PROJECT REPORT

MARKETING MANAGEMENT – 1

Submitted by:

Group 12
ANKITA SINGH | B18132
HARITHA | B18144
PRABHAV SHUKLA | B18156
SHIVEN MITTAL | B18168
VIGNESH SRIDHARAN | B18180
RUPSHA ACHARYA | FB18005
 TABLE OF CONTENTS

PART 1 Situation Analysis

1.1 Defining the Product and Competitors 1
1.2 Aggregate Market Factors 3
1.3 Macro-Environmental Factors 5
1.4 Micro-Environment Analysis 8
1.5 Competitor Analysis 10
1.6 Consumer Analysis 13
1.7 STP Analysis 17

PART 2 Recommended Strategy

2.1 Product 20
2.2 Place 22
2.3 Price 25
2.4 Promotion 26

Conclusion 29
Acknowledgements 30
References 31

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 PART 1
SITUATIONAL ANALYSIS

1.1 Defining the Product and Competitors

In recent times, much has been made about Patanjali’s entry into the FMCG sector with its line of
ayurvedic homegrown products. This has taken the entire industry by surprise and has resulted in
the erosion of the market share of other players, including MNCs like HUL and Procter and
Gamble. This overwhelming response to Patanjali’s entry can be attributed to the following
factors:

• There exists a significant market for ayurvedic and herbal products

• A homegrown indigenous company is likelier to be preferred over foreign brands

Given these inferences, we felt it would be interesting to explore the consumer insights behind this
mania for ayurvedic products. Moreover, we wanted to study how these developments have
affected Dabur, another ayurvedic giant in the FMCG space. After considering a variety of
products from Dabur cosmetics and hair oils to Chyawanprash, we decided to pick the fairly
mundane, yet necessary product category of toothpaste. The product in focus in this report is the
age-old Dabur Red Toothpaste that has been synonymous with ayurvedic dental care for years.

Competitors to Dabur Red would include all the products available in the market that offer to
satiate the same consumer needs. Thus, this would include all brands of toothpaste, ayurvedic or
not, and other offerings such as dental powders, creams and even sticks of neem trees! We,
however, confine our discussion to the ambit of toothpastes widely available in the Indian market,
for the sake of simplicity and given the massive size of the toothpaste industry. Thus, rivals for
Dabur Red would include all products of Colgate, Pepsodent, Close-Up, Himalaya, Patanjali and
other brands of toothpastes.

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1.2 Aggregate Market Factors

The supply and demand conditions of any product in any market is a function of certain
macroeconomic factors that are prevalent in the market at the time. These factors are collectively
grouped as the aggregate market factors. These factors include the aggregate market demand for
the product segment, the growth prospectus, cyclicity and variability with market conditions, the
product life cycle, seasonality, profitability, performance ratios and so on. These factors give a
holistic overview of the prevalent market conditions and can help one infer the prospects for both
existing players and for potential new entrants. In this section, we have briefly elaborated on some
of these factors in detail to give a perspective of the existing and forecasted demand for the
toothpaste sector, while focusing on the market penetration of Dabur Red.

1.2.1 Market Size and Growth Prospectus

India’s oral-care market was estimated to be valued at Rs. 10,000 crores (1.57 billion USD) as of
FY2017. Conventionally Colagate-Palmolive’s extensive line of toothpastes has been the runaway
leader in this segment. In FY13, Colgate had a market share of 56.1 %, HUL had a share of 22.8
% and Dabur had a share of 13.8 %1. However, this sector has seen a huge disruption since
Patanjali introduced its “Dant Kanti” brand of ayurvedic toothpaste. As a result, market shares
have steadily decreased for larger MNC’s like Colgate and HUL, while Patanjali has been
gradually eating into the market. In 2016, Colgate’s share had become 55.1 %, HUL had dropped
to 19 %, while the market shares of Dabur and Patanjali had increased to 15 % and 3.7 %
respectively2. Thus, it is evident that Patanjali has not only created a market for itself but has
created a bit of a niche for ayurvedic and herbal products. This was resonated by Dabur CEO, Mr.
Sunil Duggal, in an interview with analysts.

Products with natural ingredients, now in fact, account for a fifth of the entire toothpaste market
in India. In terms of individual brands, the top products in the market are Colgate Dental Cream
and Close-Up with market shares of 29 % and 13 % respectively. Dabur’s flagship Red Toothpaste
ranks next with a market share of 8.5 % in fiscal year 2017. Dant Kanti was the fastest growing
brand, however, with its market share increasing to 3 % from 1.5 %. In fact, Dant Kanti accounted
for Rs. 940 crores out of Patanjali’s 1000 crore turnover in 20171.

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1.2.2 Growth Prospectus

As of July 2016, the Indian oral healthcare industry was projected to grow at a compounded annual
growth rate (CAGR) of 6 % till 2020. This steady growth comes at the back of India’s general
macroeconomic stability and the fact that the average Indian’s disposable income is increasing,
and more people are willing to buy premium products. This growth is predicted to significantly
boost the demand for ayurvedic toothpastes.

