Cavinkare Ltd

Sachet Revolution
 Purpose of the case
To discover need of rural market
To find out channels to penetrate rural market
To implement product’s feature suitable for
rural market
To discuss advertising strategy used in rural
market
 Problem of the case study
Low penetration level of shampoo in rural
market in comparison with other beauty
products.
It is not a problem only for cavinkare but also
for other company.
 About Cavinkare limited
In 1983 with a single product cavinkare started
out as a small partnership firm chin India by
Mr. C.k. Ranganathan.
Chik India which was renamed as beauty
cosmetics in 1990.
In 1998 the company was renamed as
cavinkare pvt. Ltd.(ckpl)
 Cont…….
The reason behind the name is, cavin means
beauty in Tamil and ‘care’ is spelt as kare.
The name is also special one as the initials c
and k of Mr. ranganathan
The company offers quality personal care(hair
care, skin care, home care) and food products
 Cont….
The Company, which primarily relied on
contract manufacturing for many years has
now set up its own world class plant at
Haridwar to cater to the demand of both
domestic and international market.
CavinKare Group has crossed a turnover of
7000 million INR in 2008-2009
 Major barriers to shampoo use in india
 High price.
 view that the shampoo is more of a glamour product
rather than a hygiene product.
 Low Levels of Literacy : The literacy rate is low in
rural areas as compared to urban areas. This leads to
problem of communication for promotion purposes.
 Prevalence of spurious brands and seasonal demand :
For any branded product there are a multitude of 'local
variants', which are cheaper, and, therefore, more
desirable to villagers
INNOVATION OF SACHETS
 History of sachet
Cavinkare was the company responsible for
the small sachet revolution in India.
It was an important insight for marketing to
rural India, at the time.
When cavinkare entered the rural areas in
south India, people used to wash their hair
with soap.
 Cont…
When it launched the ‘chik’ brand of shampoo
they educated the people on how to use it
through live ‘touch and feel’ demonstrations
and also distributed free sachet at fairs
This strategy worked wonders in the rural
areas of tamilnadu and Andhra Pradesh.
How Chik Shampoo was born?
This idea came in the mind of Mr.
Ranganathan’s father when Epsom salt came
in 100 gm packets. They wanted that coolies
and the rickshaw pullers to use products. But
due to the lack of marketing strategies they
could not market the concept well. It
renamed as Chik Shampoo after the death of
father.
 How Chik Shampoo conquered the rural
market ?
• They altered the scheme, they started giving
one free Chik Shampoo sachet in lieu of five
Chik Shampoo sachets only.
• They sold shampoo in 50 paisa sachets at a
time when other shampoo sachets were selling
at Rs. 2. Soon, consumers started asking for
Chik sachets only. The sales went up from Rs
35,000 to Rs 12 lakh (Rs 1.2 million) a month.
 Cont…
• They went to the rural areas of South India
where people hardly used shampoo. They
showed them how to use it. They did live
demonstration on a young boy. They asked
those assembled to feel and smell his hair.
Next they planned Chik Shampoo-sponsored
shows of Rajniknath's films
 Communication Strategy
• Cavin Kare discovered that soap usage was the
biggest barrier and people did not see the need
for using Shampoo.
• Company tried to convey the message to the
consumer that soap usage was bad for the hair
and when a product exists specifically for hair
it should be used. Finally customers agreed
that Shampoo usage gave soft and silky hair.
 Cont
• To build a local and regional presence, they
advertised in local print and television, before
taking the brands nationally.
• They advertised more often and hired well
qualified professionals to compete with the
competitors. “ The iconic Chik Girl in every Chik
Shampoo” commercial showcased the possibility
of soft and manageable hair for the customers.
 Marketing strategy
They associated with people of similer
wavelength in thinking, who will definitely
take care of quality first and foremost and
besides, they have a strong system of quality
monitoring.
As a part of their strategy, they lay down all
the ground rules for manufacturing in
maintaining their standards.
 Cont…..
Outsourcing is one of the cardinal rule of
cavinkare corporate strategy.
Direct media promotion have helped build
knowledge of product categories and change
long-entrenched living habits.
 Cont….
By the help of effective communication they
tried to understand the fears, aspiration and
hopes of the rural consumers.
Cavinkares believes that its core competencies
are research and development, brand building,
and distribution management.
 Distribution strategy
Instead of using the conventional distribution
route, they have created a ‘sachet’ sales force
that sells only sachet packets to small retailers
including cigarette and paan shops.
Separate hawkers' channel is being created
that has moves from neighborhood to
neighborhood.
 Cont….
The hawkers’ channels exist in all cities where
they have a distribution network
Apart from unconventional method, the
company hired professionals for sales and
distribution and expanded its network beyond
south India.
 Competitive analysis
Major competitors-
o Hindustan unilever limited
o Procter $ gamble
o Dabur
o Himalaya health care
 Cont…
Market share-
o Chik shampoo with a 21.4% share is the
second largest selling shampoo in the rs. 1200
crore(rs.12 billion) shampoo market while its
other brand nyle has a 4.6% share.
o Other like meera hair wash has national share
of 23.4%
o But they are largest brand in rural u.p., Andhra
Pradesh etc.
Overall shampoo market share
HUL CAVINKARE OTHERS P&G

15.00%

16.00%
50.00%

19.00%
 Conclusion
The rural market were unaware of the benefits
of using shampoo but several strategy used by
Calvinkare made it easily known and available
It is all about how they approach the market,
takes up the challenge of selling products and
concepts through innovative media design and
more importantly interactively.
THANK YOU