Professional Documents
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ON
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ACKNOWLEDGEMENTS
A lot of effort has gone into this training report. My thanks are due to many
people with whom I have been closely associated. I would like all those who have
contributed in completing this project. First of all, I would like to send my sincere
thanks to Ms.REETA NAGARI for her helpful hand in the completion of my
project.
I would like to thank my entire beloved family & friends for providing me monetary
as well as non – monetary support, as and when required, without which this
project would not have completed on time. Their trust and patience is now
coming out in form of this project.
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CERTIFICATE
Signature :
Ms.REETA NAGARI
JIMS, Kalkaji, New Delhi
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CONTENTS
Acknowledgement 2
Certificate of completion 3
Executive Summary 5
Introduction 6
Objective 15
Literature Review 17
Company Profile 51
Research methodology 65
Limitations 80
Recommendations 81
Conclusions 82
Appendices 84
Biblography 86
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EXECUTIVE SUMMARY
This study seeks to understand the growth of Procter & Gamble through the in-depth
analysis of marketing strategies it has adopted over a long period of time to stay
ahead in the market place. This study explains how PATANJALI has maintained its
position by exploring the strategies. The study also explains how PATANJALI
became the world leader billion dollar brand from a local candle and soap maker.
Further it seeks how CSR and Advertising help PATANJALI to create and brand
image for quality and innovation.
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CHAPTER-I
INTRODUCTION
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India’s FMCG sector is the fourth largest sector in the economy and creates
employment for more than three million people in downstream activities. Its
principal constituents are Household Care, Personal Care and Food &
Beverages. The total FMCG market is in excess of Rs. 85,000 Crores. It is
currently growing at double digit growth rate and is expected to maintain a high
growth rate. FMCG Industry is characterized by a well-established distribution
network, low penetration levels, low operating cost, lower per capita consumption
and intense competition between the organized and unorganized segments.
With more players entering the FMCG sector, particularly the skin care, hair care,
deodorants, convenience foods, and health foods markets,
• Some are even willing to pay premium prices for their “higher” aspirations
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• Margin are becoming thinner for FMCG players as they battle higher raw
material costs and invest more in marketing, slick packaging and distribution
networks to gain volume and retain/gain market shares
Industry Analysis:
Industry Dynamics:
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Higher Penetration of the Rural Population
Many companies are deepening their penetration in the rural areas as:
The FMCG sector in the urban areas is becoming quite saturated (though it will
continue to dominate in the next 8 – 10 years) while the penetration in the rural
areas are only about 1%.
The rural areas have and will continue to make up more than 50% (153 million)
of India’s total households and accounting for more than its current 66%
contribution to total FMCG consumption.
Rural India has a large consuming class with 41 per cent of India's middle-
class and 58 per cent of the total disposable income.
Currently, nearly 34% of the offtake of FMCG companies come form rural
areas. Companies like PATANJALI , ITC and Colgate have already established
good distribution networks in these regions. Other companies would start
catering to these regions in near future.
Between 2005 and 2010, the FMCG sector in the rural and semi-urban areas
will experience some 50% growth, at a CAGR of 10% and increase its market
size to nearly US$ 23 billion from the 2005 level of US$11.4 billion
Demand for FMCG products is set to boom by almost 60 per cent by 2007 and
more than 100 per cent by 2015. This will be driven by the rise in share of middle
class (defined as the climbers and consuming class) from 67 per cent in 2003 to
88 per cent in 2015. The boom in various consumer categories, further, indicates
a latent demand for various product segments. For example, the upper end of
very rich and a part of the consuming class indicate a small but rapidly growing
segment for branded products. The middle segment, on the other hand, indicates
a large market for the mass end products. The BRICs report indicates that India's
per capita disposable income, currently at US$ 556 per annum, will rise to US$
1150 by 2015 - another FMCG demand driver. Spurt in the industrial and services
sector growth is also likely to boost the urban consumption demand.
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Swot Analysis of FMCG sector in India
Strengths:
Weaknesses:
• "Me-tooʺ products, which illegally mimic the labels of the established brands.
These products narrow the scope of FMCG products in rural and semi-urban
market.
Opportunities:
• Export potential
Threats:
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Industry Category and Products:
Household Care
Personal Wash:-
The market size of personal wash is estimated to be around Rs. 8,300 Cr. The
personal wash can be segregated into three segments: Premium, Economy and
Popular. The penetration level of soaps is 92 per cent. It is available in 5 million
retail stores, out of which, 75 per cent are in the rural areas. PATANJALI is the
leader with market share of 53 per cent; Godrej occupies second position with
market share of 10 per cent. With increase in disposable incomes, growth in rural
demand is expected to increase because consumers are moving up towards
premium products. However, in the recent past there has not been much change
in the volume of premium soaps in proportion to economy soaps, because
increase in prices has led some consumers to look for cheaper substitutes.
Detergents:-
The size of the detergent market is estimated to be Rs. 12,000 Cr. Household
care segment is characterized by high degree of competition and high level of
penetration. With rapid urbanization, emergence of small pack size and sachets,
the demand for the household care products is flourishing. The demand for
detergents has been growing but the regional and small
unorganized players account for a major share of the total volume of the
detergent market. In washing powder PATANJALI is the leader with 38 per cent
of market share. Other major players are Nirma, Henkel and Proctor & Gamble.
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Personal Care
Skin Care:-
The total skin care market is estimated to be around Rs. 3,400 Cr. The skin care
market is at a primary stage in India. The penetration level of this segment in
India is around 20 per cent. With changing life styles, increase in disposable
incomes, greater product choice and availability, people are becoming aware
about personal grooming. The major players in this segment are Hindustan
Unilever with a market share of 54 per cent, fol-lowed by CavinKare with a
market share of 12 per cent and Godrej with a market share of 3 per cent.
Hair Care:-
The hair care market in India is estimated at around Rs. 3,800 Cr. The hair care
market can be segmented into hair oils, shampoos, hair colorants & conditioners,
and hair gels. Marico is the leader in Hair Oil segment with market share of 33
per cent; Daburoccu-pies second position at 17 per cent.
