RURAL MARKETING

ASSIGNMENT
PATANJALI AYURVEDA LTD

Patanjali Ayurveda Limited (PAL) is a company in India that deals in Ayurveda and herbal
products in food, personal care and home care categories. The company started with an aim
to link the rising destiny of millions of rural masses on the one hand and many more suffering
and leading an unhealthy lifestyle on the other. The company within a very short span of time
had succeeded in getting its foothold in the competitive Indian fast-moving consumer goods
(FMCG) market and has reached a gross revenue of `25,000 million (about US$380 million)
in the fiscal year 2015. Patanjali Ayurveda Ltd. started in 2006 by the famous Yoga Guru
Baba Ramdev has become one of the fastest growing FMCG brands in India. Patanjali's
proposition of low price, natural, pure and swadeshi (Indian-made) products have given the
company a unique brand positioning. The brand has a meticulously designed marketing mix
strategy which has contributed to the exceptional growth trajectory. The study focuses on
demystifying how brand Patanjali scaled up in a short span of time, its business model and its
strategic decisions in a fiercely competitive retail environment.

URBAN MARKETING STRATEGIES IN TERMS OF MARKETING MIX

a) Products

Patanjali has marketed its products as herbal and Ayurveda products. This Ayurveda tag
helped to sell the range in most of the places. Future Group fast-moving consumer goods
(FMCG) president Devendra Chawla, visited the Patanjali Food and Herbal Park for better
understanding of Patanjali business. Chawla stated that advantage of buying Patanjali
products is that Ayurveda philosophy is attached to all products offered by them. This
philosophy leads consumers to buy a wide range of products simultaneously from Patanjali
group; this phenomenon is not seen with other companies. Patanjali products are perceived as
pure by the consumers as they are claimed to be 100 per cent natural. Along with this, the
suggestion of the medicinal benefits of products helps them a lot to get acceptance among the
consumers. Further, the company also claims that they rely on their own farms to cultivate
most of the herb species that are used in their various products which builds a bond of trust
between the consumers and the products of the company.

b) Price

Typically, the products claiming medicinal and health benefits charge premium prices from
the consumers. However, Patanjali Ayurveda charge lower prices from the consumers in
comparison to their competitors. The prices are about 10 to 30 per cent cheaper than
competitor, such as Dabur. As most of the raw materials are cultivated on their farmland, the
margin of profit (approximately 20 per cent) is higher due to the absence of middlemen.
Hence, company offers products to the consumers at low prices. The company is set to
consume market share of some of the FMCG majors in oral care, hair care and over-the-
counter (OTC) products with its economical pricing across its brand portfolio. Over the last 3
years, the company has recorded a compounded annual revenue growth rate of 64.7 per cent
due to offering products at low prices in the price conscious market.

c) Place

Initially, PAL started with selective distribution of their products through their recognized
outlets, such as Patanjali wellness centres, Patanjali clinics and Patanjali’s franchised retail
outlets. But with the time, demands of their products increased and they have started
intensive distribution strategy of their products. In the year 2015, Patanjali tied up with
Reliance Fresh and Future Group (one of the India’s biggest retailers) for promotion and
distribution of its products. The PAL has also launched its online portal through which
customer can order their products eliminating distributors or dealers. Further, PAL is also
planning to spread their network by setting up their own megastores across various states of
the nation. Currently, PAL operates its distribution network through its 5,000 franchised
outlets, 177,000 other retail outlets and online portal which helps them to reach the
widespread consumer base in the country.

d) Promotion

Baba Ramdev does not own share in the PAL, but Patanjali is popular among Indian
households due to his promotional efforts. During the year 2002, Baba Ramdev used to
appear as a trainer/expert of yoga on Sanskaar TV channel which was a huge success among
Indian households. Within a short span of time, millions of people started following his yoga
programme on television in search of a healthy lifestyle and fitness. When Patanjali
Ayurveda was launched in the year 2006, Baba Ramdev himself was a brand ambassador.
Patanjali has considered advertising for its products as a high priority for driving sales. The
promotion and branding in Patanjali marketing mix utilizes all media channels like print, TV,
online ads, billboards etc. The advertisements of Patanjali has been aggressive where they
have showcased the importance of using natural and ayurvedic ways of making products.
Their advertisements have also been under scrutiny as they have alleged that its competitors
have been using harmful products. Patanjali advertisements showcase their entire product
range targeting the audience who want a healthy lifestyle by using naturally curated products.

