Explains Ramesh Viswanathan, Exec. Director, CavinKare

“The only other company like us with a spread of independent brands is Dabur,” points out CKR. Clearly, the man loves comparing himself to the Burmans and hopes to replicate the stupendous success of Dabur in the FMCG segment. Yet, come to think of it, it is Nirma that CavinKare has a lot in common with. Both companies have been tagged as price warriors giving HLL and P&G a run for their money in the detergent and shampoo businesses respectively. CavinKare too got positioned as a price warrior (the sachet player) and has more or less followed Nirma’s footsteps in its heydays. Like Nirma, CavinKare too has diversified into other product categories and is aggressively taking on the urban market now. But here’s the catch. While MNCs first saturated the urban market and are now moving rural; CavinKare is moving in reverse. Being a strong player in the low-income category, CavinKare is now climbing up the ladder to also straddle the upper middle class group. So will CavinKare be able to replicate its success among the urban consumers or will it fizzle out, like Nirma did? “It (Nirma) played on price alone. Price is a vehicle to get entry into the market, but not a differentiating factor in the long run,” clarifies CKR, arguing that CavinKare has already discarded its low price image. He gives the example of Meera, their herbal hair wash powder, which is today priced at Rs.2 (at par with Sunsilk and Clinic Plus). Even fairness cream Fairever has been priced higher than HUL’s Fair&Lovely. Acquired last year for Rs.28 crore, the Maa range of fresh fruit drinks (pitted against Mazaa, Slice & Frooti) have also been shrewdly priced at Rs.13 for 250ml (Mazza is available at Rs.12 for 200ml). So, CavinKare entered the business as a price warrior, but on its part, it has made a valiant effort to discard that positioning. The recent launch of Chik Satin shampoo is an effort to develop this fresh brand imagery. Explains Ramesh Viswanathan, Exec. Director, CavinKare, “The aim of Chik Satin was to focus on the ‘bottle’ consumer whose shampoo needs are very different from that of existing Chik consumers.” With a premium look and feel, Chik Satin is focusing on attracting the urban consumer. “The strategic tie up with Coty for Adidas and Jovan is also aimed at gaining greater strength in the urban and metro markets,” adds Viswanathan.

But changing consumer mindset is not easy, says Anand Ramanathan of KPMG. “Transcending from a premium to a mass positioning is easy, but the reverse is not true,” he says, adding that even as CavinKare reverse straddles (via Chik Satin Shampoo or Nyle premium shampoo), it is imperative for them to not deviate from existing brand imagery, a fatal move for its existing consumer base. The reverse is also true. Ramanathan gives the example of CavinKare’s toilet cleaner brand Topp Mopp. “It is difficult for a relatively new entrant–despite competitive pricing to survive,” he says. Topp Mopp’s positioning was similar to rivals like Reckitt Benckiser’s Lizol in urban markets. But since toilet cleaners as a category belongs to the SEC A segment, CavinKare’s imagary (that of a SEC B and C player) created a disconnect. Result? Despite a big distribution push, Topp Mopp’s brand imagery did not coincide with the group’s positioning and the product failed.

But an undeterred CKR is moving ahead confidently with all cylinders blazing. His big bets now to secure a pan-India urban base are coming from areas like personal grooming, restaurants and dairy business. Trends in Vogue, CavinKare’s salon retail chain is expanding. Cashing in on the growing personal grooming market, CavinKare has also launched two separate beauty salons – Limelite (a unisex salon for urban youth) and Green Trends (family beauty salon), straddling high and mid income groups. “With our experience in personal care, it was natural for us to enter the retail of personal grooming services,” shares B. Nandakumar, CEO, Trends In Vogue. Having spread its footprint across the southern market (Bangalore, Hyderabad, Chennai, Trichi, Coimbatore, Madurai), CavinKare is now expanding its salon business in the north as well. And while the business may seem like a me-too of HUL’s Lakme Salon business, Nandakumar is quick to refute the notion. “Unlike Lakme beauty salons, we don’t use our own products but source professional products. Besides, all our Trends In Vogue parlours are self-owned,” he explains.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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