Marketing Management 2

PROJECT REPORT

Submitted To:
Prof. D.K. Batra

Submitted By:
Group 11 Section C
Gaurav Dutta
Pratik
Chawrekar

Word Count -

Shreya Gupta
Shubham
Pipraiya

15PGDM160
15PGDM175
15PGDM178

Tanvi Aggarwal

15PGDM184

Yuvraj Singh

15PGDM192

SUDHANSHU
GUPTA

15PGDM147

15PGDM195

"Everything we do will be within the ambit of consumer health. Earlier the

message was implicitly and not explicitly crafted. It is not just advertising or
imagery, the entire marketing, sales and distribution will be wired different from
what it used to be. Digital, ecommerce all new platforms will be the engines for
investments.

Sunil Duggal
(CEO Dabur
India Ltd.)

Executive Summary:
`

Dabur India Ltd. is the fourth largest FMCG Company in India and the worlds
largest Ayurvedic medicine &products manufacturer.This report aims to
analyze the current market prospects of Dabur with respect to one of its
flagship product, Chyawanprash. It is the largest Chyawanprash brand in
India, contributingapproximately Rs 150 Cr. to Daburs revenue. We have
analyzed it taking into account the 4 Ps of marketing, distribution channels
and trade promotion schemes. Consumer insightshave also been analyzed
such that it can aidein further increasing the market share for Dabur
Chyawanprash.

Research Methodology
To understand the marketing strategy of Dabur Chyawanprash, we had to
look into the distribution channels employed, the trade promotion schemes
and the positioning of the product. The methodologies applied were primary
research (consumer survey, interview of retailers & distributors) and
secondary research (articles, news and blogs). Secondary data was also
collected through reports the company has furnished for the general public.
The survey was carried out through a questionnaire floated online. The
questionnaire had multiple choices and an attempt was made to keep the
questions simple. An effort was also made to collect data from a diverse
group of people to avoid any biasness in the survey.

TABLE OF CONTENT

Sr

Topic

No.
1

BRIEF

COMPANY
CHYAWANPRASH

3
4
5
6
7

SEGMENT
PRODUCT
PRICING
PROMOTION
PLACE
CONSUMER ANALYSIS
RECOMMENDATIONS

LEARNING
EXHIBIT

INFORMATION

Page No.

THE

MARKET

OF

6
8
9
12
17

AND

21

22

Brief Information about the company:

Dabur was founded in 1884 by Dr. S. K. Burman to produce and dispense Ayurvedic
medicines.
Headquarters:Ghaziabad
Values: Ownership, passion for winning, people development, consumer focus,
team work, innovation and integrity.
Core Competency: Providing Ayurvedic and health care products to its
customers
Value Preposition: Relative Price to Functional, Emotional and Self Expressive
Benefits
Tagline: Celebrate Life
USP: Dedicated to the health and well-being of every household

[Exhibit 1&4]

Strategic Intent of Dabur:

Dabur intends to significantly accelerate profitable growth. To do this, they will:

Focus on growing core brands across categories, reaching out to new

geographies, and improve operational efficiencies

Meet the health and personal grooming needs of consumers with safe,
efficacious, and natural solutions by synthesizing our deep knowledge of

ayurveda and herbs with modern science

Provide consumers with innovative products within easy reach
Build a platform to become a global ayurvedic leader
Be a professionally managed employer of choice, attracting, developing and

retaining quality personnel

Provide superior returns, relative to competitors, to their shareholders

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*Note STP of the company has not been covered in this report as the same has already been covered
in the first part of the report.

Chyawanprash Market Segment

The Chyawanprash market in India is roughly worth Rs 400 Crore, majorly
dominated by Dabur with 61% market share. The other players include Himalaya,
Emami, Baidyanath and Patanjali. The market for Chyawanprash was stagnant for a
long time with growth rates in single digit. Lately there has been a spurt in the
demand for Chyawanprash because of the increasing health consciousness and an
exigency for immunity among Indians. In 2010, the market saw a 25 % jump after
almost a decade of paltry growth. [Exhibit 3&5]

Product: Dabur Chyawanprash

Right from the time it was launched in the year 1949, its main objective was to be
considered as a health care ayurvedic product which contained only natural
ingredients which increased bodys immunity.

Target market:
Dabur Chyawanprash is targeted at people of all ages be it the young crowd or the
aged people. It is positioned as a protector against environment maladies especially
during the winter season during which its usage peaks. Also now, Dabur has
launched its different variants of Chyawanprash which could be consumed round
the year.

