2. About PAL (1/3)
๏ต Baba Ramdev's Patanjali has become one nightmare for all the FMCG companies operating in
India as the firm has started eating into the market share of MNCs and local players alike.
๏ต It started in the year 1995 when Baba Ramdev established Divya Yog Mandir Trust under the
guidance of Swami Shankardev ji.
๏ต With the aim of popularizing Yoga, Baba Ramdev started teaching Yoga through small camps and
shivirs.
๏ต In 1997, Baba Ramdev and Acharya Balakrishna incorporated Patanjali Ayurved Limited, which has
corporate headquarter in Haridwar, an ancient Indian city on the banks of the Ganges river in
Uttarakhand.
๏ต Breakthrough moment came in the year 2002 when Sanskar, a spiritual channel in Hindi, signed
Baba Ramdev for its morning Yoga program.
๏ต In 2003, the rival channel of Sanskar, Aastha signed up Baba Ramdev for its 5 am Yoga program
titled โDivya Yogโ
๏ต Now ,PAL is a multinational organization with its branch offices located in countries like US, UK,
Canada, Nepal etc.
3. About PAL (2/3)
๏ต Through Patanjali Yogpeeth Trust Baba Ramdev has touched millions of lives as of 2014.
๏ต In 2006 Baba Ramdev and Acharya Balkrishna established Patanjali Ayurved to provide
products and other ayurvedic medicines for their patients. In 2012 the duo decided to
unlock the potential of Patanjali Ayurved by expanding it into the mainstream Indian retail
sector.
Face of the Brand:- Ramdev was the creative force and public face of Patanjali, even though,
as a swami, he does not have an official title or hold any shares of the privately held company.
Company's Stakeholders:- Acharya Balkrishna holds a 94% stake in Patanjali Ayurved. NRI
couple Sunita and Sarwan Poddar, followers of Ramdev, gave Balkrishna the first loan to kick-
start the business. They have a 3% shareholding in Patanjali Ayurved.
4. About PAL (3/3)
The unofficial CEO:- Ram Bharat has taken up the lead of Patanjali Ayurved, acting as an
informal chief executive officer of the Haridwar-based consumer products firm.
Market Share:-In 2015-16,company witnessed revenues of Rs 5,000 crore, up from around Rs
400 crore in 2011-12 and Rs 2,000 crore in 2014-15.
Products such as ghee (Rs 700 crore) and toothpaste (Rs 300 crore) emerged as bestsellers in
its FMCG portfolio which has around 300 products. In contrast, HUL and Colgate had revenues
of around Rs 30,170 crore and Rs 4,211 crore in 2014-15 respectively.
Aim to Double Revenue:- The company is now aiming to double its revenues to Rs 10,000
crore by March next year and invest around Rs 1,000 crore to set up six processing units and
an R&D centre.
5. Marketing Mix (1/4)
PRODUCT:- Operates in four major categories
๏ต Ayurvedic health products
๏ต Food products & Juices
๏ต Skin-care products
๏ต Home-care products
Largest selling products are cow ghee, Dant Kanti toothpaste and Kesh Kanti. It also has premium
personal-care products under โSoundaryaโ label.
Massive product range:- Patanjali now has 28 factories at the campus that make more than 800
products.
Vast Product Portfolio:- No other herbal products maker has forayed into categories such as
noodles, oats and detergents.
Getting into Yoga-Wear:- Ramdev's Patanjali made a strategy to challenge the global sportswear
giants Nike and Adidas with its foray into yogawear, which will be made of khadi.
6. Marketing Mix (2/4)
PRICING:-
Cheaper than Competition:- Most of Patanjali's products are 15%-20% cheaper than leading
brands, forcing many of its peers to launch offers and promotions to counter its rising
popularity.
๏ต Eliminates intermediaries and the margins by sourcing raw materials directly from farmers
๏ต Ensures better profitability along with lower cost for consumers
PLACE:- Uses franchise model to sell its products. Outlets classified as:
๏ต Patanjali Chikitsalaya
๏ต Patanjali Arogya Kendra
๏ต Swadesi Kendra
Patanjali uses multiple distribution channels to cater to the market. Company has a reach of 0.2
million outlets.
7. Marketing Mix (3/4)
Thousands of Retail Touch Points:- Currently, apart from e-commerce channels, Patanjali
products are sold through 1,200 Ayurvedic Chikitsalayas, 2,500 Arogya Kendras and 8,000
Swadeshi Kendras. Add to that thousands of kirana stores across the country and partnerships
with modern retail chains such as Big Bazaar.
