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RESEARCH PROJECT SYNOPSIS

ON
COMPARATIVE ANALYSIS OF PATANJALI PRODUCTS WITH
FMCG
In partial fulfillment of the requirement for the award of degree
MASTER OF BUSINESS ADMINISTRATION
(2016-2017)

DEENBANDHU CHHOTU RAM UNIVERSITY OF SCIENCE AND TECHNOLOGY,


MURTHAL

DEPARTMENT OF MANAGEMENT STUDIES

SUBMITTED TO: - SUBMITTED BY: -


DR. AARTI (ASSISTANT PROFESSOR) SIDDHARTH
Roll no -12001432047
MBA 5 YEAR (9 SEM)
Synopsis (2015-2016) MBI 9th Semester

NAME : SIDDHARTH

ROLL NO :12001432047

PROJECT TITLE:

Name of the guide: - Dr. AARTI


Signature of the Student: - _____________________

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Synopsis Guide

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Table of content:
SR TITLE Page No.
.No

1 OBJECTIVE 2

2 INTRODUCTION AND 3
BACKGROUND

3 SWOT ANALYSIS 7

4 What consumer tend to consume 8


ayurvedic goods

5 ANALYSIS OF ORGANIZATION 11
WITH
MARKETING THEORIES AND
EXPERT REVIEWS
6 FUTURE SCENARIO AND 12
RECOMMENDATIONS

7 OBJECTIVE OF STUDY 13

8 REFRENCES 18

To look into the growth of Patanjali, to study its marketing and future objectives and correlate it with
theories and expert opinion, analyses and recommend actions for future course .
COMPANY PROFILE:

Patanjali Ayurveda Limited is an Indian FMCG company. 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 has also manufacturing units in Nepal under the trademark
Nepal Gramudhyog and imports majority of herbs in Indian from Himalayas of Nepal. According to
CLSA and HSBC, Patanjali is the fastest growing FMCG company in India .

Estd. year: 2006

Company: Patanjali Ayurveda Pvt Ltd.

Founded by: Acharaya Balkrishna and Baba Ramdev


Number of employees: 200000

Its motto:

"Humara eke simple funda hai: MNCs ko replace karna (We have a simple principle: we want to
replace MNCs)," says Ramdev. "We don't want to put anyone down, but we would like to instill
Swadeshi pride so that Indian money does not go out of the country. We are not into any such war
rooms. We don't analyze other companies' strategies or conduct market surveys and feasibility studies.
It is only when people ask for cheap and healthy options that we try to respond." People's trust in us has
increased. It brought us a lot of attention and the demand for our products have shot up considerably."

Three basic principle of product development at Patanjali:

1) Competitive pricing

2) Purity of raw materials used

3) Innovation.

Patanjali major products:


SWOT Analysis:

Strengths:
Natural products without any side effects.
Solid base of trust because of Baba Ramdev.
Mix of Ayurveda and yoga that attracts people.
Presence of established distribution network in urban areas. Social responsibility to make
people healthy.

Weaknesses:

Low export levels


Absence of established distribution network in rural areas.
Strong competitors and presence of substitute products.
Lack of marketing and promotional activities.
High price of some products.

Opportunities:

Untapped rural market.


Large domestic market -over a billion population.
Changing lifestyle and rising per capital income of India.
export opportunities as Indian Ayurveda is trusted in the entire world.

Threats:

HUL and its own Ayurveda brand AYUSH that they are rebranding.
Strong political connect of the existing competitors.
Theirs has been many attacks from political parties on company for adulteration. This can hamper
its main USO that is trust.
Policies Since the company uses cultivated herbs any policies in future related to them can be a
hindrance in growth of patanjali.

Market and Competition:


Indian FMCG market is a market which has a very wide range of customers. There are many
competitors in all the categories and although they all have similar products available at almost similar
prices, Patanjali is trying to prove itself different through their marketing strategies. However, entry to
this business is easy (low entry barriers) and this fact has been utilized very efficiently to result in
combined benefit for both Patanjali and the consumers.

Major players in food processing industry:

Company Products

DABUR INDIA Ltd Fruit juices, cooking paste, honey

Branded wheat flour, biscuits, ready to-eat food,


ITC
confectionary

HUL Ice cream, branded wheat flour, bread, sauces,


jams.

