Sociology

Dabur India Ltd. was ranked amongst the top four Fast Moving Consumer Goods Company in India (ICMR, 2005). Even though, the company had continues to increase sales over the years, its positioning was not clear in the minds of its consumers. The challenge on hand was to reposition the brand so that its brand architecture could be aligned with its brand equity (IMCR, 2005).

Dabur was positioned as an umbrella brand and focused on corporate or umbrella branding more. Leaving this strategy behind, it moved to individual branding. It also developed a new logo. The aim of repositioning was an attempt to give its consumers an Ayurvedic heritage with a modern feel (ICMR, 2005).

Background
Dabur India Ltd. started off in 1884 as a small pharmacy. Today, 125 years later it has positioned itself as an FMCG in India. Dabur has come a long way in producing and marketing a wide variety of products based on the traditional science of Ayurveda (Dabur, 2009). These marketing efforts have seemed to work well for the company. It has established such a strong position in the minds of its consumers that repositioning to become a consumer goods company with a turnover of Rs. 28341.1 million (Dabur, 2009) was possible and easily accepted.

The company is divided into three major SBUs or strategic business units, namely, Consumer Care Division, Consumer Health Division and International Business Division (Dabur, 2009). Furthermore, the Consumer Care Division meets the varying needs of consumers by developing business portfolios of Personal Care, Health Care, Home Care and Foods (Dabur, 2009). The major brands in this division include Vatika,  Hajmola, Real, Fem and Dabur. According to the company website, its Rs. 9 Billion brands include Dabur Amla, Dabur Chyawanprash, Vatika, Ral, Dabur Red Toothpaste, Dabur Lal Dant Manjan, Babool, Hajmola and Dabur Honey. It is the market leader in the honey market (with over 75 percent market share), Ayurvedic medicine market (with over 65 percent market share) and the herbal digestives market (with 90 percent market share).
 
Moreover, it operates in the international sector in markets, namely, GCC, Nepal, Egypt, Nigeria, Bangladesh and the US (Dabur, 2009). It successfully markets its brands Dabur and Vatika in these places.

Purpose
The purpose of this paper is to analyze the repositioning of Dabur from a core Indian Ayurvedic brand to a contemporary Ayurvedic brand operating in the Fast Moving Consumer Goods industry of India. The paper will study the forces that drove Dabur to reposition itself. It will then analyze the marketing activities that brand has carried out for its individual brands as an attempt to reposition itself. Finally, the paper will give a marketing plan that, if followed, will allow Dabur to secure continued international growth.

Driving Factors
There are a number of factors that must have drove Dabur to reposition itself from a provider of Ayurvedic products to a herbal FMCG company. It repositioned itself to appeal to the younger generation by giving the brand a contemporary appeal. It was a brand that resorted to umbrella branding and catered to people of 35 years of age or older (IMCR, 2005). The image of the brand was that of a hardcore Ayurvedic company that made medicine for older people. For this reason and many others that follow, the company had to reposition itself. This allowed it to grow by increasing turnover by a significant amount.
Thus, the reasons for this repositioning are as follows

Potential of Growth of FMCGs in India
Dabur India Ltd. tried to reposition itself as an FMCG in India from a traditional Ayurvedic provider. One of the major reasons for this was the potential growth in the lucrative, US13.1 billion FMCG industry of India. Dabur moved the focus to FMCG because it was doing far better (Menon  Mogra, n.a.). Even now, the FMCG industry is expected to grow by a total of 60 percent, which will mean that the industry will grow by an 10 percent each year (Naukri Hub, 2009). The industry is an efficient one also because the competition is intense. According to a report by HSBC, household care, Hair care, female hygiene, male grooming, and the confectionery and chocolates are expected to be the fastest growing categories (Naukri Hub, 2009).

Already Dabur operated in hair care and female personal care. Therefore, there is immense potential for growth in these industries for Daburs Vatika and Fem. This must have been an attractive enough reason for Dabur to convert itself to a Fast Moving Consumer Goods company. Moreover, there is even more potential for growth in the rural areas of India because of the 12.2 percent of the population living there (Naukri Hub, 2009). In such areas, Ayurvedic or traditional Indian medicine would have done well. For all these reasons revolving around the potential of growth in the FMCG industry in India, Dabur opted for this profitable and fast growing industry. This is evident in the CEO Duggals growth plan statement in 2003 where he stated that We decided to set the scale high, targeting at least a strong double-digit growth. (IMCR, 2009). Dabur was searching for such expansion drivers that could give benefit to the Ayurvedic brand equity.