Shampoos:-
The Indian shampoo market is estimated to be around Rs. 2,700 Cr. It has the
penetration level of only 13 per cent in India. Sachet makes up to 40 per cent of
the total shampoo sale. It has low penetration level even in metros. Again the
market is dominated by PATANJALI with around 47 per cent market share;
PATANJALI occupies second position with market share of around 23 per cent.
Antidandruff segment constitutes around 15 per cent of the total shampoo market.
The market is further expected to increase due to increased marketing by players
and availability of shampoos in affordable sachets.
Oral Care:-
The oral care market can be segmented into toothpaste - 60 per cent;
toothpowder - 23 per cent; toothbrushes - 17 per cent. The total toothpaste
market is estimated to be around Rs. 3,500 Cr. The penetration level of
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toothpowder/toothpaste in urban areas is three times that of rural areas. This
segment is dominated by Colgate-Palmolive with market share of 49 per cent,
while PATANJALI occupies second position with market share of 30 per cent. In
toothpowders market, Colgate and Dabur are the major players. The oral care
market, especially toothpastes, remains under penetrated in India with
penetration level 50 per cent.
Food Segment :-
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Bread and biscuits sales exceeds US$1.7 billion;
Health beverage sales exceeds US$ 230 million;
Ice cream exceeds US$188 million
Chocolates sales exceeds US$73 million
• The soft drink (carbonated beverages and juices) market is in excess of US$1
billion, predominantly urban (>70%), and its consumption is highly seasonal.
• Major players in this segment include Hindustan Lever, Nestle, Cadbury and
Dabur
Tea :-
The major share of tea market is dominated by unorganized players. More than
50 per cent of the market share is capture by unorganized players. Leading
branded tea players are PATANJALI and Tata Tea. In the hot beverage market,
tea rather than coffee dominates. Coffee is consumed largely in the southern
states.
Coffee :-
The Indian beverage industry faces over supply in segments like coffee and tea.
However, more than 50 per cent of the market share is in unpacked or loose
form. The major players in this segment are Nestlé, PATANJALI and Tata Tea.
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OBJECTIVE
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OBJECTIVES OF THE STUDY
To identify the factors that has led to the success of PATANJALI over a long
period of time to stay ahead in the market place.
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CHAPTER-II
LITERATURE REVIEW
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Sales promotion decisions are significantly affected by whether the company
decides to do to pull or push strategies to accomplish its objectives. Such a
decision may require a little or a lot of cooperation from resellers. The
requirements to implement one strategy might be little more than to just stock the
product by the retailers. The other strategy may demand more participation from
resellers such as the ability to explain to the consumers as to how a product
works.
In case of using a pull strategy, marketing efforts are directed at the ultimate
consumer and consumer promotions such as consumer contests and
sweepstakes, rebates, coupons, free samples, consumer premiums, etc are
used. If this strategy is also chosen to include advertising, there are large
advertising expenditures. The objective of such promotional efforts would be to
create sufficient consumer demand to pull the product through the channels, that
is the consumers are encouraged to demand the product from retailers who in
torn place orders with wholesaler or manufacturer to meet the consumer
demand.
PULL
This strategy may require little promotional efforts from the resellers except to
stock input the product on shelves.
A pull strategy is appropriate when
The product demand as high.
It is possible to differentiate the product on the basis of real or emotional
features,
Brand consumers show high degree of involvement in the product
purchase,
There is reasonably highly brand loyalty and consumers make brand
choice decision before they go to the store.
PUSH
If a firm decides to use push strategy, its efforts are directed at resellers and the
manufacturer becomes very dependent on their personal selling abilities and
efforts. The promotional efforts are focused at pushing the product through the
distribution channels; the resellers may be required to display, demonstrate and
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offer discounts, to sell the product. The communication to resellers is generally
through trade circulars or the sales force.
PUSH
Push strategies generally appropriate for product categories where there is low
brand loyalty and many acceptable substitutes are available in the market. It
may also be suitable for relatively new products or when the brand choice is
often made in response to displays in the stores, the product purchase is
unplanned or on impulse and the consumer is familiar and has reasonably
adequate knowledge about the product. Manufacturers, who cannot afford to
engage in sustained mass advertising, often use push strategy and offer effective
incentives to dealers.
Retailer promotion: Buy Cadbury’s products worth Rs.3000/- and get any 30
chocolates worth Rs.5 each free.
Through this offer the company is pushing its product to the retailers and now
that the retailer has enough incentive the retailer stocks more and thus it
becomes essential for the retailer to push the product to the consumers.
Pull promotions Push promotions Push promotions
(Manufacturer to consumer) (Offered to trade) (Offered by retailer)
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When the product is being introduced, the major objective is to increase the trial
rate and distribution of the product. For increasing trial sampling, coupons,
demonstration which are all pull promotions, can be used. To make the product
available in distribution channels, it may become necessary to use some kind of
incentive scheme for the resellers to encourage them and minimise their risk
associating stalking a new product. Manufacturers can offer display allowances
to resellers to make the product highly visible. There could be liberal guarantees
to take back the stocks, if unsold, to reassure the trader. These are all push
promotions. For most new products, it would be difficult to be successful without
pull promotions. In fact when new products are introduced, much more
emphasis is given to pull rather than push promotions.
Cadbury is introducing the new brand bytes having an introductory offer
Rs5 off which will be available through the coupons that are distributed
with newspapers like the Times of India.
Growth stage
In this stage, the dominant objectives are to expand the market for increasing the
number of new customers who would try the product for the first time and to
encourage the repeat purchase by those who have already tried the product.
Another important objective is to expand or at least maintain the distribution. For
increasing trial, pull promotions are appropriate however as the trial rate
increases free samples become quite an expensive proposition. To encourage
repeat purchase by consumers, in pack or on-pack coupons can be used.
This would also help in converting those customers who have already tried the
product into regular users of the product. Another tool of sales promotion that
can be used is to offer bonus packs containing additional quantity at the same
price as an incentive to encourage repeat purchase. To expand the distribution,
push promotions such as different types of discounts, free goods that increase
the profitability of the trade, can be used.
