06 Feb 2018 12:00 IST

Taking on Patanjali with Ayush 2.0

Will Hindustan Unilever’s relaunched ayurveda brand pose a challenge to Baba Ramdev’s FMCG products?

In December 2016, fast-moving consumer goods (FMCG) giant Hindustan Unilever Ltd (HUL) revived its ayurveda brand, Lever Ayush (Ayush), and launched 20 new personal care products. The products, priced between ₹30 and ₹130, were targeted at the mass market, helping Ayush shed its premium tag. The move was aimed at bolstering the company’s personal care portfolio, apart from enhancing its competitive strength in the fast-growing Ayurvedic space.

Ayush’s new tagline Sahi Ayurveda (True Ayurveda) was expected to position the brand as an authentic ayurvedic brand. To support this, HUL launched a new series of Ayush ads which sought to educate customers that not all products that claimed to be ayurvedic were genuine. For the relaunch campaign that was run across various media, HUL roped in actors Akshay Kumar as the lead brand ambassador and Tamanna as the brand ambassador for products targeted at women. HUL also partnered with one of the leading institutions propagating the science of ayurveda — Arya Vaidya Pharmacy — to develop its new products.

Disruption in the sector

HUL is the Indian subsidiary of one of the world’s largest consumer goods companies, Unilever N.V. Established in 1933, HUL has for long been the market leader in the FMCG sector. The company had launched Ayush in 2001 but, by 2006, the brand had lost momentum in the market. This prompted HUL to push it to the sidelines.

In the meantime, Baba Ramdev, a yoga guru with a keen interest in ayurveda — along with a close associate, Acharya Balkrishna — set up Patanjali Ayurved Ltd. (Patanjali), which offered a range of ayurvedic consumer products. Patanjali was credited with rejuvenating the market for ayurvedic products and with disrupting the Indian FMCG sector, ultimately eating into the market share of such major incumbents as HUL and Procter and Gamble. By 2017, Patanjali’s revenues had risen to ₹10,000 crore and the company became a serious competitor for HUL, which had revenues of over ₹30,000 crore. Patanjali had set itself an ambitious target of achieving ₹50,000 crore in revenues by 2020. Its stupendous success pushed HUL to rethink its strategy in the Ayurvedic space.

The Questions

If you were a Marketing Manager at Lever Ayush charged with making Ayush the market leader in the Indian Ayurvedic space,

1. How would you create a market for Ayush?

2. What strategy would you adopt to take on the Patanjali brand, given its strong association with yoga guru Baba Ramdev and marketed on the Swadeshi plank?

3. How would you promote Ayush? What would your advertising message be?

Send your submission to blcasestudies@thehindu.co.in by January 21. It must not exceed 800 words and may include one or two graphics. See  Rules of the Challenge  for more details. The top three teams will receive gift vouchers worth ₹12,500, ₹7,500 and ₹5,000 from leather goods company Hidesign

(Debapratim is Associate Dean & Head, Case Research Centre, ICFAI Business School, Hyderabad, where Namrata is a Senior Research Associate. This case was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.)