available.from the buying of raw material to the selling of finished goods to the retailers. Based on this the product placement should be one of Dabur’s greatest strength. led to huge inventory pile-ups. For instance demand forecasting was done on a annual basis. at times. Firstly there were shortcoming in supply chain management .

Dabur’s system of accepting payments from its stockists was also very elaborate with vouchers etc. where the projections for one month are fixed. One. Firstly Dabur has shed the process of making annual forecasts and is fast moving towards a mode of rolling three monthly forecasts. this was the most critical aspect of business as it has 3 major benefits. keep inventories down. have the right stock. A branch took six days to process an order. the godowns did not have the right stock since the goods used to be sent by truck. McKinsey accordingly has given suggestions to Dabur to improve its supply chain and procurement processes. Dabur realized that there is something wrong in its supply chain-from buying of raw materials to the selling of the finished goods to the retailer. This forecasting model is based on the current market needs rather than historical performance of the product . It was with the intention of fixing its internal processes that Dabur hired Mckinsey and Company in 1997. Two. Very often. do all this with lower operational costs. This delayed its payment cycle and also affected the cash flows for the company. at the right place at the right time.35 Second problem was with logistics and procedures. at times the goods would be at the truckers godowns for a week. For a growing FMCG. Third. It then took almost the same number of days to obtain the goods from its godowns. and the truckers wanted full truck loads before they started rolling.

. the forecast now has to include specifics based on the three different sizes of the products. The company has been successful in these aspect brands to better systems and information technology. This replenishment model works on the fundamental principal that inventory should be avoided at all costs. Based on the 3 month rolling fore model.g. when forecasting was brand specific now forecasting is done on the basis of stock keeping units e. Besides all the above measures of supply chain improvement. If earlier the off-take of a certain volume of Dabur’s Chyawanprash was predicted. how goods should more from factories to warehouses to the branches. the company now insists its dealers to pay by checks. Simultaneously. the company has kicked off other initiatives like improving the collections from its dealers. Dabur will now plan delivery along geographical routes. Moreover. Dabur has also tried to reduce its inventory level. The company’s sales personnel are encourages collecting orders from stockists along pre-selected routes and Dabur sends suppliers along these routes. and the finished goods inventory is down to 40 days from 52 days.in other words. unlike in the past. which accurately predicts how much the company’s factory should produce. These days. route planning for its trucks. it is hot on what is called “Planned Journey Period” planning . which had earlier resulted into high working capital requirements. Unlike earlier. Dabur even pay its truckers . when Dabur used a complicated system of invoices to recover dues.36 and hence chances of error have been reduced.

a central procurement planing cell has been created comprising of six category managers to keep takes on the organization of raw materials. .37 5% over its earlier rates so that they carry only the company’s goods and therefore reduce idle time in wailing for whole truckloads. Also on the procurements side. packing materials and outsourcing of certain products.

opportunity to fix the price at a level. Pricing really becomes the key to the revenue of the business such is the case with Dabur. which gives suitable profits. Major factors affecting Dabur’s pricing policy are: I.38 PRICING STRATEGY Pricing is undoubtedly one of the most important decision areas of marketing. Dabur as a brand name is well reputed and readily accepted in the market. hingoli were marketed with the objectives of capturing a sizeable share of the market and so were priced towards the lower end of the scale. When Dabur marketed Vatika shampoo the product was meant for the middle classes and was moderately . Though some of the products of Dabur have been leading brands in their segments over the years. This gives to the company. Corporate and Marketing objectives: Whether the product is marketed with the initial objectives of capturing maximum market share or earning maximum profits. the company wants to communicate to the consumers that the product it is marketing is for the premium segment it will adopt a policy of high prices. This strategy has secured its purpose because today Dabur is the market leader in digestive candy segment. The main strength of Dabur’s products besides their quality is the brand name. As the sales volume in itself is dependent in price. still others are upcoming brands trying to make their pressure. Price and sales volume together decide the revenue of any business. Image sought by the firm through pricing: of through pricing. Dabur’s product like Hajmola candy. II.