Marketing Objective:
1. Long term marketing objectives:
The long term objective of Dabur
Chyawanprash is to be considered as the number one natural healthcare
supplement product which could be consumed by people of all age groups. It
is currently the top selling product in its category and aims to maintain the
position in the future too.
2. Short term marketing objectives:Keeping its long term objective in mind,
Dabur plans to grow across categories, increase its reach across geographies,
and improve operational efficiency. It wants to have a broader reach,
strengthened value network and be the market leader in most categories.
Being one of the most trusted and sought after brand in this category, Dabur
wants its reach to spread roots in different markets across India. It aims to
improve its brand visibility in the markets by strengthening its promotion and
advertising abilities.

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Financial Objective of Dabur

Financial objectives are set to give the company a solid plan for moving in a
direction for long-term success.

Market scenario
Dabur has a total market size of 8000 crore out of which DaburChyawanprash
contributes roughly about 150 crore in India and aims to expand further. But due to
the new entrants in the Chyawanprash market likePatanjali and the prevailing
competition from the old competitors like Emami and Zandu, the sales of Dabur
Chyawanprash has dipped over the time period by about 15-20%. Also, the total
sales in this segment have gone down by 10%. So, in order to increase sales and
revenue, Dabur aims to increase its operating margins by cutting down its operating
and manufacturing costs. Also, Dabur has drawn a blueprint to take its
Chyawanprash into the US markets to further increase its revenues. [Exhibit 2]

Key success factors of Dabur Chyawanprash

Dabur Chyawanprash is made from 100% natural ingredients.

Can be consumed by people of all age groups round the year as it increases
immunity.
Successful advertisement and promotional campaigns done by famous
personalities like Amitabh Bachchan and MS Dhoni.
Attractive pricing and economical packing.
Brilliant supply chain network.
Continuous innovation in its product according to customers need.

Product Depth:
Dabur has a strong range of products in the Chyawanprash category and it is
coming with new prototypes of Chyawanprash capsules and biscuits for line filling in
this category. Currently it has the following variants:

Dabur Chyawanprash SKU's

Dabur Chyawanprash Awaleha
Dabur Chyawanprash

Dabur Chyawanprash Mango

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Dabur Chyawanprash Mix fruit

Dabur Chyawanprash Orange

Dabur Chyawanprash Chocolate

Dabur Chyawanprash Sugar free

Dabur Ratnaprash

PRICING
Dabur has a systematic and regular evaluation of their products as well as their
competitors products. After analyzing each aspect carefully, they determine their
pricing strategy. As Dabur mostly deals with ayurvedic products, compromise is not
allowed with the quality of the product. The prices are kept with a minimum profit in
mind as they are beneficial for the health of every individual.
Dabur has various SKUs of a single product in different price ranges and the same
has been followed for Chyawanprash. It is available in various sizes to cater to
different needs of the consumer. Chyawanprash belongs to a non-durable product
category. It cannot reduce price to gain market share as this will question the
quality of the product. It also has to maintain a competitive price with respect to its
competitors. Dabur Chyawanprash also has a strong brand backing. Hence, the
price elasticity is low in this case. Dabur follows Mark Up pricing strategy for Dabur
Chyawanprash.

SKUs:
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Dabur Chyawanprash SKU's

Dabur Chyawanprash Awaleha (500 gms)

MRP(Rupees)
136

Dabur Chyawanprash (500 gms)

160
Dabur Chyawanprash Mango (500 gms)

163
Dabur Chyawanprash Mix fruit (500 gms)

163
Dabur Chyawanprash Orange (500 gms)

163
Dabur Chyawanprash Chocolate (500 gms)

178
Dabur Chyawanprash Sugar free (500 gms)

178
Dabur Ratnaprash(450 gms)

300

PROMOTION

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Once the product has been manufactured, priced rightly and is distributed, the next
task of the marketer is to inform potential customer about the product and
persuade them to buy the same. The promotion element of marketing mix is
concerned with the activities that are undertaken to communicate with both
customers and participants in the channel of distribution such that sales goals are
realized. There are several promotional activities such as-: Advertising, Sales
promotion, trade promotion, personal selling/direct marketing etc. but the most
effective ones are Advertising and Sales Promotion.
Advertising
Advertising is a form of communication that typically attempts to persuade potential
customers to purchase or to consume more of a particular brand of product or
service. Many advertisements are designed to generate increased consumption of
those products and services through the creation and reinforcement of "brand
image" and "brand loyalty". Every major medium is used to deliver these messages,
including television, radio, cinema, magazines, newspapers, video games, the
Internet and billboards.
Dabur has always leveraged celebrity endorsement to create a brand impression on
the consumer. It is associated with celebrities such as Amitabh Bachchan, Rani
Mukhurjee, Vivek Oberoi, Madhuri Dixit etc. So far the company has been successful
in this as celebrities like Amitabh Bachchan, who stand for reliability and integrity, is
a major endorser of Chyawanprash. He helps to bridge the trust gap between the
product and the consumer.
Sales promotion
An activity designed to boost the sales of a product or service. It may include a
free-sample