Maturity stage
When the product is in maturity stage, many similar brands are available to
customers. Due to price discounts or other extra benefits, consumers often
switched brands. This phenomenon of brand switching is more common if the
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product category happens to be one of low involvement. The sales promotional
strategy in this stage can focus on attracting maximum number of brand
switchers, reward and reinforce the loyalty of regular users and use more of push
promotions to build inventories with resellers. Many tools of sales promotion
such as premiums, price discounts, extra goods, displays, dealer contests,
feature advertising become important.
Generally a combination of pull and push promotions prove more effective during
maturity stage of a product life cycle. The market share of the brand is an
important factor in gaining the support of resellers.
Techniques Of Sales Promotions
Consumer market sales Trade sales promotions Sales force sales
promotions promotions
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The offer is termed as “banded pack” when 2 or more units of the products are
sold at a reduced price compared to the regular price.
Another variation of this technique is “buy 1 get 1 free” or some similar offer, it
could be “same for less” or “more for the same.”
The main advantage of this tool is that extra product may encourage increased
usage and help sustain the habit. Also among other similar brands, a bonus pack
stands out at the point of sale.
Refunds And Rebates
Refund is the repayment of total money paid for purchase, while the rebate
represents repayment of only part of the money paid for the purchase. Refund
offers seems to work very well in guaranteeing the trial of a product or service
since there is no risk involved for the customer because of the promise of total
refund of the purchase amount.
Refunds and Rebates play an important role in the consumer durable segment
because the product price is reduced to a great extent because of the rebate
offer.
Coupon
A coupon entitles a buyer to a designated reduction in price for a product or
service. Coupons are the oldest and most widely used form of sales promotions.
Coupons bear an expiry date and cannot be redeemed after the cut off date.
Coupons can be of 3 types:
Direct to the consumer
Media distributed
Product distributed.
The main Advantages of coupons are:
Encourage brand switching
Stimulate trial for a product
Take off the attention from price
Many companies to create more product trials has coupons in the newspapers
and magazines which avail you some rupees off on thereproducts Contests And
Sweepstakes Contests and sweepstakes can draw attention to a brand like no
other sales promotions technique. A contest has consumers compete for prizes
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based on skill or ability. Winners in a contest are determined by a panel of judges
or based on which contestant comes closest to a predetermined criterion for the
contest. Contests tend to be somewhat expensive to administer because each
entry must be judged against winning criteria. Contests were very often used
earlier where people has to write slogans, poems, stories etc. generally “I like the
product because …” and the best ones won prizes. But off lately, contests are
becoming less and sweepstakes increasing. People are more willing to play on
luck rather than participate by showing their abilities. A sweepstake is a
promotion in which winners are determined purely by chance.
Consumers need only to enter their names in the sweepstakes as a criterion for
winning. Some popular types of sweepstakes also use “scratch-off cards”.
Contests and sweepstakes often create excitement and generate interest for a
brand, but the problems of administering these promotions are substantial.
One problem is that the game itself may become the consumer’s primary focus,
while the brand becomes secondary. The technique thus fails to build long-term
affinity for the brand.
Britannia khao world cup jao campaign has taken the market by a swing.
Under the offer you collect points available on Britannia biscuit packets and
exchange 100 points for a scratch card, which has various gifts and the 100
world cup tickets. The offer was actually introduced during the last world cup and
had shown phenomenal results. Sale increased tremendously; there was an
increase in the sales by 25%, claims the company. So it is being done this year
too. This year too the contest is showing good results.
Sampling
Getting consumers to simply try a brand can have a powerful effect on future
decision-making. Sampling is a sales promotion technique designed to provide a
consumer with an opportunity to use a brand on a trial basis with little or no risk.
Saying that sampling is a popular technique is an understatement. Sampling is
particularly useful for new products, but should not be reserved for new products
alone. It can be used successfully for established brands with weak market share
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Techniques used in sampling:
In-store sampling
Door-to-Door sampling
Newspaper sampling
On-package sampling
Mobile sampling
Trial offers
Trial offers have the same goal as sampling – to induce consumer trial use of a
brand- but they are used for more expensive items.
Ex: exercise equipment, appliances, consumer electronics, etc. the expense to
the firm of course can be formidable. Segments chosen for this sales promotion
technique must have high sales potential.
Premiums and advertising specialties
Premiums
They are items offered free or at a reduced price, with, the purchase of another
item. Many firms offer a related product free.
There are 2 options available for the use of premiums:
1. A free premium provides consumers with an item at no cost, the item is
included in the package of the purchase item.
2. A self-liquidating premium requires a consumer to pay most of the cost of
the item received as a premium. In this promotion offer the consumer is
required to send a specified sum of money along with a proof of purchase
to claim the premium.
Premiums have become very common today. Many companies are offering lots
and lots of premiums. The main advantage of Premiums is that they offer not
only that one product but also another product, which may influence the
customer, a lot to buy the product. Especially if the other product is worth it.
Also new products are given free with established brands to stimulate trial of the
new brand.
Buy a Cadbury Bournvita and get a dairymilk worth rs 10 free
Advertising specialties
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Popular advertising specialties are caps, t-shirts, toys, mugs, mouse pads, pens,
calendars, etc.
Advertising specialties have 3 key elements:
A message placed on a useful icon, and given to consumers with no obligation.
Pepsodent toothpaste 100gm pack get free dental insurance worth
Rs.1000, this is a very effective strategy because it is giving you’re the
guarantee that nothing can happen to your teeth. The Rs.1000 insurance
speaks a lot for its brand and its product thrust.
Buy any Nestle chocolate and get tatoo free.
Many other kids products are influence a lot by such specialties especially liked
by the kids like tattoos, masks, tazo, cricket bats etc. hence products that have
such offers sell more than the other brand available.
Ruffles lays, get free Tazo,
Rasna, get free Prankies
Continuity/frequency Programmes
In recent years, one of the most popular sales promotion techniques among
consumers has been “frequency Programmes”. The main objective of such
Programmes is encouraging repeat purchases or repeated visits to particular
retail shops. Frequency Programmes offer consumers discounts or free product
rewards for repeat purchase or patronage of the same brand or company.
sBrand placement
Brand placement often referred to, as product placement is the sales promotions
technique of getting a marketer’s brand featured in movies and television shows.
