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Submitted to:
Prof. R. Kamble:
On:
August 9th 2009
Submitted By:
Sahiba Bakshi(08HR097)
History
Dabur is a classic case of a family owned business being handed over to professionals. It
is a company making timely strategic interventions to adapt to the business environment
and maintaining its brand equity over the years.
Dabur India Limited (DIL) is the third largest FMCG Company operating in India with a
turnover of more than Rs. 2,233 crores. It operates under three business categories
namely Consumer Care Division (CCD), Consumer Healthcare Division (CHD) and
Dabur foods Limited (in July 2007, Dabur announced the de-merger of DFL with DIL)
Dabur India Limited is one of the leading consumer goods companies of India with
interests in healthcare, personal care and foods. Dr.S.K. Burman established Dabur in the
year1884.
For more than a century Dabur has worked in active collaboration with nature to provide
the best of herbal health and personal care products to its consumers.
Dr. S.K Burman started Dabur in 1884 as a small pharmacy. Initially, he prepared
Ayurvedic medicines to treat diseases like malaria, plague and cholera that had no cure
during that period. It was his dedication, commitment and empathy that made Dabur a
renowned name among the masses. And today, after more than 120 years, Dabur is
known for its trustworthiness more than anything else.
During this passage of time, Dabur went through several structural and strategic changes
to maintain its market strength. The real mass production started in 1896. Early 1900’s
saw Dabur emerge as the first company to provide health care through scientifically
tested methods. It achieved significant improvements after setting up Research and
Development centers and manufacturing automation. The launch of Dabur’s Amla hairoil
and Chyawanprash was a boon to the expanding business. To keep up with the times,
Dabur computerized its operations in 1957. Its Dant Manjan and digestive tablets were
widely accepted as well.
However with a large product portfolio in the market, Dabur had to maintain operational
efficiency. To make sure it adjusted to the business environment it became a public
limited company in 1986 followed by diversification in Spain in 1992. A major change
came when Dabur came up with its IPO in 1994. Because of its position, Dabur’s issue
was 21 times oversubscribed. Dabur further divided its business into three separate
groups:
In 1998, for the first time in the history of Dabur, a non-family member took charge.
Dabur handed over the operations to professionals. Successful implementation of
procedures, timely changes and maintaining its essence, Dabur achieved its highest-ever
sales figure of Rs 1166.5 crore in 2000-01.
Dabur Amla was launched in 1950 and it began to be endorsed by India's beauty queens
in 1980.It comes under the consumer care division .The company shifted from glass to
PET bottles in 2000 and achieved the Rs 200-crore milestone in 2005, here after launch
of the new- look product in Gujarat, which has the company's six per cent hair oil market.
With their focus on value added categories,they expanded their portfolio in this segment
by adding: Amla lite - launched nationally in phased manner from May 2001. The unique
back label which is visible through see through bottle.
Also line extensions like Dabur Amla flower magic and Dabur Amla gold hair oil are
launched to add value.
Vision
It revolves around the notion of achieving Brand Equity in herbal and natural based
categories with vitality and health. In short, Dabur's main focus is on the phenomenon of
Ayurvedic that talks about products made from roots, herbs and animal skin, which are
nature-based.
Mission
“To be the leader in the Natural Foods & Beverages Industry.”
Striving to deliver this by:
FOOD
11% CCD
IBD
CHD
13% IBD
FOOD
CHD 7% CCD 68%
Others
Breakupof consolidatedrevenue
for FY07
Product Range
Competitive Scenario
India's hair oil market is worth Rs 2,200 crore, equally divided between perfumed and
coconut segments. The Rs 250 crore Amla oil is the largest brand of Dabur India's
portfolio. It is today the largest hair oil brand in India with over 35 million consumers.
Daburwith19%of hair oil market is a dominant player with Dabur Amla and Vatika
having strong brand equity. Dabur has a presence in almost all segments of hair oil.
A lot seems to be brewing within the company. The recovery is being slowly evident.
After a lacklustre FY 2002, Dabur’s key brands are recovering—especially the ones in
hair care. Competitive threats from Marico have been neutralised, with Dabur’s Amla
revenues up 8 per cent in the year so far. Continued momentum is expected in the hair-
care division on the back of share gains in shampoos and driven by new category-
defining launches .But most important, the demerger of the pharma business would
unearth the core capital productivity of the consumer business.
The hair-care products account for nearly 37 per cent of Dabur’s FMCG sales. In FY
2002, volumes of Dabur Amla hair-oil fell 3 per cent as Marico’s discount brand Shanti
Amla made impressive market share gains. In the same year, Dabur’s virtual monopoly in
the value-added coconut-oil segment faced a challenge when Marico launched its variant
Parachute Jasmine.
However, the company claims that Dabur Amla volumes have risen by 8 per cent in FY
2003, thanks to better packaging supported by a media campaign. Larger retailers were
making their foray into the FMCG market.
Apart from HLL, P&G, Marico and Himalya, ITC was also posing a challenge.
The supply chain of Dabur was becoming complex because of the large array of products.
Southern markets share in the sales figure was negligible. These factors posed a threat to
Dabur and hence small changes were not enough.
