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ASIAN CASE RESEARCH JOURNAL, VOL. 12, ISSUE 1, 1–28 (2008)

ACRJ
This case was prepared by
Professor Anand Kumar
Jaiswal of the Indian Institute of Management, Ahmedabad and Professor Pingali
Venugopal of Xavier Labour
Relations Institute (XLRI),
Jamshedpur, as a basis for
classroom discussion rather
than to illustrate either effective or ineffective handling of
an administrativesituation.

Cavinkare Private Limited: Serving
Low Income Consumers
“Having successfully played David to the Goliaths
of the FMCG world, C. K. Ranganathan has now
set his sight on transforming his Chennai-based
Rs.2,640 million company into a billion-dollar
entity (Rs.52,000 million to be precise) within the
next decade. Ranganathan, the moving force
behind the “sachet revolution” in thecountry,
is the man who took shampoos and perfumes
from urban store shelves to rural homes, thereby
changing the dynamics of consumer product
marketing forever. The experimentation and innovation that CavinKare brought to the market
redefined FMCG marketing in India.”

Please address all correspondence to Anand Kumar
Jaiswal, Visiting Assistant
Professor of Marketing, Indian Institute ofManagement,
Vastrapur, Ahmedabad —
380 015, India. E-mail:
akjaiswal@iimahd.ernet.in.

The Economic Times, 18 October 2004
The Economic Times Awards for Corporate Excellence for
2004 had just been announced. The Entrepreneur of the Year
award winner was C. K. Ranganathan, Managing Director of
CavinKare Private Limited.
Receiving the award had been a moment of pride
for C. K. Ranganathan. Hisjoy soared later when C. K.
Prahalad,a who himself had been trying to “educate”
corporations on how to tap the bottom of the pyramid
aC.

K. Prahalad is regarded as one of the influential business strategy thinkers.
Prahalad’s recent work The Fortune at the Bottom of the Pyramid: Eradicating Poverty
Through Profits has become one of the dominant ideas of discussion among practisingmanagers, academicians and policy makers. Prahalad posits that MNCs can do
profitable business with 4 billion customers at the bottom of the economic pyramid
and this will help in lifting the poor out of poverty.
© 2008 by World Scientific Publishing Co.

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markets, wished him saying, “It makes me proud to see
somebody from my country and hometownpreaching
through practice.”1 Starting his business with a modest
capital of Rs.15000, Ranganathan had come a long way to
receive the Entrepreneur of the Year award. His company
CavinKare had not only survived cut-throat competition
from established multi-national corporations (MNCs), but
also had grown impressively over the years. It had succeeded in carving out a share of the Indian fastmoving
consumer goods (FMCG) market through innovation, value
pricing, product differentiation and understanding of consumer mindsets. It evolved a new business model to serve
low income markets profitably.

HISTORICAL BACKGROUND OF CAVINKARE
CavinKare Private Limited was born out of the entrepreneurial zest of C. K. Ranganathan. He had a family
business of small-scale pharma packaging andcosmetics
manufacturing in Cuddalore, a small coastal town in the
state of Tamil Nadu in the southern part of India. After
completing his graduation, Ranganathan joined his family
business. In 1983 he started his own company in a small
boarding room. His entrepreneurial zeal and single-minded
commitment to business helped him in his pursuit. Twenty
years hence, his company emerged as a strongplayer in the
Indian fast moving consumer product market, offering a
range of hair care, skin care and personal care products. The
company had several known brands in its portfolio such
as Chik (shampoo, talc), Meera (herbal powder, liquid hair
wash, shampoo, hair oil), Nyle (herbal shampoo), Fairever
(fairness cream), Spinz (perfumes, deodorants and talc),
Indica (hair dye), Raaga Cool...