Capstone Project 2017 – 19

Title of the Project:

STUDY THE EFFECT OF PATANJALI ON THE TOOTHPASTE
MARKET AND CONSUMER BEHAVIOUR

Submitted by:
Faculty Guide: Prof. Rajesh Ramchandani Sharvarish C. Nandanwar
Designation: Faculty, Department of Finance 1719PGDM3878
PGDM iConnect 2017-19
PGDM 2017-19

ITM-SIA BUSINESS SCHOOL

Plot No. 88, MIDC, Dombivli Gymkhana Road,
Sagarli, Dombivli (East) - 421201

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 ABSTRACT

The Indian herbal market is flooded with numerous well-known and recognised
herbal brands. Consumers of this millennium have become more concerned about
their health and inclined to maintain quality of life which is reflected through the
preferential consumption of those products that protects the good state of their
health as well as provide maximum satisfaction. In pursuit of a healthy lifestyle
Indian have become more inclined to Ayurvedic or Herbal therapy as alternative
healthcare for natural cure. The choice and usage of a particular brand by the
consumer over the time is affected by the quality benefits offered by the brand
especially when it comes to brand of eatable and cosmetics. Consumer
satisfaction is derived when he compares the actual performance of the product
with the performance he expected out of the usage. Philip Kotler observed that is
a person’s feelings of pressure or disappointment resulting from product’s
perceived performance in relation to his or her expectations. If the perceived
benefits turned out to be almost same as expected, customer is highly satisfied
and that is how the company achieves loyalty of the customer towards the product.

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 ACKNOWLEDGEMENT

I am using this opportunity to express my gratitude to everyone who supported

me throughout the course of this Capstone project. I am thankful for their aspiring
guidance, invaluably constructive criticism and friendly advice during the project
work. I am sincerely grateful to them for sharing their truthful and illuminating
views on a number of issues related to the project.

I express my warm thanks to Prof. Mr. Rajesh Ramchandani for his support and
guidance at research project and all the people who provided me with the facilities
being required and conductive conditions for my Capstone project.

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 TABLE OF CONTENTS

CH NO. TITLE PAGE

NO.
1 Introduction 6-38
1.1 General Overview of Sector
1.2 Identifying the Research Problem
1.3 History and Evolution of The Company
1.4 Product Portfolio
1.5 Sales of Growth History
1.6 Market Share, Competitors Market Share
1.7 Total Man Power Organizational Structure
1.8 Processes
1.9 Business Strategy of Company
1.10 Growth Strategies and Turnaround Strategies
1.11 Other Relevant Information
2 Literature Review 40-41
2.1 Presentation of Material
2.2 Identification of Gap
3 Research Methodology 43-45
3.1 Data Collection
3.2 Questioner Design
4 Data Collection, Analysis and Interpretation 47-52
4.1 Types of Data Needed
4.2 The Source for The Data Collection
4.3 Analysis of Data
4.4 Results
5 Conclusion and Suggestions 54-57
5.1 Brief Description of Conclusion
5.2 Brief Description of Recommendation
5.3 Limitation of The Study
5.4 Scope of Future Research
References 59

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CHAPTER 1
Introduction

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 1.1 General Overview of Sector
The Fast-Moving Consumer Goods (FMCG) industry primarily deals with
the production, distribution and marketing of consumer-packaged goods, i.e.
those categories of products that are consumed at regular intervals. Examples
include food & beverage, personal care, pharmaceuticals, plastic goods, paper &
stationery and household products etc. The industry is vast and offers a wide
range of job opportunities in functions such as sales, supply chain, finance,
marketing, operations, purchasing, human resources, product development and
general management.
In India, the FMCG industry is the fourth largest sector with a total
(organized) market size of over US$15 billion in 2007, as per ASSOCHAM, and
can be classified under the premium and popular segments. The premium segment
(25%) caters mostly to the higher/upper middle-income consumers while the
price sensitive popular or mass segment (75%) consists of consumers belonging
mainly to the semi-urban or rural areas who are not, and cannot afford to be, brand
conscious. The market growth over the past 5 years has been phenomenal,
primarily due to consumers' growing disposable income which is directly linked
to an increased demand for FMCG goods and services. Indeed, it is widely
acknowledged that the large young population in the rural and semi-urban regions
is driving demand growth, with the continuous rise in their disposable income,
life style, food habits etc. On the supply side, the wide availability of raw
materials, vast agricultural produce, low cost of labour and increased organized
retail has helped the competitiveness of players.
FMCG sector in India play a very important role in economy. It is the fourth
largest sector in our economy with a market size of more than US$ 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. There is more comparative advantage to
FMCG companies in India as raw material availability, cheaper labour cost, and
presence across the entire value chain.
People are gracefully embracing Ayurveda products, which has resulted in
growth of FMCG major, Patanjali Ayurveda, with a m-cap of US$ 14.94 billion.
The company aims to expand globally in the next 5 to 10 years.

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 The industry is highly competitive due to presence of multi-national
companies, domestic companies and unorganized sector. A major portion of the
market is captured by unorganized players selling unbranded and unpackaged
products. More than 50 per cent of the total revenues of FMCG companies come
from products worth Rs 10 or less10.

Domestic Competitors
Hindustan Unilever Limited (HUL): Hindustan Unilever Limited (HUL) is
India's largest Fast-Moving Consumer Goods company with a heritage of over
80 years in India. On any given day, nine out of ten Indian households use our
products to feel good, look good and get more out of life – giving us a unique
opportunity to build a brighter future. HUL works to create a better future every
day and helps people feel good, look good and get more out of life with brands
and services that are good for them and good for others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents,

shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged
foods, ice cream, and water purifiers, the Company is a part of the everyday life
of millions of consumers across India. Its portfolio includes leading household
brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair & Lovely, Pond’s,
Vaseline, Lakmé, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke
Bond, Bru, Knorr, Kissan, Kwality Wall’s and Pureit.

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ITC FMCG: ITC (FMCG) has generated highest revenue till FY17. Gross Revenue
at Rs. 55001.69 crores grew by 6.6% primarily driven by an 8.0% growth in the non-
cigarette FMCG segment, 10.8% growth in Agri Business and 5.1% growth in the
Cigarettes segment. Profit Before Tax registered a growth of
7.4% to Rs. 15502.96 crores while Profit After Tax at Rs. 10200.90 crores
increased by 9.4%. Total Comprehensive Income for the year stood at Rs.
10277.90 crores (previous year Rs. 9261.79 crores).

Patanjali: According to its last official filings for FY15, Patanjali Ayurved had
total sales of ₹2,013 crore. Patanjali’s sales growth rates in the last three years
have been scorching, with revenues growing at a 55 per cent annual rate when
the FMCG market was inching up at 8-9 per cent. But these growth rates must
be seen in the context of a low base, and the vast product portfolio that Patanjali
relies on for its critical mass.

