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Marketing Research
Project
By:
Sakshar Ray Chaudhuri
Sakshar.raychaudhuri@gmail.com
Contents:
Acknowledgements .................................................................................................................................. 3
Executive Summary: ................................................................................................................................. 4
Objective: ................................................................................................................................................ 4
Research Method and its procedure: .......................................................................................................... 7
Data collected and its interpretation: .......................................................................................................... 9
Analysis and Interpretation:...................................................................................................................... 13
Factor Analysis of the “Driving Forces” responsible for the Final Purchase of Ayurvedic Products: ............. 17
Discriminant Analysis for segmenting customers of Ayurvedic products (on the basis of attributes chosen by
Factor Analysis): ...................................................................................................................................... 19
Factor Analysis on the effectiveness of different media: ............................................................................ 24
Analysis of the Brand positioning of the existing companies:..................................................................... 26
SWOT Analysis: ..................................................................................................................................... 42
Porter‟s Five Forces‟ Framework: ............................................................................................................ 44
Conclusion: ............................................................................................................................................ 48
Appendices: ........................................................................................................................................... 53
Appendix A: Questionnaire used for survey of Residents of Lucknow ....................................................... 53
Appendix B: Questions Asked to the Distributors and Retailers ................................................................ 57
Appendix C: Questions Asked to the Doctors (chiefly Ayurvedic Doctors) ................................................ 58
Appendix D: SPSS Outputs of various test carried out by the same software ............................................. 59
References:............................................................................................................................................. 64
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Acknowledgements
I am highly indebted to many people without whom the project on Marketing Research would not
have been accurate and successful.
I would also like to express gratitude to all the respondents of Lucknow who sacrificed their
precious time in responding to the questionnaire. Their polite behavior and amicable attitude made
my job much easier.
I are also grateful to all the doctors, retailers and distributors of Ayurvedic products of
Lucknow for sharing very imperative information with us and also for responding to my questions
patiently.
I also express my gratitude to Prof. SG of , who has guided me in the most critical situations.
Without his guidance, the project could have not been completed.
I am also indebted to Mr.KPA Sundher and Mr. Ashish Agarwal for keeping my energies right on
the track by sharing their practical experiences with me.
I sincerely thank to Sri.P.R.krishnakumar for giving me the privilege to work in such a wonderful
organization. I will never forget the brief meeting with him that motivated me a lot.
My sincere thanks to all the other employees of Arya Vaidya Pharmacy who have guided me during
the initial phases of training. Special thanks to Dr. Saju Thomas and Dr. Chacko for sharing their
varied pool of knowledge with me.
Last but not the least, my heartfelt thanks to Mr. G Vijaykumar, who guided me from design of the
questionnaire to analyzing the output and making meaningful judgments. I also thank him for
responding to all my queries with utmost calmness and sincerity in spite of his busy working
schedules.
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Executive Summary:
During this research project, the competitive analysis of Arya Vaidya Pharmacy vis-a-vis to the other
existing companies is being found. In addition, the perception of the common people about
Ayurvedic products and services has been formulated. Apart from this two diagnostic parts, I tried
to find out the most effective branding strategy that was been successfully implemented by any other
company in the recent past. By analyzing the perception of the common people about those
branding strategies, I tried to formulate the most effective and suitable branding strategies for Arya
Vaidya Pharmacy. The specific offerings from the individual companies are also being found out and
the points of satisfactions and dissatisfactions for those offerings are being found out. In addition, I
tried to find out how effectively those offers are exercised by the individual companies after the
implementation.
Construct Designing:
The construct for this research project has been designed to be as:
Competitive Analysis
Based upon the above-mentioned constructs and the requirement, the research objectives are
designed as below:
Objective:
The objectives of this project were threefold as it caters to the three most important and essential
finding for the company.
• A competitive analysis of the Arya Vaidya Pharmacy vis-à-vis to the existing companies providing
Ayurvedic products and services in Lucknow, Uttar Pradesh: For this purpose, I tried to get the information
about the existing Ayurvedic companies and with the help of three models of competitive analysis,
viz, Porter‟s Five Forces Framework, SWOT Analysis and Subjective assessment using questionnaire
and interviews. The details of these methods as well as the specific logics behind each of these are
being included as:
1. Porter‟s Five Forces Framework: The famous framework of Michael Porter takes into
consideration five forces like: Power of buyers, Power of suppliers, Threat of substitutes, Barriers
to entry, Competitors.
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Porter's five forces include three forces from 'horizontal' competition: threat of substitute
products, the threat of established rivals, and the threat of new entrants; and two forces from
'vertical' competition: the bargaining power of suppliers, bargaining power of customers. This tool is
being extensively used to find out whether new products, services or businesses have the potential to
be profitable or not.
2. SWOT Analysis: It highlights the company‟s present position by comparing it with the
existing position of the competitors. It gives an extensive idea about the company‟s internal factors
like the strengths and weaknesses of the company compared to its competitors and opportunities
and threats that gives an edge over the existing competitors.
In total, Competitive Analysis is an assessment of the strengths and weakness of the current and
potential Competitors with the company under consideration. The analysis provides both and
offensive and defensive strategic context through which to identify opportunities and threats.
Information Required:
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So, the information required from this study are:
• Finding out the perception of people (of Lucknow) about Ayurvedic products and services as well as about
Arya Vaidya Pharmacy (Coimbatore) Limited: This was designed to find out the underlying perception of
Ayurvedic Products and services of the existing brands in Lucknow. In addition, it was aimed at
finding the perception of the people about Ayurveda as a mode of treatment. This can also direct us
to place the Arya Vaidya Pharmacy in the optimum position depending upon the perception of the
potential customers to satisfy the unmet needs or to satisfy their needs in a better way.
