Chick Shampoo - Case study

2. Guess?Guess?

3. FMCG
FMCG refers to
Consumer non-durable
goods required for
daily or frequent use.
Typically a consumer
buys the goods atleast
once a month.

4. CavinKare Pvt.
Ltd (CKPL)

5. CHIK SHAMPOO- RURAL REVOLUTION

6. RanGe
Chik penetrated the Indian market with a wide range, 4
refreshing fragrances, sensitive pricing and right sizing
Chik (Black, Jasmine, Egg, Cool)
Sachet packing and pricing at Re.1 and 50p
Bottles sized-60 ml, 120 ml, 250 ml & 500ml
Anti Dandruff Shampoo, containing climbazole and lemon
extracts for dandruff and itching (not much popular)

7. TaRGeT audienCe
Class -Lower , Middle.
Area- Rural, Semi-urban.
MHHI Rs 1,500–3,000.
Gender - Females.
Age group of 16-plus.

8. Case ObjeCTives
To understand Indian rural dynamics and Indian rural
consumer behaviour
To provide a backdrop of the Indian Shampoo Market in the
rural context
To highlight the successful strategies that Chik Shampoo
employed in the rural market

9. The COnCepT OF saCheTs
C K Ranganathan, CMD, CavinKare, has shown the world it is
possible to beat MNCs even in FMCGs
“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 packs, he sold it in 5 gm sachets ”
“Whatever I make, I want the coolies and rickshaw pullers to use. I
want to make my products affordable to them, he used to say”
“Sachets are going to be the product of the future, he said. But my
father was a great innovator, but a poor marketer” .
 The family launchedVelvette shampoo sachet successfully in the
South in the late 1970s

10. How CHik SHampoo waS
born
1982- Ranganathan joined, but separated over differences
with family members
Name and identity changes in the last 18 years: from Chik
India pvt ltd to Beauty Cosmetics in 1990 and finally to
Cavinkare in 1998
Chik began with only 20,000 sachets, but made profits from
the second year
1989- Office in Chennai, manufacturing in Cuddalore

11. SHampoo rural market
CavinKare- pioneering attempt to offer shampoos in small
pillow packs
Market flooded with 70-odd small shampoo labels with little
differentiation
Velvette (family business), synonymous with‘sachet
shampoo’, aggressively marketed by Godrej
Consumers would ask for aVelvette but walk away happily
with whatever label the retailer gave them
Many never knew the difference, for others it did not matter

12. aCCeSSibility &
affordability
The success of the sachet changed the structure of the
shampoo industry
New layers of consumers, mainly from rural pockets,
could now afford shampoos
The‘upper class’ tag attached to shampoos fast faded
away
Extremely cut-throat market emerged

13. CHik launCH
1983- Chik shampoo launched by CavinKare
Initial launch in 10 ml pack in sachet form
Market cluttered with low-cost shampoos
“But there was a clear opportunity for a good quality
shampoo with appealing perfume at a price to delight the
consumer”
Chik endeavoured to provide to the masses a significantly
superior product than those available at similar price points
Chik shampoo used French perfume to differentiate itself on
the plank of superior fragrance

14. promotion
Cavin Kare decided to give away one sachet of Chik Shampoo free for 5
empty sachets of any shampoo brand and further extending this strategy
in the next stage it restricted the free shampoo exchange only for empty
sachets of Chik.
Ad strategy based on the powerful appeal of cinema among common
masses.Annual ad spends about Rs 2 lakh
Radio used as the sole mass advertising medium. Innovative radio ads
based on popular cinema dialogues, unlike plain radio jingles of
competitors.
“Cinema is the most cherished means of family entertainment and cine
stars have cult following in the south.Therefore, the communication
strategy was to leverage popular cinema dialogues to drive home the
message”
Popular southern cine stars endorsed Chik-Amala, Khushboo,
Manorama and Charlie

