Patanjali Vistaar: A case study approach to distribution

expansion and increasing market visibility of natural

beauty care and home care products

Presented by
Abhinav Gunjan
M1
Roll - 25
 Flow of Presentation
About the Company
Company Leadership and Organization Structure
Patanjali Geographical Spread
Range of products and services
Patanjalis competitors
Patanjalis Growth Story
Scope & Impact on Indian Economy
On-the-Job Training
Objectives of the Training
Overall observations and findings
Recommendations
Impact of GST on FMCG Industry, Digital Marketing industry and Patanjali
About the Company

Patanjali Ayurved Ltd.

Established in 2006 keeping in mind a thought of rural and urban
development in India by establishing a healthy society through Yog and
Ayurveda.
 Vision
Keeping Nationalism, Ayurved and Yog as our pillars, we are committed to
create a healthier society and country. To raise the pride and glory of the
world, we are geared up to serve people by bringing the blessings of nature
into their lives. With sheer dedication, scientific approach, astute planning and
realism, we are poised to write a new success story for the world.

Mission
Making India an ideal place for the growth and development of Ayurveda and
a prototype for the rest of the world.
Company Leadership and Organization
Structure
Established under the leadership of Yogrishi Swami Ramdev Ji and
Acharya Balkrishna Ji

Company currently has 4 Active Directors-

Acharya Balkrishna Ji,
Ms. Mukta Nand,
Mr. Ajai Kumar Arya &
Ms. Shashi Chandra Jha

Main promoter Acharya Balkrishnan owns 93% of the company

shares.

Main face of Patanjali, Swami Ramdev Ji does not own any stake
in the company but plays a huge part in product marketing and
brands visibility Thus acts as Brand Ambassador
Geographical Spread

Patanjali Ayurved Ltd has been able to achieve a tremendous

presence throughout India and around the globe.
Products

Food Non-Food Medicine

Flour and Sugar Personal Care Ayurvedic
Rice and Masala Home Care Medicine
Buscuit and
Confectionaries
Beverages
Physical Oils
 Competitors
Patanjali has its competitors in every product line. The giants like
HUL, P&G, ITC, Dabur, Himalayas etc. are the main competitors
in health, personal care and food and beverage products

Since the launch of Patanjali Dant Kanti, Colgate & Dabur lost a
significant market share.

With growing popularity of Patanjali products in consumers,

these companies started to launch their new herbal products.
Colgate launched a herbal toothpaste at price lower than that of
Patanjalis toothpaste.
 Table 1 Indias Biggest FMCG Players Revenue Growth (%)

India's Biggest FMCG Players - Revenue Growth (%)

FY12 FY13 FY14 FY15 FY16

Patanjali NA 87.16% 40.37% 70.20% 137.64%

Jyothi Laboratories 9.30% 53.70% 23.70% 14.10% 9.60%

Emami 15.60% 17.10% 4.80% 19.10% 17.80%

Marico 26.20% 14.90% 8.10% 27.10% 5.70%

Dabur 14.50% 15.80% 12.00% 11.50% 5.90%

Colgate/Palmolive (India) 17.80% 17.50% 13.10% 11.30% 4.50%

Unilever 12.10% 16.70% 8.60% 9.90% 3.80%

P&G Hygiene & Health care 29.40% 30.00% 21.60% 13.80% NA

Source: MoneyControl.com, Release by Registrar of Companies, Media Reports

 Table 2 India's Biggest FMCG Players Net Profit Growth (%)

India's Biggest FMCG Players Net Profit Growth (%)

FY12 FY13 FY14 FY15 FY16

Patanjali NA 63.40% 103.30% 70.57% 42.13%

Jyothi Laboratories 4.00% -47.30% 140.90% 34.60% 13.70%

Emami 23.40% 43.30% 79.60% 18.40% -30.50%

Marico 6.70% 27.50% 34.50% -5.60% 28.70%

Dabur -1.70% 27.60% 13.70% 13.50% 23.20%

Colgate/Palmolive (India) 10.90% 11.30% 8.70% 3.50% 3.10%

Unilever 16.70% 41.10% 1.90% 11.60% -5.40%

P&G Hygiene & Health care 20.20% 12.10% 48.60% 14.60% NA

Source: MoneyControl.com, Release by Registrar of Companies, Media Reports

 Patanjalis Growth Story
Patanjali has grown nearly ten times in the span of five years
in terms of revenue and net profit

Table 3 Revenue and Net profit of Patanjali over the past five
years 6000

Year Revenue (in crore Net profit (in crore rupees) 5000
rupees)
4000
2011-12 453.38 55.89 Revenue (in crore
3000 rupees)
Net profit (in crore
2012-13 848.56 91.33 2000 rupees)

1000
2013-14 1191.14 185.67
0
2011-12 2012-13 2013-14 2014-15 2015-16
2014-15 2028.03 316.6

2015-16 4819.61 450

Scope & Impact on Indian Economy

Patanjali plays a very vital role in the Make in India initiative.