• Product: Indian belief in Ayurveda and natural • Price: Discounted at 20-30% compared to

• Place: Ayurvedic pharmacies, franchisee, Future group, tie-ups with online retailers stores.

• Promotion: Brand ambassador- Baba Ramdev, advertising.

Choosing the value: PAL has done the customer based on :

• Demography - based on age, nationality, income

• Psychography - based on opinions, lifestyle of people

RURAL MARKETING STRATEGIES IN TERMS OF MARKETING MIX

• Product capability of satisfying the needs and wants is Acceptability. Product

acceptability is a big challenge in front of firm because catering to the 70 crore rural
customers residing in the 6 lakh villages, where the habits, demographics, custom and
culture changes at every 100 kms so the customization of products suits to the
requirements of rural need is difficult.
• Price the amount the customer has to pay for acquiring the product is Affordability.
The price of any product is a major element of marketing mix which earns revenue and
which is a prioritized determinant of market demand for product. The Patanjali products
are very popular and very much in demand because of the penetration pricing strategy
of firm but to keep it up with growing demand would be hard task for firm.
• Place is the point where sale is made and customer can avail the product is Availability.
At present to make all products available is a greatest task for firm. If advertised product
is available in market then only the firm will sustain and grow in rural market. Patanjali
Ayurveda sells through 5000 franchised stores. It has 1500 Patanjali Chikitsalaya,3000
Arogya Kendras,8000 open stores in villages and 6000 Marketing Vehicles.
• Promotion is an activity to make products known to targeted customers is Awareness.
The firm is very good at this but affordable and advertised product should available too
in the market to get rural consumer’s brand loyalty. Its advertisement highlights family
values and Indian cultures.
CONCLUSION

There was a time when Patanjali was one of the most demanded brands for natural products
and commodities in the nation. The company led by Baba Ramdev has had major brands
break into a cold sweat by the sudden success. Indian households inclined sharply towards
buying products made natural or with herbal components rather than the chemical ones, and
Patanjali was one of the few ones which provided completely authentic products. Seventy
percent of the Indian population resides in rural, which can bring in the much-needed
volumes to the firm for long run growth. With altered marketing strategies according to the
needs and wants of rural consumers should boost the sales of firm.

However, seeing the company’s boost in market value, Patanjali’s

competitors also entered the market of herbal and natural products, which marked the
beginning of the downfall of Patanjali. The urban sales of Patanjali declined by 2.7% in the
year which ended at the end of April 2019. Whereas, rural sales grew by 15.7%. Let’s
compare last year’s numbers: the sales of Patanjali in urban areas had grown by 21.1% and in
the rural areas, the growth was by a good 45.2%.

The overall market for natural products has increased by 3.5% in urban
India, which was the same as last year. But the rural market has increased by 5%, which was
4.4% last year. Rural market accounts for over 70% of India’s 1.21 billion population but
contributes only 9% in the FMCG Industry. Thus, increasing distribution and support
infrastructure in rural areas is a key area where the it needs to focus. Patanjali has to a great
extent centered to take into account the residential market. Trades in this manner stay to be a
low division of the aggregate deals. It is in this way basic to concentrate on sending out items
utilizing Indian operations as sourcing centre for the same. Patanjali forced competition to
take a notice of Ayurveda products and its market potential, the timing is right specially when
urban population is becoming healthier conscious and country side income levels are low
coupled with growing protectionism around the world.