Chik-Shampoo Sachet: DR Amit Rangnekar

ChiK- Shampoo Sachet
Dr Amit Rangnekar
www.dramitrangnekar.com
Case Objectives
Insights into Indian rural dynamics & consumer
behaviour
Innovative, low cost, promotional strategies
Packaging innovation and innovative pricing
Scaling up from rural to national player
Brand building strategies that made Chik
Shampoo the No 1 shampoo brand in rural India
amitrangnekar@gmail.com
The concept of sachets

1983, investment Rs 15,000, now
Rs 1000 crore
C K Ranganathan,
CMD,CavinKare
Possible to beat MNCs in FMCGs
Father, Chinni Krishnan, introduced
sachets in India
Rationale- affordable, penetrative,
entice trial
How Chik Shampoo was born

1978 family launched Velvette shampoo sachet
successfully in the South
1982- Ranganathan joined, differences, separated
Started Beauty Cosmetics, profitable from Y2
Chik (Chinni Krishnan)
1989: Office- Chennai, manufacturing- Cuddalore
Beauty Cosmetics name- restrictive, 1998 CavinKare
Cavin (Tamil= beauty & grace), C&K (father's initials)
Snippet
Took me 3 yearsto getmy firstloan as banks
askedfor collateral, I had none. One bank gave

me a 25,000 loan, which we rotated
&upgradedto 4 lakh & then 15 lakh. The bank
managerwrote 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- pioneers in shampoos in small pillow packs
Market- 70+ small shampoo labels with little
differentiation
Velvette (family business), synonymous with sachet
shampoo, aggressively marketed by Godrej
Consumers would ask for Velvette, retailer would
substitute
Many never knew the difference, did not matter for others
Indian Shampoo Market 1980s

High
MNC Brands
Price
Shampoo Bottles
Local Players
Chik
Need
Gap
Low
Poor
Quality
Good
Chik Targeting
Cost to Consumer
High
Make
brand
available
and
affordabl
e to
rural
consume
rs
Chik
Low
Availability of Product
High
Accessibility & Affordability

Sachet success changed the shampoo industry
structure
Affordability, sizing ensured trial, acceptance
Penetrated larger rural consumer markets
Upper class tag of shampoos fast faded away
Cut-throat market emerged
Significant trade influence
Retailer- key to consumer purchase
Chik Shampoo Launch

1983- Chik shampoo NPL in 10 ml pack
Later in sachet form
Market cluttered with low-cost shampoos
Clear opportunity for a good quality shampoo with
appealing perfume at a price to delight the

consumer
Chik significantly superior quality plus French
perfume
Differentiation- superior fragrance
Target audience
Lower middle-class/
semi-rural (Sec B2,C,D)
MHHI Rs 1,5003,000
Females, 16-plus
Key Issue
No clue how to use shampoo
Poor penetration levels
MNCs sold shampoos in bottles
Only in major district stores
CavinKares team travelled
deep in rural pockets
Awareness and demonstration
Solution
Encourage trials, key to rural success
Trials on schoolboys (women not possible)
Demonstrate how to lather and wash, comb hair
Show and feel the difference
Opportunity in small kirana stores and rural
home shops
Made people comfortable with the concept of
shampoos
School Demo
Champi on schoolboys
Promo Strategy
Cinema- religion in South India, family entertainment
Harness powerful appeal of cinema among masses
Cine stars cult, popular dialogues
Innovative ads based on popular cinema dialogues by
stars
Radio sole mass advertising medium
Annual ad spends Rs 2 lakh
Popular south stars - Amala, Khushboo, Manorama,
Charlie
Promotion
Encourage trial through consumer scheme,
create demand
On 4 empty shampoo sachets, 1 Chik sachet
free (Risky)
On 5Chik Shampoo sachets, 1 Chik sachetfree
Chik sales rose from Rs 35,000to Rs 10 lakh a
month
Innovation
In Southern markets women
keep flowers in their hair for
fragrance. So we introduced
for the 1st time, floral
fragrances (rose, jasmine) in
shampoos. The concept was a
hit
Sales jumped 3X from Rs
10 to Rs 30 lakhs pm
1990s
Chic, popular in South India
Shampoo market @15%
Amala endorsed
Sales 3X Rs 30L to 1 crore pm
Each idea rewarded by
customers
TVC
1990s Cable TV
revolution
1992 TVC with popular
cinema actors
1992: No 1 in South
India
Growth strategy
Road screening of Rajini films
Flashed Chik ads strategically
Followed up withlive demo
Post show free sachets to audience
Tremendous response- rural TN & AP
Shampoo sales up3-4X aftereveryshow
Consume
rs
started
demandi
ng Chik
National Footprint
1993- National presence, expand in geographies &
segments
Target rural + urban value-conscious consumers
Place- innovative trade schemes & consumer offerings
Shampoo @25%, Small packs 40% volumes, rural @ >
urban
Key challenge- rural reach and recall, packaging critical
1999- Chik, second largest shampoo brand in India- (also
in rural markets)- next only to HLLs Clinic Plus
Rural dynamics
Population size
Villages
< 1000
459465
70
1000-5000
58029
>5000
143248
21
1993-Indian rural market > urban

