Patanjali Ayurveda Ltd. Case Study

ACKNOWLEDGEMENT

With immense pleasure, we would like to present this project report for Patanjali Ayurveda Ltd. We take the opportunity to express our gratitude to all of them who in some or the other way helped us to accomplish this project. The study cannot be completed without your guidance, assistance, inspiration and co-operation.

We owe our gratitude to respondents of the survey, without their help we would have been unable to complete our project. These people have really been kind enough to help us by filling the questionnaire.

We would also like to thank with a deep sense of gratitude to Dr. Ravi Shanker to shape our understanding towards the project. It was because of his immense help and support that this project has been duly completed.

However, we accept the sole responsibility for any possible error and would be extremely grateful to the readers of this project if they bring such mistakes to our notice.

ABSTRACT

The Project Report is a continuation of the Business Presentation submitted earlier during the Trimester. The report would reflect some of the detailed aspects of what has already been covered earlier along with some detailed developments and strategies that Patanjali Ayurveda has been using to enhance its brand image and portray itself as market leader by marketing itself as a Health Brand.

Over the years Patanjali has been a slow but a steady growing brand. However by Year 2015 Patanjali had already established itself as a leader in the Ayurvedic/Herbal Product section and is posing a serious threat to many of its competitors. Patanjali as a brand has grown in terms of Brand Equity and this can be accounted to the “Health Brand” Strategy, which Patanjali has been using in its favour.

To understand the existing perception of the market we incorporated a study/survey for which a total of 43 Respondents replied back to us. The survey was majorly focussed on few key areas like Brand Loyalty, Ease of Product Availability, and Product Association. A detailed analysis has also been covered to drive and project an improving brand image.

An Introduction to Patanjali

Patanjali started its operations with Patanjali Yogpeeth in Hardiwar, Uttarakhand. Patanjali Yogpeeth is one of the largest yoga institutes in the country. Swami Ramdevji Maharaj and Acharya Balkrishanaji Maharaj set up Patanjali Ayurveda Pvt Ltd for treatment, researched development and for the manufacturing of ayurvedic medicines in Yoga and Ayurveda. Patanjali Yogpeeth offers treatment and scientific research and has brought a revolution when it comes healthcare in the country with the combined approach of Yoga and Ayurveda. The infrastructural facilities at Patanjali Yogpeeth includes an OPD for free medical consultation, IPD of thousand beds, laboratory for test investigation of radiology, cardiology and pathology, a yoga research department, free yoga classes, high quality ayurvedic medicines manufactured by Divya pharmacy, facilities of library and readingroom along with a cyber café, a huge auditorium, apartments for senior citizens, a grand museum and a sale outlet of 11,000 square feet for literature related to yoga and Ayurveda.

Patanjali started of manufacturing bulk ayurvedic medicines later branching its operations into FMCG markets as well. Since, the FMCG market has low entry barriers, Patanjali soon established itself as a major consumer goods’ manufacturer. The recent trends clearly imply that the company’s priorities are shifting from medicines to consumer goods, perhaps because the net revenues earned through FMCG are on par with ayurvedic medicines.

As per the report by EDEL research - The company is well on course to achieve its targeted revenue of INR50 - 60bn in FY16 (INR20.2bn in FY15). Even though the thrust is not on profitability, the company managed to clock ~20% EBITDA margin in FY15, aided by better cost management (latest machinery and strong R&D capabilities) and lower A&P spends”

FINANCIAL TRENDS

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At a supermarket if given a choice for tooth paste what brand would you prefer?

As a part of the Survey we asked our respondents the question as to if given a choice of toothpaste which brands would you prefer. The basic idea behind the positioning this question was to understand the Brand/Product Loyalty for Patanjali and its products. At the same time this question was helpful in understanding the growth and market share increase for Patanjali

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Some Observations

With a 35% share in terms of Respondent preference, Patanjali Dantkanti is a clear winner. Patanjali Dantkanti contributed a total of Rs.425 Cr towards the total Revenue goals for the company. It thus validates the increasing market share of Patanjali and confirms a future growth for the company.

MARKET SHARE (Year on Year)

In comparative study of the market shares for each Year, Patanjali has grown from 3% in 2013 to 7% in 2015. This can be accounted to a strong growth in sales of their flagship product Patanjali Dant Kanti leading which provided a substantial challenge to companies like HUL, Colgate, and Himalaya Brands.

Yogi & Acharya is an awesome combination winning hearts & developed high credibility amongst mass. The double barrelled BRAND is capturing significant percentage of market share, Year on Year.

Now to understand this perceptive penetration into the market share.

What draws you towards Patanjali Products?

As a part of the Survey we asked our respondents the question as to what draws you towards Patanjali Products. Is it the charismatic Baba Ramdev, Ayurvedic Ingredients, Health Benefits of the product or maybe the pricing on the product?

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*Survey Results

Some Observations

• The major attraction towards Patanjali Products is accounted towards Ayurvedic Ingredients (70%) & Health Benefits (50%).
• Products from “Patanjali” are available at around 15-30% cheaper costs than similar from peer companies.
• Marketing the products on the lines of Made in India & Strongly promoting the concept of “SWADESI”.
• Baba Ramdev has continuously pitched Patanjali as a “Swadesi” alternative to all the MNC products. The pitch has resonated well among many Indians who now prefer to buy Patanjali’s products rather than other companies.

The above data very prudently validates the data that most people buy Patanjali Products due to the Health Benefits of Ayurvedic Products sold by Patanjali.

Patanjali brand a strong contender in the consumer goods space!

Patanjali brand from Baba Ramdev has over 350 products from biscuits to noodles and shampoo to toothpaste. The brand is giving a reason for the consumer goods to take stock. They have recognized that Patanjali cannot be dismissed as a quirk of the baba, and the brand is growing into a contender in the segment of consumer goods at a fast pace.