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Case Study On Cavinkare Private Limited: A Challenge of Sustaining Growth and Expanding Business

CavinKare started in 1983 with an initial investment of Rs. 15,000 and has since grown significantly. It identified consumer needs for affordable yet high quality personal care products. CavinKare launched successful brands like Clinic Plus, Chik shampoo, Nyle herbal shampoo, and Fairever fairness cream by gaining insights into consumer needs. It achieved cost advantages through outsourcing manufacturing and using innovative packaging like sachets. While CavinKare faces competition, it sees opportunities in expanding its market share and diversifying into new businesses like food and retailing. Its goal is to remain the preferred choice for customers through innovation.

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Dhanun Jay
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296 views

Case Study On Cavinkare Private Limited: A Challenge of Sustaining Growth and Expanding Business

CavinKare started in 1983 with an initial investment of Rs. 15,000 and has since grown significantly. It identified consumer needs for affordable yet high quality personal care products. CavinKare launched successful brands like Clinic Plus, Chik shampoo, Nyle herbal shampoo, and Fairever fairness cream by gaining insights into consumer needs. It achieved cost advantages through outsourcing manufacturing and using innovative packaging like sachets. While CavinKare faces competition, it sees opportunities in expanding its market share and diversifying into new businesses like food and retailing. Its goal is to remain the preferred choice for customers through innovation.

Uploaded by

Dhanun Jay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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CASE STUDY ON

CAVINKARE PRIVATE LIMITED


A CHALLENGE OF SUSTAINING GROWTH AND EXPANDING
BUSINESS
Presenters:
D. Ratnakar Reddy
INTRODU
CTION
• Mr. CK Ranganathan, the Founder
Chairman
• Started from Chik India in
1983with an initial
investment of Rs. 15,000
• Changed its identity :
– 1990 :Beauty Cosmetic Pvt. Ltd.
– 1998 : Cavinkare Pvt. Ltd.
– Products : Personal Care, Food,
Beverages,
Dairy and Snacks
CAVINKARE
PRODUCTS
IDENTIFICATION OF
CONSUMER
•
NEEDS
First identification in the early’s 1980:
– Need for superior quality shampoo with affordable price.
– Clinic plus and shampoo targeting urban area
– Introduce chik sampoo in 1983
– Targeted consumers having lower income 1000-1500 per
month
– In 1984, Increased the sales from 0.5 million to 3.8
million in 1 year
– In 1990, raised to 35 million
CONT
D..
• Second identification gap:
– CavinKare realized the gap for the
need of herbal shampoo
– In 1993, it rolled out Nyle shampoo.
– Positioned it at the safest shampoo to
use.
– By 2001, Nyle was among top five
shampoo brands
GAINING CONSUMER
INSIGHTS
• Using insight CavinKare entered the fairness cream market
and launched the “Fairever” brand of fairness cream in
1998.
• Based on another consumer insight, CavinKare introduced
Meera herbal hair oil in 2004
MARKETING
COMMUNICATION
VALUE THROUGH
AFFORDABLE
• PRODUCTS
It focus on volumes and scale of economy
resulted in lower costs of production.
• CavinKare entered the perfume business to
introduce quality perfume at an affordable price.
• It launched perfume brand Spinze in the
Year 1997.
• The product was introduced in bottles as well as
small packs called “Dab-on”.
COST
ADVANTAGE
• Reduced Structure of Cost
• Outsourcing the manufacturing operation.
• Decreased overhead cost
• Nimble and agile organization
• Helped to focus on marketing and distribution
• Supported by its world class R&D infrastructrue
PACKAGING INNOVATION:
SACHETS AND LOW
UNITS
• Sachet shampoo PACK
introduced in 1976 for velvette by Chinni
Krishnan
• Popularized by Ranganathan through chik(LUPs)
• High acceptance
• Helped in the risk of trial
• Innovative packaging
– In 2000, introduced single use perfume ‘c’
– Help trial use and new users to product
– Concept of “Once a day”
DISTRIBUTION ACCESS
• Difficult to gain distribution access in rural areas
• Targeted haats and Melas
– Server 4000 consumers
– 47000 haats and 25000 melas in a year
– Rs. 0.2 million in haats
– Rs.1.43 million in melas
ROAD
•
AHEAD
Successfully competed big companies
• In 2001:
• Chik and Nyle became leading companies –Rs 8500 million
• Fairever stood umber 2 in cream –Rs 6500 million
• In 2003:
• Turnover of 2640 million
• Estimated to be 52 billion by 2012
• Two-pronged strategy
– increase market share of its current pro duc
– Diversify into new business t
INCREASE MARKET SHARE OF
PRODUCT
• Still huge gap in market share of Unilever
• Fairever 9.5 % vs Fair and lovelt 62% in 2003
• In 2004, deodrant have 3% market sahre
• In perfume category spinz have 7%
• Spinz talc have 4.27% vs 55% of ponds talc
PORTER’S FIVE FORCES ANALYSIS

Industry Competitors Potential Entries


• Rivalry among players is very high in the FMCG • No barriers to entry
industry • New entrants offer tough competition due to cost
• Price Competition effectiveness
• Advertisement and Promotional stuff • Not a capital intensive

Substitute Product
• Consumer needs are complex and never ending
• Lack of satisfaction in a new product
• Range of choices leads to higher consumer
expectation

Bargaining Power of Supplier Bargaining of Buyers


• Few number of suppliers are • Bargaining is very high
available • Switching cost is very low
• No monopoly situation in between • No threat of buying one product over
suppliers another
SWOT ANALYSIS OF THE COMPANY

STRENGTH WEAKNESS
• Strong brand portfolio • Mimic Brands
• Excellent research & development • Declining exports level
• Strong percentage, hence strong brand • High Advertising Costs increase in AD
equity spending

OPPORTUNITY THREATS
• Large domestic market • Increasing costs of raw material
• Opportunity in food sector • Competition from unbranded product
• Changing Lifestyle & rising income • Losing market share in most of the
levels categories of its Presence
DIVERSIFICATION INTO NEW
BUSINESSES
• Entered into food and retailing business
• Entering to the soap and detergent
– Organic and non-organic route to grow
• Entry into food
– Launched pickles to grow-Chinni
• Retailing Ambition
– Branded and skincare salon
– Invest 250million and open 250 salons named green
trends
Conclusion
CavinKare’s goal is to remain the preferred choice for customers
at home and in every market, besides operating with conviction
and leading certain chosen sectors for innovation.

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