Information Required:
On the basis of the information obtained from the diagnostic studies pertaining to the above
objectives, I have prescribed the promotional strategies of Arya Vaidya Pharmacy, the brief details of
which is as follows:
• Prescribing the suitable promotional strategy of Arya Vaidya Pharmacy Limited for positioning it in the
market of Lucknow: This is aimed at finding a suitable strategy to place the Arya Vaidya Pharmacy in
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Lucknow. To find a suitable branding strategy, the branding strategies of individual companies are
being analyzed and the effective mode
=207
Therefore, the sample size of the respondents who were inhabitant of Lucknow was 207. In
addition, I have interviewed all the distributors of the major Ayurvedic companies of
Lucknow. Forty (40) Ayurvedic Doctors and twenty five (25) Allopathic Doctors have been
interviewed. The number of retailers interviewed is 125.
2. Area of conducting the survey: For the sake of convenience of conducting the survey, I have
selected specific parts of Lucknow where from I have got representatives from all the
income segments of the population. . These are specified to be as:
a. Indira Nagar
b. Gomti Nagar
c. Alambagh Area
d. Charbagh Area
e. Aminabad area
Whereas the population from Indira Nagar and Gomti Nagar has participation from
Upper class, the other areas have participation from middle class and lower middle class.
A considerable population of Aminabad area belong to the lower class also.
Different innovative methods have been used to collect the data. As Hindi is the
communicating language in Lucknow, there was no problem in communicating with
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them. Most of the interviews have been taken during day time, when most of the people
hardly had any job to do due to very high temperature.
I have use different innovative methods like taking online surveys through
www.esurveypro.com. The link of the survey is given as:
http://www.esurveyspro.com/Survey.aspx?id=8f6e267f-78bf-4d82-9c5b-a43a01cfaecb
I have extensively used “orkut.com” for conducting the survey. The details are being
given in the tabular form as below:
Orkut 27
Calling in random mobile no's 21
Malls 51
parks 32
door-to-door 57
ongoing Journey 19
Grand Total 207
Though I have limited the collection of data from common respondents (inhabitants of
Lucknow) from the specific locations only, I have visited medical shops, distributors,
Exclusive Ayurvedic stores as well as doctors from different parts of Lucknow.
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Data collected and its interpretation:
Rationale behind the questionnaire design:
Questionnaire Design and interpretation was the biggest challenge in this research. The questions have
been carefully chosen and modified according to the responses from the respondents as well as
according to the objectives of this research. All of these questionnaires have been designed keepi ng
in mind that there can be responses which are not true representation of the desired sample. Special
care and techniques have been employed to eliminate such misleading replies.
Question No 1 and 2:
It was aimed at finding out the number of existing users of Ayurvedic products and services. The
perceptions of these existing users are very important as they are already exposed to the positive and
negative sides of Ayurvedic products and services. These two questions also reflect the market
penetration of Ayurvedic products and services.
Question No 3:
It was found that most people prefer the concept of an old village where people are being treated
naturally. The word “natural” was a preferred choice for them and it is recommended to use some
specific means to reflect the Natural connection of AVP‟s products and services in the
advertisement.
Question No 4:
When I talk about Ayurvedic products, which brands come in your mind?
This question is for the top of the mind recall. This is also a subjective question.
Question No 5:
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Which Ayurvedic brands you are aware of? (Grade from 1 to 5, 1-not at all aware of, 6- I know very well)
This question is being designed to find out Brand Awareness of the major Ayurvedic brands in
Lucknow. Here, I have used an interval scale and asked the respondents to rate individual brands.
Respondents were given freedom to choose company‟s name of his own choice and rate them.
Question No 6:
Which Ayurvedic company can you recall having seen or heard advertising for in the past month? (Yes/No)
This question was aimed at finding out whether the major companies have been advertising in the
recent past and whether the respondents can recall them. This is being done by sing a nominal scale
(yes or no). This can be compared with the sales figure and brand equity figure to find out the
effectiveness of the advertising campaign.
Question No 7:
Many people buy Ayurvedic products and rely on Ayurvedic treatments. What do you think about the reason behind
that? (Rate “1” if you fully agree with and rate “6” if you not at all agree with)
This is one of the questions which was most important and is expected to reveal much of the
desired information. Here, I have tried to find out the relative importance of the most important
eleven factors. These eleven factors have been shortlisted from the output of Focus Group
discussions among the inhabitants of Lucknow. From the output obtained from the question, it is
being planned to find out the most important attributes that are responsible for choosing Ayurvedic
products and services over the others. These factors will be clubbed into different group, the
members of each of which will represent similar characteristics.
Question No 8:
What are the drawbacks of Ayurvedic products and treatments (if any)?
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This question is aimed at finding out the possible points of dissatisfactions with Ayurvedic products
and treatment services. Certainly, these needs of the respondents have not been served by any of the
Ayurvedic companies. These areas are those where Arya Vaidya Pharma can place them by keeping
these areas as their Point-of-Differences.
Question No9:
This question will reveal those areas with which the existing users of Allopathic treatments are not
satisfied with. Certainly, they will appreciate any mode of treatment which caters to their unmet
needs. So, this question will highlight those areas and suggest us where I can build Points-of-
Differences.
Question No10:
Suppose you plan to visit an Ayurvedic centre or plan to buy Ayurvedic products, which will influence your decision?
(Grade 1-5, “1” for Most Influential, “6” for „Least Influential‟)
This question is meant for analyzing the most important influencing factors that result in a final
purchasing of Ayurvedic products and services. This determines and analyses the most important
driver for purchasing and helps suggesting a suitable branding strategy.
Question No11:
Which of the following treatment centers in Lucknow you have heard about?