campaign,

offering

free

gifts

or

trading

stamps,

arranging

demonstrations or exhibitions, setting up competitions with attractive prizes,

temporary price reductions, door-to-door calling, telemarketing, and personal letters
on other methods.In marketing, sales promotion is one of the four aspects of
promotion. (The other three parts of the promotional mix are advertising, personal
selling,

and

publicity/public

relations.)

Sales

promotions

are

non-personal

promotional efforts that are designed to have an immediate impact on sales.

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Some of the sales promotion tools adopted for Dabur Chyawanprash are: Price
promotions, Coupons, Gift with purchase, Competitions and prizes, Money refunds,
Point-of-sale displays, Free samples, Retailer coupons, Allowances for additional
shelf space, Incentives, Premium gifts, Samples/product sampling, Exchange
Offers/buyback, Price / Bonus Packs
PROMOTIONAL SCHEMES USED FOR STOCKISTS

Higher Margins: Tries to give higher margins to stockist so that they dont
lose interest in the product and can earn good profits after meeting all the
expenses.
Allowances: Special allowances are given to both stockist and stockist sales
man if they achieve their monthly target.
Subsidy for Promotion Budget: Company gives subsidy to the stockist,
who spends the money on the promotional schemes, like conducting a
sampling activity.
Danglers and Posters: Company gives posters and danglers to stockist
which are further pasted and distributed by stockist sales man.
Annual Gathering: All the stockists meet under one roof at least once a
year and then the stockist whose performance was best in term of sales is
awarded.
Buyback: Dabur foods have a scheme of replacement of products which gets
expired.

PROMOTIONAL SCHEMES USED FOR RETAILERS

Trade allowances: Short term incentives are offered to induce a retailer to

stock up more Dabur products.
Dealer loader: An incentive given to induce a retailer to purchase and
display the products of Dabur.
Trade contest: A contest to reward retailers those sells the most product of
Dabur foods and after a specific period they are rewarded.
Point-of-purchase displays: Extra sales tools given to retailers by Dabur to
boost sales, like danglers, posters, banners etc. helps in promoting sales.
Demos: Special demos are given to retailers and even some stands, fridge
are given by retailers.
Trade Allowance: Dabur comes with different types of trade discounts from
time to time, like sometime price discounts, sometimes gifts etc.
Cash Rebate: Generally cash rebate is given by stockiest if retailer makes
the payment in cash at the time of purchase.

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Point-of-Purchase Material: POP material is available in the form of

Distribution Structure
Margin
Retailer
10%
Wholesaler/Distributor
5%
Stockists
2%
stickers, banners, displays, posters, signs, streamers, etc. put up inside and
outside the stores & other possible purchase locations.

[Exhibit 6]
PROMOTIONAL SCHEMES USED FOR CONSUMERS

Price-pack deal: The packaging offers a consumer a certain percentage

more of the product for the same price (for example, 25% extra).
Contests /games: Immune India School Challenge , Mothers Army
Multi-packs: Dabur foods has some products in multiple packaging which
are comparatively priced lower to the products sold in a single pack.
Trade Fairs & exhibitions: Here Dabur foods displays all range of its
products, making it easier for customers to know about product line and
choose the best out of that.
Customer feedback: Dabur foods consider its customer most important and
in case of any complaint by customer the foods department will leave all its
important work and will contact the customer.
[Exhibit 7]

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Place:
Objective: Make the products available to the customers for purchase and
consumption.