Dabur: Dabur’s domestic business, which contributes 66 per cent of sales, de-
grew by five per cent, with decline of 4.4 per cent in volume growth owing to
channel destocking. Although the primary sales dipped five per cent, on the other
hand, the secondary sales grew 2 per cent YoY. The growth in MT was 5.8 per
cent. Dabur has not taken price increase irrespective of rate increase. The blended
price hike is 1.2 per cent but owing to promotional intensity that is not getting
reflected.

Amul: Amul spurred India's White Revolution, which made the country the
world's largest producer of milk and milk products. In the process Amul became
the largest food brand in India and has ventured into markets overseas. Amul is
India's largest food brand with annual brand turnover of Rs 38,000 crore. It is a
cooperative milk federation of 36 lakh milk producers of Gujarat. The turnover
of GCMMF has registered a quantum growth of 238 per cent in the last seven
years, which implies an impressive cumulative average growth rate (CAGR) of
19 per cent during this period, according to a GCMMF statement here on Tuesday.

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 Also, Amul has successfully quadrupled the income of its dairy farmers in the
last seven years, demonstrating the efficacy of its model in exceeding the
country’s goal of doubling farmer’s income in six years. Amul is not only
synonymous with the best cooperative model and farmer’s faith in cooperative
structure but also with marketing and advertising strategies it has adopted to make
it the most preferred brands of dairy products.

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Foreign Competitors
• Nestle India: Nestlé S.A. is a Swiss transnational food and drink company
headquartered in Vevey, Vaud, Switzerland. It is the largest food company in the
world, measured by revenues and other metrics, since 2014. It ranked No. 72 on the
Fortune Global 500 in 2014 and No. 33 on the 2016 edition of the Forbes Global
2000 list of largest public companies net sales for the year 2016 increased by 12.8%
on a base impacted by MAGGI Noodles issue. Net Domestic Sales increased by
13.5% and Export sales increased by 3.5%. Nestle MAGGI is back to market
leadership in the noodle’s category with close to 60% market share.

• Coca-Cola India: Coca-Cola plans to invest around $5 billion in India by 2020 and
increase its portfolio of non-aerated drinks to attract health conscious customers.
Currently around 70% of the company’s portfolio is comprised of aerated beverages,
and by introducing more fruit and dairy based drinks, Coca-Cola plans to bring this
number down to 50%. Coca-Cola India has been rapidly expanding its portfolio in
the country with a slew of launches in the past two years, including entering
segments such as dairy and coconut water. Non-carbonated beverages now
constitute 35-40 per cent of its overall India portfolio.

• Colgate: Founded in 1806, Colgate Palmolive is the global FMCG giant with 200
years of spectacular performance behind it. Its revenue in 2005 was around $1.5
billion dollars, with multiple brands indifferent sub-segments of FMCG Business
need: Colgate Palmolive wanted to increase the brand recall of Colgate toothpaste
amongst the telephonic shoppers. From a survey, it found out that 68% of the kirana
stores in India offered homedelivery as an option and 21% of the business of these
kirana stores was generated through home delivery.

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 PESTEL Analysis

Political Factors:
Political factors will have a greater influence on the organization and industry
and it is the duty of the organizations to comply with it. It is necessary for the
organizations to comply with the legislations implemented non-conformance of
which may lead to serious implications on the organization. The government has
implemented certain restriction in the import policies. However, tax exemptions
in sales and excise duty are provided for the small-scale industries. This will
allow the SMEs to invest more and will increase the number of new entrants.
Transportation and infrastructure facilities are improving not only in urban but
also in the rural area which will help in distribution network.

Economic Factors:
Current slowdown in global economic scenario affected almost every
industry across the world. There has been increase in unemployment and low
consumer spending power. This leads to consumers not opting to buy expensive
products or services. This further pressurizes the RMCG companies to reduce the
prices for the products and services. Organizations will have to review this
economic ride and must respond accordingly. A successful organization will
respond according changing economic conditions, consumer and stakeholder
behaviour. An efficient organization must be aware of the changing economic
condition across the country and global and should employ a suitable strategy to
stay in the market.
Socio-Cultural Factors:
Demographics: Demographics is the study of human population in the economy.
It helps the organization to divide the markets in different segments to target a
large of customers. For Example- according to race, age, gender, family, religion,
& sex.
Distribution of income: This shows that how income is distributed in the economy.
It directly affects the purchasing power of the buyers. And ultimately leads to
increase or decrease in the consumption level of the products.

Changes in life style: Change in life style also leads to increase or decrease in the
demand for different commodities.

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Technological Factors:
Advancement in technology boost the production with enhancement in
quality of products and services rendered to the customers. Organizations began
to adopt e-business to improve brand communication and market. Technological
advancement makes the supply chain and transactions along the chain simple.
Organizations reduced costs with effective IT technologies and increased the rate
of information transactions. Technology is playing a key and huge part in the
FMCG sector by developing the new packaging, increasing productivity and
longer shelf life of food products.
Better, stronger, more effective and faster are the key elements that all
manufacturers in this sector push for, as it drives sales. The advancement
enhances the sales by enabling the manufactures to produce better products with
attractive packaging and better communication. With advancement in
communication technology and rising social media network it enables the
organizations to communicate better to the customers by improved marketing
campaigns.
Environmental Factors:
India has Vast Rural Market with majority of population where the market is
still untapped market. India has cheap labour to provide cost advantage over other
countries. Many multinational companies are having cost advantage by
outsourcing its product requirements from its Indian company.

Legal Factors:
Employment law provides equal opportunities to every citizen to work & earn
his livelihood. It provides equal opportunities to every citizen. This law helps to
protect the rights of consumers & he can file a case against seller if he fined that
he is cheated.

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 Porter’s Five Force Model for Competition

Buyer Power:
The consumer base of this industry is larger than any other industry and they
have little or no influence on the price of the product. The consumer always
possesses great choice of brands within the product category and they can shift
from one to another without much influence. Hence, buyer power is not quite
strong in this industry. But they have power when they provide threat to shift
from one brand to another brand. In FMCG retailers should also take into the
account for analysis. Retailers can always decide which brand to stock and
consumers don't show much interest to wait if one brand of choice is not available.
So, retailers can always make choice between brands and they have more buyer
power than consumers.
Supplier Power:
Supplier power is little or limited in the FMCG industry. The industry always
has great number of suppliers with great size. There will not be any uniqueness
in the product or service of suppliers and the manufacturer can always shift from
one supplier to other supplier. However, manufacturer faces some amount of
supplier power due to the cost they must incur when switching suppliers.
Suppliers who do large business with manufacturers are always obliged to their
customers.
Threat of New Entrants:
Threat of new entrants is limited in this industry. The new entrants generally
cater to local or small markets contributing to the large unorganized sector. Raw
materials for most of the segments in FMCG industry can be easily procured. The
investment will not be high for machinery and other assets required for most of
the products in the industry. Also, the basic technology is easily available. These
factors can make the local or small manufactures to enter easily in the industry.
But this industry requires high initial launch cost and distribution network is
always a challenge. These factors act as a barrier for any new entrants in the
industry and virtually provide low threat of new entrants.

