1

Cavinkare Private Limited: Serving Low Income Consumers

Case Summary
Historical Background: - CavinKare was created out of the business energy of C.K.
Ranganathan, from business of drugstore to entire line of daily use item like locks shampoo,
talcum powdered, detergent, Etc. The organization started as Chik Indian in 1983.
Chik India, which was relabeled as Elegance Beauty products in 1990. In 1998 the Company was
relabeled as CavinKare Pvt. Ltd (CKPL). The reason behind the name is, Cavin means beauty in
Tamil and care is spelt as Kare. The name is also a special one as it signifies the name C and K
of Mr. Ranganathan. The organization offers top quality Individual proper care (hair proper care,
healthy epidermis proper care, home care) and Foodstuffs. The Company, which mainly trusted
agreement production for many years has now set up its own outstanding place at Haridwar to
serve the requirement of both household and worldwide industry.
Tough use of locks shampoo in city Indian was a pattern, but non-urban Indias highest possible
inhabitants was not aware about the use of locks shampoo and including to this, non-urban
populations investing energy was less so they could not sell the conventional nasty container, so
Chik came up with a 50 paisa Sachet and this was the increase of CavinKare Private Restricted.
Challenges experienced by CavinKare:
1. Underdeveloped People: Wide majorities of the non-urban individuals are custom
limited, and believe in old traditions, traditions, and routines.

2. Lack of Proper Actual Interaction Facilities: Actual communication of the towns is highly
expensive. Even today most towns in the southern areas are not reachable during the
monsoon.

3. Many 'languages' and Dialects: The number of languages and 'languages' differ
commonly from condition to condition, area to area and probably from area to area. The
information have to be provided in the local languages and 'languages'.

4 Low Per Household Income: Even though about 33-35% of GDP is produced in the nonurban places it is distributed by 74% of the inhabitants. Hence the per capita earnings are
low as opposed to towns.

5 Low Levels of Literacy: The knowledge rate is low in non-urban places as in comparison
to towns. This again results in problem of communication for marketing reasons.

6 Prevalence of unwarranted producers and periodic demand: For any labeled item there
are several different 'local variants', which are less expensive, and, therefore, more
suitable to villagers.

7 Different way of thinking: The difference is also in the way of considering. The kind of
options of producers that an city client loves is different from the options available to the
non-urban client. The non-urban client has a relatively easy considering as as opposed to
city version.
Products Range-Personal Care
Hair Care:
1. Chik Shampoo
2. Nyle Natural Shampoo
3. Meera Badam Shampo
4. Indica Hair Colorant
Ethnic Care
1. Meera Hair Clean Powder
2. Meera Natural Hair Oil

Skin Care:
1. Fairever
2. Spinz Talc
3. Spinz Deodorants
Marketing Strategy
1. They affiliate with individuals of similar wave length in considering, who will definitely
deal with top quality first and major and besides, they have a powerful program of top
quality tracking.
2. As part of their technique, they lay down all the guidelines for the producers in keeping
their requirements.
3. Outsourcing is one of the three primary guidelines of CavinKare's business technique.
4. Direct press special offers have assisted develop knowledge of item groups and change.
5. Long-entrenched living routines and using stereo ads, video on rim.
6. By the help of effective communication they tried to understand the worries, ambitions,
and desires of the non-urban clients.
7. CavinKare considers that its primary capabilities are research and growth, brand building,
and submission management.
8. Chik Shampoo used France fragrance to distinguish itself on the cedar of excellent
fragnance.
9. Give 4 used Sachet and get a sachet free.(initial offer)
10. Using Haats and Melas as a submission route, as melas are generally performed after the
growing and that time investing energy of farm owners is good.
11. Cavinkare submission program achieved out to .75 thousand sites.

Communication Strategy
1. CavinKare found that detergent utilization was the greatest hurdle and individuals did not
see the need for using Shampoo.
2. Company tried to express the concept to the customer that detergent utilization was bad
for the locks and when a item prevails particularly for locks it should be used.
3. Finally clients decided that Shampoo utilization provided smooth and smooth locks.
4. To develop a local and local existence, they promoted in local create and television,
before taking the producers nationwide.
5. They promoted more often and employed well certified experts to contest with the
opponents.
6. The famous Chik Lady in every Chik Shampoo professional presented the chance of
smooth and controllable locks for the clients.
Accessibility & Affordability
1. The success of the sachet modified the framework of the locks shampoo industry.
2. New levels of clients mainly from non-urban industry could now manage hair shampoos.
3. The higher category tag connected to the locks shampoo fast washed out away.
4. Extremely cut neck industry appeared.
5. Significant business impact on what the customer purchased.