Catering to the Younger Market
The largest segment of the total population in India is that of younger people. The youth of India makes up the largest segment with almost seventy percent of people being younger than 35 years of age (IMCR, 2009). This had important implications for DIL  it needed to change its focus to position to a more effective market.

Earlier, Daburs image was such that it provided herbal medicine and solutions. Therefore, it catered more to people who were older than 35 and the more traditional people. In other words, it catered mainly to less than 30 percent of Indias entire population. There was immense potential growth in the other segments of the population. Therefore, Dabur just needed to target the right demographic segment of the market.

It is also true that this segment of Indias population has the highest disposable income (IMCR, 2009). Therefore, the younger segment of India was not only the largest segment, but also had the potential of being the most profitable one. It was a wider target audience with even more money to spare on branded goods.

It realized that it could target the youth by making its brands more innovative, progressive and contemporary. Therefore, the second factor that drove Dabur to reposition was the attractiveness of a different market segment that was younger, fresher, open and more profitable also.
 
Modernizing the Brand
The third reason why Dabur India decided to restructure and reposition itself was the need to modernize the brand and its image. As mentioned earlier, the brand image and positioning had a very traditional and outdated touch to it. What Dabur needed to do in order to cater to a wider and different market was to give a contemporary touch to the brand, to make it updated, colorful and ultimately modern. It had to be made a brand that all the people in India could relate to and consume. It also needed to add an element of fun and growth.

Therefore, a factor that drove to the repositioning was the growing need to modernize brands so that they could capture the minds of more people. This way DIL could make more profit out of its brands by making them market leaders. Ultimately, the goal of the brand strategy would be met by aligning brand architecture and bran equity. The need for making the brand modern was then a reason for repositioning of Dabur brands such as honey and Chyawanprash.

Stiff Competition
Another reason why Dabur felt the needs to reposition was because of the competition in the Ayurvedic market. It needed to reposition itself so that through all this clutter, it could still make a place for itself in the minds of its consumers. It was suffering from a case of under-positioning. It was being positioned as an umbrella brand when it had so many different brands that could be uniquely positioned. For example, Dabur had to reposition its Dabur Amla Hair Oil in response to marketing efforts by Marico Industries Shanti Amla, whose market share had increased to 8.5 percent from a 7 percent while Dabur Amlas marjet share went down (Business Standard, 2001). Another threat was Bajaj Sevashram Bramhi Amla which had a share of 20 percent in 2001 (Business Standard, 2001).

Dabur Chyawanprash also began to face competition from health food drinks market (Marketing Practice, 2008). Another major competitor for Dabur in the ayurvedic industry was Himalaya herbals which also produced and marketed herbal goods, like Dabur. Even though there was little competition, but there was still competition. New products from these companies could have resulted in lesser demand for Daburs products (Scribd, 2009) To become a better positioned brand than all the others and to become well-equipped in order to emerge forward and become prominent from amongst these brands, Dabur had to reposition.

Streamline Business Operations
A factor that drove Dabur to reposition was the need to systemize and streamline its business processes and operations. There was need to synergize the processes so that Dabur could establish itself as a strong player in the industry. Dabur believes that Information Technology is an essential weapon. Says Gopal Shukla, chief information officer, Dabur, Most industries use IT in certain distinct phases before evolving into a complete e-business enabled organisation. We are currently in one of those phases and believe it to be the fourth major asset of the company (other three being strong brand image, new product development strengths and an extensive distribution network). (Arora, 2002).

Therefore, in order to become stronger in the industry, the company had to reposition itself to become an IT intensive company and so had to streamline its processes by introducing IT initiatives.

Profits Under Pressure
Finally, Dabur opted for repositioning because there was a continuous downward pressure on the profitability of the company in the year 2001 through 2002, as shown in Figure 1 below.
Rs. (Million)2000-20012001-2002Sales11664.711631.9EBDIT1372.91204.5Profit Before Tax851.7755.1Profit After Tax779.2644.4EPS2.732.26DPS1.000.50Figure  SEQ Figure  ARABIC 1 Decrease in Profitability between 2001 and 2002

This was mainly due to increases in market share of competitors corresponded with decreasing market share of DIL it self. The reason it had to resort to intense marketing of its health product was to increase profits, which were under pressure (Business Standard, 2001). Therefore, also in response to this, the company was forced to reposition.

Insufficient Range
Another reason why the company wanted to reposition was because there were gaps in its skin care and oral care categories. For example, its skin care product Gulabari did not appeal much to younger people. In the oral care category, not much appeal was created in the toothpaste categories.

