A PROJECT

ON

“A STUDY ON THE PROMOTIONAL STRATEGIES OF PATANJALI

AYURVED LIMITED”

BY

AMAN AHTASAM

BBA 6A

NAME OF THE MENTOR : DR DEBASIS RAY

ILEAD

(AFFILIATED TO WBUT)

ACKNOWLEDGEMENT

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As the old age salutation goes, I would like to express my wholehearted gratitude to every
individual who helped me in different ways to make the project a success especially ILEAD
for giving me the opportunity to do this project under the guidance of their faculty.

I would like to thank Prof. (Dr.) Debasis Ray for providing us with the opportunity to work
and expand our knowledge.

I shall fail in my duty if I don’t express my gratitude towards teachers without whom this
report would not have been successful.

Finally, no words of gratitude can express my indebtedness to my parents and my friends for
encouraging me throughout the study.

TO WHOM IT MAY CONCERN

This is to certify that Aman Ahtasam, a student of BBA (Hons.), 3rd Year, of ILEAD has
successfully completed the project on “A study on the promotional strategies of Patanjali
Ayurved Limited” under the supervision and guidance of Dr Debasis Ray. The project being
submitted is genuine and original work to the best of my knowledge.

2
 ___________________
Dr Debasis Ray

ILead

Kolkata

TABLE OF CONTENTS

SL NO. TOPIC PAGE NO.

1. ACKNOWLEDGEMENT 2

2. CERTIFICATE 3

3
3. EXECUTIVE SUMMARY 7-9

4. INTRODUCTION 10-11

5. REVIEW OF LITERATURE 12-13

6. AIMS AND OBJECTIVES 14

7. RESEARCH METHODOLOGY 15

8. RESULTS AND DISCUSSION:

CHAPTER 1: BUSINESS MANAGEMENT 16-17

PRINCIPLES OF BABA RAMDEV

CHAPTER 2: HOW PAL USED STP MODEL 18-19

FOR ITS MARKETING STRATEGY?

CHAPTER 3 - SWOT ANALYSIS OF 20-23

PATANJALI AYURVED LIMITED

CHAPTER 4: OTHER REASONS WHICH 24

LED TO ITS SUCCESS

CHAPTER 5: MARKETING MIX OF 25-27

PATANJALI AYURVED LTD.

CHAPTER 6: COMPARISON BETWEEN 28-29

PATANJALI AND ITS COMPETITORS

9. SUMMARY AND CONCLUSION 30-31

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 10. REFERENCES 32-33

TABLE OF FIGURES

SL NO. FIGURE PAGE NO.

5
1. Figure 1: Patanjali is more than a blip in the FMCG 11
Market within a short period of time.

2. Figure 2: Reasons which led to the success of Patanjali. 17

3. Figure 3: Segmentation, Targeting and Positioning of 19

Patanjali.

4. Figure 4: How Patanjali prices itself against rivals. 20

5. Figure 5: Various Products offered by Patanjali 25

6. Figure 6: Modes of Operation and Marketing Mix of 27

Patanjali.

7. Figure 7: Sustainable Competitive Advantage. 28

8. Figure 8: Analysis of Patanjali’s Performance over the 30

past 8 years.

9. Figure 9: Table showing Income Growth, Comparison 31

of Income of different FMCGs and graphs showing
Sales and Net Profit of PAL over the years.

EXECUTIVE SUMMARY

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Patanjali Ayurved Limited is an Indian FMCG company. Baba Ramdev established
Patanjali Ayurved Limited in 2006 along with Acharya Balkrishna with a determined
objective and vision to bring Ayurveda to world in scientifically approved form by
amalgamation of science with ancient Ayurvedic wisdom. The objective was further
exalted with intention of distributing quality, tested and hygienic medicines with wide
ranging cures to the largest section of populace at reasonable prices enabling the common
citizen to avail their benefits. Patanjali Ayurved Limited is committed to produce best quality
Herbomineral products and create a disease free society by promoting Yoga, Spirituality
and Ayurveda with rituals and scientific knowledge. Their goal is to achieve customer
satisfaction through customer focus and continual improvement by effective implementation
of “Quality Management System”.

