PGDM (2008-10) Term - IV

Brand Management ReportDabur Amla

Submitted to:Prof. R. Kamble:

On:August 9th 2009

Submitted By: Sahiba Bakshi(08HR097)

History

Dabur is a classic case of a family owned business being handed over to professionals. It is a company making timely strategic interventions to adapt to the business environment and maintaining its brand equity over the years.

Dabur India Limited (DIL) is the third largest FMCG Company operating in India with a turnover of more than Rs. 2,233 crores. It operates under three business categories namely Consumer Care Division (CCD), Consumer Healthcare Division (CHD) and Dabur foods Limited (in July 2007, Dabur announced the de-merger of DFL with DIL)

Dabur India Limited is one of the leading consumer goods companies of India with interests in healthcare, personal care and foods. Dr.S.K. Burman established Dabur in the year1884. 

For more than a century Dabur has worked in active collaboration with nature to provide the best of herbal health and personal care products to its consumers.

Dr. S.K Burman started Dabur in 1884 as a small pharmacy. Initially, he prepared Ayurvedic medicines to treat diseases like malaria, plague and cholera that had no cure during that period. It was his dedication, commitment and empathy that made Dabur a renowned name among the masses. And today, after more than 120 years, Dabur is known for its trustworthiness more than anything else.

During this passage of time, Dabur went through several structural and strategic changes to maintain its market strength. The real mass production started in 1896. Early 1900’s saw Dabur emerge as the first company to provide health care through scientifically tested methods. It achieved significant improvements after setting up Research and Development centers and manufacturing automation. The launch of Dabur’s Amla hairoil and Chyawanprash was a boon to the expanding business. To keep up with the times, Dabur computerized its operations in 1957. Its Dant Manjan and digestive tablets were widely accepted as well.

However with a large product portfolio in the market, Dabur had to maintain operational efficiency. To make sure it adjusted to the business environment it became a public limited company in 1986 followed by diversification in Spain in 1992. A major change came when Dabur came up with its IPO in 1994. Because of its position, Dabur’s issue was 21 times oversubscribed. Dabur further divided its business into three separate groups:

Health Care Products Division

Family Products Division

Dabur Ayurvedic Specialties Limited

In 1998, for the first time in the history of Dabur, a non-family member took charge. Dabur handed over the operations to professionals. Successful implementation of

procedures, timely changes and maintaining its essence, Dabur achieved its highest-ever sales figure of Rs 1166.5 crore in 2000-01.

Dabur Amla was launched in 1950 and it began to be endorsed by India's beauty queens in 1980.It comes under the consumer care division .The company shifted from glass to PET bottles in 2000 and achieved the Rs 200-crore milestone in 2005, here after launch of the new- look product in Gujarat, which has the company's six per cent hair oil market.

With their focus on value added categories,they expanded their portfolio in this segment by adding: Amla lite - launched nationally in phased manner from May 2001. The unique back label which is visible through see through bottle.

Also line extensions like Dabur Amla flower magic and Dabur Amla gold hair oil are launched to add value.

Vision

 It revolves around the notion of achieving Brand Equity in herbal and natural based categories with vitality and health. In short, Dabur's main focus is on the phenomenon of Ayurvedic that talks about products made from roots, herbs and animal skin, which are nature-based.

Mission

“To be the leader in the Natural Foods & Beverages Industry.”Striving to deliver this by:

- Consistently delighting the consumer through quality products

- Being the company of choice for business partners

- Delivering higher returns to stakeholders

Product Mix

Product Range

Product Category Products

Hairoil Vatika, Amla, Sarso(Anmol coconut)

Shampoo Vatika heena conditioning,root-strengtheningAnmol-natural shine, silky

Baby & Skin Care Vatika fairness, Gulabari, Vatika fairness face packJanmaghutti, Olive oil, Gripewater, Dabur lal tel

Digestive Hajmola range, Hingoli, Pudin hara

Health Supplements Chyawanprash, chyawanshakti, Dabur Honey, Glucose

Oral Care Babool (rural market), Meswak (unani method), promise, Lal paste, Binaca, PromiseOdomos, Odonil, Odopic, Sanifresh

Home Care

Competitive Scenario

India's hair oil market is worth Rs 2,200 crore, equally divided between perfumed and coconut segments. The Rs 250 crore Amla oil is the largest brand of Dabur India's portfolio. It is today the largest hair oil brand in India with over 35 million consumers. Daburwith19%of hair oil market is a dominant player with Dabur Amla and Vatika having strong brand equity. Dabur has a presence in almost all segments of hair oil.