The growth prospectus for ayurvedic toothpastes in particular is extremely positive, as reflected
by the fact that ayurvedic products have a market share of 20 % in 2017, as opposed to zero ten
years ago3. Dabur and Patanjali make up 80 % of this space. This is further resonated by the fact
that Dabur’s market share further grew to 15.4 % and Patanjali’s grew to 7.4 &% in fiscal year
2018, which emphasizes the growing market for ayurvedic toothpastes. This increasing demand
for ayurvedic and herbal products is a direct fall-out of the disruption caused by Patanjali. Riding
on its nationalistic rhetoric and homegrown tag, Patanjali has helped create a renewed demand for
ayurvedic cosmetics and this has worked well for players like Dabur.

1.2.3 Cyclicity and Seasonality

Toothpastes are items of daily use. Irrespective of the season, vagaries in consumer demographics
or economic cycles, dental care and hygiene is a fundamental human need. The importance of
maintaining oral hygiene has been reiterated to the general public by various government and
NGOs. Thus, irrespective of uncertainties in the economy or weather, the demand for toothpastes
by and large remains unaffected.

1.2.4 Profitability

Toothpaste margins in general have been reducing over the past 5-6 years on the back of increased
competition and increasing demand. As companies look to retain market share, they are forced to
offer discounts which hampers their profit margins. V Srinivasan, an FMCG analyst at Angel
Broking was of the opinion that this trend can be expected to continue in the medium term.

An example of this is the case of Colgate in 2013. Colgate reported higher advertising costs, lower
EBITDA and lower margins (19.2 %, down by 226 basis points). While the volume of sales

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remained strong, the negative impact of discounts meant a reduction in margins. Thus, for any firm
in this sector, maintaining a high sales volume is essential to ensure profitability4.

1.3 Macro-Environmental Factors

The major external and uncontrollable factors that influence an organization's decision making,
and affect its performance and strategies are generally referred to as Macro-environment factors.
These factors can affect the market demand for the product or even create the need for it.
Marketeers can even analyze these factors to recognize latent needs of the customer base. It is
important for the company to identify these forces and hack them for maximum market penetration
and to maintain market share. The macro environment is made up of six different forces –

1. Demographic
2. Economic
3. Ecological
4. Technological
5. Socio-cultural
6. Political

We discuss these forces further and analyze them with respect to our chosen product, Dabur Red
Toothpaste.

1.3.1 Demographic Forces

Demographic forces are related to the general population and the characteristics they possess. This
refers to the changes in the general population, more specifically changes in age distribution,
household patterns, ethnic distribution of an area, changing family structures and geographic shifts
in population and so on. Marketers need to keep in mind to target the correct age group and keep
track of the change of age of their target market. This is due to the fact that preferences and
perceptions change as people grow older. The study of people is very important for marketing
because people are the consumers that drive the business forward. Another important factor is the
geographic shift that arises from people migrating.

The demographic forces that affect Dabur Red could be based upon age group. Families generally
buy one brand of toothpaste for the whole family. In the case of joint families, the elders might

5
prefer an ayurvedic toothpaste and this might sway the purchasing decision of the family. On the
other hand, younger people, generally the ones who have just started working and are living alone
might not prefer the ayurvedic tasting toothpaste and might opt for another brand instead.

1.3.2 Economic Forces

This affects the purchasing power of the consumer. It is important to analyse the economic
condition of a market before launching your product, especially if your product is one that
customers use their disposable income to buy. That is, if the product we are selling is not a daily
necessity, customers might choose not to buy it during tough financial times. Therefore, it is
important for a company to closely track the financial health of the market to ensure maximum
profitability.

Since toothpaste is a product that is required on a daily basis economic forces can only affect the
consumer demand of Dabur Red to an extent. 200 g of the product costs around 90 Rs, therefore,
unless extreme financial conditions affect the market, people who prefer the ayurvedic tooth paste
will continue to buy that itself.

1.3.3 Ecological Forces

This is related to the raw material that go into the making of the product. The company should
keep track of the ecological environment. Recent years have seen growing concerns for the
environment as well. This should also be taken into consideration while marketing a product. In
case there is a shortage for the raw materials, the production process will be affected. Customers
have also started demanding more eco-friendly products and aligning with this will help increase
or maintain the demand for the product.

Since Dabur is for the most part, an ayurvedic company, the responsibility to optimize usage of
natural resources is very high. They also started an initiative called Sundesh, the Sustainable
Development Society to carry out welfare activities and to ensure that all their products are
sustainable in the long run.

1.3.4 Technological Forces

This refers to new technology that may help create new market or product opportunities.
Technological advances happen all the time and if companies do not keep up with these advances,

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their products will lose the demand they currently enjoy. Dabur regularly innovates their products
in order to keep up with the competition, especially from non-ayurvedic products.

1.3.5 Socio-Cultural Forces

Social and cultural forces vary from region to region. In a diverse country like India, companies
must be even more careful while analyzing the socio-cultural factors that might affect their product
demands. Furthermore, changing socio-cultural forces may also open up new markets or the space
for new products. Dabur International is headquartered in Dubai, UAE. The presence of Dabur in
other countries also means that the company should treat the countries and their socio-cultural
forces separately and design independent strategies for products and markets in the same.

