From its humble beginnings in 1884, Dabur has come a long way in the last 125 years. The fact that it has found its way into Pitch India’s Top Marketers in a year that has been quite tough for the economy indicates its position of strength. The company holds 25th position in our list.
The tough year notwithstanding, the FMCG sector has grown between 12 and 15 percent in the last three years, according to a FICCI-Tecknopak report brought out in July 2009. Dabur has also ridden high on the growth of the sector, marking its highest organic growth in a decade in 2008-09. And this dream run continues with the second quarter of the 2009-10 reporting the fastest growth in 18 quarters.
“Dabur has reported strong double digit growth all through the recession period and continues to move ahead on that path,” affirms Dabur India vice chairman Amit Burman.
One of the reasons for Dabur’s commendable performance during this last year has been the launch of as many as 30 new products and variants across categories, markets and geographies. The past 12 months have seen Dabur enter several new categories like fruit-based drinks with Burrst, hard surface cleaning market with Dazzl, skin care with Uveda, Gulabari and the recently acquired Fem, malted food drink with Dabur Chyawan Junior and light hair oils with Dabur Amla Flower Magic and Vatika Enriched Almond hair oils.
“Dabur’s strategy has been a combination of offensive and defensive measures. While we have put in place aggressive cost-management initiatives, we were also among the first to increase focus on small towns and rural markets – which have remained insulated from this slowdown,” says Burman.
Dabur rolled out a special rural-focused sales initiative across seven key states – Uttar Pradesh, Madhya Pradesh, Bihar, Punjab, West Bengal, Maharashtra and Gujarat. Under this initiative, the company stepped up its rural reach by going into villages with a population of below 3,000, as also increasing its salesforce in these markets to ensure deeper penetration. “Consumer-connect and availability of products are the two most important factors in determining a brand’s success,” emphasises Burman. Rural and semi-urban India contributes to almost 50 percent of Dabur’s total sales.
Taking the Traditional Route
While the industry has been looking towards modern retail, Dabur believed that traditional trade channels would yield better results. Among the several initiatives rolled out for traditional trade was the Parivaar programme, under which the company nurtured key grocery stores across the country.
The initiative sought to build long-term relationships with retailers by offering them special discounts, margins and rewards to participating outlets. Apart from buying shelf space, shopkeepers were offered retail solutions and merchandise that would help them add value and keep pace with changing times.
In bargain, the company got structured point-of-sale visibility, which ensured faster off-take at outlets.
The Vital Connect
The FMCG major has focused fiercely on connecting with its core target audience. Continued consumer-connect initiatives were rolled out with key brands like Amla and Chyawanprash, which resulted in strong double digit growths. Amla, for instance, has grown at upwards of 20 percent this year, while Chyawanprash has in the current fiscal reported a near 12 percent growth, says the company.
The Vatika portfolio was strengthened with the introduction of new variants and the brand extension into conditioners. These initiatives also resulted in Vatika reporting over 32 percent growth this year.
“We have moved beyond traditional media options like radio, television and cinema, and entered into a direct engagement with consumers with special initiatives like the rural beauty and talent contest with Dabur Amla Hair Oil. Besides, we have in place a secondary network of sales force that work only in rural belts,” adds the vice chairman.
With razor sharp focus on different segments of the market and its consumers, it is no wonder that Dabur has emerged as one of the top marketers of India.
The case facts
- Entered new categories with Burrst, Dazzl, Uveda, Fem, Chyawan Junior, Vatika Enriched Almond hair oil etc.
- The rural market has emerged as a goldmine, with almost 50 percent sales from that sector.
The acceptance: Amit Burman, Vice Chairman, Dabur India
It feels good. Dabur has reported strong double digit growth all through the recession period and continues to move ahead on that path.