Term Paper of Mkt

8/14/2019 Term Paper of Mkt

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LOVELY PROFESSIONAL UNIVERSITY

TERM PAPER

OF

MARTETING OF

IT PRODUCT

DABUR INDIA

Submitted to: Submitted by:

HARENDRA SINGH SIR Anil Kumar Newar

RS1906A21

10904838


2/23

DECLARATION

I, Anil Kumar Newar student of Lovely Professional

University have completed my Term Paper:

DADUR INDIA Ltd

The information given in this project is true to the best of

my knowledge.

Anil Kumar Newar

MBA (IT)

RS1906A21

10904838


3/23

ACKNOWLEDGEMENT

First of all I would like to thank the Lovely University and takethe opportunity to do this project as a part of the M.B.A.

Many people have influenced the shape and content of this project, and many supported me through it. I express my

sincere gratitude to Mrs. Harendra Singh Sir for assigning mea project of Managerial Economics, which is an interesting andexhaustive subject.

He has been an inspiration and role model for thistopic. His guidance and active support has made itpossible to complete the assignment.

I also would like to thank my Friends who have helped and

encouraged me throughout the working of the project.

Last but not the least I would like to thank the Almighty foralways helping me.


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DABUR INDIA Limited

Dabur India Limitedisa leading Indian consumer goods companywithinterests inHair Care, Oral Care, Health Care, Skin Care, Home Careand

Foods. From its humble beginnings in the by lanes of Calcutta way backin 1884 as an Ayurvedic medicines company, Dabur India Ltd has come along way today to become a leading consumer productsmanufacturer inIndia.For the past 125 years, we have been dedicated to providing nature-

based solutions for a healthy and holistic lifestyle.

Through our comprehensive range of products, we touch the lives of allconsumers, in all age groups, across all social boundaries. And thislegacy has helped us develop a bond of trust with our consumers.That

guarantees you thebest in all products carrying the Dabur name .


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Dabur India Limited is the fourth largest FMCG Company in India withRevenues of US$600 Million (Rs 2834 crore) & Market Capitalisation ofover US$2.2 Billion (Rs 10,000 Crore). Building on a legacy of qualityand experience for 125 years, Dabur operates in key consumer products

categories like Hair Care, Oral Care, Health Care, Skin Care, HomeCare & Foods.

Dabur India Limited has marked its presence with significantachievements and today commands a market leadership status. Our storyof success is basedon dedication to nature, corporate and processhygiene, dynamic leadership and commitment to our partners andstakeholders. The results of our policies and initiatives speak forthemselves.

3 major strategic business units (SBU) - Consumer Care Division(CCD), Consumer Health Division (CHD) and International BusinessDivision(IBD)

3 Subsidiary Group companies - Dabur International, Fem CarePharmaand newu and 8 step down subsidiaries: Dabur Nepal PvtLtd(Nepal),Dabur Egypt Ltd(Egypt),Asian Consumer Care(Bangladesh), Asian Consumer Care (Pakistan), AfricanConsumerCare(Nigeria),Naturelle LLC(Ras Al Khaimah-UAE),Weikfield

International (UAE) and Jaquline Inc. (USA).

17 ultra-modern manufacturing units spread around the globe

Products marketed in over 60 countries

Wide and deep market penetration with 50 C&F agents, more than 5000distributors and over 2.8 million retail outlets all over India

Consumer Care Division (CCD) adresses consumer needs across the

entire FMCG spectrum through four distinct business portfolios ofPersonal Car

e, Health Care, Home Care & Foods

Master brands: Dabur - Ayurvedic healthcare products Vatika - Premium hair care Hajmola - Tasty digestives

Ral - Fruit juices & beverages Fem - Fairness bleaches & skin care products


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9 Billion-Rupee brands: Dabur Amla, Dabur Chyawanprash, Vatika,Ral, Dabur Red Toothpaste, Dabur Lal Dant Manjan, Babool,Hajmola and Dabur Honey Strategic positioning of Honey as food

product, leading to market leadership (over 75%) in branded honey

market

Dabur Chyawanprash the largest selling Ayurvedic medicine withover 65% market share.

