Patanjali Case Study
THE SUCCESS STORY OF PATANJALI :
AN AYURVEDIC BRAND IN FMCG MARKET.
Dr Pooja Ramchandani, Assistant Professor At HR College.
INTRODUCTION :
In a country like India, The Fast-Moving Consumer Goods (FMCG) market is amongst the most difficult markets to crack as there is no lack of competition in this market and conquering distribution remains an uphill task. However, the Patanjali success story stands out as an exception. Apart from it’s massive surge in the brand’s revenue over the past five years, the herbal product brand has also managed to achieve brand loyalty which is something that remains a distant dream for most FMCG giants too. Although selling products at lower rates isn’t exactly considered a pricing strategy, but building …show more content…
There is no doubt that Patanjali is a disruptive force in the FMCG space and is a credible threat for the incumbents. IIFL is of the view that the growing appeal of ayurvedic and ‘natural’ products, along with factors like low price and allowing consumers to express Indian-ness in an increasingly nationalistic environment, will help Patanjali to boost its sales in the future. IIFL states that Patanjali’s highest impact will be on Colgate, since it has gained substantial traction in oral care; next most affected is Dabur, due to multiple category overlaps. ITC, Godrej Consumer Products Ltd and Nestle are least likely to be impacted due to few common categories. Their report states that our analysis suggests that by FY20, Patanjali will have high market shares in categories such as honey (35%), ayurvedic medicine (35%) and ghee (33%) and will have eight categories with turnover greater than Rs.10 billion (Rs.1,000 crore). Success may be limited in chocolates (4%), detergents (4%) and noodles (4%). Ghee, biscuits and ayurvedic medicine will be the main contributors to Patanjali’s turnover.
Bonanza Portfolio, in a note issued on 8th January, said that the FMCG industry has become more competitive with the launch of Patanjali products and that Patanjali is set to …show more content…
Ramdev Baba has over 5000 twitter followers, and keeps them engaged with regular updates and replies with respect to yoga as well as Patanjali. Baba Ramdev personally endorses the Patanjali products and encourages people to buy it buy creating a sense of civic consciousness to buy swadeshi goods.
5. Lower Pricing Strategy :
Although most FMCG giants fix higher prices in order to target high income groups, Patanjali has fixed its prices considerably lower as compared to the prices of these FMCG giants without compromising on the quality of these products. This makes Patanjali products attractive not only to lower income groups but also to higher income groups as well.
6. A Complete Swadeshi Product For Indians :
India is a country with a population of more than 1 billion people, 70% of this population resides in rural and semi-urban areas, where the reach and availability of foreign and MNC brands is limited, and the prices of their products are beyond affordability. However, the Patanjali range of products, have been made completely in India and are offered at low prices is the need of the hour. According to a study, some of the national and multinational fast moving consumer goods (FMCG) brands have started facing close competition from home-grown, and an absolutely ‘Swadeshi’
AN AYURVEDIC BRAND IN FMCG MARKET.
Dr Pooja Ramchandani, Assistant Professor At HR College.
INTRODUCTION :
In a country like India, The Fast-Moving Consumer Goods (FMCG) market is amongst the most difficult markets to crack as there is no lack of competition in this market and conquering distribution remains an uphill task. However, the Patanjali success story stands out as an exception. Apart from it’s massive surge in the brand’s revenue over the past five years, the herbal product brand has also managed to achieve brand loyalty which is something that remains a distant dream for most FMCG giants too. Although selling products at lower rates isn’t exactly considered a pricing strategy, but building …show more content…
There is no doubt that Patanjali is a disruptive force in the FMCG space and is a credible threat for the incumbents. IIFL is of the view that the growing appeal of ayurvedic and ‘natural’ products, along with factors like low price and allowing consumers to express Indian-ness in an increasingly nationalistic environment, will help Patanjali to boost its sales in the future. IIFL states that Patanjali’s highest impact will be on Colgate, since it has gained substantial traction in oral care; next most affected is Dabur, due to multiple category overlaps. ITC, Godrej Consumer Products Ltd and Nestle are least likely to be impacted due to few common categories. Their report states that our analysis suggests that by FY20, Patanjali will have high market shares in categories such as honey (35%), ayurvedic medicine (35%) and ghee (33%) and will have eight categories with turnover greater than Rs.10 billion (Rs.1,000 crore). Success may be limited in chocolates (4%), detergents (4%) and noodles (4%). Ghee, biscuits and ayurvedic medicine will be the main contributors to Patanjali’s turnover.
Bonanza Portfolio, in a note issued on 8th January, said that the FMCG industry has become more competitive with the launch of Patanjali products and that Patanjali is set to …show more content…
Ramdev Baba has over 5000 twitter followers, and keeps them engaged with regular updates and replies with respect to yoga as well as Patanjali. Baba Ramdev personally endorses the Patanjali products and encourages people to buy it buy creating a sense of civic consciousness to buy swadeshi goods.
5. Lower Pricing Strategy :
Although most FMCG giants fix higher prices in order to target high income groups, Patanjali has fixed its prices considerably lower as compared to the prices of these FMCG giants without compromising on the quality of these products. This makes Patanjali products attractive not only to lower income groups but also to higher income groups as well.
6. A Complete Swadeshi Product For Indians :
India is a country with a population of more than 1 billion people, 70% of this population resides in rural and semi-urban areas, where the reach and availability of foreign and MNC brands is limited, and the prices of their products are beyond affordability. However, the Patanjali range of products, have been made completely in India and are offered at low prices is the need of the hour. According to a study, some of the national and multinational fast moving consumer goods (FMCG) brands have started facing close competition from home-grown, and an absolutely ‘Swadeshi’