Combating the Yoga Guru: Dabur’s Dilemma

Sunil Salve, Dabur’s Chief Strategist came home after another hectic day that marked
the end of the week-long Global Dabur Summit at Mumbai in July 2016. All the top
business leaders of India’s largest Ayurvedic and natural healthcare company, Dabur
were in town from across the globe in the conclave titled ‘‘Vision 2050’’. Salve sat in his
drawing room while his wife was sitting in the balcony with a neighbor. He tried to relax
but could not – his thoughts just turned to the report submitted by his team of strategic
analysts, which predicted that Dabur would continue to be a segment leader in the
existing No. 1 brands. It forecasted that Dabur would occupy the top position in a few
other brands as well. However, something inside told him that it would not be that easy.
While re-reading the report, he was only wondering if the analysis was foolproof.
 
A single new entrant, Patanjali Ayurved (PatanjalI), which entered the Indian FMCG
industry in 2006 combating incumbents and attacking them on all fronts, had been
making waves. Within a short span of time, it was able to produce results and exceed
industry expectations. Patanjali proved to be a major potential threat to Dabur, the largest
domestic player in the FMCG market. Building on its Ayurveda brand, Patanjali launched
a foray of FMCG products and drastically reduced prices. Using the power of a Yoga
guru that made the product so widely accepted among the Indian masses, Patanjali is
threatening every FMCG giant in the country with a direct frontal attack.
 
While taking a small coffee break, Salve’s mind was diverted to the conversation in the
balcony when he heard the name Baba Ramdev. He figured out that the neighbour was
narrating her experience of adopting Yoga and how it had helped cure her high blood
pressure problem. Salve listened more intently to the conversation and it seemed that the
lady and the rest of her family were impressed by the Yoga Guru and his ability. She was
describing how all of them sat in front of the television at 6 A.M. everyday and watched
his live yoga sessions, how she and her family had also adopted the new natural
products that Baba Ramdev’s company Patanjali had introduced.

He immediately turned to the report in his hand to a section that mentioned Patanjali. The
report only talked about its various product offerings in the market and its very small
present market shares in the competing products and dismissed it as no competition for
the giant, Dabur. However, Salve recollected that he had seen other consumers of this
new brand ‘Patanjali’ in the grocery store in the compound, who were also completely
impressed by the Yoga Guru and his company’s products. He remembered the Honey ad
war that Dabur had got into, after Patanjali had directly attacked the Dabur product only a
year back. He wondered if his team’s dismissal of Patanjali as ‘‘No Threat’’ was all that
obvious when fans and fanatics of the Yoga Guru existed in great numbers around him.

Could it be that the Yoga guru was just making people more aware of the effectiveness
of Ayurveda and natural products, and hence would increase the overall market
segment? Consequently, it would only help Dabur’s cause as people would rather go
and buy products from India’s leading and most trusted Ayurvedic brand than a new
entrant such as Patanjali. He was confused about the kind of impact this Yoga Guru and
his new products would have on Dabur and the market. However, one thing was clear to
him that dismissing ‘‘Patanjali’’ as inconsequential was definitely a mistake. He now
needed his team to dive deep and analyse this new brand and its products.

Picking up his phone, he dialled the number of his assistant asking him to schedule a
meeting the following week with his team of strategists. When asked about the agenda of
the meeting, Salve replied ‘‘Is Patanjali a threat to Dabur or is it helping the cause?’’