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CavinKare's success story sjarted with the great ideaof launching Chik shampoo in sachets at a low priceof 50 paise, and then going on to introduce Meera,Nyle, Spinz, Indica and Fairever, one by one-allbased on the understanding of consumer behaviour.

Market AnalysisIn 1983, when CavinKare decided to launch its firstproduct-Chik shampoo-the shampoo market hadover 200 players with HUL being the market leaderwith its Clinic Plus brand that was positioned as ahealth shampoo. Multinational companies sold prod-ucts in big bottles and not in sachets and they soldonly from fancy stores. They did not look at the smallkirana stores, nor did they look at the rural market.

Consumer ResearchCavinKare found that many rural consumers wereusing bathing soap to wash their hair. The companyfield force found the reasons-the rural consumer hadnot heard of soaps damaging hair, and in any case, hairhad been washed by soaps for generations. Interestingly,the rural consumer was aware that shampoos cleansedhair better, but the product was expensive at Rs 2 persachet. Given that India has a tropical climate round theyear, women find it hard to maintain the softness andshine of their hair. They often complain about tangledhair. Based on these identified needs and problems,

• CavinKare conceptualized the 50 paise Chik shampoo.The research and development team was entrusted

with the task of finding a solution to this naggingproblem. It came up with a unique formula-ActiveDouble Conditioners.

Targeting and MarketingChik Shampoo has targeted both girls and women inrural and semi-urban India.

It used innovative sachet packing and a sachetwas priced at Re 1 and 50 paise. When Chik enteredthe nwket, Velvette Shampoo was being marketed. ~aggressively by Godrej.

Brand CommunicationThe new product was launched with extensive com-munication targeted at the rural and semi-urbanmasses. It showcased the possibility of soft and man-ageable hair. The girl in the commercial treated herhair with Chik shampoo and untangled her hair witha single motion of running her fingers through herhair. The advertisement communicated confidence

Rural Consumer Behaviour 141

and style along with ease in managing hair. As a result,the communication cut across all social groups.

Sales PromotionAn incentive exchange scheme- "five sachets ofany shampoo for a Chik shampoo sachet, free"-was introduced. Later, it was altered. This exchangescheme was introduced to increase the patronage ofChik, With this, consumers started asking only forChik sachets and sales showed a considerable rise.

Expansion for GrowthToday, among the rural and semi-urban population ofIndia, Chik is the preferred daily shampoo, being thesecond-largest selling shampoo. The brand has gainedthe confidence of its consumers and become a house-hold name by catering to their continuously evolvingrequirements and preferences. The company delightedcustomers with a range of four refreshing fragrances-Chik Black, Chik Jasmine, Chik Egg and Chik Cool.Further, the company expanded its market share withthe introduction of bottles sized at 60 rnl, 120 ml, 250 mland 500 mi. Its new variant, Chik Anti Dandruff Sham-poo, contains climbazole and lemon extracts that act ondandruff and itching caused by dandruff.

Meera Herbal PowderShaw Wallace had introduced a herbal product; how-ever, it was marketed very poorly. CavinKare intro-duced Meera Herbal powder and topped the mar-ket by gain.ing 95 per cent market share within sixmonths of launching.

Spinz- The Poor Man's PerfumeGood perfumes came at a huge price and werebeyond the means of ordinary people. So the com-pany came out with a Rs 10 Spinz pack.

Fairever c

In 1997, the company saw a huge demand for fairnesscreams. However, Fair & Lovely had a very strongmarket presence. Research indicates that when aproduct is good, consumers do not shift to a newbrand. However, the company went on to launchFairever, It contains saffron, which is traditionallyused to acquire a fair complexion.

Ruchi PicklesFood is a.huge market. The company decided to

make an entry into it and launched Ruchi pickles insachets. It became number one there too.

142 Rural Marketing

The New InitiativeThe overall market for shampoos in India is estimat-ed to be at Rs 20 billion a year. The popular segment,where Chik Satin has been positioned, commandsan estimated 25 per cent of this market. Accordingto a CavinKare executive, 75 per cent of Chile's salescome from the rural market, while its competitors inthe industry sell only 52 per cent of their shampoobrands in the rural markets. In the Indian shampoomarket, where sachet (7 ml) format accounts for75 per cent of the total sales, Chik has been bringingin 90 per cent of its sales in this format.

With new players and new marketing strategies,the shampoo market has become hyper-active andintensely competitive. As a leader in key southernmarkets, the company has decided to prove its acumenin the bottled shampoo segment. Affluent customerscomprise the target market and the competitors areHUts Clinic Plus and Sunsilk brands. Currently, Chikis being sold in the sachet format, positioned as aneconomy brand consumed largely in the rural market.

