Individual Assignment

On
CavinKare

Adaptive Market Leadership

COURSE FACILITATOR: Prof Subodh Tagare

Submitted By: Pawan Raj Chauhan

201831029 (Section D2E)

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 CavinKare Private Limited

About Company
In 1983 with a single product, CavinKare started out as a small partnership firm Chik India by
Mr. C.K. Ranganathan.Chik India, which was renamed as Beauty Cosmetics in 1990.In 1998 the
Company was renamed as CavinKare Pvt. Ltd (CKPL).The reason behind the name is,Cavin
means beauty in Tamil and 'care' is spelt as Kare.

CK Ranganathan, Chairman and Managing Director of CavinKare, has shown the world it is
possible to beat the multinationals even in the most difficult market of fast moving consumer
goods. A journey of their business started with only with Rs.15, 000 is now worth Rs.500 crore.
He learnt the first entrepreneurial Lessons from his father, Chinni Krishnan, who started a small-
scale pharmaceutical packaging unit, before moving on to manufacture pharmaceutical products
and cosmetics. His entrepreneurial zeal and single-minded commitment to business helped him
in his pursuit.

Rural markets- "A world of opportunities"

The rural population in India represented a vast untapped market & accounted for 74.27% of the
population of India and contributed 60 % to India's GDP. The multi-national companies did not
look at the rural markets and hence CavinKare had the opportunity to tap the market

Introduction of Chik Shampoo

Chik Shampoo introduced in 1983 and targeting at lower middle class and semi-rural population
with monthly income of Rs.1500-3000. By tapping the rural markets which we have shown that
had a huge potential, this product made a huge success there. And also due to lack of presence of
multi-national companies, they got an advantage in the market.

The origin of the concept of sachets

His father had come out with the sachet concept when he introduced Velvette shampoo in
sachets in 1976 and from there Chik single serve sachets evolved which is in a form of low unit

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packs and gave boost to shampoo consumption in India and hence Ranganathan was often
referred as "the moving force behind the sachet revolution".

Evolution of CavinKare

The Company, which primarily relied on contract manufacturing for many years, has now set up
Its own world class plant at Haridwar to cater to the demand of both domestic and international
market. The Company has employee strength of 576, an all India network of 1300 Stockiest
catering to about 25 lakh outlets nationally. CavinKare has touched a turnover of over 5000
million INR in 2006-2007. CavinKare evolved from single product i.e. Chik Shampoo to having
several products portfolio from hair care to personal care products.

Evolution of Chik Shampoo

Ranganathan named it Chik Shampoo after his father. The product launched in 1983 and did not
succeed immediately due to presence of 100 brands of shampoo and had very low awareness
among consumers but because of sachets revolution they had making profits and by execution of
various communication strategies they were able to increase awareness about their product and
hence Chik shampoo considered to be the success of CavinKare in India.Chik market share have
goes on increasing from 1% in 1984 to 25 % in 2002.

Evolution of various Product range

Being continued with Chik Shampoo for seven years they introduced Meera Herbal Powder
which is evolved due to he felt that there was a demand for herbal products and required a good
product. And Meera Herbal powder topped the market in first of its three months and had 95 per
cent market share in six months only. As panned to expand to new products they got into beauty
cosmetics products as well. They also had perfumes for poor which cater to those who cannot
afford (high priced) perfumes. He decided to come out with an Rs.10 pack Spinz. He was
successful in that too.

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Choices and Actions helped CavinKare to Succeed

Communication Strategies:

 When CavinKare entered into market the main challenge for Chik shampoo was lack of
awareness among rural consumers and their habit of using ordinary soaps to wash their
hairs instead of using shampoos products.
 CavinKare discovered that soap usage was the biggest barrier and people did not see the
need for using Shampoo. Company tried to convey the message to the consumer that soap
usage was bad for the hair and when a product exists specifically for hair it should be
used.
 So they had to create such communication plan which connect to consumers as well as
create brand awareness. So initially they had radio advertisements with use of popular
movie dialogues which supports the brand and also roped into various popular movie
stars from South India.
 They also did live demonstration of shampoo usage and product benefit.
 They started road shows, wall-paintings, and video-on-wheels as their advertising
campaigns.
 They distributed free samples and went for door to door sampling only to increase
awareness.
 They also launched consumer promotion scheme to create the consumer pull and induce
trials.
 These activities help them to increase their sales from Rs.0.5 million to Rs.3.8 million in
one year.

Distribution Strategies:

 The company faced hurdles in its drive for expansion at the national level and challenge
was to establish a nationwide distribution network. And as they primarily targeted at rural
markets where retail density was extremely low.
 Innovative manner to gain distribution access they had to develop channel.
 For designing channel they started to approached the periodic markets like haats and
melas which served about 4000 rural consumers over 10-15 villages.
 They found out that 58% of rural consumers preferred to purchase from that markets
because of better pricing, quality and product available there. Because of which
CavinKare distribution system manage to reached out 0.75 million outlets which is at par
with major competitors.

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