Patanjali is the fastest growing FMCG Company in India. Patanjali has captured a huge
market share within a very short time period. Its revenues have more than quadrupled in
the past three years. The reasons which led to its success are the following:

 Business Management Principles of Baba Ramdev like Market Research, Clever

Promotion, Easy Availability, Direct Connectivity with people, etc.

 STP Model of Patanjali:

Segmenting and Targeting - PAL has segmented its market based on:

1. Demographic – Income, Age, etc.

2. Psychographic - Health consciousness, Patriotism

PAL's target segment comprise of health conscious people who prefer “value for money”
natural products. The income segmentation strategy has worked. PAL's products have
buyers not only from the lower income and middle income segments but also from health
conscious upper middle and upper income segments.

Positioning - Patanjali uses mostly these two positioning strategy:

7
1. The brand slogan of Patanjali is “Prakriti ka Aashirwaad” which means Blessings of
Nature. Patanjali is positioned as “Natural Products available at affordable prices”.
2. The second positioning is that of “Swadeshi Make” (Made in India).

 SWOT Analysis of Patanjali:

Strengths - Baba Ramdev, penetration pricing, word of mouth promotion, E-commerce

advantage, etc.

Weaknesses - over dependency on Baba Ramdev, low margin to distributors, lack of

experienced management graduates, etc.

Opportunities - growing organic sector, tie-up with Future Group, diversification of

products, etc.

Threats - increasing competition, poor agricultural reap can affect business, etc.

 Other reasons which led to its success include focus on revenue over profitability,
proactive moves in innovation, Patanjali’s Supply Chain Management and its Sales
and Distribution.

Marketing Mix of Patanjali:

 Products: Some of the sectors where Patanjali products are already doing
great: Foods - jams, biscuits, noodles, oats, pulses and many other lines of food
products, Beverages, Healthcare & Medicines, Personal care products, Cleaning
agents, etc. Products where Patanjali is present and beating competition is: Dabur
Honey, Patanjali Ayurved is providing people with option to buy quality honey at
around 30% lesser price than Dabur. Colgate is being substituted by people in place
of Dant Kanti. Patanjali Noodles are also being used in place of Maggi.
 Pricing: plays an extremely important role in putting Patanjali Ayurved ahead of its
fierce competitors. The pricing strategy is clearly penetrative pricing because
Patanjali knows that it cannot conquer the market with higher prices.
 Place: Patanjali has a manufacturing unit in Nepal. Patanjali also imports herbs
from Himalayas in Nepal; the well-established trade relation is helping Patanjali
expand its wings in Nepal with great ease. In India, 1000’s of stores are now selling

8
 Patanjali products, and these stores are exclusively selling Patanjali, making the local
retailer quake.
 Promotion: Well, Patanjali Ayurved has acquired the requisite fame and popularity
among people because of the globally recognized Yoga Guru, Baba Ramdev. Ad
campaigns have always focused on surpassing information to people that “revenue of
Patanjali is for Charity and not for Brand Owners”.

Comparison between Patanjali and its competitors: Patanjali is clearly targeting much
older fast-moving consumer goods (FMCG) majors like Colgate-Palmolive, Nestle, Dabur
and HUL; its wide array of products — including spices, pulses, chyvanprash, toothpaste,
shampoo, toothbrush, instant noodles, tea, jam, corn flakes and also beauty products -
competes directly with products from the heavyweights. Five things FMCGs must learn
from Patanjali - Abstinence from charging brand premium, Focus on product efficacy,
Focus on innovation, having a relevant Brand Ambassador and Make in India.

In May 2017, the company announced that it had doubled revenues in just a year to over Rs
10,000 crore, becoming India’s second largest consumer goods company, second only to
Hindustan. In a single year, Baba Ramdev’s company has leapfrogged past giant companies
such as Nestlé, Godrej, Dabur and Tata. So Patanjali is certainly a corporate high performer.
Patanjali Ayurveda Ltd has, in a short span of less than a decade, recorded a turnover higher
than what several companies have managed to achieve over several decades. Food and
FMCGs contribute the maximum to the income composition. Pay Trend and Sales are
also increasing rapidly for the company. In terms of revenues and net profit, the company
had nearly grown 10 times in a span of 5 years. Therefore, we can conclude that Patanjali
Ayurved Limited is the fastest growing FMCG in India and hence, is a very tough
competition to other FMCGs.

