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    Chik-Shampoo Sachet: DR Amit Rangnekar

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    Dr Amit Rangnekar
    Chik Shampoo was launched in 1983 in India by CavinKare as an affordable shampoo packaged in sachets targeting rural consumers. It introduced sachet packaging to India and priced its 50 paisa shampoo sachet to increase accessibility for rural families. Through innovative promotional strategies like demonstrations at schools and film screenings, and partnerships with popular cinema stars, Chik Shampoo became the number one shampoo brand in rural India by building brand awareness and encouraging trials. It has since expanded nationally and introduced multiple product variants while retaining its leadership in the rural market through continuous innovation.

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    Chik-Shampoo Sachet: DR Amit Rangnekar

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    Dr Amit Rangnekar
    2K views46 pages
    Chik Shampoo was launched in 1983 in India by CavinKare as an affordable shampoo packaged in sachets targeting rural consumers. It introduced sachet packaging to India and priced its 50 paisa shampoo sachet to increase accessibility for rural families. Through innovative promotional strategies like demonstrations at schools and film screenings, and partnerships with popular cinema stars, Chik Shampoo became the number one shampoo brand in rural India by building brand awareness and encouraging trials. It has since expanded nationally and introduced multiple product variants while retaining its leadership in the rural market through continuous innovation.

    Original Description:

    Rural Marketing

    Original Title

    Chic Shampoo 2.0

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    Chik Shampoo was launched in 1983 in India by CavinKare as an affordable shampoo packaged in sachets targeting rural consumers. It introduced sachet packaging to India and priced its 50 paisa shampoo sachet to increase accessibility for rural families. Through innovative promotional strategies like demonstrations at schools and film screenings, and partnerships with popular cinema stars, Chik Shampoo became the number one shampoo brand in rural India by building brand awareness and encouraging trials. It has since expanded nationally and introduced multiple product variants while retaining its leadership in the rural market through continuous innovation.

    Copyright:

    © All Rights Reserved
    2K views46 pages

    Chik-Shampoo Sachet: DR Amit Rangnekar

    Uploaded by

    Dr Amit Rangnekar
    Chik Shampoo was launched in 1983 in India by CavinKare as an affordable shampoo packaged in sachets targeting rural consumers. It introduced sachet packaging to India and priced its 50 paisa shampoo sachet to increase accessibility for rural families. Through innovative promotional strategies like demonstrations at schools and film screenings, and partnerships with popular cinema stars, Chik Shampoo became the number one shampoo brand in rural India by building brand awareness and encouraging trials. It has since expanded nationally and introduced multiple product variants while retaining its leadership in the rural market through continuous innovation.

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    © All Rights Reserved
    of 46

    ChiK- Shampoo Sachet

    Dr Amit Rangnekar
    www.dramitrangnekar.com

    Case Objectives
    Insights into Indian rural dynamics & consumer

    behaviour
    Innovative, low cost, promotional strategies
    Packaging innovation and innovative pricing
    Scaling up from rural to national player
    Brand building strategies that made Chik

    Shampoo the No 1 shampoo brand in rural India

    [email protected]

    The concept of sachets


    1983, investment Rs 15,000, now
    Rs 1000 crore
    C K Ranganathan,
    CMD,CavinKare
    Possible to beat MNCs in FMCGs
    Father, Chinni Krishnan, introduced
    sachets in India
    Rationale- affordable, penetrative,
    entice trial
    [email protected]

    How Chik Shampoo was born


    1978 family launched Velvette shampoo sachet
    successfully in the South
    1982- Ranganathan joined, differences, separated
    Started Beauty Cosmetics, profitable from Y2
    Chik (Chinni Krishnan)
    1989: Office- Chennai, manufacturing- Cuddalore
    Beauty Cosmetics name- restrictive, 1998 CavinKare
    Cavin (Tamil= beauty & grace), C&K (father's initials)
    [email protected]

    Snippet
    Took me 3 yearsto getmy firstloan as banks

    askedfor collateral, I had none. One bank gave


    me a 25,000 loan, which we rotated
    &upgradedto 4 lakh & then 15 lakh. The bank
    managerwrote on my loan application that this
    person has no collateral, but something
    interesting about this SSI unit is that unlike
    others, this company pays income tax!
    [email protected]

    Shampoo Rural Market


    CavinKare- pioneers in shampoos in small pillow packs
    Market- 70+ small shampoo labels with little
    differentiation
    Velvette (family business), synonymous with sachet
    shampoo, aggressively marketed by Godrej
    Consumers would ask for Velvette, retailer would
    substitute
    Many never knew the difference, did not matter for others

    [email protected]