RASNA (PIOMA Instant drink, health drink, soft drink


INDUSTRIES) concentrates, flavors

PEPSI Soft drinks, potato chips, snack food, fruit juices

CARGILL Vegetable oils

NESTLE Coffee, chocolates, confectionary, instant


noodles, milk products, beverages, health drinks

Consumer Belief:
The Indian FMCG market especially the food and beverages segment has recently been flooded by adulterated
goods which have severe detrimental effects on health of the consumers. Patanjali Ayurved, led by Baba
Ramdev has since its inception stressed upon the pure and adulteration free nature of their products. [13]
This has bought them consumers looking for quality products with no detrimental effects on health. Further,
the companys insistence on using good quality fresh ingredients is also getting them new buyers.
Cheaper Costs:
Patanjalis relatively newer production line has state of the art manufacturing and packaging facilities which
allow it to be highly competitive in terms of production costs. Further, it works on low margin, high volume
model and keeps advertisement costs to bare minimum. The products are thus available at a much cheaper
costs as compared to its peers. A comparison of prices of similar goods is given below.

Made in India, for India


Baba Ramdev has continuously pitched Patanjali as a swadeshi alternative to all the MNC products which
help source Indians money abroad. The pitch has resonated well among many Indians who now prefer to buy
Patanjalis products rater than other companies.
2.5 Marketing Analysis of Patanjali Ayurved
Marketing is used as a tool to generate traction for any given product, commodity or service. Though Patanjali
has traditionally shied away from mainstream advertisements, it has utilized alternative forms of marketing
quiet effectively to bolster its presence in the market.
Word of mouth publicity: According to a study by Forbes, when a company makes a claim, its
believability is merely between 20 49%. But when real people speak fovorably about a brand the
believability jumps to 70%; when friends speak about a brand s goodness the believability jumps to 90%.
Patanjalis products have been marketed by its customers for their benefits and advantages over other
competition.
Publicity in Yoga Camps: Baba Ramdev consistently organizes yoga camps across the country. These
have been estimated to attract around 70 million people till date. Further many times this number also
witness these shows on television. Many Patanjali products are marketed by Baba Ramdev in these yoga
camps along with details of their benefits and usage. This has proved to be an excellent marketing tool.
Mainstream Advertsement: The Company has lately shifted to conventional advertisements on national
broadcasting networks. This further pushes the companys products in the market.
2.6 Distributor Analysis
A good and wide distribution network plays a vital role in the sale of any companys products, especiaaly in a
country as large as India. Patanjali is relatively new in the Indian FMCG space and thus has a comparatively
smaller distributor and retailer base as compared to its peers. Currently Patanjali s products are available
through several channels:
1. Exclusive Retail stores: Around 15000 across the country.[15]
2. Patanjali Chikitsalaya and Arogya Kendra : 3000 across the country.[16]
3. Retail Chains: Patanjali products are available at Big Bazar, reliance Fresh, Big Basket etc.
4. Future Group outlets: Patanjali has a tie-up with Future group to retail products in 245 cities and towns of
the country.[17]
5. Online retail: Patanjali products are available at patanjaliayurved.net as well as other e-commerce sites
such as Flipkart, Amazon etc.
6. Mobile Distribution: the company maintains a fleet of tempos for selling its products in rural areas.
As the demand of Patanjalis products is increasing across the country, the company is making efforts to make
Patanjali products available at general stores across the country.

Lower and effective advertising aids lower pricing


Patanjali Ayurved has limited advertising expenses, which gives it enough leeway to pass on the
savings from lower ad spends by way of lower prices. The company advertises in a limited way
news tickers, regional newspapers, some digital advertising, etc., though going ahead it might
start other forms of advertising too. Patanjali has adopted the unique information based
advertising. For instance, the company highlights the positives of cows ghee, which
automatically helps sale of Patanjali Ghee. In the recent past, the companys print advertising
has seen a marked increase.
Experts review and Management principles:

Damodar Mall, a retail with an astute understanding of what consumers want, came up with an
interesting hypothesis.

