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MARKETING STRATEGIES:

The American Marketing Association defines marketing as "the process of planning and
executing the conception, pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individual and organizational objectives."
Marketers use an assortment of strategies to guide how, when, and where product
information is presented to consumers. Their goal is to persuade consumers to buy a
particular brand or product.

A marketing strategy is a plan or an approach for marketing your products and services.
Successful marketing strategies create a desire for a product. A marketer, therefore,
needs to understand consumer likes and dislikes. In addition, marketers must know
what information will convince consumers to buy their product, and whom consumers
perceive as a credible source of information. Some marketing strategies use fictional
characters, celebrities, or experts (such as doctors) to sell products, while other
strategies use specific statements or "health claims" that state the benefits of using a
particular product or eating a particular food.
SYNTHESIS OF CORPORATE AND MARKETING STRATEGIES:

Marketing strategies explain how the marketing function fits in with the overall strategy
for a business. Examples of marketing strategies could be:

Business Strategy Example Marketing Strategies


Grow sales Launch new products
Expand distribution (e.g. open more shops)
Start selling products into overseas markets

Increase profits Increase selling prices

Reduce the amount spent on television advertising


Build customer Implement a public relations programme
awareness
Invest more in advertising
MARKETING STRATEGIES AND THEIR PURPOSE:

Some marketing strategies are created for the purpose of capturing a certain segment of
the market, but the majority of small business strategies are more generic in nature.
Even so, it's important to understand what your strategy is trying to achieve.

Boost Consumer Confidence

Consumers are fickle lot and are frequently hesitant to buy a product they know little
about. If your business or products are new to the area, you could create a marketing
campaign that emphasizes the quality and value of your products. The resulting boost in
consumer confidence will likely translate into more action at the cash register.

Create Awareness

Another way to spark interest for your products is to conduct a campaign designed to
promote your products in as many ways as possible. In other words, your marketing
strategy could be to create buzz by blanketing the local airwaves, print space, and other
advertising mediums with your name, logo, and products. Increased awareness will
definitely bring more people into your store, but it also costs money, so you should be
prepared to increase your advertising budget to pull it off.

Leverage Emotions

No matter what they say, the buying decision is emotional for many customers. Large
corporations spend millions of dollars playing on their customers' emotions and what
works for them, can work for you, too. The key is to create a campaign that makes
consumers feel themselves, your company, and the decision to buy your products.

Overcome Objections

The task of overcoming a buyer's objections is usually assigned to the sales team.
However, a well-crafted marketing campaign can work toward overcoming your
customers' buying obstacles before they walk in the door. A marketing strategy that
emphasizes warranties, testimonials, endorsements, and other positive reinforcement
devices can not only make the buying decision easier for existing customers, but also
attract new customers who hadn't previously considered buying from your business.
Set a Deadline

Why do so many ads emphasize the date the sale ends? Because people respond to
deadlines. Marketing strategies designed around the idea of limited supplies, temporary
price reductions, or other mechanisms that create a sense of urgency can provide a quick
influx of customers and can potentially jumpstart a business suffering from a
diminished customer base.

FACTORS INFLUENCING MARKETING STRATEGY:


MARKETING STRATEGIES AND TARGET CUSTOMERS:

The results of analyzing market segments leads the marketer to consider one of the
following target marketing strategies.

• Undifferentiated or Mass Marketing – Under this strategy the marketer attempts


to appeal to one large market with a single marketing strategy. While this approach
offers advantages in terms of lowering development and production costs, since
only one product is marketed, there are few markets in which all customers seek the
same benefits. While this approach was very popular in the early days of marketing
(e.g., Ford Model-T), few companies now view this as a feasible strategy.

• Differentiated or Segmentation Marketing – Marketers choosing this strategy try


to appeal to multiple smaller markets with a unique marketing strategy for each
market. The underlying concept is that bigger markets can be divided into many
sub-markets and an organization chooses different marketing strategies to reach
each sub-market it targets. Most large consumer products firms follow this strategy
as they offer multiple products (e.g., running shoes, basketball shoes) within a
larger product category (e.g., footwear).

• Concentrated or Niche Marketing –This strategy combines mass and


segmentation marketing by using a single marketing strategy to appeal to one or
more very small markets. It is primarily used by smaller marketers who have
identified small sub-segments of a larger segment that are not served well by larger
firms that follow a segmentation marketing approach. In these situations a smaller
company can do quite well marketing a single product to a narrowly defined target
market.

