Chic- Shampoo Sachet

SUBMITTED BY

Gaurav sharma
Case Objectives

• To understand Indian rural dynamics and

Indian rural consumer behaviour
• To provide a backdrop of the Indian
Shampoo Market in the rural context
• To highlight the successful strategies that
Chik Shampoo employed in the rural
market
The concept of sachets

• C K Ranganathan, CMD, CavinKare, has shown the

world it is possible to beat MNCs even in FMCGs
• Born in Cuddalore in TN, started a business with Rs
15,000, now worth Rs 500 crore (Rs 5 billion)
• “My father introduced the sachet concept as he felt
liquid can be packed well in sachets. When talcum
powder was sold in tin containers, he sold it in
20/50/100 gm packs. When Epsom salt came in 100
gm packs, he sold it in 5 gm sachets ”
• “Whatever I make, I want the coolies and rickshaw
pullers to use. I want to make my products affordable
to them, he used to say”
• “Sachets are going to be the product of the future, he
said. But my father was a great innovator, but a poor
marketer”
Dr Amit Rangnekar
amitrangnekar@gmail.com
How Chik Shampoo was born
• The family launched Velvette shampoo sachet
successfully in the South in the late 1970s
• 1982- Ranganathan joined, but separated over
differences with family members
• Started Beauty Cosmetics, with Chik Shampoo
named after his father, Chinni Krishnan
• Chik began with only 20,000 sachets, but made
profits from the second year
• 1989- Office in Chennai, manufacturing in Cuddalore
• Beauty Cosmetics name was restrictive
• 1998- in-house contest suggested CavinKare
• Cavin in Tamil means beauty and grace, and C and
K (father's initials) spelt in capitals

Dr Amit Rangnekar
amitrangnekar@gmail.com
Shampoo Rural Market

• CavinKare- pioneering attempt to offer shampoos in

small pillow packs
• Market flooded with 70-odd small shampoo labels
with little differentiation
• Velvette (family business), synonymous with ‘sachet
shampoo’, aggressively marketed by Godrej
• Consumers would ask for a Velvette but walk away
happily with whatever label the retailer gave them
• Many never knew the difference, for others it did not
matter
Indian Shampoo Market 1980s

High

MNC Brands
Shampoo Bottles
Price

Local Players
Need
Chik
Gap
Low
Poor Good
Quality
Chik Targeting

High
Cost to Consumer

The right
distribution
strategy must
make the brand
available to the
Chik rural consumer
at a cost he is
Willing to pay
Low High
Availability of Product
Target audience
• Lower middle-class/
• semi-rural (Sec B2,C,D)
• MHHI Rs 1,500–3,000
• Females
• Age group of 16-plus
Accessibility & Affordability
• The success of the sachet changed the structure of the
shampoo industry
• New layers of consumers, mainly from rural pockets,
could now afford shampoos
• The ‘upper class’ tag attached to shampoos fast faded
away
• Extremely cut-throat market emerged
• Significant trade influence on what the consumer bought

Dr Amit Rangnekar
amitrangnekar@gmail.com
Chik Launch
• 1983- Chik shampoo launched by CavinKare
• Initial launch in 10 ml pack
• Later launched in sachet form
• Market cluttered with low-cost shampoos
• “But there was a clear opportunity for a good quality
shampoo with appealing perfume at a price to delight the
consumer”
• Chik endeavoured to provide to the masses a
significantly superior product than those available at
similar price points
• Chik shampoo used French perfume to differentiate itself
on the plank of superior fragrance

Dr Amit Rangnekar
amitrangnekar@gmail.com
Promotion

• Ad strategy based on the powerful appeal of cinema

among common masses
• Innovative radio ads based on popular cinema
dialogues, unlike plain radio jingles of competitors
• “Cinema is the most cherished means of family
entertainment and cine stars have cult following in
the south. Therefore, the communication strategy
was to leverage popular cinema dialogues to drive
home the message”
• Popular southern cine stars endorsed Chik- Amala,
Khushboo, Manorama and Charlie
• Radio used as the sole mass advertising medium
• Annual ad spends about Rs 2 lakh
Dr Amit Rangnekar
amitrangnekar@gmail.com
Trials

• Shampoos getting encouraging trials from rural

consumers, but extremely low penetration levels
• Many people had no clue how to use a shampoo
• To encourage trials, CavinKare’s team travelled
extensively in rural pockets
• Trials on schoolboys to demonstrate how to lather
and wash, comb hair and show the difference
• “We were as thrilled & excited as the volunteers
during the demonstrations. This exercise had a
significant impact in breaking ice & made people
comfortable with the concept”

Dr Amit Rangnekar
amitrangnekar@gmail.com
‘Champi’ on schoolboys

Dr Amit Rangnekar
amitrangnekar@gmail.com
Impact
• “We also encouraged trial through a consumer scheme,
where anyone could take any 4 empty shampoo sachets
to a retailer and take home a Chik sachet free. Though
more risky, this scheme paid off and more and more
people began asking for Chik at their local retail outlet”
• “Later, we altered the scheme- we started giving 1 free
Chik Shampoo sachet in lieu of 5 Chik Shampoo sachets
only. Soon, consumers started asking for Chik sachets
only
• Sales rose from Rs 35,000 to Rs 10 lakh a month

