dabur ppt final group11
TRANSCRIPT
Dabur India
Abhipsita Singh
Anuj Kedia
Rajesh Raja
Sunil Kardam
Agenda
• Analysis of FMCG Industry• Dabur : An Overview• The Restructuring of 2004• Business Profile of Consumer Care Division(CCD)• The Road Ahead: Growth Strategy for Dabur CCD
Porter’s 5 Force Model
Competitors:Highly FragmentedPlagued by grey marketCompetition from MNCsLess Capital Intense butHigh advertising cost
Suppliers:Bargaining Power - LowUndifferentiated raw materials
Barriers To Entry:Economies of Scale: HighExpected RetaliationHigh R&D costs
Substitutes:Traditional homemade remediesUnorganized unbranded productCounterfeit product
Buyers:Distributors and sellersBargaining Power: High
Buyers
Distributors and sellers
Access
Few distributors have strong channels in specific regions and act as suppliers as well as retailers in the region
kirana stores can influence choice of products
Visibility of products
Bargaining Power: High
Agenda
• Analysis of FMCG Industry• Dabur : An Overview• The Restructuring of 2004• Business Profile of Consumer Care Division(CCD)• The Road Ahead: Growth Strategy for Dabur CCD
Dabur Overview
• One of the largest FMCG companies in India – Consolidated Turnover of Rs.15.4
billion ( USD 350 mn)
• Differentiated products – Strong herbal and natural profile– More than 100 years of experience in
Ayurveda
• Wide distribution network – Covering 1.6 million retail outlets – High penetration in urban and rural
areas
• Brand strength – Strong brands in diverse categories
of health and personal care – Mother brand “Dabur” trusted for
natural and herbal healthcare
PRESENCE IN INDIA
Dabur Group - Overview
Business Divisions
8%
11%10%
71%
Consumer Care Division Consumer Health Division
International Business Division Food Business
Largest Indian Personal & Health care Company –
Revenue of over $ 420 MnMarket Cap > $1.7 Bn
World Leader In Ayurveda Portfolio of over 400 Herbal
/ Ayurvedic Products
Strong Internal Competencies Robust Manufacturing Set-up
& state of the art R & D Facilities
Agenda
• Analysis of FMCG Industry• Dabur : An Overview• The Restructuring of 2004• Business Profile of Consumer Care Division(CCD)• The Road Ahead: Growth Strategy for Dabur CCD
The Restructuring of 2004
Drivers
• Internal inefficiencies – organization structure
• Market Factors – too diverse portfolio• Capital market and financial issues
Assessment Summary Evidence
4024P/E
27%17%ROCE
18%12%Op. Margins
IndustryDabur
Process
• Phase I: Consolidation–5 core units, change in structure–Shift to professional management–Cost management
• Phase II: Pharma Demerger
• Non-core units divested• Centralized procurement,
supply chain• New entity – Dabur Life
Sciences
Results
• Improved market performance• Improved efficiency• Significant improvement in capital
market parameters
2429.3P/E
17%21.2%ROCE
12%13.2%Op. Margins
19972004
Rigorous Brand Building
CELEBRITY ENDORSEMENT
REJUVENATION OF BRANDS
Performance Before Restructuring
Operating Margins (1997) ROCE (1997)
Debt/Equity (1997) Net Working Capital (1997)
0
20
40
60
Dabur Colgate HLL
%
0
25
50
75
100
125
Dabur Colgate HLL
%
0
20
40
Dabur Industry
Day
s
0
20
40
Dabur Colgate HLL
%
Market Performance
Management & HR
• Only 4 Burmans on a board of 10 directors• Professional culture• Competitive compensation packages
Cost Optimization
• Operating margins improved to 13% within 1 year
• Reduction in inventory• Reduction in costs from purchase, supply chain
-4048
1216
2002 2003 2004 9M2005Dabur Industry
Sales Growth Performance After Restructuring
0
20
40
1998 2000 2002 20040
20406080
100120
1998 2000 2002 2004
0
50
100
150
1998 2000 2002 2004
ROCE Net Working Capital
Debt/Equity
Performance After Restructuring
Agenda
• Analysis of FMCG Industry• Dabur : An Overview• The Restructuring of 2004• Business Profile of Consumer Care Division(CCD)• The Road Ahead: Growth Strategy for Dabur CCD
Consumer Care Division
• Hair care• Skin care and baby care• Digestives and Confectionary• Health Supplements• Oral Care• Home Care
Hair Care Segment
• Niche Segment - Ayurvedic Products: Leader in the segment
• Tough competition from unorganized segment and local brands Launched Anmol – economy brand
to compete with low price products
• Ayurvedic Products – Leader in Value added segment (premium)
Price
Basic Product•Dabur Anmol•Parachute•HLL Nihar
Value Added Hair oilsVatikaMarico ( Hair and Care)HLL (Clinic Plus Lite)
Dif
fere
nti
atio
n
Strategic Group of Dabur: Value Added Hair Oils
The Skin Care Story
Initial move into Skin care: A failure
•1996, Samara brand launched in Chandigarh and Delhi with 15 products
•Failure due to bad distribution and marketing
•Revamping of the brand in late 1997, Spanish co. Antonio Puig co-ordinated
•Promoted select products- fairness cream & lotion, facial scrub, anti-acne cream etc.
