Cavin Kare - History & Future

3146 Words13 Pages

Principles & Practises of Management

Submitted to: Prof. Mala Sane

Submitted by:
Name: Shubhranshu Mishra
Sec: E
Roll No.: 31
PRN: 10020441264

GRADE ASSIGNED: ________________________


It is the story of David taking on Goliath. A small company having its base in Cuddalore in Tamil Nadu, is now taking on the multinationals of the FMCG world. The Levers of the world now have competition breathing down their necks, from an all too Desi company, CavinKare. Pioneers in the field of sachet revolution, and mass marketing in rural areas, CavinKare has grown from a Rs 15,000 venture to a company making a turnover of Rs 700 crores .
Year of Establishment : 1983
Chairman and Managing Director of CavinKare
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He bought a shampoo-packing machine for Rs 3,000. The company began its journey as Chik India Ltd.
How Chik Shampoo was born
He named it Chik Shampoo after my father. The product did not succeed immediately; they learnt many things during the process. In the first month, they could sell 20,000 sachets and from the second year, they started making profits.
He moved to Chennai in 1989 but their manufacturing unit continued to be in Cuddalore. It took him three years to get the first loan because banks asked for collateral. He did not have any. But one particular bank gave him a loan of Rs 25,000 which we rotated and later upgraded to Rs 400,000, Rs 15 lakh (Rs 1.5 million), etc.
The bank manager wrote in their loan application 'This person does not have any collateral to offer but there is something interesting about this SSI unit. Unlike others, this company pays income tax!'
His business never looked back because he was very particular about paying income tax.
Strategies that made Chik Shampoo No. 1 in South India
When Chik entered the market, Velvette Shampoo was being marketed aggressively by Godrej . But a scheme of theirs became extremely successful -- they exchanged five sachets of any shampoo for a Chik Shampoo sachet, free.
Later, they altered the scheme -- they started giving one free Chik Shampoo sachet in lieu of five Chik Shampoo sachets only. Soon, consumers started asking for Chik sachets only. Their sales went up from Rs 35,000 to Rs

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