Patanjali Case study & Detailed Analysis(Business Model):
As Baba Ramdev is famous for Yoga and Ayurveda.
In this blog You will get to know entrepreneurial side of Ramkrishna Yadav.
How a Desi Company replaces colgate?
How a Yoga Guru created a approx Rs 10,216 crore?
Have you ever think about the Patanjali business model?
How patanjali is producing so many types of products?
We have got all covered for you.
Started by Baba Ramdev And Aacharya Balkrishna in January 2006, Patanjali is an Indian consumer goods company Manufacturing Unit and headquarters located in haridwar.Its also has manufacturing unit in Nepal.
According to CLSA and HSBC,Patanjali is the fastest growing FMCG company in India.Patanjali declared its annual turnover of the year 2016-17 to be estimated 10,2186 crore.It was listed 13th in the list of india’s most trusted brand as of 2018 and ranked first in FMCG category.
What’s in it for me?
1) Patanjali Business Model
Patanjali’s consumers mostly came from its great Yoga and Ayurveda network.Patanjali Yog Samiti has 1Lakh branches,and 5 lakh teachers.
There are 10,000 Patanjali Chikitshalya and Arogya Kendras.
The people who come to their yoga camps are ready market to the company.Added to that all kind of Swadeshi branding of Baba Ramdev.
Its integrated mega-facilities is Haridwar, ther firm churned out as much as its customers demand.
2. Patanjali Into Swadeshi Pitch
After pramotic swadeshi to consumers Baba Ramdev building a business empire by targeted traders community on the swadeshi plank.
You saw in its ad in social and print media,Patanjali Ayurved is appealing to shopkeepers “to give prominence to patanjali product on shelves” because it “will help in fulfilling the dream of Mahatma Gandhi to promote Swadeshi”.
“The country needs Swadeshi Products; now we are telling shopkeepers to helps in this movement.
Ultimately,Swadeshi product should reach the consumer,”Patanjali spokesperson SK Tijarawala said.
Baba Ramdev followed the same strategy with organised retailers such as the Future Group,Reliance Retail and Shoppers’ Stop-promoted HyperCITY.
While Reliance Retail has created ‘Patanjali Destinations’ at its out.
Speaking at a Conclave,Patanjali CEO,Acharya Balkrishna questioned why food processing sector in India was not generating enough revenue.
He went on to city figure from Thailand,Which indicated that india’s all food processing is only 6 % to Thailand’s 30%.
3. Best sales and distribution methods
Patanjali’s combination of low prices,’natural and pure’ proposition and ‘swadeshi’ positioning are widely acknowledged to be the reasons behind success,what is not that well known is the critical role played by patanjali’s path-breaking sales and distribution strategy in driving this exceptional growth trajectory.
A perfect distribution strategy was a key factor behind patanjali’s meteoric Growth.Patanjali’s low cost distribution system was remarkably efficient in getting its products acceptance against far heftier rivals.
The company doubled its sales targets each year and set its sights on total domination over the indian consumers. It developed a piece of hunger for new distributors and new channels for trade.
4. Low Pricing and Cost dynamics
Patanjali products are made available at an exclusive discount as compared to their companies.The company’s raw material comes directly from farmers.
It has lower marketing spends and overhead cost compared to its peer and as such are able to produce at a much cheaper price.
A large proportion of the india population,especially the middle class,is extremely price sensitive and looks for quality products at reasonable price.
Patanjali has understood and developed a strategy to take advantages of the aforesaid mindset capturing market share from share established players.
5. A Baba as Brand Ambassador
The other big factor in patanjali’s favour is the image of baba ramdev. He is a recognized face all over india and beyond.
Patanjali is able to create a brand perception of health and wellness among the indian masses,primarily because of Ramdev’s association with the brand who is considered to be a veteran of yoga and a firm believer of ayurveda.
In india market where personalities outshine products,it’s imperative to have a brand of your own.
6. How Patanjali challenged The FMCG Protocol
Now the daysIndian market is witnessing a tussle between FMCG brand to be on top of the game,especially in becoming the “desi-est brand”,which Has been occupied by Yoga Guru turned industrialist Baba Ramdev’s Patanjali Ayurved Ltd.