15. trialS
Shampoos getting encouraging trials from rural consumers,
but extremely low penetration levels
Many people had no clue how to use a shampoo
To encourage trials, CavinKare’s team travelled extensively in
rural pockets
Trials on schoolboys to demonstrate how to lather and wash,
comb hair and show the difference
“We were as thrilled & excited as the volunteers during the
demonstrations.This exercise had asignificant impact in
breaking ice & made people comfortable with the concept”

16. ‘CHampi’ on SCHoolboyS

17. SaleS impaCtS
Chik becomes popular in the southern markets i.e it was
placed No.1 brand in south india.
Shampoo market growing at a healthy 15%
Price cut strategy maintain its position in the market.Sales
rose from Rs 35,000 to Rs 12 lakh a month.
“For the 1st time, floral fragrances (rose, jasmine) were
offered in shampoos. our sales went up to Rs 30 lakh (Rs 3
million) per month and with actor Amala as our model, our
sales rose to Rs 1 crore (Rs 10 million) a month! Each idea of
ours was rewarded by our customers.”

18. Cont…….
CavinKare dominates the rural pockets with Chik .
Chik Shampoo was declared the winner of the best
performing brand in 2003 by AAAI, amongst the top ten
brands in household availability.

19. Taking on The MnCs
“MNCs sold products in bottles, not in sachets and sold only from
fancy stores.They did not look atthe small kirana stores, nor at the
rural market”
“We went to rural areas in South India where people hardly used
shampoo.We showed them how to use it by doing live
demonstration on a young boy.We asked people to feel & smell his
hair”
“Chik sponsored shows of Rajniknath's films.We showed our ads
in between, followed by live demonstrations.We distributed free
sachets among the audience after every show, which worked
wonders in ruralTN &AP.After every show, our shampoo sales
went up 3-4 times”

20. naTional fooTprinT
1993- Chik shampoo mulled a national presence
“Then, the Indian rural market only outgrew the urban
market, now it grows at double the pace”
“Chik’s objective was to expand the market, and get new
consumers in the category”
Focus- largely rural, value-conscious sections in urban areas
were also attracted
Distribution in rural areas is driven through innovative trade
schemes & consumer offerings .
70 %Villages Population size

21. rural DynaMiCs
Most villages in India are of very small size
70% villages have population < 1,000
With low accessibility and undeveloped local markets, how do you
market your products to these villages?
Opportunity-The 47,000 haats & 25,000melas organised in such
villages
Average daily business in these haats was Rs 2 lakh
CavinKare created availability in smaller villages through the
wholesale network
“The right marketing strategy for the rural market is to balance
the conflicting dimensions of‘availability’ on the one hand and
‘affordability’ on the other”

22. MiD 1990s
The shampoo market surged by 25%
Small packs contributed 40% of total shampoo volumes
Rural markets grew much faster than urban markets and
continue till date
The key challenge was to reach rural markets
Packaging became critical for rural marketing
1999- Chik, second largest shampoo brand in India-(also in
rural markets)- next only to HLL’s Clinic Plus

23. key faCTors in rural
purChase
Packaging & branding made prominent to enable quick
identification by the rural consumer”
Chik- Mnemonic & pack changed to bring in design & colour
elements, enable‘on shelf’ differentiation and aided recall 9
Doesn’t bother to check 2 Logo identification 4 Looking at
the price 25 Retailer recommends 60 Looking at the
wrapper - % of respondents Factors influencing purchase of
shampoos in rural markets

24. shaMpoo eConoMiCs
“Years back on a market visit, a rural consumer recalled he
had used soap to wash his hair for ages, and that he had no
visible damage to his hair.Though the hair felt rough, he was
fine with that. So why should he start paying for shampoos?”
“There were 5 adults per household in rural India, & @ Rs2
per sachet & 4 washes per month meant Rs.40 for hair wash
alone.They couldn’t spend such money on hair wash every
month. If the cost of hair wash could be cut to Rs2 per
person per month they would try a shampoo.This meant he
wanted something as marginal as a 50- paise shampoo pack.
The initial thought of offering a 50-paise shampoo sounded
ridiculous”

