Patanjali Group

Remedial Assignment Detailed Analysis of Products and their Marketing Strategies of PATANJALI group

Anshul Thakur Roll No. 2014058 Section A

Prof. Milind Fadnavis Institute of Management Technology, Nagpur

Patanjali Ayurved, manufacturer of ayurvedic products, is the fastest growing FMCG company in India. Credit Lyonnais Securities, a foreign

stockbroking company, has put out a report desiring for the company promoted by Baba Ramdev, the yoga guru, to be listed on the stock market. Patanjali is bigger than Emami and Jyothy Labs and is perhaps the fastest growing FMCG company in India and with revenue exceeding ₹2500 crore (US$380 million) in 2014-15.

Ownership The company was formed by Baba Ramdev in 1997. He joined hands with Acharya Balkrishna (CEO), a scholar of Ayurveda, Sanskrit and Vedas in 1990s to manufacture ayurvedic medicines. Ramdev focused on Yoga while Balkrishna assumed responsibility of spreading the Ayurveda business. Baba Ramdev does not hold any stake in Patanjali Ayurveda Ltd. Balakrishna is believed to own 92%. The balance 8% stake is held by Sarwan and Sunita Poddar, a Scotland-based non-resident Indian couple. The two are affiliated with the UK Trust of Patanjali Ayurveda and have donated land to the trust in UK.

Revenue These are the past records of Patanjali’s turnover and the company is growing at an incredible rate!

2012: Rs 450 crore 2013: Rs 850 crore 2014: Rs 1,200 crore 2015: Expected to climb to about Rs 2,500 crore.

That’s a 67% jump from last year, and a 500% growth from its inception in 2012. Patanjali has grown five times in three years. Ramdev is reported to have said in one of his interviews that he is expecting to see the revenue jump to Rs 10000 crore. That means Patanjali has literally taken over Emami which was founded in the 1970’s as an idea and started running by 1974 and currently has a revenue of 1700 crore.

Store profits: Patanjali has 5,000 franchisee retail stores. Retailers told CLSA that their average gross turnover is Rs 25,000 every day. Profit margins for retailers vary about 10-20% across product categories.

FMCG Products Patanjali Ayurved has its reach in all the categories of personal and food products. The company manufactures 800 kinds of products including 45 kinds of cosmetic products and 30 different types of food products like mustard oil, flour, butter, biscuits, spices, oil, sugar, juice, honey etc. Patanjali Ayurved products are cheaper as compare to other company products available in the market because they spend very less on advertising and marketing their products. Patanjali Ayurved's Ayurvedic Manufacturing Division has over 300 medicines for treating a range of ailments and body conditions, from common cold to chronic paralysis. Patanjali has also introduced FMCG products to diversify in the market. Indian FMCG market is a market which has a very wide range of

customers. There are many competitors in all the categories and although they all have similar products available at almost similar prices, Patanjali is trying to prove it different through their marketing strategies. However, entry to this business is easy (low entry barriers) and this fact has been utilized very efficiently to result in combined benefit for both Patanjali and the consumers.

As seen from the above Table, the major products of the Patanjali Food Park are sharbat (Juice concentrates), jam, salt, chyawanaprash, flour candy, washing powder, etc. The advantage with all these products is that these are made of natural products and don’t have any side effects at all. But as there are so many players existing in the market, that Patanjali products have a tough competition to face with.

Competitors

The competitors of Patnajali Ayurveda are       

Dabur India Ltd. The Himalaya Drug Company The Emami Group Shri Baidyanath Charak Pharmaceuticals Hamdard (Unani) Zandu Pharmaceuticals Works Vicco Laboratories

Controversy The instant noodles brand launched by yoga teacher Ramdev has not obtained mandatory product approvals from the Food Safety and Regulatory Authority of India, officials said, even though Patanjali Atta Noodles packets display an “FSSAI licence number”.