INTRODUCTION

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Patanjali Ayurved Limited is an Indian FMCG company. Baba Ramdev established
Patanjali Ayurved Limited in 2006 along with Acharya Balkrishna with the objective of
establishing science of Ayurved in accordance and coordination with the latest technology
and ancient wisdom. Patanjali Ayurved is a new approach to improve and accelerate the
Herbomineral drug discovery and development process. Traditional knowledge and
experience will serve as a powerful search engine and most importantly will greatly facilitate
intentional, focused and safe natural products research to rediscover the drug discovery
process at Patanjali Ayurved.

Patanjali Ayurved has excellent expertise & facilities for manufacturing & research- process
development of Herbomineral preparations, Organic synthesis, isolation and structure
elucidation, Biological screening, toxicological testing and pharmacokinetics. Patanjali
Ayurved is keen to establish harmonization and validation of the complex process of
Herbomineral therapeutics.

Manufacturing units and headquarters are located in the industrial area of Haridwar while the
registered office is located at Delhi. The company manufactures mineral and herbal products.
It also has manufacturing units in Nepal under the trademark Nepal Gramudhyog and imports
majority of herbs in India from Himalayas of Nepal. According to CLSA and HSBC,
Patanjali is the fastest growing FMCG Company in India. It is valued at ₹30 billion and it
declared its annual turnover of the year 2016-17 to be estimated ₹10,216 crore. Balkrishna
owns 98.6% of Patanjali Ayurved, and as of March 2018, has a net worth of US$6.1 billion.
Baba Ramdev stated in an interview that profit from Patanjali products goes to charity.

Global trend leading to increased demands of medicinal plants for pharmaceuticals,

phytochemicals, nutraceuticals, cosmetics and other products is an opportunity sector for
Indian trade and commerce. This may play a vital role in drug discovery, development and
therapeutics, in addition to dealing with a typical Western bias against Ayurveda.
Herbomineral drug technology includes all the steps that are involved in converting botanical
materials into medicines, where standardization and quality control with proper integration of
modern scientific techniques and traditional knowledge will remain important.

Vision and Mission: Patanjali was founded in 2006 with a determined objective and vision
to bring Ayurveda to world in scientifically approved form by amalgamation of science
with ancient Ayurvedic wisdom. The objective was further exalted with intention of
10
distributing quality, tested and hygienic medicines with wide ranging cures to the largest
section of populace at reasonable prices enabling the common citizen to avail their benefits.
Patanjali Ayurved Limited is committed to produce best quality Herbomineral products and
create a disease free society by promoting Yoga, Spirituality and Ayurveda with rituals
and scientific knowledge. Their goal is to achieve customer satisfaction through customer
focus and continual improvement by effective implementation of “Quality Management
System”.

Source: Company filings, Registrar of Companies Release, Media Reports

Figure 1: Patanjali is more than a blip in the FMCG Market within a short period of
time.

REVIEW OF LITERATURE

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Ali, Yadav et al. (2015) carried a study to know about consumer perception towards herbal
products. The objectives of the above study were to know the reasons of using various herbal
products. For the purpose of above study researcher collected data from 60 consumers using
herbal products in three cities of Bhopal. On the basis of their study they found that due to
hazards created by chemical products people shift it to natural products. Also they concluded
that all consumers had a positive attitude towards herbal products and there was no side
effect faced by these people.

Rani and Shukla, 2012, conducted a study to know the trends of Patanjali products. For the
purpose of above study they collected a sample of 90 consumers in Pantnagar. On the basis of
the study they concluded that within a very short period of time Patanjali products captured a
number of consumers. They also found that from 2008 to 2012 there was a huge increment
in number of products which was from 26 to 120. These 26 products included 13 products
in medicinal, 9 products in food and 4 products in cosmetic category. Till 2012 there were
120 products available among which 44 are medicinal, 34 are food and 55 are cosmetic.
They also suggested about limitations of the Patanjali products - delivery system should be
improved by the company.

Sawant (2013) conducted a research mentioning consumers’ perception towards Ayurvedic

cosmetic products. The absence of side effect is the most important factor that influence
women in the purchase of skin care products. Sinha and Singh (2015) she said that,
competition in the cosmetic market in India between national and international brand, and
between herbal and chemical product. The increase tendency and attraction of younger
generation especially female are towards the natural products.

