Analysis of Patanjali with marketing concepts.

1. PATANJALI
1. Company Background/ Launch of Patanjali
2. The Global Industry in 2006
3. Product Portfolio
4. Competitors
5. Early Strategy
6. Growth and Scaling- Strategic Challenges
7. Target Audience/Segmentation and Target Markets
8. Value Proposition and Positioning
9. Consumer Study
10.Marketing/Brand Strategy for Customers
11.Marketing Analysis
12.Conclusion / The Way Forward
13.Annexures
14.References

2. INTRODUCTION
COMPANY BACKGROUND:
Patanjali Ayurved Limited, also known as PAL - an Indian FMCG which was established in 2006, has registered
phenomenal growth over the years. Patanjali Ayurveda Limited was co-founded by Acharya Balkrishna and Baba
Ramdev, an ascetic and yoga guru of Indian origin. Acharya Balkrishna is the major stakeholder of the company (92%
stake) but Baba Ramdev has been the main driving force of the company.
In 2006, Baba Ramdev and Acharya Balkrishna established “Patanjali Yogapeeth Trust”, a landmark organization
promoting the cause of yoga, Pranayama and Ayurved. This trust added value to the brand Patanjali and laid the
foundation for Patanjali Ayurved Ltd to grow at a rapid pace. In 2006, Baba Ramdev and Acharya Balkrishna
established Patanjali Ayurved to provide ayurvedic products and medicines to patients and later in 2012, PAL decided
to expand into the mainstream Indian retail sector.
Patanjali Ayurveda Limited is a Haridwar based Indian FMCG company which is valued at ₹30 billion (US$470 million)
and earned revenues of ₹5,000 crores (US$780 million) for the fiscal 2015–16. Even though the FMCG market was
crowded, the founders saw an opportunity for a new entrant. It has become the fastest growing Indian FMCG
organization till date and its growth rate has created high benchmarks for other FMCG companies. According to
Acharya Balkrishna, “We don't know markets or marketing . . . but what we know is serving the people by providing
them high-quality products at attractive prices.”
Patanjali Ayurveda Limited with the holistic approach to enhance the quality of life of all beings all over the world, has
focused on one key aspect i.e., creating a healthy society through Yog & Ayurved and helping people adapt to healthy
and natural lifestyle. Patanjali Ayurveda Limited produces various kinds of products made from Ayurveda and natural
components in the categories of personal care and food. PAL has expanded to produce full range of consumer
categories, from edible oils, biscuits and noodles to toothpaste, hair, skin care products and groceries.
Patanjali Ayurved Ltd has marked an immense presence throughout India and around the globe over past 10 years
having have more than 47000 retail counters, 3500 distributors, multiple warehouses in 18 states and proposed
factories in 6 states.
COMPETITORS & PRODUCT PORTFOLIO:

3. Without any advertising blitzkriegs or profit-eroding discount sales, Patanjali is targeting established FMCG majors
like Colgate-Palmolive, Nestle, Dabur and HUL through its wide array of products — including spices, pulses,
chyvanprash, toothpaste, shampoo, toothbrush, instant noodles, tea, jam, corn flakes and also beauty products —
competing directly with products from the heavyweights. Patanjali is also taking on the big players in other
geographies, exporting its products to Canada, the USA, Mauritius and UK, among other countries.
In FMCG market Patanjali has positioned itself as very Indian and rural oriented and has become one of the biggest
supplier of ayurvedic and herbal products in India. The growth of Patanjali is based on its key products like herbal
soaps and shampoos, toothpaste and cow’s ghee. It has also expanded into new categories and has grew at faster
pace and has given a strong competition to the incumbents of the industry from its low priced ayurvedic products like
Dabur, Himalyan drug Company, HUL, P&G, Godrej etc . Patanjali top selling products include cow’s ghee,
toothpaste, ayurvedic medicines, soaps and shampoos:
Cow Ghee: Patanjali has positioned its cow’s ghee in the premium segment and it is well accepted by consumers
providing it a revenue of Rs 1,467 crore. In the organised branded ghee market, Patanjali is a direct rival to Amul.
Toothpaste: Patanjali’s Dantkanti toothpaste earned a revenue of Rs 940 crore with a market share of 14 percent.
Rivals include market leader Colgate Palmolive India Ltd. and Dabur India Ltd. Colgate Palmolive saw its share fall to
55.6 percent in 2016 compared to 57.4 percent in the previous year. Patanjali has been gradually eating their market
share with its competitive advantage of economical prices.
Ayurvedic medicines: Patanjali is the largest player in the medicine market with revenue of Rs 870 crore which is
nearly four times compared to its direct rival Dabur India.
Shampoos and soaps: While HUL is the market leader with a 45 percent share in shampoos, Patanjali has captured
the lower end of the market in shampoos but has not been able to penetrate the premium market and has managed
to generate Rs 825 crore. In the soap market, it faces stiff competition from its market leader HUL, the maker of
Lifebuoy, Nirma, Godrej Consumer Products and ITC. Its soap market has contributed Rs 574 crore to its revenue.
HUL has launched Lever Ayush brand, Tresseme Botanique, Fair & Lovely Ayurveda, Clinic Plus Ayurveda Care and
Citra – a specialist naturals brand and also acquired Indulekha, a premium hair care brand.Patanjali’s other rivals in
the shampoo segment include Proctor & Gamble’s Head & Shoulders and Pantene, and L’Oreal’s Garnier and L’Oreal
range.
Even though Patanjali has been a fairly new entrant in the market it has changed the dynamics of stable FMCG market
with giants like HUL, ITC, P&G and alike. It has slowly encroached into their market share through competitive pricing
and effective brand strategy.

