ANALYSIS OF THE DECLINE IN GROWTH RATE: A CASE STUDY ON PATANJALI

GROWTH RATE OF YEAR 2018

ABSTRACT
Patanjali was a leading brand in India in food, medicine and FMCG products. It had created a
brand personality with Baba Ramdev and its CEO Balkrishnan in years since it established that is
2008. Patanjali had its own identity in its consumer’s mind as it had related its brand with
swadeshi factor as well as their motive of earning profit for charity and welfare.

As we had seen in the annexure of this case, the revenue had been increasingly increased from
2008 till 2017 but in the year 2018, it has been seen that was stable revenue acquired by
Patanjali, there was a decline in this year. We would be analyzing here about some reasons
behind this problem and would look that how these reasons gave an adverse effect on
consumer loyalty and brand preference.

Keywords: loyalty, Patanjali, swadeshi, decline

INTRODUCTION

A person is a consumer of different brands at the same time. The choice and usage of a
particular brand by a consumer over the time affected by quality benefits offered by the brand
and brand identity that product has established in customer’s mind. The components of brand
like name, logo, tagline and typeface which a brand has created to reflect the value the
company is trying to bring to the market and appeal to its customers. Prospect customer is
always looking for a brand identity, its quality and brand image. They always liked the product
which is handy, in pocket price and healthy. Nowadays consumers are aware about the green
products and the effect of a particular product on their health. But with this aspect, they also
look for the publicity of the brand that can be positive or negative. Publicity plays an important
role in building a brand identity and an image in front of its customers and consumers both.

Sales promotion also give a large impact of purchase behavior of the customer. They used to
look for a product that decrease their expense and gives more benefits in terms of quantity.
Sometimes it had been seen that the consumers using one brand switch to another brand just
because they get more monetary benefit from another brand and may be they heard a negative
publicity about the brand they are using since times.

Patanjali as a brand established with the combination of both brand as well as personality
Identity. In the beginning Baba Ram Dev has established himself as a Yoga Guru and posted
Yoga as a solution to many health challenges which was useful because of western influence
and food which made our lifestyle sedentary and unhealthy. He started out by teaching yoga to
Indian audience on Sanskar and then on Asthaa channel. He got a wide acceptance. He made
the people realize the audience that Indians have forgotten our old traditions and art forms –
Yoga being one of them. Elders of the family related to this combination of spirituality and
tradition started this practice in their family too.

Various companies are having the entrants’ threat but, they are ready to beat up the
competition. Patanjali ayurvedic toothpaste has captured a large market and minds of customer
by the strategy of being using natural ingredients and being healthy for tooth. But now the
companies like Colgate and Meswak had come up with their product related to ayurveda
strategy due to which they again tried to capture the market which they loosened. This also
affected the Patanjali sales in a time.

Patanjali negative publicity after being its products had been failed in laboratory test also
affected the trust of consumer that they made since years. Patanjali played very strategically
while launching any of the new product in the market. Patanjali launched its aata noodles when
the Maggie had been banned for some time due to their failure in quality test. They tried to
make the market at that time by advertising their noodles by adding that the noodles of Maida
are eaten by Chinese, we Indians eat aata noodles. They try to create a image of being healthy
noodles in mind of customers at that time.

REASONS BEHIND THE DOWNFALL

There were many reasons behind the downfall in brand preference of Patanjali in 2018. Some
of them were:

1.Increase in sales promotion of other products: if we see the other products like
Dabur(chawanprash), Nestle (Aata Maggie), or Amul(ghee), they all are trying to capture the
market by giving monetary benefits more to the consumers. As seen Amul cow ghee has been
introduced with a less price and metal tin packing as per the requirement of the consumer. If
we come to Dabur, they also offer various benefits of chawanprash by adding the point that
their product contains gold and silver which keep the body fit and strong. They also gave some
kind of offer like Dabur red toothpaste free with the chawanprash pack. All their promotion
activities attract the consumer to purchase the different brand.

