cavinkare not affordable to many of the people

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Last updated: May 26, 2019

cavinkareIntroductionBeing started a with theinvestment of 15,000 INR in the year 1983 as a small scale pharmaceuticalpackaging unit, CK. Ranganathan built an empire whose turnover is about 1450crores in the year 2017. He then started manufacturing pharmaceutical productsand cosmetics. Cavinkare’s first product was chik shampoo.

It has diversifiedis businesses into dairy, foods, snacks, and beverages and personal carebusinesses with the presence of 23 countries. Shampoo market beforeCavinKare entrySince 1960, The shampooindustry in India has evolved which was then considered a lifestyle product inurban India. Until 2005, the market was dominated by flagship companies such asP (Proctor and Gamble) and HLL (Hindustan Lever Limited). Later, the competitionhas broadened with the presence of multi-national companies and domesticcompanies such as Garnier and ITC Ltd.

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There is high capacity of growth in topand bottom ends of the industry, which is an advantage for companies since thepenetration rates are comparatively low.There exist a differentkind of categories in the shampoo market given below1.    Cosmetic2.    Herbal.3.    And Anti-DandruffThe target segment of shampoosis mainly the upper class, upper middle class, middle class and particularly,housewives and college goers during 80’s and they were all packed in a big sizeSKU where its not affordable to many of the people in India because of whichthe shampoo penetration in the India is low. A game changer strategy by cavinkareAs of 1983, the rural peoplerarely had the access to use the shampoo which is identified to be a potentialmarket which is still untapped.

CK.Ranganathan, the chairman of CavinKare foundthis as an opportunity and wished to tap the market with their products.CavinKare introducedthe most innovative packaging concept in India’s fast-moving consumer goods historyby launching its Chik shampoo in sachets for Rs 1 and 50 paise. This sachetrevolutionized the FMCG market and the sachets make up for more than 75percentof the total volume of the shampoo segment being sold now. Since then, sachetshave played quite a role in mobilizing FMCG products in India. Sachets have nowbecome popular in the skincare and haircare segment too, including face creams,face wash, hair color etc.

Given below are the keyreason which contributed to its success1.    Indian consumers arealways up for value for money. Through sachets, they get to use an expensiveproduct for a very low cost.

2.    Due to the low cost, newconsumers who have never tried the product brand are more inclined to give it atry. After a few uses, some of these consumers may upgrade to other products ofthe brand.

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