QUESTIONS FOR DISCUSSION: Q1.

Analyse the reasons that impelled Dabur to refine its Ayurvedic image to that of a herbal FMCG company. Current, Dabur India Limited was the company established in 1884 in Calcutta, India as a small pharmacy supplying nature based Ayurvedic medicines. The company was named Dabur from its proprietor Dr. S.K. Burman. Initially, this company marketed allopathic drugs as they believed that Ayurveda is the only affordable medium of fulfilling the healthcare needs of Indian nationals. For this need, it went for the establishment of research laboratories for the mass production of traditional Ayurvedic medicines in 1919. Thereafter the company further expanded its manufacturing units different parts of India. It further expanded its distribution network in Bihar and the North Eastern regions of India. In 1936, this company was formally incorporated under in the name of Dabur India Pvt. Ltd. The image of Dabur Company was that of an Ayurvedic company. It had the public perception of being associated with the people with 35 plus age as its product was not very much appealing to the age of below 35 years of age. Since, almost 70 percent of Indias population were below age of 35, it was losing the market of below 35 age group of youth and children in India. As those groups of people below the age of 35 was the population of high disposal income and covered more that 75% of population, Dabur had to cater its products for those populations. Therefore, Dabur re-oriented itself and its image from being a manufacturer of Ayurvedic Medicine to that of a Fast Moving Consumer Goods (FMCG) company. Also the product of Dabur itself did not attract and not much appealing to the young age group, it had to initiate for new product development which created new image to Dabur. Therefore, Dabur diversified itself into its strategic business units such as Family Product Division, Health Care Product Division, Ayurvedic Speciality Division as its growth drivers. By this Dabur looked after new products in Hair care, Skin care, Oral care and Food and Beverage. The company change its strategy and re-assigned its FMGC products to powerful brands like Dabur, Vatika, Anmol, Real and Hajmola. Additionally, Dabur had to cover the mass market share of Indias population for its growth and sustainability in the market. For this they hired a consulting firm to recommend some changes in the company marketing system and processes. The internal assessment with the consulting firm found that Dabur had the image of Herbal product specialist in Herbal Product. Dabur needed focus for its product improvement and sales to generate more profit and capture market share. Therefore, Dabur maintained their reputation as global herbal FMGC market with its product for personal care and health care for all age group of people. Later on, Dabur had to increase its sales and promotion activity in order to have increased returns in the market and to compete with its competitors. An Ayurvedic herbal product was not enough for Dabur to compete and sustain in the market with the other competitors, so it launched other new FMGC products with new packaging to sustain in the market.

Q2. What were the action plans Dabur undertook as a part of its restructuring? How did they help close the chinks in its marketing armour? When Dabur realised the public perception towards its products in the market attracted the people only who were above 35 plus of age i.e. they were the major consumption of their product they switched for catering other target groups by changing their product or marketing mix. When they realised that they are losing the market of people of group below 35, which was almost seventy percent of Indias population with more disposable income, they decided to re-orient their image from being a manufacturer of Ayurvedic medicine to Fast Moving Consumer Goods (FMCG) Company. As a part of its restructuring, one of the major changes is that it also re-designed its logo from old banyan tree to healthy living green tree. Its banyan tree conveyed the message of healthy life which was more emphasized in its new logo with vibrant colour with sprouting leaves which give the message of youthful healthy life. The overall well proportioned image of the new logo and its font evoke care, support and harmony. The new logo created a new identity with its key line being Celebrate life. Dabur majorly focused on making its brand for all age group of people through its new and innovative products. It also changed on its total marketing mix strategies i.e. product, place, price and promotion. Not only as the brand of producing the ayurvedic medicines Dabur launched new market for food and beverages such as fresh juice, soups and ketchup, etc. It also changed the packaging of its product to compact and more attractive to people. It also extended its distribution networks in all parts of India for its large scale spread all over the country. Its new product in juice has 55% share in package fruit market. Also soup market has the growth of 20% in the year 2003. Its oral care products such as Dabur Lal Dant Manjan and Dabar Red Toothpaste has challenged over the leaders in the market such as Hindustan Lever and Colgate Palmolive.

