CavinKare,

The founder of CavinKare, Mr.C.K.Ranganathan started this company in 1983. He left his
family business, Velvette in 1983 and started his own Beauty Cosmetics Domain (which he
named CavinKare later on) with a capital of Rs 15,000 (yes you got it right he just had Rs
15000 when he started CavinKare. By that time Velvette was one of the market leaders in
sachet marketing.

To begin with he rented a house-cum-office for Rs250 per month and a factory space for
Rs300 per month and a shampoo-packing machine for Rs3000. He named his shampoo as
Chik after his father-Chinni Krishan. Beginning was very challenging and it took him three
years to get his first bank loan of Rs25,000 which he later upgraded slowly to Rs 15 lakh. He
had very good relationships with his suppliers despite of the fact that finances were tight for
him and a pressure of paying suppliers on time. But still he managed to win confidence of his
suppliers.

To establish his marketing network he decided to invite people with no marketing experience
in FMCG products as being new to FMCG they would be working on his norms and more
than experience the passion was required in this field.

The progress was slow & steady for him In 1983 Chik India made an annual turnover of Rs 5
lakhs and by 1986 the average turnover was around 2.5-3 lakhs per month. Despite of steady
progress Velvette was still ruling the shampoo market. To overcome this he came up with an
innovative marketing idea of giving one Chik sachet free for every four empty sachets of any
shampoo that people brought to retailer and later he changed the scheme to one Chik
shampoo sachet free for every four empty Chik shampoo sachets. This idea was unique and
first of its kind which was a major hit with the market then. And in time Chik sales went up
to Rs12lakhs/month from just Rs3 lakhs/month. By 1992 Chik became the leading selling
shampoo in Tamil Nadu with a turnover of Rs8 Crores, and by 1993 Mr. Range was ready to
go national-the result: very soon in few years Chik became the largest selling sachet shampoo
in the country & it’s now close to no.2 position to the leader-Clinic Plus

But that was not enough for Mr.Ranga, he went further to explore the rural markets in India
where only 8% penetration of shampoo was there. The usage was very low despite being
aware of shampoo market because of the price constraints. The rural people preferred soap to
shampoo. That time Chik was selling at RS1 per sachet. Rural families usually have 5-6
members which will cost Rs 2 per week for person an total of Rs12 a week that would make
up to Rs50 per month which was very high for a rural family in 1980’s.

Looking at this scenario Mr. Ranga after a thorough discussion with his team decided to
make a 50 paise sachet at half the volume of Rs1 sachet but at a concentrate that could deliver
value equal to Re1.Mr.Ranga who has a background in chemistry got involved with his team
for reformulation and finally managed to bring out 50 paise shampoo sachet. For this they
just removed excess water and made it concentrate so that it can deliver the same results as a
Re1 sachet which he improved it to deliver more conditioning & fragrance. He went further
deep into his marketing ideas where he decided to launch a 50 ml bottle of Chik shampoo as
he says that once sachet gets over & family forgets to buy, they again come back to soap
which affects the consumption of the product. A 50 ml shampoo bottle costs twice as much as
the sachet of same volume. So if six 8 ml sachets cost Rs6 a bottle of 50 ml will cost around
Rs10-15. He launched his 50 ml Chik shampoo bottle at Rs6, which captured and additional
5% of market share.

Another thought came into Mr.Ranga’s mind that what do remaining 80% of Indians do who
don’t use shampoo’s. By research he found out that these people use natural products like
Reetha, Shikakai etc. By a deeper study he found out that each state in India seemed to use
natural products that were unique to it. For eg In Andhra Pradesh people mostly use Reetha
and In Tamil Nadu people prefer Shikakai for their hair. This gave birth to Meera shampoo
which is a huge hit in market today. He launched Meera shampoo with different
combinations in different states. In AP he launched Meera with Reetha and in Tamil Nadu he
launched it with Shikakai, in Kerala he launched Meera with Hibiscus and in Karnataka he
launched a low-cost version called Karthika with a mixture of herbs that are preferred by the
people there. Karthika retails at Re1 while Meera at Rs2.