The use of a brand by actors and actresses or the mere association of the brand
with a popular film/ television show can create a positive image and have a huge
impact on the sales of a brand.
Marketers and advertisers used to think that brand placements affected only
consumers’ perceptions of a brand, much like advertising. But recent brand
placements have shown that the technique can have a sales impact like a
traditional sales promotions.
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Brand placement has varying results; if the brand name is spoken aloud the
impact can be dramatic but less obvious placements, referred to as background
placements are considered by some as a waste of money.
Coke in Yaadein , Pepsi in Khushi
Pass Pass in Yaadein
Event sponsorship
When a firm sponsors or co-sponsors an event such as a rock concert, a cricket
match, etc. the brand featured in an event immediately gains credibility with the
event audience. The audience attending an event already has a positive attitude
and affinity for the contest – they choose to attend. When this audience
encounters a brand in this very favourable reception environment, the brand
benefits from the already favourable audience attitude.
Coke and Pepsi keep sponsoring many events.
Exchange offers
If a family bought a refrigerator 10 years ago and the machine is still giving
reasonable service then the family is unlikely to buy a newer and more advanced
version of the refrigerator unless they get rid of the older one by selling it to our
country is prepared to throw it as junk. Same thing is true for a number of
products such as televisions, microwave ovens, washing machines, cars, two-
wheelers, computers, etc.
This segment of present owners is sizeable enough yet to sell new brands to
those who already own a similar product is not easy. To attract this segment,
manufacturers regularly announce exchange offers.
Consumer durables market is the one where exchange offers are used the most.
Almost all the TVs, Refrigerators, Washing Machines, etc. have exchange offers.
Internet promotions
They are the most recent form of sales promotions. They are promotions that are
done via the Internet. It is becoming increasingly popular because of the large
use of Internet. But still it has a lot to develop.
Marketing communications
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Marketing communications breaks down the strategies involved with marketing
messages into categories based on the goals of each message. There are
distinct stages in converting strangers to customers that govern the
communication medium that should be used.
Advertising
Price is one the elements of the marketing mix that generates revenue, while the
other elements generate costs. It is one of the easiest elements to adjust. It takes
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a lot of time and money to adjust the other elements like product features,
channels and even promotion.
Traditionally, the price of a product was a major determinant of buyer choice.
Although non-price factors have become important, still price remains as the
most important determining factor of market share and profitability.
Companies do their pricing in a variety of ways. In small companies the prices
are often set by the Boss or the Owner of the company. In larger companies the
price is handled by division and product-line managers. Even here the top
management sets the general pricing guidelines and policies which the
managers should keep in mind while pricing their product.
Setting the price: The company must set is price in accordance with the value
delivered and perceived by the customer. If the price is higher than the value
then the company will miss potential profits and if the value is higher than the
price, then the company will fail to harvest potential profits.
Selecting the price objective: The company should first decide where it wants
its position in the industry. The clearer a firm’s objectives the easier it is to set the
price.
Determining the demand: Each price will lead to a different level of demand
and therefore have a different impact on a company’s marketing objectives. The
relation between alternative prices and the resulting current demand is captured.
In normal conditions, demand and price are inversely proportional, the higher the
price the lower the lower the demand and the higher the demand the lower the
price. Companies want to work with customers who are less price-sensitive. But,
the internet on the other hand has increased the price sensitivity of people. If
shopping online if one visits two or more websites, then looking for the same
product, he will buy from that website which sells the product for the lowest price.
Estimating costs: Demand sets a ceiling on the price the company can charge
for its product. Costs set the floor. The company’s costs take two forms fixed and
variable. Fixed costs do not vary with production or sales revenue. But, variable
costs vary with the production. The more the company produces the more the
variable costs.
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Analyzing the price of the competitors: A company must always keep in mind
the price of its competitors. Before changing its price a company must consider
the possible outcomes of the price change. It should consider whether the price
change will initiate a price-war.
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2.0 Whether you produce good or service, you incur expenditure for producing
and selling it in the market. Thus you do need to set price of the product or
service to recover the expenditure. The most common determinants of price are
demand and supply. Let us understand this by means of a simple example.
Pure competition
Monopoly
Oligopolistic competition.
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note that no individual buyer or seller but all of them taken together determine the
price in such market.
2.7 Since the cost of production varies from firm to firm, it is possible for a
firm in the ‘short-run’ to earn above normal profit even in a purely competitive
market. This is possible till the cost of production is less than the revenue earned
by sale of the product. To put it aptly, a firm will produce so long as its marginal
cost (i.e. the cost of producing an additional unit of production) is less than the
marginal revenue (i.e. the revenue generated by sale of each additional unit of
production). The firm maximizes its profit at a price where the marginal cost
equals marginal revenue. It is not possible for the firm to earn profit beyond this
point when marginal cost exceeds the marginal revenue.
2.8 It is important to note, however, that inability on the part of the firm to earn
profits does not necessarily mean that the firm will stop producing. In fact, the
firm can continue to produce in the short-run so long as the marginal revenue is
greater than the average variable cost (- well, total cost is generally divided into
fixed cost i.e. the cost that remains fixed irrespective size of production, and
variable cost i.e. the cost that varies with the size of production. You will be
introduced to this concept of fixed and variable cost in greater detail at a later
chapter). Clearly thus it makes sense for the firm to produce rather than closing
down and losing the fixed cost which is a sunk cost.
2.11 The fact that there is a single seller under pure monopoly does not,
however, mean that it can charge any price. If it raises price too high, the buyers
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may not have the capacity to buy its product. The monopolist firm therefore
adjusts its output level for profit maximization although the price at equilibrium
level of output exceeds the average cost.
2.12 Key conditions that give rise to monopolies are economies of scales and
barriers to entry. Electricity generation, gas supply etc. are some examples
representing economies of scale. Left to themselves, they will charge monopoly
prices and restrict output. The absence of any competitive threat will also
probably leave such organizations wasteful, inefficient and sluggish.
