Repositioning Dabur

Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate
either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details: Price:

Case Code : MKTG099 For delivery in electronic format: Rs.
Case Length : 17 Pages 400;
Period : 2001-2004 For delivery through courier (within
Pub Date : 2005 India): Rs. 400 + Rs. 25 for Shipping &
Teaching : Available Handling Charges
Note
Organization : Dabur Themes
Industry : FMCG
Countries : India Repositioning

Abstract:
The case deals with the restructuring
initiatives Dabur took in the early 2000s. In
order to cater to a wider audience, Dabur
decided to reposition itself as an FMCG
company with a herbal plank, moving away
from its earlier image of an Ayurvedic
medicine manufacturer.

In order to convey a new vibrancy, the

company has adopted new product offerings
and new packaging. Dabur's promotional
campaigns includes leading Bollywood actors
and sportstars.

Dabur moved away from an umbrella

branding strategy and went in for individual
branding. It pruned products which were not
aligned with its brand architecture.
It also took concerted steps towards geographical expansion to international markets, and
within India, focused on regions like southern India, which it had earlier neglected. The
company's revenues in 2004-05 reveal that the changes undertaken by the company have
started showing results.

Issues:
The case is designed to help the students to:

• Understand why a company moves away from its core platform.

• Understand the strategies adopted by a company to change its core platform.

• Understand how confusion about a brand sets in in the mind of consumer because of the
use of the same brand name for diversification into different areas.

• Understand how a brand is repositioned.

• Understand how alignment of product, price, promotion and place is brought about.

• Understand the marketing activities undertaken to rejuvenate a brand.

• Understand how changes in demographics and psychographics affect an organisation's

vision.

• Understand how acquisitions can add value to the marketing strategy of a company.

Contents:
Page No.
Introduction 1
Background Note 1
The Restructuring Exercise 3
Outlook 8
Exhibits 11

Keywords:
Dabur, Brand Repositioning, Brand Architecture, Brand Equity, Umbrella Branding,
Brand Management, 4Ps of Marketing, FMCG Industry, Vision, Strategic Intent, Core
Values, Vatika, Anmol, Real and Hajmola.

Our research showed that consumers found it difficult to distinguish Dabur as a

corporate brand and as a master brand. The positioning was unclear to the public. So,
we decided to embark on a brand recast to identify brands based on their product
properties. This essentially means that Dabur is shedding its age-old umbrella brand
strategy, where its entire product portfolio was under one roof.

- Sunil Duggal, CEO, Dabur India Limited in 20041.

Introduction
In 2004, Dabur India Limited (Dabur) which
started as a medicine manufacturer in 1884,
was ranked at number four in terms of sales
among the Fast Moving Consumer Goods
(FMCG) companies in India. The company
now has interests in hair care, health care, oral
care and foods as well (Refer Exhibit I).
Though its spread into various segments has
ensured that the company's bottom-line has
improved over the years, Dabur's positioning
was not clear. In the early 2000s, the company
went in for a restructuring which included
aligning Dabur's brand architecture2 with
Dabur's brand equity3; pruning products that
did not align with the brand architecture and
launching new products (Refer Exhibit I and
II).

The company focused on improving its sales revenue from southern India, which
contributed only 8 percent of the company's total revenue in 2003. At this time, Dabur
identified its ayurvedic platform as a driver of future growth and got its business units
better aligned.

Moving away from using Dabur as an

umbrella brand, the company shifted to
individual branding and came out with a new
logo. The company tried to bring to its
consumers its Ayurvedic legacy with a
contemporary feel. All these changes have
improved the financial performance of the
company in 2004 as compared to 2003.

Background Note
Set up in 1884 by Dr S K Burman in West
Bengal as a proprietary firm for the
manufacture of ayurvedic drugs, Dabur (an
acronym of the name Dr Burman), started off
 with a direct mailing system to send
medicines to villages in Bengal.

Background Note Contd...

Initially, the company marketed an allopathic drug, Plagin, to combat the then prevalent
epidemic of plague. In 1896, Dr. Burman set up a small manufacturing plant at Garhia
near Calcutta for mass production of chemicals and Ayurvedic drugs.

In the early 1900s, the next generation of

Burmans took a conscious decision to focus
more on the Ayurvedic medicines market, as
they believed that it was only through
Ayurveda that the healthcare needs of poor
Indians could be met. In 1919, Dabur set up a
Research & Development laboratory to
conduct research on Ayurvedic medicines and
their manufacturing processes as described in
ancient Indian scriptures, and to develop
processes utilizing modern equipment to
manufacture these medicines without reducing
their efficacy. The following year, Dabur set
up manufacturing facilities for Ayurvedic
Medicines at Narendrapur (near Calcutta) and
Daburgram (in Bihar).

Dabur also expanded its distribution network in Bihar and the North Eastern regions. In
1936, the company was incorporated under the name Dabur India Pvt. Ltd. In 1940,
Dabur launched Dabur Amla Hair Oil, and in 1949, the company launched
Chyawanprash in a tin pack making it the first branded Chyawanprash in the country.

The company expanded its portfolio by adding

oral care products in 1970. Dabur Lal Dant
Manjan was the first product to be launched
under its oral care portfolio. In 1972, Dabur
shifted base from Kolkata to New Delhi and
started production from a hired manufacturing
facility at Faridabad.