• Customized or Micro-Marketing - This newest target marketing strategy attempts


to appeal to targeted customers with individualized marketing programs. For
micro-marketing segmentation to be effective the marketer must, to some degree,
allow customers to “build-their-own” products. This approach requires extensive
technical capability for marketers to reach individual customers and allow
customers to interact with the marketer. The Internet has been the catalyst for this
target marketing strategy. As more companies learn to utilize the Internet micro-
marketing is expected to flourish.
TYPES OF MARKETING STRATEGIES:

Marketing strategies may differ depending on the unique situation of the individual
business. However there are a number of ways of categorizing some generic strategies. A
brief description of the most common categorizing schemes is presented below:

• Strategies based on market dominance - In this scheme, firms are classified based
on their market share or dominance of an industry. Typically there are three
types of market dominance strategies:

o Leader
o Challenger
o Follower

• Porter generic strategies - strategy on the dimensions of strategic scope and


strategic strength. Strategic scope refers to the market penetration while strategic
strength refers to the firm’s sustainable competitive advantage.

o Product differentiation
o Market segmentation

• Innovation strategies - This deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is on
the cutting edge of technology and business innovation. There are three types:

o Pioneers
o Close followers
o Late followers

• Growth strategies - In this scheme we ask the question, “How should the firm
grow?”. There are a number of different ways of answering that question, but the
most common gives four answers:

o Horizontal integration
o Vertical integration
o Diversification
o Intensification
PREPARATION OF MARKETING PLAN:

Once a strategy has been identified, then the business must develop an action to turn the
strategy into reality. The starting point for this plan is the setting of marketing
objectives.

Marketing objectives are the specific targets for marketing set by the business to achieve
their corporate objectives.

Examples of marketing objectives might be:

• Increase sales by 10%


• Launch a new product by the end of the year
• Achieve a 95% customer satisfaction rating
• Increase the number of retail outlets selling our products by 250 within 12
months

It is important for a business to set marketing objectives because managers can then
have targets for their work. They can then measure more effectively the success or
failure of their marketing strategies to achieve these objectives.
BAD Marketing Strategy vs GOOD Marketing Strategy:

Introduction

In FMCG marketing, the main key to success is: “the right product, at the right moment,
for the right customer”.

Marketing is not an exact science. In spite of any market studies or panels, only 20% of
new products launched on the market are successful, so the risk of failure is really high.

That is the reason why, in the Fast Moving Consumer Goods industry, 90% of products
launched are in fact redesigned or remarketed products. The examples of success and
failure that we have chosen to study prove that even if, afterwards, it often seems easy to
analyze the reasons of a success or a failure, choices made at the launching time always
seem to be founded.
BIC Fragrance

Context

Since 1950, Société BIC has had a lot of success with developing low priced,
high-quality disposable versions of a variety of durable goods and getting consumers to
switch to these versions:

1950: disposable pen


1973: disposable lighter
1975: disposable razor

This product fitted to BIC spirit (useful, cheap and disposable). It seems
that consumers have not been seduced by the new BIC’s creation.

Launching: reasons and main steps

Searching for a new original idea, BIC conducted market studies which
told them that consumers considered fragrance to be the most important
characteristic of a perfume, not image. In the 3 billion euros perfume
market, fragrance prices had increased by 66% since 1981. So BIC felt
the market was ripe for a low-price alternative. So, a new perfume has
been developed and priced at 5 euros.

According to Marcel Bich, the founder of BIC: “over ten decisions made by a manager,
seven are right, two are quite bad and one is completely crap”.

M. Bich was right and gave us a good example of his speech. In 1988, BIC, leader for
disposable goods, innovated with a new product: perfume. In 1991, the product is
withdrawn from the market; this is a failure.

The bottle was designed to resemble BIC's cigarette lighters, connoting


everyday usage and self-purchase. An other argument has been also
given by a BIC’s executive. He has stated that the key behind the BIC
perfume concept is "taking fine French perfume out of the bedroom and
into the on-the-go world".

So BIC declined its new idea into four products:

2 fragrances for men: BIC Homme & BIC Sport (also for
women)
2 fragrances for women: BIC Jour & BIC Nuit

In order to stay in adequation with its strategy, BIC chose to sell this new
product in tobacco shops, exclusively.
Key factors of the failure

In 1991, the production of BIC perfumes is stopped. There are two main
explanations for such a disgrace. BIC made a useful product when customers look for
superficiality; they made it cheap whereas people use to spend a lot of money in this
type of goods. And they made something disposable when customers are also looking for
a beautiful object.