Dr Amit Rangnekar
amitrangnekar@gmail.com
Taking on the MNCs

• “MNCs sold products in bottles, not in sachets and

sold only from fancy stores. They did not look at the
small kirana stores, nor at the rural market”
• “We went to rural areas in South India where people
hardly used shampoo. We showed them how to use
it by doing live demonstration on a young boy.
We asked people to feel & smell his hair”
• “Chik sponsored shows of Rajniknath's films. We
showed our ads in between, followed by live
demonstrations. We distributed free sachets among
the audience after every show, which worked
wonders in rural TN & AP. After every show, our
shampoo sales went up 3-4 times”
Dr Amit Rangnekar
amitrangnekar@gmail.com
Consumer
s
start
demandin
g Chik

Dr Amit Rangnekar
amitrangnekar@gmail.com
National footprint

Population size Villages %

< 1000 459465 70
1000-5000 58029 9
>5000 143248 21
• 1993- Chik shampoo mulled a national presence
• “Then, the Indian rural market only outgrew the
urban market, now it grows at double the pace”
• “Chik’s objective was to expand the market, and
get new consumers in the category”
• Focus- largely rural, value-conscious sections in
urban areas were also attracted
• Distribution in rural areas is driven through
innovative trade schemes & consumer offerings
Dr Amit Rangnekar
amitrangnekar@gmail.com
Mid 1990s
• The shampoo market surged by 25%
• Small packs contributed 40% of total shampoo
volumes
• Rural markets grew much faster than urban markets
and continue till date
• The key challenge was to reach rural markets
• Packaging became critical for rural marketing
• 1999- Chik, second largest shampoo brand in India-
(also in rural markets)- next only to HLL’s Clinic Plus
The 50-paise shampoo sachet

• “We worked backwards, developming the formula &

packaging took us a few years. We launched Chik
shampoo sachet @ 50 paise in September 1999,
the first ever such price point”
• The result- rural shampoos grew at twice that of the
urban sector
• Price point helped penetrate deep rural pockets
• Chik market share flared from 5.6%(1999) to
23%(2004)
• 2005- Chik was a Rs 100 crore brand on MRP
value
• No.1 Indian rural shampoo, 65% rural market sales
Rural Chik
• “Chik’s value proposition helped us become No.1 in
many states in rural India. Recruiting customers is the
key issue as the rural consumer is rational & value
conscious. To be successful, the marketing mix must
deliver superior value to the rural consumer at a price
point he is comfortable with”

Rural Hold of Chik

States No. of Villages MS % (Volume) Rank
UP 107440 67 1
MP 55392 22 2
Bihar 45113 32 1
AP 28123 39 1
TN 16870 46 1
Dr Amit Rangnekar
Orissa 55352
amitrangnekar@gmail.com 19 2
The Chik Promise

• A year round tropical climate makes it difficult to

maintain hair softness and shine
• Tangled hair- Common complaint in girls & women
• Softness & manageability- key issues in the
maintenance and nourishment of hair
• Unique formula – Active Double Conditioners
• “The iconic Chik Girl in every ad treated her hair
with the shampoo and demonstrated with utmost
ease and confidence, her ability to untangle her hair
with just a single motion of running her fingers
through her hair”
• Tagline- “Yun Kiya Ho Gaya” popular phrase
amongst both girls and women today

Dr Amit Rangnekar
amitrangnekar@gmail.com
 Dr Amit Rangnekar
amitrangnekar@gmail.com
Current status
• “In the last 2-3 years, our market share has come down
though we are growing. It is mainly due to the anti-
dandruff shampoos in the market which from 0% have
taken over 25% of the market. We do not have an anti-
dandruff shampoo yet”
• “Ordinary shampoos constitute only 75% of the market,
of which we hold 20% market share. But we are the
largest brand in rural UP, AP, etc. and the number one in
many other states as well”

Dr Amit Rangnekar
amitrangnekar@gmail.com
Range

• Chik penetrated the Indian market

with a wide range, 4 refreshing
fragrances, sensistive pricing
and right sizing
• Chik Black
• Chik Jasmine
• Chik Egg
• Chik cool
• Sachet packing and pricing at Re.1 and 50p
• Bottles sized-60 ml, 120 ml, 250 ml & 500ml
• Anti Dandruff Shampoo, containing climbazole and
lemon extracts for dandruff and itching

Dr Amit Rangnekar
amitrangnekar@gmail.com
• 2006-2007- CavinKare 500 crores
• 576 employees
• All India network of 1300 Stockists catering to about 25
lakh outlets nationally
• Manufacturing plant at Haridwar (Uttaranchal)
• Third Party manufacturing at Pondicherry, Noida, Assam
and Faridabad
• Exports- Nepal, Srilanka, Malaysia, Singapore,
Bangladesh, US and the GCC region
• Target- 1500 crore company by 2010

Dr Amit Rangnekar
amitrangnekar@gmail.com
Reasons behind CavinKare’s success

• “Teamwork is the main reason for our

success. We have good professionals
who work really hard. The second reason
of our success is innovation and thirdly we
have executed innovative ideas well”

Dr Amit Rangnekar
amitrangnekar@gmail.com