1.3.6 Political

The political environment consists of government laws, pressure groups and other agencies.
Sometimes these bodies can be restricting and sometimes they can applaud growth in the form of
tax cuts and subsidies. When a company enters a new market, it must be well aware of the laws
and legislation that govern the same. Different places will have different taxation and production
policies and companies must be well-informed about the same so as to not cause controversy.

The current trading policies of the government favour Dabur and will help it expand and grow.

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1.4 Micro-Environment Analysis

Dabur Red toothpaste claims to be a blend of traditional Indian Auyrvedic medicine (like Laung,
Pudina and Tomar) and modern pharmaceutical technology. It’s been a successful product ever
since its launch and it became a billion-rupee brand in the year 2009, within five years of its
launch5.

Let’s look at the microenvironmental factors affecting this product:

1.4.1 The Company

• Dabur India Ltd. was established in 1884 – so it has over 133 years of experience and
hence, it also has the trust of the customers as a reputed brand
• In Ayurveda product segment, Dabur is the world’s largest natural healthcare company and
it has over 250 Ayurvedic and herbal products in its portfolio6
• Dabur has 12 manufacturing locations in India
• Strong financial performance: In 2018, Dabur has a market cap of $9.7 bn7
• Dabur has strong brand equity: Vatika and Real are superbrands ($10 bn +)
• It has a strong overseas presence with nearly 30% contribution to the overall sales
• Dabur has 19 world class manufacturing facilities which caters to the needs of diverse
markets

A look at some of the popular Dabur products in different categories:

• Health supplements: Dabur Chyawanprash, Dabur Honey, Dabur Glucose D

• Oral care: Dabur Red Paste, Lal Dant Manjan, Babool Toothpaste
• Hair care: Dabur Amla Hair Oil, Almond Hair Oil, Vatika oil and shampoo
• Skin care: Dabur Gulabari, Fem cream
• Home care: Odonil, Odomos
• Medicine: Dabur Triphala Churna, Dabur Ashwagandharishta, Honitus
• Digestives: Hajmola, Pudin Hara
• Food: Real, Activ

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1.4.2 The Suppliers

Dabur has a wide vendor base which consists of more than 1,000 suppliers. These suppliers supply
the raw and packing material and also supply services to Dabur.

The Central Procurement & Planning Division (CPPD) maintains the lines of communication and
transparency with these suppliers.

E-procurement platforms which are internet-based are extensively used by the company to procure
the materials and services. This provides a free and fair forum for all suppliers to participate and
compete. The Company has also arranged lines of credit and financing for its suppliers at lower
rates and this has been availed by many vendors during the year8.

1.4.3 Marketing Intermediaries

Dabur uses its sales force and its distribution network to market its products.

It has a sturdy grasp on its market intermediaries e.g. wholesalers, retailers and finally dealers. It
is by using all these channels, a Dabur product passes through multiple points and at last reaches
the consumer. Their network for distribution and supply is quite extensive as shown. Thus, the
products are delivered from one location to another with ease9.

Distribution network of Dabur: 3,000-plus distributors, 6 mn retail outlets and directly covering
over 40,000 villages7

1.4.4 Customers

More and more consumers are moving towards herbal products not only in the healthcare segment
but also for personal care items. Millennials are gravitating towards natural & herbal products
because of their concerns about health & ill effects of chemicals3.

There is a growing consumer awareness about the adverse effects of fluoride, which is present as
the main ingredient in most of the toothpastes. This has led many of the today’s consumers to
switch to herbal and natural products.

The oral care market in India is in the growth phase, and it has the potential for a strong increase.
The dearth of oral hygiene, particularly in second-tier cities and small towns, has stimulated the
businesses towards distributing the resources to increase consumer awareness in these areas9.

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Conclusion:

With this microenvironmental analysis, we can say that there is lot of potential and growth
opportunity for Dabur Red toothpaste in India. In addition to this, Dabur has appropriate resources
and a robust network to leverage this opportunity. The product is likely to show impressive growth
in the coming years.

1.5 Competitor Analysis

The toothpaste industry in India is not as old as one might think. The first modern day toothpaste
was introduced in India in the year 1975. It is interesting to note that the prior to this the Indian
oral hygiene was dominated by Ayurvedic and herbal products. The first toothpaste introduced in
the Indian market was Colgate. Since the introduction of toothpaste and various multiple
competing brands the oral hygiene awareness amongst the population has seen a stark increase.
Initially the oral hygiene category saw tremendous growth with a CAGR of over 18%, but over
the last 3 years this category has seen a decrease in growth with the average growth over last 5
years of only 10% and FY 2106-17 showing a meagre 3% growth. This slowdown in growth in
the category is primarily because of high penetration (92% in Urban and 74% in Rural) and
immense competition because of new entrants such as Patanjali.

Today the toothpaste category can be broadly classified into 4 segments –

1. Medicinal Toothpaste e.g. Sensodyne

2. Herbal Toothpaste e.g. Patanjali Dant Kanti
3. White Toothpaste e.g. Colgate
4. Gels e.g. Pepsodent

The major companies which compete for market share are –

1. Colgate-Palmolive
2. Hindustan Unilever
3. Patanjali
4. Dabur
5. Gillette
6. Sensodyne

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We can categorize the market for toothpastes as a consolidated market with the top 4 firms having
92% of the market share. The Market share of these players are given in the pie chart.

