Chic Shampoo - Rural Marketing (FILEminimizer)

ChiK- Shampoo Sachet
Dr Amit Rangnekar www.dramitrangnekar.com
Case Objectives
To understand Indian rural dynamics & consumer behaviour Highlight successful strategies that made Chik Shampoo the biggest shampoo brand in rural India
amitrangnekar@gmail.com
The concept of sachets

C K Ranganathan, CMD, CavinKare, showed it is possible to beat MNCs even in FMCGs Business- Started with Rs 15,000, now Rs 500 crore My father introduced the sachet concept as he felt liquid can be packed well in sachets. When talcum powder was sold in tin containers, he sold it in 20/50/100 gm packs. When Epsom salt came in 100 gm packs, he sold it in 5 gm sachets Sachets are going to be the product of the future, as they would be affordable to all. But my father was a great innovator, but a poor marketer
How Chik Shampoo was born

Family: Launched Velvette shampoo sachet successfully in the South in the late 1970s 1982- Ranganathan joined, differences, separated Started Beauty Cosmetics Chik named after father, Chinni Krishnan Started with 20,000 sachets, but profitable from Y2 1989: Office- Chennai, manufacturing- Cuddalore Beauty Cosmetics name- restrictive 1998- in-house contest suggested CavinKare Cavin (Tamil= beauty & grace), C and K (father's initials) spelt in capitals
Snippet
Took me 3 years to get my first loan as banks asked for collateral, I had none. One bank gave me a 25,000 loan, which we rotated & upgraded to 4 lakh & then 15 lakh. The bank manager wrote on my loan application that this person has no collateral, but something interesting about this SSI unit is that unlike others, this company pays income tax!
Shampoo Rural Market

CavinKare- pioneering attempt to offer shampoos in small pillow packs Market flooded with 70-odd small shampoo labels with little differentiation Velvette (family business), synonymous with sachet shampoo, aggressively marketed by Godrej Consumers would ask for a Velvette but walk away happily with whatever label the retailer gave them Many never knew the difference, for others it did not matter
Indian Shampoo Market 1980s

High
MNC Brands
Shampoo Bottles
Price
Local Players
Chik
Low
Poor
Need Gap
Good
Quality
Chik Targeting
High
Cost to Consumer
Chik
The right distribution strategy must make the brand available to the rural consumer at a cost he is Willing to pay High
Low
Availability of Product
Target audience
Lower middle-class/ semi-rural (Sec B2,C,D) MHHI Rs 1,5003,000 Females Age group of 16-plus
Accessibility & Affordability

Sachet success changed the shampoo industry structure New consumer layers, mainly from rural pockets, could now afford shampoos Upper class tag of shampoos fast faded away Extremely cut-throat market emerged Significant trade influence on what the consumer bought
Chik Launch
1983- Chik shampoo launched by CavinKare Initial launch in 10 ml pack Later launched in sachet form Market cluttered with low-cost shampoos But there was a clear opportunity for a good quality shampoo with appealing perfume at a price to delight the consumer Chik endeavoured to provide to the masses a significantly superior product than those available at similar price points Chik shampoo used French perfume to differentiate itself on the plank of superior fragrance
Promotion
Ad strategy- harness powerful appeal of cinema among common masses Innovative radio ads based on popular cinema dialogues, unlike plain radio jingles of competitors 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 Popular southern cine stars endorsed Chik- Amala, Khushboo, Manorama and Charlie Radio used as the sole mass advertising medium Annual ad spends about Rs 2 lakh
Trials
Shampoos- poor penetration levels Many people had no clue how to use a shampoo Encouraging trials, key to rural success CavinKares team travelled deep in rural pockets Trials on schoolboys Demonstrate how to lather and wash, comb hair Show the difference We were as thrilled & excited as the volunteers during the demonstrations. This exercise had a significant impact in breaking ice & made people comfortable with the concept
School Demo
Champi on schoolboys
Promotion
We also encouraged trial through a consumer scheme, where anyone could take any 4 empty shampoo sachets to a retailer and take home a Chik sachet free. Though more risky, this scheme paid off and more and more people began asking for Chik at their local retail outlet Later, we altered the scheme- we started giving 1 free Chik Shampoo sachet in lieu of 5 Chik Shampoo sachets only. Soon, consumers started asking for Chik sachets only Sales rose from Rs 35,000 to Rs 10 lakh a month
Innovation
Consumer insights in the Southern markets conveyed that women keep flowers in the hair for fragrance. We introduced for the 1st time, floral fragrances (rose, jasmine) in shampoos. The concept was a hit, and sales jumped three times from Rs 10 lakhs to Rs 30 lakhs a month
1990s
Chic, quite popular in the southern markets Shampoo market growing at a healthy 15% When Amala endorsed, sales rose to Rs 1 crore a month! Each idea was rewarded by our customers Chic continued with popular cinema actors 1992: extended celebrity endorsement to TV amitrangnekar@gmail.com 1992: No 1 in South India
Taking on the MNCs

