Case Study—‘Dabur Over the Years: The Dabur Story’

A classic case of a family owned business being handed over to professionals a company
making timely strategic interventions to adapt to the business environment and maintaining
its brand equity over the years.

Dabur India Limited (DIL) is the third largest FMCG Company operating in India with a
turnover of more than Rs. 2,233 crores. It operates under three business categories namely
Consumer Care Division (CCD), Consumer Healthcare Division (CHD) and Dabur foods
Limited (in July 2007, Dabur announced the de-merger of DFL with DIL).

Background- Dr. S.K Burman started Dabur in 1884 as a small pharmacy. Initially, he
prepared Ayurvedic medicines to treat diseases like malaria, plague and cholera that had
no cure during that period. It was his dedication, commitment and empathy that made
Dabur a renowned name among the masses. And today, after more than 120 years, Dabur
is known for its trustworthiness more than anything else.

During this passage of time, Dabur went through several structural and strategic changes to
maintain its market strength. The real mass production started in 1896. Early 1900’s saw
Dabur emerge as the first company to provide health care through scientifically tested
methods. It achieved significant improvements after setting up Research and Development
centers and manufacturing automation. The launch of Dabur’s Amla hair oil and
Chyawanprash was a boon to the expanding business. To keep up with the times, Dabur
computerized its operations in 1957. It’s Dant Manjan and digestive tablets were widely
accepted as well.

However with a large product portfolio in the market, Dabur had to maintain operational
efficiency. To make sure it adjusted to the business environment it became a public limited
company in 1986 followed by diversification in Spain in 1992. A major change came when
Dabur came up with its IPO in 1994. Because of its position, Dabur’s issue was 21 times
oversubscribed. Dabur further divided its business into three separate groups:

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 • Health Care Products Division

• Family Products Division

• Dabur Ayurvedic Specialties Limited.

In 1998, for the first time in the history of Dabur, a non-family member took charge.
Dabur handed over the operations to professionals. Successful implementation of
procedures, timely changes and maintaining its essence, Dabur achieved its highest-ever
sales figure of Rs1166.5 crore in 2000-01.

As FMCG sector was struggling with the slow growth in the Indian economy, Dabur
decided to take numerous strategic initiatives, reorganize operations and improvise on its
brand architecture beginning 2002.

It decided to concentrate its marketing efforts on Dabur, Vatika, Anmol, Real and Hajmola
to strengthen their brand equity, create differentiation and emerge as a pure FMCG player
recognized as herbal brand. This was chosen after a study with Accenture, which revealed
that Dabur was mainly perceived as Herbal brand and connected more with the age group
above 35.

Also, larger retailers were making their foray into the FMCG market. Apart from HLL,
P&G, Marico and Himalya, ITC was also posing a challenge. The supply chain of Dabur
was becoming complex because of the large array of products. Southern markets share in
the sales figure was negligible. These factors posed a threat to Dabur and hence small
changes were not enough.

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Table 5.1 Product Portfolio Of Dabur (Consumer Care Division 2006)

Product Category Products

Hair oil Vatika, Amla, Sarso (Anmol coconut)

Vatika heena conditioning, root-strengthening Anmol-natural

Shampoo
shine, silky

Vatika fairness, Gulabari, Vatika fairness face pack ,

Baby & Skin Care
Janamghutti, Olive oil, Gripe water, Dabur lal tel

Digestive Hajmola range, Hingoli, Pudin hara

Health Supplements Chyawanprash, chyawanshakti, Dabur Honey, Glucose

Babool (rural market), Meswak (unani method), promise, Lal

Oral Care
paste, Binaca, Promise

Home Care Odomos, Odonil, Odopic, Sanifresh

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Table 5.2 Segment Wise Competitor List

Category Dabur’s Share Main Competitors

Fruit Juice 58% Real and Active Tropicanna

Fruit Drinks (coolers) 1% Coolers Frooti And Maaza

Hair oil Coconut base 6.4% Vatika HLL

Shampoo Vatika 7.1% HLL and P&G

Hair care (overall) 27% HLL, P&G and Himalaya

Himani, Zhandu and

Chyawanprash 64%
Himalaya

Himani, Hamdard and local

Honey 40%
Players

Digestives 37% Paras and local players

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Following its plans, Dabur made significant changes in the time period 2002-2007.