Vatika Shampoo has been the fastest selling shampoo brand in Indiafor three years in a row

Hajmola tablets in command with 60% market share of digestivetablets category. About 2.5 crore Hajmola tablets are consumed inIndia every day

Leader in herbal digestives with 90% market share

Consumer Health Division (CHD) offers a range of classical Ayurvedicmedicines and Ayurvedic OTC products that deliver the age-old benefitsof Ayurveda in modern ready-to-use formats

Has more than 300 products sold through prescriptions as well as overthe counter

Major categories in traditional formulations include:- Asav Arishtas- Ras Rasayanas- Churnas- Medicated Oils

Proprietary Ayurvedic medicines developed by Dabur include:- Nature Care Isabgol

- Madhuvaani- Trifgol
http://www.dabur.com/Products-Ayurvedic%20Specialitieshttp://www.dabur.com/Products-Ayurvedic%20Specialitieshttp://www.dabur.com/Products-Ayurvedic%20Specialitieshttp://www.dabur.com/Products-Ayurvedic%20Specialities


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Division also works for promotion of Ayurveda through organisedcommunity of traditional practitioners and developing fresh batches ofstudents

International Business Division (IBD) caters to the health and personalcare needs of customers across different international markets, spanningthe Middle East, North & West Africa, EU and the US with its brandsDabur & Vatika

f total sales Leveraging the 'Natural' preference among local consumers to

increase share in perosnal care categories Focus markets:

- GCC- Egypt- Nigeria- Bangladesh- Nepal- US

High level of localization of manufacturing and sales & marketing

Background

The story of Dabur began with a small, but visionary endeavour by Dr.S. K. Burman, a physician tucked away in Bengal. His mission was to

provide effective and affordable cure for ordinary people in far-flungvillages. With missionary zeal and fervour, Dr. Burman undertook thetask of preparing natural cures for the killer diseases of those days, likecholera, malaria and plague. Soon the news of his medicines traveled, andhe came to be known as the trusted 'Daktar' or Doctor who came up witheffective cures. And that is how his venture Dabur got its name derivedfrom the Devanagri rendition of Daktar Burman. Dr. Burman set upDabur in 1884 to produce and dispense Ayurvedic medicines. Reachingout to a wide mass of people who had no access to proper treatment. Dr.S. K. Burman's commitment and ceaseless efforts resulted in thecompany growing from a fledgling medicine manufacturer in a smallCalcutta house, to a household name that at once evokes trust andreliability.


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Dabur (an acronym of the name Dr. SK Burman),was set up in WestBengal as a proprietary firm for manufacturing of ayurvedic drugs. Itstarted off with a direct mailing system to send medicines to villages inBengal. In 1896, Dr. Burman set up a small manufacturing plant at Garhia near

Calcutta for mass production of chemicals and Ayurvedic drugs. In theearly 1900s, the next generation of Burmans took a conscious decision tofocus more on the Ayurvedic medicines market. In 1919, Dabur set up itsResearch & Development laboratory for Ayurvedic medicines. In 1936,Dabur India Pvt. Ltd., was incorporated to take over the business of the

proprietary firm. In 1940, the company diversified into the personal careproducts business with the launch of its Dabur Amla Hair Oil. In 1949,Dabur launched Chyawanprash in a tin pack making it the first brandedChyawanprash in the country. It expanded its personal care portfolio by

adding oral care products in 1970. Dabur Lal Dant Manjan was the first product to be launched. In 1972, Dabur shifted base to Delhi fromCalcutta and started production from a hired manufacturing facility atFaridabad. In 1978, Dabur launched the Hajmola tablet. It set up TheDabur Research Foundation (DRF), an independent company, in 1979 tospearhead Daburs research needs. In the same year, commercial

production started at Sahibabad. In 1986, Dabur became a public limitedcompany through a reverse merger with Vidogum Ltd. and wasrechristened Dabur India Limited. The next year Dabur set up a facility at