4. Several surveys have shown that Patanjali Ayurved is eating into the market share of the FMCG majors:
 IIFL is of the view that Patanjali is a disruptive force in the FMCG space. Growing appeal of ayurvedic &
‘natural’ products and add to that factors like low price and allowing consumers to express Indian-ness in an
increasingly nationalistic environment, Patanjali is a credible threat for the incumbents with high possibility of
achieving sales of Rs. 20,000 crores by FY20.
 “With the launch of Patanjali products, the FMCG industry has become more competitive and PAL is all set to
eat market share of some of the FMCG majors present in oral care, hair care and OTC (over the counter)
products with its economical pricing across its brand portfolio”, said Bonanza Portfolio in early 2017.
 Another IIFL provides us with the impact rate, informing that PAL products highest impact will be on Colgate
(oral care) and next most affected is Dabur (due to multiple category overlaps). The report suggests that by
FY20, Patanjali will have high market shares in categories such as honey (35%), ayurvedic medicine (35%)
and ghee (33%) and will have eight categories with turnover greater than Rs.10 billion (Rs. 1,000 crores). The
main contributors to Patanjali’s turnover being Ghee, biscuits and ayurvedic medicine.
 Credit Suisse suggests that despite having fairly limited distribution, Patanjali brand has a 4-5% market share
in the toothpaste category and their analysis reported considerable drop in Colgate's volume growth was
noticed in FY16 and key reason being the strong traction that Patanjali gained in the dental care segment.
 For FY15 Patanjali Ayurved’s numbers are not available, Patanjali’s sales increased from Rs 843.92 crore in
FY13 to Rs 1,186.71 crore in FY14; net profit increased from Rs 95.19 crore to 196.31 crore. These numbers
are as per the statements filed with Registrar of Companies(ROC)
 Analysts from Edelweiss visited Patanjali’s Food and Herbal Park at Haridwar and had a meeting with the
senior officials. The resulting report of the meeting concluded that In order to implement ERP (for better
inventory management), the company has started working on plugging the gaps in the supply chain and
distribution and consolidate its online presence. Pricing discounts to the peers (15-30%), ayurvedic and natural
propositions with low A&P spends, innovations and new products pipeline lend Patanjali’s products an edge
over competitors (Baba Ramdev’s brand pull strategy). However, still distribution remains a key issue.
 The expectations are companies like HUL, Colgate and Emami to be marginally impacted by Patanjali while
Dabur is the one to be most impacted. Patanjali is looking forward to double its revenue from Rs2,000 crore
in FY15 to Rs5,000 crore in FY16, estimates according to the brokerage. Patanjali’s products give serious
challenge to flagship products of many companies as it is priced 10%-30% cheaper than peers.
 Applications for people who are interested in opening Patanjali Chikitsalya (Patanjli Mega store) or Arogya
Kendra (mega store) are available on Patanjali’s web site that shows its expansion. For mega stores an
investment of around Rs 50-60 lakh and a minimum of 2,000 sq.ft. of space is required in A grade city. For
villages of population of less than 1 lakh, a chain of Chikitsalya and Arogya centres has been planned with
investment around Rs 6-12 lakh and space requirement between 350-1000 sq.ft
THE GLOBAL FMCG INDUSTRY IN 2006
Fast-moving consumer goods (FMCG) are products that are sold quickly, at a relatively lower cost and are segmented
as personal care, Oral Care, Hair Care, Skin Care, Personal wash, cosmetics and Toiletries, deodorants.
In 2006, the Indian FMCG sector was the fourth largest sector in the economy with a total market size in excess of
US$ 13.1 billion. It’s firm MNC presence was well characterized by an established distribution network, intense
competition between the organized and unorganized segments and low operational cost. Availability of key raw
materials, cheaper labor costs and presence across the entire value chain gave India a competitive advantage. The
most influential players in the market were Hindustan Uniliver Ltd (HUL), ITC, Dabur India, Colgate, Nestle Amul,
Britannia.
Dabur, one among five FMCG companies in India and an herbal specialist saw a turnover of Rs. 19 billion (approx.
US$ 420 million) in 2005-2006, with brands portfolio including Dabur Chyawanprash, Dabur Amla, Vatika, Real and
Hajmola. Cadbury India was the market leader in the chocolate confectionery market with a 70% market share and
ranked number two in the total food-drinks market. Its popular brands included Cadbury's Dairy Milk, 5 Star, Eclairs,
and Gems
In 2000, HLL marked the beginning of a new era in India's economy, when it acquired 74 percent of Modern Food
Industries Limited. Colgate entered the fast-growing Naturals segment in 2006 by acquiring Tom's of Maine, a leader
in that market in the United States. Colgate to get hold of 84% shares of Tom's of Maine. In 2007, Colgate-Palmolive
India, the market leader in toothpaste in India, declared the acquisition of three domestic companies in south India.
ITC had a strong presence in Indian markets and the core product categories were cigarettes, foods, apparel, personal
care, stationery, safety matches and agarbattis, hotel services and IT services.