MNCs sold products in bottles, not in sachets and sold only from fancy stores. They did not look at the small kirana stores, nor at the rural market We went to rural areas in South India where people hardly used shampoo. We showed them how to use it by doing live demonstration on a young boy. We asked people to feel & smell his hair
Growth strategy
Chik sponsored shows of Rajniknath's films Flashed Chik ads in between Followed up with live demonstrations Distributed free sachets to audience after every show Tremendous response in rural TN & AP Shampoo sales went up 3-4 times after every show
Consumers started demanding Chik
National Footprint
1993- Chik mulled a national presence Objective: Expand the market, attract new consumers in the category Focus- largely rural, value-conscious sections in urban Distribution- innovative trade schemes & consumer offerings
Rural dynamics
Population size < 1000 1000-5000 >5000 Villages 459465 58029 143248 % 70 9 21
1993-Indian rural market barely outgrew urban 70% villages in India have population < 1,000 Low accessibility, undeveloped local markets How do you market your products to these villages?
Rural Dynamics
Opportunity- 47,000 haats & 25,000 melas organised in such villages Average daily business in these haats was Rs 2 lakh Strategy: created rural wholesale network, ensure availability The right marketing strategy for the rural market is to balance the conflicting dimensions of availability on the one hand and affordability on the other
Mid 1990s
The shampoo market surged by 25% Small packs contributed 40% of total shampoo volumes Rural markets grew much faster than urban Key challenge- rural reach and recall Packaging critical for rural marketing 1999- Chik, second largest shampoo brand in India(also in rural markets)- next only to HLLs Clinic Plus
Key factors in rural purchase

Factors influencing purchase of shampoos in rural markets % of respondents
Looking at the wrapper Retailer recommends Looking at the price Logo identification Doesnt bother to check
60 25 4 2 9
Chiks response
Make packaging & branding prominent to enable quick identification by the rural consumer Create Chik- Mnemonic Change pack to bring in design & colour elements Enable onshelf differentiation and aided recall
Shampoo-nomics
Years back, a rural consumer recalled he used soap to wash his hair for ages, and had no visible damage to his hair. Though the hair felt rough, he was fine with that. So why should he start paying for shampoos? There were 5 adults per household in rural India, & @ Rs2 per sachet & 4 washes per month meant Rs40 for hair wash alone. They couldnt spend such money on hair wash every month. If the cost of hair wash could be cut to Rs2 per person per month they would try a shampoo This meant he wanted something as marginal as a 50-paise shampoo pack. The initial thought sounded ridiculous
The 50-paise shampoo sachet

