INDIAN INSTITUTE OF MANAGEMENT, ROHTAK

ePGPx (03)
End Term Exam (Term I)
Marketing Management I
13.09.2020
MM - __ Time – 2 Hours
(1600 - 2000 hrs)

Name: Abhishek Raj

Roll No: 053

Marks Secured:
(In figures & words)

Question No. 1 2 3 4 5 6 7 8 9 10
Maximum Marks
Marks Scored

Examiner’s Signature
 Please write in given space only
Answer: 4

Market Analysis
Cavinkare was established in 1983 and decides to launch its first product – Chik shampoo –
There was more than 20 player in the shampoo market the shampoo market. HLL being the
market head with its Clinic Plus brand that was positioned as a health shampoo. Major
Multinational companies sold commodities in big bottles and not in sachets, and they sold
only from the fancy outlet. They did not focus at the small Kirana stores, nor do they look at
the urban rural market.

Consumer Research

Company introduce the 50 paisa shampoo sachet based on the identified need and problem
i.e., the urban rural consumer was aware that shampoo cleanse the hair better but the product
available was expensive at Rs. 2.00 per sachet and they haven’t heard of soaps damaging
their hair. So, they came up with the formula of active Double Conditioners.

Industry competitor
 Competition is very high in FMCG industry
 According to price competition
 Promotion and Advertisement stuff

Potential Entries
 No entry barriers
 New entrants through competition due to cost
 There are Not a Capital Intensive

Substitute Product
 Rural Consumer needs are complex an never ending
 There is lake of satisfaction to new product
 Product range of choices leads to higher costumer expectation

Strength
 Company have Strong brand portfolio
 They have excellent research and development
 Strong percentage, hence strong brand equity
Weakness
 Company have Mimic brands
 Decline in exports level
 There spend high cost in advertisement
Opportunity
 They have large domestic market
 They are big gap in food sector
 Consumer life style is changing and rising in income level
Threats
 There are increasing cost of raw materials
 Company have to face competitions from unbranded product
 They are losing market share in most of the categories

Comparative Analysis

FMCG Sale In Fy 16 Sale in Fy 17 Growth rate

HUL 5254.6 5410 2.97%
GCPL 735.04 798 8.62%
ITC FMCG 5572 6115 9.75%
DABUR 1288 1255 -2.61%
CAVIN KARE 951 946 -0.50%

Comparative AnaLysis
7000

6000

5000

4000

3000

2000

1000

0
HUL GCPL ITC FMCG DABUR CAVIN KARE
-1000

Sale In Fy 16 Sale in Fy 17 Growth rate

Answer: 3

CK was established by Ranganathan in 1983. His father was involved in the family
business of pharmaceutical packaging and beauty care products manufacturing in
Cuddalore, a small town in the Southern Indian state of Tamil Nadu. After graduating from in
college, Ranganathan joined the family business. In 1983, he started his own company in a
small room. His entrepreneurial zeal and single-minded commitment to the business helped it
grows and succeeds. Twenty years later, his company emerged as a dominant consumer
product company, manufacturing a variety of products in the hair care, skin care and personal
care categories.The company began operations under the name Chik India in 1983. It
changed its name twice along the way. It was renamed Beauty Cosmetics Private Limited in
1990, and later, in 1998, it changed its name again to CK Private Limited with the aim of
going beyond, Shampoo’s penetration in Rural Market was very low, In 1983, when CK
decides to launch its first product – Chik shampoo – the shampoo market had over 20 players
with the HLL being the market head with its Clinic Plus brand that was positioned as a health
shampoo. Multinational companies sold commodities in big bottles and not in sachets, and
they sold only from the fancy outlet. They did not look at the small Kirana stores, nor do they
look at the rural market, This low cost rural market innovation was also seen in “Spinz”
Perfume and “Singlez” a one time use perfume, CK adopted a Mix Marketing Approach to
penetrate the market and provided these products at a very low cost using economies of scale
and superior control over marketing and distribution by outsourcing most of it production.

