What is making Patanjali successful ?
If you have not heard of Patanjali, either you are not an Indian or you are not clued on to what is happening there!
Patanjali is the name of a company founded by a well known yoga guru , and boy, it has taken the Indian market place by a storm.
As a FMCG professional, I have been in awe, listening to the success stories of Patanjali. As per news reports, the Chawanprash to Noodles Company, will end up with a turnover of more than 750 MM USD this year growing by leaps and bounds. What are the reasons behind this success?
Our generation – the kids of 80’s and 90’s grew when cable television had started replacing the age old Doordarshan, the free to air government broadcaster. There were channels which were leveraging the latent needs of religious Indians by broadcasting faith and wellness related content. One of the standout images sticking to my mind is that of a bare chested Baba Ramdev churning his abdominal muscles demonstrating the Nauli Kriya ( see it on You tube) and similarly demonstrating the Kapal Bhati Pranayam which is again an abdominal breathing yoga exercise. The Baba has been credited to bring in the yoga revolution with is easy, step by step videos /live shows of DIY Yoga. With all this, the Baba became a top of the mind expert on all issues related to health and wellness for two generations, one – that of the baby boomers and also the next one.
Ramdev is a smart man. He traveled across the country/globe to do his live Yoga shows in which he raised money for a charity called Patanjali Ayurvedic Instritute, which he was building in Kankhal, near the holy city of Haridwar. The Baba was the pioneer in modern era crowd fundraising and very soon he was in business with a range of Ayurvedic medicines sold exclusively through exclusive Patanjali stores. Baba was not to stop here. He had won the consumers trust and he knew how to leverage it by tapping into allied categories. So here he is now with a complete range with presence in Nutrition & Supplements, Grocery, Ayurvedic medicines, Home Care, Personal Care, Health & Wellness and even Gift Hampers for Deepavali.
So what makes Baba’s venture so successful. Trust off course, but that does not create a 1 billion USD business so fast. A closer look at the marketing mix will tell you how astute Baba is.
The Product range, under the umbrella branding of Patanjali is extensive. It straddles across interrelated categories mentioned earlier in the article; and caters to a vast array of need states. And obviously, the brands enjoy the goodwill which Baba enjoys as a wellness expert. And Baba has been smart, if you go on the Grocery section of his e-commerce portal, you will see biscuits, noodles, candy, herbal tea, Indian sweets, sugar, rice, pulses, flour, cooking oil, juices and what not. So Baba has a so called “healthy” option for all your daily grocery needs, even in some of the so called junk food categories.
Pricing is another smart weapon Baba has been using. For example, his honey (250 gm) is priced at Rs 70/ vs Dabur’s which is above Rs 100/ for a similar pack. It’s not that honey is being used as a price signal, most of the products are priced some 10-20% below what the market leader’s pricing. Baba uses contract manufacturers and franchisees to get a low cost manufacturing set up and passes on to the consumers. He also squeezes the Trade margins to price the products competitively. While there are Doubting Thomas’s who don’t trust his product quality, for the masses, even his instant noodle is health food!
From just distributing through exclusive stores where Baba started, to now selling through mass market; Traditional, Modern and Online Trade, Baba has come a long way. Even though Patanjali’s distribution is yet to reach the desired critical mass, Baba will eventually get there.
And in terms of promotion and advertising, the no nonsense advertorial style of print and television advertisements go along with Baba’s image. Even though they don’t appear to be creative, effectively they break the clutter by removing emotions which most of the other companies try to leverage. It creates an image of a serious, straight forward marketer, who should be trusted. The advertisements not only try to push the group of products, they also communicate with the trade trying the leverage the nationalistic appeal the company has.
What’s next for Baba? My guess is that he will get into specialty clinics, the business of beauty, men’s grooming and education. In fact, he wants to establish a Vedic education board as well. Will he be as successful as what he has been in his startup business, I have my doubts. But I can bet my money on one thing, Baba’s business will continue to grow as long as it is pivoted around wellness.
Post Script : The Baba has also managed the other two important P's extremely well. Patanjali only recruits "vegetarians" &" "believers". The organisation is managed by Balakrishna, a motivated associate of the Baba who claims to work 18 hours a day. The other "P" is the "Political ecosystem" which again Baba has managed to leverage well.