Source: HDFC FMCG Sector Review Report 201710

Fig. 1.1 Market Share of various toothpaste brands

The herbal toothpaste segment has seen tremendous growth in the last few years. Today it
comprises 20% of the toothpaste market share compared to 0% about a decade ago. Patanjali and
Dabur comprise more than 80% of this segment. The entry of Patanjali has brought a change in
consumer mindset that anything that is herbal / ayurvedic is good for you compared to the others.

In order to capitalise on this growth in the herbal category, compete with Patanjali and prevent
market share erosion, the two market leaders Colgate-Palmolive and HUL have also launched their
own versions of herbal Toothpastes. Colagate has launched the Colgate Swarna Vedshakti and
HUL under its herbal Lever Ayush brand has launched the Lever Ayush toothpaste.

Some of the different toothpastes and their price per grammage is given in the table below –

As we can see from table 1.1, the toothpastes which project themselves as a medicinal product like
Sensodyne, Colgate Sensitive Original and Dant Kanti Advance come at a premium.

Colgate has a play across the entire spectrum of prices and categories. It has toothpastes varying
from Rs. 25 to Rs. 124 per gram and a presence in all segments across medicinal, herbal, white
etc.

In India, toothpastes also face competition from certain substitute products like Tooth Powder
(Dant Manjan) which is still used in rural areas and Meswak which is the branch of an evergreen
shrub.

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 Toothpaste Brand MRP (Rs.)/ 100gm
Sensodyne 131
Colgate Sensitive Original 124
Patanjali Dant Kanti Advance* 90
Colgate Total 71
Colgate Max Fresh 63
Lever Ayush* 60
Colgate Max Fresh (Peppermint) 59
Colgate Swarna Vedshakti* 55
Meswak 47
Dabur Red 46
Colgate Active Salt 45
Colgate Herbal 44
Pepsodent Germi Check 42
Patanjali Dant Kanti Dental Cream* 38
Patanjal Dant Kanti Junior* 35
Colgate Cibaca Vedshakti* 31
Colgate Cibaca 25
*New Entrants in the Market

Table 1.1 Price of various toothpaste brands

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1.6 Consumer Analysis

1.6.1 Primary Research: Personal Interviews

Dabur Red is one of the top selling toothpastes in India. It is quite an old variant of toothpastes
offered by Dabur, the others being Dabur Babool and Meswak.

Dabur Red attracts consumers for being made of indigenous ayurvedic ingredients. To study the
consumer behavior of this product, we surveyed around 8 consumers (both male and female), of
varied age, profession and lifestyle. The ages of the consumers surveyed varied from 21 to 72
years. The consumers talked about their experience and feedback of the product, time since when
they have been using it, attractive properties and their association with the brand.

Dabur Red Toothpaste, as we already stated, is available in the market since a long time, with
slight modifications being made in the product concoction, packaging or price from time to time.
There are consumers that have been using the product for over 20 years and through generations.
The key selling point of the product is it, being an ayurvedic product, poses to be a natural solution
to regular oral problems and being devoid of any chemicals. Hence, consumers believing in the
age-old natural ingredients to cure oral problems form the customer base of Dabur Red. There
were consumers who were suggested to use the product by their grandparents or elders.

Some consumers admittedly felt that the toothpaste usage led to healthier and stronger teeth, relief
from sensitivity, painful and swollen gums. On the contrary, some of them felt that it was
ineffective in such oral problems and thereby switched to either other brands or another variant of
Dabur. However, the fact that it contains traditional Indian ingredients like cloves, ginger, mint
extracts and other similar herbs and spices makes it one of the sought-after products in the herbal
toothpaste market which has grown by leaps and bounds in the past few years. Consumers relate
the presence of spices and herbs in the product to the peculiar taste and a hot sensation in the
mouth. Some find the flavor too strong due to its formulations.

The consumers often associated the red color of the dental cream to its ayurvedic properties.
Children are fascinated by the red color and therefore ask for this particular product, as cited by
the consumers. It leaves the toothbrush bristles tinged with red. Some consumers feel that the
company keeps experimenting with the taste from time to time. The product though accepted as
an efficient one as an oral solution to regular problems, it doesn’t give a feeling of fresh breath as

13
compared to the other toothpastes. Some consumers said that they felt the need to brush again after
5-6 hours due to the lost freshness. It did not give day long freshness. A few consumers also related
this to the confidence to talk to people which lacked in case of Dabur Red.

Though most of the consumers were quite convinced with the efficacy of the product and its
suitability as a regular dental cream, nearly all of them were dissatisfied with the quantity offered
for the given price. They found it expensive as compared to the other options available in the
market. Most consumers also agreed to the fact that they are attracted by the free gifts that Dabur
Red offers along like toothbrushes, shampoo sachets and hair oil. Children particularly ask elders
to buy this because of the free gifts.

All the above aspects have made Dabur Red one of the strong competitors in the Herbal or
Ayurvedic Dental Cream market. However, due to certain shortcomings of the product, consumers
have occasionally shifted to other products.

