cavinkare not affordable to many of the people

cavinkare

Introduction

Being started a with the
investment of 15,000 INR in the year 1983 as a small scale pharmaceutical
packaging unit, CK. Ranganathan built an empire whose turnover is about 1450
crores in the year 2017. He then started manufacturing pharmaceutical products
and cosmetics. Cavinkare’s first product was chik shampoo. It has diversified
is businesses into dairy, foods, snacks, and beverages and personal care
businesses with the presence of 23 countries.

Shampoo market before
CavinKare entry

Since 1960, The shampoo
industry in India has evolved which was then considered a lifestyle product in
urban India. Until 2005, the market was dominated by flagship companies such as
P (Proctor and Gamble) and HLL (Hindustan Lever Limited). Later, the competition
has broadened with the presence of multi-national companies and domestic
companies such as Garnier and ITC Ltd. There is high capacity of growth in top
and bottom ends of the industry, which is an advantage for companies since the
penetration rates are comparatively low.

There exist a different
kind of categories in the shampoo market given below

1.    Cosmetic

2.    Herbal.

3.    And Anti-Dandruff

The target segment of shampoos
is mainly the upper class, upper middle class, middle class and particularly,
housewives and college goers during 80’s and they were all packed in a big size
SKU where its not affordable to many of the people in India because of which
the shampoo penetration in the India is low.

 A game changer strategy by cavinkare

As of 1983, the rural people
rarely had the access to use the shampoo which is identified to be a potential
market which is still untapped. CK.Ranganathan, the chairman of CavinKare found
this as an opportunity and wished to tap the market with their products.

CavinKare introduced
the most innovative packaging concept in India’s fast-moving consumer goods history
by launching its Chik shampoo in sachets for Rs 1 and 50 paise. This sachet
revolutionized the FMCG market and the sachets make up for more than 75percent
of the total volume of the shampoo segment being sold now. Since then, sachets
have played quite a role in mobilizing FMCG products in India. Sachets have now
become popular in the skincare and haircare segment too, including face creams,
face wash, hair color etc.

Given below are the key
reason which contributed to its success

1.    Indian consumers are
always up for value for money. Through sachets, they get to use an expensive
product for a very low cost.

2.    Due to the low cost, new
consumers who have never tried the product brand are more inclined to give it a
try. After a few uses, some of these consumers may upgrade to other products of
the brand.

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