Brand Rejuvenation: With youth forming a major population of India, Dabur decided to
revamp its brand identity. Dabur associated itself with Amitabh Bachchan, Vivek Oberoi,
Rani Mukherjee and Virender Sehwag for endorsements. New packaging and advertising
campaign saw the sales of Chyawanprash grow by 8.5 per cent in 2003-04.

Brand Logo: The year 2004-05 saw a whole new brand identity of Dabur. The old Banyan
tree was replaced with a new, fresh Banyan tree.The logo was changed to a tree with a
younger look. The leaves suggesting growth, energy and rejuvenation, twin colours
reflecting perfect combination of stability and freshness, the trunk represented three people
raising their hands in joy, the broad trunk symbolized stability, multiple branches were
chosen to convey growth, and warmth and energy were displayed through the soft orange
colour. ‘Celebrating Life’ was chosen as a new tag that completely summarized the whole
essence.

Dabur Chyawanprash Rejuvenation: Dabur Chyawanprash (DCP) is a heritage brand

which came into existence in the year 1949. The brand is now ruling the market with a
market share of around 60 - 70 %. The total Chyawanprash market is estimated to be
around Rs 300 crore (AC Nielsen Retail Audit 2006-07).

Chyawanprash is popular as a kid's health tonic. Parents used to rely on this product for
their kids especially if the kids are between the ages 6-16. Because the teens are usually
hyperactive and less inclined to taking foods. Hence Chyawanprash offered a solution to
the worried parents. The ayurvedic tag also alleviated worries of side-effects.

Over a period of time Dabur Chyawanprash began to face tough competition not from
other Chyawanprash marketers but from health food drinks market. In fact the generic
competition was hurting DCP more than the brand competition. The health food drinks
like Horlicks, Bournvita, Complan etc appealed more to kids than the Chyawanprash. The
modern lifestyle also made this product look dated.

There was also a perception among the consumers that Chyawanprash is something that
has to be consumed when you are not feeling healthy. DCP although was ruling the

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market faced the issue of stagnation. The stagnation was a result of category stagnation
rather than saturation. The only option left for DCP was to rejuvenate the entire product
category.

In 2007, Dabur undertook a major repositioning exercise for this Rs 150 cr0re flagship
brand. The purpose of repositioning was to:

• Stretch the market for Chyawanprash

• Make the brand more contemporary

• Reinforce new set of attributes.

The brand identified two segments: Adults and Kids as the focal point in the repositioning
exercise. A series of TVC and print campaigns were released to target both the segments.
The campaigns were aimed at parents. The consumer insight was that people care about
their loved ones than oneself (source: Hindustan Times).

The entire campaign was based on the theme of 'role reversal '. The ads featured the brand
ambassador Amitabh Bachchan asking the audience to understand the challenges of being
a kid, a father and a mother. The campaign involves mother taking the role of a kid, father
and son taking the role of a mother and thus understanding the physical and metal
exertions involved in each role. The ads end with the Voice-Over ' Dabur Chyawanprash,
Zaroorat hai sabko ' (meaning - DCP: essential for everyone).

DCP earlier had the slogan - Zaroorat Hai and was positioning itself as a health tonic
which is essential for kids. The new tagline broadens the segments by including every
member of the family. In the new positioning the brand retains the core brand manthra of '
Natural health tonic' but stretches the segments to include adults.

By positioning it to adults does not mean that the brand has lost its sight on kids. The
brand makes itself relevant to kids by a series of campaigns featuring a new brand
ambassador Vivek Oberoi.

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By positioning itself to new segments, the brand aims to realize its full potential. DCP now
stresses on the new set of attributes: health, stress and diabetes. While the standard
Chyawanprash takes the health attribute, Dabur launched Chyawanshakti to take on the
stress platform. Chyawanshakti is positioned as a stress reliever and energizer.

DCP also makes the category attractive to diabetic/ diabetic prone consumers by launching
Dabur Chyawanprakash. Chyawanprakash is targeting the high density of diabetic patients
in our country which makes a highly lucrative market. To take on the competition from the
health food drink market, Dabur is planning a foray into the HFD market with a new
brand.

News reports suggest that the new gamble has paid off pretty well. What I liked about the
repositioning is the execution of the entire idea. Without making much hue and cry, the
brand had very subtly made itself relevant to adults.

