Rural marketing project on CHIK SHAMPOO SACHET The document discusses CavinKare's rural marketing strategy for their Chik Shampoo brand. Some key points: 1. CavinKare pioneered small sachet packaging which made shampoo affordable for rural consumers. The sachets were distributed through demonstrations to educate customers. 2. This strategy was highly successful in rural South India and helped Chik Shampoo compete with larger brands. Sachets expanded the customer base. 3. CavinKare focuses on quality, research, branding and distribution. Their affordable sachets and promotions through mobile beauty parlors further increased rural access to their

1. Rural marketing project
on
CHIK SHAMPOO SACHET
Dr. Sanjay Patro
Report by
220 Mr. Heemanish Midde | 243 Mr. Rahul Palan | 256 Dr. Vikas Kumar Hiran
20th Nov, 2008
Xavier Institute of Management and Research, Mumbai
Mumbai University

2. RURAL MARKETING
An Overview
Trends indicate that the rural markets are coming up in a big way and growing twice as fast as the
urban as many 'middle income and above' households in the rural areas as there are in the urban
areas.
The share of FMCG products in rural markets is 53%, durables boasts of 59% market share.
The number of middle and high income households in rural India is expected to grow from 80 million
to 111 million by 2008. In urban India, the same is expected to grow from 46 million to 59 million.
Thus, the absolute size of rural India is expected to be double that of urban India.
“A world of opportunity”
The Indian rural market with its vast size and demand base offers great opportunities to marketers.
Two-thirds of countries consumers live in rural areas and almost half of the national income is
generated here.
Features
Large and Scattered market: It consists of over 63 crore consumers from 5,70,000 villages spread
throughout the country.
Major income from agriculture: Nearly 60 % of the rural income is from agriculture
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3. Traditional Outlook: The rural consumer values old customs and tradition. They do not prefer
changes.
Challenges
1. Underdeveloped People: Vast majorities of the rural people are tradition bound, and
believe in old customs, traditions, and habits.
2. Lack of Proper Physical Communication Facilities: Physical communication of the villages is
highly expensive. Even today most villages in the eastern parts of the country are
inaccessible during the monsoon.
3. Many Languages and Dialects: The number of languages and dialects vary widely from state
to state, region to region and probably from district to district. The messages have to be
delivered in the local languages and dialects.
4. Low Per Capita Income: Even though about 33-35% of gross domestic product is generated
in the rural areas it is shared by 74% of the population. Hence the per capita incomes are
low compared to the urban areas.
5. Low Levels of Literacy: The literacy rate is low in rural areas as compared to urban areas.
This again leads to problem of communication for promotion purposes.
6. Prevalence of spurious brands and seasonal demand: For any branded product there are a
multitude of 'local variants', which are cheaper, and, therefore, more desirable to villagers.
7. Different way of thinking: The difference is also in the way of thinking. The kind of choices
of brands that an urban customer enjoys is different from the choices available to the rural
customer. The rural customer has a fairly simple thinking as compared to the urban
counterpart.
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4. HAIR CARE
Hair Care Category in India
1. There are 5 main products
2. Hair Oil
3. Shampoo / Conditioners
4. Styling products
5. Herbal Remedies
6. Hair Dyes / colors
Shampoos
The word Shampoo is derived from the Hindi word “Champi”. Remember Johnny Walker’s famous
song - Meri Jaan, Meri Jaan, Sunday Ke Sunday, Teil Maalish - Champi Teil Maalish. The British loved
the message so much; they started calling Champi as Shampoo
Targeting for Shampoos
Hair Shampoos and Conditioners are targeted at Upper middle class Now, also middle class and
house wives Upper class rural consumers Teenagers - they are the major segment
Types of Shampoos
Shampoo market is segmented on benefit platforms
1. Cosmetic ( shine, health, strength )
2. Anti - Dandruff
3. Herbal
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5. Hair Care Facts
The frequency of shampoo usage is very low. Most consumers use shampoo only once or twice in
a week. In many cases, these products are used on special occasions such as weddings, parties etc
Some customers use shampoo only to address a specific problem such as dandruff or when they
need to condition their hair
Use of conditioners is not common. It is restricted to the super premium segment or those who
are very involved with their hair care Some consumers use natural conditioning agents such as
henna