As FMCG sector was struggling with the slow growth in the Indian economy, Dabur
decided to take numerous strategic initiatives, reorganize operations and improvise on its
brand architecture beginning 2002. It decided to concentrate its marketing efforts on
Dabur, Vatika, Anmol, Real and Hajmola to strengthen their brand equity, create
differentiation and emerge as a pure FMCG player recognized as a herbal brand.
Major competitors
Category
Dabur’s Share
Main
Competitors
Hair oil
Coconut base
6.4% Vatika
HLL
Hair care
(overall)
27%
The year 2004-05 saw a whole new brand identity of Dabur. The old Banyan tree was
replaced with a new, fresh Banyan tree.
The logo was changed to a tree with a younger look. The leaves suggesting growth,
energy and rejuvenation, twin colors reflecting perfect combination of stability and
freshness, the trunk represented three people raising their hands in joy, the broad trunk
symbolized stability, multiple branches were chosen to convey growth, and warmth and
energy were displayed through the soft orange color. ‘Celebrating Life’ was chosen as a
new tag that completely summarized the whole essence.
Dabur India is repositioning its lead brand, Dabur Amla Hair Oil, since it was losing its
market share to Marico Industries' Shanti Amla.
Dabur Amla has also launched its hair oil brand extension christened Dabur Amla Lite
which failed to gain critical mass. The company has changed its packaging so as to target
the youth segment as well as dedicating to its products an image of "health and well
being”.
The 57-year-old Dabur Amla hair oil has given itself a face-lift with Rani Mukherjee now
gracing its new-look bottles.
Ahmedabad March 23 The yesteryear reigning queens of Bollywood — Jaya Pradha, Sri
Devi, Juhi Chawla and Karisma Kapoor — who endorsed this product on silver screen
since 1980, did not have the chance to grace the Dabur Amla bottles, which went with a
picture of an unidentifiable young woman.
But all that has changed as the brand ambassador Rani Mukherjee will now be reaching
out to the 35 million strong customers of Dabur Amla hair oil with her picture on the
bottles.
Dabur has extended its association with the Bollywood star with a brand restage and new
packaging. With the brand ambassador's face now on the front label, the company expects
to increase its current 18 per cent growth in the hair oil segment.
Brand Communication
Brand Equity
This was chosen after a study with Accenture, which revealed that Dabur was mainly
perceived as an Herbal brand and connected more with the age group above 35.
With a share of 35%, personal care division portfolio has the second largest contribution
to Consumer care division sales. The portfolio comprises three categories: hair care, skin
care and baby care. Hair care: The category comprises hair oils and shampoos. DIL
continued to keep pace with the hair oil market growing at 13% in line with category
growth. Most impressive was the 18% growth in Amla in 2007-08. Given that the Amla
franchise already posts sales of over Rs.250 crore, the growth is on a fairly large base.
Amla was promoted consistently over the year around the proposition of converting
mustard oil users. There was focused promotion across small towns and on special
festivals. The company also penetrated the rural markets and held rural beauty pageants
so that it portrays the brand as a local household product that can be used by rural women
who wants to look good. While the mustard oil conversion is intrinsic to DIL's strategy,
Dabur has also introduced mustard and amla hair oil mix under the Anmol brand. The
focus here is in establishing Dabur's oil as a credible herbal alternative to existing
shampoos in the market. The colour “green” along with the picture of “amla” helps in
conveying the herbal as well as ayurvedic amla connection.
Branding Strategies
Promotion Strategies
• T.V COMMERCIAL
• RADIO
• NEWSPAPER
• POP DISPLAY
• WALL PANTING
• VIDEO VANS
• SALES PROPOTION
• CONTEST IN MELAS OR HAATS
In order to further deepen the brand's penetration in the rural pockets, the company also
announced the launch of special low-priced packs
Analysis of strategy
When a banyan tree's branches hit the ground, they start acting as roots, too.After a while,
it is difficult to make out which is the tree's main source of nutrition -- the original roots,
or the branch-turned-roots. It is a particularly apt analogy for Dabur India, and not just
because a banyan tree has been the logo of the company for since its inception.
In Dabur's case, though, the banyan tree stands for what has not been achieved. The
company has been branching out -- it has seven brands in the oral care category, nine in
the hair care space and six brands in foods.
In fact, the Rs 1,852-crore (Rs 18.52 billion) company has a presence in categories
ranging from mosquito repellents and juices to face packs and honey, some acquired and
some developed in-house. Trouble is, not one of these categories contributes more than
21 per cent to the company's revenues.
What is better: a few power brands that are nurtured to offer huge returns or a wide array
of products all of which contribute meager sums that, nevertheless, adds up to a
reasonably good total?
There is a school of thought that believes Dabur's choice may not be the best way of
ensuring future growth: too many segments will constrain it from scaling up significantly
to match increasing competition and that will bring down overall pace of growth. Hear
some analysts on the subject.
It is probably better for a company to create a few champion brands rather than dissipate
its energies on too many products, because that is what will result in sustainable margins.
It is difficult to scale up organically these days because brands are constantly being
upstaged. Now, if companies don't scale up, margins are going to be under pressure.
They do have several categories but they don't believe that thier portfolio is unwieldy or
too complex.
What works for Hindustan Lever doesn't necessarily work for them. Their strategy is
based not on the size of the individual products, but on the size of the brands. They are
using our two master brands -- Dabur and Vatika – to grow categories, rather than single
products.