This question was aimed at finding out the most popular treatment centers in Lucknow and their
brand awareness.
Question No12:
This is done to find out the perception of the common people about the existing Ayurvedic brands
of Lucknow. I have formulated a few important attributes on the basis of which the individual
brands are being given relative scores. This is done to find out the perception of the individual
brand as well as to find out the point that are not satisfied by the existing brands. The areas which
are not served by the other existing brands can be considered to be the target areas for a newly
launched brand.
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Question No13, 14, 15 and 16:
Are you….?
These questions are meant for finding out the demographic profiles of each of the respondents. This
gives an idea about the detailed profiling of the respondents.
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Analysis and Interpretation:
I have found that around 59% of the respondent uses Ayurvedic products. Out of these
59%, 15% of them use Ayurvedic treatment services.
As it was quite obvious, I have found that all of those who use Ayurvedic treatment services
necessarily use Ayurvedic products.
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The demographic profiles of the respondents are being exhibited in a self-explanatory format as
below:
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Brand Awareness:
Here, I have tried to find out the number of the respondents who are aware of the brand name
of the individual brands and their advertisement campaigning. This shows that Dabur (92%) is
leading in brand awareness though it was not the market leader in terms of the top of the mind
recall. Here, it is followed by Baba Ramdev‟s Medicine (87%), Himalaya (85%), Emami (83%)
and Zandu (72%) as major competitors.
Similarly, it was found that Ramdev‟s clinic is known to 87% of the respondents followed by
Lucknow Government Ayurvedic College (59%) and Lavanya Ayurvedic Centre (22%).
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Top of Mind Recall:
This is the analysis of the brands which comes into respondents‟ mind when they are recalling
Ayurveda. These brands are associated with the brands which respondents associate with
Ayurvedic treatments. It signifies how strongly the brands are placed in the mind of the
respondents.
It shows that Baba Ramdev‟s Medicines or Patanjali Ayurvedic center score the maximum
among all of the brands existing in Lucknow with around 29% of the respondents recall about it
while answering to the question. It was followed by Himalaya (20%), Dabur (19%) and Emami
(11%).
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Factor Analysis of the “Driving Forces” responsible for the Final Purchase of
Ayurvedic Products:
Here, I have sorted out the most important drivers or influencing factor which influences the
respondent while finally purchasing the Ayurvedic products. This factor analysis extracts the most
important factors into two or more important and significant categories. This is done on the basis of
the responses of Question no7.
The responses from the respondents are being analyzed by SPSS software package, the output and
interpretations of which are described as below:
This Factor Analysis has divided all the variables into two significant groups of components. The
membership of any variable in a particular component are dependent upon the value of the
coefficient in the matrix.
Notes: - More the score of a variable more is the association of that variable with that component.
For a variable to be a member of a component group, the value in the matrix should be at
least (0.05) for significant association.
Rotated Component Matrix a
Component
1 2
V1 .836 .094
V2 .862 .237
V3 .795 .306
V4 .316 .528
V5 .604 .409
V6 .326 .429
V7 .041 .805
V8 .312 .487
V9 .508 .121
V10 .102 .619
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 3 iterations.
Where V2=Effectiveness
V4=Natural
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V5=Recommendations
V6=Less Painful
V7=Cheap
V8=readily available
V10=Status Symbol
Component 2 is a combination of Natural, cheap and Status Symbol. These are not the basic needs
of the common people. Rather, these are the attributes which makes them delighted. So, these can
be classified as “Delighting factors”.
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Discriminant Analysis for segmenting customers of Ayurvedic products (on the
basis of attributes chosen by Factor Analysis):
In this model, I have considered the relative importance given to different attributes (by individual
customer) to be parameters to decide whether the customer is an user of Ayurvedic Products and
Ayurvedic Treatment Services in two different analysis. The definite scores given to the parameters
are considered to be a characteristic parameter of a particular person.
In order to compute the discriminant score of any respondent, the unstandardised discriminant
function is generated as
V2 Function
1
1 .820
2 -.594
Unstandardised canonical discriminant functions evaluated at group means
Now, I have got the new means for the two groups, the mean for Group1 (non users of Ayurvedic
Product), the new mean is (.820) and that of Group2 (users of Ayurvedic products) is (-.594). The
mean, that is, the midpoint of these two means is (0.113). This gives us a decision rule for classifying
any new customer case:
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If the discriminant score of a respondent is in between (0.113) and (0.820), I can classify
him to be a “Non-user” of Ayurvedic Products.
If the discriminant score of a respondent lies in between (-0.594) and (0.113), I can classify
him to be a “User” of Ayurvedic Products.
Classification Resultsa
V2 Predicted Group Membership Total
1 2
Original Count 1 58 29 87
2 17 103 120
% 1 66.7 33.3 100.0
2 14.2 85.8 100.0
a. 77.8 % of original grouped cases correctly classified.
The result shows that in case of original group classification according to this model, there is 77.8%
accuracy. Or in other words, this analysis is 77.8% accurate according to this model.
The value of Wilks‟ Lambda is found to be (0.123), which is very close to Zero. It indicates better
discriminating power of the model.
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As I have determined in the earlier case, the unstandardised discriminant function is generated as
Y=-(1.138)-V4 (.098) + V5 (.610) - V6 (.062) - V7 (.163) + V8 (.052) – V9 (.041) +V10 (.393) - V11
(.354) +
Or, putting the original abbreviations of each of the variables, I can get
Now, I have got the new means for the two groups, the mean for Group1 (non users of Ayurvedic
Treatment Services), the new mean is (0.146) and that of Group2 (users of Ayurvedic Services) is (-
0.831). The mean, that is, the midpoint of these two means is (-0.3425). This gives us a decision rule
for classifying any new customer case:
If the discriminant score of a respondent is in between (-0.3425) and (0.146), I can classify
him to be a “Non-user” of Ayurvedic Treatment Services.
