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5. A Study of Marketing Strategies of Patanjali’s FMCG Products Author: Falguni Babhulkar, Asma Khan, Yash Kadwe, Yash Kshatriya, Mayur

Khurdal Guide: Prof.Afrin Siddique

ABSTRACT: The research paper is about Patanjali Ayurved Ltd., also known as PAL, an Indian FMCG which has registered phenomenal growth in the last 5 years. The case tracks the different strategies which worked for Patanjali Ayurved Ltd (PAL) in the hyper competitive Indian FMCG sector. Acharya Balkrishna is the Managing Director and major stake holder of Patanjali Ayurved Ltd (PAL) but the driving force behind Patanjali Ayurved Ltd is Baba Ramdev, an ascetic and yoga guru of Indian origin. The paper narrates the growth strategies of Patanjali Ayurved Ltd and key role played by Baba Ramdev and Acharya Balkrishna to bring it to its present stage. Authors have used two business models namely “Value Creation and Delivery sequence” and “Strategic Planning” model to narrate the growth and success of Patanjali Ayurved Ltd. Keywords: Patanjali Ayurved, STP, Environment Analysis, Marketing mix.

1. INTRODUCTION

Patanjali Ayurved Limited

Type Private

Industry Consumer goods

Founded 2006

Founder Ramdev

Acharya Balkrishna

Headquarters Haridwar, India

Area served South Asia and Middle East

Products Foods, beverages, cleaning

agents, personal care

products, Ayurvedic

medicine

Revenue 10,561 crore

(US$1.6 billion) (2016-17)

Number of

employees

200,000 (2011–12)

Website www.patanjaliayurved.net patanjaliayurved.org

Patanjali Ayurved was co -founded by Acharya Balkrishna and Baba Ramdev to propagate the science of ayurved. Today, some of the ayurvedic products produced by PAL are a strong synergy between ancient wisdom and modern technology. Even though Acharya Balkrishna is the primary stakeholder of the company (92% stake), the main driving force behind Patanjali Ayurved is the charisma and

philosophy of Baba Ramdev, a Yoga guru and an ascetic of Indian origin.

2. OBJECTIVES:

To study the effect of digital marketing strategies on the growth of Patanjali’s FMCG products. To study the marketing mix of Patanjali Ayurved ltd. To study their different strategies for their survival in the hyper competitive Indian FMCG sector.

3. RESEARCH

METHODOLOGY

Research Design- Problem Definition: To study the effect of digital marketing on the sale of Patanjali FMCG products. Objectives: To study the marketing strategies of Patanjali Ayurved Ltd. To find out how the digital marketing strategies have affected the sale of Patanjali FMCG products. Data collection techniques:- Primary Data:-

Interview Method.

Observation Method. Secondary Data:- Websites and Books

4. THEORIZATION Marketing Strategies: Strategic Planning:

Baba Ramdev and Acharya Balkrishna knew that they have created a captive market with

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their efforts since last one and a half decade, which values health, yoga, pranayama and above all brand Baba Ramdev. This captive market is health conscious, looks out for affordable products, believes in the philosophy of swadeshi (home grown) and above all considers Baba Ramdev as their ideal. When Patanjali ayurved launched its products in the Indian retail sector, this captive market was among the first to buy and use its products. This captive market developed instant loyalty to Brand Patanjali. The role of this captive market was not only limited to buying, using and spreading good word of mouth about PAL products but they also became partners with PAL by becoming their franchisees. In the initial days majority of the franchisees established by PAL came from this captive market. These franchisees along with the distribution of products also advertised and promoted PAL products in their respective regions, hence establishing brand Patanjali firmly into the mind of local populace. When compared to an FMCG multinational which uses a traditional distribution channel, PAL followed a different distribution strategy, effective in catapulting it to its present position. Today Patanjali's turnover stands close to USD 1 billion (Rs 5,000 cr, FY ending 2016) with a mammoth goal of reaching close to USD 1.5 billion (Rs 10,000cr by FY ending 2017) and close to USD 3 billion (Rs 20,000 cr by FY ending 2020). Patanjali Ayurved's value creation and delivery strategy encompassing both the Strategic and Tactical Marketing is instrumental in making it a force to reckon with in the Indian FMCG industry. Strategic Marketing: Choosing the Value (Kotler et al 2008) Segmentation & Targeting PAL has segmented its market based on 1. Demographic – Income, age etc. 2. Psychographic - Health Consciousness, Patriotism PAL's target segment comprise of health conscious people who prefer “value for money” natural products. PAL has products targeted at children (health drinks) and elderly people (some Ayurvedic medicines). Almost all products of PAL are affordable in nature (at a price 15% - 30% lower than the

