Dabur India Limited A Indian Consumer Goods Company Marketing Essay

Dabur India particular A Indian Consumer Goods Company marting EssayIntroductionDabur India Limited is a leading Indian consumer goods company with interests in Hair C ar, Oral get by, Health assistance, Skin look at, Home Care and Foods. From its humble beginnings in the by lanes of Calcutta demeanor back in 1884 as an Ayurvedic medical specialtys company, Dabur India Ltd has come a long way today to become a leading consumer reapings manufacturer in India.The founder, Dr.S.K.Burman, was a practicing allopathic doctor. At that time Malaria, Cholera and Plague were the common diseases. He was a physician who brought Ayurvedic medicines to the masses of Bengal. Initially established as a proprietary loaded for the manufacture of chemicals and ayurvedic drugs it was later on 19th November 1930 incorporated as private limited company. Late Shri C.L.Burman, son of late Dr S.K. Burman and his son late Shri P.C.Burman in the disclose of Dr S.K.Burman Pvt.Ltd. to expand the operati ons by setting up production facilities at Garia and Narendrapur, West Bengal and Daburgram, Bihar. Dabur (Dr.S.K.Burman) Pvt. Ltd. was merged with Vidogum and Chemicals Ltd. w.e.f. 1st July1985 and the amalgamated company was renamed DABUR INDIA LIMITED.For the past 125 years, they ready been dedicated to providing nature-based solutions for a healthy and holistic lifestyle. Through their comprehensive range of products, they cater to all consumers, in all age groups, crossways all affectionate boundaries. And this legacy has helped them develop a bond of trust with the customers.VISIONDedicated to the health and tumesce being of every house hold.Dabur is a company with a set of established business values, which direct its functioning as well as all its operations. The guiding forces for Dabur are the words of its founder, Dr.S. K. Burman, what is that life worth that cannot consecrate comfort to others. The Company offers its customers, the products to suit their needs and g ive them good values for m onenessy. The company is committed to follow the ethical practices in doing business. At Dabur, nature acts as not only the source of raw materials but also an inspiration and the company is committed to product the ecological balance.Journey so far1884 The make of Dabur1972 The company shifts base to Delhi from Kolkata1986 Registered as Public Limited Company1994 Listed on the Bombay Stock Exchange1998 Professional team inducted to run the company2000 Crosses Rs. ampere-second0 Crore derangement2003 Pharmaceutical crinkle de-merged to focus on core FMCG2004 Profit exceeds Rs. 100 Crore2005 Acquire Balsara strengthening Oral care provided entry into Homecare atom2006 Dabur figures in natural covering 10 Great Places to Work2007 Dabur ranked among Asias best under a Billion enterprises by Forbes2008 Acquired Fem Care Pharma entering the mainstream Skin care department2009 Strong maturation momentum continued in spite of general economic downturn. A lso Dabur Red Toothpaste becomes Daburs 9th Billion Rupee score.2010 Touched US$4 billion securities industryplace cap. Overseas acquisition, Hobi assort, Turkey to strengthen presence in MENA and adjacent regions.Dabur At-a-GlanceDabur India Limited has marked its presence with significant achievements and today commands a grocery store leadership status. Their story of success is based on dedication to nature, corporate and process hygiene, dynamic leadership and commitment to their partners and stakeholders.Leading consumer goods company in India with a turnover of Rs. 3417 Crore (FY10)3major strategic business units (SBU) Consumer Care Division (CCD), Consumer Health Division (CHD) and International Business Division (IBD)3Subsidiary Group companies Dabur International,Fem Care Pharma and new-fashioneduand8 step down subsidiaries Dabur Nepal Pvt Ltd (Nepal), Dabur Egypt Ltd (Egypt), Asian Consumer Care (Bangladesh), Asian Consumer Care (Pakistan), African Consumer Care ( Nigeria), Naturelle LLC (Ras Al Khaimah-UAE), Weikfield International (UAE) and Jaquline Inc. (USA).17 ultra-modern manufacturing units mobilise around the globe reapings marketed in over 60 countriesWide and deep market penetration with50 CF agents, more than 5000 distributors and over 2.8 million retail outlets all over IndiaDabur India Ltds manufacturing activities spanning various consumer products categories are carried out in 17 factories spread across India and abroad.Dabur has 11 manufacturing facilities in India, out of which two main units