Marketing Case Study: Patanjali Ayurved

1727 Words 7 Pages
Patanjali Ayurved has become a force to reckon with in Indian FMCG, food and health

segments, even without having invested in the traditional advertising channels for years. The

only advertisement mediums used for a long time were the ‘word-of-mouth’ and advertising

through the yoga camps of Baba Ramdev. Now, crores have been allotted for Patanjali’s

advertising across various media channels and one can only imagine the potential heights it

would reach. Its revenue grew from Rs. 450 crore in 2011-12 to Rs. 2000 crore in 2014-15 and

it’s been predicted to be Rs. 6000 crore in 2015-16. This unprecedented growth story is giving

sleepless nights to the leaders of India’s FMCG businesses. The last time a company’s entry had

caused
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Chyavanprash and Honey by Patanjali have been priced 25% and 43% lesser respectively, than

Dabur. The ‘Atta Noodles’ is priced 36% lesser than Maggi. This gave encouragement to many

to try out Patanjali products. Patanjali managed to keep its costs low by not hiring expensive

management professionals and adopting unconventional distribution mostly through its own

stores. Today, as Patanjali prepares itself to take on the giants in the Indian FMCG sector, it

targets to make its products available in 2 million stores by end of 2016.

Colgate Palmolive India with a history of 75 years is facing a huge threat from this relatively

new entrant. According to recent reports from IIFL and Credit Suisse, Patanjali is gaining market

share at the expense of Colgate Palmolive India. Patanjali already has a market share of more

than 5% despite its limited distribution. It is estimated to hit double digits within the next few

years. According to Credit Suisse, Colgate, which has 57.6% market share, saw a
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Even

though due to falling commodities prices, personal care products are getting cheaper to make and

the cost savings are being passed on to consumers, rising competition from Patanjali products are

causing Colgate Palmolive India’s growth to slow down.

According to IIFL, Patanjali could derive almost 39% of its turnover from the market-share gains

from the listed FMCG players across categories and could reduce the cumulative sales of the

companies by Rs. 7900 crore. It says that the credibility of Patanjali lies in the fact that it does

not try to beat other FMCG companies at their game but is changing the game for them. It

expects Patanjali’s revenue to grow nearly 10 times in the next four years. As the MNCs battle

Patanjali on its own turf, their costs would rise as they are forced to launch or acquire and

advertise new products. Also, the common strategy by the FMCG companies has been to allure

the customers by flaunting the clinical research that they have done on their products. Changing

track and going herbal may ultimately be rejected as inauthentic.

64.5

CAGR (%)

22.7

20

15.2

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