Atta Noodles Patanajali Ayurved, the FMCG venture promoted by yoga guru Baba Ramdev, on Monday 15 Nov 2015 launched noodles aiming to take on Nestle’s Maggi. But till date the FDI has not received any requests for the approval of the noodles.

Overall, product/market strategy of the Patanjali group can be understood through Ansoff’s Matrix (Ansoff, 1957) as shown in Figure-1 below. Ansoff’s matrix, despite of being more than fifty year old marketing tool, still has a great contributor to understand the diversification strategy of the organization (Richardson and Evans, 2007). It can be clearly understood from the matrix that Patanjali Yogpeeth is diversifying itself from ayurvedic medicine to FMCG products.

SWOT Analysis of Patanjali Yogpeeth

Marketing Strategy of Patanjali Yogpeeth Targeting Masses through Pranayam and Yoga No one can help admiring the simplicity of the techniques for practicing the different pranayam (controlled breathing) which His Holiness Swami Ramdev Ji Maharaj has evolved and has been teaching to the common mass in India. One finds the methods taught by Swamiji very simple for any lay person to pick up and follow. It is the simplicity in the technique that is making Pranayam a part of life to common man. Pranayam were there in text books for long time but, no one from the common mass in India did have access to it for the techniques of practicing them were very complex. There were also some words of caution attached to such instructions that any deviation from the practicing techniques would cause immense harm to a person. This gave birth to an idea that Pranayam should never be attempted to be practiced individually and should only be practiced in the guidance and vigil of a trained Yoga teacher (Guru). Such rigid rules, complexity in practicing techniques and above all the caution that, any deviation in the practicing techniques would cause immense harm to the person, took Pranayam far away from common mass and was finally lost

and buried. No one dared to practice such an art which would cause harm to them if there is even a slightest of deviation in the technique. Swamiji has done a tremendous job in breaking this concept of fear in common mass about the harm caused by Pranayam. His Holiness has devised very simple techniques for practicing the Pranayam which are very easily picked up by any common man just by watching the T.V. His Holiness Swamiji has also assured the common mass that Pranayam can never cause harm to any person attempting to practice individually. Swamiji has exhumed the Indian ancestral science of Pranayam from the grave of darkness, fear and monopoly of a few and presented it in its simplest form for the welfare of the mankind. Swamiji has removed the veil of darkness and the mystery of Pranayam is unfolding itself to the common mass in India.

Sales and Distribution Patanjali follows various modes of distribution for their products. 

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They provide sale of products through their website with online payment facility. These products can be procured through post also by sending the required amount through demand draft etc. Patanjali has opened “Patanjali Chikitsalayas” and “Patanjali Arogya Kendra” in almost all the cities of the country from where all the Patanjali products can be procured easily. A Patanjali trained Ayurvedic doctor also sits in every Patanjali Chikitsalaya from whom consultation can be obtained regarding various medicines. Patanjali herbal products are also available at Post offices across the country. A shop is established for sale of products wherever a yoga camp is organized. Patanjali has prepared disease specific CDs which they sell through their various outlets.

Partnerships Future Group Patanjali Ayurveda recently declared its tie-up with Future Group on 9 October, 2015 under which, all the consumer products of the Patanjali group will be available for the sale in the latter’s Nilgiris, Food Bazar, Food Hall, Big Bazaar retail outlets.

References 1. http://economictimes.indiatimes.com/industry/consproducts/fmcg/patanjali-enters-big-retail-with-future-group-tieup/articleshow/49285002.cms 2. file:///C:/Users/user/Downloads/Marketing_through_spirituality_A_cas e_of.pdf 3. http://caconnectindia.com/ca-ipcc/patanjali-sucess-story/ 4. https://in.finance.yahoo.com/news/10-stunning-facts-baba-ramdev053501185.html

5. http://www.iosrjournals.org/iosr-jbm/papers/ies-mcrc-volume1/11.pdf