Entering the new market segment that Chik is target-ing requires changing the image as well. CavinKare'sExecutive Director, Ramesh Viswanathan, said, "ChikSatin is not a premium or niche segment product. It isslightly higher in the value chain:'

For discussion1. What, in your view, are the key contributing

factors to the success of CavinKare?2. Is the company right in launching Chik

Satin-an upward extension? Substantiateyour answer by (i) profiling target consumersand their expectations and (ii) probable reac-tions of its current and potential consumers.

Source: www.cavinkare.com/chikshampoo.html; "BrandingStrategies: Chik Shampoo;' available at http://strategicbrand.blogspot.com/2007 /06/branding -strategies-chile -sharn-poo.html; S. Kalyana Ramanathan, "CavinKare to takeon HUL, ITC in Bottled Shampoo Biz;' Business Standard,17September 2008, available at www.business-standard.com/india/ news/ cavinkare -to -takeh ul- itc-in-bottled -sharnpoo-biz/334627/ .

Caring for One'andAll

Walk into any small eatery in the southern and easternparts of the country and you will find it hard to missthe bottle of Horlicks at the cash counter. Horlicks isnot a young brand-it has been around for decades.Horlicks' market share of the Rs 2.305 billion milkbeverages market is above 50 per cent. The brandthat was worth around Rs 8 billion in the early yearsof the decade, is today 50 per cent bigger at close toRs 12 billion, bringing in the bulk of the company'sannual turnover ofRs 15.8 billion. Rivals know beat-ing Horlicks in the market place is a tough act. Nestlehas stopped making Milo and new entrant DaburIndia has decided to stay clear of Horlicks and pitchits Chyawan Junior against GSK Consumer Health-care's otJlet beverage brand, Boost.

Consumer-centric ProductsGSK Consumer Healthcare has decided to use theimage of the brand to get into new categories. ZubairAhmed, managing director maintains, "These cat-egories are relevant and our research shows' thatconsumers need these products. We are not creat-ing needs, we're simply fulfilling them." Recently, itlaunched biscuits for children, a nutrition drink for

women, an energy bar and chilled milk. "We're ridingthe equity of Horlicks and supplementing it withconsumer insights:' says Ahmed.

Value-for-Money PositioningWhat has worked in the company's favour, saysAnand Ramanathan, an analyst with audit and con-sulting firm KPMG Advisory Services is Horlicks'value-for-money positioning. "Horlicks may not bea cheap product but it's been communicated as avalue-for-money product. Parents today are willingto spend more on nutrition for their children andthat has helped GSK Consumer Healthcare,"

To that extent, Horlicks may have gained overcompetitors such as Complan that are perceived to bemore expensive, a perception that hasn't changed overtime. SaysZubair Ahmed, "Compared to competitors,Horlicks is the best value-for-money proposition.Moreover, the consumer gets value for the moneyspent" For the new launches too, he has in mind a sim-ilar value proposition, though final prices will be fixedkeeping in mind the target group. "Women's Horlicksis far more expensive than the base Horlicks but that'sbecause the consumer isgetting much more and there's

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no other similar product available. Horlicks Nutribarswill be primarily a metro phenomenon to start with,so the pricing has been decided accordingly:'

In the late 1990s, market research showed thatHorlicks was seen "as a nourishing but boring drink"and it was beginning to lose significance. What'smore, consumers were beginning to prefer flavoursover nutrients.

So, in 2003, the brand was revamped. It wasmade tastier and launched in two new flavours-vanilla and honey. The company had earlierlaunched a chocolate version to try and win overconsumers in the North and West who typicallyprefer chocolate-flavoured drinks. However, thesuccess was limited.

After the 2003 repositioning, the company felt theneed for a more direct engagement with the kids andnot through their mothers. "We had to acknowledgethat today's kids know what they want to drink:'observes a compa\1Y representative. From that day,children became the primary target and mothersbecame the secondary target for Horlicks. It also led to 'the genesis of the "Pran Chanchal" (livewire children)concept that marked a clear communication dividebetween Junior Horlicks and general Horlicks.

Meanwhile, the second strategy for staying aheadof the competition was to expand Horlicks' equityin the health food drink (HFD) category in rela-tion to other "solid" nourishment categories suchas biscuits, cereal bars and the ready-to-drink milkcategories. According to Shubhajit Sen, executivevice-president, marketing, GSKCH, "We realized thatthere was a clear gap in the market for a biscuit spe-cially designed for toddlers:' The outcome was JuniorHorlicks biscuits. Fortified with vitamins (Bl , B2 andNiacin) and containing no added flavours or artificialpreservatives, these are targeted at children betweentwo and five years of age and come in five animalshapes and two variants-chocolate and butter.The product is priced at Rs 10 and Rs 35 for 35 g and125 g patks, respectively.