Case of PatanjaliYogpeeth
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to propagate and implement the noble and sublime aspects of Indian
culture the philosophy and teachings of Vedas, Upanisads, etc. along with
Yoga and Ayurveda.
An OPD for free medical consultation to six to ten thousand patients and
IPD of one thousand beds
Facilities for test investigations of pathology, radiology, cardiology, etc. by
ultra - modern machines, along with Panchkarma and Satkarma
Yog Research Department equipped with the latest machines for
establishing Yoga on the criteria of modern medicine
Free Yoga classes by Yoga teachers (each for 1-
hour duration)
Free Ayurveda and Yoga therapeutic consultation by
well - trained Vaidyas
An elegant Yajna is performed daily on Vedic and
scientific tradition.
Panchkarma-Chikitsa, SatkarmaChikitsa, salya (surgical) Chikitsaeksara-
sutra, karnabhedana, agnikarma, dental and eye treatment services
available at the lowest cost
High quality ayurvedic medicines manufactured Patanjali Pathological
Laboratory and Research Centre by Divya Pharmacy is available at the
lowest price
Books, VCD/DVD, MP3 , Audio CD are also available
Facilities of library and reading room, along with a cyber cafe, are
available
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Divya Herbal Park located near Phase-I.
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5. Marketing Strategy of PatanjaliYogpeeth
There were also some words of caution attached to such instructions that
any deviation from the practicing techniques would cause immense harm to
a person. This gave birth to an idea that Pranayam should never be
attempted to be practiced individually and should only be practiced in the
guidance and vigil of a trained Yoga teacher (Guru). Such rigid rules,
complexity in practicing techniques and above all the caution that, any
deviation in the practicing techniques would cause immense harm to the
person, took Pranayam far away from common mass and was finally lost
and buried. No one dared to practice such an art which would cause harm
to them if there is even a slightest of deviation in the technique.
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and the mystery of Pranayam is unfolding itself to the common mass in
India.
43
mental medical condition completely, without any side effects. Swami
Ramdev has proved and declared on Indian and International TV Channels,
pranayam and yoga is the complete natural cure for all physical and mental
ailments. But if medicines are required they are also available and these
packages of medicines are available at a very low cost. The medicines can
cure all the diseases from a simple cold to cancer. In a bid to promote
ayurveda, Swami Ramdev's Trust has tied up with 600 qualified ayurvedic
practitioners who are offering treatment to masses for a variety of diseases,
some of them termed incurable by the modern system.
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ZandukesariJiwan
Flour ArogyaAata Aashirwad, Annapurna
Candy Amla, Anardana DaburHazmola
Washing Ujjwal Arial, Surf-excel, Tide
Powder
As seen from the above Table, the major products of the Patanjali Food
Park are sharbat (Juice concentrates), jam, salt, chyawanaprash, flour
candy, washing powder, etc. The advantage with all these products is that
these are made of natural products and don’t have any side effects at all.
But as there are so many players existing in the market, that Patanjali
products have a tough competition to face with.
45
5.5 Pricing Strategy
Patanjali follows a very smooth Supply chain management. The three parts
of supply chain are product flow, cash flow and information flow. In supply
chain of Patanjali all these are maintained very smoothly. Supply Chain of
Patanjali can be well understood with the help of some examples. First we
will take the example of sale of Patanjali products. They sell their products
only through their own outlets opened in almost every district/city of India.
Each outlet sends its demand to central office at Haridwar. Then based on
demand, different products are gathered from various units of Patanjali viz.
Divya Pharmacy, PatanjaliAyurved, Patanjali Foods etc. Then the items are
delivered to the respective outlets mainly through Patanjali transport. This
shows a good example of Supply chain management. Next we can take the
case of Patanjali Gram at Uttarkashi. Here Swami Haridasji has presented
46
a very good example of SCM. They collect cow urine from rural
households. After initial filtration, it is sent to Patanjali Food and Herbal
Park where it is processed and is sent to various Patanjali outlets for
distribution. The part of money received from the sale of cow urine is kept
by Patanjali Food and Herbal Park Limited as processing cost and the rest
is sent to the village. Some amount is distributed to the people as a price of
cows urine, rest is used for the development of the village like establishing
necessary infrastructure, building schools etc. The Patanjali Mega Food
Park (PMFP) has been envisaged to help in creation of enabling
infrastructure for food processing and a comprehensive ‘farm-to-plate’
supply chain system. The initiative aims to seek maximum value addition
by backward as well as forward integration between the farmers, factory
and the market. It can be said that the supply chain doesn’t have any
intermediary in between but rather it’s a direct from supplier to producer to
consumer. This also helps in reducing the cost because it avoids the
unnecessary commission cost and other related charges of the
intermediaries.
They provide sale of products through their website with online payment
facility. These products can be procured through post also by sending the
required amount through demand draft etc.
Patanjali has opened “PatanjaliChikitsalayas” and “PatanjaliArogya
Kendra” in almost all the cities of the country from where all the
47
Patanjaliproducts can be procured easily. A Patanjali trained Ayurvedic
doctor also sits in every PatanjaliChikitsalaya from whom consultation
can be obtained regarding various medicines.
Patanjali herbal products are also available at Post offices
across the country.
A shop is established for sale of products wherever a yoga
camp is organized.
Patanjali has prepared disease specific CDs which they sell
through their various outlets.
Baba Ramdev's live yoga classes became a passion. And it all began in
the year 2002 when Sanskar television channel started airing Baba
Ramdev's yogic classes; overnight, Baba Ramdev became a sensation he
had hundreds of followers who morphed into thousands. Then Sanskar
channel's rival Astha channel signed him. In two years time he was a hit
and with him also the channel benefited. His TV shows have the largest
TRP. Today, he is one of the biggest draws on Indian television. He can be
seen not only on religious channels like Aastha, but also news and features
channels like AajTak, India TV and Sahara One. Millions around the
country follow his programmes religiously and use Ayurvedic medicines
prescribed by him. There was an eight-month waiting period before one
could see Ramdev; he was being booked that far ahead by television
channels for his live yoga classes each morning. His yoga sessions were
beamed live into 170 countries. Also, Baba Ramdev's pack i.e., one DVD,
two Video CDs, three books on yoga, pranayam and herbal remedies, and
Magazines are available. This set of four promotional materials with a
Research Oriented Monthly Magazine of Yog, Spiritualism, Ayurveda,
Culture and Tradition-YogSandesh available in 5 languages can do much
to lure customers. Even healthy people are following his yoga pranayam
regimen, as available in his DVDs, VCDs, Books and magazines etc., to
48
keep fit. Baba Ramdev has got the pulse of the basic needs of people
which is not only limited to food, clothing and shelter but also includes a
healthy life style, and has managed to fine tune his offerings to suit the
needs of all. He has mastered the art of mass customization and practices
the art dexterously so much so that each individual feels that he is talking to
him individually.