About 50% of consumers use ordinary toilet soaps to wash their hair. About 15 % of consumers
use toilet soaps as well as shampoo for cleaning their hair
Brand loyalties in shampoo are not very strong. Consumers frequently look for a change,
particularly in fragrance
Consumers attribute lathering to the act of cleaning Major expectations from the product are
improvement in texture and manageability, giving softness and bounce to hair, curing and
avoiding damage to the hair
An Indian needs more shampoo for a proper wash (average 6 ml) compared to 4 ml needed in
Western countries as most Indian women have long hair
Most consumers do not use shampoo daily Regular users would need smaller quantity of
shampoo per bath. Hair tend to collect more dust due to dusty environment and oiling habits
Southern market is predominantly a sachet market, accounting for 70 % of sachet volumes
In Contrast, shampoo bottles are more popular in the Northern markets About 50 % of the
shampoo bottles are sold in the Northern region alone In the North, local brands such as Ayur
have strong equities and these products being low priced dilute sachet’s USP of low price
Shampoo market Size in India
Size of shampoo market - 930 Cr
Anti - Dandruff Shampoo - 20 % of above
Sachet Sales - 70 % of above
Shampoo Awareness in India
Urban areas - 90 %, accounting for 80 % of shampoo sold in the country
Rural areas - 80 %, accounting for 20 % of shampoo sold in the country
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6. Shampoo Usage
Per Capita consumption of Shampoo in India - 13 ml
Per Capita consumption of Shampoo in Indonesia - 160 ml
Per Capita consumption of Shampoo in Thailand - 330 ml
Shampoo Penetration in India
All India Shampoo - 14 %
Urban - 40 %
Rural - 10 %
Growth in Shampoo
Average Growth over the last few yrs - > 20
Expected Average growth over the next few yrs - 25 %
AD segment is the fastest growing segment, growing at 10 - 12 % every year.
H & S growing at 15 - 20 % every year
Evolution of Shampoo in India
1. HLL undisputed leader from the early 90’s
2. Sunsilk launched in 1964 ( General Shampoo platform )
3. Clinic Plus launched in 1971 ( Family, health shampoo platform )
4. Clinic All Clear launched in 1987 ( Therapeutic AD Shampoo )
5. Sunsilk re-launched in 1987 - Shampoo + Conditioner ( Beauty platform ) with Sachet SKU
6. HLL Goes rural with Sachet Clinic Active launched in 1991 ( with Pro Vitamin B - health
platform )
7. Sunsilk re-positioned and re-launched in 1994 ( Nutracare) - Pink for dry hair, yellow for
normal hair, green for oily hair and black for long hair
Entry of Competition
Why did competition Enter India
Teeming millions
Burgeoning middle class
Westernized youth
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7. low penetration levels
Huge untapped market
New Entrants into the Market
P & G enters India in Nov 1995, with the world’s largest selling brand - Pantene
Colgate Palmolive launched Optima also in Nov 1995 ( break through in Keratin treatment )
Nirma launched Nirma Shampoo which went into rough weather because it also had a
detergent and soap with the same name. The brand name also had low price connotations
Shampoo Boom in India
In mid 1997, per capita consumption of Shampoo increased
Of the Rs. 350 Cr. Shampoo market, the AD segment accounted for a 20 % share
P & G launched its Internationally acclaimed A & D shampoo H & S in 1997 with Zinc
Pyrithine ( ZPT ) - a unique anti-microbial agent. There were 2 variants - regular and menthol
Sachet sale became 40 % of all shampoo consumption in the country
HLL Dominance
Clinic, Sunsilk, Organics and Lux and their various brand extensions dominate the shampoo
market
In 1998, the company re-launched Clinic and Sunsilk brands
Sunsilk was re-launched with Fruitamins.
Today HLL has a 63 % market share in the shampoo market
In South India, Clinic Plus and Clinic All Clear put together have a market share of about 70 %
The top Shampoo brands
Normal Shampoo’s
o Clinic Plus
o Sunsilk
o Chik
Herbal Shampoos
o Ayush
o Dabur Vatika
o Nyle
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8. Anti Dandruff Shampoos
o Clinic All Clear
o Head and Shoulders
o Dabur Vatika AD
Premium Products
o Shehnaz Hussain
o Revlon Flex
o L'Oreal
The way forward
While toilet soaps have reached saturation, there is immense potential for penetration of
shampoos into Indian households.
According to NCAER, Shampoo penetration is expected to grow from 314 thousand
households in 1998-99, to 502 per thousand households in 2006-07.
Ad Budgets are on the rise
The reasons are
1. Lot of competition in the market
2. Low penetration levels
3. High potential
4. Untapped rural market to reach to
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9. COMPANY’S PROFILE
In 1983 with a single product, CavinKare started out as a small partnership firm Chik India by Mr. C.K.
Ranganathan.
Chik India, which was renamed as Beauty Cosmetics in 1990.
In 1998 the Company was renamed as CavinKare Pvt. Ltd (CKPL).