Since the international players started venturing into the market of india,they had only focused on eliminating the traditional and age-old methods and introducing modern techniques.
Patanjali made the “deshi”segment alive when other FMCG brand were still selling the chemically loaded products.
Slowly other companies too started to look into space they had avoided looking in all these years,which is why other FMCG products too have started venturing their products in “desi” space.
7. Is Baba Ramdeva’s Ptanjali a non-profitable company?
As you all know Patanjali Ayurved Limited is a FMCG company.Obviously It gains profit by selling their products.But another important thing is the profit earned by them goes to charity.
It can be proved by the following points:
1- Baba Ram Dev is unpaid Brand Ambassador
2- Managing Director takes 0 salary
3- Gurukulam and Vansprastha Aashram (For Samaj Seva)
Patanjali Marketing Strategy
The 12 years old FMCG Company Patanjali has emerged as a prominent FMCG player in the market with a large number of products and deep assortments.Its manufacturing unit are located in Haridwar and outside India i.e.
Nepal under the trademark of nepal Gramodyog.It is primarily in the business of minerals and herbals.
Like other FMCG Company,it uses the mis of demographic and psychographics segmentation strategies to make its offerings appropriate / relevant to the particular set of customer groups.
It uses undifferentiated targeting strategy,as the main objective Patanjali is to offer healthy Products to all people.
- Patanjali used ADS(Alternative Distribution System)in order to create new demand.
- Patanjali centered to general trade once a sizable consumer base was generated.
- It also reduce cost by using another distribution strategy: Primarley distribution.By setting up of its own stores,eliminating wholesalers.It eliminated wholesalers in the retail space too.
- Low Prices
- Swadeshi Manufacturing
- Part of the profits going to charity
- Gaining Massive Popularity from Yog Guru Ramdev Baba
- Natural & Ayurvedic Products
9. Man Behind Empire of Patanjali Business Model
Baba Ramdev-led company’s revenue makes it the second-largest pure-play FMCG giant after market leader Hindustan Unilever(HUL),which had a turnover of Rs 30,783 crore in the last fiscal.
If Patanjali is able to double its turnover,even HUL will come within its biting distance.There is a man who know how it can be done Acharya Balkrishna , the CEO.
A confidant of Baba Ramdev,Balkrishna hold a 94% stake in Patanjali Ayurved,but he doesn’t take home a salary.Yet,he works for 15 hours a day,even on Sundays and other holidays during the year.
He claims he hasn’t taken a single day’s leave.”I work daily from 7 am to 10 pm.While a normal person would work for 8 hours a day,I work for 15 hours through the week.I am doing the job of five people,”he says.
10. Challenges From Multinationals
To counter attack Patanjali Dominance in Herbal Category,colgate launched Cibaca Vedshakti herbal toothpaste and many more products like Active salt, Active salt neem,Sensitive Clove etc.
They also brought down the prices of their products and providing promotions in the top end multifunction toothpaste segment. Colgate India is spending aggressively on advertising.As per the Market report,Colgate India spent about 12% of its revenue on marketing compared to 9% globally.
In December 2015,Unilever acquired Indulekha Brand for INR 330 crore to step up its presence in the new and emerging categories.They relaunched Ayush Brand with a wide range of products including toothpaste,soap, handwash, shampoo and face wash in five South Indian States.
11. How Patanjali is planning its future
Patanjali kickstarted the new year by foraying into the e-commerce platform and its founder Baba Ramdev has now decided to throw down the gauntlet to the firm’s strongest competitor-Hindustan Unilever Limited (HUL)
A report in The Economic Time says that Patanjali is eyeing to overtake HUL’s existing market presence.
“We have created capacity of Rs 50,000 crore and w are racing ahead now.Our target is to beat HUL by next year,”Ramdev told paper.
12. ABOUT THE TOP MANAGEMENT
Managing Director :Acharya Balkrishna
2-Ajai Kumar Arya
Company Secretary : Shashi Chandra Jha
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