Shinde and Gharat (2017) examined a study on product positioning of Patanjali products.
The purpose of above study was to find the various prospects of Patanjali products and also
factors influencing these products. They concluded that Patanjali has captured a huge
market share within a very short time period but shortage of these products is the major
problem faced by consumers these days.

According to Pittie, 2015, Patanjali is not just targeting its own distribution Chikitsalayas,
but also big retailers like Reliance Retail, Big Bazaar, Hyper City and Star Bazaar are
stocking Ramdev's FMCG products. But the real play is online. While Patanjali's products

12
are already available at e-commerce site Big Basket, Ramdev is now aiming for Amazon
too. This will allow the consumers to locate nearby outlets that are selling Patanjali products
and also to facilitate online ordering of products, Patanjali has launched its mobile app.
Patanjali also sells its products through the Patanjali Arogya Kendras, Swadeshi Kendras
and Patanjali Chikitsalayas. The company has 10,000 franchisee models of Chikitsalayas
and Arogya Kendras and around 2 lakh outlets that are selling Patanjali products. The
company operates through 100 super distributors.

Vyas, 2015, believes Patanjali instead of outsourcing like established, listed FMCG firms, it
has flourished on a backward integration model, using large tracts of land to cultivate and
run its factories. Patanjali's revenues have more than quadrupled in the past three years.
Despite undercutting competitors, PAL's operating margin is around 20% higher than
many of its peers which advertise aggressively.

AIMS AND OBJECTIVES

The objectives of conducting this study are:

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  To analyze the company and the reasons that led to its success and made it the
fastest growing FMCG Company over the years.
 To throw light upon the marketing strategies of Patanjali.
 To analyze and compare how Patanjali is different from other FMCGs.

RESEARCH METHODOLOGY
The findings are obtained mainly from Secondary Data. Secondary data was obtained from
various authenticated sources such as the internet, books, journal and articles. Secondary

14
sources consist of not only published records and reports, but also unpublished reports. An
attempt has been made to glitter my objective behind the selection of this topic. It is collected
with the help of the following sources:

1. Annual Report of Patanjali Ayurved Limited.

2. Website and Blog of Patanjali Ayurved Limited.
3. Research Papers.

The strategies have been analyzed very thoroughly.

Method of analysis: for interpretation of the data, the following statistical and analytical
tools have been used:

1. Graphs – Bar Graphs and Pie Charts

Limitation of the study: the study has been completed with some limitations, which are:

1. Limited Data – This project constitutes one part of data collection that is, Secondary
Data. There were limitations for Primary Data collection because of confidentiality.
2. Limited Area – Also it was difficult to collect the data regarding the competitors and
their other information. Accurate figures were difficult to get.

RESULTS AND DISCUSSIONS

Patanjali is the fastest growing FMCG Company in India. Patanjali has captured a huge
market share within a very short time period. Its revenues have more than quadrupled in

15
the past three years. Despite undercutting competitors, PAL's operating margin is around
20% higher than many of its peers. The reasons which led to its success are the following:

CHAPTER 1: BUSINESS MANAGEMENT PRINCIPLES OF BABA

RAMDEV

 Work on something which you have enough knowledge and practice about: Hold
strong expertise on the subject before starting up. Baba Ramdev has enough
knowledge about Ayurveda and this is the main reason behind the success of the
brand.
 Market research is very important: Before starting any business, market research is
very important. Baba Ramdev did a proper market research and established the
headquarters accordingly in Haridwar, where people are into pure herbal products.
Patanjali is the fastest growing FMCG Company in India because of the fact that there
were already many mixed impure products, but he made it an advantage by finding
the demand of people and worked accordingly.
 Save money regarding the brand ambassador: Baba Ramdev focussed more on the
quality rather than quantity; he increased sales by advertising through some other
channel. He did not waste his money on any brand ambassador, instead he promoted
it himself.
 Company of skilled people: For building a business, you will require people with
knowledge and skill. Baba Ramdev built a successful brand by selecting qualified
people (more than two lakh currently working), especially in the field of science and
biology or the ones with PhD, who are dedicated towards work and production of the
product. Even for yoga, the instructors who are under him are all flexible and well-
versed in it.
 Direct connectivity: Generally, people are not sure about whether the brand
ambassadors are themselves consuming the product or not. But is his case, people are
sure that he being the ambassador uses the product every day. Via his Yoga sessions,
the audience gets a direct connection with Baba Ramdev and it is easier for him to
build trust.
 Clever promotion: No one knows better about your production yourself. In case of
Patanjali, Baba Ramdev, he directly spoke to people, which increased his