Noida Export Processing Zone to cater to the global markets. In 1990, it

set up a branch office and warehousing operations in London to servicethe European markets. In 1991, it set up Dabur Overseas Ltd. in CaymanIslands to cater to its overseas investment needs. Dabur Overseas Ltd.,later funded Dabur Egypt Ltd., in Cairo, which manufactured personalcare and food products. In 1992, Dabur entered into 49:51 joint venturewith the Spanish confectionery major Agrolimen group under the nameGeneral De Confeteria India Ltd. (GCI). The same year Dabur enteredinto a biscuit joint venture named Excelcia Foods with Nestle. Daburcame out with its initial public offer in November 1993, raising Rs. 541.5

mn (at Rs. 95 per share). The issue was oversubscribed 21 times. Daburused the funds to expand and modernize its production bases and todevelop new production facilities. In the same year Dabur roped in AFFerguson to offer advice on a restructuring plan. Based on itsrecommendations, Dabur was broken up into seven profit centers and

professionals were brought in.In 1997, Dabur launched its ProjectSTARS (Strive To Achieve Record Successes) to achieve acceleratedgrowth in the coming years. The scope of this project was identified asthe entire gamut of strategic, structural and operational changes to enable

efficiencies and improve growth rates.


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In April 1997, Dabur hired consultants McKinsey & Co to strengthenits competitive position. Dabur introduced Samara range of herbal skinand hair care products in early 1997. In 1998, the Burman family handedover management of the company to a professional CEO and limited their

role to strategic inputs at Board level. Ninu Khanna joined Dabur as CEOin November 1998 on a three-year contract. In the same year, Daburentered into a 50:50 joint venture with Bongrain of France, a Fortune 500company in processed and specialty cheeses. The venture was namedDabon International and began manufacturing cheese products in Noida(UP). In 1999, the company implemented a restructuring template

prepared by McKinsey & Co. It withdrew from the low margin businesses like merchant exports, veterinary drugs and herbalintermediates. It also exited from two joint ventures in Excelcia Foods

with Nestle and General De Confiteria Ltd., with Agrolimen. Itdiscontinued its Samara line of herbal cosmetics and pulled out ofveterinary products and bulk drugs. In 2001, Dabur set up amanufacturing facility in UK for oncology injectibles at an investment of$15 mn where commercial production is slated for late 2004. The state-ofthe- art plant and laboratory in UK have approval from the MCA ofUK. They follow FDA guidelines for production of drugs specifically forEuropean and American markets. In 2001, Dabur roped in Accenture todefine clear roles and responsibilities of its board of directors and thechief executive officer to prevent any overlap. In the same year, Family

Council was constituted for formalizing the promoter familys role inmanaging the business interests encompassing all group companies. Theroles of Management Committee, Board of Directors and Family Councilwere defined and formalized. In December 2001

Dabur restructured its Pharmaceutical business and separated it from itsFMCG business. Now, Dabur is busy with restructuring its operations inline with the recommendations. As a first step in this exercise, Daburidentified six Over-the-counter (OTC) brands under the ayurvedic

specialities division, which will be moved to the healthcare division.These include Isabgol, Natures Cure, Madhuvani and Stresscom.

IT initiatives, the company now plans to take the battle to its competitorswith an entry into the FMCG sector and believes IT to be anindispensable weapon in this war. Says Gopal Shukla, chief informationofficer, Dabur, Most industries use IT in certain distinct phases beforeevolving into a complete e-business enabled organisation. We arecurrently in one of those phases and believe it to be the fourth major asset

of the company (other three being strong brand image, new productdevelopment strengths and an extensive distribution network). In an


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effort to establish itself as a strong player in the FMCG sector, Dabur hasalready started implementing IT systems and processes all across thecompany. Says Shukla,

The distribution network is the lifeline for an FMCG company and is agreater value add in terms of IT returns than manufacturing. In line withthis, we have outlined our IT focus on streamlining complete outwardlogistics of the company in the true spirit of an FMCG. With IT assistingin the very build-up of its new image, it surely is an exciting time for ITat Dabur.

According to Shukla, the IT department of the company will haveimportant role to play in its IT initiatives. From its early beginnings, the

implementation of simple COBOL and Foxpro based applications to theimplementation of the manufacturing ERP system, intranet and extranetbased applications and establishment of a robust communication andnetworking system, the team has played an active role in ensuring that theIT infrastructure lives up to expectations and perform its task. Aftersuccessfully implementing Baan ERP and MFG/PRO Dabur at present isundergoing process of implementing SAP to work along withaforementioned systems.

