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Chanakyaneeti on Pricing tactics by Dabur Honey

Chanakya says that he who produces double the anticipated revenues eats up the Country and its people.  Chanakya proposes punishment for such a person.  By this logic, shouldn’t Dabur be punished by its loyal Customers? In a recent Interview to CNBC TV 18, Amit Burman, Vice Chairman, Dabur says that the Company will not cut down the price of Dabur Honey to counter disruptive pricing tactics by Baba Ramdev’s Patanjali Honey. It will be relevant to mention here that Dabur is a market leader in Branded Honey for years, but by pricing 500 gm Honey 33 to 40 % cheaper than Dabur, Patanjali Honey is fast improving its Market Share in the Branded Segment. Amit Burman said in the Interview that they will continue with the premium pricing as it is Science VS Faith in case of Dabur Vs Patanjali. This is where you are getting it wrong Mr Burman.  Let’s concentrate only on Honey, and let’s further concentrate on Science Vs Faith. You said in the interview that your Honey is Premium because it is properly filtered, properly packed and hygienically packed. Agreed, but should it command 40% Premium to a Brand which is promoted by a person who is now synonym with Yoga and Ayurveda?

What is Honey?  WHO defines honey as “the natural sweet substance produced by honeybees from the nectar of plants or from secretions of living parts of plants or excretions of plant-sucking insects on the living parts of plants, which the bees collect, transform by combining with specific substances of their own, deposit, dehydrate, store and leave in the honeycomb to ripen and mature”.  So, as clear from the definition, Dabur doesn’t manufacture Honey with a scientific formulae/recipe. It is a natural commodity with a limited scope of value addition. Now let’s analyze faith. Dabur is a respected Brand with 130 years of History.  Is Ayurveda older than 130 years? It has a History of more than 5000 years, and your competitor is fast emerging as the face of Ayurveda in this scientific era. And you can’t undermine Ayurveda as it is the Bread and Butter of your own Company. So we can conclude that in case of Honey you can’t beat Patanjali on both Science and Faith. If your Honey is so scientific and pure, then why is it banned in several developed countries?

All this points to the fact that in the current Business Environment, you are trying to charge more premium for your product than your Brand commands. You can’t continue with this practice for long. Patanjali’s recent marketing tie-ups with retail giants like Future group should be a clear signal of the times to come. I throw a humble challenge to you Mr Amit Burman. You may not agree today, but price difference in Dabur and Patanjali Honey will not be more than 15 % in the next two years. Otherwise, as Chanakya said around 2000 years ago, your customers will punish you in their own language.

Author: Kujnish Vashisht,


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