Rural Marketing

Group 8
 Presented by
q Deepankar Ø 08PG0010
q Toshal Ø 08PG0027
q Arpit Ø 08PG0109
q Venugopal Ø 08PG0146
q Roy Stephen Ø 08PG0236
q Catherin Ø 08PG0250
q Ketan Ø 08PG0314
q Varun Ø 08PG0342
q Sandhya Ø 08PG0364
 Rural Market

• Half the national income is generated

in the Rural India.
• 2/3rd of the population live here.
• A World Of Opportunities and
Challenges
• Traditional Outlook
• Large and Scattered market
• Major income from Agriculture
 Challenges
• Lower literacy rates
• Seasonal demand
• Spurious goods
• Different from Urban market
• Lower per capita Income
• Many languages, Dialects
• Underdeveloped
• Lack of Physical communication,
Infrastructure
 Case Objectives
• To understand the Indian rural
dynamics and Indian Rural consumer
behavior.
• To Provide a backdrop of Indian
Shampoo Market in rural context
• To highlight the successful strategies
that Chik Shampoo employed in the
rural market
 Corporate Vision
"We shall achieve growth by continuously offering
unique products and services that would give
customers utmost satisfaction and thereby be a
role model”

• In 1983 with a single product, CavinKare started

out as a small partnership firm.
• The Company that began its journey as Chik India
Ltd was renamed as CavinKare Pvt. Ltd (CKPL) in
1998.
• With innovative Entrepreneur C.K. Ranganathan
at the helm, CavinKare emerged into a successful
• Established with an initial investment
of Rs 15,000 in 1983.
• CavinKare has set an ambitious sales
target of Rs 5,000 crore by 2012
 Birth of Chik Shampoo
• late 70’s :Successful launch of Velvette
Shampoo in the South
• 1982 : Ranganathan joined. But seperated over
differences with family members.
• Started beauty cosmetics ,with Chik Shampoo
named after his father Chinni Krishnan
• Chik began with only 20,000 sachets but made
profits from second year
• 1989 : Office in chennai, manufacturing in
cuddalore
• 1998 : in-house contest suggested CavinKare
• Cavin in Tamil means beauty and Grace, and C
and K (Father’s Initials) spelt in capitals.
 CHIK SHAMPOO
• Just a mention of Chik Shampoo
today gives rise to varied
perceptions.
• To the rural and semi urban
population of India, it is the preferred
daily shampoo.
• To the market and its players, the
second largest selling shampoo in
the country.
• Chik Shampoo identified a
humongous opportunity in rural and
semi urban India and created waves
with its entry into these markets.
• Combining  innovative sachet
packing, strategic pricing (At Re.1
and 50p) and a strong and motivated
distribution network, Chik Shampoo
transformed the  very nature of
shampoo packaging and usage.
 The Concept of Sachets
• “Whatever I make, I want the coolies and
rickshaw pullers to use . I want my product
affordable to them”

• “Sachets are going to be the product of

future”

• “ My Father introduced the sachet concept

as he felt liquid can be packed well in
sachets. When talcum powder was sold in
tin containers, he sold it in 20/50/100 gm
packs. When Epsom salt came in 100 gm
pack, he sold it in 5 gm sachets”
 Shampoo market in India-
Early 1980’s
High

