CavinKare Private limited: Serving Low Income Consumers|
Submitted to: Dr. Rohit Singh (Module Leader)|
Sec - B|
Qus1: In the light of the above case identify the reasons and factors in growth of Chik Shampoo. Is the size of that segment is one of the main reasons for its exponential growth. Try to identify the details of various other competitors in that segment and elaborate upon the positioning strategy of the company.
Ans: CavinKare Private Limited had succeeded in carving out a very prominent share of the fast moving consumer goods market. One of the most successful CavinKare products being “CHIK SHAMPOO” in tapping low income markets in India. CavinKare, when realized that in 1983 the lower middle and semi rural population had very low awareness among consumers, and found there was a need for a superior quality shampoo with appealing perfume and available at affordable price. Chik shampoo started to differentiate itself on the basis ‘quality & superior fragrance’. They were able to see the profitability opportunities in selling products to rural consumers and also consumers in small towns. The reasons and factors of growth of Chik shampoo are discusses below. Educating Consumers:
One of the most important factors for Chik shampoo to pick up was that the company realized in order to sell their product they would have to first convince people start to use it first. Also they realized in order to sell they would have to first spread proper consumer education as most of the rural consumers had no idea how to use shampoo. Therefore they developed a communication plan to connect to consumers & create brand awareness. They relied heavily on radio for mass media advertising and later used movie stars for mass appeal which helped in making Chik’s marketing communication effective. The company started aggressive road shows to educate villagers how to lather, wash & comb hair. Wall paintings and ‘video-on-wheels’ formed a major chunk of the advertising campaign. They also went for large scale door-to-door sampling. This strategy worked very well. They also had launched a creative promotion scheme to create ‘the customer pull & induce trials’, in this scheme if a customer returned four empty shampoo sachets of Chik they would get one free. This scheme ran for a year and proved very successful in increasing Chik’s awareness.
Single Serve Sachet:
Mr. Ranganathan was often referred as “the moving force behind the sachet revolution in India.” The single serve sachets gave a boost to the shampoo consumption & were especially suitable for rural markets. The single sachets were a big hit in rural India as they got high acceptance & due to low income urban consumers who could not afford the “comfort of inventory”. Sachets not only offered the convenience of buying the product only when it was needed but also minimized the risk of trial. Extending distribution reach:
Another factor for the success of Chik shampoo was dure there well spread and planned distribution reach. Chik brand was targeted at rural consumers primarily and the biggest challenge they faced was ‘distribution access’ as rural markets being harder to reach. In order to overcome that particular obstacle they started tapping into periodic markets like haats and melas. For CavinKare, haats acted as a very useful means of reaching out to rural consumers. Melas on the other hand attracted a large number of buyers from distant places also. This kind of distribution played a critical role in accessing consumers in remote and less prosperous villages. CavinKare was thus successful in increasing its penetration of rural markets by focusing on these periodic markets. For CavinKare, the extending distribution access was the key to marketing Chik shampoo to rural consumers. Due to this kind of distribution the reach of rural markets was better than most...