If the discriminant score of a respondent lies in between (-0.831) and (-0.3425), I can classify
him to be a “User” of Ayurvedic Treatment Services.
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Prior Probabilities for Groups
V3 Prior Cases Used in Analysis
Unweighted Weighted
1 .500 176 176.000
2 .500 31 31.000
Total 1.000 207 207.000
The average ratings given to the relative effectiveness different modes of establishment of
advertisements on the final purchase of Ayurvedic products are being listed as follows:
TV Advertisements 4.06
Friend's/Relative's 4.18
Suggestion
Roadside 3.75
Hoardings/Billboards
Internet Advertisement 2.97
Display @ outlets 3.43
Advertisements in 3.38
Magazines
Doctor's Recommendation 4.37
Medical Camp 3.88
Discount Offered 3.67
Recommendations of the 3.33
retailers
As higher score signifies better effectiveness, I can say that doctor‟s recommendation plays the most
significant role in selecting Ayurvedic medicines followed by Friend‟s or relatives‟‟ suggestions and TV
advertisements. It can also be said that Internet advertisement has the most significant influence in the final
purchase. The graphical representations of the details are being given as:
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It shows that a large portion of the population think that Doctors‟ suggestion is the highly effective in
influencing them for the final purchase.
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Factor Analysis on the effectiveness of different media:
Here, I have tried to find out the most effective media which result in a final purchasing of
Ayurvedic products. This involves getting the information about the most effective media that
influences the most leading to the final purchasing decision of Ayurvedic products.
This test will group the factors into some significant groups.
The groups of factors which have Eigen Value more than “1” are considered to be significant.
The ScreePlot shows that the percentage of the total variation explained by the groups of factors.
I have five major factors and components, say, C1, C2, C3, C4 and C5.
Notes: - More the score of a variable more is the association of that variable with that component.
For a variable to be a member of a component group, the value in the matrix should be at
least (0.05) for significant association.
C2 comprises of V8 only.
C5 comprises of V3 only.
V3=Friends‟/Relatives‟ Suggestions
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V4=Roadside Hoardings
V5=Internet Advertisements
V7=Advertisements in Magazines
V8=Doctors‟ recommendations
V9=Medical camp organized by the company that have benefited you in the past
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Analysis of the Brand positioning of the existing companies:
Here, I have tried to find out the perception of doctors about different company‟s products on the
basis of eight most important attributes or parameters chosen by them. Initially, I had planned to
conduct this survey on the basis of the information collected from the common people from
Lucknow. But, as most of them are not aware of all the companies and as the questionnaire became
tedious for them to fill up, I have decided to conduct this Survey on the basis of the information
collected from the doctors. I have eight important factors, namely, Effectiveness, Price, Availability,
Quality, Less Side Effect , Wide variety or ranges of products available, Packaging, Offers.
I had 11 major Ayurvedic companies being judged upon these parameters, namely: Dabur,
Himalaya, Arya Vaidya Pharmacy, Charak, Dhutpapeshwar, Unjha (UAP), Emami, Zandu, Vaid
Ramani, Baidyanath, Patanjali (Baba Ramdev‟s Medicine).
Eigen values
Function Eigenvalues % of Variance Cumulative % Canonical
Correlation
1 3.334a 57.7 57.7 .877
2 .896a 15.5 73.2 .687
3 .642a 11.1 84.3 .625
4 .403a 7.0 91.3 .536
5 .318a 5.5 96.8 .491
6 .110a 1.9 98.7 .315
7 .069a 1.2 99.9 .254
8 .005a .1 100.0 .073
a. First 8 canonical discriminant functions were used in the analysis.
An Eigen Value close to or more than the value of “1” is considered to be significant. Here, I have
tried to group all the eight important factors in two significant groups for ease of interpretation as
well as for ease of classification of individual companies‟ position into the matrix.
Wilks' Lambda
Test of Wilks' Lambda Chi-square df Sig.
Function(s)
1 through 8 .034 1457.487 80 .000
2 through 8 .146 827.606 63 .000
3 through 8 .276 552.796 48 .000
4 through 8 .453 339.894 35 .000
5 through 8 .636 194.409 24 .000
6 through 8 .838 75.879 15 .000
7 through 8 .930 30.964 8 .000
8 .995 2.269 3 .518
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Similarly, if the Wilks‟ Lambda value is close to zero, it signifies that that factor is more significant and is
capable of higher degree of explanation. Here, I can crosscheck and see that the first two tests to Functions
are absolutely selected and approved by the second test also.
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In all of these contingency tables, I have assumed all the eight attributes to be variables. These eight
variables are Effectiveness, Price, Availability, Quality, Less Side Effect, Wide variety or ranges of
products available, Packaging, Offers in orders. In addition, I have considered “Brand name” to be
variable0009.
I have classified all variables into two Functions, viz, Function1 and Function2.
Function1 is a combination of VAR0004, VAR0002, VAR0005, VAR0006 and VAR0001, that is, a
combination of parameters like Effectiveness, Price, Quality, Less Side Effect and Wide Variety of
Products available. These can be classified as the essential factors or attributes that the doctors
expect from the individual product.
Function2 is a combination of VAR0003, VAR0007 and VAR0008, that is, a combination of
parameters like Availability, Packaging and offers. These are the factors that delight the doctors.
These factors are not the primarily essential factors, but these are the areas which can be utilized to
impress the doctors.