To sum up, following are some of the inferences drawn from the consumer interaction:

The praiseworthy features:

• Ayurvedic Product, herbal formulation made of natural ingredients

• Old product, being used in households since years and generations
• Recommended by elders, grandparents
• Consumers feel their teeth become healthier and stronger
• Solution to teeth and mouth problems like bleeding and swollen gums, mouth odor
• Attractive color that children generally like the product for
• Free gifts offered with packs like toothbrushes, hair oil, shampoo

The shortcomings:

• Ineffective in teeth problems like swollen gums and sensitivity

• Lack of long lasting mouth freshness as compared to other products
• Higher cost
• Taste

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In a nutshell, some of the consumers are religious users of the products, while others admitted have
shifted to some other brands.

1.6.2 Secondary Research: Factor Analysis

A factor analysis was conducted by Dr. Rashmi Aggarwal from DAV College, India, as part of a
research on the consumer behavior when it comes to brand choices between toothpaste brands11.
This research work which includes a survey of 550 respondents, thoroughly investigated the
various factors that play on a consumer’s mind while making decisions on choosing between
toothpaste brands. Their analysis concluded on the following weights to the different aspects of a
toothpaste:

Table 1.2 Factor Analysis of Consumer Preferences

The above analysis divides the consumer preferences about toothpastes into four aspects, viz.
Functional Aspect, Ingredients, Value and Easiness.

• Functional Aspect

From the above analysis, it was observed that when it comes to function, most consumers gave a
lot of importance to a feeling of freshness after brushing and to the whitening power of the paste.
The flavor and prevention of tooth decay were factors which were not perceived to be as useful
for the respondents.

• Ingredients

When it comes to ingredients, it was shown that the consumers valued herbal ingredients the most.
Thus, the survey highlighted the current trend of Indian consumers preferring herbal and ayurvedic
products.
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• Value

In terms of value, the respondents primarily cared about the price of the toothpaste. Thus, it seems
that all other factors remaining constant, consumers would pick the offering with lower price. The
second most important factor when it came to value was the reputation of the brand that
manufactured the paste.

• Easiness

The main consideration for respondents was the ease of access to the particular brand of paste.
Familiarity of the brand also helped them pick one brand over another.

1.6.3 Key Takeaways

The following could be inferred when we juxtapose the results of our secondary research with our
interview findings:

• Consumers valued Dabur for its herbal ingredients, which is also the functional factor with
highest weight.

• However, some of them find the clove flavor too strong and do not find the Dabur Red
paste refreshing.

• The price of Dabur Red is Rs. 45 per 100g while that of Patanali Dant Kanti is Rs. 38 per
100g. As seen from our secondary research, consumers prefer lower priced offerings and
Dabur Red takes a hit in this regard.

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1.7 Segmentation, Targeting and Positioning

1.7.1 Segmentation

Toothpaste being an essential commodity, it is safe to assume that the vast majority of the Indian
population are users. The demand is independent of vagaries in weather, economic cycles and
other socio-political factors. Thus, the kind of toothpaste one buys is largely decided by the
personal disposable income of the individual. As indicated by the factor analysis cited earlier, a
consumer looks for price for value while evaluating her options. Thus, the best way to segment
Indian toothpaste market would be along the lines of average household income. In our work, we
have drawn on data from BCG12 to segment the Indian population.

Indian FMCG Market

Income Demographics
160

140
Population (Millions)

120

100

80

60

40

20

0
Elite (>20) Affluent (10-20) Aspirers (5-10) Next Billion (1.50-5) Strugglers (<1.50)
Annual Income (Lakhs INR)

Population 2016 Population 2025

Fig. 1.2 Income-wise segmentation of Indian households

As seen above, Indian households are segmented into five categories, namely the elite (income
more than 20 lakh rupees p.a.), affluent (income between 10 and 20 lakhs rupees p.a.), aspirers
(income between 5 and 10 lakhs rupees p.a.), next billion (income between 1.50 and 5 lakhs rupees
p.a.) and strugglers (income below 1.50 lakhs rupees p.a.). India’s middle class (next billion and
aspirers) account for 60% of the population today, accounting for 160 million houses. This number
is expected to go up to 201 million by 2025.

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1.7.2 Targeting

Given the projected spurge in the number of middle class households, it makes sense to target this
section of the market for a company like Dabur. Apart from the fact that the Indian middle class is
most of the population, it is also the segment that has driven the growth of ayurvedic penetration
into the FMCG market. Thus, Dabur must ensure it targets this segment with its products. We
propose two lines of targeting, one for the existing Dabur Red paste and the other for a proposed
premium specialty paste.

1. Target the entire middle class with the existing product

2. Target the aspirers and dental patients through the specialty product

Estimated Dabur Red Market Size:

Current middle-class households: 160 million

Projected number in 2025: 200 million

Avg consumption/household (assuming one time use for average of 4 members per household:
1168g per year

Taking an average price of Rs. 45 per 100 g of toothpaste, the market size is Rs. 8410 crores

By 2025, assuming 4% inflation, we can calculate this to grow to Rs. 15560 crores (CAGR 6.34%)

Thus, targeting this segment would give Dabur Red the ideal opportunity to maximize market
share and revenue.