•The range completely withdrawn in 1998
Reasons for failure of Samara:
Products projected as need-based and not on glamour plank
Insufficient advertising and promotional support
•Skin care solution relaunched in 2004 under the brand Vatika
•So far three basic products launched
•The segment has tremendous potential for expansion
Natural positioning of Vatika – made brand extension feasible
Advertising costs reduced, no fresh brand building needed
Vatika Superbrand : from hair care solution to value added natural personal care for women
Creating Awareness:Other brands don’t offer solution to problems caused by pollution, hard water and chemicals
Vatika Woman:Young, contemporary, multi-faceted, achievement-driven and confident.
Promotional Activities Vatika Supermodel 2001
Give a cosmetic and glamorous image to the brand. .
Co-Branding with Vatika
VATIKA BRAND BUILDING
Baby Care Segment
Dabur’s entry
Babycare market
Sustaining the
position
• High customer loyalty in the baby hair care and toiletries
• J&J – undisputed leader• Difficult for Dabur to break into this
segment
• Skin care: highly fragmented – mostly home-made concoctions used
• Preference for natural/herbal product• Dabur entered with ayurvedic massage oils
and baby digestive tonic• Present situation: Market leader with 22%
share
• Refrained from products not directly related to Ayurvedic Expertise (e.g. toiletries)
• Maintained competitive prices in the market
Baby Skin Care Company Shares - 2005
Others40%
Jhonson's Baby Oil
17%
Dabur Lal Tail22%
Wipro Baby Soft Oil11%
Keo Karpin8%
Dabur Baby Olive Oil
2%
Dabur oil and tonic
Price
D
iffe
ren
tiat
ion
Babycare segment: Competition In the value offered
Johnson & Johnson
Himalaya Baby products
Marico Sparsh
Baby Care Company Share by Value - 2005
Others
7%
L'Oreal
0%
Karnataka Soaps & Detergents
1%
Dey's Medical
4%Wipro
9%
Dabur12%
J & J67%
Digestives Category
• Flagship brand worth Rs. 100 crore
• Market Leader with 75% market share in digestive tablets category
• Oldest brand in the Rs. 90 crore digestive market in India
• The power brand of Dabur had grown to be a mature brand – several revival strategies:– Unique Positioning : Not as a
digestive remedy(medicinal aspect)– Launching of Hajmola Candies :
Different Flavors– Celebrity Endorsement : Amitabh
Bachchan as brand ambassador
Competitive Profile
Redefining the Image of Mature Brand
•Hajmola Candy – Different flavors are Albela Aam, Pangebaaz pineapple, Rangeela santra , Chulbuli imli
•Hajmola Candy Fun 2 – available in three flavors : peach, green mango and litchi
Twice the fun and twice the taste as hajmola candy
•Hajmola Anardana - first branded churan in the market with a unique chatpata taste.
•Hajmola Mast Masala - Spices market with dual benefit of taste and health.