Ever wondered why Amish Tripathi's the Shiva Trilogy became the fastest selling book series in
the history of Indian publishing, with 2.5 million copies in print and over Rs 70 crore in sales?

Or why Devdutt Patnaik is such a hit on the speaking circuit? As consumers get confident, they
like contemporary things that spring from their cultural identity, says Mr Mall.

The success of Amul, on the other hand, is about the timeless appeal of "in your face" value or
authenticity. And finally, the concept of Ayush, or the appeal of all things natural, and the
concept of wellness.

Patanjali Is the Multiplier Effect of These Three Appeal Vectors.

Mr. Defender Chawla, the president of the Future Group, says about patanjali: Two major
factors responsible for phenomenal growth of Patanjali is Trust and Direct Marketing Due to the
recent scams and adulteration in consumer products public has lost trust on consumer products of
leading FMCGs and that is what Patanjali is counting upon. The combination of Ayurveda and yoga
and then direct promotions by baba ramdev during his yoga shivirs and lesson is a good and a
trustworthy promotion of Patanjali.People have no reason to doubt the authenticity of the products
as it is promoted by baba Ramdev who has dedicated his life for teaching yoga and a healthy life
style to the public.

Future Scenario:
PAL have very aggressive growth plans in future which is going to make competitors life very hard. PAL
aims at turnover of over INR 10000 crores in 2016-17 more than double from the INR 5000 crores in the
fiscal year 2015-16. PAL is also planning to invest INR 1000 crores in 2016 in setting up 5 to 6 new
processing units in states like Assam, Maharashtra, MP, Rajasthan, Haryana and UP. The factories will
come up at Drought hit areas like Vidarbha in Maharashtra and Bundelkhand region in UP & MP. 4
factories will be operational by the end of Q1 2017 which will generate more than 5 lacs jobs. They have
plans to spend around INR 500 crores on cow protection, a research Centre and setting up world class
universities for Vedic education. PAL is planning to set up Cosmetic and Ayurveda medicine factory in
Birgunj, Nepal as well where they will manufacture various cosmetic and herbal products .

The Indian consumer is becoming more inclined towards all things natural, organic and

herbal when it comes to skin care, personal care and make-up and the year 2016 has

been a game-changer for this industry. According to promoter sisters of Azafran

Innovacion Ltd, the organic skincare market in India is expected to cross the Rs. 1,000-
crore mark by 2020. With the consumer becoming more aware and driven towards

beauty and wellness, this market is growing at 20-25 per cent Year on Year in India.

The Ayurveda push: Growth of Patanjali, HUL enters competition

Ayurveda is a Rs 4500 crore sector in India today. With a growth rate of 16 per cent, this sector is touted to

reach Rs 7000 crore by 2020. The Indian governments big push to this sector through the Ministry of AYUSH

has also paved way for Ayurveda brands stepping out of their shells and foraying into beauty and personal care.

The rise of Patanjali, which now has a revenue of Rs 5,000 crore, is proof that the demand for herbal products

has touched a new high. According to CLSA and HSBC, Patanjali is the fastest growing FMCG company in

India.

Another proof of the immense growth in demand for Ayurveda and herbal products is that FMCG major

Hindustan Unilever is set to re-enter this space to take on Patanjali. Reports say HUL is reviving its Ayurveda

brand Lever Ayush and is launching new personal care products under the label. While Lever Ayush was

launched in 2001, it lost pace through the years. However, HUL is now set for the race and will be ranging

products in the price range of Rs 30 to Rs 150. Patanjalis Baba Ramdev had said that his brand will beat

brands like HUL and ITC. With HULs herbal push, in 2017, all eyes are going to be on this sector as the

competition gets fiercer.

While Patanjali has come out as the big daddy in 2016, old and new, big and small, all Ayurveda brands are

looking at this huge growing demand for all things natural and organic as an opportunity and expanding with

newer products and markets in 2017.

Another example of this is Ayurvita, an Ayurveda brand from Delhi, which is going to introduce a new

cosmetics range under its label. We have around 27 franchisees across India spread over eight states. I have

two franchisees in Netherland and 3 in the US. Well also be launching in Malaysia in November. We have a

franchisee in Kenya and we are in the process of finalising one in Australia, says Dr Vijay Pratap Kushvaha,

Managing Director, Ayurvita Healthcare.