The Marketing Strategy

CavinKare's brand-building, marketing-mix and distribution strategies can be better
understood by examining the marketing strategies of its six most successful product brands -
Chik, Meera, Nyle, Spinz, India and Fairever.

Chik Shampoo

In 1983, when CavinKare decided to

launch its first product - Chik shampoo,
the shampoo market had over 200 players
with HLL being the market leader with its
Clinic Plus brand, which was positioned
as a health shampoo...

Meera Herbal and Nyle Shampoo

In 1992, CavinKare identified good

potential for herbal products in the hair
care market. The company launched
Meera Herbal wash powder in 1992 for
the benefit of traditional customers, who
used herbal powders at home to wash
hair...

Brand Extensions & Business Diversification

Apart from building many strong brands, CavinKare also introduced brand extensions
whenever it identified a category where such a move might serve the purpose better than a
new brand. Through the 1990s, the company came up with many brand extensions such as
Meera Shampoo, Nyle Wonder, Nyle moisturizing lotion, Nyle cold cream, Chik toilet soap,
Chik Kali Mehendi, Chik talc, Spinz talc, Spinz deodorant, and Meera soap...

Today CavinKare is largest hair Wash Company in South India leaving behind HUL & P&G
CavinKare in Perfume Market:

Mr. Range then decided to check perfume market where there was a penetration of less than 1
%. He found out that almost majority of population uses perfume but very scarcely on special
occasion like weddings, parties, festivals etc because of its high price. On average a good
perfume bottle costs Rs 100.

Sensing an opportunity here Mr.Ranga introduced Spinz at Rs10 a pack. Although it did well
still he was not satisfied and then introduced a Rs 2 single use pack. This pack worked great
initially but took a back step later reason being customers wanted a perfume whose fragrance
would last a day long and not just for few hours. After a while of hard work CavinKare
emerged with a cute 2ml glass vial called Dabon. For a while Spinz was 4th largest selling
perfume but now although it’s not doing that well...surely they will make it work again.

CavinKare in Fairness Cream Market:

In Feb 1998 when everything going right & fine for CavinKare. Mr.Ranga decided to explore
market for fairness creams, where he found that it was one of high margin business and
dominated by one giant leader Fair and Lovely. Penetration into this market was only 6% due
to advertisement budget , for eg Fair and Lovely’s advertising budget was more than CK
turnover.

Mr.Ranga came up with a fairness cream which did not satisfied consumers much. After a
market research with local consumers he found out that it’s ingredients that mattered most to
consumers in terms of fairness. They prefer ingredients like saffron & milk which are know
since ages for fairness and backed by Ayurvedas and thus FAIREVER was born- a cream that
contains milk & saffron. However unlike other CK products they decided to keep the keep
the price range for this product at premium since people are aware that saffron is expensive
and they will willingly pay for this. Also Mr.Ranga developed a very good relation with his
distributors by recognizing their efforts through public functions and press coverage’s.
Fairever wrested up 18% market share in its first year & today it has around 8% market share
on all India basis.

CavinKare in Pickle Market:

CavinKare also operates in food market. Their brands Ruchi (Mostly found in supermarkets
for soya nuggets) & Chinni pickles are very famous. Infact Chinni pickles is the largest
selling sachet pickle in the whole India.Chinni pickle came into existence when during his
market visits Mr.Ranga saw small enterprises selling single use packet pickle which was
packed in unhygienic polythene packs with high level of microbial contamination. Mr.Ranga
worked with machine manufacturers to develop a pickle packing machine which was difficult
because of the pickle’s consistency, oil proportion also size of pieces differ during cutting.
Finally a pickle packing machine was developed along with a process that could deliver zero
microbial infestation and Chinni pickle got introduced into the market.

Today CavinKare is a 750 Crore company which started its base from Rs15000, clearly
demonstrating an example of breakthrough into the market competing with leading giants
with innovative techniques. The best part is that CK doesn’t remained constraint to only
FMCG but challenged the market leaders in different mix of areas.