.Dabur Vision

Dedicated to the health and well

Being of every household

The vision is intertwined with below mentioned core values of the company:-Ownership: This is our company. We accept personal responsibility, and

accountability to meet business needs

Passion for Winning: We all are leaders in our area of responsibility,with a deep commitment to deliver results. We are determined to be the

best at doing what matters most

People Development: People are our most important asset. We add valuethrough result driven training, and we encourage & reward excellence

Consumer Focus: We have superior understanding of consumer needs

and develop products to fulfill them better


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Team Work: We work together on the principle of mutual trust &transparency in a boundary-less organization. We are intellectually honestin advocating proposals, including recognizing risks

Innovation: Continuous innovation in products & processes is the basisof our success

Integrity: We are committed to the achievement of business successwith integrity. We are honest with consumers, with business partners andwith each other

Strategic intent

Following are the defined means to achieve that intent:-

Focus on growing our core brands across categories, reaching out tonew geographies, within and outside India, and improve operationalefficiencies by leveraging technology

Be the preferred company to meet the health and personal grooming

needs of our target consumers with safe, efficacious, natural solutions bysynthesizing our deep knowledge of ayurveda and herbs with modernscience

Provide our consumers with innovative products within easy reach

Build a platform to enable Dabur to become a global ayurvedic leader

Be a professionally managed employer of choice, attracting, developingand retaining quality personnel

Be responsible citizens with a commitment to environmental protection

Provide superior returns, relative to our peer group, to our shareholders

Marketing strategies


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Focus on growing our core brands across categories, reaching out tonew geographies, within and outside India, and improve operationalefficiencies by leveraging technology

Be the preferred company to meet the health and personal groomingneeds of our target consumers with safe, efficacious, natural solutions

by synthesizing our deep knowledge of ayurveda and herbs withmodern science

Provide our consumers with innovative products within easyreachBuild a platform to enable Dabur to become a global ayurvedicleader

Be a professionally managed employer of choice, attracting,developing and retaining quality personnel

Be responsible citizens with a commitment to environmentalprotection

Provide superior returns, relative to our peer group, to ourshareholders

Market Position -Dabur India

Dabur India Limited is an Indian trans-national with a turnover oapproximately US$255 million which is engaged in the manufacturing

and marketing of a variety of natural and herb based products in thecategories of Personal care, Oral care, Health care, Foods andPharmaceuticals such as Dabur Amla Hair oil, Dabur Vatika Hair oil andShampoos, Dabur Honey,Dabur Chyavanprash, Dabur Real Fruit Juice,etc. As summarized in the Annual Report (2000-01), the companys storyis that of a more than a century old partnership with nature using thetheories of Ayurveda (the ancient Indian system of alternative therapies),to create a wide range of products. In contrast, the leading multinational

players in the fast moving consumer goods sector such as Unilevers,

SmithKline Beecham, Proctor and Gamble, Johnson and Johnson, etc. areknown for manufacturing and marketing primarily chemical based


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products in each of the product categories whether hair oils, shampoos,toothpowders, baby care or healthcare products. Differentiation is thename of the game The operations of Dabur India Limited are a story ofcontinuous differentiation through a variety of means discussed by

Alderson (1965) as the bases of differential advantage including productdifferentiation, market segmentation, differentiated appeals, transvectionre-engineering and continuing advancements in technology and

processes. Market segmentation is the policy of selecting a group ofcustomers with relatively homogenous demands and deriving productioneconomies from that selection (Alderson, 1965). Daburs 2000 launch ofVatika Anti Dandruff Shampoo, which has natural lemon extracts forfighting dandruff, is a prime example of this. By focusing its marketingefforts towards targeting women suffering from dandruff but who are

scared to use chemicals for dandruff control, Dabur created a sizeable subsegment of natural anti-dandruff shampoos. The advantage is attested toby response of Head andShoulders who launched a variant with lemon extracts to win backconsumers. Similarly, Daburs Vatika Henna Conditioning Shampootapped the market segment of people who use shampoo very rarely asthey are scared of the harmful effects of chemicals on their hair.Marketing efforts are concentrated on promoting its key herbalingredient, henna, as many Indian consumers have grown up usinghomemade henna paste on their hair. This marketing campaign yielded

unprecedented results with sales of the brand now over AU $14 million.And Dubar is confident of retaining this advantage. In response to a queryon the likely counter attack by the leading multinational brands such asPantene and Sunsilk a member of the marketing teamheadreplied, They may be multinationals, but we have the mother of all