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Threat of Substitutes:
The FMCG industry bears a high threat of substitutes. The industry possesses
many organized players with great number of local manufactures. The products
in the industry can always be imitated and marketed. The industry possesses high
level threat of substitutes in rural market than in the urban.
Degree of Rivalry:
The degree of rivalry is high in the industry. There are many global players
along with local manufacturers. The industry enjoys low customer loyalty. The
customers always have wide choice of brands and the switching cost is always
minimum or negligible. There will be only slight difference in the quality of
brands. So, the competition is fierce in the industry to attract customers and retain
them.

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 Government Policy/Regulations

The Government of India’s policies and regulatory frameworks such as

relaxation of license rules and approval of 51 per cent foreign direct investment
(FDI) in multi-brand and 100 per cent in single-brand retail are some of the major
growth drivers in this sector. The government has also amended the Sugarcane
Control Order, 1966, and replaced the Statutory Minimum Price (SMP) of
sugarcane with Fair and Remunerative Price (FRP) and the State Advised Price
(SAP).
There is a lot of scope for growth in the FMCG sector from rural markets
with consumption expected to grow in these areas as penetration of brands
increases. Also, with rising per capita income, which is projected to expand at a
CAGR of 7.4 per cent over the period 2013-19, the FMCG sector is anticipated
to witness some major growth.
Growing awareness, easier access, and changing lifestyles are the key growth
drivers for the consumer market. The Government of India's policies and regulatory
frameworks such as GST and demonetisation are expected to drive demand, both in
the rural and urban areas, and economic growth in a structured manner in the long
term and improve performance of companies within the sector.

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 1.2 Identifying the Research Problem
Patanjali Ayurveda- Entry into FMCG
Patanjali started off manufacturing bulk ayurvedic medicines later
branching its operations into FMCG markets as well. Since, the FMCG market
has low entry barriers, Patanjali soon established itself as a major consumer
goods’ manufacturer. The recent trends clearly imply that the company’s
priorities are shifting from medicines to consumer goods, perhaps because the
net revenues earned through FMCG are on par with ayurvedic medicines.

Patanjali Ayurveda – Current Market Insights

Patanjali as a brand currently has more than 350 products from Soap to
Toothpaste and from Oats to Health drinks. The 2014-2015 revenue of Patanjali
Ayurveda crosses Rs. 2000 crore figures. In January 2016, IIFL said “Patanjali
Ayurveda Ltd has, in a short span of less than a decade, recorded a turnover
higher than what several companies have managed to achieve over several
decades. There is no doubt that Patanjali is a disruptive force in the FMCG
space and is a credible threat for the incumbents.” The industrial data indicates
that the brand has a market share of 4-5%.

Focus on revenue over profitability

As per the report by edelresearch “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”
Proactive moves in Innovation
Patanjali Ayurveda is aggressively planning to enter every consumer
category. Currently Patanjali Ghee is expected to be at INR 12 billion in the
financial year 2016 and if it gains solid distribution expertise, it could pose a
serious threat to its competitors. An innovative R&D facility equipped with latest
technology, Patanjali has also launched a mobile app which helps the consumer
to locate retail outlets and for online ordering of Patanjali products Patanjali’s
Pipeline.

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Patanjali has a very strong pipeline, thanks to their innovative and huge R&D
setup.

The new products include:

• Patanjali yoga wear (Vastram)

• Dant Kanti Advance
• Sugar free Chyawanprash
• PowerVita
• Seabuck thorn dietry supplement

Rise of Patanjali: To analyse the strategy followed by Patanjali, it’s feasibility if

followed by other business houses and impact on global FMCG companies
Patanjali, founded in 2007 by Baba Ramdev and his aide Swami Acharya
Balakrishan has grown into a 5000-crore company in 2015. It has disrupted the
entire FMCG market with its unconventional growth story. The credit goes to
Baba Ramdev who has very meticulously decided the timeline for each action and
delivered unprecedented success. Patanjali’s vision is to provide
herbal/ayurvedic/natural solutions to all the problems and in this pursuit, it is also
elevating the livelihoods of local farmers. It has leveraged the emotional route by
bringing in the ‘Swadeshi’ angle to market its products. The drivers for Patanjali
purchase are lower price points which induces sampling and when they find no
noticeable difference with the pricey brands, they tend to stick to Patanjali. The
key differentiators for Patanjali are its herbal or ayurvedic offerings and the free
consultation it provides to the customers at Arogya Kendras/ Chikitsalayas
through its certified Ayurvedic doctors. Besides it has also increased its
distribution channels through franchise stores, retail chains and kirana stores.
However, the supply is not proportional to demand and a lot of customers are not
able to find the desired products. To solve this, they have invested in food parks
and have outsourced manufacturing to other SMEs while conducting stringent
checks to ensure consistent quality.
The strategy followed by Patanjali is unconventional in that they have not
made any significant investment in marketing and promotion and have relied on
word of mouth publicity. Baba Ramdev has done minimal promotion by endorsing
the brand in his yoga sessions televised on national channels. The FMCG giants
cannot rely on such a strategy because they cannot sell the products at such low
prices or provide free doctor consultations and other activities on a continuous basis.
Thus, it is not feasible for other companies to follow this model.

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The FMCG industry has a lot of big players with dominant market leaders in each
category. Patanjali is in direct rivalry with most of them and with time has been
able to take away market share from the best-selling brands. In retaliation, the
market leaders are bringing out newer herbal products at lower price points or
putting into action other strategies. However, Patanjali has the advantage of being
the forerunner and have gained enough traction that it will be difficult to displace
them. The entrance of Patanjali has not just marked its increased share of the pie
but it has also managed to increase the size of the pie itself.

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 1.3 History and Evolution of The Company

Patanjali Ayurved, started in 2006 by the famous Yoga Guru Baba Ramdev,
has seen a meteoric rise in the past few years with revenues of ₹5,000 crore in
FY16 from ₹450 crore in FY12. While Patanjali’s combination of low prices,
‘natural and pure’ proposition and ‘swadeshi’ positioning are widely
acknowledged to be the reasons behind success, what is not that well known is
the critical role played by Patanjali’s path-breaking sales and distribution strategy
in driving this exceptional growth trajectory.
Patanjali can offer low prices to consumers due to very low selling,
administrative and general costs at 2.5 per cent of revenues. Advertising spend in
FY 16 at 6 per cent is also well below the peer set. Critically, it has kept retail
margins at half or lower levels as compared to competition. The focus of the
article is to demystify how Patanjali scaled up distribution in an intensely
competitive retail FMCG environment in India despite low retail and A&P spends.
In a new market, Patanjali first drives trials and consumption using
dedicated stores. These stores are essentially Ayurveda clinics, run by
entrepreneurs entirely with their own investment. They are of three types –
Arogya Kendra, Chikitsalaya and Swadeshi Kendras.
Patanjali extends support in two ways: It trains and certifies medical
practitioners nominated by these stores in Ayurveda and provides usage of the
Patanjali brand name. This automatically bestows trust and credibility due to the
rub-off effect of Baba Ramdev’s credentials on Yoga and Ayurveda.
A powerful network effect is seen at these stores. Early adopters bring in
additional footfalls through strong word of mouth. The fact that a trustworthy
consultation is free in an important area such as healthcare provides a strong hook
for passing on recommendations to friends and relatives.
These stores also serve another function – product introductions are done
extremely efficiently and decisions to continue tweaking or scaling up the product
and communication mix can happen in a short time frame. The swift rise of
Patanjali driven by a large variety of product offerings coupled with
unconventional marketing strategies has disrupted the whole FMCG sector and
revolutionized the industry in a record time.