Companys Strategic Goals
One more reason the company wanted to reposition was because this strategy was in line with the companys goals and objectives. Dabur focuses on growth and expansion (Dabur, 2009). Therefore, repositioning seemed like a good idea to keep up with the culture and goals.

Marketing Activities

Developing a Brand Strategy
Once the company decided to reposition itself to an FMCG company in the beginning of 2000, a number of marketing efforts and activities were carried out so that the repositioned message could be effectively put through. According to a company spokesperson, Daburs first priority was to get the brand strategy right. In other words, it needed to focus on where it wanted to see the brand in the future. After having decided this, the plan was to align the brand architecture with brand equity.

Move from Umbrella Branding to Unique Branding
The company, in the past, had focused on umbrella branding. It wanted to change this to focus more unique branding for five of its major brands Dabur, Hajmola, Vatika, Anmol, and Real. Each of these was assigned to the FMCG operations. For example, these five unique brands then became umbrella brands for related categories. For example, Hajmola was the umbrella brand for all digestive brands while Dabur was the umbrella band for all health products such as the Dabur Chyawanprash.

Changing the Logo
The logo of the parent company was changed. It had always been a banyan tree. This was changed to something more modern and relevant to the growing nature of the brand. Hence, a new identity for the company was founded. The new logo is fresh and shows firmness. It advocates a brand that is affirmative, practical and progressive (Menon  Mogra, n.a.). The explosion of leaves and the colors of this new tree express growth, rejuvenation and inner strength (Menon  Mogra, n.a.).

The former and present logos are both illustrated in figure 1 below.

Figure  SEQ Figure  ARABIC 2 Old and New Logos of Dabur
The company also introduced a new campaign for its Hajmola Candy. Hajmola was though to be a digestive candy that performed the function well. Other than that there was nothing special about it. Dabur wanted to target this digestive solution to the youth. As a result, they added an element of fun in it.

According to the company website, in the logo, the tree trunk depicts three people with their arms raised. This expresses exultation (Dabur, 2009). The branches symbolize growth and expansion while the roots suggest stability. The leaves show rejuvenation. The color (orange) depicts warmth and energy while the font is similar to older font, preserving the identity of the company. Overall, the logo expresses harmony (Dabur, 2009).

Promoting Specific Brands Dabur Chyawanprash
Dabur Chyawanprash is an ayurvedic health supplement. It is a very Indian, a very traditional product that not many people were comfortable with. As mentioned earlier, Dabur Chyawanprash was facing competition from the drinks market. Drinks like Bournvita, Horlicks and others appealed to children more than a health supplement like chyawanprash.  Also, Dabur Chyawanprash was targeted more towards kids and the aged, and not adults (Marketing Practice, 2008). This really held back the growth of this product to a different and wider audience. As a repositioning activity, the brand started to focus on kids and adults. They started showing commercials and print ads. The new campaign was targeted to parents and the idea behind it was to promote the brand to them so that they encourage their kids to have it, as a caring and loving gesture (Marketing Practice, 2008). The entire campaign focused on reversing of roles (Marketing Practice, 2008). For example, fathers were reversing roles with mothers and vice versa so that they can understand what the other was going through. The entire campaign focused on caring about other people (your family). Indirectly a link between giving the family this brand and caring about them was established.

Celebrity Endorsements
To create a high profile for the brand, the company also got their brands endorsed by celebrities. In the case of Dabur Chyawanprash, Amitabh Bachan was chosen as the celebrity endorser. This worked well for many markets, in the international sector also as it allowed Dabur to capitalize on Amitabh Bachans popularity in major parts of all its markets.

Introduction of Brands in New Product Categories
As another repositioning activity, Dabur launched a range of juices called Coolers in 2004. This worked well with the consumers as they thought it to be more natural than anything else and this is what mattered to them the most. In addition to introducing new products, it tried to have the perfect marketing mix by focusing as much on the price, promotion and distribution efforts also. For example, coolers was cheaply priced at Rs. 50 per one liter and distribution costs were lowered by outsourcing raw materials to nearby farmers. In addition to Coolers, Dabur positioned Real Activ as a good juice brand also. However, the difference was that this was the premium juice brand and so was highly priced. They promoted this by having health runs by Sunita Godara, the Indian marathon athlete. This created a link between health and the juice. It was targeted towards health conscious people.

Another market that Dabur expanded into was the soups market when it introduced its first tomato soup in 2003. Furthermore, Dabur jumped into the oral care market to introduce its tooth powder and red toothpaste. As an attempt to contribute more to this market, Dabur acquired the herbal company Balsara. This was a good move for Dabur as increased its market share in the category.