Indianconditioners henna, on our side. Differentiation by selection ofappeals implies the use of advertising to situate products in market

preference niches (Blair and Uhl, 1976) without any physical change in

the product (Alderson, 1965). Dabur Honey, has been built as the leadingbrand of honey in India entirely through the use of mass mediaadvertising.

Traditionally in India honey occupied an image of a medicinal tonic forcoughs and colds during winter. Dabur used advertising to position DaburHoney as a taste enhancer and additive housewives could use with theireveryday food. ``While thateffort yielded resultsthe brand needed to

find a way to increase the width and depthof usage to continue the pace

of growth,'' says Sunil Duggal, vice-president, sales and marketing (c.f.Kaul, 2000). To maintain the advantage, advertising appeals now target


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children, who have been classified by research as the primary consumersof honey in the Indian household, while simultaneously zeroing in on

breakfast as the key consumption occasion. Similarly Dabur Gulabari, apure rose water has, successfully used mass media advertising since the

past 2 years to move to a the position of a skin care product and hasexpanded its sales two fold from the earlier days when it was being soldas just another rose water in the market. Differential appeals can alsooccur in the intermediate rather than final market. Daburs AnmolCoconut Oil was differentiated by transvection. It occupied a commodity

position in a crowded coconut oil market containing larger competitors.Dabur decided to stop all advertising and spend the money saved onattractive bulk

purchase discounts for retailers. The brand now occupies a leadership

position in the northern part of the country with steady sales from the restof India. As a marketing team participant put itAnother example of transvectional differentiation is that of Dabur Honeywho has managed to establish semi-exclusive relationships with some ofthe leading suppliers of raw honey in the country. This has helped itmaintain its image of the best quality honey. To further consolidatetheir position of leadership, Dabur has now also started a venture calledHoney Bee Products, which undertakes activities such as manufacturingof beekeeping equipment and management of an apiculture center thatrears high breed queen bees. Differentiation by product improvement

occurs when improvements to an already existing product are done, eitherto be used as the basis for product promotion, or for further productdevelopment without being communicated externally (Alderson 1965).Several products and brands in Dabur have been through either a gradualor a more comprehensive and noticeable product improvement program.When Dabur Red Tooth Powder, which is the second largest brandmarketed by the company, experienced an large decline in sales a coupleof years ago, research revealed that the target consumers relied mainly onherbal ingredients for dental care, were not sure of the ingredients in

Daburs toothpowder and their efficacy for dental care. The company notonly reformulated the product by increasing the existing herbal extractsand adding new ones known to be beneficial for the teeth, but to alsohighlighted this fact in the packaging as well as advertising. This not onlystemmed the decline but also led to healthy growth figures. Dabur VatikaHenna Conditioning shampoo on the other hand, has followed a moregradual and subtle program of product improvements in key productaspects such as lathering, conditioning and fragrance. These productimprovements have not been communicated to the consumers through the

brands advertising, but are simply part of the companys effort to


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continually deliver a consistently better product to the consumer in linewith the brand promise of a superior natural conditioning shampoo.

Differentiation by process improvement pertains to production processes

rather than the product. Alderson (1965) suggests that by employingprocess improvement the producer enjoys a very favored position with ageneric difference between the product and anything else available.Unlike advantage attained by product differentiation it does not involvesacrificing all other segments of a market in order to have a more secure

position in the target segment. There are some brands in Dabur such asDabur Honey and Dabur Anmol Coconut Oil where there is nomanufacturing involved and the products are simply processed and

packed by the company. In the case of Dabur Honey, constant

improvements in processing capabilities coupled with systematic researchto understand consumer perceptions of product quality, have ensured thatDabur has been able to deliver a more consistent, superior andinternational quality blend of honey.