    Indian Shampoo Market 1980s


    High

    MNC Brands
    Price

    Shampoo Bottles

    Local Players

    Chik

    Need
    Gap

    Low
    Poor

    Quality
    [email protected]

    Good

    Chik Targeting

    Cost to Consumer

    High

    Make
    brand
    available
    and
    affordabl
    e to
    rural
    consume
    rs

    Chik

    Low

    Availability of Product
    [email protected]

    High

    Accessibility & Affordability


    Sachet success changed the shampoo industry
    structure
    Affordability, sizing ensured trial, acceptance
    Penetrated larger rural consumer markets
    Upper class tag of shampoos fast faded away
    Cut-throat market emerged
    Significant trade influence
    Retailer- key to consumer purchase
    [email protected]

    [email protected]

    Chik Shampoo Launch


    1983- Chik shampoo NPL in 10 ml pack
    Later in sachet form
    Market cluttered with low-cost shampoos
    Clear opportunity for a good quality shampoo with

    appealing perfume at a price to delight the


    consumer
    Chik significantly superior quality plus French

    perfume
    Differentiation- superior fragrance
    [email protected]

    Target audience
    Lower middle-class/
    semi-rural (Sec B2,C,D)
    MHHI Rs 1,5003,000
    Females, 16-plus

    [email protected]

    Key Issue
    No clue how to use shampoo
    Poor penetration levels
    MNCs sold shampoos in bottles
    Only in major district stores
    CavinKares team travelled
    deep in rural pockets
    Awareness and demonstration

    [email protected]

    Solution
    Encourage trials, key to rural success
    Trials on schoolboys (women not possible)
    Demonstrate how to lather and wash, comb hair
    Show and feel the difference
    Opportunity in small kirana stores and rural
    home shops
    Made people comfortable with the concept of
    shampoos
    [email protected]

    School Demo

    [email protected]

    Champi on schoolboys

    [email protected]

    Promo Strategy
    Cinema- religion in South India, family entertainment
    Harness powerful appeal of cinema among masses
    Cine stars cult, popular dialogues
    Innovative ads based on popular cinema dialogues by
    stars
    Radio sole mass advertising medium
    Annual ad spends Rs 2 lakh
    Popular south stars - Amala, Khushboo, Manorama,
    Charlie
    [email protected]

    Promotion
    Encourage trial through consumer scheme,
    create demand
    On 4 empty shampoo sachets, 1 Chik sachet
    free (Risky)
    On 5Chik Shampoo sachets, 1 Chik sachetfree
    Chik sales rose from Rs 35,000to Rs 10 lakh a
    month

    [email protected]

    Innovation
    In Southern markets women
    keep flowers in their hair for
    fragrance. So we introduced
    for the 1st time, floral
    fragrances (rose, jasmine) in
    shampoos. The concept was a
    hit
    Sales jumped 3X from Rs
    10 to Rs 30 lakhs pm
    [email protected]

    1990s
    Chic, popular in South India
    Shampoo market @15%
    Amala endorsed
    Sales 3X Rs 30L to 1 crore pm
    Each idea rewarded by
    customers

    [email protected]

    TVC
    1990s Cable TV
    revolution
    1992 TVC with popular
    cinema actors
    1992: No 1 in South
    India
    [email protected]

    Growth strategy
    Road screening of Rajini films
    Flashed Chik ads strategically
    Followed up withlive demo
    Post show free sachets to audience
    Tremendous response- rural TN & AP
    Shampoo sales up3-4X aftereveryshow

    [email protected]

    Consume
    rs
    started
    demandi
    ng Chik

    [email protected]

    National Footprint
    1993- National presence, expand in geographies &
    segments
    Target rural + urban value-conscious consumers
    Place- innovative trade schemes & consumer offerings
    Shampoo @25%, Small packs 40% volumes, rural @ >
    urban
    Key challenge- rural reach and recall, packaging critical
    1999- Chik, second largest shampoo brand in India- (also
    in rural markets)- next only to HLLs Clinic Plus
    [email protected]

    Rural dynamics
    Population size

    Villages

    < 1000

    459465

    70

    1000-5000

    58029

    >5000

    143248

    21

    1993-Indian rural market > urban


    70% villages with population <
    1000
    Low accessibility, undeveloped
    How do you market your products?
    [email protected]

    Rural Dynamics
    Opportunity- 47,000 haats & 25,000 melas in villages
    Average daily business Rs 2 lakh
    Key- network, availability, sizing, pricing
    Rural customer- rational & value conscious
    Critical- deliver superior value at an affordable price
    point

    [email protected]

    [email protected]

    [email protected]

