The story of Patanjali is not like any other businesses in India. It is unique because it is an empire created by a baba. Yes, Baba Ramdev, the yoga guru of the masses, is the man behind the brand called PATANJALI. Baba Ramdev’s name is enough to make Patanjali what it is today. He is the mascot of the brand. His years of hard work in promoting yoga and Ayurveda is what has helped him create Patanjali into a mega brand today. A not very old entrant into the FMCG sector of India, yet it’s giving all major FMCG businesses in India a run for their money.
Along with Acharya Balkrishna, Baba Ramdev, in 2006, created a massive consumer goods company with headquarters in Haridwar, Uttrakhand. Their aim is to utilise ancient science and wisdom to produce products for customers. Its business model deals with products ranging from ayurvedic medicines, herbal products, cosmetics, detergents to biscuits, noodles and other snacks under one umbrella brand, Patanjali. It is a modern business empire, but there is nature and naturalness in everything they do. It resonates even in their brand slogan that states Prakriti ka Aashirwaad, i.e. blessing from the nature. It has a massive network of around 4500 retail counters to sell about 900 varieties of products. It also has 10K plus Patanjali Chikitshalay (clinic) and Arogya Kendras (wellness centers) all over the country.
Who are Patanjali’s Customers?
Patanjali is like any other FMCG company that produce and sell products of regular consumption and use. So how did it grow so quick into a 10K crore company in a short span of just 16 years? Not difficult to agree; it is the result of the readymade customer base that Patanjali could create much before it frayed into the FMCG sector. The massive 500 thousand plus branches of Patanjali Yoga Samiti with equal number of teachers in them have followers from cities and rural areas, in every age group. It started in North India but soon spread its branches rapidly to other parts of the country. Patanjali has a dedicated family of loyal customers.
What does Patanjali Sell?
The different varieties of products that the company sell are:
- Food & Beverages
- Ayurvedic Products
- Detergents and Cleaning Agents
- Cosmetics & Personal Care Products
Some of the best-selling products from the house of Patanjali are:
- Patanjali Chyawanprash
- Patanjali Cow's Ghee
- Patanjali Giloy Amla Juice
- Patanjali Honey.
- Patanjali Makhana
- Patanjali Kachchi Ghani Sarso Oil
- Patanjali Tulsi Ghanvati
- Patanjali Tulsi Panchang Juice
- Patanjali Aloevera Juice.
What made Patanjali successful in the competitive FMCG sector?
Patanjali’s competitors are some of the top-notch companies viz. Dabur India, Marico, Procter & Gamble, Nestle Ltd., HUL, Himalaya Herbal Healthcare, Colgate-Palmolive, Adani-Wilmar. Not only in India, the company is also competing with these big players exporting its products to Canada, the USA, Mauritius, and the UK.
Patanjali’s business strategy is simple yet unique in every regard, be it in production, pricing, branding & promotion, and distribution.
Production:
Patanjali produces some 900 types of products in various categories. It has also forayed into clothing with Patanjali Paridhan. Looks like, it does not want to keep anything untouched. Its main production plant is in Haridwar. In Nepal, it runs the Nepal Gramodyog, mainly engaged in the mineral and herbal business. Patanjali also acquired Ruchi Soya, in a strategic move, to boost its food products line. Not only this, Patanjali Foods has one of the largest palm oil plantations in India having 60K hectares.
Pricing
Among several players, Patanjali knows how to play well in the pricing aspect. Patanjali understands that it cannot conquer the market with higher prices. Premium pricing is not something its huge middle class but a dedicated customer base may be able to take so easily. Hence, it basically follows the reasonable pricing model. Its products are 5-10% below the average price offered by its competitor products. This helped Patanjali to penetrate the market faster than other FMCG brands. Price comparison is another tactic Patanjali successfully applies.
Distribution
Patanjali has strategically cut down its distribution costs by establishing its own stores. It encourages individuals to become franchisees of the brand. Small business owners are part of this franchisee network helping sell the company its products through the length and breadth of the country.
Patanjali Clinics (Patanjali Chikitsalayas) are being set up in different tier cities in India. The patients that come to these clinics eventually buy products from its stores and become customers of the company.
Besides, the Arogya Kendras (wellness centers) that they have also help sell its products. The yoga teachers working herein suggest fitness exercises and Patanjali’s ayurvedic medicines and supplements, generating revenue for the company.
Branding and Promotion
Patanjali has been able to save huge money by not engaging any celebrities in its advertising campaigns. Baba Ramdev is the sole face of Patanjali. He is a brand himself, a yoga guru followed by millions. His cult status helps to promote the products. His image as prakritik person and believer of Ayurveda has created a perception of good health and wellness among the masses. Perhaps no other celebrity could have expanded Patanjali at a breakneck speed as Baba did.
Other strategic moves that helped Patanjali expand fast
Patanjali sources its products directly from farms cutting the role of intermediaries. This reduces its procurement costs of raw materials. Back in 2019, Patanjali's strategic move to acquire Ruchi Soya, a food manufacturing company, gave a boost to its production line.
Patanjali promotes its products under one umbrella brand and that is Patanjali - the name that everyone trusts and does not engage in any celebrity advertising or endorsement. It helps Patanjali save huge costs on promotion and advertising which it utilizes on developing other aspects of the company.
It banked upon its customers’ growing love for swadeshi or Indian products, educating them about the benefits of nature and natural products. The shdudh (pure) desi (indigenous) pitch has resonated well. Larger players that earlier focused on technology and modern science have now realized the importance of shifting to ancient science and wisdom. But Patanjali started its journey as a house of products manufacturing products on ancient Indian science, thereby getting the edge. Patanjali has effectively marketed itself as the source of this wisdom. It’s obvious why customers would prefer the source then the peripherals. This is helping Patanjali add customers every day and hence generate more sales and revenue.
The other benefit of putting Ayurveda and ancient wisdom to use lets Patanjali get tax exemption as well. It has also helped Patanjali expand its manufacturing units on lands bought at discounted rates.
In the conclusion, I can only say that Patanjali’s success story is an inspiration for all. This is a case for study due to its unique and successful business model that grew on a loyal customer base and word of mouth. It is the story of a baba who grew from being a yoga guru to a successful businessman.
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Successful Business