Patanjali Case Study
“Patanjali” is the name which don’t need any introduction. Patanjali products are available in all parts of the country and have a huge consumer base.
Patanjali Ayurved Limited was registered in January 2006 with its headquaters in Haridwar.
In the beginning Patanjali set up multiple medical clinincs acroos the nation under the name of Divya Chikitsalaya. These medical clinics provided free diagnosis to the poor people.
Under Divya Chikitsalaya, they provided ayurvedic medicines for around 6 years before entering Indian Mainstream Retail Sector.
In 2012, Baba Ramdev and Acharya Balkrishna launched a number of different grocery products into the market.
In the beginning, they only offering common household ayurvedic products. But later on the company launched all sorts of daily use items.
Important Facts About Patanjali
- Patanjali has been known for its astonishing growth rate since its eastablishment. The company has a turn over of more than 10,000 crore in financial year 18-19. They projected turnover of 12,000 crore in 19-20.
- Haridwar based Patanjali group has acquired debt-ridden Ruchi Soya in last financial year is expected to cross turn over of Rs 25,000 crore.
- Patanjali acquired Ruchi Soya in Rs 4,500 crore. Ramdev is expecting that Patanjali will cross turnover of Rs 50,000 crore in next five years.
- Since the entry of Patanjali in FMCG sector, its revenue has been multiplying over the years. Ramdev’s company is giving a tough competition to the giants of the industry including HUL (Hindustan Unilever Limited).
Patanjali case study is divided in 5 sections.
A. Wide Range of Products
Patanjali has started its journey with Divya Pharmacy that only sold ayurvedic medicines, but now Patanjali has become a leading FMCG company. These days Patanjali sells everything, from daily needs to cosmetics. The main reason of the success is that Patanjali is offering ayurvedic products to the people at affordable prices. The product category of Patanjali can be divided as follows:-
1. Natural Health Care
Health care products contains digestives , health and wellness products, diet food, health drinks and beverages.
Patanjali’s cow’s ghee which belongs to this category, is one of the hot selling product with revenue of 1308 crore in financial year 2015-16.
Health care products of Patanjali are very much in demand as people trust the quality of products. Indian population also shows their loyalty for Baba Ramdev’s Patanjali by showing interest in all new launches.
This category also covers one important section and that is Immunity boosters. Doctors usually recommend immunity boosters to all category of patients.
2. Natural Food Products
This category includes a number of products that vary from biscuits, jams, noodles to spices and pulses. This is the important sector as people trust patanjali for being herbal and chemical free.
3. Ayurvedic Medicines
Ayurvedic medicines are the backbone of the Patanjali and making them kings they are today. The major share of the company’s profit comes from the sales of ayurvedic medicines.
Patanjali sold ayurvedic medicines under the name of Divya Pharmaceuticals for more than 6 years before entering FMCG sector.
These ayurvedic medicines are the main reason of Patanjali’s rise today.
4. Herbal Home Care
This category includes products which we use during Pooja. This is category which includes Agarbatties, Dhoops, Hawan Samagri, Camphor, cotton wicks and also cover air fresheners.
Patanajali boasts that their pooja material is natural and thus completely harmless to everyone.
5. Natural Personal Care
This category includes skin care, dental care and hair care products. This category includes all sorts of daily use items like body care products and dish wash.
Patanjali have complete range of products and they claimed that they only use natural ingredients to manufacture. Patanjali products are healthy for people as compared to other manufacturers who use chemicals.
6. Patanjali Publication
Under this category, Patanjali is offering various books and CDs of Yoga, Motivation, Religion and many more topics of Indian culture.
7. Swadeshi Samriddhi Card
Patanjali Swadeshi Samriddhi Card provides insurance benefits of Rs 5 lacs in case of death and Rs2.5 lacs in case of permanent disability. The cost of card is Rs 100 and also have conditions for claim if any.
8. Patanjali Paridhan
Under this category, Patanjali is working in the apparel sector. Patanjali Paridhan is is an exclusive apparel brand which has 3000 products. This is further classify into three sub brands named Aastha, Livfit and Sanskar. A womenswear is covered under Aastha brand, Livfit cover unisex sportswear and menswear cover under Sanskar brand.
These products are only being sold at the Patanjali Paridhan stores at Meerut, Aurangabad, Haridwar, New Delhi and Berhampur. Patanjali is targeting to soon open Paridhan stores in all metro cities in the country.
It is also expected that these products will be available soon on e-commerce sites like Flipkart, Amazon and Paytm.