5. When Patanjali entered in 2006, it posed threats to its competitors utilizing the ascetic image of Baba Ramdev which
attracted many consumers.
More recently, according to Nielsen FMCG growth in the rural sector for the quarter ended March 2012 stood at 17.2%,
surpassing the urban segment at 16.5%. The purchasing power in rural areas has outpaced that of urban areas as
non-farm incomes improve, bolstering consumer spending on FMCG products.
EARLY STRATEGY
Baba Ramdev’s fan base is a huge consumer market of more than 70 million coming from an Ayurveda-freak nation
through years of conducting yoga sessions. Initially, PAL products were priced lower than their key competitors to
target the price sensitive Indian consumers and create more “value” in Patanjali’s products for future. Patanjali focused
to attract aspiration and conservatism-driven rural-urban consumers by placing modern consumer household products
promising transparency and purity with goodness. Many a times, it was seen that Baba Ramdev raised voices to
boycott foreign or outside items from shampoos to colas by demonstrating the after impacts or ill-effects of their
consumption. This further promoted Patanjali, cleared routes for various product categories and helped to create a
dependable buyer base.
Also the initial employee structure involved mostly free volunteers from manufacturing to selling who did not take
regular wages. 40 crores+ raised form Baba Ramdev’s Yoga shivirs, satellite network programs and gifts received
were used to begin expansion in the FMCG sector but promotional activity still depended vigorously upon informal
publicizing, word-of-mouth, complimented by a couple of advertisements to instil its image/character in the FMCG
consumer market and strengthen its brand identity.
PAL’s initial strategy focussed on targeting large market consisting of mainly financial & assets limitation masses. To
bring complete focus to these target market databases were prepared of the general population attending yoga camps
which was followed by creating confidence among his adherents of Baba or the followers to realise the dream of
building up World's biggest nourishment and Herbal Park. This project ensured that more than 7,000 individuals will
get immediate and around 200000 individuals will get roundabout job opportunities through this project.
An ever expanding product portfolio complemented by brand extensions, Image driven marketing strategies and a
key decision to keep the sub-marked range absent under Patanjali "Umbrella" have been the driving forces in
establishing Patanjali as a brand.
GROWTH AND SCALING- STRATEGIES
Now as we move towards analysing the growth & scaling strategies some basic questions need to be
answered. How Is Patanjali Different from its competitors such as P&G and HUL? Also as we analyse this
difference in strategies opted by the two, we arrive at the answer ‘why Patanjali was able to capture a huge market
share in such a short span whereas it took decades for P&G or HUL to reach to this point?’.
Patanjali utilizes ‘Branded House’ strategy in which the complete organization is a brand. Each and every product
delivered will be promoted under one brand name. For instance, Apple! Despite the fact that each & every Apple
products such as Mac, iPod, iPhone & so on are unique and perform distinctive functions yet they are altogether
marked as 'Apple items'. Customers can usually be seen going insane to buy their products for the sole reason of
owning a product of that brand. Likewise, Patanjali is following the branded house strategy and ensuring launch of
different products under one brand, i.e., 'Patanjali Ayurveda'. Moreover, their advertisement strategy reveals that they
are not looking to promote individual products, say a toothpaste, and instead want to push forward the whole brand
resulting in reduced promotion and publicizing costs too.
While established market players such as P&G, HUL and others focus on 'House of Brands' strategy in which more
emphasis is on development of sub-brands as opposed to one parent brand. The fundamental purpose of this strategy
is to eliminate over dependence of the company on single brand and in this process make sure that if the off chance
that on the off chance that one brand doesn't do well, the organization can in any case ensure revenues from different
brands and the failure won't hurt the organization gravely. Like in P&G, there are many brands, including Pampers,
Duracell, Gillette, and Tide to name a few but it can easily be noticed that the name P&G gets almost no or very little
prominence. P&G concentrates on the promoting individual products instead of marketing its organization name ‘P&G’
as a brand in any advertisement.
The organization's deals and circulation strategies enable it to keep its expenses to low as well. PAL has seen a
meteoric ascent in the last couple of years with improving revenues from ₹450 crores in FY12 to ₹5,000 crores in