70% villages with population <
1000
Low accessibility, undeveloped
How do you market your products?
Rural Dynamics
Opportunity- 47,000 haats & 25,000 melas in villages
Average daily business Rs 2 lakh
Key- network, availability, sizing, pricing
Rural customer- rational & value conscious
Critical- deliver superior value at an affordable price
point
Key factors in rural purchase

Factors influencing purchase of
shampoos in rural markets
% of
respondents
Looking at the wrapper
60
Retailer recommends
Looking at the price
Logo identification
25
4
2
Doesnt bother to check
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
Insight- Rural consumers used soap to wash hair
and though the hair felt rough, they continued
using soap as they could not afford shampoos
Sachet@ Rs2*4 washes pm* 5 adults/rural family
= Rs 40 for hair wash alone= unaffordable
If cost of hair wash was @Rs2/ adult/monththey would try a shampoo
50-paise shampoo sachet- ridiculous
The 50-paise shampoo sachet

We worked backwards for over 2 years,
developing the formula & packaging. Finally, we

launched Chik shampoo sachet @50p in Sep
1999, the first ever such price point
Price point helped penetrate deep rural pockets
Chik NMS flared from 5.6%(1999) to 23%(2004)
Rural shampoo volumes @2X urban sector
2005: Chik Rs 100 crore brand
Rural Chik
No.1 Indian rural shampoo, 65% rural market sales
Rural Hold of Chik

States
No. of
Villages
MS %
(Volume)
Rank
107440
67
Bihar
45113
32
AP
28123
39
TN
16870
46
MP
55392
22
Orissa
55352
19
UP
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
Shampoo National Shares (AC

Nielsen)
Anti Dandruffamitrangnekar@gmail.com
Market 25% NMS, Chik absent
Promo
Promo
Chik Range
Right pricing & sizing
Chik- Black, Jasmine, Egg, Cool, Satin
Anti Dandruff Shampoo- climbazole + lemon
extracts(itching)
Sachet @Re1, 50p; Bottles -60, 120 (Rs 20), 250
& 500ml
Mobile beauty parlours

Unconventional media to entice consumers to try
Mobile parlour vans- complete brand experience
Hair stylists use Chik on clients, sample Re 1 sachets
Reach- 900 towns pm, 50k hair washes, 25L lakh people
Target- colleges, market places & large residential
localities
Play TVC as stylists work on volunteers, contests
Promotional spots Radio Mirchi
Other successes
1983 Chik Shampoo- focus for 7 years
1991 Meera Herbal Hair wash powder- 95% NMS

1993 Nyle Herbal Shampoo- transparent packaging
1997 Spinz Perfume- @Rs 10, super hit
1997 Fairever Fairness Cream- India No 2 (with saffron)
1998 Indica Hair Dye- Baalon ko de dil ki umar
2003 M&A Ruchi Pickle sachet, 5000 TPA India No 1
2007 Karthika Shampoo
2008 M&A Prakash Dairy, Snacks, M&A Padhmam
Herbal
2009 RestaurantsFoodstaurants, Veg Nation
Sales
Urban thrust,
NPL
50p sachet
Price penetration
National reach
Radio
Demos
Film screenings
TV
Trade
management
Demos
4+1 offer
CavinKare Group turnover 2010-2011- Rs 1016 cr

Chik Shampoo Rs 200 cr+ brand
11% NMS (Value), 19% NMS (Volume) of shampoo market
No 2 to Clinic Plus, 29% market share (HUL 47%, P&G 18%)
1780 employees, 1300 Stockists, 25 lakh retailers
Plants- Haridwar, TP-Pondicherry, Noida, Assam, Faridabad
Exports- Nepal, SL, Malaysia, Singapore, Bangladesh, US,
GCC
Reasons behind CavinKares success

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

Chik-Shampoo Sachet: DR Amit Rangnekar

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Chik-Shampoo Sachet: DR Amit Rangnekar

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Drepturi de autor:

ChiK- Shampoo Sachet

Shampoo the No 1 shampoo brand in rural India

The concept of sachets

How Chik Shampoo was born

askedfor collateral, I had none. One bank gave

Shampoo Rural Market

Indian Shampoo Market 1980s

Accessibility & Affordability

Chik Shampoo Launch

appealing perfume at a price to delight the

1993-Indian rural market > urban

Key factors in rural purchase

Looking at the wrapper

Doesnt bother to check

The 50-paise shampoo sachet

developing the formula & packaging. Finally, we

Rural Hold of Chik

The Urban thrust

Shampoo National Shares (AC

Mobile beauty parlours

1983 Chik Shampoo- focus for 7 years

1991 Meera Herbal Hair wash powder- 95% NMS

CavinKare Group turnover 2010-2011- Rs 1016 cr

Reasons behind CavinKares success

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