Patanjali MegaStores:- Patanjali is also planning to open Patanjali Mega Stores across India
starting with Nagpur and Lucknow. The company has also readied a premium brand
'Soundarya' to take on the likes of big cosmetics brands such as L'Oreal and Maybelline.
The Patanjali mega stores will sell everything from noodles and biscuits to ayurvedic medicines
and ghee, will measure around 5,000 square feet, according to Balkrishna.
PAL has a strong presence in the modern retail format, ecommerce and its own outlets but
lacks presence in the traditional retail formats, which serve close to 90% of Indian retail market
8. Marketing Mix (4/4)
PROMOTION:-
๏ต Focusses on content marketing: educating consumers about products
๏ต Relies heavily on Ramdevโs endorsement and promotions at his yoga camps
๏ต Started investing in mass media marketing, television commercials
๏ต Partnered with Future Group to increase visibility of its products
๏ต Worked with reputed creative agencies such as DDB, Mudra and McCann and taking help of
Sushil Kumar and Hema Malini for advertisements
9. PESTEL (1/3)
๏ต Political
Taxation policy: Impact on cost of input products, finally it impact on final price of the products
Government support: Ayurveda and yoga, โAyush-Ministryโ
๏ต Economical Factors
Inflation rate: Important factor in the mind of customers to look out for value for money
Tax rates and interest rates: High tax rates and interest rates impact on the cost of capital,
manufacturing cost increases
GST: goods and services tax will also help organizations like PAL
PAL procures its raw materials locally, trust on exports is less. Factors like currency exchange
rates have no impact
10. PESTEL (2/3)
๏ต Social Factors
Health consciousness: People are becoming more health conscious
Rise in life style diseases: Lifestyle diseases like Heart attacks, cancer, BP, diabetes
are on the rise in the Indian society. Main cause is chemicals in the food we eat, products use
apart from lifestyle
๏ต Technological Factors
Research & development: Govt created a environment for R&D in India, through Patanjali
Yogpeeth trust at Haridwar where it involved in R&D of Ayurvedic and herbal products
Automation: Drug production helps in mass production of ayruvedic drugs with out losing
their effectiveness and efficiency
11. PESTEL (3/3)
๏ต Environmental Factors
India is a rich source of certain herbs which may not be available anywhere else in the world
Science of Ayurveda is free of any hazardous chemicals. Direct advantage over allopathic
medicines as no side effects
Ayurveda products are more eco-friendly in nature compared to other chemical based products
๏ต Legal Factors
The medicine central control act 1970, the drugs and cosmetics act 1940, the drugs and magic
remedies act 1954 are the legal aspects monitoring PAL
12. Swot analysis
STRENGTHS
โข Good relations with indian government
โข Low production cost
โข So many followers of YOGA (20 crore )
โข Price 20-30% lower than competitors
WEAKNESS
โข Low presence in traditional retail
โข Huge dependency on Baba ramdev
โข Restrictions over distributions
โข Packaging is poor as compared to other
companies
OPPORTUNITIES
โข Ties with retails like BIGBASKET.com
where they can promote their products
โข Only 21% of revenues from pure
ayurvedic products while another 39%
from herbal/cosmetics, 40% from foods.
THREATS
โข Backlash from FMCG MNCโS
โข Himalaya worth 600 crore already in to skin
care Ayurveda segment whose products are
very popular
โข Challenges from DABUR INDIA and EMAMI
who are planning for making new strategies
13. Porter's FIVE FORCE ANALYSIS
๏ต Industry rivalry: (High) Industry is highly competitive with organized players like Dabur,
zandu balm, Himalaya etc. They established marketing channels in both traditional and
modern retail and are present in the market since last few decades
๏ต Bargaining power of buyers: (Moderate) Buyers are looking for reliable ayurvedic
compositions, Price and Quality of the product are the major determinants
๏ต Bargaining power of suppliers : (Moderate to High) Business is highly dependent on the
right ingredient, suppliers have a good bargaining power, The bargaining power of the
suppliers can be controlled by backward integration
๏ต Threat of New Entrants: (Moderate to High) Major threat to Patanjali is from existing
players in different segments Ex: Colgate entering into the natural and ayurvedic segment
through Colgate Active Salt โ Neem
๏ต Threat of Substitute Products: (Low to moderate) The substitute products depend on the
respective product category