A lot seems to be brewing within the company. The recovery is being slowly evident. After a lacklustre FY 2002, Dabur’s key brands are recovering—especially the ones in hair care. Competitive threats from Marico have been neutralised, with Dabur’s Amla revenues up 8 per cent in the year so far. Continued momentum is expected in the hair-care division on the back of share gains in shampoos and driven by new category-defining launches .But most important, the demerger of the pharma business would unearth the core capital productivity of the consumer business.

The hair-care products account for nearly 37 per cent of Dabur’s FMCG sales. In FY 2002, volumes of Dabur Amla hair-oil fell 3 per cent as Marico’s discount brand Shanti Amla made impressive market share gains. In the same year, Dabur’s virtual monopoly in the value-added coconut-oil segment faced a challenge when Marico launched its variant Parachute Jasmine.

However, the company claims that Dabur Amla volumes have risen by 8 per cent in FY 2003, thanks to better packaging supported by a media campaign. Larger retailers were making their foray into the FMCG market.

Apart from HLL, P&G, Marico and Himalya, ITC was also posing a challenge.

The supply chain of Dabur was becoming complex because of the large array of products. Southern markets share in the sales figure was negligible. These factors posed a threat to Dabur and hence small changes were not enough.

As FMCG sector was struggling with the slow growth in the Indian economy, Dabur decided to take numerous strategic initiatives, reorganize operations and improvise on its brand architecture beginning 2002. It decided to concentrate its marketing efforts on Dabur, Vatika, Anmol, Real and Hajmola to strengthen their brand equity, create differentiation and emerge as a pure FMCG player recognized as a herbal brand.

Major competitors

Category Dabur’s Share

Main Competitors

Hair oil Coconut base

6.4% Vatika HLL

Hair care (overall)

27% HLL, P&G and Himalaya

Brand Rejuvenation

With youth forming a major population of India, Dabur decided to revamp its brand identity. Dabur associated itself with Amitabh Bachchan, Vivek Oberoi, Rani Mukherjee and Virender Sehwag for endorsements. New packaging and advertising campaign saw the sales of Chyawanprash grow by 8.5 per cent in 2003-04.

The year 2004-05 saw a whole new brand identity of Dabur. The old Banyan tree was replaced with a new, fresh Banyan tree.

The logo was changed to a tree with a younger look. The leaves suggesting growth, energy and rejuvenation, twin colors reflecting perfect combination of stability and freshness, the trunk represented three people raising their hands in joy, the broad trunk symbolized stability, multiple branches were chosen to convey growth, and warmth and energy were displayed through the soft orange color. ‘Celebrating Life’ was chosen as a new tag that completely summarized the whole essence.

Dabur India is repositioning its lead brand, Dabur Amla Hair Oil, since it was losing its market share to Marico Industries' Shanti Amla.

Dabur Amla has also launched its hair oil brand extension christened Dabur Amla Lite which failed to gain critical mass. The company has changed its packaging so as to target the youth segment as well as dedicating to its products an image of "health and well being”.

The 57-year-old Dabur Amla hair oil has given itself a face-lift with Rani Mukherjee now gracing its new-look bottles.

Ahmedabad March 23 The yesteryear reigning queens of Bollywood — Jaya Pradha, Sri Devi, Juhi Chawla and Karisma Kapoor — who endorsed this product on silver screen since 1980, did not have the chance to grace the Dabur Amla bottles, which went with a picture of an unidentifiable young woman.

But all that has changed as the brand ambassador Rani Mukherjee will now be reaching out to the 35 million strong customers of Dabur Amla hair oil with her picture on the bottles.

Dabur has extended its association with the Bollywood star with a brand restage and new packaging. With the brand ambassador's face now on the front label, the company expects to increase its current 18 per cent growth in the hair oil segment.

Brand Communication

Brand Equity

This was chosen after a study with Accenture, which revealed that Dabur was mainly perceived as an Herbal brand and connected more with the age group above 35.

With a share of 35%, personal care division portfolio has the second largest contribution to Consumer care division sales. The portfolio comprises three categories: hair care, skin care and baby care. Hair care: The category comprises hair oils and shampoos. DIL continued to keep pace with the hair oil market growing at 13% in line with category growth. Most impressive was the 18% growth in Amla in 2007-08. Given that the Amla franchise already posts sales of over Rs.250 crore, the growth is on a fairly large base. Amla was promoted consistently over the year around the proposition of converting mustard oil users. There was focused promotion across small towns and on special festivals. The company also penetrated the rural markets and held rural beauty pageants so that it portrays the brand as a local household product that can be used by rural women

who wants to look good. While the mustard oil conversion is intrinsic to DIL's strategy, Dabur has also introduced mustard and amla hair oil mix under the Anmol brand. The focus here is in establishing Dabur's oil as a credible herbal alternative to existing shampoos in the market. The colour “green” along with the picture of “amla” helps in conveying the herbal as well as ayurvedic amla connection.

