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Case Study OnCavinKare Private Limited

A CHALLENGE OF SUSTAINING GROWTH AND EXPANDING BUSINESS

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Presenters:Kabita DhimalAshir KhadkaYashika GoyalBabina Poudel

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Introduction• Mr.C.K.Ranganathan, the Founder Chairman • Started from  Chik India in 1983 with an initial

investment of Rs. 15,000• Changed its identity :

– 1990 :Beauty Cosmetic Pvt. Ltd.– 1998 : Cavinkare Pvt. Ltd.– Products : Personal Care, Food, Beverages,

Dairy and Snacks

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CavinKare Products

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Identification of Consumer Needs• First identification in the early’s 1980:

– Need for superior quality shampoo with affordable price.– Clinic plus and shampoo targeting urban area– Introduce chik sampoo in 1983– Targeted consumers having lower income 1000-1500 per

month– In 1984, Increased the sales from 0.5 million to 3.8

million in 1 year – In 1990, raised to 35 million

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Contd..• Second identification gap:

– CavinKare realized the gap for the need of herbal shampoo

– In 1993, it rolled out Nyle shampoo.– Positioned it at the safest shampoo to

use.– By 2001, Nyle was among top five

shampoo brands

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Gaining Consumer Insights• Using insight CavinKare entered the fairness cream market

and launched the “Fairever” brand of fairness cream in 1998.• Based on another consumer insight, CavinKare introduced

Meera herbal hair oil in 2004

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Marketing Communication

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Delivering Customer Value through Affordable Products

• It focus on volumes and scale of economy resulted in lower costs of production.

• CavinKare entered the perfume business to introduce quality perfume at an affordable price.

• It launched perfume brand Spinze in the Year 1997.

• The product was introduced in bottles as well as small packs called “Dab-on”.

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Cost Advantage• Reduced Structure of Cost• Outsourcing the manufacturing operation.• Decreased overhead cost • Nimble and agile organization• Helped to focus on marketing and distribution• Supported by its world class R&D infrastructrue

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Packaging Innovation: Sachets and Low units pack

• Sachet shampoo introduced in 1976 for velvette by Chinni Krishnan

• Popularized by Ranganathan through chik(LUPs)• High acceptance• Helped in the risk of trial• Innovative packaging

– In 2000, introduced single use perfume ‘c’– Help trial use and new users to product– Concept of “Once a day”

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Distribution Access

• Difficult to gain distribution access in rural areas• Targeted haats and Melas

– Server 4000 consumers– 47000 haats and 25000 melas in a year– Rs. 0.2 million in haats– Rs.1.43 million in melas

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Road Ahead• Successfully competed big companies• In 2001:• Chik and Nyle became leading companies –Rs 8500 million• Fairever stood umber 2 in cream –Rs 6500 million• In 2003:• Turnover of 2640 million• Estimated to be 52 billion by 2012• Two-pronged strategy

– increase market share of its current product– Diversify into new business

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Increase Market Share of Product

• Still huge gap in market share of Unilever • Fairever 9.5 % vs Fair and lovelt 62% in 2003• In 2004, deodrant have 3% market sahre• In perfume category spinz have 7%• Spinz talc have 4.27% vs 55% of ponds talc

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Diversification into New Businesses

• Entered into food and retailing business• Entering to the soap and detergent

– Organic and non-organic route to grow• Entry into food

– Launched pickles to grow-Chinni• Retailing Ambition

– Branded and skincare salon– Invest 250million and open 250 salons named green trends

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ConclusionCavinKare’s goal is to remain the preferred choice for customers at home and in every market, besides operating with conviction and leading certain chosen sectors for innovation.

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