First of all, the product did not correspond to the brand image. Indeed, BIC Company is
known and liked for proposing useful products in the every day
life. But perfume is something more sophisticated and “futile”, far away from the BIC
universe.

Secondly, BIC perfume did not fit with consumer needs on the market. Actually, it
seems that conventional wisdom, according to which “the key to success for perfume is
image”, was right. Contrary to the tendency shown with market studies.

Conclusion

This failure showed us that a company whishing to diversify and innovate


should be sure to stay in adequation with its spirit and brand image. This
company must be sure that consumers are ready to change their habits.
BIC went too far on a conservative market.
Smirnoff Ice

For several years, alcohol market tended to decrease. If traditional alcoholic drinks, such
as wine, do not suffer this tendency, the situation is tougher for spirit and beers. At the
end of the 90’s, Bacardi tried to face this drop by launching: Bacardi Breezer (sweet
cocktails in 25cl bottles). But the product is only sold in the UK. In 2000, Smirnoff (n°2
on the world spirituous market) decided to launch a similar concept worldwide.
BINGO!!

Context

Before this new step in its history, Smirnoff was only positioned on the
spirituous segment. To extend its range of products and gain market
share on the alcohol market, Smirnoff had to compete on new segment.
By launching Smirnoff Ice, the brand was attacking the girl market.

Indeed, this product has some common points with the beer category:

Similar packaging and package (mainly 25cl Bottles)


Nearly similar alcoholic degree (between 4 and 7°)

In 2000, the beer market represented 738 million liters against 254
million liters for the spirituous market. At this time, this market was
dominated by the following brands:

Classic beers: Heineken and 1664


Special beers: Desperados, Corona and Leffe

Launching: reasons and main steps

It appears to Smirnoff marketing executives that entering the beer market


was the best opportunity for at least two reasons.

First of all, there is no similar product existing in the beer market (excepted in the UK).

Secondly, it is a high potential segment as it will permit to renew the beer


segment and by the way, to attract young people.

Smirnoff Ice is positioned as a fashion product for adults and aim to make
young people and women jump from soft alcohols to spirituous (e.g. vodka). During the
launching campaign, the objective was to be present in as many as possible fashion
places.
Key factors of the success

In 2002 (launching year), 326 millions of bottles have been sold in the US
and 660 millions in the rest of the world.

This great success can, be explained by the coherence between Smirnoff


offer and the general consumers demand:

Young and fashionable packaging


Easy to transport (increase of bottle consumption)
Sweeter taste, softer alcohol flavor, no typical bitterness of beer
Qualitative positioning

The product has been made following this


idea. This is a mix of Vodka, lemon and
malt. Smirnoff Ice has been launched in
world. It was sold in 75cl bottles (3€) and
in packs of 6 X 27,5cl bottles (7€). The
alcohol degree is about 5,5° and the
product must be drunk fresh (3°c).

Smirnoff has also chosen the right target with the 18 - 35


years old.

The distribution network also contribute to the success of the launching campaign:
fashionable places in the first time, and then super and hypermarkets.

Finally, the fact that this new product has been launched by a powerful
and well known brand has obviously contributed to the success. Indeed, the
communication campaign has been focused on the product only as there was no brand
awareness work to do.

Conclusion

Smirnoff has been successful with this product because the company chose the right
marketing strategy to diversify its product portfolio. Indeed, they did not make the same
mistakes as BIC, staying on their original market and launching a complementary
product. With Smirnoff Ice, the company is attracting people to alcoholic beverages and
so to its vodka.
CASE STUDY:
CAVINKARE:

Success is a journey not a destination. CavinKare began with a young mind choosing the
road less taken. In 1983 with a single product, CavinKare started out as a small
partnership firm. The Company that began its journey as Chik India Ltd was renamed as
CavinKare Pvt. Ltd (CKPL) in 1998. With innovative Entrepreneur C.K. Ranganathan at
the helm, CavinKare emerged into a successful business enterprise.