Products & Services

Dabur provides its products into various segments. Dabur presents rangeof herbal personal care products. Bringing together the gentle touch ofnature and Ayurvedas wisdom. Backed by the unfailing quality of Dabur

Products. Hair oil, Fairness face pack, Shampoo, Tooth paste, red gel, laldant manjan, dabur binaca toothbrush, vatika hair oil, anmol sarso aawla,vatika heena conditioning shampoo, vatika anti-dandruff shampoo.Instead of this in food range of REAL active natural juice, daburhomemade, dabur honey etc., are the few Successful brands of company.After demerging its consumer and pharmaceutical businesses in FY04,Dabur laid out a growth strategy -- new product introductions, brandextensions to new segments, and focus on new geographies. This strategy

has paid rich dividends for Dabur and has delivered sales growth ahead ofthe consumer non-durable sector average. Balsaras acquisition


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Product mix

Daburs product range encompasses health care, personal care,ayurvedic specialities and food segments

Dabur's Health Care range brings for you a wide selection ofAyurvedic and natural products that offer complete care for varyingindividual needs. Our products are derived from the time-testedheritage of Ayurveda, and backed by the most modern scientific test &trials that ensure unfailing quality and safety in anything you pick.

.HAIR CARE

AMLA HAIR OIL

AMLA LITE HAIR OIL

AMLA LITE HAIR OIL

VATIKA HAIR OIL

VATIKA HAIR OIL

ANTI-DANDRUFF SHAMPOO

ANTI-DANDRUFF SHAMPOO

ANMOL SARSON AMLA

ANMOL SARSON AMLA

ANMOL SHAMPOO

ANMOL SHAMPOO

ANMOL SILKY BLACK SHAMPOO

ANMOL SILKY BLACK SHAMPOO

HEENA CONDITIONING SHAMPOO


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ANMOL NATURAL SHINE SHAMPOO

SKIN CARE

GULABARI

HEENA CONDITIONING SHAMPOO

VATIKA FAIRNESS FACE PACK

VATIKA SAFFRON GLOW SOAP WITH SANDAL

HEALTH CARE PRODUCT RANGE

HEALTH SUPPLEMENTS

DABUR CHYAWANPRASH

DABUR CHYAWANSHAKTI

GLUSOSE D

DIGESTIVES

HAJMOLA YUMSTICK HAJMOLA MAST MASALA

ANARDANA HAJMOLA CANDY FUN 2HAJMOLA

CANDY HAJMOLA PUDIN HARA G

PUDIN HARA DABUR HINGOLI

HAJMOLA CANDY FUN 2


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NATURAL CURES

SHILAJIT GOLD NATURE CARE

DABUR BALM SAT ISABGOL

SHILAJIT RING-RING

ITCH CARE BACK AID

SHANKH PUSHPI SARBYNA STRONG

BABY CARE

DABUR LAL TAIL

DABUR BABY OLIVE OIL

DABUR JANMA GHUTTI

ORAL CARE

RED TOOTHPASTE

BINACA TOOTHBRUSH

RED GEL

BALSARA

BABOOL TOOTHPASTE

LAL DANT MANJAN

MESWAK TOOTHPASTE

PROMISE TOOTHPASTE

HOME CARE

ODOMOS ODONIL

ODOPIC SANI FRESH


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FOODS

REAL

REAL ACTIV

DABUR HONEY

DABUR HOMMADE

LEMONEEZ

CAPSICO PEPPER SAUCE

Culinary

Pricing strategies

Dabur India Ltd has decided to cut Vatika shampoo prices by 20 per centfrom next month besides launching the brand in one-rupee sachets to gainvolumes.

Babool has lost considerable share due to aggressive pricing by marketleaders. What Dabur wants is to give Babool new pricing, improved

packaging and fresh communication.