I have plotted the individual companies score taking the two factors, viz Factor1 and Factor2 to be
the two axes. This shows how all of these companies are able to place themselves in the mind of the
doctors, who are the major determining factor for the success of an Ayurvedic company. They are
the influencers for the final purchase as obtained in the result of the survey.
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The scores of the individual companies and explanations :
Dabur:
Himalaya:
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AVP:
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Charak:
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Dhutpapeshwar:
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Unjha:
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Emami:
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Zandu:
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Vaid Ramani:
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Baidyanath:
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Patanjali( Baba Ramdev’s Medicine):
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Together, I have plotted the two dimension of group of parameters and plotted the scores of the
individual companies into that.
Dabur is equidistant from both the axes. So, it is maintaining a balance between the two factors,
though there is a scope to improve in both the cases. In other words, if it faces competition from a
company who satisfies both the factors and set of attributes, it can beat Dabur in the competition at
ease.
Himalaya posses a lower market share than Dabur, and this is reflected in the perception of the
doctors. It has shown a lower score in both of the Function1 and Function2. The group centroid of
Himalaya is showing a lower score in terms of both the functions.
It can be said that Arya Vaidya Pharma has a specific position over here and this brand name has
been associated with higher degree of effectiveness, less side effect and all the other basic necessit ies.
But, it terms of packaging and offers and discounts given to the retailers or distributors, it is scoring
lower than the other existing brands.
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So, there is a huge potential for Arya Vaidya Pharmacy to place itself by maintain its strong points as
mentioned earlier and by developing on these area of availability, packaging and offers as signified
by Function2.
I strongly recommend tapping the huge market by placing the company‟s products and services in
that area which is not being served by any of the existing companies by satisfying the function2
parameters.
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SWOT Analysis:
Strengths:
Weakness:
The product is known to a handful of people who rate the product very high. Other are
seemed to consider it as a common Ayurvedic product from Kerala. They perceive no
difference between this product and any Ayurvedic product from any other Ayurvedic
company from Kerala. So, the brand name of the company, which has a strong influence in
placing it among the top two companies in Kerala and Tamil Nadu, is not so influential in
Lucknow. Rather, lack of Brand Awareness among common people can be considered as a
weakness of the company in that part of the country.
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Opportunities:
There is a huge existing market of Ayurvedic products and services in Luck now. If I
consider the products of Arya Vaidya Pharmacy, I can consider it to be a high-quality
product available at a cheaper price. It was found in the study that people in Lucknow are
price sensitive. So, if the products can be placed as “better-value-for-money” products, the
potential for capturing a huge share of the market will be high. Also, the company‟s
traditional methodology of treatment and its unique nesses, if properly communicated to the
target population, can open a huge scope in the same way as Patanjali chikitsalaya has
43suitable done.
Possible tie-ups with the Government Ayurvedic College and Hospitals for Institutional
purchasing of Ayurvedic products. The same can be extended to the existing treatment
centers in the city.
If the company‟s products and services can be launched together in Lucknow, they can
synergize each other. It has been suggested by the existing retailers and distributors that the
treatment centers can take a major role to potentiate the demand of the products of AVP.
The recommendations of the products by medical practitioners will create a huge demand
which can be given a boost by suitable advertisements and other means of mass awareness.
Threats:
For the last two years, Patanjali Ayurvedic centre has established its centre in Lucknow.
After its inception, it has killed the competition in the sector of Ayurvedic Treatment
Services. As it provides free consultation, people are more attracted towards it. The patients
are being prescribed with Patanjali‟s medicines only. Due to this, they are able to capture
more than 50% of the markets in Ayurvedic treatment services. Their market share is still
increasing day-by-day.
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Porter’s Five Forces’ Framework:
I have analyzed the competitiveness of Ayurvedic products and services industry of Lucknow on the
basis of the Porter‟s Five Forces‟ Framework. This takes into consideration the five major forces
that influence the Ayurvedic industry in Lucknow.
Here, we have quantifies the risk factors in five categories depending upon the extent to which they
are dominant in influencing the industry as a whole. The categories are: very low, low, moderate,
high and very high.
Threat of buyers:
Buyer Concentration with respect to the Focal Industry is higher compared to the allopathic
medicine. It has been found that almost 59% of the respondents in Lucknow use Ayurvedic
products and the heritage and culture of Ayurvedic products and services have been in existence for
centuries. So, higher buyers‟ concentration with respect to the Focal Industry reduces to the
bargaining power of the buyers. So, the risk for the focal industry is Low.
There are a lot of competitors present in the Ayurvedic industry. It has been found that the buyers
can avail products of different companies depending upon the availability of the products. It has
been found that excluding the higher selling product, most of the other products are either not
available or being supplied by a few company. Considering the wide ranges of products offered by
AVP, I can say that though buyer have the power to switch over to the products of the othe r
competitors for a specific ranges of products, they do not possess the same in case of the indigenous
products that can only be supplied by AVP.
Threat of suppliers :
Supplier concentration w.r.t the Industry: As the suppliers of this industry are mostly
unorganized, it was found that the numbers of suppliers are much more compared to the Ayurvedic
companies. So, the threat is low as the suppliers are less in number. It is not very low as in some
specific medicines; the suppliers are very less in number.
Incumbents' switching costs in changing suppliers: The switching cost is not very high due to
the abundance of suppliers. But, in most of the cases, the Ayurvedic companies are in long-term
relationships with the suppliers. In case of Arya Vaidya Pharmacy, the local suppliers as well as the
suppliers from Calcutta and Mumbai are in a long term relationship with the company. So, the risk
is moderate as the effects of both the factors are prominent.