16
 credibility. For example, he met Lalu Prasad Yadav and made him as a model for his
special cream and energy bars.
 Try to keep the product cheap: The biggest mantra to success is best quality
product with cheap prices. According to the company, all the products
manufactured by Patanjali are made from Ayurveda and natural components, which
are cheaper than other alternatives in the market due to lesser production and
marketing costs.
 Easy availability: For any business, it is important for the company’s product to be
easily available anywhere at a reasonable market price. Patanjali Ayurveda sold
through nearly 4,700 retail outlets as of May 2016.
 Timing: Get complete information about the other brands that are going to compete
with you at the time of launch. For example, when there was a controversy related to
Maggie, Ramdev Baba launched instant noodles on November 15, 2015. You should
launch your product as per the demand of the consumers in the market.

Source: Slide share - Patanjali Ayurved | UAE Market

Figure 2: Reasons which led to the success of Patanjali.

CHAPTER 2: HOW PAL USED STP MODEL FOR ITS MARKETING

STRATEGY?

 Segmenting and Targeting - PAL has segmented its market based on:

17
1. Demographic – Income, Age, etc.
2. Psychographic - Health consciousness, Patriotism

PAL's target segment comprise of health conscious people who prefer “value for money”
natural products. PAL has products targeted at children (health drinks) and elderly people
with a wide range of Ayurvedic products (Ayurvedic medicines, Ayurvedic FMCG products).
Almost all products of PAL are affordable in market, at a price 15% - 30% lower than the
competition. Hence the income segmentation strategy has worked. PAL's products have
buyers not only from the lower income and middle income segments but also from health
conscious upper middle and upper income segments. These two segments have found
value in PAL's natural and Ayurvedic products.

 Positioning - Patanjali uses mostly these two positioning strategy:

1. The brand slogan of Patanjali is “Prakriti ka Aashirwaad” which means Blessings of

Nature. Patanjali is positioned as “Natural Products available at affordable prices”.
2. The second positioning is that of “Swadeshi Make” (Made in India).

Both the positioning strategies have created wonders for Patanjali. These positioning
strategies have synergistically integrated with the brand Patanjali as India is considered to be
the birth place of Ayurved.

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Source: Slide share - Patanjali Ayurved | UAE Market
Figure 3: Segmentation, Targeting and Positioning of Patanjali.

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CHAPTER 3: SWOT ANALYSIS OF PATANJALI AYURVED LIMITED

 STRENGTHS:

Baba Ramdev: The exponential growth of Patanjali can be credited to Baba Ramdev and his
popularity. For a newly formed FMCG in India, it would have been impossible to show the
kind of growth that Patanjali has shown in such a short period of time. But the fan following
and goodwill of Baba Ramdev guaranteed that Patanjali grows quickly and becomes a
routine name in the Indian households.

Strong patriotism: Patanjali has used the India card to its advantage and has always
marketed that it’s a brand made in India, for Indians. Patanjali actively asks Indians to buy
India made products to help the economy of the country. Besides this, the quality of the
products has helped in the fantastic growth of Patanjali.

Penetration Pricing: Patanjali products are generally priced at 20-30 % lower than the
competitive brands and thus it becomes impossible for the competitive brands to compete
with Patanjali on price. The company sources the products directly from farmers and thus
cuts on middlemen. Hence, they are able to produce at lower costs and it gives them an
advantage over its competitors.

Source: Edelweiss Research

Figure 4: How Patanjali prices itself against rivals.

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Ayurveda and Herbal: The products that Patanjali offers are made from Ayurveda and
Herbal natural components. The Swadeshi products also have played an important role in the
success of Patanjali.

Strong Distribution channels: Patanjali products are sold through medical centres such as
Patanjali Chikitsalayas and Patanjali Arogya Kendras, non-medical centres such as
Swadeshi Kendras. Patanjali has recently tied up with the Future group for distribution
through Modern retail.