6. FY16. Their sales and distribution methods has ensured that costs stay low too. Along with this ideal blend of low
costs, natural, pure and unadulterated' proposition and "Swadeshi" positioning are generally recognized to be the
success mantra for Patanjali, but it not well known that Patanjali’s path-breaking sales and distribution strategy has
contributed immensely in driving this exceptional growth trajectory.
Patanjali offers lower prices to shoppers because of low selling, administrative and general expenses at 2.5% of
revenues. Setting Advertisement spending in FY 16 at 6%, well beneath the peer set, critically has kept retail
margins at 1/2 or lower levels when contrasted with competing organizations. Analyzing the following strategies will
help us demystify how Patanjali scaled up distribution in an extremely aggressive retail FMCG market in India in
spite of low retail and A&P spends.
This assures high footfalls and likelihood of building a large scale of early adopters
Distribution Strategy:
Patanjali followed two-step distribution approach in General Trade (GT):
Step 1: Create a solid alternative distribution framework for demand creation and build informal word-of-mouth
supporters for the same
Step 2: Pivot to GT once a sizeable consumer base is created from Stage
Another Distribution Framework
In another market, Patanjali has set up dedicated stores, to drive trials and consumption of products, which are
basically Ayurveda Clinics operated entirely by entrepreneurs using their own investments. These Clinics are of 3
sorts – 1). Arogya Kendra 2). Chikitsalaya 3). Swadeshi Kendras.
Patanjali provides support by training and confirming medicinal 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.
In return, these stores provide various services. One is free consultation by certified medical practitioners. This
assures high footfalls build a large scale of early adopters. It serves as a retail store. The entire range of around
200-260 SKUs is stocked across both OTC, pharmaceutical and FMCG products and there is typically a weekly
replenishment cycle. There is cross-selling across pharmaceutical skillfully and FMCG products. The presence of
Ayurvedic medical practitioners at the outlet is a major determinant of sales. On the days when the medical
practitioner is absent, sales fall 30-40 per cent.
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 which 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.
Currently, 10,000 stores (Chikitsalaya, Arogya Kendra, and Swadeshi Kendras) contribute to 60 per cent of the
company’s revenues. In Delhi NCR, one of the older markets for Patanjali, there are over 400 of these stores
whereas in a newer market such as Mumbai, there are approximately 270 stores.
The pivot to GT
Once a sizeable consumer base is built through these dedicated stores, these consumers would expect Patanjali’s
products to be available at general stores, grocers and chemists in the vicinity of the dedicated store. These retailers
are then forced to stock up on Patanjali’s products for fear of losing on a customer’s goodwill. This builds a platform
for the next stage of growth.
Various towns are at different stages of evolution.
In 2013, dedicated stores contributed to 80 per cent of total FMCG sales across GT and the dedicated store
network. As consumer awareness and pull were created, GT started stalking at Patanjali’s top products (oral care
and honey) despite uncompetitive margins. This pivot to GT continued resulting in dedicated stores’ contribution
falling to around 45 per cent today.
Mumbai is still a Stage 1 market; dedicated stores contribute to around 70 per cent of FMCG sales across the GT
and dedicated store network. As consumer trials and consumer pull is created, it is increasingly evident that
availability in general trade would increase.

7. Alternative channels
While Patanjali’s scorching pace of growth has stupefied most FMCG players, the concept of winning in alternative
distribution channels is not new. Select players have adopted a “flanker” strategy so as to bypass competition,
entrench their position, encircle and then launch a frontal attack in mainstream channels.
Notable examples include Starbucks’ consumer packaged goods (CPG) business. Starbucks leveraged its retail
store footprint to build a flourishing CPG business. The intent was to capture a larger share of coffee consumption
that is reaching consumers whenever they want great coffee.
The stores provided a perfect platform to drive effective sampling and build partnerships with retail consumers.
Starbucks then enhanced availability through a tie-up with the CPG giant Kraft.
In the case of Yellow Diamond Wafers, the company targeted a relatively lesser contested space – smaller mom-
and-pop retailers within the intensely competitive wafers market. Yellow Diamond is now planning to enter the more
mainstream bigger retailers.
Developing an alternative channel strategy can help a company create white-space opportunities and dominate
them. This approach is valid both for incumbents as well as new entrants into the FMCG market. The question is
“will a company take risks in a blue ocean and enjoy the associated upsides or will it try to compete in a red ocean
with a classical sales and distribution approach”? Time and risk appetite will separate the winners from the rest of
the pack.
PESTEL ANALYSIS
For an organization to build the future course of action, the PESTEL factors must be considered. A thorough
knowledge and understanding of these factors helps to strategize accordingly.
Political: The growth of Patanjali Ayurved in the country is supported by the present political government. Baba
Ramdev supports Shri Narendra Modi and is friendly to the present government. The present central government
has majority in the parliament. A stable government supports well for the organizations like Patanjali who invests
heavily in the factors of production and marketing. Governments taxation policies impact the cost of the input
products and hence impacting on the final price of the products. PAL input costs increases or decreases based on
the taxation policies of the government. Central Government is promoting Ayurved and Yoga. Government of India
has a separate “Ayush Ministry” to promote Yoga, Ayurved and other traditional and complementary medicines. PAL
is expanding its operations but outside its home state, Uttarakhand, because of the lack of cooperation from the
state government there. The government has helped Patanjali to secure loans at lower interest rates and Patanjali is
also being offered subsidized land as food parks.
Economic: Implementation of Goods and Services Tax will also help organizations like Patanjali Ayurved Ltd.
Economic factors like Inflation rate and Tax rates and Interest Rates are impacting Patanjali Ayurved Ltd and other
organizations in its segment. Moderate inflation rate, an important factor in the mind of customer to look out for
value for money products. Higher tax rates and interest rates impact the cost of capital adversely and hence the
manufacturing cost increases, making the products costly in the market. Since Patanjali Ayurved procures its raw
materials locally and thrust on exports is minimal, the factors like currency exchange rates etc have no significant
impact.
Social: People are becoming more health conscious and there is an increasing trend to spend on health and
awareness programs and products. Diseases like heart attacks, cancer, BP, Diabetes are on rise in the Indian
society. The main cause for this is chemicals in the food we eat and the products we use apart from the lifestyle of
an individual. People are more inclined towards natural products.
Technological: Government has created a favorable environment for R&D in India. Patanjali through Patanjali
Yogpeeth Trust at Haridwar is involved in R&D of ayurvedic and herbal products. Baba Ramdev has claimed that
their R&D has created ayurvedic products which can cure deadly diseases like cancer. Automation in drug
production helps in mass production of ayurvedic drugs without losing their effectiveness and efficacy. Better means
of communication, resulting in fast information disbursal and penetration.
Environmental: The science of ayurved is not affected any hazardous chemicals. It has a direct advantage over
allopathic medicines as it has no side effects. India is a rich source of certain herbs which may not be available
anywhere else in the world. The residues produced in ayurvedic product manufacturing is far less harmful compared

