Patanjali research project

Marketing Research Case Study

Why we chose Patanjali? A force to reckon with

Over FY12‐15, Patanjali registered revenue CAGR of 64.7%. The company has aggressive plan to enter every consumer category (keeping aside those that impact lifestyle and health). At the current juncture, though its presence in many categories may not queer the pitch for other consumer goods companies (each category not too big to impact except Ghee, which is expected to be INR12bn in FY16), over the long term, gaining palpable distribution prowess could pose a serious threat to competition. Patanjali’s proactive moves in innovation have been crucial for its growth. Other consumer companies will need to step up innovations, particularly in the herbal and ayurvedic space (distribution strength will come handy) to counter competition.

The 3 principles vital for growth Patanjali Ayurved is a incorporated company under the Companies Act – Patanjali Ayurved Limited. Though a corporate entity, its working and ideology is not completely that can be compared to that of a perfect corporate culture. The company is focussed on top‐line growth rather than profitability. Its business ideology is inspired by Swami Ramdev’s ideologies to touch every life through Patanjali which will help the consumers and be present in all the segments where the consumers feel they can get a better product at a better price. The organisation conducts its business on the following 3 main principles: (1) Providing world‐class products to consumers (making sure the company does not add any preservatives or uses natural preservatives as far as possible). (2) Producing products in the most cost‐effective manner so that the products are priced very reasonably. (3) Whatever profits the company earns are ploughed back into business so that it can invest the same for launch of new products, cost effectiveness or further capacity expansion. Patanjali will not launch any products that are harmful to the health of consumers and detrimental to the health and lifestyle of the people. Hence, the company will not get into product categories like tobacco and liquor which are bad for health. Going forward, the company also plans to open 500‐600 branches of Acharyakulam (educational institutions).

Areas patanjali wants to improve:

 The company has so far concentrated on a direct distribution approach with an exclusive store network. The challenge will also lie in setting up a national distribution network so the customer waiting time decreases.

 As the demand for patanjali products increases, the supply chain has to be more efficient as well as the procurement of resources should me more frequent and also maintaining the inventory efficiently.

 Patanjali will set up manufacturing plants in South India and is looking to become a partner in mega food park being developed in southern cities.

 Patanjali is soon coming out with our Patanjali mega stores which would be spread in 2,000-3,000 sq feet, exclusively for our products

 The approach of the company has been to concentrate on its quality and let word-of-mouth do the rest. As the competitors grow aware of its growing market share, they will try new innovative marketing strategies. So patanjali can’t rely only on word-of mouth anymore, it would have to adopt a more conventional and aggressive marketing strategy.

 This will require a significant shift in its costing as well as investments, which could impact the company’s earnings.

 It will also be looking to increase the penetration of ayurveda products in India.

 Patanjali, which has 15,000 stores across the country, plans to add more products in segments where it already has presence such as dairy, instant foods, baby care, natural cosmetics and health supplements.

 Seeing the penetration and impact of digitalization, patanjali is planning to sell its products on e-commerce platform.

 Exports are also in the pipeline to the countries like USA, UK and Canada.

Why carry out Marketing Research?

As the Patanjali is working on increasing their sales and finding new ways to grow their market size with a strong new product line. Along with this, the company want to compete with other existing competitors like Nestle and ITC. Therefore, it is very essential for the company to focus on the needs of its customers, and they have to understand and anticipates the consumer needs before the development of new products line. The consumer needs require market research which can

add value to the business. It helps them identify in what products or extension the company focus on and for whom. MR can assist them in staying ahead and improve its competitive advantages. Also, Patanjali can instruct their suppliers for an advertising campaign to raise awareness of the product among consumer.

Type of research: I) Primary Research:

a) Questionnaire:

The primary research was more towards the new product line in which the Patanjali would invest. Some of the major categories we mentioned are:

 Deodorants & perfume

 Skin Care Products

 Washing Detergents & Soaps

 Kitchen Accessories (Dish scrubbers, washers etc.)