• Moved away from the medicinal
aspect and focuses on the mischievous aspect
• Fun-filled digestive tablets
• Candies and yumsticks – Dual benefits of health & taste
• Competitors’ focus – only taste
DIFFERENTIATION
Celebrity endorsement
•Kapil Dev, brand ambassador in 1995
•Amitabh Bachchan, brand ambassador in 2004
•Virender Sehwag, brand ambassador for yumstick
Fine distribution network in both rural and urban areas
PROMOTION
Health Supplements Category
Dabur pioneered the Chyawanprash category
• Has been a market leader since its launch
• Adding relevance to the category- Chyawanprash variant ‘Chyavanshakti’
• Legal battle with Emami over the promotion of “Amritprash”
Dabur Honey:• Largest national player in branded honey
• Redefining honey usage in food products
Dabur Glucose
•Energy source to remain fresh and fight fatigue
•Legal battle with Heinko over the name Glucose D initially, similar to its product Glucon D
Oral Care Segment
Initial Brands• Dabur Red Toothpowder• Dabur Red Toothpaste
Problems:• No differentiation – too few products• Declining tooth powder market
• What Balsara Acquisition brought : Babool : Economy segment Meswak: Premium segment Promise: Popular product
• Wider distribution network in Western India
• With Dabur’s better distribution in India, all the acquired brands grew at more than 30%
Competitive Profile
Home Care Segment
Dabur entered the category with the Balsara acquisition• Odonil : A generic name in Air freshener segment• Odomos : Dominant share of personal application insect repellants• Odopic : Dishwashing and surface cleaner with strong equity in West India• Sanifresh :No.2 in toilet cleaner market
Total market size estimate at about Rs.20 billion
Attractive categories with CAGR of 15-25% and low penetration levels
Insect Repellant PAP
Solid deodorizer
Acquiring the Leader
Agenda• Analysis of FMCG Industry• Dabur : An Overview• The Restructuring of 2004• Business Profile of Consumer Care Division(CCD)• The Road Ahead: Growth Strategy for Dabur CCD
THE ROAD AHEAD FOR DABUR
Proposed Strategies for Organic and Inorganic Growth
SWOT Analysis
Strengths:
Strong BrandStrong financial positionRobust distribution networkIdeal product portfolio for international businessNiche player
Weaknesses:
Key flagship brands like Chyawanprash, Lal Dant Manjan and Hajmola have maturedSkewed presence in the country, lagging in the Southern partsLow on glamour and style quotient
Opportunities:
Huge untapped international marketHuge potential for Private Labels business Booming Indian retail sectorUntapped South Indian marketForay into health clinic concept
Threats:
Fierce competition in the FMCG sectorUncertain commodity prices and dependence on agri-based productsPrice sensitive customers
Growth Strategy
PLATFORMS
CATEGORIES
MARKETS
Current categories New categories
Ayurveda
Herbal
Natural
North, East & West India
South India
Global Markets
Current Product Portfolio
Expanding Reach
of existing products Acquisitions
Innovation
Marketing Innovation•Special Branding exercise for the Southern market•Restructuring of brands: Separating Vatika from DaburAnd establishing it as a completeNatural Beauty solution brand Independent of Dabur.
SCM Innovation•Fwd. Integration of ERPFor suppliers to the Stockists and retailers•Participative relationshipWith the stockist – less Inventory , better estimateOf demand.
Product Innovation•Completing product portfolio at different price points• Innovative packaging•Smaller SKUs e.g. sachets•Redesigning of products for the Southern market
The Road Ahead• “Retailer push” to customers: tie-ups with retail majors like Big Bazaar, Spencers, Foodworld etc.• Unconventional distribution for rural markets , as done by Emami
Parameters for Acquisition
Brand Fit
Minimum overlap of product offerings
High Growth Potential
Access to new customer group
Complimentary distribution channel
The Acquisition Picture
Parameter Dabur Cavin Kare Vicco Labs Ayur Herbal
Turnover 2000 Crores 572 crores 150 crores100 crores
Exports 11% of Sales 8% of Sales 15% of Sales 8% of Sales
Presence: Overall
Across SegmentsPersonal Care,
Foods, Home care
Personal Care Focus
Strong Herbal Beauty Product
Focus
Personal CareLimited (Hair Oil
and Face Pack)
Extensive(Hair, skin creams,
talc, deodorant)
Limited (Turmeric based cream)
Strong (exceeding level of depth)
Brand Image Fit N.A. Not very Strong Very StrongVery Strong
Baby Care Strong Doesn’t Exist Doesn’t Exist Doesn’t Exist
Distribution Network
Very Strong Extensive – South focused
Limited Strong Dealer Network
Ayur Range of Products
Ayur’s Case – The Rationale
Access to a wide range of skin care, hair care, face and body care products
Herbal image is aligned with Dabur’s
Brands are modern and youthful
Strong dealer network specially in north and west India
Products can be used in Vatika beauty clinics
Value for money offerings
Affordable proposition
Renowned research academy
Strategies for the Future
• Packaging– Up-gradation from sachets– New attractive packaging
• Brand– Dissociate Vatika from Dabur– Further rationalize brand image
Vatika Skin and Beauty Clinics
• Vatika woman has a premium image
• Market Size for beauty treatment: 100 crores
• Competition: Kaya Skin Clinic Shehnaz Hussein Beauty Clinics
• Kaya Skin Clinic– 1.5lakh customers,43 clinics across India– Turnover of 43 crores– Rs.1200-1500 per sitting– Services constitute 85 percent of revenues– Products sold at 50 per cent premium
Proposed Model
• Gradual roll out of around 50 clinics around the country– Start with Metros– Expand to Tier-1 and Tier-2 cities
• Projected Figures– Rs. 89 crores in revenues in 4 years with 30 clinics– Rs. 16 crores in profits– Operating breakeven for a Clinic: 5-6 months– Project breakeven: 36 months
• Define Criteria for success of Pilot tests– Operating breakeven at least in under a year
Strategies for South
• Brand endorsement with local artists & sportspersons
• Following regional advertising norms
• Product adjustment to suit the regional needs
• Develop distribution network in South
THANK YOU