1.7.3 Positioning

Dabur advertises Dabur Red as an ayurvedic dental cream that can fight up to 7 dental illnesses.
They also cite various independent research results as proof for this claim in their ad. Thus, the
product is positioned as a herbal product. Moreover, one ad shows Dabur Red being compared to
a toothpaste resembling Dant Kanti, with Dabur citing the research findings as adding more
credibility to its quality as compared to its rival. Thus, Dabur seems aware of the threat of Dant
Kanti and has sought to address this issue. We feel Dabur should continue with the same
positioning for Dabur Red, and must adopt a high-performance ayurvedic premium positioning for
the proposed specialty product.
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 PART 2
RECOMMENDED STRATEGY

The Patanjali-driven boost in demand for ayurvedic FMCG products has seen Dabur Red do well
in recent years. However, Patanjali’s Dant Kanti is catching up at an unbelievable pace and Dabur
must act to safeguard its position as the market leader in ayurvedic pastes. Moreover, there is a
premium specialty segment of pastes that Dabur has not explored.

Thus, the main challenges for Dabur are:

• Handling the threat of Patanjali Dant Kanti

• Penetrating into the market for premium toothpastes

• Increasing consumer satisfaction by meeting perceived shortcomings

To address the same, we suggest two recommendations to Dabur

1. Reduce the price of Dabur Red

2. Introduce a premium specialty product called Dabur Green

By reducing the price, Dabur Red will be almost as cheap as Patanjali Dant Kanti. This would
increase sales volumes and retain market share. Introduction of Dabur Green would focus on
addressing the consumer perceived shortcomings, while allowing Dabur to explore a new avenue
that had been unexplored till this point.

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2.1 PRODUCT
2.1.1 Consumer Targets
Toothpaste is a universal and essential personal care product with a relatively high penetration in
India (92% in Urban and 74% in Rural). It is consumed ubiquitously by all major customer
segments across all demographics - geography, gender, religion, income, occupation etc. Given
this our target consumer for the toothpaste is the entire Indian population. According to estimates
the total toothpaste market is expected to grow to over 2.5bln USD by 2025 at a CAGR of 6.5%.

Toothpaste is a product which is purchased for the entire household and is usually purchased by
one member of the family every month usually on the first weekend of the month. Based on this
insight we have segmented our target buyers on 2 levels –

1. The Decision Maker – This is the person who decides for the household which toothpaste
to buy at the beginning of the month which will be used by every member of the
household. The decision maker is usually the housewife / lady of the house. She will be
the primary target of our advertisements and center of most of our promotional initiatives.
2. The Influencer – This is the person who can influence the decision of the decision maker.
Given that our product is in the herbal category, it is very relatable to the elders of the
household who used the ingredients present in our toothpaste as a substitute for
toothpaste when they were kids. They are aware of the benefits of these herbs and hence
can suggest the use of our product. Also given that in India elders of the household are
highly respected and still have a say in these matters they can be strong proponents of our
product.

2.1.2 Competitor Targets

Dabur is a company that has been present in the herbal category since its very early days and has
a very strong foothold in the market. But in the last few years with the entry of Patanjali as a
market challenger and the disruption it has cause, the market leader position of Dabur has come
under threat. While this may appear to be a threat, but it is also a great opportunity as the overall
size of the pie has increased substantially and it gives Dabur the opportunity to ride this wave of
growth.

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The strategy of Dabur should be to retain its position as the market leader versus Patanjali. It can
do this by capitalizing on the brand equity that Dabur has built over decades. There also various
other products which can be seen as a potential threat like the herbal toothpastes launched by
large FMCG companies like Lever Aayush and Colgate-Palmolive.

Dabur Red: Compete with toothpastes like Colgate Active Salt, Colgate Herbal, Patanjali Dant
Kanti Dental Cream, Colgate Cibaca Vedshakti.

Dabur Green: Compete with toothpastes like Sensodyne, Colgate Sensitive Original, Patanjali
Dant Kanti Advance, Colgate Total

2.1.3 Product Features

For the proposed product, Dabur GREEN, we intend to utilize the observations made from the
secondary research (refer to Table 1.2). As mentioned earlier, the factors that customers give the
most importance to while deciding on the toothpaste that they will purchase, and use are as follows-

1. It gives them a feeling of freshness

2. It contains herbal ingredients
3. The price of the brand is reasonable
4. It is easily available

For the purpose of designing our product features, we will consider the first two observations while
the other two will be picked up in the sections pertaining to Price and Place respectively.

Customers want the toothpaste they use to leave them feeling fresh. A few customers had also
expressed that they did not prefer the strong taste of clove in Dabur RED. Taking this into
consideration we have decided that for Dabur GREEN, we will reduce the intensity of clove and
increase the peppermint content.

