Baba Ramdev's Patanjali galloping sales are showing no signs of stalling. In the year ending March'16, his company's
sales stood at INR 105.61 billion. And it is
projected to cross INR 200 - 250 billion in sales this financial year.
How is Patanjali able to clock impressive sales growth figure, at a time when other blue-blooded FMCG companies, like Hindustan Unilever, Colgate, Nestle are finding the going difficult?
I wish to share with you my reasons, which could be leading to Baba Ramdev’s Patanjali growth.
It is based on a fortuitous meeting I had with him, in 2011, in Goa, during which I spent a better part of a day, discussing various activities undertaken by him – including Patanjali
Here is what I understood was the secret recipe of Patanjali's success:
1. Product: Use genuine & natural ingredients & in sufficient quantities, which make them effective in delivering the promise, it claims to deliver.
Result - customers, who buy the brand, experience the promise & become the company's Brand Advocate
2. Recipe: It is derived from Indian heritage.
3. Promise: Goodness of nature with each product having its own unique benefits which is effectively highlighted.
4. Price: 15 – 30% lower than the competition.
5. Promotion: Use Alternate Media to build brand:
a. Buzz Creation (Word of Mouth Publicity). When a company makes a claim its believability is merely between 20 – 49%. But when real people speak good about a brand - the believability jumps to 70%; when friends speak about a brand's goodness the believability jumps to 90%. Result: Increase in the believability of brand promise accompanied by the drop in Advertising & Sales Promotion expense.
. Public Relation: Baba Ramdev – is the ‘celebrity’ endorser of his brand. He is always in news. When Press writes about him his brands get publicity & benefits from it.
c. Events: He holds innumerable Yoga camps (events); in these camps, as he demonstrates the yoga pose, he subtly introduces Patanjali range of brands by highlighting there numerous features & the resultant benefits they offer. And, request his ‘followers’ to try & experience the benefit themselves.
d. Digital Medium: His Website is extremely
engaging.
e.TV: For better part of a day he is always on ‘Sanskar’ Channel. On & off while demonstrating Yoga pose, he subtly introduces his brands.
f.Integrating Brand & not merely product placement: He intelligently integrates his various products in Yoga camp, TV shows & eschews forceful product placement.
6. Place (Distribution): Multiple distribution channels.
a. Company Owned stores, which exclusive sell his range of products.
b. Normal FMCG distribution channel through which his range of products are available at Mom & Pop stores
c. Modern Retail Outlets: Big Bazar etc...
d. Online
7. People: The sales person in his stores, according to him, act as ‘Authentic Consultant'. Take this case of a person who has come with a problem; the store person will patiently listen to there problems & then provide a solution to eliminate the problem from the root itself. He took the pain to point out that big companies when they give solutions to ensure that people become dependent upon there product for life, which results in business for them - as long as the person lives! His strategy is to provide solutions so that the problem gets rooted out & the person does not need his product.
8.Expenses: He knew I had worked in an alcoholic beverage company & travelled by air & stayed in 5 Star Hotel when on a company work. He contrasted his system:
a. Travel: His salespeople travel by public transport – bus, train, shared tempo / auto. When they visit stores in a town they seek out the help of friends to take them around on a bike or ride it themselves.
b. Stay: At friends / relatives place in the town they are visiting. Only if these options do not exist then they can stay in functional hotels - not 5 Stars. If 2 or more people are travelling then they share the room.
c. Food: No alcohol & non-vegetarian food can be had on company expense – only hygienic & basic food is encouraged.
d. Salary: He knew I was from IIT - IIM. He looked at me & mentioned that he hired local people at extremely competitive salary & not at 'IIT - IIM salary'.
e. Controlling expense ‘mindset’: Take his Personal Assistant. He was a retired person. He had an obsolete model of Nokia phone which most of us would not have deemed it fit to be seen with. I asked him why does he not have a new model. He looked as if I had asked a stupid question & explained – ‘phone is for communication not for fashion, jee!’
Has his strategy borne fruit? My mother insists on using his range of products & has successfully convinced my wife to opt for them vouching for there goodness & effectiveness.
Business Lesson for us: 1. Focus on creating a great product. 2. Make sure the product delivers the promise. 3. Always place customer interest, ahead of yours. They in return they will protect your interest by giving you business. 4. Make your customer your Brand Advocate. 5. Use Alternate media to build your brand – Buzz, PR, Events & Digital. 6. Do not ever permit your expense to soar. Keep them as low as possible.
Disclosure: I have shared what Baba Ramdev shared with me & I observed during the day I spend in his company. Many years have passed since then & many things must have changed.