The reason behind the name is, Cavin means beauty in Tamil and ‘care’ is spelt as Kare.
The name is also a special one as it denotes the initials C and K of Mr. Ranganathan.
The company offers quality Personal care (hair care, skin care, home care) and Food products.
The Company, which primarily relied on contract manufacturing for many years has now set up its
own world class plant at Haridwar to cater to the demand of both domestic and international
market.
The Company has employee strength of 576, an all India network of 1300 Stockists catering to about
25 lakh outlets nationally.
CavinKare has touched a turnover of over 5000 million INR in 2006-2007.
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10. Products Range
Personal Care
Hair Care:
o Chik Shampoo
o Nyle Herbal Shampoo
o Meera Badam Shampoo
o Indica Hair Colorant
Ethnic Care:
o Meera Hair Wash Powder
o Karthika Hair Wash Powder
o Meera Herbal Hair Oil
Skin Care:
o Fairever
o Spinz Talc
o Spinz Deodorants
o Nyle Cold cream and lotion
Home Care:
o Tex
Food Division:
o Ruchi Pickles
o Chinni's Pickles
o Chinni's Masala
o Chinni's Vermicelli
o Ruchi Gulab Jamun Mix
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11. Competitive Analysis
Major Competitors:
HUL
P&G
Dabur
Himalaya health care
Colgate-Palmolive
Market Share
Chik shampoo with a 21.4 per cent share is the second largest selling shampoo in the Rs.
1,200-crore (Rs 12 billion) shampoo market while its other brand Nyle has a 4.6 per cent
share.
It has a 9 per cent share in the Rs 750-crore (Rs 7.50 billion) fairness cream market with the
Fairever brand.
Others like Meera hair wash and Nyle moisturizing lotion have national shares of 23.4 per
cent and 4.2 per cent, respectively.
But they are the largest brand in rural Uttar Pradesh, Andhra Pradesh, etc.
Important Facts
The company has six major brands - Fairever, Chik, Nyle, Meera, Indica and Spinz.
While its shampoo brands (Chik and Nyle) contribute 50 per cent to the company's turnover.
The Fairever cream contributes 30 per cent.
The balance is from Spinz (deodorant, perfume) Indica hair dye and other products.
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12. CAVINKARE’S STRATEGY
Marketing Strategy
They associate with people of similar wavelength in thinking, who will definitely take care of
quality first and foremost and besides, they have a strong system of quality monitoring.
As part of their strategy, they lay down all the ground rules for the manufacturers in
maintaining their standards.
Outsourcing is one of the three cardinal rules of CavinKare's corporate strategy.
Direct media promotions have helped build knowledge of product categories and change
long-entrenched living habits.
By the help of effective communication they tried to understand the fears, aspirations, and
hopes of the rural consumers.
CavinKare believes that its core competencies are research and development, brand
building, and distribution management.
Chik Shampoo used French perfume to differentiate itself on the plank of superior
fragnance.
Promotional Strategy
The company is taking some tips from its shampoo experience.
The Chinni pickles are available in single-use sachets that cost Re 1 to Rs 3, as well as low-
priced, upright pouches.
The rationale is simple: home-made pickle aside, the market is flooded with local brands.
Consumers, therefore, have little incentive to upgrade to a branded product.
Single-serve packaging will also serving in the institutional sales.
CavinKare is hoping the low price point and convenience of sachets will help rope in hotels
and restaurants as bulk customers.
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13. CavinKare also introduced single-use sachets for its Spinz Singiez perfumes in two fragrances
priced at 1.50 each.
CavinKare Pvt Ltd is also running mobile beauty parlours.
The mobile parlour exercise aims to provide a complete brand experience by having hair
stylists use Chik on volunteers and distribute its Re 1 sachets as samples.
The mobile parlours are targeting- girls' colleges, market places and residential localities.
Step towards Rural Marketing
CavinKare have shown that communication is key when it comes to building brands in rural
markets.
CavinKare, which enabled its product brands to compete directly with market leaders such
as HLL, P&G, Godrej and Henkel successfully.
CavinKare's successful brands such as Chik, Nyle, Meera, Fairever and Spinz are good
example.
CavinKare was the company responsible for the small sachet revolution in India.
It was an important insight for marketing to rural India, at the time.
That’s why C. K. Ranganathan was declared the Marketing Professional of the Year in the
India Brand Summit-2003 .
The awards were given for Leadership Excellence and Pioneer of sachet packing and mass
marketing in rural areas.
When CavinKare entered the rural areas in South India, people used to wash their hair with
soap.