8. to that of an allopathic manufacturing one. Ayurvedic products are far more environment friendly compared to other
chemical based products.
Legal: Ayurved being a vast field has no of government acts applicable to it such as the medicinal central council
act of 1970, the drugs and cosmetics act of 1940 and the rules made thereafter, the drugs and magic remedies act
of 1954 and the rules made thereafter.
STP ANALYSIS
SEGEMENTATION
Patanjali Ayurved established itself in 2006 manufactured ayurvedic products and medicines to patients later unlocked
the potential of Patanjali Ayurved by expanding it into the mainstream Indian retail sector. Patanjali did not segment
the customer base as such and it considered the whole population as its potential customers. Baba Ramdev had a
vision of bringing prosperity and producing unadultered natural Ayurveda products easily available to common
masses.
1. Geographic Segmentation
Patanjali products are more commonly used in North Indian Market but not much common in south indian
market because of the language barrier and mainly because its marketing and packing is done through Hindi
medium. Around 75 units with an investment of Rs 6,000 crore will come up by March and a new Northeast
industrial policy is expected soon. Patanjali is exporting its products to Canada, the USA, Mauritius and UK,
among other countries.
2. Demographics Segmentation
Patanjali has products targeted for all age groups like health drinks for children, beauty products for young
generation and ayurvedic medicines for elderly people. Patanjali products were affordable in nature as they
were 15-30% lower than the competition. Initially, lower and middle income groups were their main focus but
later even upper middle and upper income segments were attracted towards Patanjali products.
3. Behavioral Segmentation
Customers who live a healthy lifestyle are benefited through Patanjali products. Customers were more inclined
towards ayurvedic and herbal products.
4. Psychographic Segmentation
The customers who follow Ramdev’s Yoga perceive him as an ascetic model and his products adds more
value and creates mass appeal based on swadeshi sentiments.
TARGETING
Patanjali has diversified into almost all categories like oral care, hair care, skin care, groceries, health drinks and
supplementary, packaged food etc. Since they have no differential products, this substantiates the fact that they are
not targeting any particular segment rather serving the whole segment with their offering. They can also tap eastern,
western and southern market by launching their products in the regional languages.
4P’S ANALYSIS
PRODUCT:
Patanjali Ayurveda Ltd has diversified its products into wide range of offerings, around 800 products including 250
medicinal products, 45 cosmetic products and 30 food products through its exclusive outlets. The product category of
Patanjali can be classified as Home care, Health juices, cosmetic and health and food and beverages. It started with
Ayurveda medicinal products, organic health juices, honey which could justify the Ayurvedic tag it had and slowly
ventured typical FMCG Company and copied its product portfolio. Patanjali uses only herbal and organic ingredients
to manufacture its products which creates a differential Ayurvedic image of their offerings. The main drivers of the
product development strategy are low price, purity and innovation. One of the reasons Patanjali Ayurved has been
able to acquire market share so quickly is due to the low lead times between the product concept and product launch.
For example, the lead time between the product concept of Patanjali Noodles and the Product launch in the market is
close to 4 months.
PRICE
Patanjali entered an extremely competitive segment in Indian FMCG Company where the main players were HUL,
Nestle, Dabur, ITC, etc. Patanjali Ayurved Ltd. was sold at a price lower than 15-30% lower than its competition.