6.1 Strengths:
Natural products without any kind of side effects
Innovative use of spirituality
Presence of established distribution networks in urban areas
Solid base and image of the trust
Social Responsibility to make people healthy
49
6.2 Weaknesses:
Strong competitors and availability of substitute products
Low exports levels
High price of some products
Absence of established distribution networks in rural areas
Very less promotional activities
6.3 Opportunities:
Large domestic market – over a billion populations
Untapped rural market
Changing lifestyles and rising income levels, i.e. increasing
per capita income of consumers ¾Export potential and tax and
duty benefits for setting exports units
6.4 Threats:
Political interference
Controversy created by other groups regarding Patanjali
products
Removal of import restrictions resulting in replacing of
domestic brands
Temporary Slowdown in Economy can have an impact on
FMCG Industry
50
CHAPTER III
COMPANY PROFILE
51
Patanjali Ayurveda Kendra Pvt Ltd was officially inaugurated by
ParamPujyaYogRisi Swami RamdevjiMaharaj& Ayurveda ShiromaniRishikalpa
Acharya Shree BalkrishnajiMaharaj on 27 September 2011 (2064/6/10 B.S.) and
started its operation as an Patanjali Ayurveda Kendra Pvt Ltd at swoyambhu,
Katmandu, Nepal with the ultimate aim of providing holistic, natural and effective
Ayurveda treatment. Patanjali Ayurveda Kendra Pvt Ltd. has registered in 2006
to company Registar, Government of Nepal. The company has authorized to
operate sales of Ayurvedic Medicines and publication. It was established with the
main purpose of curing and preventing common ailments by Ayurveda and
importing all kind of Ayurvedic medicines, audio-visual materials and literatures
of Divya Pharmacy, DivyaYogSadhana and DivyaPrakashan, Haridwar, India to
distribute in Nepal.
The Kendra was committed in taking guidance of all the advanced methods of
effective treatment procedures of Ayurveda. The Center was equipped with
Ayurvedic Doctors, Pathology Department, Pharmacy, Counseling Department
and many more facilities. The Ayurvedic doctors were trained from Haridwar and
in-house for a minimum period of 2-3 months before being put into professional
practice.
Patanjali Ayurveda Kendra had made achievements in treating thousands
suffering from diseases like osteoarthritis, rheumatoid arthritis, osteoporosis, low
back ache, cervical spondylsis, psoriasis, allergic respiratory disorders, multiple
sclerosis, age related mental stress and rheumatic diseases. Ayurveda is a
holistic healing science. Going beyond just curing an ailment, Ayurveda aims at
total well being of the individual – his mind, body and spirit.
About Us
The Kendra was committed in taking guidance of all the advanced methods of
effective treatment procedures of Ayurveda. The Center was equipped with
Ayurvedic Doctors, Pathology Department, Pharmacy, Counseling Department
and many more facilities. The Ayurvedic doctors were trained from Haridwar and
in-house for a minimum period of 2-3 months before being put into professional
practice.
53
Board of Directors
54
Thrustonrevenueoverprofitability;onlinemovestospurgrowth
Despitebeingacorporateentity,PatanjaliadherestoBabaRamdev’sconsumer‐centri
cideologies.Hence,thefocusisonrevenueandnotprofitability. The company is well
on course to achieve its targeted revenue of ~INR50‐60bn in FY16 (INR20.2bn
in FY15). Even though the thrust is not on profitability, the company managed to
clock ~20% EBITDA margin in FY15, aided by better cost management (latest
machinery and strong R&D capabilities) and lower A&P spends.
Toimproveitsdistributionreach,itisstrengtheningitsonlinepresence.Patanjali is also
implementing ERP which will help in inventory mapping. Shortly, a mobile app
will also be launched to help locate retail outlets and for online ordering of
Patanjali products.
Newproductpipelinestrongandinnovative
Patanjaliboastsofastrongnewproducts’pipeline.Theproductsarenotonlyinnovative,
butreasonablypricedtoo.AcentralR&Dfacilityequippedwithlatesttechologyalongwit
haseparatenewproductdepartmenthavehelpedinliningupaseriesofnewlaunchesov
ernextfewmonths. The new launches pipeline includes: Patanjali Noodles,
DantKanti Advance, Sugar free Chyawanprash, PowerVita, Seabuck thorn
dietary supplement and powdered hair dye, among others.
Aforcetoreckonwith
OverFY12‐15,PatanjaliregisteredrevenueCAGRof64.7%.Thecompanyhasaggres
siveplantoentereveryconsumercategory(keepingasidethosethatimpactlifestyleand
health).Atthecurrentjuncture,thoughitspresenceinmanycategoriesmaynotqueerthe
pitchforotherconsumergoodscompanies(eachcategorynottoobigtoimpactexceptG
hee,whichisexpectedtobeINR12bninFY16),overthelongterm,gainingpalpabledistri
butionprowesscouldposeaseriousthreattocompetition.Patanjali’s proactive moves
in innovation have been crucial for its growth. Other consumer companies will
55
need to step up innovations, particularly in the herbal and ayurvedic space
(distribution strength will come handy) to counter competition.