Price

High

Poor Quality Good

 Target Audience
• Lower Middle Class
• Semi Rural (Sec B2, C, D)
• Monthly household income of Rs
1500 – 3000
• Females in age group of 16 - plus
 Promotion
• Trial and free samples
• Ad Strategy based on the powerful appeal of
cinema among common masses
• Innovative radio ads based on popular
cinema dialogues, unlike plain radio jingles
of competitors
• Popular cine stars endorsed Chik – Amala,
Khushboo, Manorma and Charlie
• Radio used as a sole mass advertising
medium
• Annual ads spend about Rs 2 Lacs
• “Cinema is the most cherished means of
family entertainment and cine stars have
cult following in south. Therefore the
communication strategy was to leverage
• Multinational companies sold products
in big bottles and not in sachets and
they sold only from fancy stores.
• MNC did not look at the small kirana
stores, nor did they look at the rural
market.
• CHIK went to the rural areas of South
India where people hardly
used shampoo.
• Showed them how to use it, did  live
demonstration on a young boy and
 Shampoo Rural MArket
• CavinKare- Pioneering attempt to offer
shampoos in small pillow packs
• Market flooded with 70 odd small
shampoo labels with little differntiation
• Velvette (family business), synonymous
with ‘sachet shampoo’, aggressively
marketed by Godrej.
• Consumers will ask for velvette but
walk with whatever label the retailer
gave them
• Many never knew the difference, for
others it did not matter
 Shampoo Market
Urban/Rural split-up
(volume)
35
%
RURA
L
U
RBA
65
%
 Chik moves up the value
chain
• Chik Satin- bottle shampoo is priced
at Rs 56 for a 200 ml bottle
• While Clinic Plus is priced at Rs 63
and Sunsilk at around Rs 87 at the
higher price point.
 Problems in entering bottle
shampoo
• Chik ranks poorly in terms of quality
as compared to the bigger brands
• Consumer perception rates Clinic as
a higher-end brand while Chik is the
‘economical’ shampoo
• The company faces in-house
competition from its own herbal
shampoo brand Nyle, a popular
brand in the metros
 Competitors
• Hindustan Unilever Ltd. (HUL),
• Procter & Gamble Company (P&G)
• Dabur
• Himalaya
• Colgate-Palmolive
Indian shampoo market, where sachet
(7 ml) format accounts for 75 per cent
of the total sales, Chik has been
bringing in 90 per cent of its sales in
this format.
• 2004 -HLL had launched sachets at
50 paise and Re 1 compared to its
rival's (Procter & Gamble) sachets at
Rs 2 and Rs 3 for its three brands.
• P&G had priced its sachets Rejoice at
Rs 2, and Pantene and Head &
Shoulders at Rs 3 each. Such an offer
(buy one, get one free) was the
company's first in 10 years
• Bangalore:
• ``gold maal hai bhai, sab gold maal
hai.''
sachets of clinic plus and sunsilk that
consumers can wash their hair and
land up winning prizes in gold: one
first prize of 2.5 kg of gold, 5 second
prizes of 250 gm of gold and 4,400
third prizes of gold coins.
• Clinic Plus multi-sachet — a pack of 4
targeted at a family of 4 for Rs 3.
• HUL also launched a Clinic All Clear
triple pack shampoo sachet for Rs 5.
• Marico recently launched the Rs 4
sachet of its Hair & Care product Silk-
n-Shine.
• Marico also offers Parachute
Advanced Starz shampoo sachets for
kids at Rs 3.
• Chik goes to court – wins against HUL
 Chik’s Reaction
Variants and Innovative promotions
• Promotional and sampling exercise in Tamil
Nadu, which is the largest market for Chik’s
Jasmine variant.
• Sixteen bus terminals across the State will
witness this promotion. Prominent flower
markets in Chennai have also been done up
with the new Chik Jasmine branding.
• The prices remain at 50 paise and Re 1 for
its sachets and Rs 30 for a 100-ml bottle.
• The company aims to raise the market
share (volume) of Chik from 18.5 per cent to
25 per cent in the next two years.
 Recent activities
• In March, the company also launched
Chik Floral. The bigger markets for
Chik are Andhra Pradesh and Uttar
Pradesh, where the sales come from
the Chik Black variant.
• CavinKare will soon launch another
fairness cream brand, Chik Fairness
Cream, targeting the mass segment.
The new brand will be sold in two
packs - 25 gm for Rs 10, and Rs 2-
sachets
 Worry worry worry….
• Industry observers also point out that
despite being launched in the metros
in 2000, Chik is hardly visible in retail
outlets
• The shampoo bottle business has
been dropping industry-wide, he said,
with users downtrading to sachets or
switching brands. Sachets account
for about 82 per cent of the Rs
2,400-crore shampoo market.
 Facts n figures…
• 20% share of India's Rs 930 crore
Indian shampoo market, Chik is
firmly rooted in the mind.
• The shampoo market in India was
estimated at Rs. 21.41 billion per
annum as of February 2008, growing
annually at a rate of 14.5 percent.
 Accessibility and
Affordability
• The success of sachet changed the
structure of the shampoo industry
• New layers of consumers, mainly
from rural pockets and could not
afford shampoos
• The ‘upper class’ tag attached to the
shampoos fast faded away
• Extremely cut-throat market
emerged
• Significant trade influence on what
 Distribution strategy
High High

Cost
to
custo
mer

Low
High
Availability of product
 Conquering the Market
TRIALS FREE SACHET SCHEME

• Shampoos getting • 1 Chik Shampoo Sachet

encouraging trials from in lieu of 4 empty
rural consumers, but sachets of any shampoo
extremely low
penetration levels
• Later – 1 Chik Shampoo
• Many people had no clue Sachet in lieu of 5 Chik
how to use a shampoo shampoo sachets
• To encourage trials,
CavinKare’s team
travelled extensively in • Sales went up from Rs
rural pockets. 35000 to Rs 12 Lacs a
month
• Trials on school boys
• Significant impact in
 Turning Point
Floral Fragrence Southern Cine Stars
Shampoo • Cinestars Amala,
• Consumer Insight – Khushboo,
Southern Women Manorma and
keep flower in hair Charlie – Popular
for fragrance among rural people
• Introduced Jasmine • Sales went up to Rs
and Rose 1 Crore a month
Fragrance
shampoo
• Sale went up from
Rs 12 Lac to Rs 30
 Recommendations
• Variants and Innovative Promos
• State sensitive instead of
Nationalizing
• Focus on strengths
• Change Mindset
• Improve packaging for bottles
• Totally different brand
 The Success
Teamwork is the main reason
for our success. We have
good professionals who work
really hard. The second
reason of our success is
innovation and thirdly we
have executed innovative
ideas well.
Thank
you….