E-commerce advantage: Patanjali sells very well through the E-commerce companies and
has a lot of packages of products which it sells online. So even if people are not nearby a
Patanjali store, but they believe in Baba Ramdev or want to purchase Indian products, then
they can do so online via E-commerce.

Word-of-Mouth Promotion: For a new company especially in the consumer goods

category, a high share of its expenditure goes into advertisements and promotions. Patanjali
followed a word-of-mouth promotion strategy initially and did not spend much on
promotions and advertising. Patanjali depended on over the brand loyalty of its customers.

Keeping up with the trend: Be it advertising with celebrities as brand ambassadors or

entering modern retail or using e-commerce as a platform, Patanjali has always understood
the potential of social media platforms.

 WEAKNESSES:

Over dependency on Ramdev: For many of its consumers, Patanjali is still synonymous to
Baba Ramdev and hence any actions of Baba Ramdev will have repercussions on the
brand itself. Baba Ramdev’s political affiliations are also well known and hence if at all he is
targeted for any political vendetta, Patanjali will also suffer.

A low number of manufacturing units: Patanjali needs to set up manufacturing units in

different parts of the country which would require heavy investments. It also would have to
move from the word-of-mouth strategy to nationwide promotional campaigns.

Penetration pricing is not long term: Patanjali might have to compromise on its pricing
strategies if it wants to expand and thus it’s a big challenge for Patanjali. It cannot sell at

21
such low costs for a very long term. Any company needs profits to drive more sales and
therefore earn more profits. It’s a cycle. But if Patanjali does not earn much, then it cannot
spend much and cannot expand.

Product Dependence: While Patanjali has many products in its kitty but a major part of its
revenues are dependent on 5-6 of its main products such as its toothpaste and shampoo. They
need to push the other products more to achieve its ambitious target.

Low margin to distributors: Patanjali offers much lower margins to distributors and
retailers as compared to other consumer goods company, since it is playing a game of
volume and not margins. That’s the reason for it being a demand run company.

Lack of experienced management graduates: Patanjali does not have a large pool of
management graduates and thinks tanks which can be a problem when they look for
expansion throughout the country or globally.

 OPPORTUNITIES:

Growing organic sector: Patanjali has been successful in creating awareness about the
benefits of using herbal and natural products which have created a market for itself. The
awareness has spread and the demand is ever growing.

Expand Rural: With the portfolio of products that Patanjali has, it has great potential in the
rural market and should look to expand its operations in the vast rural market of India.

Going Global: Patanjali has a great opportunity to expand globally and can look for Middle
East and African nation in the beginning. Various other companies such as Dabur have
already expanded globally and have been successful.

Tie ups: Patanjali has successfully tied up with Future group and should continue tie up
with modern retail chains and increase its E-commerce sales.

Diversify: While Patanjali is now present in retail products, it has not entered clothing which
is another area where competitors like Reliance and Aditya Birla have expanded successfully.
So Patanjali can plan on diversifying its product portfolio even further to Khaadi, making
it a fashion statement and being true to the roots of Patanjali being an Indian brand.

22
  THREATS:

Increasing Competition: FMCG majors such as HUL, Marico, etc. and new entrants such as
Sri Ayurveda are also entering the organic market after the awareness created by Patanjali
which increases the competition in the market.

Negative Word-of-Mouth: Any negative word-of-mouth created on social media platforms

can affect its position in the market.

Poor reap can affect business: Patanjali is heavily dependent on natural ingredients and
products and hence poor agricultural reap can affect its sales.

Price war: The longer the price war, the more is the effect on the brand. Such a price
war will have drastic effect on Patanjali’s profitability, especially because the brand is
already selling at very low margins.

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CHAPTER 4: OTHER REASONS WHICH LED TO ITS SUCCESS

 Focus on revenue over profitability

 Proactive moves in Innovation: Patanjali Ayurveda is aggressively planning to enter
into every consumer category. An innovative R&D facility equipped with latest
technology.
 Patanjali’s Supply Chain Management: The three phases of Patanjali’s supply
chain are product flow, information flow and cash flow.
 Sales and Distribution: Patanjali provides sale of products online and can also be
procured through post by sending the money through demand draft. Patanjali herbal
products are available at Post Offices across the country. It also has “Patanjali
Chikatsalayas” and “Patanjali Arogya Kendra” in almost all the cities of the
country. To strengthen the distribution Patanjali is also implementing ERP which
will help them in managing the inventory.
 Patanjali‘s R&D facility: Patanjali’s R&D center has all the advanced technology
and machinery required for testing the products. The company also has a separate
R&D department for each of its production units. The company also has a high-end
central R&D facility.