39

priced. But when Dabur honeys and Real fruit juices were marketed, they were targeted at the premium segment and were relatively high priced.
III.

Costs of manufacturing & Marketing: Sometimes the costs that a company incurs in manufacturing and marketing a product also get reflected in the price. Four years ago, when Dabur launched Vatika Hair oil, it was the first coconut oil to have other ingredients beneficial for hair. A lot of research work had done into it and to have the product readily accepted it was heavily advertised. All this resulted in raising the MRP of the product.

IV.

Competitors pricing policy: often when in a segment there is much competition to the reckoned with, the prices of the competitors for similar products have to be kept in mind before deciding on the price for a product. In such category fall the Dabur Amla hair oil, Anmol coconut oil and Dabur Chyawanprash.

The pricing policy adopted by Dabur India limited is cost based pricing where the total cost incurred in the manufacturing process of a product plays a significant part in deciding the price of the product. The approach used in cost - based pricing, at Dabur is Mark-up pricing. The major elements in this policy are: Fixed Costs: These results from the expenses on men and machinery e.g., the wages and salaries paid, the annual changes of running a machine etc. These expenses remain fixed with the volume of production.

40

Variable Costs: These expenses vary with the volume of production. They are a result of the raw materials used, the processes and technology employed, the sales tax or the excise duty accused in course of production of a particular product. Mark-up: This is the margin, which is added to the above-mentioned costs before arising at the price of a product. This mark-up is what finally results into a profit for the company. Mark-up is a percentage of the total fixed and variable costs. Depending upon the type of product, its saleability, the target segment, the competitor’s price, the mark-up may be anything between 50-150% of the total costs. Since Dabur’s products a mostly Ayurvedic or herbal, the cost of the raw materials constitutes the chunk of the total costs. The costs of raw material form a part of the variable costs and differ from the variable costs and is different from products to product. Most of Dabur’s products are affordable i.e.; they are priced towards the lower or moderately high end of the scale. Dabur very well knows where it can change a premium and where it cannot. This is why; Dabur has made its presence in most of the homes of India and is steadily doing so abroad.

41

PROMOTIONAL STRATEGY
Dabur, like an upcoming FMCG company realizes the importance of advertising in the marketing of its product. Like a true visionary Dabur from time to time, introduced as well as changed some of its campaigns (for key products) to bring them according to the changing market scenario. In all its advertising is handled by 8 agencies. Campaign for digestive: Hajmola, Hajmola Candy, and Pudin Hara are done by Hindustan Thompson Associates (HTA). Pudin Hara has been identified as one of the core brands of Dabur by McKinsey and HTA is going to release a new campaign for it shortly. Advertising for digestions is through all the media - T.V, newspapers and magazines. Campaign for Dabur Amla Hair Oil: This account has been looked after by Ogilvy & Mather over the years. This grand old product of Dabur has once again adorned a new face for advertising. Known for celebrity advertising, this product is now promoted by Karishma Kapoor. Some of the leading ladies of the film industry who have endorsed this product are Jayapradha, Sridevi, Juhi Chawla. Campaign for Vatika hair oil & Shampoo: Advertising for Vatika hair oil which was introduced 4 years back and Vatika Shampoo which was introduced a year back has been looked after by Mudra. Another product which is campaigned for by Mudra is Red tooth powder. While Vatika hair oil and shampoo is advertised both in print and electronic media, advertising in print media is more common for red tooth power. Also, for this, magazines prevalent in small cities (in vernacular language) are more