The grand old group Vasudeva Vilasam is also cashing in on the opportunities, moving out of its comfort zone

in the South and adding more franchisees in the northern regions of India, with its wide range of personal care

and beauty products under its brand Adara.


While Biotique and Himalaya are among the leaders in this segment, international brands are also looking at

making the most of it. French cosmetics company LOral has unveiled its plans to establish its research centre

in India to delve into natural active ingredients in cosmetics. This research and innovation centre is a tribute to

Indias scientific excellence. It is designed to become a laboratory of innovation for Indian beauty and a source

of inspiration for the rest of the world, says Laurent Attal, Executive VP of Research and Innovation for

LOral. It has also launched a new natural hair care range under Garnier Ultra Blends.

As Shreyansh Kocheri, Research Analyst at Euromonitor International puts it, Increasing demand for natural

and Ayurvedic beauty products over the review period has led to heightened competition in this area. Players

such as Patanjali Ayurveda, Hindustan Unilever, Colgate-Palmolive India, Dabur India, Emami Ltd, Marico

and Godrej Consumer Products have introduced range of new products, targeting the masses during 2015. The

mass players like Dabur, Emami and Patanjali are expected to continue educating Indian consumers about the

benefits of Ayurvedic products through aggressive product promotions and in-store displays. These brands are

also expected to focus on expanding distribution over the forecast period in order to increase penetration and

reach.

Patanjali may beat HUL to become the biggest FMCG brand in India by 2018-19

The Fast-Moving Consumer Goods (FMCG) market is amongst the most difficult markets to crack,
especially in a country like India where there is no dearth of competition and conquering distribution
remains an uphill task. But the Patanjali success story stands out as an exception to the rule.

Apart from its massive surge in year-on-year revenue, the herbal product brand has managed to achieve
something that remains a distant dream for most FMCG behemoths brand loyalty. While selling products
at cheap rates isnt exactly considered a pricing strategy, building an ever growing loyal customer base is a
business strategy bar none. Thats exactly what Patanjali has managed to achieve.
Pat Anjalis growth story has been covered time and time again. But, if we had to summarize it for you, the
companys revenues would be a good place to start.
Turnover in 2011-12: Rs 446 crores
Turnover in 2012-13: Rs 850 crore
Turnover in 2013-14: Rs 1,200 crore
Turnover in 2014-15: Rs 2,006 crore
Turnover in 2015-16: Rs 5,000 crore
And the company has no plans of slowing down in 2016-17. In a press meet on Tuesday, the companys
founder Baba Ramdev said that the company is projecting a revenue of over Rs 10,000 crore in the current
fiscal year. Thats a 100 percent increase for a company that is already churning out sales to the tune of Rs
5,000 crore.

Patanjali Vs Dabur. The ad war for your attention


FMCG giant Dabur has waged war against its rival, Baba Ramdevs Patanjali Ayurveda.
Newly emerging firm, Patanjali had sounded the war bugle with an advertisement, last December, which
claimed its honey brand is safer and cheaper than other brands in the market. Pat Anjalis television
advertisement displays a bottle of honey, that looks very similar to a Dabur bottle, and goes on to claim that
the price of Pat Anjalis product is much cheaper than other brands. Its just Rs 70 and not Rs 122 (the exact
price of Daburs product for its 250-gram pack), the ad claimed.

Patanjali Ayurveda is eating into the market share of the FMCG majors, and the company has caught
the attention of almost all the big brokerages

Rarely do capital market experts look beyond the universe of companies listed on the stock exchanges. Their
spreadsheets, presentations and analysis revolve around the financial ratios of listed companies that report
their revenues and profits at regular intervals.

Home-grown ecommerce stars like Flipkart, Snap deal and Paytm, among others, have caught the attention
of such analysts with their advertising blitzkriegs and profit-eroding discount sales.

But, there is one unlisted company that is now on the radar of almost all the big brokerages; it is not burning
cash and boasts of a loyal following, traits that are uncommon in the ecommerce space where profits are a
distant dream. The company is Patanjali Ayurveda Ltd (PAL).