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CHAPTER 5: MARKETING MIX OF PATANJALI AYURVED LTD.

 Products in the marketing mix of Patanjali Ayurved: Baba Ramdev is

constantly pushing Indian people to start using Indian brands and save the economical
growth of the company. Patanjali is planning to take over all reputed brands dealing in
beverages and foods.

Some of the sectors where Patanjali products are already doing great:
 Foods – Including jams, biscuits, noodles, oats, pulses and many other lines of food
products.
 Beverages
 Healthcare & Medicines
 Personal care products
 Cleaning agents

Source: Youth Express

Figure 5: Various Products offered by Patanjali

25
Products where Patanjali is present and beating competition are:

Dabur Honey - Patanjali Ayurved is providing people with option to buy quality honey at
around 30% lesser price than Dabur. Colgate - Patanjali Ayurved is preaching how Colgate
cheated people in early days and how Ayurved is the best way to treat your gums and your
teeth. Dant Kanti is being used in a lot of households. Patanjali Noodles - Patanjali Noodles
rose to fame while Maggi was away from the market and has done quite damage to Maggi,
which was once the king of Noodle’s market.

 Pricing in the marketing mix of Patanjali Ayurved:

Two factors that have made Patanjali Ayurved the fastest growing FMCG Company in India
are:

a) Use of Natural Ingredients and Ayurved and

b) Pricing. Pricing plays an extremely important role in putting Patanjali Ayurved ahead of
its fierce competitors. Hindustan Uniliver and P&G are trying their level best to cope up with
the competition but the love for Indian product growing in people is not helping them.

Patanjali is educating people about the benefits of using their products and are also using
price comparison as an effective marketing strategy. The pricing strategy is clearly
penetrative pricing because Patanjali knows that it cannot conquer the market with higher
prices. Plus, if the ingredients are natural and domestic, the cost of the product is lesser too.
There is a drop of 25-30 percent of price in almost every product when compared to
International Brands which is helping Patanjali reach each and every household in India.

 Place in the marketing mix of Patanjali Ayurved:

Patanjali Ayurved is India’s fastest growing FMCG Company but it is not stopping it from
spreading its wing to neighbouring countries like Nepal. Patanjali has a manufacturing unit
in Nepal. Patanjali also imports herbs from Himalayas in Nepal; the well-established trade
relation is helping Patanjali expand its wings in Nepal with great ease.

With the growing outreach in India and Nepal, Baba Ramdev surely will be aiming to
overtake market in lot of other countries. With impressive revenue of 5000 Crores, Patanjali
is surely going to have a lot of fund for expansion and growth. In India, 1000’s of stores are
now selling Patanjali products, and these stores are exclusively selling Patanjali, making the

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local retailer quake. The penetration levels will only rise further as the margins in the product
are good too.

 Promotion in the marketing mix of Patanjali Ayurved:

Patanjali Ayurved goes with the Slogan “Prakriti ka Ashirwad”. Well, Patanjali Ayurved has
acquired the requisite fame and popularity among people because of the globally
recognized Yoga Guru, Baba Ramdev. This brand ambassador of Patanjali is single
handedly responsible for the success of the brand. While a lot of people shifted to Patanjali
Products because of Baba Ramdev, a pool of Indians started following him when they
realized how good and cheap Patanjali products actually are. Patanjali Ad campaigns have
always focused on surpassing information to people that “revenue of Patanjali is for
Charity and not for Brand Owners”. Secondly, it is better that the revenue generated
from day to day products remains within India rather than the profits going out to foreign
companies.

Source: Slide share - Patanjali Ayurved | UAE Market

Figure 6: Modes of Operation and Marketing Mix of Patanjali.