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Likelihood of supplier forward integration: Most of the suppliers in this industry are
concentrated more towards their existing business. As setting up a new Ayurvedic Company to a
large scale demands expertise which can only be gained over years, the likelihood of a supplier to
form a new company (specifically which will have a potential to challenge the existing companies) is
very less. So, the perceived risk is also very less.
Substitutability of suppliers' product: In most of the cases, the suppliers supply raw materials,
which are in abundance in nature. So, they can be easily substituted by the supply from another
supply. But, there are certain specific raw materials which can only be supplied by specific supplier
and these products are necessary for a specific medicament without which the latter cannot be
formulated. So, considering both the situations, the threat from this factor is “Less”, but not “Very
Less”.
Suppliers' switching costs in changing Focal Industry firms: The suppliers are mostly
unorganized and thereby, their sizes are much lesser than that of the Ayurvedic companies. In
addition, the companies prefer to retain the suppliers for long-term benefits. So, switching the firms
in the focal industry has been proven to be costly for the suppliers. So, the risks to the Ayurvedic
companies are very less.
In total, it was observed that, most of the suppliers of the raw materials needed for AVP are local. A
few of the major suppliers are located at Mumbai, Kolkata and some other cities of India. Though
the materials needed for manufacturing Ayurvedic products are very specific and are being supplied
by only a few specific suppliers, it can be assumed that the suppliers are in a fairly good contract
with AVP for a longtime. The local people who supply the chief ingredients are not in a position to
bargain as they do not have many buyers for their products. Moreover, as AVP is a well-known
brand in the areas where it‟s manufacturing units are located. So, it is in an advantageous position to
bargain with the suppliers.
Threat of substitutes:
Considering these factors and the result reflected from the perception of the respondents, we can
infer that the perceived risk is: very High
To describe it more, there is a huge threat of the substitutes of Ayurvedic products and services. The
two major popular alternatives are Allopathic and Homeopathic treatments. Allopathic treatments
are famous for prompt and quick remedy of almost all types of diseases. It was found during the
study that most of the people who are not satisfied with Ayurveda are planning to rely in allopathic
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treatments. A few of them are also planning to switch over to Homeopathic treatments due to the
fewer side effects of this mode of treatment. There are also substitutes like natural therapies like
Yoga. So, there is a huge threat from the substitutes.
Buyers' switching costs: the buyers‟ switching cost is very less considering that there is no fixed
investment attached to it. So, the perceived risk is very high. In addition to that, considering the
lower capital requirement of a new start-ups and the abundance of the financial options, we can
conclude that a new entry is possible at ease in the market. In addition to that, some pharmaceutical
companies which are already there in allopathic medicine business for a long period of time are also
coming into this Ayurvedic market. Examples are East India Pharmaceuticals
There are barriers to enter into the market as the fixed costs for a bulk manufacturer of Ayurvedic
products are huge. Though, some of the companies are banking on small scale production where the
fixed cost is very less and the medicines are mostly manufactured manually. So, for large scale of
production, there are barriers of entry, but for small scales of production, it may not be so
significant.
Threat of Rivalry:
Degree of fragmentation in Ayurvedic Industry: it was observed in Lucknow that many major
players and a number of local players are existing in Lucknow and the market is fragmented. So the
fragmentation in this industry is very high and with the introduction of newer brands like Patanjali,
the fragmentation has reached at its peak. So, the perceived risk out of the fragmentation is very
high.
Growth-rate in Ayurvedic Industry: The Annual sales figure of the different distributors suggest
that the industry is growing at a rate of 15% on year-on-year basis. So, the growth rate is optimum.
Considering the fact that the awareness of common people about Ayurvedic products and services
are increasing day by day, we can conclude that the growth rate is fairly good. So, the perceived risk
out of this factor is very less.
Extent of homogeneity in FI's products: the products and services offered by the different
Ayurvedic companies are almost same, except the fact that some companies have specific medicines
targeted towards some rarely diseases. So, the products offered by the companies are almost
homogeneous. In addition to that, I have taken into consideration Buyers' switching costs in
changing between different Ayurvedic companies, where the risk to the companies are very
high.
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So, the perceived risk is: High
There are a number of competitors which are competing in the market. Most of them are offering a
huge margin to the retailers as well as distributors compared to the general policy of AVP. The
major competitors as well as their activities are being found out in the survey and subsequently, they
are being analyzed to find out their respective profiles. The details of the same are being explained in
the subsequent parts of the document. But, there is strong competition among all of them and as the
market of Ayurveda in Lucknow is in the stage of maturity, I can infer that the new entrants in the
market can be considered to be laggards and they are expected to face a huge competition from the
existing player. Many of the players have been existing for more than half-a-century. So, competitors
are a source of worry for the new entrants.
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Conclusion:
a. Perception Mapping of the common people ( inhabitants of Lucknow):
It has been found that Baba Ramdev‟s medicine has placed itself at the top of the mind of the
population. In spite of the fact that it has been introduced only three years back, it has come
second in the second position in terms of brand awareness with an 87% of the respondents are
aware of the brand. Dabur has held itself at the top in terms of brand awareness. Though Arya
Vaidya Pharmacy is present there for last few years, it has almost zero-awareness among the
respondents. It was also found that Ayurvedic products and services has a very good reputation
among the common people with almost 59% of them use Ayurvedic products and 15% of them
are the consumers of Ayurvedic services.
I have extracted the major influential factors that affect final purchases in Ayurvedic products
and services. These are being grouped into two significant groups by factor analysis. One of
them is a combination of Effectiveness, fewer side effects, recommendations and dissatisfactions
with the other modes of treatments. These factors can be called as the Basic Expectancy Factors.
The other one is a combination of factors pertaining to Natural treatment, cheap option and
Status symbol. These are attributed to be the delighting factors.