competition); hence the income segmentation strategy has worked. Initially the products were targeted at lower and middle income groups but with the present turnover of close to a billion dollars (Rs 5000 cr) this fiscal, it is evident that PAL's products have buyers not only from the lower income and middle income segments but also from health conscious upper middle and upper income segments. These 2 segments have found value in PALS's natural and Ayurvedic products. PAL's market targeting strategy is that of “Selective Specialization” as they cater to a lot of segments in their market but not the entire market. Positioning: Patanjali has a two pronged positioning strategy 1. The brand slogan of Patanjali is “Prakriti ka Aashirwaad” which means Blessings of Nature. Patanjali is positioned as “Natural Products available at affordable prices”. 2. The 2nd positioning plank is that of “Swadeshi Make” (Made in India). Both the positioning planks have created wonders for Patanjali. The twin positioning planks are synergistically integrated with the brand Patanjali as India is considered to be the birth place of Ayurved. The “Swadeshi make” plank also helps in assimilating the previous people movements initiated by Baba Ramdev like Bharat swabhiman and swadeshi andolan with Patanjali Ayurved Ltd. Tactical Marketing Mix Product: Patanjali Ayurved has 4 product categories: 1. Home care 2. Cosmetics and health 3. Food and beverages 4. Health drink The company is planning to venture into packaged cow milk, Khadi and animal feed this year. Patanjali uses natural ingredients and herbs to manufacture its products. They have state of the art R&D facility, involved in the latest research on products which can benefit their target market. It has few star products in the product portfolio. Patanjali's cow ghee was worth Rs 1308 crore in FY 2015-16, the herbal toothpaste Dant Kanti was worth 425 crores. Shampoo and Hair Oil under the brand name

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Kesh Kanti, did a turnover of Rs 325 crores (Annexure 3). One of the reasons Patanjali Ayurved has been able to garner market share so rapidly is because of low lead times between the product concept and product launch. Patanjali Ayurved's R & D team has been able to produce good quality products at low cost in less time for eg. The lead time between the product concept of Patanjali Noodles (which happened after Maggi was declared unfit for consumption by FSSAI, India) and the Product launch in the market is close to 4 months. Price: Patanjali Ayurved's products are sold at a price of 15% - 30% lower than that of competition. Except for Patanjali Cow Ghee, which is sold at a premium in the market, every other product has a market penetration pricing strategy. The pricing strategy has helped Patanjali establish itself in the marketplace. Established brands which did not consider Patanjali as a competition initially, are now forced to sit and take notice. HUL (Hindustan Unilever Ltd) has reported the slowest growth in revenue in the last 6 years. Colgate, one of the MNCs worst hit by the growth of Patanjali, has reported its worst revenue growth since last 4 years. Distribution:

Patanjali uses multiple distribution channels to cater to the market. Company has a reach of 0.2 million outlets. PAL has a strong presence in the market through its 1200 chikitsalayas, 2500 arogya kendras, 7000 open store in villages and 5600 marketing vehicles. PAL also plans to establish 250 mega stores in tier 1 & tier 2 cities. PAL also has a tieup with behemoths of modern retail like Reliance and Future Group, which carry its product range across all its stores in the country. It also has tie-ups with Star Bazaar (Tata Group), More (Aditya Birla Group), Spencer Retail, D-Mart, Apollo Pharmacy etc to increase its reach in urban India. PAL has embraced the e-commerce mode of retailing products through Patanjali ayurved.net. PAL has a strong presence in the modern retail format, ecommerce and its own outlets but lacks presence in the traditional retail formats,

which serve close to 90% of Indian retail market. Promotion:

PAL has used different promotion strategies as follows: 1. Baba Ramdev through his Yoga Shivirs not only talks about the different Yoga postures and their benefits in curing the diseases but also about the Patanjali Ayurved products aiding in a healthy lifestyle and a disease free life. This is one of the most potent promotion tools used by PAL. 2. Word of mouth communication certainly has a higher believability factor compared to other mediums of advertising. Baba Ramdev has created a strong community of loyalists through the efforts of Patanjali Yogapeeth Trust and Yoga shivirs, who speak very high of Baba Ramdev and Patanjali products. 3. Recently, Patanjali Ayurved has seen a spurt in its advertising spent. PAL's advertisement in print and digital media is readily seen. 4. PAL has also embraced digital marketing and has a well-designed face book page and twitter account. 5. Public Relations: Baba Ramdev has excellent Public Relations and Media skills. He is an often featured personality along with his products in media. 6. Patanjali Ayurved has its channel on YouTube which features more than 200 videos on Yoga and product information. 7. Baba Ramdev's books and VCDs are not only an excellent information disbursal tool but also a subtle promotion tool. The above mentioned strategies have helped Patanjali reach a turnover of close to a billion dollars. But PAL has set ambitious goals for itself. Is it possible for PAL to clock a turnover of USD 1.5 billion (Rs 10,000 crore) in the next financial year and USD 3 billion (Rs 20,000 crore) by the end of FY 2020. DIGITAL MARKETING STRATEGIES: Having strong and in-depth information about the importance of social media and the various digital platforms, Baba Ramdev smartly utilized the same in order to promote his brand Patanjali. You might come across several traditional ways of advertising, such as radio, television, and newspaper, for Patanjali. Along with this,

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there is also a strong e-commerce website of the brand, which facilitates the modern, digital group of consumers to easily grab the products and services that attract them. This is common in today’s market of competition; Baba Ramdev has come up with ideas and strategies, which allowed the brand to leave behind the leading brands. There is a strong and active presence of the company in the social media platforms. It ensures to engage, interact and communicate with the consumers, in order to resolve their queries and to make them aware of the new and latest products available in the market. Holding various sessions of Yoga around the world, Baba Ramdev uses the platform to voice his opinion about the “Ayurvedic, Natural Products” of the brand. He also uses the digital platforms by sharing the stories of his employees working in the firm, or by sharing the experiences of people using the brand. This doubles up the reach of the brand and serves as a quality podium for the consumers to engage and interact with the brand easily. Baba Ramdev also uses Twitter to share his opinion or answer the questions asked by his loyal customers or the prospective ones. In this age of digitalization, where television and the internet have become common for every household, Baba Ramdev makes the best use of both for promotions, whether it is Television or YouTube. By appearing on various TV shows (he recently made an appearance on The Kapil Sharma Show) and by participating in different game shows or competitions (he participated in a Kushti competition against Sushil Kumar and folks), he promoted Patanjali products and also focused on its quality by coming up with relevant proven examples. Complementing its ‘natural and pure’ or “Prakriti ka Ashirwad” proposition is the ‘swadeshi’ concept, which Baba Ramdev focuses on, thus luring a large group of individuals towards the business.

Where the competitors of the industry, including the leading players of the FMCG industry like P&G, Himalayas, HUL etc, are opting for only television, newspaper, magazine, and YouTube advertising promotions, Patanjali is using the digital platforms full-fledged for its promotion. The path-breaking sales, distribution and marketing strategy adopted by the brand has contributed excellently in driving its exceptional growth trajectory. Adopting a very rustic and classy kind of communication style for the brand, it aimed to create a Swadeshi and niche kind of image for the brand. And this did work out excellently for it. Along with its communication style, the digital strategy worked wonders for the brand. Using the mobile video ad platform Pokkt, Patanjali used the digital video advertising in order to develop and promote the brand and its various products. Baba Ramdev also showed his farsightedness of reaching new prospects by using in-game integration with one of the Chota Bheem games for promoting Patanjali noodles. The Yoga-preacher also utilized the right time to launch Patanjali noodles, when Maggi was going through a scandal. He promised that Patanjali noodles would be safer, healthier and better-quality noodles. Hitting the market at the right time, Patanjali came up as a great augmentation opportunity for the brand to grab the attention of its clients and to earn trust and loyalty of its clients excellently. In order to promote your brand and to market your products, you ought to know your audience. And Patanjali did make sure that it knows its audience quite well. The Patanjali consumers have a very specific profile and the content which Baba Ramdev used for it centered on this specific category. The consumers need to feel that the products are for their benefits and are healthier for their body and skin. It ought to fit in their lifestyle.