9. Patanjali’s pricing strategy is defined by the core competency of the segment. The Patanjali products had a market
penetration strategy due to the low pricing which helped them establish in marketplace. Patanjali’s products compete
with products of other FMCGs like patanjali noodles with Maggie, toothpaste with Colgate, etc. The FMCG model of
Patanjali is more focused on giving healthier and natural variant to target customers. In case of typical MNC FMCG,
certain amount is spent on marketing, packaging and advertisements. But in the case of FMCG products, they do not
market or advertise nor on packaging and hence their product are cheaper than the competitors. Patanjali does not
invest on extensive market research or hire high paying officials in their company. These are some reasons why
patanjali positions its products as low priced products.
PLACE
Patanjali has multiple distribution channels to cater market. The main manufacturing unit is in Haridwar, where all the
production and manufacturing takes place. Then, the products are sold out through the offline and online sectors.
Patanjali Ayurved Limited shows its presence through 1200 Chikitsalaya, 2500 Arogya Kendra and 7000 Retail stores
which handles it directly from distribution to procurement. The exclusive patanjali retail stores are minimal and
simplistic and sells only Patanjali Ayurveda products. Patanjali products are also made available through Big Bazaar
retail outlets and also Yoga camps organised by Baba Ramdev. Patanjali also has 2 online retail stores along with an
app on Google play store. Patanjali also sells its products through third party online platforms like Amazon, Flipkart,
Snap deal and big basket.
PROMOTION
The main objective of Patanjali was to highlight the health benefits of the Ayurveda products and to evoke the
Swadeshi sentiment into the Indian consumer’s mind. Baba Ramdev, a yoga guru being the brand ambassador
promoted the Patanjali Ayurved products aiding in healthy lifestyle and disease free through his yoga shivirs during
his talks about different yoga postures and its benefits. Baba Ramdev has many loyal followers through the efforts of
Patanjali Yogapeeth Trust and Yoga shivirs, who spoke positive about Baba Ramdev and Patanjali products. Patanjali
is heavily promoted through TV media, Aastha Channel. Patanjali Ayurved Ltd. Advertised through prints and digital
media and now also embraced the digital marketing and has a well-designed Facebook page and twitter account.
VALUE PROPOSITION AND POSITIONING
Patanjali’s Key to Success In recent times, people have become more health conscious which is evident from the fact
that many companies are investing money in organic and Ayurvedic products. According to Nielsen, the health and
wellness segment is worth a sizeable Rs. 33,000 crore. It grew 6% over 2014. Patanjali, with its Ayurvedic product
line, is able to somehow capitalise on this changing consumer behaviour and hence capture more market share.
Patanjali products are sold through three types of medical centres. These include Patanjali Chikitsalayas which are
basically clinics. Then there are Patanjali Arogya Kendras which are health and wellness centres. They also have
non-medicine outlets called Swadeshi Kendras. The group has 15,000 exclusive outlets across India. They also
distribute through general retail stores. As mentioned above, they have also tied up with well-known retail chains also.
They plan to grow to 1,00,000 outlets in the next few years. Patanjali products are available at an attractive discount
as compared to their competition. The company follows the modern distribution channel therefore it sources products
directly from farmers and cuts on middlemen to boost profits. Hence, they are able to reduce their raw material
procurement cost and are able to produce goods at a much cheaper price. Currently, Patanjali is making 20%
operating profit which is higher than the industry average. Patanjali is able to create a brand perception of health and
wellness among the Indian masses, primarily because of Baba Ramdev’s association with the brand who is considered
to be a veteran of yoga. Hence, more people are getting attracted to Patanjali’s products and are re-buying products
more frequently. If you notice, Patanjali sells its products with a very simple packaging. Now, many would feel that it
is not a good strategy but the truth is it is working for Patanjali. With a product like Patanjali, where the message is to
promote ‘Ayurveda’ and ‘Health’, simple packaging can be a very effective way of promotion and that is why the
company is able to do miracles with its simple yet effective packaging. With its packaging (especially with leaves and
herbs), consumers get a feeling that they are using ayurvedic products of health and wellness and are attracted to
buy it. Baba Ramdev is considered to be a veteran guru of yoga across the globe. He has been very cooperative with
press and media and has maintained good relationships with them. Also, he is known to have good connections with
many politicians. So he used both the facts to publicise his company free of cost. Take for instance when Baba
Ramdev approached Lalu Prasad Yadav and gave his face a massage with a Patanjali face cream and it was covered
by media. Or the Maggi scandal when Baba Ramdev came forward and gave a statement that he would launch safer
and better-quality noodles for the masses. Advertising and promotions typically account for 12-20% of revenue
expenditure by consumer goods companies. When a new company gets into the business, this spending is
significantly higher. In initial stage, Patanjali followed a unique word-of-mouth publicity model and the entire revenue

10. was without any advertising. It was purely because of the customer’s belief in Baba Ramdev that resulted in brand
loyalty of its customers that the word-of-mouth promotion proved so successful for the company.
SITUATION ANALYSIS
Strengths
 Tie up with retail chains like Future group and Reliance retail
 Follows Branded House strategy rather than House of Brands strategy
 Captive Market
 Available at discounted prices as compared to the competitors as the sources of their products is directly from
the farmers
 Increasing number of health conscious people which is evident from the fact that people are growing more
conscious towards ayurvedic products i.e. according to the Nielson the health and wellness segment is worth
sizeable Rs 33000 crore
 Distribution through health care centres and non-health care centres
 Brand perception of health and wellness as Baba Ramdev who is considered veteran of Yoga
 To promote health and ayurvedic products simple packaging is a effective way of promotion
Opportunities
 Should ensure that its products are available at anytime and everywhere i.e. it should widen its distribution
channels
 Avoid falling into the ‘Icarus Paradox’ i.e. It refers to the phenomenon of businesses failing abruptly after a
period of apparent success, where this failure is brought about by the very elements that led to their initial
success”
 Ensure to maintain the same level of quality in future as well, there should not be any trade-off between the
quality and sales whatsoever the reason may be.
Threats
 Question mark over the purity of patanjali products after Patanjali Amla Juice failed the laboratory test
under FSSAI standards
 misbranding and misrepresentation of patanjali’s products
 New players entering the market eg. Shri Ravishankar and Isha yogi Guru ji launching their ayurvedic
products
Weakness
 The major challenges for PAL is to attract/ reach out to non yoga nationalists section of the society as
well as Brand Savvy younger generation of the country.
 A large part of turnover contributed by only few products(cow’s ghee, ayurvedic-medicines, tooth-paste,
shampoo, soaps)
 Huge dependency on Baba Ramdev
CONSUMER STUDY
BRAND STRATEGY FOR CONSUMERS
Patanjali Ayurved Limited aims to popularize Ayurveda, India’s ancient medical science. Baba Ramdev, being a
famous yoga guru through his yoga camps has created captive market directly which values health, yoga, pranayama
and above all brand Baba Ramdev. This captive market is health conscious and it looks out for affordable products,
believes in the philosophy of swadeshi (home grown) and above all considers Baba Ramdev as their ideal. When
Patanjali ayurved launched its products in the Indian retail sector, this captive market was among the first to buy and
use its products. This captive market has developed instant loyalty to Brand Patanjali. One of the factors that has led
to customer satisfaction and customer loyalty is the belief of Patanjali in consumer centric ideology and therefore it
sells best quality products at attractive price points. There may even be some products in the company’s portfolio on
which are making losses or fetch low margins, but it continues to sell these products to meet consumer needs.