Smart marketing and clear product positioning not only ensured CavinKare's growth but
also helped the company broaden its product portfolio extensively. The company now
markets ten major brands. Over the years, CavinKare has achieved a competitive edge
with sound understanding of mass marketing dynamics. The company offers quality
Personal care (hair care, skin care, home care) and Food products borne out of a keen
understanding of consumer needs and keeping up company's the values of innovation
and customer satisfaction.

Today, CavinKare, having established a firm foothold in the national market, is


increasing its popularity in the international arena. A dedicated Research &
Development centre, equipped with latest equipment and technologies, constantly
supports the various divisions in their endeavour. 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 has touched a turnover of over 5000 million INR in 2006-2007. The
Company has employee strength of 576, an all India network of 1300 Stockists catering
to about 25 lakh outlets nationally. CavinKare's astute professionalism, innovative
products and consistent quality are results of its significant corporate practice.

“ To succeed we believe that we need total commitment and highest standard of ethical
and corporate behaviour in order to provide the best for our consumers, stakeholders
and employees”.

- C.K. Rananathan
THE INNOVATIVE ENTREPRENEUR:

C K Ranganathan, chairman and managing director of CavinKare, has shown the world
it is possible to beat the multinationals even in the most difficult market of fast moving
consumer goods.

Ranganathan's journey, which started from a small town of Cuddalore in Tamil Nadu,
has been an amazing one. A business which he started with only with Rs 15,000 is now
worth Rs 500 crore (Rs 5 billion).

He learnt the first entrepreneurial lessons from his father, Chinni Krishnan, who started
a small-scale pharmaceutical packaging unit, before moving on to manufacture
pharmaceutical products and cosmetics.

C K Ranganathan has the following to say:

His father, his inspiration

His father, Chinni Krishnan, an agriculturist, was also into pharmaceutical business. As
he was poor in academics, he wanted him to either do agriculture or start a business.

HIs siblings were good in studies -- two of them became doctors and another a lawyer.
He was the odd one out. While his siblings studied in English medium schools, he was
put in a Tamil medium school. He used to suffer from an inferiority complex because
of his poor academic record.

Studies did not interest him, but rearing pets did. When he was in the fifth standard, he
had a lot of pets -- more than 500 pigeons, a lot of fish and a large variety of birds. He
used to earn pocket money out of pet business at that time. Perhaps, the entrepreneurial
spirit in him showed its first streak.

The origin of the concept of sachets

His father died as he entered college. His father had come out with the sachet concept a
couple of years prior to his demise. He felt liquid can be packed in sachets as well. When
talcum powder was sold only in tin containers, he was the one who sold it in 100 gm, 50
gm and 20 gm packs.

When Epsom salt came in 100 gm packets, his father brought out salt sachets of as low
as 5 gm.

'Whatever I make, I want the coolies and the rickshawpullers to use. I want to make my
products affordable to them,' he used to say.
Selling things in sachets was his motto as he said, 'this is going to be the product of the
future.' But my father could not market the concept well. He moved from one innovation
to another but never thought of marketing strategies. He was a great innovator, but a
poor marketer.

Joining the family business

After his father's death, his brothers took charge of the family business. In 1982, when
he joined them after his studies, they had launched Velvette Shampoo. Within eight
to nine months, he left the business because his ideas clashed with theirs.

As he was in the manufacturing unit, he did not know anything about marketing or
finance. But, his inferiority complex notwithstanding, he was somehow confident of
doing business better.

Starting his own business with Rs 15,000

He had left my brothers saying that he did not want any stake in the property or
business. That was a defining moment for him. He had saved Rs 15,000 from his salary
and that was all he had. Yet he was confident of achieving success. He did not feel
anything about riding a bicycle after having got used to cars.

For a week, he could not make up his mind as to what business to do. He knew only two
things; making shampoo and rearing pets. He didn't want to venture into the shampoo
business as it would initate a fight with his brothers. However, he decided to do the
same later as he could only make shampoo.

He rented a house-cum-office for Rs 250 a month against an advance of Rs 1,000. He


took another place for the factory for a rent of Rs 300 a month and against an advance
of Rs 1,200. He bought a shampoo-packing machine for Rs 3,000.

How Chik Shampoo was born

He named it Chik Shampoo after his father. The product did not succeed
immediately; he learnt many things during the process. In the first month, he could sell
20,000 sachets and from the second year, he started making profits.