The active ingredients of the new ayurvedic toothpaste could be -

• Peppermint oil – Provides long lasting freshness

• Clove Oil - Helps in fighting germs and useful in gingivitis
• Pudina Satva - Helps prevent Bad breath & Toothache
• Tomar Beej (Zanthoxylum alatum) - Helps prevent dental diseases
• Sunthi (Ginger) - Helps prevent toothache

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Furthermore, another valuable feedback we had received during our primary research was that
customers felt like Dabur RED was not very effective when it comes to fighting issues like
sensitivity. To address this issue, Dabur GREEN will introduce Potassium Nitrate. Potassium
Nitrate penetrates the teeth and blocks the neural transmission in the nerve that causes sensitivity
and as a result, soothes the nerve. Colgate Sensitive Toothpaste -Complex protection is the main
product in the market that provides maximum-strength amount of potassium nitrate allowed in a
non-prescriptive toothpaste. Our aim is to rise up to match this position and provide our customers
with a better ayurvedic product to meet their needs.

Value proposition

“Advanced protection from sensitivity with prolonged freshness. All Natural.”

We offer a toothpaste that not only recognizes the benefits of natural and herbal ingredients but
also maximizes the benefits from these ingredients to combat sensitivity and provide long lasting
freshness. The presence of peppermint oil will ensure that our customers are left feeling fresh for
a longer period of time. Maximum-strength amount of Potassium Nitrate (5%) will help fight
against sensitivity and provide relief over prolonged use.

Recognizing the shift in consumer trends, we cater to customers who have accepted the
advantages of ayurvedic and natural products and are making conscious decisions to buy and use
products that entail the same.

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2.2 PLACE

Dabur Red toothpaste is a Pan-India product. It already has a huge customer base, being the largest
brand of herbal toothpaste in India, followed closely by Patanjali. It can leverage its market leader
position in Ayurvedic oral care for its new product, Dabur Green, and the new Dabur Red, with
slight changes in properties and ingredients as proposed. It can roll them out in the same market
with redefined customer segments as per the strategy. Moreover, Dabur should look at going
further inroads into the rural Indian market with these product offerings in the oral care segment.
To capture the rising market demand for herbal products that now constitute 20% of the toothpaste
market in India, Dabur should look at channelizing this market potential towards increasing its
own market share, especially in geographies where it has lower shares, by devising specific
marketing strategies targeted at those areas.

Dabur7,9 has a wide channel of distributors or retailers spanned across India. The well-knit
distribution network, which is extensive and incomparable, is one of the strengths of Dabur. It does
not need to create a new one for the new products suggested. Rather, it can use the same network
to reach out to its customers particularly leveraging the digital platform to enhance consumer
awareness and brand visibility. It has a strong grip over its market intermediaries like the
distributors and wholesalers.

The primary channels through which Dabur Red is sold to the customers are e-commerce and the
retail outlets (organized and unorganized). Each one of them has been further discussed below:

E-commerce:

Dabur already sells its products through e-commerce channels like Amazon, Flipkart and Grocery
Apps like Grofers and Bigbasket. Though Dabur has started with the online sale of products a few
years back, it has been received well by the customers who are increasingly moving to the e-
commerce platforms. This makes this channel all the more important to analyze. Dabur Red is sold
widely through these channels and is one of the top-selling toothpastes. It should utilize the same
channels for both products, new Dabur Red and Dabur Green. The visibility can however be
increased on these channels by partnering with the e-commerce companies for promotional
activities. Offers in terms of product bundles, subscription pricing, etc can be introduced to the
customers on these platforms.

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Retail outlets:

Dabur has a vast network of over 2 million retail outlets across rural and urban areas in India. Both
the organized and unorganized retail outlets should be targeted to facilitate the visibility and
outreach of the product to the related customer segments.

a. Organized Retailers: This includes supermarkets, retail chains, etc. Most of the Dabur products
are already available in the outlets along with the oral care products. The new products can be
pushed through these channels with collaboration with retailers for increased shelf space and by
running promotions such as ad campaigns at supermarkets, offers, discounts and product bundles
to garner visibility of the customers.

b. Unorganized Retailers: These are the privately owned small shops like general stores, kirana
shops, etc. Toothpastes, being an everyday use commodity, is widely sold through these channels
as well. The shopkeepers are mostly indifferent between the top-selling toothpaste brands and
therefore, can be incentivized with increased retail margin to push Dabur products to the
customers. Product visibility through these channels can also be increased by providing hoardings
and banners that they put in front of their shops. The rural market is completely constituted of this
form of retail outlets. Thus, to increase sales in the rural markets, this channel has to be explored
with an apt strategy.

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2.3 PRICE

As seen in factor analysis, price is the most sought-after factor in terms of product value. Other
aspects being same, price is the differentiator for consumers deciding between two toothpastes.
Hence, attractive pricing is always helpful to increase sales, but should not be done at the expense
of margins.

Dabur Red

Price of main rival Dant Kanti is at Rs. 38, new entrant Colgate Vedshakti is Rs. 31 for 100g.
Dabur Red currently sells at Rs. 46 for 100g. Discount of 15%, bringing price down to Rs. 39
would help increase volume of sales. While this may affect the margins in the short run, it would
help wrestle market share from Dant Kanti and in the long-run, Dabur can capitalize on the same

Dabur Green
Price of main rivals ranges from Rs. 90 for Patanjali Dant Kanti Advanced, to Rs. 124 for Colgate
Sensitive for 100g. To wrestle market share, the new product must be priced aggressively at around
Rs. 85 per 100g. This would enable Dabur to have a price advantage, boosting sales in the short-
run. Again, this item being a premium product with higher margins, as the sales is maximized, the
company stands to gain more through high volume of sales.

