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A 5000 Cr. empire. How patanjali became so successful

The Ayurveda brand Patanjali was established in 2006 by Baba Ramdev and Acharya Balkrishna. And since then the company has seen a massive growth of 94 percent. In fact, Patanjali is the fastest growing company in the entire country. Over the last five years, it has grown five times in revenue. The company has touched the 5000 Cr INR. And now Patanjali is targeting to touch the 10,000 Cr mark with their rapid sales. Presently, they have over 4000 distributors in the country. In addition, they also have 10,000 stores and 100 mega marts in India. To increase their sales to the next level Patanjali has collaborated with famous retail chains like the Future Group and Reliance Retail. Finally, Patanjali is also spending about 1000 Crore to establish four new manufacturing plants.

Patanjali has managed to compete with giants like P&G and HUL

In the recent times, Patanjali as a new comer is giving very tough competition to giants like P&G and HUL. In fact, in some departments, Patanjali has even managed to beat them. This is due to the fact that Patanjali always followed the Brand house strategy, unlike the others. P&G and HUL are following ‘House of brand’ strategy. To further explain this theory let me explain you both the strategies.

In a Branded House, the company is the entire brand. Therefore, all of its products will be marketed under the same brand. For a good example let’s take Apple for instance. Apple is known to manufacture various products like iPhone, Mac etc. All of them have different utilities but all of them are marketed under the Same brand. Patanjali is also using the same tactics to promote their products. In fact, they have a whole plethora of products marketed under the same name. For this reason, they don’t even need to promote their individual product through advertisement. They can promote the entire brand which assists them to save marketing and advertising costs at the same time.

So what’s wrong with P&G and HUL?

Both of them are focusing on ‘House of brands’ strategy to market their products. So far they have managed very well by implementing this strategy. In this strategy, they focus on the development of sub-brands rather than their parent brand. This makes their sub-brands independent of their parent brands. And this gives one advantage to the parent brand. If one sub-brand doesn’t go well according to their plan, then the company can still earn profits from its other brands in the market. Furthermore, this also doesn’t ruin the reputation of the entire company. Accordingly, companies like P&G never promote themselves in any advertisement. Instead, they focus on promoting their individual products like Gillette, Tide, Pampers etc.

Major factors behind the success of Patanjali:

  1. The health conscious people:

    There’s no denying the fact that in the recent years we have seen a gradual increase in health conscious people. Everyone wants to look well-toned and healthy. Therefore, people are more interested in healthy products. And, the Ayurveda tag gives them the assurance of a healthy product. By the introduction of various products by Patanjali the industry has seen massive growth in health and wellness sector. Over the years Patanjali has established themselves as the synonym to healthy products among the consumers.

  2. Less expensive:

    If you compare the products of a company with products of Patanjali then you will notice that there’s a significant price difference. However, this doesn’t mean that they are inferior in any way. This is due to the fact that the company cuts on the middlemen to maximize their profits. And hence they are able to provide their products at an attractive discount price compared to their competition. In fact, they also manufacture most of their raw materials for their products.

  3. A good supply network:

    Yes, they have an immense network to supply their products to the consumers. Firstly, they sell their products through their medical clinics (Patanjali Chikitsalayas). Secondly, Ram Dev Baba is a YogGuru so the products are also available at Patanjali Arogya Kendras (wellness centers). Furthermore, Patanjali also has non-medical outlets famously known as the Swadeshi Kendras. In addition to this, they also have 15,000 outlets in India. In the recent times, the local general store has also begun selling their products. Finally, company’s plan to go even further by setting up 1,00,000 outlets in the upcoming years.

  4. The health factor:

    Whenever a person hears the name of Patanjali he/she relates it to Ayurveda. And Ayurveda is considered to be healthy. The company has successfully managed to create this perception among the Indian folks. The association of Baba Ramdev to the brand further creates the healthy image. Baba Ramdev had resurrected Yoga back, that’s why people have deep faith in him and his brand.

  5. Minimalistic and simple packaging:

    Patanjali always used simple packing in their products. Instead of packaging them with glossy graphics and slogans they opted for simpler means. This further resembles the simplicity and effectiveness of Ayurveda. With a natural look of the packaging, they are using the simplicity of Yoga and Ayurveda to promote their products. Ultimately, the consumers feel the health and wellness factor while purchasing their products.

  6. Solid Media promotion:

    All of the credit goes to Baba Ramdev. His saint like appearance creates faith among the consumers. In fact, he has been the torch bearer of Yoga over the world. Baba Ramdev has also managed to maintain the healthy relationship the press and media. Furthermore, he also has good relations with most of the politicians. Both of this factors led him to promote his company without any cost. The press themselves gave enough limelight to him and his company for promotion. Furthermore, he gained massive popularity when he decided to launch his own instant noodles during the Maggi fiasco.

  7. Less expense on advertising:

    Presently, an average company spends about 12 to 20 percent of their revenue on an advertising campaign. However, Patanjali is a big exception in this case. During their days of emergence, they spend nothing on their advertising campaign and still managed to gain customer’s attention to their brand. Their brand loyalty has boomed over the years.

Conclusion:

Patanjali has proven the fact Indian brands also have the potential to compete and beat the international brands. It’s unconventional market strategies have made it a giant in India. People have become loyal to the brand in the very short period of time. The more is yet to come.

 

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