11. In the current scenario, when both retailers and consumers are hooked to huge discounts across categories Patanjali
have adopted zero discount strategy such that even modern players like Big Bazaar and D-Mart, which have built their
business on the discounting model, have been barred from offering any discount on Patanjali products because the
company relies on brand loyalty and the quality of the products at prices which are cheaper than others in almost all
segments
Patanjali is said to be benefiting from a shifting their consumer preferences towards herbal and ayurvedic products
which is nature oriented. It has also positioned itself as a swadeshi brand, which has an appeal among a category of
consumers.
As per the secondary market research data, major factors impacting consumer towards purchasing patanjali products
is swadeshi factor (natural), good quality, and reasonable price. As per the surveys consumers prefer food and
cosmetics related products from patanjali. Customers expect these products from patanjali because they perceive
patanjali products as healthy and of good quality.
Porter’s Five Forces
Industry Rivalry: High
Patanjali competes with both Organised and Unorganised sector of the industry
 Unorganised Sector: Many new players are entering this sector. Sri Sri Ravishankar (Art of living fame)
and Isha Yoga Guru ji are contemplating to launch Ayurvedic products soon in the market. The latest
oneis MSG brand launched by Saint Gurmeet Ram Raheem with a portfolio of 160+ products. We will
have to see how these brands built their reputation and maintain their presence in the long term against
PAL.
 Organised Sector: The industry is highly competitive and there are organized players like Dabur, Zandu,
Baidyanath Himalaya etc. These brands have established marketing channels in both traditional and
modern retail and are present in the market since last few decades. They have a strong and loyal base of
customers who has been using their products consistently.
Bargaining Power of the buyers: High
Due to the large number of players, low switching cost, and low product differentiation in the Indian FMCG
industry, there is huge competition and that benefits the consumers with wide range of choices and substitutes.
Customer are also price sensitive therefore price and quality of goods are the two main factors that drive this
power. So they must be able to perceive value in the products offered.
Threat of new entrants: Medium
FMCG industry is a capital intensive industry which act as a barrier to new entrants since significant amount of
investment is required in distribution, R&D and brand promotion both in rural and urban markets. The incumbent
players of the market enjoy economies of scale due to their expertise, strong brand equity and strong hold on
distribution networks. Therefore, major competitor of patanjali is from existing players from different segments.
Threat of substitute products: High
There are multiple substitutes present within segment(Dabur, Himalya) as well as outside segment (P&G India,
L’oreal, Hul).

12. Factors that drive this force are as below:
 Pricing strategy of substitutes: Generally, the products offered by patanjali are priced below than the other
branded competitors (Dabur, Himalya). Patanjali sells its products at lower prices to meet the demand of
the consumers. It is able to sell its products at a price which is 10-30% less than its competitors who spend
12% to 18% on advertising and promotion.
 Better quality of substitutes: Quality plays a major role when it comes to competition on the market
among close substitutes. A pressure is built to improve quality of main product if the quality of a substitute
is better than the quality of main product. Therefore, its necessary that the quality of product offered is
better or at par with its substitute products offered. Also if the product is perceived as of low quality than
its substitutes, the threat of the substitute is drastically increased.
 Low switching costs to consumers: The threat of substitute products is higher if there is low or no
switching cost for products in the market. When there are lot of brands and equal or similar number of
offerings from those brands, with low product differentiation it becomes easier to switch products. FMCG
market is a good example where customers enjoy low switching cost..

