Total turnover of around Rs 2000 crore within 5 years(Exhibit 10) Product portfolio Food Products Baked and beverages Healthcare Products Beauty products and cosmetics Homecare Hair care Major contribution to revenue(as of 2015 Exhibit 12) Health care- 19% Ghee – 22% Toiletries – 20% Uses 3-tier distribution system Chikitsalaya Distributors Arogya kendras Uses a pricing strategy of cost + profit (Lower priced then competitors) . Open competition with MNCs Heavy spending (around 10% of its revenue) on advertising in 2016 2 products in dabur’s portfolio were effected by Patanajali’s entry Dabur Honey Dabur chawanprash In a first in over two decades, sales of Dabur honey dipped by 8.50 percent in the first quarter of 2017 fiscal over the previous year’s corresponding period. Price of Patanjali honey was 30-40% less than that of Dabur. Market share of Dabur decreased from 60% to 40%. Dabur’s flagship Chyawanprash brand also fell by almost 2 percent—from 58.9 percent in October-November 2015 to 57 percent during the same period in 2016 As we can see from Exhibit 17 though being a small player in the industry as compared to Dabur the market share of Patanjali has been doubled from 0.7% to1.5% in just 1 year Though having been entered into almost every product line Dabur had , Patanjali has been able to compete only in few products like- Honey Chawanprash Dant kanti(Toothpaste)
So Patanjali is not a direct threat for Dabur as per the current
scenario but can be a serious competitor in future in some of its product lines. Few reasons of patanajali being a threat in future:- Popularity of Baba Ramdev Low pricing as compared to Dabur Strong distribution network developed over the years Patanjali directly attacked Dabur by entering ad war . Ad says--It’s just Rs 70 and not Rs 122(price of dabur honey) Dabur launched a counter ad claiming its honey to be Food Safety and Standards Authority of India (FSSAI) approved -- which means the product is tested and licensed by food regulator and hence is much safer Over the years Dabur started focusing on Non ayurvedic products rather than sticking to its core value of ayurvedic products . Overall 40% of its sale came from Non-ayurvedic products. This shift cam because Dabur wanted to grow its business to other countries like middle East ,Africa,Europe etc. where ayurveda was never a popular or a saleable concept. Dabur needs to get back to basics and return to its core— Ayurveda After the entry and success of patanjali Dabur realised that there is a lot of opportunity in Ayurveda so they need to shift their focus back to ayurvedic products. Company should revamp their marketing communication . New tag line(Science-based Ayurveda.) tied up with e-commerce marketplace Snapdeal to set up an e-store for its Ayurveda products called LiveVEDA. Estimate -2020, Dabur targets Ayurvedic products to constitute more than 75% of its sales in India, from around 60% now