We only mentioned categories of products mentioned in Patanjali Ayurved’s website.
B. Strategies followed by Patanjali to become market king :-
Patanjali has astonished everyone with its unparalleled growth and become the fastest growing Indian FMCG company in the history. It is one of the most successful FMCG Company in the Indian market and company owes its success to multiple factors.
1. The Face of Patanjali
One important fact about Patanjali is that unlike other companies, they never completely depended upon celebrity for endorsements, but rather made Baba Ramdev the face of the company.
Being a yoga guru, Baba Ramdev has already motivated many people to pursue healthier life through yoga camps. He has many followers who are also the initial consumers of Patanjali products. They not worked as consumers but also helped to build the market for the brand through their positive reviews.
The reason for such a big fan following is that Baba Ramdev always not only talked about yoga and its benefits but also about India and its culture. He has been known to shun MNCs for looting India with their products and encouraged people to buy “Swadeshi” or made in India products. His focus is to promote Indian products and he advised people to boycott foreign companies who are filling their pockets.
His speeches have always reflected a sense of patriotism which develops a sense of love for their motherland among Indians. Patanjali has used these things to market their products positively among the people of the nation.
2. Market Research
Patanjali has an excellent market research team that works continuously towards providing customers with the best products. Patanjali has been working to keep customer needs on top priority and launch products accordingly.
Baba Ramdev and his team interact with their customers on a large scale using different platforms. Major platform is his yoga sessions. There are many executives in his health care services, dispensaries and stores who are working to serve this purpose. The result is Patanjali understand what their customer need and then cater products that could meet those needs.
Good example of market research is aloevera juice, that is not a medicine. Rather consumers use it as a daily wellness product to lead a healthy life. This is what we called a market research. They are concerned about their customers interest and demands. This is also the major reason that Patanjali is rising day by day.
3. Branding of Products
Patanjali has worked cleverly on its branding by telling the story of its being natural and Swadeshi.
Consider the brand name & logo. “Patanjali” drives its name from the name of a scholar of 2nd century, who is considered as the “Father of Yoga”. Not only brand name but their logo represents their name with green and saffron line below, which invokes a sense of patriotism among people.
Other important fact is the logo of Divya Yogapeeth, which is quite interesting as it invokes sense of Hinduism with OM sign.
4. Market segmentation and supply management.
A big reason for the success of Patanjali is that they targeted all sections of the society and people of all ages.
Patanjali broke the common misconception of “Ayurvedic” is for elderly and made it cool enough to be adopted by the youngsters also.
From their gooseberry candies, chocolates, noodles and other similar products, they have been working hard to become a favorite among the kids and the generation Z.
Patanjali also focus on cosmetic and body care products to target the young generation.
The price and packaging of the products has been done keeping in mind the needs of all sections of the nation. The prices of all products are not high as compared to other brands. The prices of daily use products are available at cheaper rates so that people from lower classes can afford them. They also have products to target higher economic classes of the society.
Patanjali has handling the supply management in a planned manner with more than 10000+ outlets throughout the nation. Moreover, now their products are also available at the non-Patanjali retails stores, helping them to manage the demand and also increases turnover.
C. SWOT Analysis
Patanjali started only a decade back and has already become the major player in FMCG sector in India. Considering all the working and major achievements, we are giving SWOT analysis of Patanjali.
Image of Trust
Owing to the social image of Baba Ramdev and Acharya Balkrishna, Patanjali develops a solid image of trust across the nation.
Strong Distribution Network
Patanjali has a large distribution network in the country which covers almost all the areas of the nation. It also helps the company to cover a larger group of people.
Make in India and Swadeshi Initiatives
The company has always been promoting the use of Swadeshi products. This has been a major part of their marketing strategy and makes Patanjali to taste a huge success. It also helps to create a better image of Patanjali in the eyes of its customers.
Innovative and Harmless Products
Patanjali always focus on being natural which make its products harmless. Being natural, generate more demands for their products. Patanjali also known for its innovative products to fulfill customer needs.
Baba Ramdev and Acharya Balkrishna have been doing social works through free chikitsalayas and hospitals which helps to create better image of Patanjali.
Concentration on Limited Region
Patanjali’s outlets are mostly situated in Northern and Western India. Its products are highly in demand throughout the India but the lesser number of outlets in eastern and southern India can prove harmful to the company. As they are leaving almost half of the country untouched which will effects Company’s growth in long span.
If company can tackle this problem and open more stores there, then they can tap larger opportunities in the future.
