As the world is speedily inclining towards pure and organic products, the most ancient science of medicine, healthcare, personal care, food and beverages, Ayurveda is reliving its glory. Many recent studies and report cl

CS Professional · Multidisciplinary Case Studies · PYQS · June 2021
As the world is speedily inclining towards pure and organic products, the most ancient science of medicine, healthcare, personal care, food and beverages, Ayurveda is reliving its glory. Many recent studies and report clearly explain that the revival of Ayurveda is not restricted to India and China but spreading across all continents, Ayurveda is successful in creating domino impact all across the globe. As per a market research, the Indian Ayurveda market is all set to register 16% growth (CAGR) till 2025. At present, the size of the domestic market is ₹30,000 Crores, and Ayurveda's market penetration is increasing in both rural and urban areas. A 2019 report also conveys that 77% of Indian households are using Ayurvedic products as against 69% in 2015. The major chunk of the domestic revenue (75%) comes from the sale of Ayurveda products whereas services/consulting contribute only 25% to the total business. The industry whose market size was USD 3.4 billion in 2015 is expected to reach USD 9.7 billion by 2022. Growing awareness among masses about potential side effects of present day modern medicine, healthcare, personal care, food and beverages on various media platforms has compelled them to switch to natural safer, and holistic alternative, Ayurveda. The future of Ayurveda is looking fabulous as more and more players are entering the market with innovative products, quality packaging, and strategic marketing activities. Earlier, Ayurvedic companies failed to impress customers with presentation and promotional activities, but the new generation of entrepreneurs is smartly working on these aspects to partake in growing market competition. One of the major companies in Indian Ayurvedic Industry, Ashwamedha Rudrapeeth Limited (ARL) was founded by Rudra and his friend. ARL is consumer product giant that is beating the world's most recognised FMCG companies in India. ARL has managed to expand an empire so big that it is shaking the fast-moving consumer goods industry in India to its core. It is no mean achievement for someone like Rudra, who does not have any formal education on brand and marketing could beat world class brand in a very short span of 10 years. The answer lies at the core of building a brand - being "Purpose" driven. The objective of ARL was to develop a holistic approach to improve the quality of life of all beings, world over. It was conceived with the objective of amalgamating the ancient wisdom of the Science of Ayurveda with the modern scientific techniques of industrial management. Its intention was to distribute quality, tested and hygienic products with wide ranging effects to the largest section of populace at reasonable prices enabling the common citizen to avail their benefits. It also aimed to establish Ashwamedha Ayurveda as a science based, inventional, problem-solving, natural and trusted for healthy lives. Rudra and his friend knew that they have created a captive market with their efforts since last one and a half decade, which values health, yoga, pranayama and above all, Rudra has become brand ambassador for ARL. This captive market is health conscious, looks out for affordable products, believes in the philosophy of swadeshi (home grown) and above all considers Rudra as their idol. When Ashwamedha Ayurveda launched its products in the Indian retail sector, this captive market was among the first to buy and use its products. This captive market developed instant loyalty to Brand Ashwamedha. The role of this captive market was not only limited to buying, using and spreading good word of mouth about ARL products but they also became partners with ARL by becoming their franchisees. In the initial days' majority of the franchisees established by ARL came from this captive market. These franchisees along with the distribution of products also advertised and promoted ARL products in their respective regions, hence establishing brand Ashwamedha firmly into the mind of local populace. When compared to an FMCG multinational which uses a traditional distribution channel, ARL followed a different distribution strategy, effective in catapulting it to its present position. Presently, Ashwamedha's turnover stands close to ₹7000 Crore with a mammoth goal of reaching close to ₹10,500 Crore in Financial Year ending 2023 and close to ₹21,000 Crore by Financial Year ending 2025. Ashwamedha Ayurveda's value creation and delivery strategy encompassing both the Strategic and Tactical Marketing is instrumental in making it a force to reckon with in the Indian FMCG industry. ARL's target segment comprise of health-conscious people who prefer "value for money" natural products. ARL has products targeted at children (health drinks) and elderly people (some ayurvedic preparations). Almost all products of ARL are affordable (at a price 15%-30% lower than the competition), hence the income segmentation strategy has worked. Initially, the products were targeted at lower and middle-income groups but with the present turnover of close to a billion dollars this fiscal, it is evident that ARL's products have buyers not only from the lower income and middle-income segments but also from health conscious upper-middle and upper-income segments. These two segments have found value in ARL's natural and ayurvedic products. ARL's market targeting strategy is that of "Selective Specialization" as they cater to a large segment in their market but not the entire market. The company is planning to venture into packaged cow milk, 'Khadi' and animal feed this year. Ashwamedha uses natural ingredients and herbs to manufacture its products. They have state of the art Research and Development (R&D) facility, involved in the latest research on products which can benefit their target market. It has few star products in its product portfolio. Ashwamedha's cow ghee, Shampoo, Hair care and oral care products have a combined turnover more than ₹1500 Crore. One of the reasons Ashwamedha Ayurveda has been able to garner market share so rapidly is because of low lead times between the product concept and product launch. Ashwamedha Ayurveda's R & D team has been able to produce high quality products at low price in short duration. Ashwamedha Ayurveda's products are generally economically priced except for Ashwamedha Cow Ghee. This is sold at a premium in the market, every other product has a market penetration pricing strategy. The pricing strategy has helped Ashwamedha establish itself in the marketplace. Established brands which did not consider it as a competition initially, are now forced to sit and take note of it. Its core values are driven by Rudra's beliefs and hence there is no difference between the two. What drives Rudra, drives brand Ashwamedha Ayurveda. Ashwamedha uses multiple distribution channels to cater to the market. Company has 2 Lakh outlets in India. ARL has a strong presence in the market through its 1200 Chikitsalayas, 2500 Arogya Kendras. For Rural market they have got 7000 stores in villages and 5600 marketing vehicles which roams across all villages. ARL also plans to establish 250 mega stores in tier 1 and tier 2 cities in next 3 years. ARL also has a tie-up with behemoths of modern retail Groups, which carry its entire product range in their exclusive retail chain across all stores in the country. ARL has embraced the e-commerce mode of retailing products through Ashwamedhaayurved.net and has a strong presence in the modern retail format. Rudra through his Yoga Camps not only talks about the different Yoga postures and their benefits in curing the diseases but also about the Ashwamedha Ayurved products aiding in a healthy lifestyle and a disease-free life. This is one of the most potent promotion tools used by ARL. Word of mouth communication certainly has a higher believability factor compared to other mediums of advertising. Rudra has created a strong community of loyalists through the efforts of Ashwamedha Yogapeeth Trust and Yoga Camps, which speak very high of Rudra and Ashwamedha products. Recently, Ashwamedha Ayurveda has seen a spurt in its promotional outlay. Ashwamedha Ayurveda has its channel on YouTube which features more than 1000 videos on Yoga and on product information. Ashwamedha has made disruptive progress in the FMCG sector. Within a span of less than 10 years, it has displaced ayurvedic market leaders and has become synonymous with ayurvedic products. Rudra's charisma has pushed Ashwamedha to grow over 10 times in a span of less than 10 years. The FMCG giants are also taking steps to check its advancements. However, now it has gained public attention in the market and there is overwhelming demand for its products, it will be difficult for them to win back their lost market shares. 'Focus on quality and quantity of offerings while assuming that customers will seek out and buy reasonably priced, well-made products'. Comment.