The3principlesvitalforgrowth
PatanjaliAyurvedisaincorporatedcompanyundertheCompaniesAct–
PatanjaliAyurvedLimited.Thoughacorporateentity,itsworkingandideologyisnotcom
pletelythatcanbecomparedtothatofaperfectcorporateculture.Thecompanyisfocuss
edontop‐linegrowthratherthanprofitability.Its business ideology is inspired by
Swami Ramdev’s ideologies totouch every life through Patanjali which will help
the consumers and be present in all thesegments where the consumers feel
they can get a better product at a better
price.Theorganisationconductsitsbusinessonthefollowing3mainprinciples:
(1) Providingworld‐classproductstoconsumers(makingsurethecompanydoesnota
ddanypreservativesorusesnaturalpreservativesasfaraspossible).
56
(2) Producingproductsinthemostcost‐effectivemannersothattheproductsarepriced
veryreasonably.
(3) Whateverprofitsthecompanyearnsareploughedbackintobusinesssothatitcanin
vestthesameforlaunchofnewproducts,costeffectivenessorfurthercapacityexpa
nsion.
Patanjaliwillnotlaunchanyproductsthatareharmfultothehealthofconsumersanddetr
imentaltothehealthandlifestyleofthepeople.Hence,thecompanywillnotgetintoprodu
ctcategoriesliketobaccoandliquorwhicharebadforhealth.Goingforward,thecompan
yalsoplanstoopen500‐600branchesofAcharyakulam(educationalinstitutions).
Sauces&Pickles Ketchup,Pickles
Sweets Murabba,SoanPapdi
HairCare Shampoo,Conditioner,HairOil,HairColor
Soaps&Handwash Handwash,soaps
OralCare Toothbrush,paste
Makeup Kajal
ShavingandGrooming ShaveGel,Shavecream
57
58
Targetingmorethan250%revenuegrowthinFY16
Patanjaliclockedrevenueof~INR20.3bninFY15withEBITDAmarginof~20%.Thec
ompanytargetstoachieverevenueofINR50‐60bninFY16itself.Growthisbeingdrive
nbythecompany’slargestsellingproduct,cow’sghee(expectedtobeINR12bninFY1
6)followedbyDantKantiandKesh
Kanti.Patanajalialsohasarobustpipelineofnewproducts,whichwillhelpachieveitsta
rget.
59
60
Lowerandeffectiveadvertisingaidslowerpricing
PatanjaliAyurvedhaslimitedadvertisingexpenses,whichgivesitenoughleewaytop
assonthesavingsfromloweradspendsbywayoflowerprices.Thecompanyadvertise
sinalimitedway–
newstickers,regionalnewspapers,somedigitaladvertising,etc.,thoughgoingahead
itmightstartotherformsofadvertisingtoo.Patanjali has adopted the unique
informationbased advertising. For instance, the company highlights the
positives of cow’s ghee, whichautomatically helps sale of Patanjali Ghee. In the
recent past, the company’s printadvertising has seen a marked increase.
Fig.3:Patanjali ’sinformativeprintadvertisements‐KeshKantiandGhee
61
Onlineplatformtospruceupdistributionnetwork
ManypeoplecomplainthatduetoPatanjali’sweakdistributionnetworkitsproductsar
enoteasilyavailableeverywhereandtheyareunabletobuythem.Toaddressthisconc
ern,thecompanyhaschalkedoutanaggressiveplantoimproveitspresenceontheonli
neplatform.
Currently,it isalreadysellingits productsthrough
its
web‐site,www.Patanjaliayurved.net,fromwhereconsumerscanordertheprod
uctsandgetfreedeliveryofthesameiftheordervalueexceedsINR499.Other
companies likebigbasket.com, etc., that also sell Patanjali products online have
been barred from doingso.The company is also implementing ERP for better
mapping of inventory (SAP hasalready been implemented). Patanjali will also be
launching its mobile app, which willallow consumers to locate nearby outlets that
are selling Patanjali products and alsofacilitate online ordering of products.
PatanjalialsosellsitsproductsthroughthePatanjaliChikitsalayas(wherefreemedica
lconsultancyisgivenbymedicalpractioners),PatanjaliArogyaKendras(healthandw
62
ellnesscentre)andSwadeshiKendras(regularoutlet).As for reach, the company
has close to 0.2mnoutlets and 10,000 franchisee model of
ChikitshalyasandArogyaKendras.
Distributionwise,thecompanyoperatesthrough100superdistributors(thiswillbebol
steredgoingforward)whointurnsupplytothewholesalersandretailers(whooperatet
hrougha500‐600strongsalesteam).Asofnow,thecompanyhasnoplanstohavedire
ctreach.
Fig.5:Patanjali ayurved.net
Apartfromonlinepresence,Patanjaliisalsotakingstepstoenhanceitsover
alldistributorcoverage.Thecompanyhasinvitedapplicationsfordistributor
shipofitsproducts.Beingseized of the fact that that there is high
demand for its products, Patanjali is now offeringseparate
distributorship for food and cosmetics compared to the earlier system
when onedistributor managed both. Also, the company is giving
63
distributorship at the district, tehsilandmandi levels, which shows its confidence
on its the growth trajectory and demand forits products.
64
RESEARCH METHODOLOGY
65
Scope of the thesis work
Research methodology can be defined as, it is used to give a clear cut idea on
what the researcher is carrying out his or her research. In order to plan in a right
point of time and to advance the research work methodology makes the right
platform to the researcher to mapping out the research work in relevance to
make solid plans.
More over methodology guides the researcher to involve and to be active in his
or her particular field of enquiry. Most of the situations the aim of the research
and the research topic won’t be same at all time it varies from its objectives and
flow of the research but by adopting a suitable methodology this can be
achieved.
Research Design:
1. Primary data
2. Secondary data
Purpose. Primary data for this research, data are collected through a direct
source like survey to obtain the first hand information is others resources are
written below.
Survey.
66
Face to face interaction.
Books.
Website.
Newspaper.
Financial Magazine. ( weekly , business world etc)
Research Period:
Research work is only carried for 2 or 3 weeks.
67
JUSTIFICATION OF THE CHOOSING TOPIC
The Indian FMCG sector is the fourth largest sector in the economy with a total
market size in excess of US$ 13.1 billion. It has a strong MNC presence and is
characterized by a well-established distribution network, intense competition
between the organized and unorganized segments and low operational cost.
