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Dabur cuts shampoo prices, to launch smaller packs at Rs 5

08-September-2004
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Dabur cuts shampoo prices, to launch smaller packs at Rs 5

With the FMCG sector continuing to witness fierce price wars, Dabur India Ltd (DIL) has decided on several initiatives to spur growth, which include selective price reduction, product launches and introduction of smaller packs at the ubiquitous Rs 5 price point for the first time.

Taking the cue from other FMCG majors, the company slashed prices of Vatika shampoo by 20 per cent valid beginning this month.

"We have cut Vatika shampoo prices by 20 per cent. The decision to cut prices was carefully planned, taking into account the competitive landscape, product costing and our own brand strategy," the CEO, Mr Sunil Duggal, told Business Line.

Mr Duggal said that after the price cut the 100-ml Vatika (at Rs 38) would be comparable to HLL's Sunsilk available at the same pack size.

The company eyes a 20 per cent volume growth in shampoos due to the price correction, despite excluding its value-for-money shampoo brand Anmol from the price cut.

Mr Duggal said apart from price reductions, the company will also play the volume game. It will soon launch smaller packs in the products segment that include baby massage oil, toothpaste, shampoo and hair oil.

"The smaller packs are not the typical sachets but smaller lami-tubes and HDPE (a plastic category) containers at the popular Rs 5 price point," he said.

Several product launches are also in the pipeline. Mr Duggal said the company plans to introduce a herbal toothpaste and a gel under the flagship brand Dabur as well as another shampoo variant this fiscal.

"We had earlier wanted to extend the Binaca brand to toothpastes but that would have gone against our new brand architecture. So, we have decided to instead launch a herbal toothpaste and a gel under Dabur," he said adding the Binaca portfolio will not be extended to toothpastes in the near future.

DIL's fresh initiatives to spur volume growth follow closely the company's announcement to take the inorganic route to growth through brand acquisitions. "We are looking to scale up our business inorganically by acquiring brands in the healthcare and personal care space which have been positioned on the herbal platform. DIL has a Rs 200-crore war chest and if needed, we can even raise debt to finance acquisitions," Mr Duggal said.

Dabur is to have a complete image overhaul. DIL has already begun the process of revamping its age-old logo.

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