are at Baddi (Himachal Pradesh) and Pantnagar (Uttaranchal).Daburs Business StructureNote Percentage share in revenue based on FY10 Financials Femcare included in Consumer Care DivisionConsumer Care Division (CCD)Consumer Care Division (CCD) adresses consumer needs across the entire FMCG spectrum through four distinct business portfolios of Personal Care, Health Care, Home CareFoods. overshadow brandsDabur Ayurvedic healthcare product sVatika Premium hair careHajmola Tasty digestivesRal return juices beveragesFem Fairness bleaches skin care products9 Billion-Rupee brands Dabur Amla, Dabur Chyawanprash, Vatika, Ral, Dabur Red Toothpaste, Dabur Lal Dant Manjan, Babool, Hajmola and Dabur dearestStrategic positioning of Honey as food product, leading to market leadership (over 75%) in branded honey marketDabur Chyawanprash the largest selling Ayurvedic medicine with over 65% market share.VatikaShampoo has been the fastest selling shampoo brand in India for three years in a rowHajmola tablets in command with 60% market share of digestive tablets category. About 2.5 crore Hajmola tablets are consumed in India every dayLeader in herbal digestives with 90% market shareCategory-wise Share of CCD Brand OverviewConsumer Care CategoriesHair CareHair Oil ShampooSource Value share-ACN June, 09 Value Share-ACN Mar, 10Oral CareValue Share-ACN March, 2010Health SupplementsValue Share-ACN March, 2010FoodsCompany Est. Mar, 2 010 for Fruit Juice categorySkin Care*Company estimates Includes Fem skin care portfolioDigestivesValue Share-ACN March, 2010Home CareValue Share-ACN Mar,2010 for Aerosols categoryConsumer Health Division (CHD)Consumer Health Division (CHD) offers a range ofclassical Ayurvedic medicinesand Ayurvedic OTC products that deliver the age-old benefits of Ayurveda in modern ready-to-use formats. Daburs Consumer healthcare business is the Companys oldest business, and today has a growing portfolio of OTC products to address a variety of problems ranging from Womens Health to Baby Care andCough Cold to Rejuvenation.Has more than three hundred products sold through prescriptions as well as over the counterMajor categories in traditional formulations include Asav Arishtas Ras Rasayanas Churnas Medicated OilsProprietary Ayurvedic medicines developed by Dabur include Nature Care Isabgol Madhuvaani TrifgolDivision also works for promotion of Ayurveda through organised community of traditional practitioners and developing fresh batches of studentsThe Consumer Health Division, CHD witnessed a growth of 10.2% during the quarter led by ethical portfolio which grew by 14.5%. In OTC, Pudin Hara grew by 12.8%. The Pudin Hara portfolio has been extended by launching Pudin Hara Lemon Fizz in the tartness segment.International Business Division (IBD)International Business Division (IBD) caters to the health and personal care needs of customers across different outside(a) markets, spanning the Middle East, normality West Africa, European Union and the USwith its brands Dabur VatikaGrowing at a CAGR of 33% in the last 6 years and contributes to about 20% of rack up gross revenueLeveraging the Natural preference among local anaesthetic consumers to increase share in perosnal care categoriesFocus markets GCC Egypt Nigeria Bangladesh Nepal USHigh level of localization of manufacturing and sales marketingWorld wise division of DaburDaburs International businessThe Companys key markets for international business are the Middle East, Africa, UK and South Asian geographies, with manufacturing plants located across regions. The Company also has a private label business in USA and UK, along with Guar gum exports, which takes place from its Indian plants.The Companys International Business Division recorded an impressive sales growth of 26.3% from Rs.477.0 crore in 2008-09 to Rs.602.5 crore in 2009-10, contributing to 18% of overall consolidated sales. The operating margins of the business breakd significantly during the year reflecting the strength of the brands even though the external conditions were tough and the environment was plagued by recessionary trends, currency depreciations and demand contraction.Robust sales growth in international markets was possible due to Strong Brand portfolio positioned on herbal and natural platform Aggressive new product launches and brand extensions Geographical involution into new markets Strong Sales and Distribution network Strong manufacturing backbone and expansion of own manufacturing in key geographies Localised and efficient supply chain.Product PortfolioThe company has built strong and