The Patanjali Phenomena

PatanjaliProductsPatanjali, the new FMCG giant is breaking every growth records and making phenomenal business. It’s the new growth icon in FMCG industry. Global analysts are writing its story and projecting its future path. So, what’s new in this article? Well, having been a user of Patanjali products for the last 5-6 years I would tell you what’s the driving force behind Patanjali products? How the divine yogic belief on Baba Ramdev got converted into Patanjali product adoption and loyalty. Whether Baba Ramdev is the only reason of product acceptance or the product really great?

Patanjali is a FMCG company built on the platform of spirituality, Ayurveda and Patriotism. It’s not a company but a movement, a movement for indigenous products with excellent quality. But, the million dollar question is how this company is writing the new and unbelievable growth story and whether it is sustainable?

I would say there are basically 6 reasons behind Patanjali’s success:

  1. The Yoga follower base- Baba Ramdev is the undisputable yoga icon in India. His contribution towards promoting yoga and pranayama in Indian masses cannot be underestimated. He has been performing yogic aasanas and pranayamas on Aastha and Sanskaar channel for the last two decades. People have been benefitted by practicing his yoga teachings. These results and benefits got converted into a huge follower base of yoga guru and when the company he endorses i.e. Patanjali, came up with FMCG products, it was widely accepted among his followers because of trust built because of yoga and its benefits.
  2. Product affordability- For the same amount and better quality patanjali products are cheaper w.r.t other brands and this lower price were never perceived as a sign of inferior quality because of the word of mouth publicity of patanjali products. Also, the affordability and its quality were almost always told in Baba Ramdev’s yog shivir by himself. He is the face of his products with quite a vocal challenge to other brands that no one can challenge the quality of Patanjali’s products.
  3. Infrastructure- Few of you might be knowing, but patanjali Food Park is one of the largest and most unusual food park in the world with world-class manufacturing facility with strict quality adherence. So, the platform or base created by patanjali for its business is quite strong and with long-term vision. This sort of infrastructure helps in getting the first step right is any form of business which patanjali did.
  4. Word of Mouth publicity– Patanjali is one of the best examples of how word of mouth publicity can be leveraged to push your products. How yogic and divine beliefs can be converted into product trust and beliefs and how a person’s charisma can be extended into the brand itself. Initial product adoption by Baba Ramdev’s followers created a lot of positive responses and feedbacks about patanjali’s products and the product’s quality gave sustainability to the initial product adoption.
  5. Umbrella brand strategy– Patanjali is a unique company in FMCG space with its umbrella brand strategy, each and every product of patanjali is identified with the parent brand name i.e. Patanjali. On the other hand, other companies like P&G, HUL etc. follows a house of brands strategy where individual brands are built-in different categories with no any mention of parent brands like Pepsodent, Pantene, Surf, Lifebuoy etc. For a newcomer like patanjali, it’s the best strategy to adopt if you want to challenge multiple brands at a time because-
  • In this case, beliefs built-in one category can be transmitted into other and this would prompt customers for initial product trial which will help in getting product adopted by the customers because of product’s quality.

But, there is a flip side to it, in the case of one product/category failure, the parent brand is quite vulnerable as it will be significantly affected and sales figure may dive down rapidly. Whereas, if everything goes right the dividend that this strategy can yield is unimaginable which is something happening with patanjali at present.

  1. PatanjaliPatanRamdev.jpgPatriotism and Indian-ness- Bharat Swabhiman as endorsed by yoga guru is also helping patanjali’s success. Baba Ramdev is always seen speaking on national television about the need of purchasing indigenous products so as to reduce the cash outflow to other countries which is also a reason behind weakening of the rupee. This awareness and education instills a sort of patriotism in people and leaves no any space for counter-argument in terms of logic/persuasion for product adoption.

Finally, I would like to say that challenging patanjali is not going to be easy for FMCG giants because patanjali is playing on its strength and is doing what it is best at doing. So, these FMCG giants need to come up with a unique strategy like herbal variants of existing products, increased expenditure on marketing communication etc. which is easier said than done. Let’s see who is going to win this epic corporate battle. Which company and how much of it will get affected will depend on the portfolio overlap with patanjali and how strong patanjali is in that category.

About Ravi Shankar

PGDM, IIM Bangalore, Class of 2017
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