07 Feb 2018 19:54 IST

Third Runner-up

Tap into fortune at the bottom of pyramid

There exists a big opportunity for ayurvedic products among the lower-income segments

When HUL launched Ayush back in 2001, the market for ayurvedic products was limited. Since then, the personal care market has shifted towards natural products. However, the company’s oversight to emerging market trends allowed Patanjali to disrupt the FMCG market.


Use demand space map to create market

While looking at creating a new market, HUL should follow a structured process:

~ Explore value creation opportunities with Ayush.

~ Choose the right segment.

~ Design, communicate and deliver value to the segment.

~ Appropriate revenue from the segment at a right price.

~ Sustain value through retention and customer acquisition.

Ayush 2.0

Patanjali’s success has proven the existence of a big opportunity for ayurvedic products in India in lower income segments, with a price range between ₹25 and ₹110.

An analogy can be drawn with the Nirma vs. Surf war. HUL retained Surf for its premium segment and used Wheel to battle Nirma. Similarly, the relaunched Ayush can play the role of Wheel and cater to lower income segments.

- As per BCG report, a key driver of FMCG sector in India will be from the Tier 2, 3 and 4 cities, that will account for 45 per cent of the consumption by 2025.

- With this insight and C K Prahlad’s Fortune at Bottom of Pyramid concept, it can be concluded that huge value creation opportunity exists in lower tiers of the pyramid. HUL has the ‘Indulekha’ brand for its premium ayurvedic products.

Demand-centric approach

HUL cannot use the common perceptual map to identify where a market for Ayush can be built within the lower segments. There are certain constraints for the company:

~ There is a possibility of multiple segments, none of which are Ayush’s core due to a wide portfolio.

~ There are multiple brands targeting the same segment as HUL.

~ It becomes difficult to explain consumer choice through surveys and to win their mind.


Instead of segmenting market by demographics, a ‘demand-centric’ approach should be adopted by HUL to choose its target segments. Through ethnographic studies and laddering market research, consumer needs, reasons and occasions driving consumer choice of products need to be understood.

The demand-space map has ‘needs’ on one dimension and context (psychographic/demographic) on the another. Each demand space (number one to six ) is mutually exclusive and appeals to need defined segment.

Capitalise on distribution and link Ayush to the Vedas

Next, HUL should translate the insights from demand space map into an actionable plan, allocate its resources and formulate its go-to market strategy.

Lever Ayush’s key competition is Patanjali’s strong brand equity and its Swadeshi alignment. The latter’s weakness is its distribution. To counter Patanjali, Ayush should use a two-pronged approach.

~ Communicate its association with Arya Vaidya Pharmacy through marketing mavens.

~Communicate its source of ayurvedic knowledge as the Indian Vedas making Ayush distinctly Indian.

~ Leverage distribution network.


We hypothesise the coexistence of four consumer groups within each demand space based on paying potential and accessibility. Since Ayush is mainly for low income segment and is competitively priced to counter Patanjali, the focus is on three quadrants where Ayush will have to leverage the three factors mentioned above.

Distribution is key point of difference

~ Shakti workforce for bottom left : Seventy per cent of India is in the rural areas and 500,000 villages out of 600,000 is in bottom left category. HUL penetrated this space successfully with its Shakti initiative (to financially empower rural women and create livelihood opportunities).

The same approach can be used for Ayush. Use of sachets-based packaging will solve the issue of affordability. Moreover, Shakti women can act as marketing mavens and use their one-on-one, personal relationship with customers to push Lever Ayush, especially for low involvement products such as oral hygiene ones and toiletries.

~ E-commerce for bottom right : Penetration of e-commerce is high for high involvement products such as skin care and fragrances. Moreover, this consumer group will be very discerning. The brand can leverage its strong financial resources to do extensive digital marketing campaign on Ayush and its Indian Vedic linkage to influence these consumers, who will not be easily swayed by one brand icon.

Distribution is key point of purchase

· Delight for top left : This consumer group will be difficult to capture from Patanjali. However, as per Kano Model, offering consumers additional convenience or features at no additional cost can increase satisfaction exponentially. Lever Ayush needs to focus on delighting consumers through combo offerings and savings.

Leveraging technology

Lever Ayush should promote itself as a ‘holistic healthcare solution’ to counter Patanjali. More than 90 per cent of India has mobile connectivity. Lever Ayush can complement its products with Sahayak — an AI-based toll free call centre service that offers customers solutions to basic skin, oral and hare care problems with a focus on ayurveda, and reinforce Ayush’s link with the Vedas.


Lever Ayush should continue its current mix of traditional and digital marketing with a budget allocation of 10-12 per cent of revenue, to aggressively take on Patanjali.

As for advertising, mythology is a strong communication vehicle in any culture. In this regard, Ayush can use elements of Indian myth in its ad message, and use taglines such as ‘Wisdom of Indian Vedas brought to you by a trusted brand’.

(The third runner-up is a second-year PGP student at IIM Bangalore)