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 1.4 Product Portfolio
Patanjali Ayurved, a small pharmacy just a decade ago, is now an FMCG giant.
Now it aims to overtake the country's biggest consumer goods company
Hindustan Unilever, which has been present in India for over 80 years. Baba
Ramdev-founded Patanjali's FY17 sales amounted to Rs 10,561 crore, a third that
of the listed HUL, which reported sales of Rs 34,487 crore.
A key factor behind Patanjali's rise is a few select products that have become
immensely popular with the masses. Below are Patanjali’s top five products and
how they compare with rivals, according to Bloomberg.
1. Cow’s Ghee
Patanjali earned a revenue of Rs 1,467 crore from cow’s ghee, a
fragmented market with several unorganised players. In the organised
branded ghee market, Patanjali is a direct rival to Amul. Branded ghee
accounts for about 44 percent of volumes in the overall market, according
to market researcher Kantar Worldpanel. Patanjali is the only brand that
seems to have a good presence across zones, Kantar Worldpanel said.

2. DantKanti Toothpaste
Dantkanti toothpaste earned a revenue of Rs 940 crore from the segment.
The company said its share in market stood at 14 percent at the end of
March. Rivals include market leader Colgate Palmolive India Ltd. and
Dabur India Ltd. Colgate Palmolive saw its share fall to 55.6 per cent in
2016 compared to 57.4 per cent in the previous year, according to its
investor presentation. Dabur India, maker of Dabur Red and Meswak
brands, said in its earnings conference call that its share in the herbal and
ayurvedic toothpaste market rose 1 percentage point in the year ended
March amid consumers’ growing preference for such products.

3. Ayurvedicmedicines
Patanjali earned Rs 870 crore revenue from ayurvedic medicines, nearly
four times compared to its direct rival Dabur India.

4. Keshkanti Shampoo
Keshkanti shampoo contributed a revenue of Rs 825 crore for Patanjali.
Hindustan Unilever is the market leader with a 45 per cent share in
shampoos. India’s largest consumer goods maker earned Rs 16,304 crore
from the personal care segment, which includes shampoo and soap brands

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 like Dove, Sunsilk, Tresemme and Lux, and skincare products like Fair &
Lovely and Ponds cream.

5. Soaps
Patanjali’s herbal soap segment mopped up a revenue of Rs 574 crore.
HUL, the maker of Lifebuoy, is the market leader in soaps, followed by
rivals like Nirma, Godrej Consumer Products and ITC.

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 1.5 Sales Growth History

Patanjali is clearly targeting much older fast-moving consumer goods

(FMCG) majors like Colgate-Palmolive, Nestle, Dabur and HUL; its wide array
of products — including spices, pulses, chyvanprash, toothpaste, shampoo,
toothbrush, instant noodles, tea, jam, corn flakes and beauty products — competes
directly with products from the heavyweights. A quick glance at the packaging of
a PAL product usually makes it clear which market-leader is being targeted; the
design similarities do not seem coincidental. Patanjali is also taking on the big
players in other geographies, exporting its products to Canada, the USA,
Mauritius and UK, among other countries.
Patanjali’s main promoter is Acharya Balkrishnan, who owns 93 per cent
of the company; the remaining stake is owned by Sarwan and Sunita Poddar, an
NRI couple. Yoga teacher and television personality ‘Baba’ Ramdev does not
own any stake in the company, but he has played a huge part in the brand’s
gaining visibility, by marketing it in the numerous yoga camps that he holds
across the country.
As per statements filed with the Registrar of Companies (RoC), Patanjali
Ayurved’s net profit increased from Rs 95.19 crore in FY13 to Rs 196.31 crore
in FY14; sales increased from Rs 843.92 crore to Rs 1,186.71 crore in the same
period. The numbers for FY15 were not available with RoC.
A team of analysts from Edelweiss, who went to Patanjali's Food and
Herbal Park at Haridwar and met senior officials, said that the management is
confident of achieving a revenue target of around Rs.5,000-6,000 crore by FY16.
The resulting report said, “The company is working on plugging the gaps in the
supply chain and distribution with plans afoot to implement ERP (for better
inventory management) and consolidate its online presence. Strong innovation
and new products pipeline, pricing discounts to the peers (15‐30%), ayurvedic
and natural propositions with low A&P spends (leveraging Baba Ramdev’s brand
pull) lend Patanjali’s products an edge over competition. However, distribution
remains a key monitorable.”
According to the brokerage, Patanjali is looking to double its revenue from
Rs.2,000 crore in FY15 to Rs.5,000 crore in FY16 estimates.

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 1.6 Market Share, Competitors’ Market Share

Patanjali Dant Kanti has outpaced Hindustan Unilever’s Pepsodent, Colgate’s

Active Salt and GlaxoSmithKline’s Sensodyne after nearly trebling its share in
the oral care segment over the past year.

The Baba Ramdev-led brand had 6.2 per cent share during the quarter
ended June, compared to 2.2 per cent a year ago, making it the country’s
fourth-largest toothpaste company. Colgate — still controlling half the market
with 52.7 per cent — lost 120 basis points, while Hindustan Unilever’s share
declined 240 bps to 17.6 per cent.
Dabur, which has gained 20 bps at 12.1 per cent along with Patanjali, has been
fuelling its expansion of the herbal products market, underlining the growing
demand for ayurvedic products and forcing most companies to launch herbal
variants of toothpastes. Products that have “natural” ingredients now account
for nearly a fifth of the overall toothpaste market.
Since 2011, market shares of brands owned by HUL, India’s largest
consumer packaged goods firm, have fallen by 0.4-0.5%. This is the steepest fall
in share by value among the top 20 brands in India’s personal care market—one
where brand loyalty ensures market shares remain static—data from Euromonitor
shows.

The brands losing market share include Fair & Lovely, share by retail value
of which fell 50 basis points to 4.6% between 2011 and 2016, and Lux and Clinic
Plus, which also fell by the same amount to 3.8% and 2.5%, respectively. Fair &
Lovely retained its No.2 spot in the top brands and is worth more than Rs2,000
crore, as per HUL’s annual report. Lux and Clinic are among HUL’s Rs1,000
crore brands, as per the report. This, even as HUL retained its dominance on the
personal care and beauty market with aggregate share worth 25.4% by value,
versus Patanjali’s 2.6%, as per Euromonitor data. HUL’s share fell 2.5% between
2011 and 2016.