Campaign for Dabur Chywanprash: Over the years the advertising campaign for Dabur Chyawanprash has been handled by Response. Dabur Honey.it does not want any two of its campaigns to be similar. All the advertising agencies hired by Dabur are responsible for creative execution and media planning for their advertisements. an advertising agency of Calcutta. The reason why Dabur does not use one or two agencies to advertise for its products is simple .42 often used. Still other products like Hajmola pills and candies as well as Hingoli have a humorous aspect in their campaign to catch the imagination of the consumers. media buying is . Real Fruit Juice: The agency responsible for handling the campaigns for the food’s division is enterprise Venus also both print and electronic media are used for this product range. While Pudin Hara uses a common man to endorse the product celebrity appeal is used for Dabur amla hair oil. While the agencies look after the creative aspect and media planning and scheduling. Both print and electronic media are used for campaigns for Dabur Chywanprash. Campaign for Dabur Honey. their goodness and benefits to human beings are clearly explained in the ads of these products. Vatika Shampoo. A vast number of appeals can be seen to be there in Dabur’s advertisements. This is because the target segment of this product is in small cities and towns. Chyawanprash. and Real Fruit Juice extensive information about the constituents used.

e.Adbur. Radio) are bought in a consolidated manner by this agency. Whenever a product has to be advertised. II. These may be prime time slots.) and media time (in case of electronic media like TV. Here a advertising budget is made which is comparable to the budgets of the competitors in that segment. dabur decides the time and space and the product is advertised accordingly. which have been in the market for long i. Some of the methods used advertising appropriationing are : I. Likewise future advertising outlays are decided. full page or half page bookings. Competition based: This method is used is used for deciding outlays for products which are in highly competitive segment like Real Fruit Juices. A regression analysis done based on historical data in which a comparison of past expenditure and sale is done. Historical basis: Dabur uses this method for products. digestive candies etc. the quantum of funds required to attain the specified advertising goals is decided on a function-to-basis. III. Dabur is a firm believer in advertising and benefits and as such has a huge advertising outlay. Media space (in case of print newspapers.43 done by the in-home agency . Amla Hair Oil. Task based : According to this method. But the manner in which the advertising budget is appropriationed differs from product to product and depends upon what the advertising and ultimately the marketing objectives of the company regarding those products are. magazines etc. Chyawanprash. ..

Consumer schemes are also undertaken and they are usually need based. the growth of herbal product industry in India has been remarkable. there is always some object to be achieved through them which can vary from increasing the number of dealers or giving incentives to dealers to stock Dabur’s product more. which is responsible for the Public Relations of the company. to increase the sale of a product.. CONCLUSION Being a treasure trove of rare medicinal plants and the birthplace of three therapeutic systems. stickers and so on.e. According to a survey. communication . which not only helps employees communicate effectively with each other but also helps in dissemination of news and information. Dabur also has various sales promotion techniques. danglers. In today’s changing times. Besides this. the current estimate of the total herbal market is Rs. Dabur has a corporate communication department. the company brings out ‘Contact’ a quality newsletter.whether it is internal or external forms an integral part of an organization. 2500 crores which is growing at a rate of 25 to 30% per annum. Many companies are there . Most of them are the POP materials like dispenses for candies etc. It is a two-way communication channel between employees due to its interactive nature. These schemes are tactical in nature i. These schemes may proceed the introduction of a new product. build an image for the company etc. to sponsor an event. Also from time to time various Dealer promotion schemes are undertaken.44 Besides campaigning in print and electronic media.

. keeping in view the challenge of the global market. Fast Moving Consumer Goods (FMCG) industry is one of the most competitive and fast growing industry in India. focusing on core competency. manufacturing of herbal products is the only business of Baidyanath. With the growing awareness and realization among people for herbal products. Based on their finding and suggestions the company is poised for transformation. The major weaknesses of the company as identified by McKinsey are: • • • • Family run business lacking professional managers. Dabur. changing competitive world and meeting the demand of demanding customers. felt the need for appointing an international consultant to study and identify areas of improvement in various aspects of company’s business to improve cost effectiveness and to diagnose organizational and strategic aspects. Improper and unscientific methods of demand forecasting. in 1997 for devising its strategic. maximizing team performance. The company appointed McKinsey & Co. Highly diversified product portfolio with no or little synergy. Poor raw material procurement planning.45 in this highly competitive field. these companies claim to be marketing not just a product but a whole civilisation.. While for Dabur herbal products business forms the major activity (Dabur is a highly diversified company). organizational and operational guidelines.