A research report by ICICI Securities says that only 9% of Dabur's portfolio is affected by
Patanjali, in contrast to around 45% of Hindustan Unilever's portfolio. Dabur's chyawanprash
and honey are directly affected by Patanjali. In contrast, a wide variety of HUL's segments like
soaps, shampoos, detergents, dish wash and oral care are directly affected by Patanjali. Hence,
ICICI Securities believes that Patanjali is a greater threat to HUL than Dabur. However, the
impact on revenues of each segment of HUL may be small. Dabur's suffered a loss of 2%
market share in Chyawanprash in Q3FY15-16, while its oral care segment gained 1% market
share. HUL's oral care segment, which consists of brands like Pepsodent and Close Up, is losing
market share to Patanjali.

Patanjali has revenues of Rs3,267 crore in FY15-16 upto January as per a Brickwork Ratings
India Pvt. Ltd report with a target of achieving ending the year with Rs5,000 crore of revenues.
Patanjali has a significant market share in honey, ayurvedic medicines and ghee segments. Oral
care segment is estimated to contribute to around 10% of its revenues. Patanjali's products are
priced at a discount to HUL's products. The price differential is pronounced in the detergents
segment, where its products are priced at around 70% premium to Patanjali products.
Detergents and dishwashes are among the fastest growing segments for Patanjali and no wonder
that HUL's dishwash and detergent segments are impacted drastically by Patanjali, finds the
ICICI report. What HUL and others are finding hard to compete with is that Patanjali has
positioned itself as a natural/Ayurvedic brand, which has gone well with the Indian consumer.
HUL, like other FMCG majors, is trying to counter this threat. It has just completed its acquisition of
premium Ayurvedic brand Indulekha from Masons group.

HUL has a much higher dependence on urban demand as compared to Dabur. Around 2/3rd of HUL's revenues
come from urban demand as opposed to around half of Dabur's revenues. Thus, HUL will benefit more from
urban demand revival as compared to Dabur. With respect to raw materials, palm oil is an important raw
material for soaps. Palm oil prices have risen by more than 30% during the last six months. Similarly, sugar
prices too have risen by more than 30% in the last seven months, affecting input costs for food products in the
FMCG sector. The strategies that FMCG companies adopt if these raw material prices continue to rise, will be
keenly tracked by analysts. Just like many of its peers in the FMCG space, HUL trades at premium valuations
with a price-to-earnings (PE) multiple of 46 based on trailing 12 months earnings. Similar is the case with
Dabur which trades at a PE of 36 based on consolidated numbers, while at 50 based on standalone numbers. It
would be interesting to note whether there is a demand revival in the rural segment. Another interesting aspect
would be whether FMCG majors increase their advertising spends to counter the threat of Patanjali.
OBJECTIVE OF STUDY

1. To know the market share of Patanjali and HUL.


2. To find the growth opportunities of Patanjli in Indian Market.
3. To study the brand perception of PATANJALI in minds of Consumers
4. To know the attributes that a customer keeps in mind while buying PATANJALI Products.
References:
http://patanjaliayurveda.com/en/company-profile

Marketing Management (14th Edition) 14th Edition, by Philip T Kotler (Author), Kevin Lane Keller
(Author)

http://www.sciencedirect.com/science/article/pii/S1877042814031255

http://www.scribd.com/doc/61780413/Study-on-Patanjali-Yogpeeth-With-Other-
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http://www.iosrjournals.org/iosr-jbm/papers/ies-mcrc-volume-1/11.pdf

http://docslide.us/documents/patanjhali-v3.html

http://patanjaliayurved.org/pal

http://www.indiaonlinepages.com/population/india-current-population.html
Research report on Indian FMCG Industry, AFS Action, July 13, 2013
http://info.shine.com/industry/fmcg/6.html
http://reports.dionglobal.in/Actionfinadmin/Reports/FDR0108201343.pdf
https://en.wikipedia.org/wiki/Patanjali_Ayurved
Patanjali Ayurved, waiting in the wings, Edelweiss Research
http://www.thehindu.com/news/cities/mumbai/business/fastmoving-ayurvedicgoods/article8187124.ece
http://patanjaliayurveda.com/en/about-us
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http://companiesinindia.net/fmcg/