Repositioning at Dabur

NORLAN C.
CAGOCO
REPOSITIONING AT DABUR
1. Analyse the reasons that impelled Dabur to refine its Ayurvedic image to
that of a herbal FMCG company?
Dabur India Limited started as a medicine manufacturer in 1884 by Dr S K Burman in
WestBengal. It was started as a proprietary firm for the manufacture of Ayurvedic drugs. Dabur
initially used to send medicines to villages in Bengal by mail. The company marketed
anallopathic drug, Plagin, to combat the then prevalent epidemic of plague. In 1896, Dr. Burman
set up a small manufacturing plant at Garhia near Calcutta for mass production of chemicals
and Ayurvedic drugs. In the early 1900s, the next generation of Burmans took a conscious
decision to focus more on the Ayurvedic medicines market, as they believed that it was only
through Ayurveda that the healthcare needs of poor Indians could be met.
In 1919, Dabur set up a Research & Development laboratory to conduct research on Ayurvedic
medicines. Their manufacturing processes used to be as described in ancient Indian scriptures
and developed the process of utilizing modern equipment to manufacture these medicines
without reducing their efficacy. The following year, Dabur set up manufacturing facilities for
Ayurvedic Medicines at Narendrapur, West Bengal and Daburgram, Bihar in India. Dabur also
expanded its distribution network in Bihar and the North Eastern regions. In 1936, the company
was incorporated under the name Dabur India Pvt. Ltd.
In 1940, Dabur launched Dabur Amla Hair Oil, and later in 1949, the company launched
Chyawanprash in a tin pack making it the first branded Chyawanprash in the country. The
company expanded its portfolio by adding oral care products in 1970. Dabur LalDant
Manjanwas the first product to be launched under its oral care portfolio. In 1972, Dabur shifted
base from Kolkata to New Delhi and started production from a hired manufacturing facility at
Faridabad, U.P. In 1978, Dabur launched the Hajmola tablet. Dabur set up 'The Dabur Research
Foundation (DRF),' an independent company, in 1979 to spearhead its research needs. In the
same year Sahibabad factory became operational and this unit was one of the largest and most
modern production facilities for Ayurvedic medicines in India at that time. The company
became a public limited company in 1986 and launched its first public issue in 1994.
In 2004, Dabur had three strategic business units: Family Products Division (FPD), HealthCare
Products Division (HCPD) and Dabur Ayurvedic Specialties (DASL) which contributed45
percent, 28 percent and 27 percent respectively to Dabur's sales revenue in 2003-04. FPD
looked after products related to Hair Care, Skin Care, Oral Care and Foods. The three leading
brands in this division had a turnover of Rs. 1 billion each in 2003-04. HCPD dealt with
products related to health supplements, digestives, baby care and natural cares. DASL managed
about 250 Ayurvedic medicines.
Although Dabur diversified itself into a number of areas, the image of Dabur was still that of an
Ayurvedic company. In the public perception, Dabur products were associated with the 35 plus
age group. With almost seventy percent of India's population below 35, it appeared that Dabur
was missing out this mass market, which also had high disposable income. Apart from the above
fact, Dabur in 2001-02 experienced a downturn in sales and profit and there were indications of
2. What are the action plans Dabur undertook as part of its restructuring?
How did they help close the chinks in its marketing armour?
Dabur conducted various Marketing Activities such as Moving from an umbrella
branding to Unique branding, Changing the company logo – the new logo is fresh and
shows firmness. It advocates a brand that is affirmative, practical and progressive.
Celebrity Endorsements created Dabur a high profile brand. And Introduction of brands
in new product categories, as well as expanding the brands into new product categories.
3. Dabur targeted sales of Rs 200 billion by 2006. Hence it needed to grow

annually at a rate of 15-20 percent in years 2004, 2005 and 2006. Comment
on the growth of strategies adopted by Dabur.
Dabur should position itself as a good quality brand because India is perceived to be a
good quality brand. Consumers instantly link between poverty with bad quality. For this
reason, Dabur needs to focus on the quality and positioning itself effectively. The prices
must remain competitive. It must focus on effective distribution channels in these
overseas markets, where there is little knowhow.

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NORLAN C.

3. Dabur targeted sales of Rs 200 billion by 2006. Hence it needed to grow

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