 Tea, coffee

 Instants Cooking Snacks

 Oats

 Butter Milk

 Weight gain and loss products.

Based on primary research the people who are the user of Patanjali Products are expecting companies to grow their market in the Instants Cooking Snacks and Weight gain and loss products. Despite the options are in the intersection of choices, Weight gain and loss products are more preferable—and from this, the needs are easily visible

b) Interviews:

0 2 4 6 8 10 12 14

Deodorants & perfume Skin Care Products Washing Detergents & Soaps Kitchen Accessories (Dish scrubbers, washers…

Tea, coffee Instants Cooking Snacks Oats Butter Milk Weight gain and loss products.

We have also conducted some face to face interviews. Most of the people aren’t entirely aware of the Patanjali products, but they are willing to try products of Patanjali. Most of them are the loyal customer of other products of competitors. Only 40 % (5 out of 13 people) of them are the regular customer of Patanjali, and they will buy new products of Skin Care products. ‘Tea & Coffee’ & ‘Spices’ were the preferable categories.

2) Qualitative Research:

Primary market data also involve some requirements of qualitative and quantitative data which can be used to identify the customer needs.

Instants Cooking Snacks is one of the popular categories of the people who consumes Patanjali products, and they would like to consume such snacks. Patanjali noodles made a good brand image among the people during the absence of the Nestle’s Maggi.

For new product ideas, Weight gain and loss products, Oats and Skin Care were in the popular product categories for women, as they are more derived towards natural products

3) Quantitative Research:

The information that we get from the quantitative data is that more than 98% (data calculated through survey) of people like to consume herbal, and natural products but only 60% will like to buy it from Patanjali. On the similar fashion, more than 90% of people prefer other company’s product, but only 40% of the people will try to switch to our products.

4) Secondary Research:

Besides, we have also gone through different research article to get the idea about the market. There are some reports which we also preferred to get the best idea for the Patanjali products. Patanjali has a separate team for new product development. The company has been able to leave a mark owing to the pace and frequency of new product launches. Its robust R&D department has churned out new products in quick time and lower costs. After the Maggi issue, within three months the Patanjali Noodle was ready to serve their customers.

Patanjali products are now high in demand and now offering separate distributorship for food and cosmetics. And, new products expected to be in the market are:

Patanjali Noodles, Powdered hair dye, Power Vatica (Healthy drink), Child range (baby products), Sugar-free Chyawanprash, Dant Kanti (Toothpaste), Seabuck (thorn dietary supplement) and Divyapay (heath drink like tea)

Some are also in the phase of R&D, those are:

 Chicory coffee (caffeine free)

 Buttermilk in powder form

 Madhuram – ginger and rose flavor

 Weight gain and loss products

90% of manufacturing is done within the Patanjali Factory. And they are going to open one more manufacturing plant to enhance capacity it is open to even third‐party manufacturing.

Marketing Strategy of Patanjali Yogpeeth

Targeting Masses through Pranayam and Yoga

No one can help admiring the simplicity of the techniques for practicing the different pranayama (controlled breathing) which His Holiness Swami Ramdev Ji Maharaj has evolved and has been teaching to the common mass in India. One finds the methods taught by Swamiji very simple for any lay person to pick up and follow. It is the simplicity in the technique that is making Pranayam a part of life to common man. Pranayam were there in text books for long time but, no one from the common mass in India did have access to it for the techniques of practicing them were very complex.

There were also some words of caution attached to such instructions that any deviation from the practicing techniques would cause immense harm to a person. This gave birth to an idea that Pranayam should never be attempted to be practiced individually and should only be practiced in the guidance and vigil of a trained Yoga teacher (Guru). Such rigid rules, complexity in practicing techniques and above all the caution that, any deviation in the practicing techniques would cause immense harm to the person, took Pranayam far away from common mass and was finally lost and buried. No one dared to practice such an art which would cause harm to them if there is even a slightest of deviation in the technique.