based on McKinsey’s recommendations. Complex system of payment to dealers and stockists. It is a positive sign that the company. Dabur’s brand was known but nothing much about the company was known. The first step in this area is to polish up its operational methods and to give up on redundant practices. Dabur has initiated the process of adhering to new and better systems and styles of management. The company is in the process of recruiting a professional CEO from outside the company to take on the day to day responsibilities of management. Based on the suggestions of McKinsey. The company has also decided to exit from non-core areas and has already appointed consultants to hive off these business/brands. Lack of co-ordination between central supply cell. Long cash-flow cycle and huge working capital requirement. Firstly Dabur has identified core areas of competence and has decided to focus on these business to maximize growth in the national and intentional market through effective strategies. The focus is .46 • • • • • Huge inventory pile up or stock outs. Dabur’s future growth will be guided by the theme “DOING FEWER THINGS BUT DOING THEM BETTER”. has taken the initiative to change and alter its weak points. Dabur is also changing from a promoter driven company to a professionally managed company. branches and warehouses.

. Today also. Some of them are: • • • • • Undertaking a mammoth task of transforming a more than 100-year-old company. improving distribution efficiencies. Giving up the family hold on a 800 crore group. right mix of advertising. Selling out non-core business. strong R&D backup. Ltd. we hitherto have a world class company. Shree Baidyanath Ayurveda Bhawan Pvt.well recognized and established brand. The major strength of Dabur in this rapidly growing herbal industry is that they were pioneers in this field. reduction in manufacturing costs and improvement in quality. Dabur is putting up a new thrust to solve its loopholes and many of its initiatives are commendable. It is a company whose management still lies among the family . Introduction of a series of operational and logistical systems into the business. Appointing of an outside consultancy to look into its problems. improving sales force. is today at a stage where Dabur was few years back. improving purchasing capabilities.47 now on supply chain management. All these combined with the inherent strength Dabur has. the name DABUR is a household name and most of the consumers have high regard for the company’s products and the products are synonymous with quality and effectively. efficient utilization of corporate resources etc. promotion and product packaging. marketing inputs.

It has 2 joint managing directors who look after the operations of its 5 offices spread countrywide. It is the only herbal Product Company to have a range of over 700 product. But with the largest range of Ayurvedic products and with ages of business experience. the company is still not at the top nor is so well rated by the consumers. Well-earned reputation for quality. • Baidyanath because of the low profile image it has for all these years. R& and operational process. . This aside. • The company has not grown with the changing time and has not adopted modern management practices in terms of quality control.48 members. • The packaging of the product as well as the quality of its print and electronic media ads has not been improved and this also suggests some negative connotation about the company. is perceived to be a small and backward company with some factory some where. Hence its products are at times taken to be of inferior value and not upto the mark. The reasons for this are not hard to find. the company has some major strengths • • Goodwill of the regular users of its products. • Advertising has not formed a thrust area of the marketing strategy and hence of the correct brand or company image has not been projected. It is also one of the oldest company of Ayurvedic/herbal medicines/products.

organizational and operational guidelines. changing competitive world and meeting the demands of demanding customers. the company is still not at the top nor is so well rated by the consumers. felt the need for appointing an international consultant to study and identify areas of improvement in various aspects of company’s business. Fast Moving Consumer Goods (FMCG) industry is one of the most competitive and fast growing industry in India. Based on their findings and suggestion the company in poised for transformation. Baidyanath is today at a stage where Dabur was few years back. focussing on core competency. But still Baidyanath. Advertising has not formed the thrust area and so correct company or brand image has not be created. the company appointed McKinsey & Co. if its has to survive today’s cutthroat competition. Zandu. To improve cost effectiveness and to diagnose organizational and strategic aspects. Even with the largest range of Ayurvedic products and with ages of business experience.49 • A strong market presence by retail outlets. Outlets readily accepting to stock its products.. it has an uphill task of tackling the upcomingcompanies like Smyle. keeping in view the challenge of global market. The reason for this are quite obvious. Yogi Pharmacy. . Together with this the company has not grown with modern times and has not improved on packaging or R&D efforts. Dabur. in 1997 for devising its strategic. Nothing much is known about the company. maximising team performance.HimalayanDrugs etc.