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In order to make sure that his brand is accepted by people from all sphere and sector, he made sure that there are no aspirations attached to it. He gave a very realistic and humble image to his brand. And thus he didn’t use anybody from the film fraternity (even though he had good terms with them) like Shahrukh Khan as the brand ambassador, as he realized this will simply not work for him. He rather preferred to keep his product advertisement simple to make it feel essential and realistic.

5. LITERATURE REVIEW:

According to Pittie (2015), Patanjali is not just targeting its own distribution Chikitsalayas, but also big retailers like Reliance Retail, Big Bazaar, Hyper City and Star Bazaar are stocking Ramdev's FMCG products. But the real play is online. While Patanjali's products are already available at e-commerce site BigBasket, Ramdev is now aiming for Amazon too. To allow the consumers to locate nearby outlets that are selling Patanjali products and also to facilitate online ordering of products, Patanjali has launched its mobile app. Patanjali also sells its products through the Patanjali Arogya Kendras, Swadeshi Kendras and Patanjali Chikitsalayas. The company has 10,000 franchisee models of Chikitshalyas and Arogya Kendras and around 2 lakh outlets that are selling Patanjali products. The company operates through 100 super distributors.

Kumar (2014) reports that the Patanjali Mega Food Park (PMFP) has been envisaged to help in creation of infrastructure for food processing and a ‘farm-to-plate’ supply chain system. It helps in maximum value addition by backward and forward integration between the farmers, factory and the market. The supply chain doesn’t have any intermediary in between but rather it’s a direct from supplier to producer to consumer. This also helps in reducing the cost because it avoids the unnecessary commission cost and other related charges of the intermediaries. Trend of Patanjali products: Singh and Rajni (2015) reports that PAL perhaps lacks most ingredients for building a large-scale consumer goods business, be its negligible A&P (advertising & promotion) spends or distribution network. Yet, the brand power of a yoga guru has brought PAL into the top league with top line reportedly in excess of Jyothy Labs and Emami.

6. ANALYSIS AND

INTERPRETATION: In this age, where the start-ups find it extremely difficult to survive in the market, which is predominantly occupied by the large conglomerates, Patanjali, a comparatively new business has gained turnover of Rs 10,561 crore and has left behind several leading FMCG companies. Leaving behind the top-notch FMCG companies like P&G, HUL, Himalayas etc, Patanjali has rapidly become the fastest

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growing Indian Ayurvedic Company with more than 1,500 employees and 1000 dedicated centres all around India.

How Patanjali Managed To Carve A Mark

In The Industry? The success of Patanjali is catered to the excellent strategies and wonderful marketing techniques of the face of the brand, Baba Ramdev. This yoga-guru-cum-business-czar has hand-held the brand and led it to the height of success. He is not only a renowned yoga-guru of the nation but is also the brand ambassador of Patanjali.

Considering his huge fan-following, nationally and internationally, Baba Ramdev has managed to build and secured his brand equity

in this fluctuating and highly competitive market. He has brilliantly leveraged the digital marketing platforms and has ensured to incorporate the digital marketing strategies into the brand promotion of his company. It is known to all that the fast moving consumer goods or FMCG industry, has always been dependent on insights of consumer behaviour and preferences. Understanding this scope of the industry, Baba Ramdev used his followers to ensure creating positive consumer behaviour towards his products and has been extremely successful in doing so.

7. CONCLUSION Baba ramdev’s brand seems well configured and ready for takeoff. It seems to have all the magic ingredients of success.

The brand has moved into e commerce besides being available with retail chains and under its own distribution centers.

The brand pyramid has legs. The products are available online and through offline retail.

And finally it’s not only his companies that are digital. Baba Ramdev is himself digital.

He has 451k followers on twitter. Our MNC CEO’s are going to find it difficult to match it following in the near future.

On face book baba ramdev has 5.7 million people liking his page.