He moved to Chennai in 1989 but his manufacturing unit continued to be in


Cuddalore. It took him three years to get the first loan because banks asked for
collateral. He did not have any. But one particular bank gave him a loan of Rs
25,000 which they rotated and later upgraded to Rs 400,000, Rs 15 lakh (Rs 1.5
million), etc.

The bank manager wrote in the loan application. 'This person does not have any
collateral to offer but there is something interesting about this SSI unit. Unlike others,
this company pays income tax!'
How Beauty Cosmetics became CavinKare

As they planned to expand to new products, they thought the name Beauty Cosmetics
would be restrictive. In 1998, they ran a contest among their employees for a name and
one of them suggested CavinKare; with C and K spelt in capitals. CK, his father's initials.
Moreover, Cavin in Tamil means beauty and grace. So the brand CavinKare was
introduced.

Perfumes for the poor

They wanted to cater to those who cannot afford (high priced) perfumes. Good
perfumes came at a huge price -- they were beyond the means of ordinary people. So,
they decided to come out with a Rs 10 pack Spinz. They were successful in that too.
CavinKare’s INNOVATIVE STRATEGY:

CavinKare’s strong belief in innovation has been the main reason for its survival in the
market. The company is well known as a pioneer in sale of sachets in the market. From
time and again it has been known to introduce products to unreached masses. The
following products expanded their reach amongst customers:

CHIK SHAMPOO:

Just a mention of Chik Shampoo today gives rise to varied perceptions. To the rural and
semi urban population of India, it is the preferred daily shampoo. To the market and its
players, the second largest selling shampoo in the country. To the competition, a case
study in competitive strategy. And to us, our raison de etre.

In a highly competitive FMCG category that seemed impenetrable to most marketers.


Chik Shampoo identified a humongous opportunity in rural and semi urban India and
created waves with its entry into these markets. Combining innovative sachet packing,
strategic pricing (At Re.1 and 50p) and a strong and motivated distribution network,
Chik Shampoo transformed the very nature of shampoo packaging and usage.

TARGET MARKET:

Chik Shampoo has always targeted both, girls and women in rural and semi urban India.
The brand has gained their confidence and become a household name by catering to
their continuously evolving requirements and preferences.

STRATEGY FOR SUCCESS:

• Rural penetration,
• Live demonstrations,
• Advertisements in movie theatres,
• Introduction of sachets of small quantity.
How Chik Shampoo conquered the rural market

Multinational companies sold products in big bottles and not in sachets and they sold
only from fancy stores. They did not look at the small kirana stores, nor did they look at
the rural market.

Cavinkare 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. They showed
advertisements in between, followed by live demonstrations. They also distributed free
sachets among the audience after these shows. This worked wonders in rural Tamil
Nadu and Andhra Pradesh. After every show, their shampoo sales went up three to four
times.

Today, the Indian rural market is growing at a pace double than that of the urban
market.

Chik Shampoo No. 1 in South India:

When Chik entered the market, Velvette Shampoo was being marketed aggressively by
Godrej. But a scheme of his became extremely successful --they exchanged five sachets
of any shampoo for a Chik Shampoo sachet, free.

Later, they altered the scheme -- they started giving one free Chik Shampoo sachet in
lieu of five Chik Shampoo sachets only. 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.

When they introduced jasmine and rose fragrances, the sales went up to Rs 30 lakh (Rs
3 million) per month and with actor Amala as the model, our sales rose to Rs 1 crore (Rs
10 million) a month! Each idea of theirs was rewarded by his customers. There has been
no looking back since then.

Cavinkare’s market share increased and in 1992, they became the numero uno in South
India. It took nine years for Mr. Raghanathan to overtake his brothers' business.
Innovative marketing strategy used for Chik Shampoo:

“During 1999, the penetration level of Chik Shampoo was not aggressive. Hence the
company went back to the consumer to understand their basic needs that would help
Cvai Kare to drive the sales growth and gain good market share in the shampoo market.
Cavin Kare also discovered that soap usage was the biggest barrier and people did not
see the need for using Shampoo. As part of the consumer study, the 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. The consumers responded by
stating that their fathers and grandfathers have used only soap and their hair continued
to maintain good health. So the argument that Soap was harmful did not bear merit to
them. However they did agree that Shampoo usage gave soft and silky hair. However
their perceived value on hair wash was very less and they did not want to spend more
out of their pockets to buy Shampoo. The study also revealed that though the aspiration
to use shampoo was there, the need to spend more did not appeal. To arrive at a solution
for this situation, Cavin Kare introduced the 50 Paise shampoo sachet, which easily
satisfied a single wash. It was a calculated risk took, since the existing volumes of 1
rupee shampoo sachets was also in the market but when sales started picking up for the
50 paise shampoo, the 1 Rupee Shampoo also picked up pace once the consumer started
making a habit of using Chik shampoo and Cavin Kare gained a good margin.