24
 Dated: May 05, 2017

Dabur: Dabur’s domestic business, which contributes 66 per cent of sales, de-
grew by five per cent, with decline of 4.4 per cent in volume growth owing to
channel destocking
ITC FMCG: ITC (FMCG) has generated highest revenue till FY17. Gross
Revenue at Rs. 55001.69 crores grew by 6.6% primarily driven by an 8.0%
growth in the non-cigarette FMCG segment

25
 1.7 Organizational Structure

Patanjali has two faces - Patanjali Ayurveda Limited (PAL) which is a

registered manufacturing company and Patanjali Yogpeeth Trust which is a
registered charitable trust - a part of Divya Yoga Mandir Trust, Kankhal,
Haridwar.

Both have different HR executives and different salary structure, and

different level of organisational structure though their CEO is same i.e. Acharya
Balkrishna Ji.

There's another unit of Patanjali, Bharat Swabhiman Trust which is the

regulating authority of all Patanjali Chikitsalyas, Patanjali stores, mega stores,
distributorships, and Patanjali Yoga Pracharak (yoga teachers).

26
 1.8 Processes

CREATION OF BCG MATRIX WITH DESCRIPTION

a) A star (named after “rising star”) has both high market share and high
market growth. A star product enjoys increasing sales revenue, but because it’s a
growing market, competitors are attracted to it. This result in the company
spending a great deal on promotional spending and might involve the business in
high capital investment to increase the capacity.

27
 b) Cash cows (with high market share in a low market growth) often exist in
established markets that have reached maturity stage. The low rate of market growth
reduces competition, so it is possible to spend less on advertising. A high proportion
of cash cows are ideal for companies seeking high profits, but firms with cash cows
will try to develop new products to enter high-growth markets.
c) Question marks (or problem children) are competing in a competitive
market, with a low market share and high market growth. Because the market is
growing, there is possibility of increase in sales in future, even if the product does
not increase its market share. Many new products are problem children at first, as
they tend to need large amounts of market research and promotion in order to
succeed. If successful, they become stars or cash cows.
d) A dog has a low market share and is in a low-growth market. Businesses
need to think carefully about retaining such products in the market, as they offer
little scope for profit-making. During recession, these products will be dropped.
However, these products should not be so simply written off.

28
 SWOT ANALYSIS

Strengths:

Baba Ramdev: The exponential growth of Patanjali can be credited to Baba

Ramdev and his popularity. For a newly formed FMCG in India, it would have
been impossible to show the kind of growth that Patanjali has shown in such a
short period of time. But the fan following, and goodwill of Baba Ramdev
guaranteed that Patanjali grows quickly and becomes a routine name in the Indian
households.

Ayurveda and Herbal: The Products that Patanjali offers are made from
Ayurveda and Herbal natural components. The Swadeshi products also have
played an important role in the success of Patanjali. India has never been low on
plants or vegetation and we get a lot of naturally grown medicines in our dense
forests.

Word-of-Mouth Promotion: For a new company especially in the

consumer goods category, a high share of its expenditure goes into
advertisements and promotions. Patanjali followed a word-of-mouth promotion
strategy initially and did not spend much on promotions and advertising. Patanjali
depended on over the Brand loyalty of its customers.

29
Weaknesses:

Over dependency on Ramdev: For many of its consumers, Patanjali is still

synonymous to Baba Ramdev and hence any actions of Baba Ramdev will have
repercussions on the brand itself. Baba Ramdev’s political affiliations are also
well known and hence if at all he is targeted for any political vendetta, Patanjali
will also suffer.

A low number of manufacturing units: Patanjali has set itself an ambitious

target of INR 10,000 crores for the fiscal year 2016-17. For that to happen,
Patanjali would need to set up manufacturing units in different parts of the
country which would require heavy investments. It also would have to move from
the word-of-mouth strategy to nationwide promotional campaigns.

Lack of experienced management graduates: Patanjali does not have a

large pool of management graduates and thinks tanks which a problem can be
when they look for expansion throughout the country or globally.

Opportunities

Growing organic sector: Patanjali has been successful in creating awareness

about the benefits of using herbal and natural products whihavecreated a market for
itself. The awareness has spread, and the demand is ever growing.

Expand Rural: With the portfolio of products that Patanjali has, it has great
potential in the rural market and should look to expand its operations in the vast
rural market of India.

Going Global: Patanjali has a great opportunity to expand globally and can
look for Middle East and African nation in the beginning. Various other
companies such as Dabur have already expanded globally and have been
successful.

30
 Diversify: While Patanjali is now present in retail products, it has not
entered clothing which is another area where competitors like Reliance and
Aditya Birla have expanded successfully. So Patanjali can plan on diversifying
its product portfolio even further to Khaadi, making it a fashion statement and
being true to the roots of Patanjali being an Indian brand.

Threats

Increasing Competition: FMCG majors such as HUL, Marico, etc. and new
entrants such as Sri Ayurveda are also entering the organic market after the
awareness created by Patanjali which increases the competition in the market.

Poor reap can affect business: Patanjali is heavily dependent on natural

ingredients and products and hence poor agricultural reap can affect its sales.

Price war: A price war is good for consumers, but it is detrimental for
business. The longer the price war, the more is the effect on the brand. Companies
like HUL, Colgate and others have been at the top for long. They have deep
pockets and they will naturally respond to Patanjali. Such a price war will have
drastic effect on Patanjali’s profitability, especially because the brand is already
selling at very low margins

31
COMPANY’S STRENGTH AND WEAKNESS ON ITS VALUE
CHAIN

Primary Activities
Inbound logistics: In house cultivation of herbs and medical ingredients
Over 500 acres of Uttarakhand land
Operations:
• Zero wastage methodologies of plant and food and herbal parks
• Unlike most firms, invites experts to research labs & plants
• Phenomenally low overheads

Outbound logistics:
In house distribution through dedicated outlets now through web portals
and with reliance and future outlets too

Marketing and sales:

• Ayurveda association and appeal for Swadeshi Swabhimaan
• Only large firm growing without large advertising budgets, Baba Ramdev
himself as face of the brand
• Highest margins offered under trade promotion

Service:
Through over 2000 Chikitsalaya, 3000 Arogya kendra, 5000 Swadeshi
kendra spread country wide

Supporting Activities Procurements:

• Direct sourcing from farmers – backward integration
• Total control over Quality of input
material
Human Resources:
• No fat pay check hiring, top exacts zero salary
• Specialist researcher, trained people at 10000 kendras
Technology:
Receives the transfer of technology under the DRDO FICCI ATAC initiative
For commercialization of spin-off technologies

Firm infrastructure:
• Patajali food & herbal park
• 3 manufacturing units with 177000 retail outlets reach by mid-2015