Swamiji has done a tremendous job in breaking this concept of fear in common mass about the harm caused by Pranayam. His Holiness has devised very simple techniques for practicing the Pranayam which are very easily picked up by any common man just by watching the T.V. His Holiness Swamiji has also assured the common mass that Pranayam can never cause harm to any person attempting to practice individually. Swamiji has exhumed the Indian ancestral science of Pranayam from the grave of darkness, fear and monopoly of a few and presented it in its simplest form for the welfare of the mankind. Swamiji has removed the veil of darkness and the mystery of Pranayam is unfolding itself to the common mass in India.

Product strategy

Pranayam and Yoga: A Package for Various Diseases

Swami Ramdev's Divya Medicines are claimed to be one hundred percent natural, made from potent herbs available in the Himalayas, with no or very little side effects. They have proven extremely effective for combating all forms of sickness and disease. Along with these medicines, Swamiji recommends patients to also adopt the practice of pranayam, which will strengthen the immune system and quicken the healing process. Ramdev Baba opines that pranayam and yoga are the complete Ancient Indian Therapy, which is a Medical Science in itself that cures any physical or mental medical condition completely, without any side effects. Swami Ramdev has proved and declared on Indian and International TV

Channels, pranayam and yoga is the complete natural cure for all physical and mental ailments. But if medicines are required they are also available and these packages of medicines are available at a very low cost. The medicines can cure all the diseases from a simple cold to cancer. In a bid to promote ayurveda,

Swami Ramdev's Trust has tied up with 600 qualified ayurvedic practitioners who are offering treatment to masses for a variety of diseases, some of them termed incurable by the modern system.

Pricing Strategy

Developing an effective pricing strategy remains the most important and difficult part of the marketing process. As far as the pricing of FMCG products is concerned, the pricing strategy is a mix of skimming and penetration. Some products are costly than other competitive brands and some are cheap. But, in case of pranayam and yoga, Baba Ramdev's uses a penetration strategy and cost is very less. He urges people not to lose hope or suffer and depend on expensive treatments. The diseases for which Indian population spend much more in hospitals, pranayam and yoga treat all the ailments completely without costly medicines, operations or surgery. It is amazing, but it is claimed to be true that this is the cheapest and the only complete cure to most of the so called incurable diseases like Diabetes, Cancer, HIV and AIDS too.

Supply Chain Management (SCM)

Patanjali follows a very smooth Supply chain management. The three parts of supply chain are product flow, cash flow and information flow. In supply chain of Patanjali all these are maintained very smoothly. Supply Chain of Patanjali can be well understood with the help of some examples. First we will take the example of sale of Patanjali products. They sell their products only through their own outlets opened in almost every district/city of India. Each outlet sends its demand to central office at Haridwar.

Then based on demand, different products are gathered from various units of Patanjali viz. Divya Pharmacy, Patanjali Ayurved, Patanjali Foods etc. Then the items are delivered to the respective outlets mainly through Patanjali transport. This shows a good example of Supply chain management.

Next we can take the case of Patanjali Gram at Uttarkashi. Here Swami Haridasji has presented a very good example of SCM. They collect cow urine from rural households. After initial filtration, it is sent to Patanjali Food and Herbal Park where it is processed and is sent to various Patanjali outlets for

distribution. The part of money received from the sale of cow urine is kept by Patanjali Food and Herbal Park Limited as processing cost and the rest is sent to the village. Some amount is distributed to the people as a price of cows urine, rest is used for the development of the village like establishing necessary infrastructure, building schools etc. The Patanjali Mega Food Park (PMFP) has been envisaged to help in creation of enabling infrastructure for food processing and a comprehensive ‘farm-to-plate’ supply chain system. The initiative aims to seek maximum value addition by backward as well as forward integration between the farmers, factory and the market. It can be said that 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.

Sales and Distribution

Patanjali follows various modes of distribution for their products.