Marketing Mix Strategy

The marketing mix strategy refers to the set of actions, or tactics, that a company uses to
promote its brand or product in the market. The 4Ps make up a typical marketing mix - Price,
Product, Promotion and Place, CK Adopted this marketing strategy for launching new
products in rural areas where penetration was low

Price
Pricing refers to the value that is put for a product. It depends on costs of production, segment
targeted, ability of the market to pay, supply - demand and a host of other direct and indirect
factors. There can be several types of pricing strategies, each tied in with an overall business
plan. Pricing can also be used a demarcation, to differentiate and enhance the image of a
product, CK adopted the least price strategy to compete with bigger brands who were
providing products at a higher price, they introduced Shampoo Sachets at 0.50 Rs and
“Spinz” perfume at a very low cost
Product
Product refers to the item actually being sold. The product must deliver a minimum level of
performance, otherwise even the best work on the other elements of the marketing mix won't
do any good, CK introduced herbal products and natural products to differentiate, they also
introduced product with low LUP and SUP, which was affordable and easy to store by
vendors

Place
Place refers to the point of sale. In every industry, catching the eye of the consumer and
making it easy for her to buy it is the main aim of a good distribution or “place'” strategy.
Retailers pay a premium for the right location. CK had outsourced all of the manufacturing to
have a tight control over marketing and distribution, with a focused approach and LUP, the
vendors were able to sell CK products without thinking about inventory

Promotion
This refers to all the activities undertaken to make the product or service known to the user
and trade. This can include advertising, word of mouth, press reports, incentives,
commissions and awards to the trade, CK targeted the low income group with regional
promotion strategy they marketed heavily using mass media advertising and using popular
film stars to do advertising of their products

CK adopted unconventional methods of advertising and marketing, which helped them scale
up their market share, they focused on rural populations, but the strategy had to be changed
for the future, they wanted to be major player in FMCG in the upcoming years, for this they
wanted to woo upper or upper middle class population of India, the major factors in
influencing this population are:

Differentiating Product Lines and Creating innovative products such as Herbal Perfumes,
Branded Salon and Salon Products
They realized that Many ‘middle income’ households are there in the urban areas, if they are
the target market then why not the middle income group of rural population
Chik and Nyle had become leading brands in terms of growth and market share, Launching of
Trends indicate that the urban markets are also lucrative up in a big way and growing faster,
they launched affordable salons with custom salon products to woo urban upper class
population
Entree in the Food Business also indicated that they wanted to differentiate and create
products that would cater to urban sector
Entree in Detergent and retailing ambitions also can help in research and development to
cater the Upper Urban Segment

Answer: 1

In relevance to this case the factors affecting the buying behaviour of the customers are as
follows

ECONOMIC FACTORS

· The company has targeted the customers on economic factors such as level of standard
living . for example the company has targeted the rural sector , they have launched shampoo
sachet for Rs 0.50 thus increasing the sales.

 level of standard of living , the company has products for all segment
 The company has targeted all the segment and on the basis of price the
company and the innovations which the company make from time to time.
 The company is closely engage with the customers and identifying the need
of the customers.

PSYCOLOGICAL FACTORS

 The company has targeted the customers on the basis of psychological

factors such as learning , involvement , lifestyle , perception , motivation
etc.
 The company has target its customers on the basis of motivation , for
example company is running ad on the national television for shampoo or a
hair dye ad people will get motivated by seeing the advertisement and the
quality of the product advertised in the market.
 Company is running ad on fairness cream in news papers or television the
customer with dark skin will get motivated by the add and the product , thus
it will increase the sale of the company .

PERSONAL FACTORS
  The company has targeted the customers on personal factors such as age , lifestyle ,
occupation ,personality and self concept
 The company has products for all the age groups of people . for example the
company has perfumes , shampoo , talc powder , fairness creams , hair dye , hair
wash etc.
 The company has products for everyone according to their needs.
 For example company is selling fairness creams targeting the dark people in the
market.
 Company is selling hair dyes targeting the mid age and above people in the market.
 Company is advertising on the televisions about their products , this also comes
under personal factor

CULTURAL AND SOCIAL FACTORS

 The company has targeted the customers on the basis of cultural and social factors
like culture , social class , sub culture , social groups , role and status.
 The company has targeted the customers on the cultural factors , for example the
company is advertising on the news paper or the television the targets various
cultures which are their in our country , all these thing increase the sales of the
company.
 The company has list of various products such as hair care , ethinic care , skin care ,
personal care
 The company has priced its products lesser than the other brand in the competition
example sunsilk etc.
 The company has also played and important role in the distribution and avaliblity
of its products , the products are available everywhere .
 Price of the products is also very low.