32
 1.9 Business Strategy of The Company

Distribution strategy

▪ Patanjali used ADS (Alternative distribution system) in order to create

new demand
▪ Patanjali then pivoted to general trade once a sizable consumer base
was generated
▪ It also eliminated costs by using another distribution strategy: primary
distribution. By setting up a lot of its own stores, eliminating wholesalers
and encouraging trial. It eliminated wholesalers in the retail space too.
▪ Marketing strategies by Patanjali Ayurved Ltd
▪ Industry sources indicate that Patanjali’s market share is likely to be
around 5% by end 2015. This is a big success in this category, which had
just three players until now. (Credit Suisse).
▪ Patanjali likely to more than double its revenue to Rs 5,000 crore in FY16
from Rs 2000 crore in FY15. (Reliance securities) Sales and Distribution
▪ Patanjali Ayurved sells through nearly 4000 retail outlets as of
2015.Patanjali also sells its products online and is planning to open outlets
at railway stations and airports.
▪ Patanjali Ayurveda has tied up with Pittie Group and Kishore Biyani's Future
Group on 9 October 2015. As per the tie-up with Future Group, all the
consumer products of Patanjali will be available for the direct sale in Future
Group outlets.
▪ Patanjali Ayurveda products are also available in modern trade stores
including Reliance retail, hyper city and Star Bazaar apart from online
channels. Défense organization DRDO entered into licensing agreements
with Patanjali Ayurveda for transfer of technology.
Branding Strategies
1. The “Branded House” – In this methodology, the company is the brand.
All products and services within that company will be subsets of the primary
brand. A good example of a branded house is Apple. They use a singular name
across all their activities. To all their stakeholders they are known simply as
“Apple”. They may have different categories/divisions (iPod, Mac, iTunes,

33
iPhone, etc…) but they all must fall under the scrutiny of existing branding
strategies and standards.
2. The “House of Brands” – This architecture focuses of the branding of
multiple sub brands while the primary brand gets little or no attention. Proctor &
Gamble is a perfect example. Under P&G there are dozens of brands, including
Pampers, Duracell, Gillette, and Year of Graduation 2017 16 Tide just to name a
few. However, P&G gets very little prominence of itself, and adds no real
credibility to any of its products.
3. The “House Blend” – This is an architecture based on the development of
sub-brands with the added credibility of the existing parent brand. Google, for
example, started as a search engine then continued to establish the primary brand
through offerings such as Gmail, Calendar, and Maps. Eventually, they began to
acquire other, smaller tech companies such as Blogger, Picasa, and YouTube.
These acquisitions maintained their existing brands but gained credibility through
the primary brand of Google.

34
 1.-10 Growth Strategies and Turnaround Strategies
Baba Ramdev and Acharya Balkrishna knew that efforts to create a captive
market during the past year and a half to focus on health, yoga, Yama prana, and,
above all, the Baba Ramdev brand. When Patanjali launched its products in the
Indian retail sector, this captive market was the first to buy and use its products.
This captive market developed immediate loyalty to the Patanjali brand. The role
of the captive market has been associated with Patanjali, but not limited to those
who buy or use or spread the good word about Patanjali products have been the
franchise.

Initially, Strategic Marketing: Choosing the Value Segmentation & Targeting

Patanjali has segmented its market based on
1. Demographic – Income, age etc.
2. Psychographic - Health Consciousness, Patriotism

Patanjali's target segment comprise of health-conscious people who prefer “value

for money” natural products. Patanjali has products targeted at children (health
drinks) and elderly people (some ayurvedic medicines). Almost all products of
Patanjali are affordable in nature (at a price 15% - 30% lower than the
competition), hence the income segmentation strategy has worked. Initially the
products were targeted at lower and middle-income groups but with the present
turnover of close to a billion dollars (Rs 5000 cr) this fiscal, it is evident that
Patanjali's products have buyers not only from the lower income and middle-
income segments but also from health-conscious upper middle- and upper-
income segments. These 2 segments have found value in Patanjalis's natural and
ayurvedic products. Patanjali's market targeting strategy is that of “Selective
Specialization” as they cater to a lot of segments in their market but not the entire
market.
Positioning Patanjali has a two-pronged positioning strategy 1. The brand slogan of
Patanjali is “Prakriti ka Aashirwaad” which means Blessings of Nature. Patanjali is
positioned as “Natural Products available at affordable prices”.
2. The 2nd positioning plank is that of “Swadeshi Make” (Made in India). Both
the positioning planks have created wonders for Patanjali. The twin positioning
planks are synergistically integrated with the brand Patanjali as India is the birth
place of Ayurved. The “Swadeshi make” plank also helps in assimilating the
previous people movements initiated by Baba Ramdev like Bharat swabhiman
and swadeshi andolan with Patanjali Ayurved.

35
Tactical Marketing Mix Patanjali Ayurved has 4 product categories:
1. Home care
2. Cosmetics and health
3. Food and beverages
4. Health drink

Price: Patanjali Ayurved's products are sold at a price of 15% - 30% lower than
that of competition. Except for Patanjali Cow Ghee, which is sold at a premium
in the market, every other product has a market penetration pricing strategy. The
pricing strategy has helped Patanjali establish itself in the marketplace.
Established brands which did
Promotion: Patanjali has used different promotion strategies as follows:(24)
1. Baba Ramdev through his Yoga Shivirs not only talks about the different
Yoga postures and their benefits in curing the diseases but also about the
Patanjali Ayurved products aiding in a healthy lifestyle and a disease-free life.
This is one of the most potent promotion tools used by Patanjali.
2. Word of mouth communication certainly has a higher believability factor
compared to other mediums of advertising. Baba Ramdev has created a strong
community of loyalists through the efforts of Patanjali Yogapeeth Trust and Yoga
shivirs, who speak very high of Baba Ramdev and Patanjali products.
3. Recently, Patanjali Ayurved has seen a spurt in its advertising spent.
Patanjali's advertisement in print and digital media is readily seen.
4. Patanjali has also embraced digital marketing and has a well-designed
Facebook page and twitter account.
5. Public Relations: Baba Ramdev has excellent Public Relations and Media
skills. He is an often-featured personality along with his products in media.
6. Patanjali ayurved has its channel on YouTube which features more than 200
videos on Yoga and product information.
7. Baba Ramdev's books and VCDs are not only an excellent information
disbursal tool but also a subtle promotion tool.

36
 1.11 Other Relevant Information
COMPETITORS STRATEGY

• Loyal consumer base and competitive price - Baba Ramdev’s fanatic

consumer base of about ~70 million has proved to be a great head start for
him. This large fan base comes from an Ayurveda-freak nation and years
of conducting yoga sessions. Further, Patanjali’s products are priced lower
than their key competitors for price sensitive Indian consumers, who now
see more “value” in Patanjali’s products.

