Repositioning Dabur

Topics: Fast moving consumer goods, Ayurveda Pages: 5 (1712 words) Published: September 9, 2012
Question 1:
Analyze the reasons that impelled Dabur to refine its Ayurvedic image to that of a herbal FMCG company?

Dabur India Limited started as a medicine manufacturer in 1884 by Dr S K Burman in West Bengal. It was started as a proprietary firm for the manufacture of Ayurvedic drugs. Daburinitially used to send medicines to villages in Bengal by mail.The company marketed an allopathic drug, Plagin, to combat the then prevalent epidemic of plague. In 1896, Dr. Burman set up a small manufacturing plant at Garhia near Calcutta for mass production of chemicals and Ayurvedic drugs.In the early 1900s, the next generation of Burmans took a conscious decision to focus more on the Ayurvedic medicines market, as they believed that it was only through Ayurveda that the healthcare needs of poor Indians could be met. In 1919, Dabur set up a Research & Development laboratory to conduct research on Ayurvedic medicines. Their manufacturing processes used to be as described in ancient Indian scriptures and developed the process of utilizing modern equipment to manufacture these medicines without reducing their efficacy. The following year, Dabur set up manufacturing facilities for Ayurvedic Medicines at Narendrapur, West Bengal and Daburgram, Bihar in India.Dabur also expanded its distribution network in Bihar and the North Eastern regions. In 1936, the company was incorporated under the name Dabur India Pvt. Ltd. In 1940, Dabur launched Dabur Amla Hair Oil, and later in 1949, the company launched Chyawanprash in a tin pack making it the first branded Chyawanprash in the country.The company expanded its portfolio by adding oral care products in 1970. Dabur LalDantManjan was the first product to be launched under its oral care portfolio. In 1972, Dabur shifted base from Kolkata to New Delhi and started production from a hired manufacturing facility at Faridabad, U.P. In 1978, Dabur launched the Hajmola tablet. Dabur set up 'The Dabur Research Foundation (DRF),' an independent company, in 1979 to spearhead its research needs. In the same year Sahibabad factory became operational and this unit was one of the largest and most modern production facilities for Ayurvedic medicines in India at that time.The company became a public limited company in 1986 and launched its first public issue in 1994. In 2004, Dabur had three strategic business units: Family Products Division (FPD), Health Care Products Division (HCPD) and Dabur Ayurvedic Specialties (DASL) which contributed 45 percent, 28 percent and 27 percent respectively to Dabur's sales revenue in 2003-04. FPD looked after products related to Hair Care, Skin Care, Oral Care and Foods. The three leading brands in this division had a turnover of Rs. 1 billion each in 2003-04. HCPD dealt with products related to health supplements, digestives, baby care and natural cares. DASL managed about 250 Ayurvedic medicines. Although Dabur diversified itself into a number of areas, the image of Dabur was still that of an Ayurvedic company. In the public perception, Dabur products were associated with the 35 plus age group. With almost seventy percent of India's population below 35, it appeared that Dabur was missing out this mass market, which also had high disposable income.Apart from the above fact, Dabur in 2001-02 experienced a downturn in sales and profit and there were indications of slow growth of the company too. Dabur then hired a consulting firm called Accenture and asked them to recommend some changes in the company’s marketing system and process. Dabur concluded form that assessment that consumers recognize Dabur as an herbal specialist. They also found that Dabur’s reputation in this field was considerableacross small towns as well as big cities. Moreover, the size of global herbal FMCG market was estimate at 40 billion. The herbal FMCG market is considered to be the fastest growing product category within FMCGs. And these products were used by youth. Accumulating all...
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