Another situation where innovation was required was the economy value consumers
saw between using shampoo sachets and shampoo bottles. 65-70% of the shampoo sold
in India is through sachets and only 30% is through bottles. Sachet sells more due to the
phenomenal value it offers to the consumer.

As explained by Mr. C.K Ranganathan…..

“Let us assume 7ml of Shampoo in a Sachet is sold at Rs.2 and a 100 ml bottle of the
same brand of Shampoo is sold at Rs.55. When a consumer buys 14 Sachets and stores
them in a bottle, it would make 98 ml. The consumer would invest about Rs.28, which is
roughly half the price as that of the bottle. Sachet thus offers high level of economy and
also every use is measured. So to offer the consumer value for money we came up with
the concept that bottles will be cheaper than the sachets. We had to be innovative and
economize on the cost of bottle, packaging and other things and came out with a 50 ml
bottle of Chik for Rs.6 with 2ml more in the bottle when costs are compared. This move
resulted in a huge volume of sales and helped the growth of Chik from 5% market share
to the current value of 21%. So this exercise revealed to us that the consumer would buy
a product if he sees enough value for money.”
PRODUCT DIVERSIFICATION:

It is believed that the continuous pursuit of perfection is perfection in its true essence.
At CavinKare, this belief has been put into practice with comprehensive understanding,
utmost dedication and care. From being a player with a single offering, Chik Shampoo
has penetrated the Indian market with a wide range offering of four refreshing
fragrances. The brand spread its shoots with Chik Black, Chik Jasmine, Chik Egg and
Chik cool. Added to its successful sachet packing and pricing at Re.1 and 50p, the
Company expanded its market share with the introduction of bottles sized-60 ml, 120
ml,250 ml & 500ml.

Launching Meera Herbal powder and NYLE Shampoo

They continued with Chik Shampoo for seven years before venturing into anything else.

Meera Herbal powder was actually not their idea. Shaw Wallace already had a herbal
product but it was marketed very poorly. They felt there was a demand for herbal
products and they made a good product. Mr. Ranganathan felt he should be the leader if
theirs was a good product. In the third month itself, they topped the market. In six
months, they had 95 per cent market share, while Shaw Wallace had only 4-5 per cent.

Launching a fairness cream

They decided to launch Fairever in 1997 as Mr. Ranganathan saw a huge demand
fairness cream. Now, they are the second largest player in the market.

Research states that when a product is good, consumers do not shift to a new brand. The
CavinKare team told him not to venture into the fairness cream market as the
consumers were quite satisfied with the existing products. But they went to launch the
product containing saffron -- which is traditionally used to get a fair complexion. In six
months, sales galloped.

This was followed by Indica hair dye.

Two and a half years ago, they launched Ruchi pickles in sachets and became number
one there too. CavinKare sells close to 5,000 tonne of pickles per annum and it hopes to
double this in two to three years.

The process from then on has continued wherein CavinKare has added many variants to
its products and expanded its market share.
CavinKare in FOOD INDUSTRY:

Apart from expansion in the skin care products, CavinKare also entered the food
segment by buying of Ruchi Agro foods.

In November 2003, the Chennai-based CavinKare Pvt Ltd. (CavinKare), the Rs 2.64
billion (bn) hair, skin and personal care company, announced the acquisition of the
Andhra Pradesh-based Ruchi Agro Foods' pickle brand, 'Ruchi,' for Rs 150 million (mn).

The acquisition also included the Ruchi Agro Foods' pickle manufacturing plant (with a
capacity of 130 to 150 tonne per month) and machinery in Gudur, Andhra Pradesh. Ruchi
was the first major brand acquired by CavinKare, since its inception in 1983. The
acquisition was aimed at boosting the branded food business, which the company had
entered in September 2003, through its Chinni's brand of pickles.
The 'Ruchi' brand was the market leader in Tamil Nadu (a Southern state in India) and
was also a major player in other states in South India. The brand was expected to give
CavinKare a firm footing in the food market in the region. According to sources in
CavinKare, the "Ruchi" brand would be promoted as a premium brand, while "Chinni's"
would cater to the mass market.

