CavinKare and Coty

A Strategic Alliance

CavinKare pvt. Ltd.
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A fast moving consumer goods (FMCG) company based at chennai. Personal care is CavinKare’s core business. CavinKare mainly addresses the mass market. CavinKare portfolio include Chik, Nyle, Meera, Indica, Fairever, Spinz, Ruchi, Chinnis, Maa, Green Trends, Limelite, with Cavin’s Milk. Mr. C.K. Ranganathan, is the Chairman and Managing Director, CavinKare. Mr. Ramesh Viswanathan’s, Executive Director, CavinKare

Coty, Inc.
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Coty Inc. the world’s leading fragrance marketer. It is a Paris based marketer. It is also a beauty products manufacturer whose main businesses are fragrances (65% of revenue), followed by color cosmetics (20%), toiletries (12%) and skin care (3%). Coty Inc is the exclusive global licensee of the adidas brand name in so far as personal care products are concerned Mr. Venkatesh Babu, (east) Regional Managing , Director of Coty Inc.

Coty's brands

Coty Beauty – Adidas Jovan Baby Phat Chupa Chups VictoriaBeckham Esprit Halle Berry McGraw-Tim McGraw Pierre Cardin Playboy

Coty Prestige – Calvin Klein Cerruti Chloé Chopard Jennifer Lopez Vivienne Westwood Lancaster Marc Jacobs Nikos

Adidas & Jovan
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Adidas is a sports brand. "Impossible is Nothing" is the current mainstream marketing slogan for Adidas. Adidas divided the brand into three main groups with each a separate focus: Adidas Performance,Adidas Originals, Style Essentials. Adidas’s personal care products under the Sports Sensation is one of the top selling product. & Jovan is also a famous premium brand.

Tie-up
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CavinKare Pvt. Ltd., entered into a strategic alliance with Coty Inc. to market the entire Adidas and Jovan range personal care portfolio in the Indian market, on a revenue-sharing basis. CavinKare, is set to bring in the Adidas range of personal care products — deo spray, body spray, shower gel, aftershave and eau de toilette &Jovan range include fragrance and personal care products — from the Coty’s stable. Jointly invest in building the brand in the Indian market. Coty Inc and CavinKare foresee a long term marketing alliance to successfully establish the business in India. This alliance will strengthen adidas’ position as a major player in the male personal care segment

STRATEGIC ALLIANCE
COTY + ADIDAS + CAVINKARE

Mr.C.K. Ranganathan’s view

CavinKare mainly addresses the mass market. The strategic alliance will helps to get into the premium segment, where CavinKare did not have presence. In light of this alliance, the Indian market will also take part in global product launching in the future. The Indian deodorant and fine fragrance market is vastly untapped. With this alliance, CavinKare hopes to unlock the potential of the Indian fragrance market with a strong lifestyle brand like adidas. CavinKare, has over the last 25 years, gained a very good understanding of the Indian consumer and has established a strong distribution network, both of which will help in this endeavor.

Mr. Ramesh Viswanathan’s view
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Estimates 40 per cent growth year-on-year, the Rs. 500-crore fragrances and perfumes market and expects to garner at least 10 per cent share of that market in the first year. The range is to be sold through about 50,000 outlets in the first year, mainly at modern and large-format stores. The men’s deo body sprays and fragrance market is one of the largest and fastest growing segments in India. Priced slightly above that of the current market leader, Axe, the Adidas range of products will initially be made available in over 50,000 stores across the country. With an ad budget of Rs.10crore, the company initiates campaigns on the internet, television to increase the brand visibility. This is supported by a lot of below-the-line marketing activities.

Mr. Venkatesh Babu’s view

There is a huge potential in the personal care segment in Asia. The alliance will help in increasing the accessibility of Adidas products in India, which is a fundamental part of Coty’s Asian strategy. As the license partner, Coty Inc. will be assisting CavinKare to build up the market for adidas personal care. Coty Inc., known for its astute acquisitions and licensing partnerships, is the global leader in fragrances. Using this strategy Coty can further expand its territory.

Strategy benefits
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Coty has built a unique portfolio of brands that have produced some of the strongest consumer franchises in history. Expertise CavinKare in developing brands in the personal care space and in extensive distribution network will come in handy. CK has plans to cut prices of its personal care products at around 5% anticipating acute competition in the market. "Competition will drive prices down. By the end of the year, prices could be lower by as much as 15 per cent. This will help people to consume the products in India economically. This will build CK to introduce customized fragrances by setting up a manufacturing facility.

CONCLUSION
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This type of tie-up is more useful to both the companies in development. Because of this, the men’s deo body sprays and fragrance market will become one of the largest and fastest growing segments in India. This will help to overcome the rivalry companies in marketing. Mainly this type of tie-up is used between international companies and local companies, for the entry of their market in vice versa location. Local company uses the brand name of International company for its global development and helps International company for distribution over that area. This is the first time the Indian company is distributing other brands, this will show the way to other companies.

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