CavinKare Private Limited (B): Entry into Soaps and Detergents Market

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Abstract

In the two decades since its inception, CavinKare had built a reputation for rewriting the rules of the game. CavinKare’s Chik brand of shampoo was a leader in rural markets and had emerged as the second largest selling shampoo brand in India. Its keen understanding of consumers, focus on innovation and developing affordable products, low cost of operations, and wide distribution access were some of the factors that contributed to CavinKare's success. In 2004, the company was planning on introducing its soap and detergent products. However, a sudden change in market conditions due to a price war between two giants: Hindustan Unilever Limited (HUL) and Procter & Gamble (P&G) lead to doubt as to whether the new products should be released. The new market scenario was capable of drastically changing revenue and profitability projections for any new entrant into the market prompting K. S. Ramesh to consider whether he should delay the introduction of soap and detergent products or simply scrap the plans altogether.

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