In 1978, Dabur launched the Hajmola tablet.

Dabur set up 'The Dabur Research Foundation
(DRF),' an independent company, in 1979 to
spearhead its research needs.
 In the same year Sahibabad factory became
operational and this unit was one of the largest
and most modern production facilities for
Ayurvedic medicines in India at that time.

Dabur became a public limited company in 1986 and launched its first public issue in
1994 (Refer Exhibit III & 1V for the shareholding pattern, Vision, Strategic Intent and
Core Values of Dabur). In 2004, Dabur had three strategic business units: Family
Products Division (FPD), Health Care Products Division (HCPD) and Dabur Ayurvedic
Specialties (DASL) which contributed 45 percent, 28 percent and 27 percent respectively
to Dabur's sales revenue in 2003-04...

Excerpts

The Restructuring Exercise

Though Dabur diversified into number of areas, the image of Dabur was that of an
Ayurvedic company. In the public perception, Dabur products were associated with the
35-plus age group. With almost seventy percent of India's population below 35, it
appeared that Dabur would be missing out on this mass market, which also had high
disposable income...

Aligning the Brand Architecture

Dabur was looking for growth drivers which

could leverage the herbal brand equity of the
company. "We decided to set the scale high,
targeting at least a strong double-digit
growth," said Sunil Duggal (Duggal), CEO,
Dabur speaking about the growth plans the
company set in 2003.

In order to achieve the targeted sales of Rs 20

billion by 2006, which translated to annual
growth of 15-20 percent for three years from
2004 to 2006, the company identified personal
and healthcare products as growth drivers. But
there were gaps in Dabur's product range...

Getting the 4Ps Right

In 2004, Dabur launched a new range in juices called Coolers which included traditional
preparations like Aam Ka Panna, along with others like pomegranate and water melon
juice. "Consumers perceive this as the next best thing to having a fresh fruit...
 Outlook
Dabur's repositioning exercise seemed to have
achieved some success with a perceptible
increase in sales and net profit margin of the
company in 2004 (Refer Exhibit IX).

Nikhil Vora, Vice President, Research, SSKI

Securities commented, "What the company
had done is pretty positive and credible; it
continues to innovate and renovate.

However, the company needs to keep the

growth momentum in the categories in which
it leads like Chyawanprash, honey and herbal
digestives."...

Thursday, November 29, 2007

promotion strategy 4 dabur chyanwanprash
Mom’s the word in new ad campaign for chyawanprash
‘Role reversal’ script features Amitabh Bachchan
It plans to
contact 4-6 lakh consumers across the top 10-15 cities in the country through interactive
events.
Sravanthi Challapalli
Chennai, Nov. 28 After the kids, it’s Mom! Dabur, which is marketing Chyawanprash as
a health supplement for all sections of consumers, has launched a new advertising
campaign featuring Amitabh Bachchan. The focus this time is on the homemaker.
Speaking to Business Line, Mr K.K. Chutani, General Manager (Marketing), Dabur
India, said the company would also take up consumer activation activity.
It plans to contact 4-6 lakh consumers across the top 10-15 cities in the country through
interactive events.
Activation has started in the rural markets which account for 40 per cent of the brand’s
sales.
Ever since the company took upon itself the onus of expanding the Chyawanprash
category three years ago, it began talking to non-users and ‘non-believers’ to convince
them they could benefit from it, Mr Chutani said.
The campaign, which goes with the tagline ‘Zaroorat Hai’ (‘It’s necessary’), this year
uses the tactic of having a husband and son swap roles with the homemaker to bring to
light the stress the homemaker faces and the amount of energy she expends in her daily
running of the house.
“The mother, who has the most stressful job, treats herself as the least important person
in her household. And the other members in the family don’t see a conflict there, so we
tried the ‘role reversal’ strategy to show that homemakers too need Chyawanprash,” Mr
Chutani said.
Last year, Dabur used the campaign to tell mothers that school exacted a lot from
children and Chyawanprash would help revitalise them. Variants
After last year’s test-launch, Dabur is rolling out the sugar-free variant of Chyawanprash
nationally this year. It is test-launching Chyawan Junior, a chocolate-granule adaptation
to the malted drink form, meant for children, in West Bengal and Maharashtra. It has also
launched Chyawanshakti, meant to combat stress.
The Chyawanprash market, estimated at Rs 225 crore, is still a small market, probably
because of the taste and consumers’ perceptions of it. That’s the case with most health
supplements, with the exception of malted drinks, a Rs 1,000-crore market, Mr Chutani
said. Elaborating, he said honey is a Rs 120-crore market (organised sector) and glucose,
a Rs 180-crore market.Growth factor
However, Mr Chutani says that in the last three years, both the brand and the market have
been growing. From April 2006 to March 2007, the segment grew 19.5 per cent by value;
Dabur grew 24.4 per cent. By volume, the industry grew 17.8 per cent, and Dabur grew
21.8 per cent, Mr Chutani said.
Dabur accounts for 65 per cent of the sales. The North and the East are the biggest
markets for Chyawanprash, the former accounting for 50-55 per cent.
The other major players are Baidyanath and Emami, with market share of about 11 per
cent and 9 per cent respectively, said Mr Chutani.