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CHAPTER 6: COMPARISON BETWEEN PATANJALI AND ITS
COMPETITORS

Patanjali is clearly targeting much older fast-moving consumer goods (FMCG) majors like
Colgate-Palmolive, Nestle, Dabur and HUL; its wide array of products — including spices,
pulses, chyvanprash, toothpaste, shampoo, toothbrush, instant noodles, tea, jam, corn flakes
and also beauty products - competes directly with products from the heavyweights. A quick
glance at the packaging of a PAL product usually makes it clear which market-leader is being
targetted; the design similarities do not seem coincidental. Patanjali is also taking on the big
players in other geographies, exporting its products to Canada, the USA, Mauritius and UK,
among other countries.

Source: Slide share by Anant Katyayani

Figure 7: Sustainable Competitive Advantage.

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Patanjali surely did something that resonated with the Indian consumers very well. Let us
look at five tips that other FMCG brands must learn from Patanjali Ayurveda:

Abstinence from charging brand premium: Patanjali products are cheaper than its peers
in the same category. They don’t charge a premium for their products unlike most brands.
Milind Sarwate, former CFO of Marico says that the whole concept of charging a premium
and using that premium for advertising has been turned down by Patanjali.

Focus on product efficacy: Patanjali has focused on improving product efficacy and giving
more value to consumers. Instead of spending a premium on advertising to shape customer
perceptions, they focused on delivering value. This has found favours with the people as is
evident by Patanjali’s success.

Focus on innovation: Constant innovations and disruptions always pay dividends in the
end. Despite the FMCG sector pretty much saturated with so many competitors for every
product, Patanjali has reinforced that there is scope for innovation and disruption at any point
in the industry.

Having a relevant brand ambassador: Most FMCGs hire film stars or sports persons to do
advertising. The efficacy of this has reduced with time. Most of the time the ambassadors
and the product connect is very poor. The Maggi ban showed that there has to be a strong
connection between the products being advertised and its ambassadors. Patanjali Ayurved’s
Brand Ambassador Baba Ramdev, a strong advocate of herbal and organic products, has
proved that celebrity endorsements work more efficiently only if the endorser is relevant to
the brand they are promoting.

Made in India brand: Patanjali products are completely made in India and sold at a price
point which makes it affordable to people who live in rural and semi-urban areas. Indians are
far more trusting of a local brand selling herbal and organic products than a Global MNC.
Hence there is growing preference for Patanjali products over global ones.

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 SUMMARY AND CONCLUSION

Figure 8: Analysis of Patanjali’s Performance over the past 8 years.

Interpretation:

The above graph tells us how well Patanjali has performed in the past 8 years. In May 2017,
the company announced that it had doubled revenues in just a year to over Rs 10,000 crore,
becoming India’s second largest consumer goods company, second only to Hindustan. In a
single year, Baba Ramdev’s company has leapfrogged past giant companies such as Nestlé,
Godrej, Dabur and Tata. So Patanjali is certainly a corporate high performer. The revenues
have been doubled in the FY 2015-16 and this explains why the projected revenue for the
FY 2017-18 is 20000-25000 crores.

In January 2016, IIFL said “Patanjali Ayurveda Ltd has, in a short span of less than a decade,
recorded a turnover higher than what several companies have managed to achieve over
several decades. There is no doubt that Patanjali is a disruptive force in the FMCG space and
is a credible threat for the incumbents.” IIFL is of the view that the growing appeal of
Ayurvedic and ‘natural’ products, along with factors like low price and allowing consumers
to express Indian-ness in an increasingly nationalistic environment, will help Patanjali
achieve sales of Rs.20,000 crore by FY20.

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Source: Registrar of Companies
Figure 9: Table showing Income Growth, Comparison of Income of different FMCGs
and graphs showing Sales and Net Profit of PAL over the years.

Interpretation:
From the above table of Patanjali Income Growth, we can conclude that with time the income
for the FMCG Company keeps on increasing. In the Financial Year 2015, the income
growth almost doubled itself when compared to FY14. In the Financial Year 2017, the
revenue is the maximum which is 9,346 (all figures are in crores) and Food and FMCGs
contribute the maximum to the income composition, 40% and 39% respectively. From the
graphs we can conclude the same i.e. Pay Trend and Sales are also increasing rapidly for
the company. In the Financial Year 2015, Sales go above 19,000 and Pay Trend or Net Profit
above 2800. In terms of revenues and net profit, the company had nearly grown 10 times in a
span of 5 years. Therefore, we can conclude that Patanjali Ayurved Limited is the fastest
growing FMCG in India and hence, is a very tough competition to other FMCGs.

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