Answer : 2

Process of new product development

1. New Product Strategy :- CK was established by Ranganathan in 1983. His father was
involved in the family
business of pharmaceutical packaging and beauty care products manufacturing in
Cuddalore, a small town in the Southern Indian state of Tamil Nadu. After graduating
from in college, Ranganathan joined the family business. In 1983, he started his own
company in a small room. His entrepreneurial zeal and single-minded commitment to
the business helped it grows and succeeds. Twenty years later, his company emerged
as a dominant consumer product company, manufacturing a variety of products in the
hair care, skin care and personal care categories.The company began operations under
the name Chik India in 1983. It changed its name twice along the way. It was renamed
Beauty Cosmetics Private Limited in 1990, and later, in 1998, it changed its name
again to CK Private Limited with the aim of going beyond, Shampoo’s penetration in
Rural Market was very low, In 1983, when CK decides to launch its first product –
Chik shampoo – the shampoo market had over 20 players with the HLL being the
market head with its Clinic Plus brand that was positioned as a health shampoo.
Multinational companies sold commodities in big bottles and not in sachets, and they
sold only from the fancy outlet. They did not look at the small Kirana stores, nor do
they look at the rural market, This low cost rural market innovation was also seen in
“Spinz” Perfume and “Singlez” a one time use perfume, CK adopted a Mix Marketing
Approach to penetrate the market and provided these products at a very low cost using
economies of scale and superior control over marketing and distribution by
outsourcing most of it production.

Marketing Mix Strategy

The marketing mix strategy refers to the set of actions, or tactics, that a company uses
to promote its brand or product in the market. The 4Ps make up a typical marketing
mix - Price, Product, Promotion and Place, CK Adopted this marketing strategy for
launching new products in rural areas where penetration was low

Price
Pricing refers to the value that is put for a product. It depends on costs of production,
segment targeted, ability of the market to pay, supply - demand and a host of other
direct and indirect factors. There can be several types of pricing strategies, each tied
in with an overall business plan. Pricing can also be used a demarcation, to
differentiate and enhance the image of a product, CK adopted the least price strategy
to compete with bigger brands who were providing products at a higher price, they
introduced Shampoo Sachets at 0.50 Rs and “Spinz” perfume at a very low cost

Product
Product refers to the item actually being sold. The product must deliver a minimum
level of performance, otherwise even the best work on the other elements of the
marketing mix won't do any good, CK introduced herbal products and natural
products to differentiate, they also introduced product with low LUP and SUP, which
 was affordable and easy to store by vendors

Place
Place refers to the point of sale. In every industry, catching the eye of the consumer
and making it easy for her to buy it is the main aim of a good distribution or “place'”
strategy. Retailers pay a premium for the right location. CK had outsourced all of the
manufacturing to have a tight control over marketing and distribution, with a focused
approach and LUP, the vendors were able to sell CK products without thinking about
inventory

Promotion
This refers to all the activities undertaken to make the product or service known to the
user and trade. This can include advertising, word of mouth, press reports, incentives,
commissions and awards to the trade, CK targeted the low income group with
regional promotion strategy they marketed heavily using mass media advertising and
using popular film stars to do advertising of their products

CK adopted unconventional methods of advertising and marketing, which helped

them scale up their market share, they focused on rural populations, but the strategy
had to be changed for the future, they wanted to be major player in FMCG in the
upcoming years, for this they wanted to woo upper or upper middle class population
of India, the major factors in influencing this population are:
had a great insight of the Gaps in the market, the needs which customer wanted.
There was approach in the company towards the needs of customer, which was not
fulfilled or overlooked by top companies. CavinKare used to take that project and
made a strategy to launch that product. With every Gap or requirement CavinKare
introduced produts in Market.
2. Idea Generation:- New product Ideas comes from many sources, including customers,
employees, distributors, competitors, vendors R&D etc. In the case of CavinKare
customer needs gave the company to launch the products which actually the customer
wants, the price segment in which the customer wants.
3. Idea Screening:- After new Idea have been generated, they pass through the first filter
in the product development process, this is called screening.
4. Business Analysis :- New products Ideas that survive the initial screening process
move to the business analysis stage where the figures for demand , cost, sales are
calculated.
 5. Development & Development of Test marketing:- In the early stage of development
the R&D or engineering develops a prototype of product and then the same is
launched in test market.
6. Idea Commercialization: - The final stage in the new product development process is
commercialization.

In the case of CavinKare they initially launched Chick Shampoo and then they entered the
Herbal Shampoo segment and developed a product which is in the same segment but with
natural ingredients. Later when company researched about usage of the shampoo and
monthly expenses which happens on washing hair realized the need of launching a shampoo
which is as cheap as Rs 0.5. Similarly in hair care later in 2004 CavinKare introduced Meera
herbal hair oil, as there were many brads available with herbs but customers were not sure
that the product actually contains herbs or not. Using consumer insight the company
developed a unique design concept for its herbal hair oil products, where by it offered a
visual demonstration of its herbs infusing into oil.