Threat of suppliers growing bargaining power moderate
For ayurvedic products correct ingredient are required which sometimes have high medicinal value. Patanjali is
fully integrated organisation. It has its own herbal plantations in Padartha, haridwar and uttrakhand to reduce
dependency on other suppliers. Thus due to backward integration the bargaining power of suppliers in case of
patanjali is moderate.
CONCLUSION / THE WAY FORWARD
As we have seen earlier, Patanjali has come up as a very prominent brand in the FMCG segment. Ramdev the
Yoga guru has used his popularity in a leveraging way to enter in this competitive market. Patanjali started off at
a very small scale in the Indian market. But it gradually has taken up its revenue to Rs.10561 Crores currently.
The brand itself did not need any ambassador, Ramdev has smartly used his popularity that he has in the society
to gain its market share. Ramdev has targeted the mentality of the customers, caught the most sensitive thing of
the public i.e., “A healthy world” and marketed its product very well to make Patanjali a big fat Corporate Giant.
It initially faced some competition from the established brands in FMCG market like Dabur, HUL, Procter and
Gamble and Britannia amongst others but in the herbal product segment, Patanjali showed tough competiton to
Himalaya, Biotique etc. Amongst the ayurvedic segment its competitor’s brand Ayush product was also affected
to a great extent. In most of the eastern and the Northern cities, it has established itself and its market is well
settled. Also, going forward things are improving greatly. Hence, we can say that Patanjali has done really well
in establishing a good value proposition to its customers and also ensured a competitive relations with its
competitors by not entering into any anti-competitive activities. It has developed a very healthy market in almost
all segments by winning peoples trust and affection and at the same time Patanjali has given a headache to many
marketers with its unconventional ways of marketing. It has disrupted the whole FMCG sector and bought a
revolution in the industry in a very short span of time. A point to note is that many people are buying Patanjali
products due to the market value attached to the products. Hence, Patanjali (unlike its competitors) is attracting
brand-loyal customers and not price-sensitive customers.
Based on our report, Patanjali has so far done very well and it can still improve in future, if it focuses on some
more of the following things.
Its Journey way forward should be:
Strengthen their distribution channels: The key to any to success of any FMCG segment is that Patanjali should
work on its distribution channel scheme. This is important because in order to maintain the customer’s loyalty
who have now completely relied upon their product, Patanjali have to ensure that at every place where it has its
market share already established Patanjali should have its products available in proper time at proper interval so

13. that the trust of the people should be taken off the form the brand. Supply meeting the demand will ideally help
the market to be well established in the area where it is not at all established.
Avoid falling into the ‘Icarus Paradox’: Icarus Paradox refers to the phenomenon of businesses failing abruptly
after a period of apparent success, where this failure is brought about by the very elements that led to their initial
success”. To cope up with this a thing, Patanjali should ensure that it is going as per the changing market pattern.
The very first of the success of any brand that it should change and adapt itself with the changing marketing
pattern and that is expected out of them from the point of view of the customers with respect to their preferences.
Its advertisements, product development, promotional strategies, traditional way of marketing should change
accordingly from time to time based on consumer behavior.
Focus on quality: Patanjali have somehow maintained the same level of quality of the brand so far in its plant as
well in the market and it should continue to keep up the same level of quality so that its market base which is
somewhat now constricted to the northern and the eastern region expands also in the other section of the society.
And what continues the brand loyalty is the trust of the consumer with respect to its quality on the brand. And
they further believe in results.
Challenges which it will be facing:
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. Reliance
on proper contracted manufacturers is extremely important when it comes to entering into newer segments.
An ever expanding product portfolio with brand extensions: If we take the example of the brands like Virgin
Group, they have done a good job in brand extensions, though with facing failures in many categories. Patanjali
which has forayed into various categories (such as shoes, apparels, home cleaning solutions, etc.) that are not
directly linked with Ayurveda or purity or goodness, will have to ensure that its loyal customers are not confused
with what is that they are trying to do and how in deep it wants to dig in. This could serve as a challenge for the
brand in the long run.
Absence of a key sub-branded range under Patanjali “Umbrella” – Patanjali’s products are working on “Umbrella
Patanjali” its products are linked with generic names such as Patanjali Atta Noodles, Patanjali ghee, Patanjali
Cornflakes. Their communication focuses around the name “Patanjali” and not any sub-brand. Hence it can affect
sales of their key categories, if inconsistent product categories do not perform well. It can also confuse consumers
if Patanjali want to increase “product depth” and launch variants with minute differences. What Patanjali can do
is it can first link its range with a brand and it can then launch its new variant gradually linked with its own brand
like Parle Hide and Seek.
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
companion Acharya Balkrishna. Any questions arising on their integrity will surely affect the brand’s
performance.
Final note: Suggestion
In our opinion, it is advisable that Patanjali should focus on fewer product lines and not on vast segment. It should
try expanding its geographical market in that range and shall create its newer product range with a solid brand
architecture so that it can offset any risk that arise being associated with umbrella branding. Through this their
product depth will increase and appeal to different segments. It should try and move away from a being a “Baba
image-driven” company, in case they wish to stay relevant and longer in the Indian market.

14. 1. ANNEXURES

15. 2. REFERENCES
Gopal, P. B. (n.d.). Demystifying the Brand Patanjali - A Case on growth strategies of Patanjali Ayurved Ltd.. .
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Patanjali Ayurved Ltd. Retrieved from http://library.pes.edu/opac/Casestudy.pdf
Research report::Indian FMCG Industry. (, 2013, July 30). Retrieved from
http://reports.dionglobal.in/actionfinadmin/reports/fdr0108201343.pdf
Patanjali_Ayurved. (n.d.). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Patanjali_Ayurved
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http://puneresearch.com/media/data/issues/5827fea79f840.pdf
Mandal, P. D. (2016). A Research Report on Patanjali. Banglore.
(n.d.). Retrieved from Industry Analysis: Indian FMCG Sector:
http://shodhganga.inflibnet.ac.in/bitstream/10603/3706/13/13_chapter%204.pdf
(n.d.). Retrieved from http://patanjaliayurved.org/
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