The Chairman in his annual report message said, “If I were to summarize your Company’s
performance during the year under review (2004-2005), it would be ‘Pursuit of Profitable
Growth’”.

HR Initiatives: The culture at Dabur gives full autonomy to its employees. Various
training and development programs like Young Manager Development Program, Prayas,
Leading and Facilitating Performance, Campus to Corpora and a Balanced scorecard
approach to performance evaluation, helps employees realize their potential.

Recently, Dabur has adopted an innovative HR program of offering ESOPs to new

engineering and management trainees at the time of joining. Also in 2005, Dabur gave
Bonus to its employees after 12 years. This boosted the employee morale further.

Dabur was listed as a “Great Place to Work”, in a survey conducted by Grow Talent &
Company and Great Place to Work Institute, USA. Dabur was listed as the 10th “Great
Place to Work”. The results were published in Business World dated February 2006.

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IT initiatives: Dabur installed centralized SAP ERP system from 1st April 2006 for all
business units. It also implemented a country wide new WAN Infrastructure for running
centralized ERP system. Further it set up new Data Centre at KCO Head Office.

Supply chain Initiatives: Dabur has undertaken e-procurement in a big way. In 2003-04
Dabur India procured Rs.210 crore of raw materials through e-sourcing — or almost 50
per cent of total raw material expenditure — and, in the process, considerably controlled
raw material costs which were on a rise.

For better production and operation management, Dabur included automation; de-bottle
necking, Kaizen and wastage control. It set up production units in locations providing tax
holidays to reduce cost and improve efficiency.

Other important changes: Dabur made its largest acquisition by taking over Balsara
hygiene and home products business. Dabur bought the entire promoters’ stake of three
Balsara companies through an all-cash deal of Rs.140 crore. This was done to ensure
Dabur’s presence in all price segments in the herbal oral care market. Moreover, it allowed
Dabur’s entry in the household care segment, where Balsara has well-established brands.

Dabur also de-merged its pharmaceutical business to come out as a pure FMCG player.
Dabur estimated that the southern region was contributing as low as 7% to its overall
growth. For this purpose, the south team adopted a three-phase approach. First, it focused
on point of sale promotions and stocking practices. Second phase included better
marketing efforts in terms of advertising and packaging. Finally, it envisioned customized
product launches for the Southern states. The completion of first two phases by 2005-06
resulted in increasing contribution to 10%.

Vision 2010: After the successful implementation of the 4-year business plan from 2002 to
2006, Dabur has launched another plan for 2010. The main objectives are: Doubling of the
sales figure from 2006. The new plan will focus on expansion, acquisition and innovation.
Although Dabur’s international business has done well — growing by almost 29 per cent
to Rs.292 crore in 2006-07, plans are to increase it by leaps and bounds.

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Growth will be achieved through international business, homecare, healthcare and foods.
Southern markets will remain as a focus area to increase its revenue share to 15 per cent.
With smoothly sailing through its previous plans, this vision seems possible. Time and
again, Dabur has made decisions that have led to its present position. However, if Dabur
could be more aggressive in its approach, it can rise to unprecedented levels.

Case Study Analysis – ‘Dabur Over the Years: The Dabur

Story’

Introduction

The case study sighted above discusses how a family owned brand had been nurtured by
the professionals. Dr. S.K Burman started Dabur in 1884 as a small pharmacy. Initially, he
prepared Ayurvedic medicines to treat diseases like malaria, plague and cholera that had
no cure during that period. It was his dedication, commitment and empathy that made
Dabur a renowned name among the masses. And today, after more than 120 years, Dabur
is known for its trustworthiness more than anything else.

Company took some key steps to give the brand a new look and also it should be perceived
as young brand having years of experience. The case study also looks at the brand
revitalization of its product Dabur Chyawanprash.

Reasons For Brand Revitalization

• Struggling industry environment: FMCG sector was struggling with the slow
growth rate in the Indian economy, Dabur decided to take numerous strategic
initiatives, reorganize operations and improvise on its brand architecture beginning
2002.

• Easy entry to competitors: Larger retailers were making their foray into the
FMCG market. Apart from HUL, P&G, Marico and Himalya, ITC was also posing
a challenge.