robust brand architecture with two mega brands for international business across all geographies Dabur and Vatika and most of its offerings are under both of these two brands.Dabur Amla Dabur Amla franchise achieved a growth of 38% along with all the extensions. Basis Nielsen Retail Audit in KSA, Dabur Amla Hair Oil with a market share of 34.2% is the biggest brand in the hair oil segment. Dabur Amla Gold has market share of 6.8% while Dabur Amla Jasmine is at 5.1%. The Amla franchise has straightway been extended to the Hair cream off Category with the launch of Dabur Amla Hair Cream. It has become the fastest growing brand in the Hair Cream segment notching up sales of more than INR 13 Crore in first year of launch.Vatika There has been a robust growth of 36% in the Vatika franchise which includes Va tika Enriched Hair Oil, Coconut Hair Oil, Hair Creams and Hamam Zaith. Vatika brand is now worth Rs.185 Cr built from a negligible base over the last four years in the Arab belt. There was a boffo re- launch of Shampoos and Conditioners, launch of one more variant in Hamam Zaith and re-launch of Vatika Coconut Hair Oil. Light hair oil range of Vatika Hair oils registered 51% growth in MENA. Vatika Hair Cream is now an INR 64 Cr brand in MENA. Vatika Hair Cream gained 370 bps in market share and change state 12.7% of the market in volume terms. It grew by 44% in volume terms over LY in a category that has remained flat. Vatika Hair Cream is now the no. 2 player in Modern Trade with a 15.6% volume mkt share despite high-pressure competition from established brands.Vatika DermoViva a new sub- brand launched for the Personal Wash and Skin Care segment had its first launch in the Bar Soap category and has managed to create consumer equity in a category dominated by strong MNC players .FEM The FEM brand was strengthened in the overseas markets through ATL and BTL inputs which saw the brand grow by 100% in just nine months of operation since the takeover.Daburs International MarketThe key contributing markets/ regions to the International Business growth squander been GCC, Egypt, Nigeria, Algeria, Morocco, Libya, Yemen, Syria and South Africa.GCC, the biggest market in the IBD and despite being a mature market, has registered a strong growth of 42% over last year fuelled by innovations and new product launches in the Hair Care, Personal Wash and Oral Care segments.Dabur Egypt Limited has witnessed another fantastic performance with 30% growth in sales.African Consumer Care, Nigeria has grown by 17% over last year in terms of local currency , aided by strong growth of Dabur Herbal Toothpaste and Dabur Herbal colloidal jelly in the Oral Care category.Asian Consumer Care, Pakistan has grown by 26% in revenue with Hajmola and Dabur Amla becoming the two strong brand s for the region.Dabur Internationals UK process has witnessed a 23% growth over previous year which has been the highest growth rate for this region in the last 8 years.Markets of North Africa, Levant and Yemen have witnessed an impressive performance with 49% growth over previous year.Asian Consumer Care, Bangladesh, registered a growth of 47% during the fiscal 2009-10. The growth has been led by change magnitude dispersion penetration and focussed brand approach.Dabur Nepal Pvt Limited which makes fruit juices and also caters to local consumer market in Nepal recorded impressive growth of 26% in its sales to the domestic market of Nepal.Dabur recently has bought Turkey-based personal care company Hobi Kozmetik Group in a deal at Rs. $ 69 million. The company, in a move to increase its presence across Middle East and North African region, has made the acquisition. Hobi Kozmetik is a market leader in the hair gel category with 35% market share. Companys products sold under Hobby and vernal Era brands in 35 countries. The transaction is expected to be completed by Q3 of FY11. Dabur, which is the biggest FMCG in India with large market capitalization, has huge investment and expansion plans as the company aims to expand its foreign sales.Exports from IndiaThe company also exports guargum and private label spontaneous care products from India. During the year 2009-10 the company recorded Guargum exports to the tune of Rs.43.3 crore as compared to Rs.48.3 crore in the previous year. The sales were lower due to poor global demand and recessionary environment.Exports to USA recorded impressive growth with sales increasing to Rs.38.4 Cr in 2009- 10 versus Rs.27.6 in 2008-09 reflecting a growth of 39% despite the recessionary environment in developed markets. The