CavinKare’s success with shampoo in the sachet is today probably course material for any marketing student. Seen earlier as a company with a stronghold in South India, its products have steadily spread across a number of States in the country. Nellaiappan Thiruambalam, Director & CEO, Personal Care and Foods Division, CavinKare Pvt. Ltd, tells us how the company is poised to grow at double the industry growth rate and why
Q] What role does innovation play in your marketing?
Delivering value to the consumer – that has been guiding our thoughts and actions. It benefits the customer when the product is delivered to them at a particular price, and value is nothing but benefit given at a particular price. So innovation is extremely important in terms of design and manufacture and how the product is delivered to the consumer at a particular price point, especially in the Indian context where the price spectrum is fairly varied. India is a bi-polar country where you have billionaires, a large population of middle class and the very poor. Therefore, the need to cater to a very wide spectrum of pricing options is part of that marketing strategy. The combination of benefit and price varies across the consumer spectrum and it is a right mix for innovation to kick in, in a big way.
Q] What are the differentiated marketing strategies adopted by CavinKare during the recent economic slowdown?
During a slowdown people are more cautious about their money, so there is a major increase in value consciousness. Consumers are much more tight-fisted in terms of spending, so we look to provide extra value-delivery to help the consumer make a decision. An economic slowdown typically forces companies and marketers to think much more in terms of delivering extra value to the consumers, which is what we do. During times like these, we cross-promote our products and give extra grammage to consumers. Sampling also gains lot more significance during these times. As the money put on the table is limited, consumers are reluctant and want to be very sure of their purchase. We tend to facilitate that with sampling packs, small packs and trial packs, which also helps in getting consumers to try out a product.
Q] Did you cut back or up your ad spends during this period?
We actually upped it a bit so that the bridge with the consumer remains strong, and we remain in the consumers mind. Spends went up by about 25–30 per cent, and as a philosophy we would like to increase it next year as well.
Q] Which medium utilizes a major chunk of your advertising and marketing spends?
TV takes up a predominant chunk of our spends at between 70 to 80 per cent, followed by Print at about 10 to 12 per cent. We are also using Digital to target urban audiences, while Radio is used more for smaller towns.
Q] What are the BTL activities and sales promotions that you have undertaken to increase consumer engagement?
We started in the hair care segment with Chik Shampoo. Today, we have a diversified portfolio and are present in the food and beverage segments. Getting consumers to taste the products is extremely important in the food space, so we are reaching them through retail in an interesting fashion – by getting retailers themselves to sample our products. For the personal care and food and beverage segments, we are looking at engaging consumers in a dialogue via mobile, whereby they get a chance to sample our products by reaching out to their nearest dealer.
Q] What percentage of revenues come in from non-urban (particularly rural areas) versus Tier I and Tier II cities?
Non-urban constitutes a very large chunk, and with urban it is growing extremely well now because of changing portfolio. Today, we are almost at 50:50.
Q] Does your marketing strategy vary for urban and non-urban areas?
Besides using radio, even our product design varies. The pack size and SKU (Stock Keeping Unit) do vary because the consumers’ propensity to buy a quantity at a particular time varies across urban and rural markets. Consumers are more price conscious down the income spectrum, so fine-tuning the products for these audiences and delivering the product to the rural audiences is very different from delivering to the urban audiences. For example, the shopping environment, which is better in urban areas, influences the distribution. The communication is also customized to suit the consumer’s viewing or reading habits.
Q] Which is the strongest brand in your portfolio?
We have several brands which are strong in their categories and make it to the top of the brand list. Chik has always been a strong brand in the shampoo category, while Indica is emerging extremely powerful in the hair colour space. In addition to Chik, our other shampoo brands – Meera and Karthika – are doing very well in Andhra Pradesh and Tamil Nadu. Cavin’s milkshake is another emerging strong brand and our Garden range of snacks is a very powerful brand in Maharashtra. Our fairness cream, Fairever, is also very strong in the South. All our brands are giving us traction and will continue to do so going forward.
Q] From personal care, CavinKare went on an expansion spree, diversifying into dairy products and to even restaurants, only to get out of some businesses later on. What has been the learning?
We experimented with the restaurant business in Chennai (Vegnation) and that was a limited experiment. We realized that our resources could be a lot more productive if put into the packaged food and packaged personal care products. So that was where the experiment ended. The learning is that in today’s highly competitive world, all businesses have become very resource-intensive, so we need to support whatever business we are in to an adequate level. Also, engaging with your consumer in a meaningful, adequate manner takes priority over the number of categories you want to be in.
Q] What is the future course – consolidation or focused expansion? CavinKare is still perceived to be a South Indian brand, what are the initiatives being taken to create a pan- India appeal?
Considering the categories we are currently in across personal care and food and beverage segments, we are here to stay. We believe that these categories can be leveraged far better for growth than what we are currently seeing. We are looking to expand our market and we believe that we can take Garden Namkeens outside Maharashtra and to the rest of the country. Similarly, we believe Cavin’s Milkshake can be taken outside South India. There is a lot more to be leveraged in geographical expansion and extending the brands that we already have into markets outside South India is number one on top of the list. Endorsing our products, we have Parineeti Chopra for Spinz, Preity Zinta for our Indica hair colour and Indian cricketer, R. Ashwin to endorse Cavin’s Milkshakes. Today, our production facilities are far better spread out and we have our largest factory in Uttaranchal. We are also approaching modern trade across the country. Production facility, brands being extended and sales team being augmented across India all say that we want to grow faster.
Q] What are the strengths and weaknesses of being a home-grown FMCG player taking on the likes of global/Indian MNCs?
As a company, we cater to the bottom of the pyramid much before that became a commonly used phrase. Our connections with the consumer and understanding of the Indian consumer give us an advantage in terms of delivering better services to value-conscious customers. So that helps us play the game much better.
Q] What are the future goals set by the company?
We believe we can quite easily grow at more than double the market growth rate, in whichever category that we are operating in. It is our goal and we are resourcing in terms of products, marketing and distribution capability to ensure we do just that.
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