We worked backwards. Developing the formula & packaging took us over 2 years. Finally, we launched Chik shampoo sachet @ 50 paise in September 1999, the first ever such price point Price point helped penetrate deep rural pockets Chik market share flared from 5.6%(1999) to 23%(2004) Rural shampoo volumes grew at 2X urban sector 2005: Chik Rs 100 crore brand No.1 Indian rural shampoo, 65% rural market sales
Rural Chik
Chiks value proposition helped us become No.1 in many states in rural India. Recruiting customers is the key issue as the rural consumer is rational & value conscious. To be successful, the marketing mix must deliver superior value to the rural consumer at a price point he is comfortable with
Rural Hold of Chik
States UP Bihar AP TN No. of Villages 107440 45113 28123 16870 MS % (Volume) 67 32 39 46 Rank 1 1 1 1
MP
Orissa
55392
55352
22
19
2
2
The Urban thrust

Tangled hair- Common complaint in girls & women Hot climate, difficult to maintain softness & shine Unique formula Active Double Conditioners The iconic Chik Girl Tagline- Yun Kiya Ho Gaya Popular phrase
Current status
In the last 2-3 years, our market share has come down though we are growing. It is mainly due to the anti-dandruff shampoos in the market which from 0% have taken over 25% of the market. We do not have an anti-dandruff shampoo yet Ordinary shampoos constitute only 75% of the market, of which we hold 20% market share. But we are the largest brand in rural UP, AP, etc. and the number one in many other states as well
Range
Chik penetrated the Indian market with a wide range, 4 refreshing fragrances, sensistive pricing and right sizing Chik Black Chik Jasmine Chik Egg Chik cool Sachet packing and pricing at Re.1 and 50p Bottles sized-60 ml, 120 ml (Rs 20) 250 ml & 500ml Anti Dandruff Shampoo, containing climbazole and lemon extracts for dandruff and itching
Mobile beauty parlours

Unconventional media to entice consumers TVC are not enough to drive consumer trials. The mobile parlour exercise aims to provide a complete brand experience by having hair stylists use Chik on volunteers and distribute its Re 1 sachets as samples. Viswanathan, VP Chik Shampoo Parlour Vans- cover 900 towns/month Reach: 50,000 hairwashes, touch 25 lakh people Target- girls' colleges, market places & residential localities with 20-50,000 population Expand to metros and Class I towns Play TVC as stylists work on volunteers Promotional spots on Radio Mirchi, on-site commentary & contests
Other successes
We focused only on Chik for 7 years Meera Herbal powder-95% share Spinz perfumes @ Rs 10, a runaway hit Nyle- Herbal Shampoo- Transparent packaging Fairever fairness cream (1997)- 2nd largest player, with saffron, traditionally used for fair complexion Indica Hair dye- Baalon ko de dil ki umar Ruchi Pickle sachets (2004)- No.1, 5000 tpa pickles Chinnis Masala range
2006-2007- CavinKare 500 crores 11% value share of Rs 1,500-crore shampoo market 19 per cent volume share of 63,000 tonne market No 2 to Clinic Plus, 29% market share 576 employees All India network of 1300 Stockists catering to about 25 lakh outlets nationally Manufacturing plant at Haridwar (Uttaranchal) Third Party manufacturing at Pondicherry, Noida, Assam and Faridabad Exports- Nepal, Srilanka, Malaysia, Singapore, Bangladesh, US and the GCC region Target- 1500 crore company by 2010
Reasons behind CavinKares success

Teamwork is the main reason for our success. We have good professionals who work really hard. The second reason of our success is innovation and thirdly we have executed innovative ideas well

Chic Shampoo - Rural Marketing (FILEminimizer)

Încărcat de

Informații document

Drepturi de autor

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Chic Shampoo - Rural Marketing (FILEminimizer)

Încărcat de

Drepturi de autor:

ChiK- Shampoo Sachet

Dr Amit Rangnekar www.dramitrangnekar.com

The concept of sachets

How Chik Shampoo was born

Shampoo Rural Market

Indian Shampoo Market 1980s

Accessibility & Affordability

Taking on the MNCs

Consumers started demanding Chik

Key factors in rural purchase

The 50-paise shampoo sachet

The Urban thrust

Mobile beauty parlours

Reasons behind CavinKares success

S-ar putea să vă placă și