Easy Availability of Substitutes
This is very common problem in the market, as some companies make fakes of your product. These fakes are available at cheaper prices and that harms the brand’s revenue.
Many Patanjali products still do not have the clinical approval label on them. If any competitors give air to these approvals, then definitely this will cause harm to the brand image of Patanjali.
Patanjali is totally depends on Baba Ramdev ji for its promotions. This will harm company’s marketing in the long run as majority of population is still not watching yoga.
An inclination to Herbal and Natural
Patanjali focus on herbal and natural which brings people’s interest in their products. This also opens a large avenue of opportunities to work on.
Even though Patanjali distributes its products to a large section of India, but still its has a lot of untapped areas. This mostly includes areas of Eastern and Southern India.
The hectic lifestyles these days, force people to work harder and to keep themselves fit there is no better way to use natural products. Patanjali already made his image of natural and healthy products.
Baba Ramdev has a large popularity outside India too and this can be use to expand Patanjali’s market internationally. This will help company to generate more revenue by tapping untapped resources.
Threat of International Competition
As Patanjali is growing its market in India and sooner they will go international also. But they will have to face competition from larger and multinational brands in India and in foreign also.
Baba Ramdev is very popular face in India and often seen on many political platforms giving speeches. Though he is not actively involved in politics but this indirect indulgence can also affect Patanjali.
Products in Controversy
The fact is that some Patanjali products are not clinically approved. This can create a sense of mistrust among their consumers.
Like any other brand growing in business, Patanjali too has to face many challenges and controversies. The major question raises on their investment sources. Many industry leaders point out that the investment cycle of the company is in mystery.
But the Acharya Balkrishna has always handled this question in intelligent manner. He has responded saying that they receive a lot of money in charity and owing to their fast growth; banks are always ready to give them loans.
He further added that he has no issues in giving reports to anyone for all the records of money they get and how they spend it.
Important thing is that both the yoga gurus do not spend a penny on their luxuries. They are living very simple lives in their ashrams doing social works.
The company is already surrounded by many questions regarding funds and in 2017 one more question raises. Maharashtra and Madhya Pradesh Government has sold pieces of lands to Baba Ramdev in Nagpur and Indore at dirt-cheap prices. The actual cost of these lands was too high.
Apart from this, Patanjali products have come under the scanner as some put the questions that their products did not meet quality standards. Also Patanjali Ghee, Amla Juice and Noodles were doubted that they are not meeting quality standards.
Acharya Balkrishna calls it ‘shadyantra’ by the competitors. He further added that our consumers never doubt our quality and this is the reason our sales growing day by day. We are giving value for money products and Patanjali’s strength is purity and authenticity.
Patanjali also boast of having WHO, ISO, GLP AND GMP certifications to meet the questions of quality. Even though shrouded by these controversies, the company still manages to save its image and dignity.
E. Future Aspirations
The company’s growth story has been quite unbelievable and they fulfilled their goals quite early. Baba Ramdev has even expressed his hopes to become number one FMCG Company by the financial year 2020-21.
But this dream can only be achieve proper plan and management. Since the company realizes that and increase focus on better planning the supply-chain management and distribution of products.
The company has been setting new multiple manufacturing units across the nation. Patanjali plans to invest about Rs 5000 crore and adding 5 manufacturing plants in with focus to cover eastern and southern markets.
The company has the major market share of cow ghee, mustard oil and honey. Also they are the second largest brand in flour. Even in toothpaste category, company have share of more than 14 percent.
Patanjali further planning to increase its distributors from 6,000 to 12,000.
The company is gearing up to take on international fast food brands like KFC, Subway and McDonald’s. They are working on a business plan to enter the restaurant business with complete focus on serving nutritious and hygienic food.
Acharya Balkrishna said that we are planning to enter in e-commerce business soon. Baba Ramdev usually said that Patanjali does not work for profit but rather working to provide the people better products with reasonable prices.
F. Jobs and Careers
Patanjali is growing at fast rate and it creates thousands of jobs in different segments. Today more than 2 lacs people are working in this company. Company today have assets of more than Rs 4000 crore.
Patanjali brand has generated quite a ripple in the FMCG sector right from the start. Patanjali has started its journey in 2006 but its growth and success is amazing. Even the company has to face many challenges and obstacles but the company is standing tall as ever.
Headed by two Yoga gurus, who has no degrees in marketing or business, made Patanjali a huge success. Patanjali is expected to go a long way in the future, but have to work hard as the road ahead will be tougher than before.
We also recommend you to read the case study of Pulse candy.
Also visit Patanjali website.