The new product launches continued. Glaxo-SmithKline Consumer Healthcare (GSKCH) Indiaintroduced four new products in three months-Eno Mausambi, Junior Horlicks Biscuits, HorlicksNutriBar and Chilldoodh-the last two markingthe company's entry into two new categories, theRs 0.08 to 0.01 billion cereal bar market and theRs 0.4 billion ready-to-drink milk category, where

Amul and Nestle control 25 per cent to 30 per centshare, according to various market sources.

The NutriBar, launched in February 2009, has anedge. It reportedly packs in 11 vital nutrients andiron while contributing just 114 calories-an idealsnack for weight-conscious adults. This is currentlybeing hawked in three flavours-Choco Crispy (30 gfor Rs 15), Cereal n' Milk (30 g for Rs 15) and Nuts n'Raisins (30 g for Rs 18).

Chilldoodh in 200 ml packs, priced at Rs 17, is alsofortified with vitamins and calcium and is set to besold in modern retail formats, self-service stores andstand-alone fruit juice centres. It is available in fourflavours-Choco Dude, Cafe Stud, Kesar Punk andYoMango.

"The idea is to address all age groups. There'sHorlicks Lite for the elderly who often have a sugarproblem and for the youth we have Horlicks Nutribarpositioned on the twin planks of health and conve-nience:' says Ahmed.

Horlicks has, for the first time, tapped the bottom-of-the-pyramid market with a new sub-brand-Horlicks Asha. To lure the price-sensitive, massconsumer, its price is about 40 per cent cheaper thanthe mainstream brand. While regular Horlicks costsRs 135 for 500 g, the cheaper variant, Asha, is pricedat Rs 85. Rural markets already contribute 30 to35 per cent to GSKCH's sales. Calling the rural mar-ket "absolutely critical" for the company, Shubhajit ,Sen said that GSKCH has hinged its rural strategy ontwo aspects-low-unit packs (90 g sachets of Boost, •and biscuits at Rs 5) and products tailored for ruralconsumers, Horlicks Asha being an example.

Reaching the Target MarketHorlicks does not feel the need for a brandambassador. The ad budget is over Rs 1.94 billion.The radio, through which Horlicks reached outto mothers even 40 years ago, is still an effective •channel in states such as Bihar or Orissa whereconsumers don't have access to television or wherepower cuts are frequent. In the early years, moth-er were the sole target audience since the productcatered to the entire family. However, once pes-ter power became big in the 1990s, the advertise-ments of Horlicks started talking to children too.The change worked because it was also the timewhen mothers' mindsets were changing-theyhad become more indulgent and let children drink

144 Rural Marketing

what they liked, rather than imposing on them adrink of their own choice.

The company believes that t-he Internet can be agood way to connect with kids. So, there are tipsposted on examinations on the Web site "Examska bhoot bhagao" (Drive the exam-demon away).Besides, the company has also reached out tochildren with Wizkids, a contact programme thatprovides a platform for schoolchildren across25 cities to showcase their talent.

Adding Rural ReachUnder Ahmed, GSK Consumer Healthcare hasupped the ante on distribution. In an aggressive "goto market" approach adopted earlier this year, it cre-,ated a second layer of distributors in smaller townsto supplement the existing chain of around 500 bigdistributors. Most of these 4,000 sub-distributorswere appointed in the eastern and southern partsof the country. The idea, according to Vice Presi-dent (Sales) Navneet Saluja, is to increase the retailreach by at least 30 per cent. "Right now we reachout to around 25 per cent of the rural market andwe hope to extend this reach to about 40 per cent of

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the hinterland in a couple of years. We're looking tohave a presence in towns that have a population of5,000 people:'

For discussion1. "Something for everyone" is the philosophy

of GSK Consumer Healthcare. Has the com-pany succeeded in this regard? Are there anyopportunities based on consumer segmentsand unfulfilled needs?

2. Critically evaluate the promotion programmesfrom the rural consumer's point of view andmake suggestions.

Source: Radhika Sachdev, "Brains and Brawns," TheFinancial Express, 8 July 2009, available at www.finan-cialexpress.com/printer/news/486336/; Ratna Bhushan,"Horlicks Pins its Hopes on Asha," The Economic Times,24 November 2009, available at http://economictimes.indi-atimes.com/news/news-by-industrylcons-products/foodlHorlicks- pins- its- hope-on -Ashal articleshow 15262423.cms; Shobhana Subramanian, "Horlicks Stretches Out,"Business Standard, 14 July 2009, available at www.busi-ness-standard.com/india/news/horlicks-stretches-outl3637901.