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 • Stiff competition: Over a period of time Dabur Chyawanprash began to face tough
competition not from other Chyawanprash marketers but from health food drinks
market. In fact the generic competition was hurting DCP more than the brand
competition. The health food drinks like Horlicks, Bournvita, Complan etc
appealed more to kids than the Chyawanprash. The modern lifestyle also made this
product look dated.

• Market stagnation: DCP although was ruling the market faced the issue of
stagnation. The stagnation was a result of category stagnation rather than
saturation.

• Supply chain: The supply chain of Dabur was becoming complex because of the
large array of products. Southern markets share in the sales figure was negligible.
These factors posed a threat to Dabur and hence small changes were not enough.

Strategies For Brand Revitalization

• Attract new customers: With youth forming a major population of India, Dabur
decided to revamp its brand identity. Dabur associated itself with Amitabh
Bachchan, Vivek Oberoi, Rani Mukherjee and Virender Sehwag for endorsements.
New packaging and advertising campaign saw the sales of Chyawanprash grow by
8.5 per cent in 2003-04.

• Change the brand image: The year 2004-05 saw a whole new brand identity of
Dabur. The old Banyan tree was replaced with a new, fresh Banyan tree.The logo
was changed to a tree with a younger look. The leaves suggesting growth, energy
and rejuvenation, twin colours reflecting perfect combination of stability and
freshness, the trunk represented three people raising their hands in joy, the broad
trunk symbolized stability, multiple branches were chosen to convey growth, and
warmth and energy were displayed through the soft orange colour. ‘Celebrating
Life’ was chosen as a new tag that completely summarized the whole essence.

146
 • Associate the brand with relevant goals: DCP earlier had the slogan - Zaroorat
Hai and was positioning itself as a health tonic which is essential for kids. The new
tagline broadens the segments by including every member of the family. In the new
positioning the brand retains the core brand manthra of ' Natural health tonic' but
stretches the segments to include adults.

• Brand extensions and sub-brands: The standard Chyawanprash takes the health
attribute; Dabur launched Chyawanshakti to take on the stress platform.
Chyawanshakti is positioned as a stress reliever and energizer. DCP also makes the
category attractive to diabetic/ diabetic prone consumers by launching Dabur
Chyawanprakash. Chyawanprakash is targeting the high density of diabetic
patients in our country which makes a highly lucrative market.

• Identifying additional or new usage opportunities: The brand was being

positioned not as the tonics required when kids are not well but as the tonic which
protects them from cold and coughs which is effective for adults also. This was
communicated through the ads featured the brand ambassador Amitabh Bachchan
asking the audience to understand the challenges of being a kid, a father and a
mother. The campaign involves mother taking the role of a kid, father and son
taking the role of a mother and thus understanding the physical and metal exertions
involved in each role. So the brand got new usage opportunity of health tonic
essential for all.

Parameters Of Mature Brand For Brand Revitalization

• A distinct Point-of-Differentiation: The brand carries with it the differentiating

point of an ayurvedic brand to which Indian consumer more loyal as the products
under this category do not have side effect and are healthy.

• Moderate to premium priced: The brand offers the wide range of product in all
categories so that the consumer select as per its requirement and usage.

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 • Focused management with resources: Brand has been able to sustain for more than
120 years due to focused management which had been nurturing the brand on regular
basis.

• Wide distribution network: Brand has wide distribution network all across the
country and the products are easily available in medical shop, grocery shop and malls.

• Loyal customer base: Brand has very vast loyal customer base and the brand has also
changed its image with its customer.

• Long-held heritage: As the brand is more than 120 years it holds long heritage with
it.

• Brand awareness has narrowed: As per the above case study the brand awareness
was getting narrowed down due to intense competition from the MNC giants like
HUL, P&G to name the few.

Conclusion
The company has, over the past couple of years, been pruning its low contribution brands and
reorienting its focus on its key brands in the family products, healthcare and food segment.
The company has also been consciously reoriented itself into a fast moving consumer goods
(FMCG) company against its image of a company manufacturing ayurvedic products.

The company has also introduced various over-the-counter products this year for backache
and anti-septic categories with aggressive marketing in order to boost top line growth which
has been under pressure.

Thus we can say that by continuously rejuvenating the brand Dabur it has leaded the glorious
and successful life. This brand can be categorized as the mature brand being nurtured
although it’s life.