Patanjali Literature Review

Impact of Brand Awareness, Advertising, Word-of-mouth and Experiential learning on Purchase intention towards Patanjali 1. The FMCG Market Scene in India The FMCG market has always been one of enormous potential in India, owing majorly to its huge population. However, from the 1950’s through the 1980’s, investments and growth in the industry were very limited, because of the low purchasing power of the population and the government’s preference for the small-scale sector. The liberalization of the economy boosted the incomes and living standards of the people and brought in an influx of Fast Moving Consumer Goods in the market. SL Rao (2001) relates the growth in the GDP, agriculture and industry over the post-liberalization period, corresponding with a growth in consumer goods production. The peak growth of consumer goods production (during the 90’s) was in 1995-96 when the Index showed a growth of 12.8 per cent, declining thereafter for three years, rising to 6 per cent in 1999-2000 and 8 per cent in 2000-01. There was a surge of foreign companies into the market, like Hindustan Unilever Limited, Marico, Henkel, Procter & Gamble, Cadbury and Reckitt Benckiser, with their wide range of goods, trying to attract and capture the Indian consumers. The competition has been both between the domestic companies (like Dabur, Emami and Amul) and the foreign companies, and that among the foreign companies themselves. Products range from toiletries, pharmaceuticals, cosmetics, bulbs, packaged food products, house care products, plastic goods, white goods, consumer nondurables, etc. The arrival of Patanjali into the Indian FMCG market in 2006 marked a turning point in its timeline, and the years that followed presented a rare case where a domestic brand was about to continually outperform its foreign competitors, grow manifold over the years, and even create a loyal base of customers with its marketing, which was a fading concept among FMCG products. 2. The purchase intention of consumers and its

determinants

The Hierarchy-of-effects theory (1961) proposed that cognitive activity (non-evaluative thinking) causes affective activity (evaluative mental activity), which causes conative activity (plans for actions and the actions themselves). It selected various variables which were indicative of the various stages in the hierarchy- Advertising, Attitude, Awareness, Confidence, Favorableness, Intention, Knowledge, Purchase, Use and Word-of-mouth. Terrence V. O'Brien (1971) tried to establish what the thoughts of a customer are as he learns about a brand, how he forms his purchase decision and why he picks one brand over another. His findings showed a significant positive impact of word-of-mouth on subsequent purchase intention. Surprisingly, his research concluded that advertising has no direct influence on ultimate purchase for the product studied. That could however, be attributed to the primitive form of advertising used back then, compared to now. Case in point, Sharma & Sharma (2007) identified that advertising, sales promotion, publicity and public relation were the most efficient tools available that could be accessed by a marketing manager to identify its products and services among competitors. Parikshat Singh Manhas and Vivel Sharma (2011) ascertained that branding and promotion are integral components regarding fast moving consumer goods, and influences the purchase patterns of consumers in India. They noticed that Indian companies are continually spending greater amounts of resources on building brand equity. “Marketers and shareholders have come to realize that the most valuable and enduring asset a company can own is its own brand. This brand needs to be continually nurtured through promotional activity in above-the-line and below-the-line communications.” Consumers in emerging markets like India are different from their counterparts in developed markets. Our markets are often characterized by specific local needs, limited purchasing power and high price sensitivity. (Prahalad and Lieberthal, 1998). Khanna and Palepu (1997) have illustrated that firms in the wake of inadequately-developed markets for labor and capital, in an emergent market like India, firms must go through numerous constraints and challenges from all fronts, to cope up with the competitive environment of FMCG. G. Nagarajan and J. Khaja Sheriff (2013) have highlighted some more challenges in the FMCG sector and identifies promotion- advertising, trade shows, promotional literature, technical literature, samples, incentives, Web site, seminars, public relations, as one of the areas to work upon to make a mark in the market.

Positive word-of-mouth has been considered by researchers, time and time again, as one of the oldest and most effective forms of marketing communication, whether from the vendors, experts, or friends and family. Empirical data collected by Ennew, Banerjee and Li (2000) and the models drawn from them suggested that the integration of word-of-mouth into the marketing strategy may be beneficial and help develop a more customer-centric approach to marketing. Bharadwaj et al. (1993) had previously suggested that when women buyers cannot evaluate the qualities of various products and decide on one, they might go for the brand with more reputation on word-of-mouth. Building a successful brand is something that takes a lifetime of commitment with enormous time planning and perseverance. Only then can a brand be big and fruitful enough to attract customers and create that impression just by its name. Bhimrao M. Ghodeswar (2008) studies how brands like Archies, Boroline, Dabur Vatika have been able to create a strong positioning for themselves, and the brand name, as a result, is enough for the consumers to know that they are the best in greeting cards, antiseptic creams and hair care shampoos respectively. David C. Edelman (2010) emphasized the importance of branding in the digital age. They pointed out how, for instance, while consideration online, a customer can add or remove a brand entirely from his selection while evaluating his products. Customer reviews have also become a huge influencing factor in the digital age, and proper branding can have immense positive effect on the reception and success of the brand among its customers. SL Rao (2001) observed that the Indian consumers were noticing that what one brand had to offer was not too different from that of another brand, and as a result, were willing to try out other brands as well, weakening the forces of brand loyalty in the FMCG sector. 3. The arrival of Patanjali Patanjali Ayurved Limited arrived into the Indian FMCG market in 2006. It was founded by Baba Ramdev and Acharya Balkrishna, and the company mainly focused on herbal and mineral products during the initial years, eventually expanding into a much wider array of consumer goods like cosmetics, spices, chocolate bars, biscuits, juices, cornflakes etc. which put it in direct competition with many established brands in the country. Patanjali has, however, only grown stronger over the years; its revenue has grown from Rupees 163 crores in 2009-10 to Rupees 5,000 crores in 2015-16. According to an article on india.com (8th feb 2016), Patanjali plans on providing jobs for 8000 youths.

3.1 Brand Strategy: Patanjali’s strategy has evolved with time. What started as a company making herbal products and ayurvedic medicine, has now become a dominant player in the Indian FMCG market, manufacturing 444 types of products. One thing has however remained constant- Patanjali sells all its products under the name Patanjali, instead of emphasizing on distinct names for each product. In addition, it is associated with a famous personality, takes pride in being a swadeshi product, spreads the message of purity, and marked its presence in the e-commerce sector. 3.2 Brand Positioning: Patanjali has positioned itself on the pillars of purity. It emphasizes the absence of any harmful chemicals or adulteration in its products, while simultaneously emphasizing the shortcomings of competitor products in that field. The usage of the word “zeher” (meaning poison) for its competitors’ products has been a key strategy on Patanjali’s part to settle the idea on its consumers’ minds. Patanjali also emphasizes that a huge chunk of its revenue goes to charity, and its consumers are helping the country in the process of buying its products. Lately, Patanjali has even started appealing to the nationalism in its consumers, spreading the message of how foreign companies are taking the country’s capital away from the country, and has started a pitch to throw all foreign companies out of the Indian market in the coming years. It tries to convince its customers that the Rupees 5,000 crore revenue is also a victory for them and the country, and that the trend must continue, until all its competition is wiped out. 3.3 Brand Personality: The name Patanjali is derived from that of an ancient Sanskrit author, of works like Mahabhasya and Yoga Sutras, and the name thus carries a sense of spirituality to it. The prominent face behind the brand is yoga guru Baba Ramdev, a respected saint in the country. The personality of the brand speaks of nature, yoga, ayurveda, purity and absence of any harmful condiment- qualities that denote its sincerity. At the same time, the brand also stresses on its effectiveness and reliability- qualities that propagate its competence.