• Appeal to rural-urban “aspiration and conservatism-driven” consumers -

Apart from appealing to the above consumer base, Patanjali also managed
to attract rural-urban “aspiration and conservatism-driven” consumers by
launching modern consumer household products which promised purity
with goodness, on the lines of major players.
• Anti-foreign campaigns – Time and again, Baba Ramdev raised voices to
boycott “foreign” products, ranging from shampoos to colas, by showing
their ill-effects. This further created a loyal consumer base that promoted
word-of-mouth advertising for Patanjali and cleared ways for different
product categories.
• Maintaining quality and brand promise – The key to buying any Patanjali
product is quality and purity (possibly, that’s why its cow milk ghee’s sales
forms ~50% of its revenues). This stands as a core brand promise.
Consumers associate Patanjali with these attributes. Without a consistent
adherence to quality standards across all its product categories, Patanjali
cannot shake the boardrooms of FMCG giants. Quality becomes even more
important as the company starts relying on contract manufacturers for
newer and “inconsistent” product categories. You just can’t open an
apparel and shoes manufacturing plant overnight, if you are running a food
and medicine plant!
• An ever-expanding product portfolio with brand extensions – Few brands,
such as Virgin Group, have done a tremendous job at brand extensions,
though with failures in many categories. Considering Patanjali has forayed
into categories (such as shoes, apparels, home cleaning solutions, etc.) that
are not directly linked with ayurveda or purity or goodness, ensuring their
loyal consumers do not get confused with what it wants to do with the brand
and how far it wants to stretch, could be a challenge in the longer run.
• Image driven branding – Consumers don't just buy products to suit their
needs, instead they buy a solution that offers them value with “trust”.
“Patanjali” is largely co-branded/co-promoted with Baba Ramdev and his

37
companion Acharya Balkrishna. Any questions arising on their integrity
will surely affect the brand’s performance.

38
 CHAPTER 2
Literature Review

39
 2.1 Presentation of Material

In 1995, Ramdev was a little-known yoga teacher in Haridwar when his close
associate, Acharya Balkrishna, and him set up Divya Pharmacy - under the aegis
of Ramdev's guru, Swami Shankar Dev's, ashram - to make Ayurvedic and herbal
medicines. at the same time, with Ramdev's popularity soaring, substantial funds
began to come in - sizeable loans from the likes of NRIs Sarwan and Sunita
Poddar, as well as locals such as Govind Agarwal - which in turn helped to get
bank loans. Thus, was born Patanjali Avurved as a private company in 2006,
which has since rolled out a range of products - in healthcare, hair care, dental
care, toiletries, food and more - at breath-taking speed.
He readily acknowledges the role of the media in his rise. “Patanjali ko
bananey mein ek se 10 per cent humara role hai, baaki role media ka hai”. Initially,
Patanjali shunned the conventional distribution network, preferring to rely on its
own channels of super distributors, distributors, Chikitsalayas (franchise
dispensaries) and Arogya Kendras (health centres which sell Ayurvedic
remedies).
Patanjali's own advertising was limited in the past, but has increased
considerably of late, with ads appearing on general entertainment TV channels
(GECs) such as Star and Zee. The company has also reached out to regional
Southern channels. Once it turned to retail outlets from 2011, revenue began to
multiply manifold. its toothpaste Dant Kranti, for instance, launched in March
2010, brought in revenues of Rs 200 crore in 2014/15. Patanjali has also ventured
out to produce many other new items that were mostly produced by foreign
companies in recent months.

40
 2.2 Identification of Gap

Rani, S., and Shukla, C. (2012 Conducted a study to know the trends of
patanjali products. For above study, they collected a sample of 90 consumers in
pantnagar. Based on above study, they concluded that within a very short period
of time patanjali products captured a number of consumers. Also, they found that
from 2008 to 2012 there is a huge increment in number of products which is from
26 to 120. They also suggested about limitation of patanjali products that delivery
system should be improved by Patanjali Company. Ali, M.I., and Yadav, M.
(2015) carried a study to know about consumer perception towards herbal
products. The objectives of the above study were to know the reasons of using
various herbal products. For above study researcher collected data from 60
consumers using herbal products in three cities of Bhopal. On the basis of their
study they found that due to hazards created by chemical products people shift it
to natural products. Also, they concluded that all consumers had a positive
attitude towards herbal products and there was no side effect faced by these
people. Khanna, R. (2015) carried a study on consumer perception regarding
Patanjali products. The objectives of the above study were to know about the
perception, satisfaction level and attributes of consumer about patanjali products.
The data was collected by the researcher from 100 respondents in Punjab. They
found that consumer was highly satisfied with patanjali products due to
reasonable prices and due to curing ability. Shinde, D.T., and Gharat, S.J. (2017)
examined a study on product positioning of patanjali products. The purpose of
above study was to find the various prospects of patanjali products and factors
influencing these products. They concluded that patanjali has captured a huge
market share within a very short time, but shortage of these products is the major
problem faced by consumers these days.
Patanjali's own advertising was limited in the past, but has increased
considerably of late, with ads appearing on general entertainment TV channels
(GECs) such as Star and Zee. The company has also reached out to regional
Southern channels. Once it turned to retail outlets from 2011, revenue began to
multiply manifold. its toothpaste Dant Kranti, for instance, launched in March
2010, brought in revenues of Rs 200 crore in 2014/15. Patanjali has also ventured
out to produce many other new items that were mostly produced by foreign
companies in recent months.

41
 CHAPTER 3
Research Methodology

42
 3.1 Data Collection

Response of 100 people collected in the form of online questionnaire and

various questions asked, the interpretation of questionnaire asked the
interpretation of the questionnaire is as follows
1. Age: Most respondents were from the age group of 18-25 followed by age
group of 35 and above

2. Have you used any product of Patanjali brand?

Over 94% people have used Patanjali products

3. How did you come to know about that product?

49% of the people can know of Patanjali from advertisements
39% on recommendations
22% on self-exploration

43
 4. How frequently do you think about the brand?
A little over 42% of the people think sometimes about the brand
And 25% of people thinks about the of the product often

5. What factors influence you to use Patanjali brand?

Over 50% respondents feel that quality of product but there is equal % of notion
between price and patriotic sentiments although patriotic sentiments surpass the
price and curiosity.

44
3.2 Questioner Design

45
 CHAPTER 4
Data Collection and Analysis

46
 4.1 Types of Data Needed

Methodology
The current study is based on primary data and required data were collected from
websites, convenient sampling was used in the study. Sample of 100 respondents
were selected for the study and the study undertook a two months period in around
Coimbatore city only. Secondary sources have been used to collect information
about ‘Patanjali’ brands. Journals, articles, research reports and government
documents were reviewed to get the insight of the previous interventions that the
stakeholders and policy makers have already in place. Also, websites of natural
products manufacturing company and online document were investigated to
conduct this research. To analyse the questionnaire results tools of Simple
percentage analysis, Garrett’s Ranking Technique, Regression and non-
parametric (chi-square) test have been used and the pilot survey was conducted.

47
4.2 The Source for The Data Collection

48
Interpretation

Total numbers of 100 respondents involved in this pilot survey, regarding

demographic characteristics of the respondents, 51% were females the remaining
49% were males. Regarding the age group, 33% of the respondents were in the
age group of 31-40 years. Based on the findings, the respondents are mostly
married persons with 67%, 53% of the respondents in the sample are joint family,
Regarding size of the family, 52% of the respondents were in the group of below
4 members, and 44% of the respondents are mostly Degree /Diploma holders,
Regarding the income level, 57% of the respondents were in the category of
Rs.10001-20000, Finally, the no. of the earning members in the family of the
respondents were mostly in the category of 2 members.
The study shows that, 31% of the respondents are come to know about the
products through advertisement, and 52% of the respondents feel that the health
factor / benefit are hygiene, and 28% of the respondents buy the products at
fortnight, Regarding the purchase decision, 32% of the respondents were in the
category of female- head of the family, 95% of the respondents are said suitable
pricing policy of all their products are followed for their products.