Answer & Explanation:

With so many options available to customers, one may wonder whether or not quality still matters. The answer is a resounding "yes," and quality isn't just about offering a product or service that exceeds the standard, but it's also the reputation gained for consistently delivering a customer experience that is "above and beyond." It is to be noted that managing quality is crucial for small businesses. Quality products help to maintain customer satisfaction/loyalty and reduce the risk and cost of replacing faulty goods. Companies can build a reputation for quality by gaining accreditation with a recognized quality standard. Meet Customer Expectations Regardless of the industry, customers aren't going to choose solely based on price, but often on quality. In fact, studies have shown that customers will pay more for a product or service that they think is of high quality and either meet or exceeds the standards. It is well accepted fact that customers expect quality products from the business organisations. Quality is Critical to satisfy a Customer Quality is a key differentiator in a crowded / competitive market. It's the reason that Apple can price its iPhone higher than any other mobile phone in the industry - because the company has established a long history of delivering superior products. If customer's expectations are not met they will quickly look for alternatives. Thus, quality is critical to satisfy customers and retaining their loyalty in order to ensure their long-term association with the products as well as the business organisation offering the products. Quality products make significant contribution to long-term revenue and profitability also. Quality assist in building Reputation Quality reflects on a company's reputation. The growing importance of social media means that both customers and prospective customers can easily share favourable opinions as well as criticisms regarding the product quality. In the current scenario, various online forums like, social media platforms, product review sites, social networking sites etc. have provided ample opportunities to the customers to express their good and bitter experiences regarding the quality of the products. A product enjoying strong reputation due to its superior quality can thrive despite being the market is highly competitive. On the contrary, poor quality product most often fails in the market leading the product recall and negative publicity about the product, thereby exerting a debilitating impact on the reputation of the business organisation. Meet or Exceed Industry Standards Adherence to recognized quality standards may be essential for dealing with certain customers or complying with pertinent legislations. Public-sector companies, for example, may insist that their suppliers achieve accreditation with quality standards. If a business organisation sell products in regulated markets, such as health care, food or electrical goods, it must comply with health and safety standards formulated to protect consumers. Accredited quality control systems play a crucial role in complying with various standards. Accreditation can also help an organisation to win new customers in the existing market or enter new markets by giving prospective customers a surety that the business organisation or the company possess the ability to sell quality products. Effective Cost Management Poor quality results into increase in costs. If a company do not have an effective quality-control system in place, it may have to incur costs on two fronts, i.e., first in analysing the root causes of the production of poor quality products and second in retesting of the poor quality or defective products in order to ensure that when they are resold in the market they conform to the prescribed quality standards. It is to be noted that in case defective products increases the cost of the company substantially, i.e., first the replacement cost of the defective product and second paying of compensation to the aggrieved customer. Thus, a business which focuses on producing quality products at reasonable price will command customer loyalty and brand image. The same is reflected by Ashwameda Ayurved.

Topics: Marketing Strategy

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