Sachet King Moves to Shed Regional Tag

Tuesday, May 3, 2011

Chinni Krishnan Ranganathan is best known for selling shampoo in 50-paise sachets in the seventies – almost a decade before multinational competitors such as Unilever and Procter & Gamble woke up to the huge potential in India’s bottom of the pyramid market.

But CavinKare’s Chairman and Managing Director has many others firsts to his credit, enhancing his reputation as somebody who is super-fast in spotting new opportunities. So when sachet became commoditised, Ranganathan tried a new selling strategy: whoever comes with five empty Chik shampoo sachets will get one for free. If retailers collect sachets from three customers, they will get one free. Though common now, it was a new initiative that time.

“This is where I think the big change came in,” Ranganathan says. CavinKare’s turnover zoomed to Rs 10 lakh from just Rs 35,000 in just nine months. It soon became Rs 25 lakh after the company brought in differentiation of its products through fragrances – again a first such move in the industry.

“While competitors used fragrance costing Rs 500-700 for their products, we imported fragrances, spending Rs 3,000. It was a disproportionate investment, but it worked,” Ranganathan says.

CavinKare’s turnover has of course crossed Rs 1,000 crore now, and Ranganathan has now set his sights on more than doubling it to Rs 2,500 crore shortly. The game plan is simple: the CMD wants to shed the regional tag for the company’s products and is going national – even international – with a vengeance. So Meera – the company’s oldest shampoo brand – will see a makeover and is expected to be relaunched nationally next month. The company is also looking overseas, including the US, Australia and Africa

Source: Business Standard (link opens in a new window)