In addition to that, I have done discriminant analysis to categorize common people into two
categories, namely, potential users of Ayurvedic (products and services) and the others
• If the discriminant score of a respondent is in between (0.113) and (0.820), I can classify him
to be a “Non-user” of Ayurvedic Products.
• If the discriminant score of a respondent lies in between (-0.594) and (0.113), I can classify
him to be a “User” of Ayurvedic Products
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Now, I have got the new means for the two groups, the mean for Group1 (non users of
Ayurvedic Treatment Services), the new mean is (0.146) and that of Group2 (users of Ayurvedic
Services) is (-0.831). The mean, that is, the midpoint of these two means is ( -0.3425). This gives
us a decision rule for classifying any new customer case:
• If the discriminant score of a respondent is in between (-0.3425) and (0.146), I can classify
him to be a “Non-user” of Ayurvedic Treatment Services.
• If the discriminant score of a respondent lies in between (-0.831) and (-0.3425), I can classify
him to be a “User” of Ayurvedic Treatment Services.
From the above equations, it can be inferred that the higher the coefficients of any attribute in
an equation, the higher is the influence of the same. So, the relative importance of the factors
and their influencing power with respect to the others can be gauged from the same.
An attribute based perception mapping was being carried out for all the prominent brands of
Ayurvedic products in Lucknow. It was based upon the responses of the doctors. On the basis
of two sets of factors, we have found the scores of individual brands. It shows that all the
companies are scoring in a cluster and the score is not very high with respect to both the sets of
factors. So, we can infer that there are scopes of improvement for any brand by scoring very
high in both sets of factors.
b. Competitive Analysis:
The competitive analysis was carried out in the Ayurvedic industry as well as with respect to
Arya Vaidya Pharmacy itself. It was found that the market is overcrowded with too many
competitors (both national players as well as local players). Based on the information collected, I
came into conclusion that Arya Vaidya Pharmacy is not in a position in the Lucknow market.
This market is dominated by Patanjali Chikitsalaya, which has been instrumental in finding a
dominant place for itself in just few years. The Ayurvedic market in Lucknow is expanding at a
higher pace and people over here rely on Ayurveda as a mode of treatment. So, newer
opportunities can be exploited with proper marketing strategies, which are being reflected in the
suggestive promotional strategies.
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Promotional strategies to introduce Arya Vaidya Pharmacy’s Products and Services in
Lucknow:
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with higher rate of discounts or commission. This rewarding system can encourage the
doctors to put the stock of the products of Arya Vaidya Pharmacy with them. This will
enable them to get the higher chunk of the profit. The most preferable range of discount
is in between 30%-40% for the doctors. Whereas, the preferable range of discount for
the retailers is around 50%-60% for a newly introduced products. Considering that, it is
better to offer the doctors with an optimum amount of stock of Products.
Opening retail outlets of its own as well as giving more commissions to the existing
ones: It is highly recommended to open outlets of its own as it will result in more profit
margins per unit of product sold. In addition, this exclusive retail stores will promote the
products of Arya Vaidya Pharmacy which will in turn potentiate the demand. The
preferable locations are the different popular shopping malls specifically in and around
Gomti Nagar. In addition, AVP can offer higher rate of commission to the Ayurvedic
retailers. Though their satisfaction level can only be achieved if a higher rate of discount
is being offered, it is highly possible to convince them by increasing the demand from
the customers' side.
It has been found that the pricing of the products of AVP are considerably less than that
of the other competitors. Though the customers are price sensitive, it has been found
that the sales figure of the other companies are much higher than that expected in spite
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of higher price. So, it is highly recommended to price the products a little higher than the
other companies‟ products and place it as a superior quality product with a higher price.
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Appendices:
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Baidyanath
Baba Ramdev‟s Medicine
7. Many people buy Ayurvedic products and rely on Ayurvedic treatments. What do you think
about the reason behind that? ( Rate “1” if you fully agree with and rate “6” if you not at all
agree with)
It is Effective
Less side effect
It is Natural
Their friends and relatives uses Ayurvedic
products and services
It is less painful
It is related to Indian culture
It is not so much painful
It is cheap
It is readily available
People are not satisfied with the other
treatment methods like allopathic treatment
It is status symbol
If there is any other reason(s), kindly mention along with the rating below:
8. What are the drawbacks of Ayurvedic products and treatments (if any)? Kindly list it down
in the following place.
9. What are the drawbacks of Allopathic treatments?
10. Suppose you plan to visit an Ayurvedic centre or plan to buy Ayurvedic products, which will
influence your decision? (grade 1-6, “6” for Most Influential, “1” for „Least Influential‟)
TV Advertisements
Friends suggestion
Roadside Hoardings/Billboards
Internet Advertisement
Display at the Retail outlets
Advertisement in Magazines
Doctors‟ recommendation
The Medical camp by the company that
benefitted you
Discount offered by the company
Recommendation of the retailer (shop-owner)
11. Which of the following treatment centers in Lucknow you have heard about?
(Write “Y” is you know about the center, or else leave it blank)
a. Baba Ramdev‟s Clinic
b. Kerala Ayurvedic treatment Centre
c. Dabur Ayurvedic centre
d. Agnivesh Ayurvedic Clinic
e. Dr. Goyal‟s Panchakarma Clinic
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f. Lucknow Ayurvedic College and Hospital
g. Charak Ayurvedic treatment centre
h. Please mention if anything else in the space below
12. Rate the following products on these parameters: (Rate each of them out of “5”)
Parameters Safety Cost Avail-ability Popular- Quality Less Mark ‟N‟
effecti ity (more Side if you are
veness recomme effect unaware
ndations/ of the
usages by brand
fellows)
(Name of the
Brand )
Dabur
Himalaya
Arya Vaidya
Pharmacy
Charak
Dhutpapeshwar
AUP
Emami
Zandu
Vaid Ramani
Baidyanath
Baba Ramdev‟s
Medicine
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16. Your family income (on a yearly basis) :
Please tick against the right option
Thank you for taking part in the survey. All of your answers will be treated confidentially.