2.Negative news, blogs: According to CCA (consumer complaint council), the Patanjali claim for
its “kachi ghani mustard oil” was not supportive. They also declared that other rivals are selling
mustard oil, adulterated with oil made by solvent extraction process with neurotoxin containing
hexane. It was purely misleading. Patanjali also failed to protect themselves from misleading
ads complaint of “Dant Kanti” that is protects from gum bleeding, yellow teeth, gum tightening,
bad breath and sensitivity.

3. Lack of renovation: As Patanjali is more focused towards pricing and swadeshi factor, they
are very least worry about renovation of their products. They are not incurring expenses much
on analyzing the consumer needs and wants so that they can make changes in the product to
make it more responsive.

4. Competitors offerings: The reason behind the decline could be consumer fatigue and FMCG
companies like Colgate and HUL investing heavily in natural products to lure back consumers
who may have drifted to the rival camp. Competitors like Dabur and Colgate have been
defending their side. While Dabur responded with strategic pricing, HUL launched nationally an
ayurvedic range of products. Colgate, too, was forced to come up with an ayurvedic offering.

5. Taste and Preference: customers also not liked the taste of Patanjali’s product like
Powervita, chawanprash and aata noodles. Also, some cream biscuits are also not liked by the
consumers.

6. Failure in laboratory tests: Out of 82 products, 32 products had failed in laboratory test
(according to the Hindustan times news). This also affected the publicity of Patanjali and gave a
negative outlook in front of the customer.

"By the end of December, our noodles will hit one million stores. We are ramping up our
production capacity,'' Ramdev told reporters here. Maggi had an 80 per cent share in the
Indian market before the ban, according to a Namura report. The other strong player in
the market is ITC's YiPPee! Noodles and the two companies have been engaged in fierce
rivalry.
The competition is bound to get fiercer as Patanjali has priced its 70 gram pack of 'Atta
Noodles' at Rs 15, claiming it to be cheaper than the price of its competitors.
Ramdev said, "it is Rs 10 cheaper than our rivals, who are selling atta noodles at Rs 25."
He also said that the Patanjali noodles are based on rice bran oil and not palm oil which
other manufacturers use.
Its products are available at modern trade shops, including Reliance Fresh, Big Bazaar, D
Mart and Patanjali's own retail network. Nestle India relaunched Maggi noodles in the
market last week after Bombay High Court lifted the ban on it imposed by FSSAI and
Maharashtra FDA.
SAID IN INDIATODAY BY BABA RAMDEV.
Patanjali Noodles: Wheat Flour, Edible oil, Salt Wheat gluten, Minerals (Calcium carbonate and Potassium
Chloride), Acidity Regulators and Guar gum.

Maggie Noodles: Wheat flour, edible rice bran oil, iodised salt, mineral & xanthan gum
Tastemaker: Hydrolysed groundnut protein, onion, chilli, garlic, coriander, turmeric, cumin, aniseed, black pepper, fenugreek,
ginger, clove nutmeg and cardamom.

Masala Mix: Mixed spices of coriander, Onion, Garlic, Turmeric powder, Cumin, Ginger, Red Chilli, clove, hydrated vegetables
(Carrot, Peas, Beans), salt, flavour enhancers, vegetable protein, sugar, acidifying agents and thickeners.

CONCLUSION
Patanjali’s downfall in year 2018 may be bad for company perspective, but Patanjali had not
accepted the failure and tried to enhance themselves by bringing new products with a wide
variety. Recently, Patanjali had introduced “PARIDHAN”, an outlet of fashion wear for men,
women and kids. Patanjali had to innovate new outlook of analyzing the customer’s demand
and must go on the path which id consumer oriented. Patanjali had to improve more on quality
and advertise themselves in more effective and innovative way. They already had captured a
good market in ayurveda and medicine sector, now they should go on stabilizing their product
quality and customer loyalty and services.

price per packet

12.5

12

11.5

11
price per packet

10.5

10

9.5

9
maggie patanjali aata noodles yipee
REFERENCES

https://www.mouthshut.com/product-reviews/Patanjali-Atta-Noodles-reviews-

https://www.hindustantimes.com/business/ramdev-launches-patanjali-instant-
noodles-plans-6-plants