When it launched the ‘Chik’ brand of shampoo they educated the people on how to use it
through live ‘touch and feel’ demonstrations and also distributed free sachets at fairs.
This strategy worked wonders in the rural areas of Tamil- Nadu and Andhra Pradesh.
Accessibility & Affordability
The success of the sachet changed the structure of the shampoo industry
New layers of consumers mainly from rural market could now afford shampoos
The upper class tag attached to the shampoo fast faded away
Extremely cut throat market emerged
Significant trade influence on what the consumer bought
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14. How Chik Shampoo was born?
This idea came in the mind of Mr. Ranganathan’s father when Epsom salt came in 100 gm
packets.
They wanted that coolies and the rickshaw pullers to use products.
But due to the lack of marketing strategies they could not market the concept well.
It renamed as Chik Shampoo after the death of father.
Target Audiences
Lower Middle Class
Semi Rural (SEC B2, C, D)
Monthly House hold Income: Rs. 1500 – Rs. 3000
Age Group: 16+ yrs
Girls and women of rural and semi urban population of India.
Overall Shampoo Market Share
HUL's 50% (Clinic Plus, Sunsilk, Clinic All Clear, Others Lux and Ayush). 16% P&G
Cavinkare 19% (Chik and Nyle).
P&G 15% (Pantene, Rejoice, Head and Shoulders).
Others 16%.
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15. Communication Strategy
CavinKare discovered that soap usage was the biggest barrier and people did not see the
need for using Shampoo.
Company tried to convey the message to the consumer that soap usage was bad for the hair
and when a product exists specifically for hair it should be used.
Finally customers agreed that Shampoo usage gave soft and silky hair.
To build a local and regional presence, they advertised in local print and television, before
taking the brands nationally.
They advertised more often and hired well qualified professionals to compete with the
competitors.
“The iconic Chik Girl in every Chik Shampoo” commercial showcased the possibility of soft
and manageable hair for the customers.
How Chik Shampoo conquered the rural market?
They went to the rural areas of South India where people hardly used shampoo.
They showed them how to use it.
They did live demonstration on a young boy.
They asked those assembled to feel and smell his hair.
Next they planned Chik Shampoo-sponsored shows of Rajniknath's films.
They showed their advertisements in between, followed by live demonstrations.
They also distributed free sachets among the audience after these shows.
This worked wonders in rural Tamil Nadu and Andhra Pradesh.
After every show, their shampoo sales went up three to four times.
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16. They altered the scheme; they started giving one free Chik Shampoo sachet in lieu of five
Chik Shampoo sachets only.
They sold shampoo in 50 paisa sachets at a time when other shampoo sachets were selling
at Rs. 2.
These price points helped penetrate deep rural pockets.
Soon, consumers started asking for Chik sachets only.
The sales went up from Rs 35,000 to Rs 12 lakh (Rs 1.2 million) a month.
Distribution Strategy
Instead of using the conventional distribution route, they have created a `sachet' sales force
that sells only sachet packs to small retailers including cigarette and paan shops.
Separate hawkers' channel is being created that has moved from neighborhood to
neighborhood.
The hawker channels exist in all cities where they have a distribution network.
CavinKare's personal products division is moving towards post offices.
They are placing products at post offices, products such as shikakai powder, shampoo and
hair dye.
They are using such channels to expand product reach and gain accessibility.
Because the unconventional route is not expected to become a major revenue generator in
the coming years.
Apart from unconventional method, the company hired professionals for sales and
distribution and expanded its network beyond South India.
CavinKare has its offices in Chennai, Pondicherry, New Delhi, Mumbai and Kolkata along with
2000 stockists, which supply to six lakh outlets.
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17. Retailer Promotion
Apart from the service charges Cavinkare also gave retailers a Chik Sachet free for every 15
empty sachets they get from the consumer.
They give special gift if dealer sale more products in a particular season.
They also give discount on bulk purchasing.
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18. CURRENT STATUS
In the last 2 – 3 yrs the market share has come down though it is growing. It is mainly due to the anti
dandruff shampoos in the market which from 0% has taken over 25% of the market. CavinKare
doesn’t have an anti dandruff shampoo yet.
Ordinary shampoos constitute only 75% of the market of which Chik holds 20% market share. But
Chik is the largest brand in rural UP, AP, etc. and the number one in many other states as well
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19. CONCLUSION
So the fact remains that the rural market in India has great potential, which is just waiting to be
tapped.
Ultimately, the ball lies in the court of Cavinkare’s marketeers .
It's all about how they approaches the market, takes up the challenge of selling products and
concepts through innovative media design and more importantly interactivity.
THANK YOU
*****
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