Branding Strategies

Strategy used by Dabur is fourfold -EXPANSION ACQUISITION INNOVATION REGIONAL BRANDING

Dabur is trying to capture market BY LAUNCHING product with a REGIONAL TWIST. Eg. Dabur Amla Flower Magic Hair Oil in Punjab AMRITSAR: Dabur Amla has claimed solutions for bad hair with the introduction of Dabur Amla Flower Magic Hair oil. Their new product promise nourished, healthy hair.It has mild, pleasant fragrance besides it has is a unique offering that has the goodness of Amla and fragrance of flowers for healthy and attractive hair. The all new Dabur Amla Flower Magic Hair Oil is now available at all retail outlets in Jalandhar, Amritsar, Ludhiana, Patiala, Sangrur, Bathinda and Ferozepur.Especially targeted at young college going girls who are desiring beautiful, fragrant hair that makes them even more attractive. Dabur Amla Flower Magic Hair oil is a non-sticky hair oil with the nourishing goodness of Amla which makes hair stronger and longer, pleasant fragrance from white flowers such as Rajnigandha, Mogra, Jasmine and White Flowers that make hair more beautiful and attractive. North India and Punjab is among the largest markets for Dabur Amla Hair Oil. The brand, in fact, accounts for almost 40% of Dabur s sales in Punjab.

Promotion Strategies

• T.V COMMERCIAL • RADIO • NEWSPAPER • POP DISPLAY • WALL PANTING • VIDEO VANS • SALES PROPOTION • CONTEST IN MELAS OR HAATS

In order to further deepen the brand's penetration in the rural pockets, the company also announced the launch of special low-priced packs

DABUR HEAVILY ADVERTISED THEIR PRODUCT THROUGH VARIOUS CONTESTS

1. Dabur Amla sunder aur susheel pratiyogita2. Dabur Amla 'Banke Dikhao Rani'- In an attempt to give better exposure to rural

women, 'Dabur Amla' is going to conduct 'Rural Beauty Pageant' across 52 distritcts in Madhya Pradesh, Uttar Pradesh and Bihar, covering 2,000 villages.

Analysis of strategy

When a banyan tree's branches hit the ground, they start acting as roots, too.After a while, it is difficult to make out which is the tree's main source of nutrition -- the original roots, or the branch-turned-roots. It is a particularly apt analogy for Dabur India, and not just because a banyan tree has been the logo of the company for since its inception.

In Dabur's case, though, the banyan tree stands for what has not been achieved. The company has been branching out -- it has seven brands in the oral care category, nine in the hair care space and six brands in foods.

In fact, the Rs 1,852-crore (Rs 18.52 billion) company has a presence in categories ranging from mosquito repellents and juices to face packs and honey, some acquired and some developed in-house. Trouble is, not one of these categories contributes more than 21 per cent to the company's revenues.

What is better: a few power brands that are nurtured to offer huge returns or a wide array of products all of which contribute meager sums that, nevertheless, adds up to a reasonably good total?

There is a school of thought that believes Dabur's choice may not be the best way of ensuring future growth: too many segments will constrain it from scaling up significantly to match increasing competition and that will bring down overall pace of growth. Hear some analysts on the subject.

It is probably better for a company to create a few champion brands rather than dissipate its energies on too many products, because that is what will result in sustainable margins. It is difficult to scale up organically these days because brands are constantly being upstaged. Now, if companies don't scale up, margins are going to be under pressure.

They do have several categories but they don't believe that thier portfolio is unwieldy or too complex.

What works for Hindustan Lever doesn't necessarily work for them. Their strategy is based not on the size of the individual products, but on the size of the brands. They are using our two master brands -- Dabur and Vatika – to grow categories, rather than single products.

The Road Ahead

Dabur India plans to invest around Rs 200 crore over the next two years. It plans to keep on pushing the hair oil range. Amla Flower Magic is being test marketed in Punjab and Vatika Enriched Almond in Maharashtra and these products will be launched nationally in sometime. The herbal OTC healthcare range is something the company would like to pursue.