Cavin Kare!!!

Cavin Kare was established in the year 1983, with an investment of Rs 15000. The company was started with a single product by an innovative entrepreneur C. K Ranganathan. In the initial period, the company was named as Chik India Ltd and it was renamed as CavinKare Pvt. Ltd (CKPL) in 1998. The reason behind the name is, Cavin means beauty in tamil and ‘care’ is spelt as Kare. The name is also a special one as it denotes the initials C and K of Mr. Ranganathan. The company offers quality Personal care (hair care, skin care, home care) and Food products. CavinKare has touched a turnover of over Rs 5000 million in 2006-2007. The Company has employee strength of 576 and has a network of 1300 Stockists catering to about 25 lakh outlets nationally.

Strategies used:
The main strategy of Cavin Kare is to strengthen the distribution and marketing. The company made its brand available to the customer through out the country. Continuous concentration upon Research and Development is an added advantage to the company which has dedicated staffs. Their main job is to understand the needs of the target audience and to bring more innovative products

Innovative marketing strategy used for Chik Shampoo:

“During 1999, the penetration level of Chik Shampoo was not aggressive. Hence the company went back to the consumer to understand their basic needs that would help Cvai Kare to drive the sales growth and gain good market share in the shampoo market. Cavin Kare also discovered that soap usage was the biggest barrier and people did not see the need for using Shampoo. As part of the consumer study, the company tried to convey the message to the consumer that soap usage was bad for the hair and when a product exists specifically for hair it should be used. The consumers responded by stating that their fathers and grandfathers have used only soap and their hair continued to maintain good health. So the argument that Soap was harmful did not bear merit to them. However they did agree that Shampoo usage gave soft and silky hair. However their perceived value on hair wash was very less and they did not want to spend more out of their pockets to buy Shampoo. The study also revealed that though the aspiration to use shampoo was there, the need to spend more did not appeal. To arrive at a solution for this situation, Cavin Kare introduced the 50 Paise shampoo sachet, which easily satisfied a single wash. It was a calculated risk took, since the existing volumes of 1 rupee shampoo sachets was also in the market but when sales started picking up for the 50 paise shampoo, the 1 Rupee Shampoo also picked up pace once the consumer started making a habit of using Chik shampoo and Cavin Kare gained a good margin.

Another situation where innovation was required was the economy value consumers saw between using shampoo sachets and shampoo bottles. 65-70% of the shampoo sold in India is through sachets and only 30% is through bottles. Sachet sells more due to the phenomenal value it offers to the consumer.
As explained by Mr. C.K Ranganathan…..
“Let us assume 7ml of Shampoo in a Sachet is sold at Rs.2 and a 100 ml bottle of the same brand of Shampoo is sold at Rs.55. When a consumer buys 14 Sachets and stores them in a bottle, it would make 98 ml. The consumer would invest about Rs.28, which is roughly half the price as that of the bottle. Sachet thus offers high level of economy and also every use is measured. So to offer the consumer value for money we came up with the concept that bottles will be cheaper than the sachets. We had to be innovative and economize on the cost of bottle, packaging and other things and came out with a 50 ml bottle of Chik for Rs.6 with 2ml more in the bottle when costs are compared. This move resulted in a huge volume of sales and helped the growth of Chik from 5% market share to the current value of 21%. So this exercise revealed to us that the consumer would buy a product if he sees enough value for money.”