    Key factors in rural purchase


    Factors influencing purchase of
    shampoos in rural markets

    % of
    respondents

    Looking at the wrapper

    60

    Retailer recommends
    Looking at the price
    Logo identification

    25
    4
    2

    Doesnt bother to check

    [email protected]

    Chiks response
    Make packaging & branding prominent to
    enable quick identification by the rural
    consumer
    Create Chik- Mnemonic
    Change pack to bring in design & colour
    elements
    Enable onshelf differentiation and aided
    recall
    [email protected]

    Shampoo-nomics
    Insight- Rural consumers used soap to wash hair
    and though the hair felt rough, they continued
    using soap as they could not afford shampoos
    Sachet@ Rs2*4 washes pm* 5 adults/rural family
    = Rs 40 for hair wash alone= unaffordable
    If cost of hair wash was @Rs2/ adult/monththey would try a shampoo
    50-paise shampoo sachet- ridiculous

    [email protected]

    The 50-paise shampoo sachet


    We worked backwards for over 2 years,

    developing the formula & packaging. Finally, we


    launched Chik shampoo sachet @50p in Sep
    1999, the first ever such price point
    Price point helped penetrate deep rural pockets
    Chik NMS flared from 5.6%(1999) to 23%(2004)
    Rural shampoo volumes @2X urban sector
    2005: Chik Rs 100 crore brand

    [email protected]

    [email protected]

    [email protected]

    [email protected]

    Rural Chik
    No.1 Indian rural shampoo, 65% rural market sales

    Rural Hold of Chik


    States

    No. of
    Villages

    MS %
    (Volume)

    Rank

    107440

    67

    Bihar

    45113

    32

    AP

    28123

    39

    TN

    16870

    46

    MP

    55392

    22

    Orissa

    [email protected]
    55352

    19

    UP

    The Urban thrust


    Tangled hair- Common
    complaint in girls &
    women
    Hot climate, difficult to
    maintain softness & shine
    Unique formula Active
    Double Conditioners
    The iconic Chik Girl
    Tagline- Yun Kiya Ho
    Gaya
    Popular phrase
    [email protected]

    Shampoo National Shares (AC


    Nielsen)

    Anti [email protected]
    Market 25% NMS, Chik absent

    Promo

    [email protected]

    Promo

    [email protected]

    Chik Range
    Right pricing & sizing
    Chik- Black, Jasmine, Egg, Cool, Satin
    Anti Dandruff Shampoo- climbazole + lemon
    extracts(itching)
    Sachet @Re1, 50p; Bottles -60, 120 (Rs 20), 250
    & 500ml

    [email protected]

    Mobile beauty parlours


    Unconventional media to entice consumers to try
    Mobile parlour vans- complete brand experience
    Hair stylists use Chik on clients, sample Re 1 sachets
    Reach- 900 towns pm, 50k hair washes, 25L lakh people
    Target- colleges, market places & large residential

    localities
    Play TVC as stylists work on volunteers, contests
    Promotional spots Radio Mirchi

    [email protected]

    Other successes

    1983 Chik Shampoo- focus for 7 years

    1991 Meera Herbal Hair wash powder- 95% NMS


    1993 Nyle Herbal Shampoo- transparent packaging
    1997 Spinz Perfume- @Rs 10, super hit
    1997 Fairever Fairness Cream- India No 2 (with saffron)
    1998 Indica Hair Dye- Baalon ko de dil ki umar
    2003 M&A Ruchi Pickle sachet, 5000 TPA India No 1
    2007 Karthika Shampoo
    2008 M&A Prakash Dairy, Snacks, M&A Padhmam

    Herbal
    [email protected]
    2009 RestaurantsFoodstaurants, Veg Nation

    Sales

    Urban thrust,
    NPL

    50p sachet
    Price penetration
    National reach

    Radio
    Demos
    Film screenings

    TV
    Trade
    management

    Demos
    4+1 offer

    [email protected]

    CavinKare Group turnover 2010-2011- Rs 1016 cr


    Chik Shampoo Rs 200 cr+ brand
    11% NMS (Value), 19% NMS (Volume) of shampoo market
    No 2 to Clinic Plus, 29% market share (HUL 47%, P&G 18%)
    1780 employees, 1300 Stockists, 25 lakh retailers
    Plants- Haridwar, TP-Pondicherry, Noida, Assam, Faridabad
    Exports- Nepal, SL, Malaysia, Singapore, Bangladesh, US,
    GCC

    [email protected]

    Reasons behind CavinKares success


    Teamwork is the main reason for our
    success. We have good professionals
    whowork really hard. The second reason of
    our success is innovation and thirdly we have
    executed innovative ideas well

    [email protected]

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