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Appendix B: Questions Asked to the Distributors and Retailers
1. Major brands of Ayurvedic products and services existing in Lucknow
2. Amount of demand of each of them ( Monthly/Annually)
3. Number of distributors of the individual company ( specifically the company the distributor
is serving ) in and around Lucknow
4. Number of retailers whom the distributor is supplying
5. Number of retail outlets selling exclusively Ayurvedic product and number of medical shops
selling Ayurvedic products along with allopathic products ( popularly known as “Aungraji
Dawakhana”)
6. Brands available at your outlet/dealership centre
7. Any seasonal pattern
12. Any specific methods to boost up the sales like cash discounts
13. The contract details among them and individual company (specifically the offerings from the
company)
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23. The Ayurvedic companies which in recent past winded up their business and the specific
reason(s) behind that
24. Major factors that exists behind a successful Ayurvedic company
25. The branding strategies taken by different companies during their first time launch in
Lucknow and how effective were those campaigns
26. Branding strategies of the existing companies and the effectiveness of them are according to
the retailers/distributors. The effect of those branding strategies on the demand of the
products of respective brands.
2. Amount of medicine recommended each day of different brands with specific amount if
possible
3. Specific offerings from the individual companies
4. The important attributes for choosing a particular company‟s product or for recommending
the same to the patients
Name Of
the
Ayurvedic
Companies
Scores
out of
5
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6. How the medicaments are being dispensed? Whether the doctor themselves mix the drugs
and dispense or they prescribe it
7. Offerings from different companies and specific points of satisfaction and/or dissatisfaction
8. Expectation from a newly launched company and its product ranges. (starting from quality
of the products to the offerings )
9. Impression about Arya Vaidya Pharmacy (if you have heard about it and/or used its
products and/or services)
10. Specific suggestion and possible areas of improvement for the existing products
11. Number of Ayurvedic doctors in Lucknow
12. Total number of patients treated daily by Ayurvedic treatment.
13. Any major trend in the perceptions of the patients about Ayurvedic products and Services
14. Effect of different macro-economical factors on the patients and on their perceptions (if
any)
Appendix D: SPSS Outputs of various test carried out by the same software
Spss Outputs of Factor Analysis of the “Driving Forces” responsible for the Final
Purchase of Ayurvedic Products:
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The scree plot of the same is being depicted as follow:
Wilks' Lambda
Test of Wilks' Lambda Chi-square Df Sig.
Function(s)
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Canonical
Discriminant
Function Coefficients
Function
1
V4 -.087
V5 .421
V6 .148
V7 .257
V8 .066
V9 -.133
V10 .069
V11 .124
V12 .130
V13 -.014
(Constant -2.870
)
Unstandardized
coefficients
Eigen values
Function Eigen value % of Variance Cumulative % Canonical Correlation
1 .891 100.0 100.0 .331
a. First 1 canonical discriminant functions were used in the analysis.
Wilks' Lambda
Test of Wilks' Lambda Chi-square df Sig.
Function(s)
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Canonical
Discriminant
Function Coefficients
Function
1
V4 -.098
V5 .610
V6 -.062
V7 -.163
V8 .052
V9 -.041
V10 .393
V11 -.354
V12 .003
V13 .064
(Constant -1.138
)
Unstandardised
coefficients
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SPSS output related to Analysis of the Brand Positioning of the existing companies:
Structure Matrix
Function
1 2 3 4 5 6 7 8
VAR00004 .478* .448 .119 .391 -.319 -.462 -.052 .291
VAR00008 -.379 .118 .707* .311 .315 -.183 .115 .316
VAR00002 .397 -.138 .602* .231 -.314 .388 -.046 -.395
VAR00005 .316 -.300 -.405 .624* .076 .050 -.186 .463
VAR00006 .479 .287 .069 -.365 .645* .276 .013 .240
VAR00007 -.211 .510 -.123 .287 -.196 .722* -.149 .125
VAR00001 .161 -.034 -.012 .144 -.248 -.060 .890* .307
VAR00003 -.193 .273 -.093 .504 .457 -.142 .202 -.597*
Pooled within-groups correlations between discriminating variables and standardized canonical discriminant functions
Variables ordered by absolute size of correlation within function.
*. Largest absolute correlation between each variable and any discriminant function
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Canonical Discriminant Function Coefficients
Function
1 2 3 4 5 6 7 8
VAR00001 .090 -.055 -.089 .046 -.162 .164 .997 .174
VAR00002 .464 -.311 .536 .235 -.150 .378 -.010 -.385
VAR00003 .026 .306 -.267 .558 .522 -.141 .308 -.751
VAR00004 .463 .779 .065 .138 -.377 -.628 -.253 .087
VAR00005 .233 -.618 -.280 .660 .300 .171 -.207 .362
VAR00006 .610 .299 .084 -.311 .701 .289 .109 .168
VAR00007 -.360 .657 -.164 .199 -.280 .720 -.046 .210
VAR00008 -.520 -.087 .782 .292 .345 -.078 -.036 .525
(Constant) -3.538 -2.489 -2.419 -4.625 -2.237 -2.405 -1.938 -1.370
Unstandardized coefficients
References:
1. Marketing Research by Rajendra Nargundkar
2. www.scribd.com
3. www.esurveyspro.com
4. www.google.com
5. www.yellowpages.com
6. www.orkut.com
7. All the official websites of the competitors.
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