Availability of key raw materials, cheaper labour costs and presence across the
entire value chain gives India a competitive advantage. The FMCG market is set
to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration
level as well as per capita consumption in most product categories like jams,
toothpaste, skin care, hair wash etc in India is low indicating the untapped market
potential. Burgeoning Indian population, particularly the middle class and the
rural segments, presents an opportunity to makers of branded products to
convert consumers to branded products.
The slow growth rate witnessed through the years 2017 to 2004 by the FMCG
sector was revived in FY’05, registering a growth rate of about 6%. The growth
was mainly driven by improved performance of personal care products such as
shampoos, deodorant, hair dyes, soap, toiletries, etc and penetration into the
rural and semi-urban areas of India. Rural marketing has become a critical factor
in boosting bottom lines.
This study will give the detailed insight of FMCG sector in India and how it has
surmounted the downturn faced in the past. How the companies like HUL has
changed their marketing strategies to overcome their shrinking profit margins and
beat competition.
68
CHAPTER-IV
ANALYSIS AND FINDINGS
69
50%
45%
44%
40%
35%
30% 28%
Percentage
25%
20%
17%
15%
10% 8%
5% 4%
0%
Result: 44% customers preferred print media in year 2017 for advertisement
purpose to use the Brand Management apart from this almost 65% of the FMCG
company spending huge money over the Advertisement in the web , TV and
electronically.
70
60%
51%
50%
40%
Percentage
30%
27%
20%
13%
10%
6%
3%
0%
Result: 51% of revenue is generated by the print media from the advertisement
of the various FMCG company brands like Coca cola , Vatika i.e. Dabur which
still has unique brand preference for the Print Media while after launching Radio
FM service this industry earned almost 13% of the revenue from the PATANJALI
company and the biggest contributor.
71
3 . Do you find any seasonal variation promoting the FMCG product
through various advertisement channel?
11%
NO
Yes
89%
Result: 89% agencies have No Seasonal variation in terms of the capacity of the
FMCG spending over the Advertisement where as 11% of the people suggested
yes FMCG business is almost non Seasonal but it makes sense to say
Advertisement industry does have slight seasonal variance from the FMCG
Company for the advertisement.
72
4. Percentage break-up of receiving advertisements in different languages
Regional/Others
6%
English
24%
Hindi
70%
73
.
A. FMCG
B. Service
C. Consumer Durable
D. Others
Advertisement Frequency
PATANJALI 58%
Consumer Durable 12%
Service 19%
Others 11%
Advertisment Frequency
Others
11%
Service
19%
FMCG
Consumer 58%
Durabel
12%
74
Result: As per my study FMCG is contributing highest advertisement spend in
respect to others like Telecom, consumer Durable or the service sector.
PATANJALI has contributed 58% of the revenue in total advertisement
Industries.
0.0%
11.4%
Low Cost
High Quality
47.7%
Coverage area of
advertising medium
40.9%
Other
75
7. How much percentage of your revenue, you spend for advertisement?
1-3%
7-10%
24%
19%
4-6%
38%
Result: 38% clients spend 4-6% of their revenue for advertisement purpose
which is about 100 to 115 Crore rupees invested by the FMCG Company for
promoting their goods and services to the consumer. Although this cost some
time create problem to the company because they fear if they reduce this cost
might be the sales go down and the competitor will gain the market share.
76
8. How often do you give advertisement in one month?
4, 5%
12, 14%
0-5 times
11-15 times
29, 33%
More than 15
times
Result: 48% clients give advertisement for 0-5 times in one month i.e. the
changing the Advertisement sequence although PATANJALI company Airing
almost every day 10-15 times their advertisement in TV, Print Media, Internet so
they can capture large number of the consumer.
77
9. Are you satisfied with the services of advertising agencies?
Cost
0, 0%
5, 6% 15, 17%
Highly Satisfied
Satisfied
25, 28%
Indifferent
Dissatisfied
Highly
Dissatisfied
43, 49%
Result: Max. Clients are satisfied with cost structure. As per our result suggested
that 15.17% of the client are highly satisfied with the Advertisement cost they
incurred by the advertisement agency knowing the fact Innovation and creativity
is required lot of work.
78
FINDINGS & INFERENCES
1) Patanjali has very well created its desired image of premium product
company.
2) Patanjali almost 80% of Patanjali customers are satisfied with the quality
and value provided to them in the pricing model of Patanjali .
3) Patanjali has maintained its growth rate and position in the market from a
period of decade by rightly choosing and implementing the marketing mix
strategies.
4) Patanjali believes in fulfilling csr and to get a reputation of a csr company
over a period of time.
5) Patanjali is a premium class company with its product are only in premium
segments except one rejoice in india.
79
LIMITATIONS
3. Small area for research: The area for research was too small due lack of
resources to reach mass population
80
RECOMMENDATION
81
CONCLUSION
Most of the people believe in doing good and become spiritual. It has also been
found in the past that spirituality affects the buying behavior of the people
(Standiferet al., 2010). Spiritual gurus make use of up to date media to stay
connected to their devotees and also impact their consumption behavior
(Warrier,
2003). As far as PatanjaliYogpeeth is concerned, Baba Ramdevji has also
influenced life of many with pranayam and yoga, though this influence is for
welfare of people. Therefore, within a very short span of time, Patanjali has
made a huge success and become well known not only at national but also at
international level. Swami Ramdevji has emphasized on pranayam and yoga
dimensions of spirituality to target the mass population worldwide.
PatanjaliYogpeeth is fully utilizing this spiritual competitive advantage, created
by Swami Ramdevji, to sell its own products in the market. PatanjaliYogpeeth is
not only selling its ayurvedic medicines, but also diversifying itself through
selling of FMCG products. Moreover, the organization is engaged in various
good activities which are of great benefit to the society. It is trying to imbibe
good character in masses with good health through yoga and ayurveda. Hence,
it can be said that PatanjaliYogpeeth has succeeded in creating a positive
image through spirituality and using it to sell the products in the market.
83
APPENDICES
85
BIBLIOGRAPHY
Books:
www.google.co.in
www.hulfnbservices.com
www.nestle.com
www.managementparadise.com
Business Magazines:
87