Distribution Channels: Key strength of Dabur

Distribution Agent
Manufacturing plants

Numb
er
12

Clearing and Forwarding

agents

40

Stockist/Distributor

1500

Salesmen

8000

Retailers

53000
00

Function
To provide the finished products
Pass on products from factories to stockist
Third party agents
Saves storage costs for company
Supplies to the retailers
Take orders from retailers
Fulfills them from Stockist
Merchandising
Shelf space (Exhibit 3)
Banners and posters
Direct contact with consumers
Influencers

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Distribution Channel
Dabur has a wide distribution network, covering over 75000retail outlet with huge
penetration in rural and urban market, through 50 clearing and Forwarding(CFA)
agents and above 5000 distributors.Daburs` distribution network extends beyond
India and have a huge presence in overseas market as well- Central, North & South
America, Australia, AsianMarket, Middle East,North&South Africa, East & West
Europe.

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Supply Chain Management

Supply chain management starts form procuring raw materials from supplier,
converting them to finished goods and dispatching them to final destination. The
main objective is remove all bottleneck and minimize the company cost.

Manufacturing Units:
Dabur has total 11 Manufacturing facilities in India producing all natural ayurvedic
products l like Chyawanprash, Gulucose, Shampoos,Hajmola and Real juices.
[Exhibit 8]
Its major functions are:

Procuring raw material from potential supplier

Transform raw material to finshed goods (Value addition)
Packaging and shipment to final destination

Clearing and Forwading Agent

Finished goods despatched from manufacturing unit to ware houses of
Clearing and forwarding agents
Clearing and forwarding agents are third party agents, they only help
company to moves their products manufacturing unit to Stockist / Substockist, Modern Trade and Institutions.
These helps company cost cutting as they do not have to build big
Gowdowns/ warehouses and their maintenance cost. In return Company has
to pay few percentage to CFA.
For Delhi NCR, Meerut and Ghaziabad there is only one CFA situated at Mohan
Nagar, where all products of Dabur are kept.
Stockist/Sub-stockist/Distibutor
CFA supplies goods to stockist/ distributor as per their order and they will stock
these goods in their godowns.
The whole market is divided into two parts

Urban Distribution Channel (Stockist)

Rural Distribution Channel (Sub-Stockist)

Urban Distribution Channel (Stockist)

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This is further sub-divided into two parts based on populations, viz: population
above 5 lakhs and population between 1 to 5 lakhs. The whole segment is directly
covered by the stockist.
In the segment of 5 lakh above population segment,there are three ways of
covering the market.

Beat Wise
Line Wise
Channel Wise

Whereas in population segment of 1 to 5 lakh population there ae two ways:

Beat wise
Channel Wise

Beat Wise Distribution: Here total market is divided into different territory where the
total products are served to all the outlets exist in that area.
Channel Wise: Here the product is divided into different channels like Healh care
product, Home Products, personal care products.
Line Wise Distribution: Here the total product is more specifically divided into
different lines like Chyanwaparsh, hair care, dental care nutrition food etc.
Rural Disribution Network (Sub-Stockist)
Sub-stockist get the required goods through Super-Stockist, who cover the whole
urban distribution channel. The whole rural distribution network is served by three
parties: Substockist, Wholeseller and Dabur networks itself.
Distribution Network
Distributors have their own sales person. Their work is to place the product in
the market and get order from retailer/wholeseller and supplies goods to
them in time.
Each sales person has to cover schedule route specify in the beat daily.
Another person, Merchandising representitive, work is to make product visible
in the market, by pasting posters, placing products on front shelves of
retailers, and promote via various schemes run by the company time to time.
Companies sales officer keeps check on distributor and makes monthly
report which is further analyzed by its area manager.
Dabur has 1 stockist in Noida and Gaziabad respectively.
Retailer

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Retail business is the heart of any business as they connect with the end consumers
and have the real potential to take any business to new heights or can bring it to
toes if not maintained properly.
Distributor supplies Chyawanprash to retailer as schedule and try to push new
products like Mango, Mixed Flavour of the company by persuading retailers to give
brand special display like brand/product hording, pamplets acquiring front shelves,
to get affective brand presence by arranging in a more noticeable manner.

Retail market is further sub-dvided into different categories based on their sales
volumes.
Retail Classification
Categor
y
A
B
C

Monthly Business
Above 10,000
5,000 - 10,000
Below 5,000

Margin of retailer depend upon their location and sales volumes. It may vary from
8% to 15%.
Chyawanprash is available is all types of Retail Outlet like Supermarket, Chemist,
small outlet etc.
Dabur has a more extensive retail market, and has a presence in all major cities and
town which cover more than 75000 retail outlet pan India making its product
available to all segment customer at ease.
Online Retailing:
Dabur Not only follow traditional retailling but has transform itself into online
retailling also as with time most of the purchase are made online. One can find
extensive Dabur products at various discount prices on all major e-commerce
retailling sites.

