SRI RAGA SKIN CARE - CASE STUDY

Tara had to fight many academic battles in her class room. She is also very much alive to the fact that
she has to face competition one day or another. She did not expect it would happen so soon. When Tara
graduated in business management, she found that there was a vast market potential for skin care
products particularly in the economy range. ‘The middle and lower income groups’ she says, ‘are in a
state of despair not able to afford the high priced, high quality products offered by large domestic
companies and MNCs’.

She teamed up with three of her class mates and set up Hopes India Pvt. Ltd. Hopes manufactured and
marketed, Sri Raga skin care products using herbal secrets, priced affordably, and supported by
persuasive and educative campaigns, in the urban areas and door-to-door selling with the help of self-
help groups (SHGS) and DWCRA (Development of Women and Child in Rural Areas)groups in the rural
areas. The product garnered substantial market share in a span of three years. In Andhra Pradesh and
Karnataka, it has become the market leader in the herbal segment. Table-1 compares Sri Raga with other
similar products.

Table 1 Price Comparisons

Sailing cannot be smooth in life or business. The slow growth rates of urban markets and intense
competition in high-end markets has turned the attention of new entrants to the growing low-end markets.
Even the established brands like Fair & Lovely have targeted at rural markets.

Sensing the evolution of competition, Tara called for a meeting of her key executives. The discussion
considered various aspects pertaining to markets, competitive brands and strategic options. The
members felt that Sri Raga’s target market is mostly young married housewives in the group of 25–40
years. On the other hand, the fair brands attracted the teenagers and just married girls. The possible
reasons for patronizing Sri Raga are: its low price, herbal-base and healthy skin promise. The fair brands
claim a change in complexion whereas Sri Raga emphasizes on ‘Give Life To Your Skin’. It asserts, “Why
change your natural complexion? Give new life to it? Look bright always”. The mature young woman
appreciated the message and patronized it.

“I am sure, we have no threat from the existing products. A product similar to ours at a lower price or with
high promotion blitzkrieg may destabilise us”, said Tara. At this point, she got a fax message which
read as follows, “French Cosmetics, the new entrant is launching Fair Always at Rs. 20 (50 gms)
and Rs. 39 (100 gms) with heavy promotion”.

To hold the market leadership, Tara considered the following needs to aggressively plan a Marketing &
Promotional strategy what will be the Plan you will suggest.