CK Ranganathan (Ranganathan), chairman and managing director, CavinKare said, "The price of
Chinni's is half that of Ruchi and we will position both brands to capture the entire market and
also take Ruchi nationally."

CavinKare, which began as a small regional player in the early 1980s, emerged as major fast
moving consumer goods (FMCG) player in India in the early 21st century, competing directly with
multinational companies (MNCs) like Hindustan Lever Limited (HLL)and P&G Home Products
Limited (P&G), in various product segments like skin, hair and personal care.

Strategies used:

The main strategy of Cavin Kare is to strengthen the distribution and marketing. The company
made its brand available to the customer through out the country. Continuous concentration
upon Research and Development is an added advantage to the company which has dedicated
staffs. Their main job is to understand the needs of the target audience and to bring more
innovative products.
CRITICAL ANALYSIS OF MARKETING STARATEGY:

CalvinKare has adopted an approach of constant innovation in marketing to reach its


untapped potential customers.

ADVANTAGE:

The advantage of the strategy adopted was that it could reach those masses of people
which were unheard off. The company was successful in:

• Educating the people regarding the use of product,

• Creating demand for its shampoo in segments where none existed,

• Reaching lower classes who could not afford big bottles of shampoo,

• Diversifying in more than one segment,

• Giving the customer constant new variants of products,

• Serving the customer base in more than one segment (i.e. skin care, hair care and
food industry)

• Capturing the untapped rural segment.


DISADVANTAGE:

• The main criticism of the marketing strategy comes from the fact that it avoided
the rich masses of the segment. Its initial products were designed to serve the
poor masses and rural market and, therefore, it has been positioned as a brand of
the masses and not a brand of niche category.

• The products offered by CavinKare appeals to general masses but does not appeal
to rich classes. It has lost this part of share to companies like Amway, P & G and
others who exclusively serve upper and rich classes. CavinKare has failed to built
such products which are rightly priced to meet demands to the exclusive class. It
has spread itself as a medium ranged product but does not offer exclusive
products.

• Moreoever, by emphasizing more on sale of sachets, it missed out on sales which


it could have done had it sold only in big bottles. It missed out on, thus, selling
more volumes of products.

• The company has introduced five new variants in the “CHIK” Shampoo range and
in this attempt it has cannibalized its own product.

• CavinKare failed to introduce an anti dandruff shampoo in the market, thereby,


loosing a major amount of its market share to anti dandruff shampoo producers.
The company was slow to recognize the trend and shift towards anti dandruff
range. Though, the company did introduce the anti dandruff, it had lost a portion
of share already.

• The company entered a segment of food and pickles which needed the company
to market for a new set of customer base. Though it still targets the rural market,
the base for skin care and food & pickles is different.
Recommendations:

For Resposible Hair and Skin Care Marketing:

CavinKare should indulge in marketing for the niche segment. It should also derive
strategies wherein it can position itself as a exclusive brand without loosing on its image
as a brand for local people. It should diversify its product portfolio to include products
of high and mid range. Besides this, it should utilize other means for reaching the
customer i.e. internet and kiosks. The products should be more widely available.
Nowadays each brand is available in sachets. Therefore, to distinguish itself it should
offer attractive sachets which capture attention even in malls. It should also concentrate
on opening centres wherein the customer can use its product before buying. Various live
demonstrations should be held and new customers should be encouraged.

For Responsible Food Marketing:

Consumers rely on product advertisements and food labels for nutritional education.
The American Association of Advertising Agencies states that responsible food
marketing strategies should: (1) avoid vague, false, misleading, or exaggerated
statements; (2) avoid incomplete or distorted interpretations of claims made by
professional or scientific authorities; and (3) avoid unfair product comparisons.
Advertisers must also consider the long-term consequences or potential for harm
stemming from their claims. While these recommendations are important in developed
countries, they become even more critical in international marketing campaigns.

It is also important for consumers to recognize their role in evaluating health claims and
product comparisons. While advertisers are aware of the need for truth in advertising,
sometimes their desire to sell products over-shadows an accurate disclosure of product
attributes. Advertisers should bear in mind that inaccurate or vague health claims have
the potential to cause economic hardship, illness, and even death. Lastly, marketing
strategies used in developing nations should be subjected to the highest standards of
truth in advertising.