incredible system of annual forecasting to the more reliable and error free system of making quarterly rolling forecasts. The order processing and procurement planning for raw materials has to improve at Dabur. 1. The company should hire more and more outside professionals into both top and middle management. . The demand forecasting has to charge from the unscientific. There are also changes to be brought on the operational front.50 RECOMMENDATIONS DABUR INDIA LIMITED Most of the recommendations for Dabur have been covered by the McKinsey report. If Dabur has to emerge as a true FMCG company it has to divest its non-core businesses fast and focus only on some core competencies. If this happens then the situation of inventory putting up or stock outs will be minimized. It should also initiate the process of adhering to new and better system and style of management. 4. 2. 3. It this is done growth will follow soon. Nevertheless it would be worthwhile to note them again.

Dabur has often been accused of pricing its products arbitrarily. Baidyanath. if it wants to survive today’s competition. Most on the consumers interviewed also suggested similar things for both the companies. It also has to have more stringent quality control methods and its pricing policy should be more scientific. 7. if it has to emerge as a fresh Indian multinational and a true FMCG then it has to divert from its non-core business. If the company has to grow. Many-a-times Dabur’s products have not withstood quality control tests. most felt that Dabur’s products were highly priced while Baidyanath . If Dabur has to surface as an multi-national and face the world competition it will have to follow more stringent quality control methods. it has to adopt a more scientific way of pricing an understand that today's consumer is an intelligence one who has the freedom & opportunity to choose. 6. it should improve upon the packaging and advertising of its products. It also has to introduce systems in its operational as well as strategic fronts. Also the quality of the raw materials used should be looked into.51 5. Dabur. then the first thing it should do is to alter the image of the company as well as its products. Lastly. Even though Dabur and Baidyanath were the most popular companies with consumers. It also should include outsiders in its business and also modern management practices. This will also help Dabur to stand quality control tests in the international arena.

52 had good and reasonably priced products but cost out to other companies on account of poor packaging & low key advertising. .

by Phillip Kotler Principles of Marketing – by Phillip Kotler & Gary Amstrong 3. Others Annual Report of Dabur (1997-98) Company Literature of Baidyanath Economic Times Newspaper .53 BIBLIOGRAPHY 1. Magazines Business India Businessworld 2. 1998 Issue 22 Nov-6 Dec Books Marketing Management .

E.54 LIMITATIONS Although it has been my endeavour to take all necessary precautions to ensure that the information gathered is authentic and maximum facts are presented the report has a few handicaps. 3. Baidyanath did not disclose the sales figures. In this sense time was a limiting factor and a major constraint to accomplish the given task. . But there might have been wrong and biased facts given. 1. consumers and others approached has been assumed to be correct. Time: The nature of the report required detailed and meticulous information gathering. 2. Human Error: The feedback provided by the company executives. This caused a lot of pilferage of time and unnecessary of duplication of effort. Non-cooperation: While by and large the people approached were helpful some people were non-cooperative. The opinion of few cannot be generalised in any manner. Also a lot of information was withheld due to its sensitive nature.g. The reader has to discount these fallacies with regard to the small scale on which it has been prepared. Also sometimes the executives were not available and I had to re-schedule my appointments time and again. Also many holidays occurred during the preparation time of this report and access to information was limited in this period.

. calls. Cost: Baidyanath's head office in Calcutta had to be contacted several times on fax and phone to get company literature. Only a registered office is here and it proved quite difficult to get information from there. Logistical Problems: One major problem that occurred was the absence of marketing office of Baidyanath in Delhi. product range etc.55 4. computer work and printouts. This resulted in major expanses apart from the expenses incurred in local travel. 5.

