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GROUP 10

Section B
Swarnajit Saha(pgp10100)
Devesh Upadhyay(pgp10079)
Rishabh Gupta(pgp10103)
Misha Garg(pgp10094)
Abhilash(pgp10064)
K.N.L.Manasa(pgp10087)
Somya Agarwal(pgp10114)

CavinKare Case Analysis

Q1. How has been the performance of CavinKare in the market so far?
CavinKare was established by C. K. Ranganathan in 1983. The first product
introduced by the company was Chik shampoo. Chik was launched after careful market
research and customer need analysis. This helped Chik to attain a dominant position in the
market with about 21.19% market share in 2002. In 1993, they extended their portfolio by
launching another shampoo brand, Nyle, which was a herbal shampoo to target customers
that were reluctant to use chemically made shampoos. This also answered to the consumer
need and became one of top 5 shampoo selling brands in India with 10% share in shampoo
market and 45% share in herbal shampoo market. They also took on the monopoly of HUL in
fairness cream market with their new launch of Fairever. As this also answered to the
consumer needs, Fairever acquired 6% market share within 6 months of its launch. Consumer
engagement with consumers helped CavinKare gain important insights from time to time.
With well curated marketing strategies, CavinKare was able to build strong brand and gain
consumer visibility. The company had almost tripled in revenues from about 85 crores to
about 260 crores during the period of 1999-2003. From this, we can conclude that CavinKare
have performed really well in the market so far.

Q2. What are the key capabilities that helped CavinKare establish its foothold in the Indian
FMCG market? Can the company leverage the same capabilities in soaps and detergents?
CavinKare identified the gaps that were overlooked by the major FMCG companies
like HUL. Before converting product innovations into brands, CavinKare followed a four-
pronged strategy for gaining consumer insights. This helped the company to understand
requirements of customer and gain advantage over its competitors. They developed herbal
shampoo which was new in market and positioned it as a safe and natural product for hair.
They also made a revolutionary change by putting shampoos and perfumes in a small sachet
which costed very low and as a result so many lower and medium class consumers started
using such products. These low-cost products in sachets were very economical and gave
consumers opportunity to try new product. As a result, market share of CavinKare increased
in rural market. Moreover, CalvinKare utilized the sentiments of people to launch its face
cream product as empowering product rather than just a beauty product.
Yes ,the company can leverage the same capability in soaps and detergents by
bringing innovative ideas as done in case of shampoos. They can bring variety in size, cost
and can position its product as natural and cost efficient. By using effective advertising and
introducing innovative product, CalvinKare can perform really good in soaps and detergents.

Q3. What was the approach adopted by CavinKare in the new product introduction? What
were the success factors for new product development?
Building strong brands and gaining consumer visibility was an important part of
CavinKare marketing strategy. Their target was always delivering customer value through
affordable products. While introducing new product in the market, one of its key aspect in
marketing communication was to use of regional media. They relied heavily on radio for
mass media advertising. In its use of national media as well, CavinKare was able to connect
with consumers by taking dig on competitor products. Various creative communication
campaigns helped build CavinKare’s brand equity among its target segments.
Over the years, CavinKare has well established nationwide distribution network. This
ensured that its products were available at a large number of retail outlets. Also to gain
distribution access, CavinKare approached rural consumers in an innovative way. Such as,
visiting to rural markets like haats, melas, mandies to promote as well as sell their products.
Also, they provide product in low units packs and sachets for cheaper affordability.
Main success factor for new product development was their ability to identify gaps in
the market and understanding consumer requirements by four-pronged strategy for gaining
consumer insights. Some of the product introduced inspired by the consumer insights are as
follows:
Chik shampoo: First shampoo to offer fragrances and a low unit pack at INR 0.50 per pack.
Meera hair oil: Introduced novel packaging design with perforated container filled with pure
herb extracts dipped in a bottle of coconut oil.
Fairever fairness cream: The first to use saffron in fairness creams
Spinz perfumes: First company to launch in a distinctive dab on pack, single use perfume
pack.

Q4. What were the strategic reasons behind CavinKare’s intention to diversify? Is it
justifiable for the company to venture into an entirely new business instead of focusing on its
current business?
Strategic reasons behind Cavinkare’s intension to diversify are:
 The variety of products is increased by diversity
 The number of target market increases with the diversity of products
 Diversification will help meet the estimated demand and sustain the company’s
growth
-In 2001, the size of shampoo and fairness cream markets in India estimated to be
INR 8,500 million and INR 6,500 million, respectively.
 There is a good scope for cross selling
 The risk factor is reduced due to diversification in products
 To increase the turnover: Company had set the vision to become an INR 52 billion by
2012.
Diversifying in the detergent and soaps have growth opportunities as the company would
be able to follow both organic and non-organic routes to growth. The main idea was to
target larger customers, given that the detergents and the soap market was a very large
one. Even a small market share in initial phase would have a major effect on its sales
turnover. Food was another category and had the potential to grow many times its current
size. Retailing was another area in which the company was trying to venture into. It
would help company reinforce its brands. Hence, It is justifiable for the company to
venture into an entirely new business due to increase in growth opportunities in other
markets which would help CavinKare to improve its sales and achieve the target turnover.