Patanjali is the name of a company founded by a well known yoga guru , and boy, it has taken the Indian market place by a storm.
As a FMCG professional, I have been in awe, listening to the success stories of Patanjali. As per news reports, the Chawanprash to Noodles Company, will end up with a turnover of more than 750 MM USD this year growing by leaps and bounds. What are the reasons behind this success?
Our generation – the kids of 80’s and 90’s grew when cable television had started replacing the age old Doordarshan, the free to air government broadcaster. There were channels which were leveraging the latent needs of religious Indians by broadcasting faith and wellness related content. One of the standout images sticking to my mind is that of a bare chested Baba Ramdev churning his abdominal muscles demonstrating the Nauli Kriya ( see it on You tube) and similarly demonstrating the Kapal Bhati Pranayam which is again an abdominal breathing yoga exercise. The Baba has been credited to bring in the yoga revolution with is easy, step by step videos /live shows of DIY Yoga. With all this, the Baba became a top of the mind expert on all issues related to health and wellness for two generations, one – that of the baby boomers and also the next one.
Ramdev is a smart man. He traveled across the country/globe to do his live Yoga shows in which he raised money for a charity called Patanjali Ayurvedic Instritute, which he was building in Kankhal, near the holy city of Haridwar. The Baba was the pioneer in modern era crowd fundraising and very soon he was in business with a range of Ayurvedic medicines sold exclusively through exclusive Patanjali stores. Baba was not to stop here. He had won the consumers trust and he knew how to leverage it by tapping into allied categories. So here he is now with a complete range with presence in Nutrition & Supplements, Grocery, Ayurvedic medicines, Home Care, Personal Care, Health & Wellness and even Gift Hampers for Deepavali.
So what makes Baba’s venture so successful. Trust off course, but that does not create a 1 billion USD business so fast. A closer look at the marketing mix will tell you how astute Baba is.
The Product range, under the umbrella branding of Patanjali is extensive. It straddles across interrelated categories mentioned earlier in the article; and caters to a vast array of need states. And obviously, the brands enjoy the goodwill which Baba enjoys as a wellness expert. And Baba has been smart, if you go on the Grocery section of his e-commerce portal, you will see biscuits, noodles, candy, herbal tea, Indian sweets, sugar, rice, pulses, flour, cooking oil, juices and what not. So Baba has a so called “healthy” option for all your daily grocery needs, even in some of the so called junk food categories.
Pricing is another smart weapon Baba has been using. For example, his honey (250 gm) is priced at Rs 70/ vs Dabur’s which is above Rs 100/ for a similar pack. It’s not that honey is being used as a price signal, most of the products are priced some 10-20% below what the market leader’s pricing. Baba uses contract manufacturers and franchisees to get a low cost manufacturing set up and passes on to the consumers. He also squeezes the Trade margins to price the products competitively. While there are Doubting Thomas’s who don’t trust his product quality, for the masses, even his instant noodle is health food!
From just distributing through exclusive stores where Baba started, to now selling through mass market; Traditional, Modern and Online Trade, Baba has come a long way. Even though Patanjali’s distribution is yet to reach the desired critical mass, Baba will eventually get there.
And in terms of promotion and advertising, the no nonsense advertorial style of print and television advertisements go along with Baba’s image. Even though they don’t appear to be creative, effectively they break the clutter by removing emotions which most of the other companies try to leverage. It creates an image of a serious, straight forward marketer, who should be trusted. The advertisements not only try to push the group of products, they also communicate with the trade trying the leverage the nationalistic appeal the company has.
What’s next for Baba? My guess is that he will get into specialty clinics, the business of beauty, men’s grooming and education. In fact, he wants to establish a Vedic education board as well. Will he be as successful as what he has been in his startup business, I have my doubts. But I can bet my money on one thing, Baba’s business will continue to grow as long as it is pivoted around wellness.
Post Script : The Baba has also managed the other two important P's extremely well. Patanjali only recruits "vegetarians" &" "believers". The organisation is managed by Balakrishna, a motivated associate of the Baba who claims to work 18 hours a day. The other "P" is the "Political ecosystem" which again Baba has managed to leverage well.
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