This method helped in obtaining in depth knowledge and facts and whatever doubts. under what brand name are they marketed . if ever. surfaced were cleared at the very moment. The reasons for using an exploratory research method was to obtain qualitative data and also since the nature of study is as such that it required the exploration of various aspects within and outside the company. interview method was used.56 METHODOLOGY The research design plays a pivotal role in the quality and content of the data in making of any project report. This method also gave the officials interviewed the utmost freedom in responding and was highly contributory in getting incisive information. Interview method was used whenever any reluctance was shown by the respondent for filling up the questionnaire. Information was gathered through the questionnaire method as well as by interview method. The type of research design chosen is seen to have a bearing on all the aspects of report writing. The research design undertaken for the study was an exploratory one. Some of the questions asked are: • What is the product range. For this purpose various primary and secondary sources were used. Mostly for the company executives. In order to carry out a well researched analysis efforts were taken to collect enough information about both the companies. For collecting primary information (regarding the company as well as consumer's attitudes) company executives and 25 consumers were approached.

This questionnaire has 10 close-ended questions.57 • What are the quality standards maintained • How s demand estimated and sales forecasted • Where are factories located • Major R&D efforts • Strength over competitors • What are the channels of distribution . • What is the pricing policy and main constituents of price • Advertising budget.who are the intermediaries involved. In all 25 consumers were approached and . • No outlets • How are inventory levels maintained and warehousing done. allocation and programming • Types of sales promotion effort undertaken • Publicity and PR work done by the company In order to gauge the consumer's attitude towards herbal product and about the products of Dabur and Baidyanath in particular another questionnaire was used.

4. 2. The questions and their logic are as below: 1.Ineffective .58 their responses taken.No side effects .Affective . What kind of herbal products you use? (a) Medicine (b) Cosmetic (c) Others (Pl. What portion of your total consumption of the above is formed by herbal products? The two above questions helped in knowing the growing prevalence of herbal products. Do you use Herbal products/ If No. given a chance would you? This question helped in knowing the percentage of people using or favouring herbal products. specify______) 5. then why? .Long term remedy If No.Short term remedy . If Yes. Herbal products are better than synthetic ones? 3. These responses were later analysed and were of colossal help in coming to various conclusions for the report. the utility or strength over synthetic products. then why? (Please tick) .Dicey constituents Both the above questionnaires help in gauging the perception of people regarding herbal products. . Each question asked to the consumer and some logic behind it.

2. 1. …………………………….Safe 9. List 2 product of the above mentioned company liked by you/used by you the most. ……………………………. . 6&7 helped in knowing the attitude of the consumers regarding different companies. Which two companies first come in your mind when your talk of herbal products (medicines and cosmetics)? 7. .59 6. Among Dabur and Baidyanath which one is better? Why (Pl.Effective .Value for money/reasonably priced . 8. specify)..Genuine products . Rate the following companies engaged in herbal product business in terms of your preference Medicine Dabur Baidyanath Zandu Hamdard Biotique Shahnaz Dabur Ayur Cosmetics Question nos.

Improve quality .60 Question 8&9 helped in knowing the consumers attitude specifically for Dabur or Baidyanath. 8) What steps should the other company take to improve its position? (Please tick) . (Ref.Better advertising . Both the questionnaires formed the right tool to except the required information from the respondents.Better availability The last question helped in knowing the loopholes which existed for the company (not preferred) and the steps which could be taken to improve its image and standing in the market. No. Quest. Following are the main sources used in the project. 10. • Business magazines . It gave an idea why one company was preferred over the other and which products were mostly favoured. Various secondary sources were also used to gather data as these provided an objective basis of getting useful information.Better packaging .Better product range . Once the information was collected the next step was to filter out the data and to present in the most appealing manner.

Also before coming to the marketing strategies of Dabur and Baidyanath a brief write up about marketing process and the growing relevance of marketing for India has been given.61 • Annual reports These secondary sources gave some information which helped in better understanding of the functioning of the companies. . since it derives its roots from the ancient system of Indian medicine . This is followed by "Case for Herbal products". Stating why people are for and against herbal products and finally and overview of the whole herbal product industry is presented. This project report covers the upcoming segment of the herbal product industry. Therefore in course of this project report. in order to facilitate better understanding of the whole scenario a brief introduction to the system of Ayurved has been given. This industry has a special relevance for India.Ayurveda.

Sign up to vote on this title
UsefulNot useful