US sales comprise Private Label and Ethnic business. Key markets in USA and Europe contributed to the growth. Innovative product developmentsin Oral care private label- such as Pro-age, Sensitive and He rbal toothpastes were launched. Ethnic Sales in USA and Canada also performed well record 80% growth albeit on a low base. Various new products were successfully launched in the market and penetration ofmainstay Dabur products interchangeable Hair Oils and Chyawanprash into Canadian mainstream retail chains such as Walmart was achieved.Competitor AnalysisCategoryDaburs ShareMain CompetitorsFruit Juice58% Real and ActiveTropicannaFruit Drinks (coolers)1% CoolersFrooti And MaazaHair oil Coconut base6.4% VatikaHLLShampoo Vatika7.1%HLL and PGHair care (overall)27%HLL, PG and HimalayaChyawanprash64%Himani, Zhandu and HimalayaHoney40%Himani, Hamdard and local PlayersDigestives37%Paras and local playersCompetitionMarket Cap.(Rs. cr.)SalesTurnoverNet ProfitTotal AssetsHUL60,897.6317,725.332,202.032,583.52Dabur India18,851.772,874.60433.15859.35Godrej Consumer12,917.721,267.88248.12839.87Colgate11,244.571,770.82290.22330.70Godrej Ind7,770.69880.9719.331,570.31Marico7,641.542,030.85235.0294 8.58PG7,169.93904.46179.76440.02Emami6,891.491,006.86165.40878.42Gillette India5,953.64852.48137.10490.89Jyothy Labs2,440.33579.8780.05399.10Source moneycontrol.comBCG AnalysisInternation business division which promises high growth potential in Egypt, Nigeria, Pakistan, Banladesh, Nepal, US needs more investment.Price penetration is a key strategy for Cash Cows like Health supplements, Digestives and Home care.Dabur has adopted a strategy of premium pricing for its Dog category like Baby care.Vision 2010The following are the principal features of the 2010 strategic plan-Doubling of the sales figure from 2006The new plan will focus on expansion, acquisition and innovation. Although Daburs international business has done well growing by almost 33% from Rs.602.5 crore in 2009-10, plans are to increase it by leaps and bounds.Growth will be achieved through international business, homecare, healthcare and foods.Southern markets will remain as a focus area to increase its revenue share to 15 per cent.After smoothly sailing through its previous plans, this vision seems possible. However, if Dabur could be more aggressive in its approach, it can achieve unprecedented results. To conclude, there are few recommendations which are as follows.RecommendationsEntering countrified marketDabur should target more towards the rural market and tier 2 and tier 3 cities. These markets have traditionally been loyal to Daburs ayurvedic range of personal products.Tapping the rising global demand of herbal and Ayurvedic productsNew trends in the global market for the rising demand of herbal/ ayurvedic products are seen. This is the right time when Dabur should re launch itself as a key international player in the global arena.Targeting premium segmentIn the domestic market, there is a huge scope for Dabur to launch niche/luxury segment products catering to specific target groups.Development of new markets for Products ServicesNew areas of growth are opened up for Dabur with the ex pansion into the new markets of Cambodia, Philippines, Belarus, Gambia and Bolivia. The sales and distribution structure should be strengthened in the key markets of Yemen, Syria, Kuwait, Malaysia and Tanzania. It can be done by appointing new distributors in CIS, Mozambique, Guinea and Rwanda etcEntering US MarketThe Company is also trying to enter into the US Market where it is attempting to build a full fledged distribution channel. It will also be utilitarian to mention that some of its products like Chyawanprash are selling in the US via indirect channels. But this task is going to be a herculean one since US laws are tough and the preferences of consumers also vary greatly than that of markets which are usually catered to by Dabur.Targeting South AfricaIn Africa the company should look at countries like South Africa where it currently is not present. It already has a personal care plant in Egypt and a toothpaste plant in Nigeria. Dabur can do well in these markets because the profile and preferences of these consumers are very much like India.Focusing on ExportThe focus should be to continue expanding the companys presence across geographies and to mold the opportunities that exist in existing and potential segments. The company should continue to invest in brand building, manufacturing and human capital in order to maintain and improve the existing robust growth path.