They provide sale of products through their website with online payment facility. These products can be procured through post also by sending the required amount through demand draft etc. Patanjali has opened “Patanjali Chikitsalayas” and “Patanjali Arogya Kendra” in almost all the cities of the country from where all the Patanjali products can be procured easily. A Patanjali trained Ayurvedic doctor also sits in every Patanjali Chikitsalaya from whom consultation can be obtained regarding various medicines.

� Patanjali herbal products are also available at Post offices across the country. � A shop is established for sale of products wherever a yoga camp is organized.

� Patanjali has prepared disease specific CDs which they sell through their various outlets. Promotional Strategy

Baba Ramdev's live yoga classes became a passion. And it all began in the year 2002 when Sanskar television channel started airing Baba Ramdev's yogic classes; overnight, Baba Ramdev became a sensation he had hundreds of followers who morphed into thousands. Then Sanskar channel's rival Astha channel signed him. In two years time he was a hit and with him also the channel

benefited. His TV shows have the largest TRP. Today, he is one of the biggest draws on Indian television. He can be seen not only on religious channels like Aastha, but also news and features channels like Aaj Tak, India TV and Sahara One. Millions around the country follow his programmes religiously and use Ayurvedic medicines prescribed by him. There was an eight-month waiting period before one could see Ramdev; he was being booked that far ahead by television channels for his live yoga classes each morning. His yoga sessions were beamed live into 170 countries. Also, Baba Ramdev's pack i.e., one DVD, two Video CDs, three books on yoga, pranayam and herbal remedies, and Magazines are available. This set of four promotional materials with a Research Oriented Monthly Magazine of Yog, Spiritualism, Ayurveda,

Culture and Tradition-Yog Sandesh available in 5 languages can do much to lure customers. Even healthy people are following his yoga pranayam regimen, as available in his DVDs, VCDs, Books and magazines etc., to keep fit. Baba Ramdev has got the pulse of the basic needs of people which is not only limited to food, clothing and shelter but also includes a healthy life style, and has managed to fine tune his offerings to suit the needs of all. He has mastered the art of mass customization and practices the art dexterously so much so that each individual feels that he is talking to him individually.

The SWOT Analysis of the Patanjali Yogpeeth is explained as follows. Strengths:

� Natural products without any kind of side effects � Innovative use of spirituality

� Presence of established distribution networks in urban areas � Solid base and image of the trust

� Social Responsibility to make people healthy Weaknesses:

� Strong competitors and availability of substitute products � Low exports levels

� High price of some products

� Absence of established distribution networks in rural areas � Very less promotional activities

Opportunities:

� Large domestic market – over a billion populations � Untapped rural market

� Changing lifestyles and rising income levels, i.e. increasing per capita income of consumers � Export potential and tax and duty benefits for setting exports units

Threats:

� Political interference

� Controversy created by other groups regarding Patanjali products � Removal of import restrictions resulting in replacing of domestic brands � Temporary Slowdown in Economy can have an impact on FMCG Industry

Questionnaire:

1. Have you consume any products of Patanjali?

 Yes

 No

2. If Yes, Can you mention the name of the product below? __________________

3. Which is your favorite FMCG brand?

 Nestle  Patanjali  ITC  Godrej  HUL  Other

4. Which product do you like the most of that particular company (only one)? __________________

5. In which segments, do you want to consume Patanjali products?

 Deodorants & perfume

 Skin Care Products

 Washing Detergents & Soaps

 Kitchen Accessories (Dish scrubbers, washers, etc.)

 Tea, coffee

 Instants Cooking Snacks

 Oats

 Butter Milk

 Weight gain and loss products.

Not at all Likely (1) Slightly likely (2) Can’t Say (3) Moderately likely (4) Very Likely (5) 6. Would you like to consume

more Herbal and natural snacks/beverages/cosmetics? 7. If Patanjali will sell you these

products, will you still consume it

8. If Patanjali will start making (those items which Patanjali doesn’t produce) your most likable items (which you have mentioned in the question 4), will you try it from us?