Not like other MNCs, (Eg. HUL, Nestles, P&G etc), Patanjali
retains and reinvests its profits in India itself and does not give
royalty to any off-shore company or parent company as in case of
other MNCs.

This money is then invested into business expansion, education,

rural development, employment and human advancement.

Keeping its products at very marginal price, Patanjali is able to

reach the masses; and also caters the need of every segment of
the consumers that promises quality products for them.
ON-THE-JOB TRAINING
 Objectives of the Training
Main objectives of internship were to gain product knowledge,
increase market visibility, and distribution expansion.

Following were the expected learning out of the internship

To have complete product knowledge.
To know about rate calculation, order booking and invoicing.
To analyze the market visibility of Company.
To identify new distributors.
To measure the performance of distributors by collecting feedbacks from
retailers.
To aware retailers about service and compensation policies of the
company.
 Details of work assigned
Visit minimum 30 outlets per day for FCLC.
Gain product knowledge and Rate Calculation.
Market Visibility Tracking.

Key observations & findings

Retailers very often face issue of stock unavailability from
distributors.
They do not get the product on time, and at times get products
before the one month of expiry date
Favourable treatment being done towards few retailers.
Damage and return policy unspecified and inappropriate
according to them.
 Observations and Findings
No standard distributor selection parameter was followed for selecting
distributors
amateur distributors who were having no experience, also SO and DSM
were not going to market for taking any orders and were also not
following any defined beat plan.

Distributors area mapping was also not there at initial stage infiltration of
one distributor into another distributors area causing confusion for retailers.

Demand was good enough but distributors were not getting stock from
super distributors regularly

No selection parameter was followed for selection of DSM. They were not
verbally and technically sound enough for day to day business activities.
 Distributors only working like sleeping investors and were not fully
working for companys moto of 3-I, where involvement was totally
missing.

Distributors not following the FIFO inventory model that very badly
impacted the inventory management system.

Only easily accessible areas were covered by sales force

After 15 days of my joining, area Mithlanchal got its own dedicated

Area Sales Manager who had already worked with HUL and so he already
had work experience of FMCG industry and area knowledge as well as
very good hold on market which helped Patanjali to grow its business in
this area
Recommendations

Products should be made available to distributors according to the

demand and delivery should be on time.
Supply chain should be managed properly
Sales force training
Schemes and recognition programs should be launched for motivation of
distributors.
Promotional tools should be made available to the retailers and
distributors.
Product promotion should also be done in regional and local languages
and banners, bill-boards etc should be placed at local markets etc
A proper shelf-display should be initiated.
Usually new products whenever launched are directly put into the stores
and customers are not made aware of the new products. New products
should be made available and distributed as samples to the customers.
Advertisement in print media and electronic media should be done for all
the products.
Impact of GST

How GST impacts FMCG firms?

Items of mass consumption toothpaste, soaps, hair oil etc have been
put under 18% tax slab (significantly lower than earlier 22-24%
GST rate schedule indicates that nearly 81% of all items are in 18% tax
bracket or below, remaining 19% fall in 28% tax slab.
 GSTs impact on Patanjali
12 % tax to be levied on Ayurvedic products under GST. Currently it is 8-
9% on Ayurvedic products such as medicines, shampoos, toothpasts.

GSTs impact on Digital Marketing

Input credit Currently, advertising is considered as a manufacturing
expense subject to sales tax and VAT. Thus no input credit is available.
However, now advertising will be available for input credit of 18% on
taxes paid on advertisements. This will help cut down advertisers losses
Advertising cost A unified GST through supply chain should mitigate
the cascading impact of tax and thereby reduce cost of creating Ad
Service tax set at 18%, 3 % higher than current rate
Teething problem Small firms may face implementation & teething
problems
Thank You!