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2.4 PROMOTION

The two strategies i.e. reducing the price of existing Dabur Red paste and launching the new Dabur
Green needs to be promoted through efficient means. Some of them can be as follows:

Packaging:

• To launch a new product, that too in premium category, the packaging plays an important role
at primary level promotion. The packing should reflect the premium feel of the category,
should be eye-catching and should highlight its distinctiveness.

• Power words like active, super, advanced or superior should be used to describe the new
avatar. This will generate the image that this product has some upgraded features over its
previous versions.

• Since, mint is used in the product to offset the bitter/ strong taste of clove, the image of mint
leave should be prominently shown on the pack.

• As shown in the factor analysis, the key attribute for the decision to buy a toothpaste is that it
has herbal ingredients, so the pictures of herbs on the pack will be as easy visual cue for the
customers who want to buy ayurvedic products.

Focus:

• Main focus of promotion should be on the upgraded and distinguishing features of the
toothpaste like greater no. of exotic herbs, enhanced taste, refreshing mint etc.

• The new TASTE and enhanced FRESHNESS should be marketed as the USP of new product.
In the factor analysis shown earlier, the ‘feeling of freshness’ emerges as the major factor in
the functional aspect of the toothpaste when the customers decide buy one.

• Now, coming to the market focus in the advertisements, it should be directed towards attracting
the attention of housewives. Since in most Indian households, the decisions regarding the
purchase of day to day items is taken by the housewife, their general tendency of monitoring
and sustaining family health can be targeted. As an ayurvedic product, the Dabur green should
be promoted as the ideal choice of a typical Indian family.

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• The competitor Patanjali’s reach is mostly concentrated in the North India and it’s products
have not yet penetrated the South Indian markets up-to its potential. So, it’s relatively less
explored territory for ayurvedic toothpastes. Thus, Dabur Green can easily find a market there.

• To promote the product in South India, one measure can be is to print the pack of the toothpaste
in South Indian Languages. This will also strengthen the perception of a swadeshi product
which the people are more inclined to buy these days.

Strategy for Promotion

To promote the newly launched Dabur Green, and also to amplify the sales of the previous version
Dabur Red, the company should adopt a combination of ‘Push’ and ‘Pull’ strategies. The details
of these strategies are as follows:

Push Strategy

• Organising trade shows to promote and encourage demands at the retailors side. This will help
in spreading the awareness about the difference between the new product and its previous
versions. Retailors will also get to know about which type of customers we are targeting with
each product.

• In the initial phase, more attention should be given to the push strategy including direct selling
to the customer. This will minimise the time interval between a customer noticing the product
and buying that same product.

• Display at point of sales: Banners and hoardings should be put at some major retail stores to
gather crowd and to engage the customers by interaction with trained salesmen.

• Separate display of the product at chemist shops to attract customer’s attention.

• Stalls for promoting the discounted Dabur Red Toothpaste.

Pull Strategy

• Digital Marketing: Ads should be placed on the homepage of YouTube. Google ads on the
dental care blogs and webpages, promotion on e-retailers like Amazon and Flipkart. Since the
major source of information nowadays is the internet, it should be exploited fully to extend

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 costumer reach. Considering the no. of growing no. of internet users in India
(refer graph), the digital marketing should be the prime focus of the company in future also.

Fig. 2.1 No. of internet users in India from 2015 to 2022 (in millions)13

• Dabur should run a Dental Health and Hygiene Campaign on popular social media sites like
Facebook and Instagram telling the benefits of using ayurvedic toothpastes. The campaign
should focus on common dental problems like cavity and plaque and how the advanced Dabur
Green will help to fight these.

• Television commercials: TV commercial is still one of the most effective medium of promoting
a consumer good. It should be used extensively to target the population who buys premium
toothpastes like Sensodyne, Colgate Sensitive and Dant Kanti Advance. Dabur Green should
address these issues.

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 CONCLUSION

The demand for ayurvedic products is on the rise and the segment is here to stay. Dabur, being
India’s largest Ayurvedic medicines and FMCG manufacturer, must make sure that it
capitalizes on this craze. We feel that given Dabur’s size and scale, taking Patanjali head on in
a price war would ensure it keeps its market share. Moreover, Dabur has left the premium
segment untouched and it should make an offering in this segment. Increasing awareness about
dental health and increased consumer spending means that this is a segment that can be
expected to do well in the future. Thus, by taking these measures, Dabur will be able to grow
the size of its pie while also safeguarding its existing market share.

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 ACKNOWLEDGEMENTS

We thank our guides, Prof Teidor Lyngdoh and Prof. Debasis Pradhan for their encouragement,
support, guidance and for the opportunity to do this project. Without their inputs and guidance,
this would not have been possible. We thank all the participants in our primary research who
were willing to give us some of their valuable time. Without their candidness, we would not
have understood the consumer perceptions of the product half as well. Special thanks to Rupsha
for helping us obtain a diverse pool of participants. Lastly, we thank the institute for access to
resources that we needed to make this report.

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