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Customer Analysis
We tried to profile the Chyawanprash user by conducting a survey such that it helps
us understand Daburs marketing strategy.
Number of respondents in the survey: 45

20%

11%

<18
29%

40%

18-29
30-44
>45

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The survey had a well-distributed gender ratio and an age mix. Almost 75% of them
are Chyawanprash users.

Dabur has a stronghold in the Chyawanprash market as over 85% of the users claim
to use their product. Other popular ones were the new entrant, Patanjali and
HimaniSonaChandi.

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The positioning of Chyawanprash is inclined as a health supplement that

boosts immunity and protects from cold & Flu. Relating this to how people
perceive Dabur as a brand, we can see a strong association. Dabur products
are perceived as Reliable, Healthy and having Ayurvedic elements in it which
is exactly what most people are looking for when it comes to Chyawanprash.

A clear co-relation can be seen between the positioning of Chyawanprash

and its usage. Most of the users preferred to take it during the winter season
when common cold is prevalent. Thus, in order to boost sales, trade
promotion schemes can be implemented during the summer season
when demand is low for the product. There is also a gap in the
market where no product is targeted to increase the usage during
summer season I.e. a Chyawanprash variant for use in summer
season. Positioning of the product for round-the-year usage is very
essential. Even though Dabur has campaigns directing the same, it
is yet to establish this in the minds of the consumer.

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We conducted a weighted average analysis on a few parameters for Dabur

and its competitors to get an understanding of the areas where Dabur has a
competitive advantage and the areas where it can grow to maintain the
same.
Dabur has an edge on Brand, Price and availability of the product over its
competitors. The most important among these will be the availability.
Because this is a consumer good where choices are made based on what is
available in front of the eye, it is important to have an extensive reach.
Dabur scores well above its competitors in this. It has a robust distribution
and a channel management system (It has been covered under the
distributors and retailer analysis section). An interesting result form the
survey was the ingredients analysis. Consumers today are informed well and
they look into each and every aspect of the prodcut. Daburs competitors has
a substantial edge in the ingredients section. Consumers perceive greater
benefits from its competitors ingredients. This is one area where Patanjali is
greatly pushing its product. This is one area where it can focus on i.e. to
come up with a more satisfactory product.

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The Brand recall for Dabur Chyawanprash

is very high when it comes to its competitors. People are more aware about its
advertisements. Surprisingly Himani Sona Chandi scores well in this. One reason
could be their strong association with celebrities. Dabur has also been associated
with celebrities such as Amitabh Bachchan, MS Dhoni etc. It can continue to do the
same and achieve a greater market penetration.

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Recommendations and
Learning

Availability and reach is the central point of retail marketing. Dabur is the

market leader in this segment because of the shelf space and availability it
commands as compared to its competitors. In this segment, decision maker (mainly
the house wives) takes a call at the point of sale if it is available at the store, its
packaging and pricing. Dabur scores high on all of these.

Despite being the market leader in the segment, slow growth of the segment

itself can make life difficult for the leader. Dabur can overcome this by increasing
per capita consumption and changing the common perception of winter usage to
round the year usage.

To increase per capita consumption, it can come up with multiple product

variants i.e. flavours or product forms (Dabur plans to come up with Chyawanprash
biscuits, capsules)

To change the perception of the product as a winter-product and promote

round the year usage, it needs to launch a campaign promoting daily usage
benefits. Taking a cue from what Horlicks did where it launched multiple flavours
and for different age segments, Dabur Chyawanprash can follow suit.

Dabur can also look to increase market share. From the survey conducted,

one-fourth of the survey participants were non-users. It can be concluded that there
is a substantial segment of the population that are unaware about the benefits of
the product or dont feel that it is a necessary commodity. Thus, being the market
leader it can look to position the product as a necessary commodity considering the
degrading condition of the environment.

E-tailing has become essential for any consumer good. Dabur was the first

company to sell Chyawanprash online. It can leverage this to increase market share.
To adapt to these changes they have hired Starcom MediaVest Group (SMG) to
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assign its media duties. SMG is one of the worlds largest media agency. Thus, in
todays online world, e-tailing as a channel has gained significant traction.

Exhibits
1. Business Structure of Dabur

2. Competitors of Dabur Chyawanprash

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3. Product Portfolio

4.

Market Share of Dabur in different segments

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5.Dabur Brands

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6.Shelf space

7.Advertising

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8.

Manufacturing Locations of Dabur

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