Expanding into Different Geographic Regions
Dabur also focused on promotional efforts in the rural areas where it sent mobiles that promoted its Chywanprash, as a health supplement and a protection against germs.  It also focused on different markets such as that of Southern India. It carried out marketing activities there by customizing labels and encouraged better stocking activities in these parts also. As a result, sales from this division grew. Finally, Dabur grew in international markets also. Dabur took over a company called RedRock Ltd. in the Middle East and later renamed it to Dabur International Ltd. Later, in 2003, subsidiary businesses in countries such as Nepal, Pakistan, Nigeria and Bangladesh were also added to the market profile and contributed to a significant amount of the total sales revenue.

Marketing Plan in the International Sectors

Situation Analysis Strengths and Weaknesses
All over the world, people are becoming more aware and educated about the effectiveness of herbal medicine and solutions in contrast to synthetic and purely scientific ones. This is one of the biggest advantages that Dabur can capitalize on in the international sector. An Indian herbal solution has a great potential to appeal to foreigners. Its core solution gives Dabur one of the greatest opportunities for it to work abroad. Even if, initially, people in the international world perceive the company and brands as products that give Ayurvedic solutions rather than FMCGs, this would still work for Dabur. This can allow Dabur to focus on markets that it has ignored globally such as the Asia Pacific Region.

One of the strong points working in favor of Dabur is its ability to create strong alliances with popular
business in newer markets. This increases business for it (Scribd, 2009). Secondly, what Dabur is selling is original and very traditional. This is something people may especially come to India for traditional Ayurvedic solutions.

Also, its reputation as one of the largest FMCGs can allow it to work globally. Also, the brand has a great deal of reputation itself. People believe in its power to cure (Scribd, 2009).
Some of the weaknesses of the brand are that their products are perceived to be of low quality. This can be especially difficult to promote internationally where many better quality and better produced substitutes are available and this could be a potential threat. Other than that, Dabur Indias RD efforts are also insignificant (Scribd, 2009). Research and Development is perceived to be of great significance, especially in the Western part of the world.

An opportunity that Dabur could capitalize on is that of the Internet. It could start selling products online. This will allow it to sell easily to potential and existing overseas markets.

Competitor Analysis 
Before opening anymore overseas operations in countries like Russia, Dabur would need to carry out a complete competitive analysis to see how well herbal medicine and goods providers are doing there and whether they are in a position to cater to the local people more effectively by using local herbal practices rather than Ayurvedics.

It will also need to analyze the strengths and weaknesses of any such competitors so that they can respond effectively to their marketing efforts and introduce and position Dabur brands accordingly. Also, FMCGs, in addition to herbal companies, in potential markets will need to be analyzed for how well reputed and trusted they are.

Apart from that, in markets where Dabur already exists, periodical competitor analyses must be carried out from time to time in order to keep a read on the active competitors in these markets.

Marketing Objectives and Goals
The marketing objectives in overseas markets will be slightly different to the marketing objectives in India. In order to secure continued growth in the international sector, Dabur must focus on positioning its brand as one that provides traditional herbal solutions in a contemporary way. More than modern, overseas consumers will go for the touch of India in the products sold by Dabur. Therefore, as a marketing objective, Dabur must focus on its herbal legacy.

Marketing goals must include expanding into the existing markets and opening into newer markets, especially the Asia Pacific region where Dabur has the potential of becoming popular in the relevant industries.

Marketing Strategy
The marketing strategy will be much of what Dabur has used in the past. It must, very importantly, position itself as a good quality brand. This is because India is perceived to be a poor country. Consumers instantly link poverty with bad quality. For this reason, Dabur will need to focus on the quality and positioning itself effectively, in the light of this.

Other than that, prices must remain competitive. Premium pricing, especially outside of India, will not work well. Therefore, it should price its products accordingly. It msut also focus on effective distribution channels in these overseas markets, where there is little knowhow. In order to secure growth, it must gain the trust of its supply chain partners and maintain good relatiosnw ith them so that Dabur products can be marketed and distributed effectively.

Finally, as far as promotions are concerned, it must continue to use celebrities that are known to be truly Indian and are popular globally. A good potential endorser could be Shahrukh Khan who is liked by people all over the world and is thought to be one of the most successful Indians.

Budget and Controls
Finally, Dabur must have a separate budget and financials for its overseas markets. The controls must also be different and more effective. The reason for this is that it is relatively difficult to monitor how successful a campaign was in a foreign market. Therefore, as a control, it must hire consultants that will allow it to see the results of campaign in these markets and then give suggestions on how to improve them. Many other steps can be taken to improve and keep controls in these markets.