Promotion strategies

Daburs promotional campaigns include leading Bollywood actors andsport stars. IN 2005-2006, key brand endorsements by celebritiesincluded Amitabh Bachhan for chyawanprash and Rani Mukherjee for

vatika hair oil and dabur anmol. The company also signed up VivekOberoi to endorse babool toothpaste and Dabur chyawanprash.


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They plan to reach out to our consumers through not only theconventional methods of television and print advertisements but they also

plan to do a lot of outdoor activities that will include stockists, doctorsand the consumer himself.

To strengthen its presence in the southern market, FMCG companyDabur India is all set to localise some of its products through regionalnames and advertising campaigns. The company is going the whole hogfrom re-christening its brands in local languages like Tamil to creatingspecial products with a distinct local flavour and even roping in localcelebrities as brand ambassadors. The idea being to make the brandsmore easily understood to the Tamil-speaking populace.

Distribution strategies

When Dabur India Ltd (DIL) announced its intention to acquire brandspositioned on the herbal plank in the personal and healthcare segments inSeptember last year, the announcement left many in the industry

wondering.

Where were brands that had perceived equity and potential for furthergrowth? And if such brands were there in the fast moving consumergoods (FMCG) space, wouldn't they be already spoken for? What aboutticklish issues such as brand valuation and deal size?

These doubts lingered as no announcement came from the company formore than three months thereafter. And the general lack of acquisitions

and mergers in the FMCG segment seemed to prove the sceptics rights that though DIL was on the prowl, it would find acquisition a tricky

business.

But when the company finally announced the acquisition of three Balsaragroup companies in an all-cash deal last week for Rs 143 crore, industrywatchers could not help nodding their approval.

After all, the acquisition is not only synergistic with Dabur's present

product mix, it also comes at a time when the company is trying tooccupy each price point in the oral care market. The deal also allows DIL


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to enter the high-growth household product area.

According to industry estimates, the toothpaste market is estimated at Rs1,900 crore, whereas the combined pie for utensil and toilet cleaners,

mosquito repellents and air fresheners is at Rs 2,000 crore. So, in onestroke, the company has gained entry into the latter while consolidatingits position in the oral care market, analysts say.

whether the company's appetite for acquisitions was sated, DIL is open tomore acquisitions in areas where the company already operates

personal care, healthcare, foods and now household care.

Dabur expects 10 per cent growth immediately in revenues after thisacquisition. Balsara's businesses recorded sales of Rs 199.6 crore in2003-04 with losses of about Rs 8 crore, Duggal says, adding that thethree acquired companies will become DIL's subsidiaries. These could bemerged into DIL at a later date.

Pointing out the synergies with DIL, he says this acquisition brings notonly a complementary brand portfolio but also economies of scale inmarketing, sales and distribution. Balsara has three manufacturing sites at

Kanpur, Silvassa and Baddi. Duggal says there are no plans to rationalisemanpower at Balsara companies where the total headcount is 600.

This acquisition brings DIL toothpaste brands Promise, Babool andMeswak; Odonil air freshener and Sanifresh toilet cleaner, Odopic dish-washing detergent and Odomos insect repellent.

Terming the acquisition of Balsara's herbal oral care as a "good strategicfit," Duggal says the acquired brands will strengthen the company's

existing oral care portfolio and provide DIL with regional saliency. While45 per cent of Balsara's revenues come from the West and South of thecountry, DIL's strength lies in servicing the Northern and Easternmarkets. Also, the manufacturing facilities of Balsara are expected to

provide significant cost synergies and economies of scale to Dabur India.

But while this acquisition makes sense for Dabur, why would Balsara

want to divest all its well-known brands? Duggal explains that this wasnecessitated as the brands needed large-scale investments that the


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promoters of Balsara were unable to make. Despite several attempts,Balsara officials remained unavailable for comments.

In addition to the oral care and household care businesses, Balsara also

operates in the high-growth private label and herbal extracts andcomplexes businesses. The fate of these two businesses after DIL'sacquisition also could not be ascertained.

Company Dabur India Ltd mark a good impact in india of FMCG productthe target is cover to all rural or urban areas because 80% in IndiaSupply there product is a chain

FACTORY

DISTRUBITER

WOHESALLER

RETAILERKIRANAWALA

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