25. The 50-paise shaMpoo
saCheT
“We worked backwards, developing the formula & packaging
took us a few years.We launched Chik shampoo sachet @ 50
paise in September 1999, the first ever such price point”
The result- rural shampoos grew at twice that of the urban
sector
Price point helped penetrate deep rural pockets
Chik market share flared from 5.6%(1999) to23%(2004)
2005- Chik was a Rs 100 crore brand on MRP value
No.1 Indian rural shampoo, 65% rural market sales

26. rural Chik
•“Chik’s value
proposition helped us
become No.1 in many
states in rural India.
Recruiting customers
is the key issue as the
rural consumer is
rational & value
conscious. To be
successful, the
marketing mix must
deliver superior value
to the rural consumer
at a price point he is
comfortable with”
RANK
MS %
(Volume)
STATES
(Rural hold of
chik )
2 19 Orissa
1 46 TN
1 39 AP
1 32 Bihar
2 22 MP
1 67 UP

27. The Chik proMise
A year round tropical climate makes it difficult to maintain hair
softness and shine
Tangled hair- Common complaint in girls & women
Softness & manageability- key issues in the maintenance and
nourishment of hair
Unique formula –Active Double Conditioners
“The iconic Chik Girl in every ad treated her hair with the
shampoo and demonstrated with utmost ease and confidence, her
ability to untangle her hair with just a single motion of running
her fingers through her hair”
Tagline- “Yun Kiya Ho Gayal” popular phrase amongst both girls
and women today

28. Current status
“In the last 2-3 years, our market share has come down
though we are growing. It is mainly due to the anti-dandruff
shampoos in the market which from 0% have taken over 25%
of the market.We do not have an anti-dandruff shampoo yet”
“Ordinary shampoos constitute only 75% of the market, of
which we hold 20% market share. But we are the largest
brand in rural UP,AP, etc. and the number one in many other
states as well”

29. strateGY aDOPteD
The company marketing Chik shampoos came up with a wide
variety of changes to target the rural markets. Some of the
changes that the company adopted are:
Changing the Packaging of the product by introducing
sachets instead of conventional bottles.
Slashing the price of the product to 50-paise per sachet so
that rural consumers could afford it.
Adopting innovative ways of promotion by using radio
advertising in the form of jingles and cinema dialogues that
would appeal the rural consumers.

30. COnt……..
A wide variety of perfumed shampoos were available so as to
give more option to the rural consumers.
The village Haats and Melas were used as an efficient way of
the rural distribution channels.
The packaging looks of the products were modified and they
were made to look more attractive to the rural consumers.
Thus it can be seen that to market Chik Shampoo, the
company made significant changes in the 4 P’s of the
marketing mix so as to ensure that their product successfully
penetrated the rural markets.

31. twO-PrOnGeD strateGY
 CavinKare adopted a two-pronged
strategy of getting retailers to push
its products such as shampoos by
offering them competitive
incentive schemes, besides free
distribution of shampoo sachets
and product demonstrations in
public to ensure at least
rudimentary brand recall among
rural customers such as Vajramma.
 To ensure better visibility for
products, CavinKare encouraged
retailers with display incentives,
over and above all other benefits.

32. PresentlY
CavinKare Group has crossed a turnover of 8819 million INR
in 2009-2010.The Company has employee strength of 1520,
an all India network of 1300 Stockists catering to about 25
lakh outlets nationally.
CavinKare, well-known manufacturer of hair care, skin care
and personal care products, is targeting to achieve turnover
of Rs 5,200 crore by 2012, out of which it expects to earn a
contribution of Rs 1,000 crore from its dairy division alone.
It markets its products in India, Nepal, Sri Lanka, Malaysia,
Singapore, Bangladesh, the United States, and the GCC
region

33. reasOns behinD
CavinKare’s 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”.

34. COnClusiOn
Rural market in India has great potential which is just waiting
to be tapped.
Ultimately the ball lies in the court of potential marketer,
(cavinkare already proved it), even they having prosperous
chances to increase their market share in rural India.
It's all in the hand of marketers, about how they going to
approaches the market, takes up the challenge of selling
products and concepts through innovative media design and
more importantly interactivity.