In the FMGC segments of Dabur products such as toothpaste, Shampoo, Baby massage oils and Hair oil, Dabur kept the price of its product competitive in comparison to others in the market to increase the demand for such product. Dabur initiated selective price reduction for their products and also introduce smaller sachets of this product in lower price to target all group and for the easy convenience uses. It had reduced the price of Vatika Shampoo by 20% and also launched 1 rupee sachets Vatika Shampoo to double the volume of its sales in the rural markets of India. Dabur did not contribute more towards its branding and promotion initially therefore it tried to re-focusing in its own branding strategies. It launched its new promotional campaigns targeting all the age groups through advertisements and brand indorsing with leading Bollywood actors and sport stars like Amitabh Bachchan which had tremendous impact in India as well as aboard for publicity of their products . From its umbrella brand of
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Chayanprash and honey, Dabur moved towards launch of new products in its portfolio such as oral care, hair care, skin care, sanitary and health care products. It adopted new product promotion and branding strategy with wide range of new offerings and packaging. Not only in India, Dabur also acquired the business of its franchisees and engaged in manufacturing and selling and export of its product and services internationally. In the Middle East, under its licence limit of Dabur Redrock Limited, later renamed as Dabur International Ltd. marketed Dabur products in 2003. In the same year, its other subsidiaries were established in Nepal, Nigeria, Bangladesh and Pakistan. It also entered in North America in the year 2003 initiating its product market for ethnic Indian segment. All of these repositioning exercises of Dabur have achieved success to the company with noticeable increase in sales and profit for the company in the year 2004. Its sales figure and profit have tremendously increased in the year 2004 in comparison to those of earlier period. The company's revenue in 2004 reveals that the changes undertaken by the company have shown better results.

Q3. Dabur targeted sales of 200 billion by 2006. Hence it needed to grow annually at a rate of 15-20 percent in the year 2004, 2005 and 2006. Comment on the growth strategies adopted by Dabur? Throughout study of the given case, we found that Dabur had created its milestone in expanding its business from 125 years using new strategic, changing its own image and producing different innovating product for all age groups people. In the year 2003-04 Dabur had the sales revenue of 11.48 billion and its net profit was 1.01 billion. Also the company aims of gaining 200 billion sales by year 2006 which means 15 to 20 percent of annual increment in sales figure. Dabur has implemented aggressive marketing policy with lots of innovation and renovation of its product line. Its growth strategies involve the total repositioning of its brand and product. Dabur re-oriented its perception of the Ayurvedic medicine manufacturer with its products associated with the people above 35 years of age. Therefore it has been able to cater the overall market share of rest 75 percent of total population having high level of disposable income. Also, Ayurvedic herbal products is enough for Dabur to compete and sustain in the market with the other competitors, so the company moved itself from herbal medicine manufacturing company to FMGC company. It launched new products which lured all the age groups from children to old age. For this diversified itself into its strategic business units such as Family Product Division, Health Care Product Division, Ayurvedic Speciality Division as its growth drivers. In FMGC Segment Dabur offered new products in Ayurvedic medicines, Hair care, Oral care, Skin care, and Food and Beverage. For the growth and sustainability in the market and to get more market share it hired a good and renowned consulting firm Accenture to recommend some changes in the company marketing system and processes. Form the internal assessment found Dabur realised that it
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had the image of Herbal product specialist and had strong Herbal healthcare product market share it maintained their reputation as global herbal FMGC market with its product for personal care and health care for all age group of people. As a part of its restructuring, it also re-designed its logo which give the message of youthful healthy life with its key line being Celebrate life. The company identified its major personal and healthcare products being its strong growth drivers and changed the umbrella branding strategy to the Key brand Strategy for all major products, categorizing itself in the powerful brands. It reassigned all its FMCG products to its five power brands Dabur, Vatika, Anmol, Real and Hajmola. Dabur did not contribute more towards its branding and promotion initially therefore it tried to re-focusing in its branding strategies. It launched its new promotional campaigns targeting all the age groups through advertisements with leading Bollywood actors and sport stars like Big B which had huge impact on local as well as global market. It adopted new product promotion and branding strategy with wide range of new offerings and packaging. Dabur also took concerted steps towards geographical expansion to international markets, and within India, focused on regions like southern India, which it had earlier neglected to increase its sales and revenue. It has also identified its business outside India so has acquired the business of its franchisees and engaged in manufacturing and selling and export of its product and services internationally. In the Middleeast, under its licence limit of Dabur Redrock Limited, later renamed as Dabur International Ltd. marketed Dabur products in 2003. In the same year, its other subsidiaries were established in Nepal, Nigeria, Bangladesh and Pakistan. It has also entered in North America in the year 2003 initiating its product market for ethnic Indian segment. Dabur has adopted the Line Extension Strategy for attracting consumers of different area, by introducing its products and expanding its market share. It has been emphasizing on the taste and preference of its consumers and assigning its product portfolio according to their need and wants. In targeting for increasing sales Dabur could use its opportunities like extending Vatika brand to new categories like Skin Care and body wash, launch several OTC brands, exploring new geographical areas and spreading it globally as well as locally, adopted the strategy of renovation and innovation. Using these aggressive marketing strategies, Dabur becoming trustworthy and fast moving growth company (FMCG).