49
 4.3 Analysis of Data

ANOVA

a. Dependent Variable: Satisfied

b. Predictors: (Constant), Advertising, Good Quality, Age, Availability,
Experience, N &
P (natural and pure), Health Benefits, B. Ramdev (endorsement), Gender,
Swadeshi, Reasonable Price, Brand Image, Occupation, Informative, income,
Ad-ones.
The above table shows that about 29% variability in satisfaction level of customer
is explained by the dependent variables. The significance level is .015 which is
less than 0.05, so we reject the null hypothesis

50
 Chi Square Test

Here, the value of p is far less than 0.05 too depicting that people, being satisfied,
would like to buy Patanjali Product again after using once. Chi square
interpretation (test of association)
H0: The product attributes affect post buying satisfaction level of the buyer H1:
The product attributes do not affect post buying satisfaction level of the buyer.

51
 4.4 Results
Ayurvedic and Herbal remedies are available in all Patanjali and organic stores.
Ayurvedic products are reasonably cost effective and well accepted by customers.
They are easily available and do not have side effects. With its rich bio-diversity
and rich heritage of Indian medicinal system, India would draw world attention
as an abode of eco-friendly medicinal systems that are in harmony with the nature,
it is concluded that all the customers are aware of the product, and the customers
are satisfied with the quality and price of the products.
The Findings in the paper show that there are many significant factors that
together make up the buying decision of the product. Customers’ perception
towards a brand is built largely on the satisfactory value the user receives after
paying for the product and the benefits the user looks for. In the above study, a
large portion of the user is satisfied from Patanjali products. It may be because of
reasonable price of the product. It may be due to ability of the product to cure the
problem. The satisfaction brings in the retention of customer. Patanjali is enjoying
the advantageous position in market through spirituality element involved in its
products. However, it should not ignore the competitors like Naturals, pure roots,
Vindhya herbals. Patanjali in order to retain more customers and satisfy them,
must fulfil the claims made by the company before any other brand may
mushroom up and take away the benefits of marketing through spirituality.

52
 CHAPTER 5
Conclusion and Suggestions

53
 5.1 Brief description of conclusion

Patanjali Ayurved Ltd., also known as Patanjali, an Indian FMCG which has
registered phenomenal growth in the last 5 years. The case tracks the different
strategies which worked for Patanjali Ayurved Ltd (Patanjali) in the hyper
competitive Indian FMCG sector. Acharya Balkrishna is the Managing Director
and major stake holder of Patanjali Ayurved Ltd (Patanjali) but the driving force
behind Patanjali Ayurved Ltd is Baba Ramdev, an ascetic and yoga guru of Indian
origin. Baba Ramdev and Acharya Balkrishna to bring it to its present stage.
Authors have used two business models namely “Value Creation and Delivery
sequence” and “Strategic Planning” model to narrate the growth and success of
Patanjali Ayurved Ltd.
Baba Ramdev’s Patanjali has made disruptive progress in the FMCG sector.
Within a span of less than 10 years, it has displaced ayurvedic market leaders like
Emami and Himalaya. Patanjali has become synonymous with ayurvedic
products. While the total demand is not being satisfied as of now, efforts are on
to increase sourcing to maintain steady supply of raw materials. The fill rate is
45-50% and can only increase from now on. They have increased their margins
for franchise stores as well as retail chains to around 10% and thus are getting
better placement on the shelves. They are focused on serving the masses and thus
cut corners in packaging and advertising. This is changing as they are spending
on advertising recently. The radio campaign is the first proof of that. Ramdev
Baba’s charisma has pushed Patanjali to grow over 10 times in a span of less than
10 years. The FMCG giants are also taking steps to check the advancements of
Patanjali. However now that it has gained traction in the market and there is
overwhelming demand for its products, it will be difficult for them to win back
their lost market shares.

54
 5.2 Brief Description of Recommendation
Patanjali should cut off manufacturing or marketing the products which are not
aligned with their core value of providing Ayurvedic products which has health
benefits. By this, they can retain and strengthen their position as the market leader
in Ayurveda and herbal products. Also, by this process, they will have a smaller
portfolio than present, which will enable them to divert all these resources into
those products. Quality will enhance significantly, packaging can be improved &
steady demand-supply can be maintained as a result along with many other
possibilities.
Greatly enhanced research and development efforts would be essential for new,
innovative product development thereby, increasing the product line. Employing
more foreigners in the R&D area, for a more diversified outlook, may lead to
great results. Increase in no. of products provided by Patanjali could result in
more customers getting attracted to the Patanjali products. Training the salesman
to be more active, motivated and interested towards the customers will lead to an
increase in sales and a good sense of hospitality towards the customer increases
the chances of closing in a deal. They can also be motivated by ensuring a certain
incentive or a bonus, to work harder and get more customers to buy company
products.

55
 5.3 Limitation of The Study
The following constraints were found out in the project, during its execution: The
study was carried out in the NCR Region; therefore, response of the population
living outside the region was not recorded. This could prove to be a hindrance,
when a wider market is taken into consideration, as different consumers in
different parts of the nation might have different choices and views. Sometimes,
the data being provided by the respondent may be inaccurate or false because of
various factors like social acceptability etc. A major disinterest in answering to
the survey by many people existed. This reduced the chances to study various
factors in detail.

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 5.4 Scope of Future Research

It is estimated that by FY 2020, PAL would be able to garner double-digit market

share in 10 of the 25 categories. However, the company would have to counter a few
challenges on the way. The first is brand loyalty. Will it emerge as a key force strong
enough to make consumers switch their long-standing affinities with other brands?
PAL does have the advantage of a single brand that could enable brand equity
seamlessly to spread from one product to another. The larger issue before the
company would be to chart the best route to traverse the trade supply chain. Until
now, their voyage has been rather simple – goods from the factory went to a
distributor and then directly to the exclusive store network. Now that PAL wants to
boost sales phenomenally, it will have to rapidly grow distribution coverage. No
wonder, it targets to make its products available in 2 million stores by the end of
2016 as against the current 0.2 million stores. This leap would make the supply chain
exceedingly complex, especially for a company like PAL which does not have
systems to track secondary sales, nor a large and disciplined sales force. The second
most important question that PAL needs to address soon is the brands strong linkages
to its founder Baba Ramdev. Humans are mortal, but brands are timeless. Given the
fact that the brand is closely inter-twined with the Baba and has been riding on his
popularity, the company will soon have to ensure that this popularity and strong
emotional connect does not wane after the Baba is no more. Worldwide it has been
seen that the strongest brands have survived the volatility of the markets and have
succeeded over generations due to their ability to span generations with ease and
remain contemporary to the consumer. Thus, brands like Coca Cola, BMW,
Raymond’s and Cadbury’s to name a few have the ability to defy time. And it is this
strength of timelessness that PAL must understand and build upon soon.

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References

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