Patanjali – A big beast

If we ask someone about Patanjali about 3 years ago, no one would have recognized it as an FMCG brand, forget consumers even the FMGC players not have dreamt about it. And now merely after 3 years, Patanjali has silently made their way in the consumer’s houses in some way or the other.

Baba Ram Dev is a known personality and has good fan following. He reemphasized on power of yoga and ayurveda which is from our own roots. Eventually he first made its way to people’s mind and later securing place in their hearts. With this, there was a trend observed where people preference changing to more natural and ayurvedic products.

In business, he used a very good strategy to first test the market with ayurvedic products which were closely related to his yogic image. He had introduced various new product in market like aloevera juice, giloi juice etc. which were not already present in the market. In his various yoga sessions, he imparted knowledge about these products and their health benefits. Slowly people started using these products and even started spreading the goodness of product. In turn Patanjali got the raw deal with the huge word of mouth publicity. With this spreading publicity, company also started to build its distribution network through dealership, which could be picked up by middle class person looking for extra income. It was a good deal as Patanjali brand was already getting huge publicity and dealers were seeing low turnaround time.

All going good, Patanjali now teaches us on how to take the business to the next level with the strong base already established. Patanjali was already a known brand in Ayurveda products, same brand was extended to FMGC products like atta, biscuits etc. It used the same distribution network which consumers were already aware of. Brand also emphasized on the natural ingredients being used, no harmful chemicals etc. I see few things going bang on with it:

1. Consumer’s inclination for the chemical free products, healthier natural product was increasing.

2. Government boosted support for Patajali to promote make in India initiative.

3. Patanjali already had extensive distribution network in place.

4. Low price point to cater to needs of people at the base of the pyramid.

With absolutely no money spend on marketing (initially), products started to make their way into consumer’s house with word of mouth publicity. And suddenly Patanjali emerged as a huge FMGC brand, which started to threaten the bigger existing players like HUL, Britannia. These companies will need to ponder on their strategies to tackle such grass root level competition. Of late, marketing efforts have been piped up, Baba Ram Dev used himself as brand ambassador in most of the ads. There are other celebrities like Hema Malini who are seen in the ads but they claim to be promoting it for free just out of the loyalty. Patanjali also closed a deal with Future group as their sales partners and gets separate shelf space, again hurting existing players. Brand has rightly made its way from people’s mind to heart and now to their monthly budgets.

It is already challenging other companies by targeting revenue of Rs. 10000 Crs for fiscal year 16-17. All is going good with the brand but I see some points which needs to be looked upon:

1. Is such extensive brand extension correct in all aspect? I mean Patanjali being extended for the food related products could be understood. But same brand being used for the products like soap, detergent etc. does not seems to be good fit.

       1.1  Patanjali’s brand element being its natural, chemical free, but how can detergent be chemical free products?

2. What about product certification like fssai mark etc. I noticed for some of their product this mark is not there and competing brands are using this to counter attack.  

3. When company goes big bang with many product and pan India coverage, it might not be producing it all by itself. When the product manufacturing is outsourced, can there be quality control in such cases with respect to its raw materials, manufacturing place hygiene etc.

Existing companies must be doing something wrong because of which a new brand is replacing their products. They must be ignoring the changing preferences. This shows that the companies at all times needs to be connected to their base customers to build next strategy. It would be interesting to see how will the existing player change their strategy now; I see some companies introducing new sub-brands to cater to change in the people’s preference for natural products. What else these companies can do? Also what would be the next strategy of Patanjali?