Case Questions Solutions

Reasons & Factors in growth of Chik Shampoo:

1. Product Availability - Shampoos penetration in rural market was very less.

2. Market Study - CalvinKare was into pharmacy, and had a study regarding cheap
packaging.
3. Low Awareness It can be taken as advantage, as Chik Shampoo got the chance to
spread awareness before other international players in rural India.
4. LUP and SUP It was the major reason of growth as LUP and SUP was affordable and
were easy to store.
5. Unexplored/ Untapped Only HUL covered some of the rural regions, so the major rural
market of India was untapped and unexplored.

6. Innovation/ Differential - core competencies are research and development, brand

building, and distribution management.

7. Moreover no competitor provided with the combination of good quality at low price.

Rural markets are more attractive than urban markets

1. High Market Potential as 73.78% population earn between the range of 1000 and above,
and the rate at which per capita of rural population is increasing is much or less similar.
2. Many middle income households are there in the urban areas, if they are the target
market then why not the middle income group of rural population

3. Government policy of India is such that it supports villages and provides better credit
facility to the companies venturing into rural segment.
4. The Indian rural markets vast size offers great opportunities to marketers in terms of
size.

5. Trends indicate that the rural markets are coming up in a big way and growing twice as
fast as the urban as many 'middle income and above' households in the rural areas as
there are in the urban areas.

Size of the segment main reason for exponential growth

Yes, Selling in volume was the major reason for growth as:
1. Reach (distribution) of HUL, P&Gs holding and distribution were not so strong in rural
area.
2. The price of the HUL and P&G products are more as compared to Chik.

Marketing Mix Strategy

Promotion

Cinema is the most cherished means of family entertainment and cine stars have cult following in
the south. Therefore, the communication strategy was to leverage popular cinema dialogues to
drive home the message
1. Ad strategy based on the powerful appeal of cinema among common masses.
2. Innovative radio ads based on popular cinema dialogues, unlike plain radio jingles of
competitors.
3. Popular southern cine stars were endorsed Chik- Amala, Khushboo, Manorama and
Charlie.
4. To encourage trials, CavinKares team travelled extensively in rural pockets
5. Trials on schoolboys to demonstrate how to lather and wash, comb hair and show the
difference
6. Video on Wheels and other traditional methods.
7. Wall Paintings and Road Shows
8. One sachet for four empty sachets.

Price

Price of the product plays a major role for the sales growth of any product. CavinKare followed a
policy Price Penetration, as its price was lowest in the market, so that it can attract price sensitive
customers and tap more and more market.
The price of the shampoo remained the same, in all the quantity. Generally other shampoo
company provided with different price per ml for various sizes. i.e. Lower as quantity per ml
increases.
They came onto the 50 paise sachet price, they discovered the price by finding out the per person
consumption of soap in terms of Rs. which came across 8 Rs per month for a family.

Place- Distribution

1. Instead of using conventional distribution route, they have created sachet sales force that
sells only sachet packs to small retailer including paan shops.

2. Haats- These are the weekly shops, haats have a verity of items, rural people prefer to
buy from haats as the perception is items are priced lower in haats.

3. Melas.- Melas are generally conducted after the harvesting, so melas attract a huge
crowd and at that time buying power is also high
4. 40% coverage of total rural population(.75 million retail outlets.) Distribution strategy
clears that Chik wanted to cover more of rural untapped market.

Product
1. Sachets introduced for the 1st time

2. Easy to store and access.

3. Different fragrance- Chik used a French Fragrance in the shampoo.

4. Spinz Deodorant (Dab-on) for one week.- i.e use a small sized package deodorant.

5. Packaging in small quantity and providing shampoo package in 3 color, with a common
lady been displayed on all.

6. High end technology used for manufacturing process.

Competitor of Chik Shampoo

Hindustan Lever Limited was a major competitor of Chik Shampoo in Rural India. HLL had 2
major shampoo brands- Clinic Plus and Sunsilk.
Clinic Plus was launched in 1971 and positioned itself as Shampoo that makes your familys
hair healthy and glowing. It appealed largely to urban middle class. HLL launched Clinic all
Clear in 1987 as therapeutic-anti dandruff shampoo. Sunsilk beauty shampoo, available since
1964 was positioned as the hair expert
Procter & Gamble was the other competitor. It had Pantene and Head & Shoulders in its
portfolio as a shampoo brand. Pantene was launched in 1995 and Head & Shoulders later an antidandruff shampoo in 1997.
Dabur was leading Indian company. It is more into herbal products. Its Vatika Herbal Shampoo
gave competition to Nyle herbal shampoo of Cavinkare.
Other competitors were RDM Traders Private Limited (Ayur Herbal Shampoo) and Godrej
(Colourgloss Shampoo) and Jhonsan & Jhonsan(medicated anti-dandruff shampoo) and various
other local players who had very less presence in the market.