PRICING STRATEGIES OF PATHANJALI
PRODUCTS
Introduction
Company profile
Pricing strategies
Conclusion
Reference
NAVIN M S
Reg. No. 19311047
II M Com A&T
Department of Commerce
Pondicherry University
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INTRODUCTION
Pricing strategy refers to the methods that a company
used to price its products. All companies fix the price of its products that
include the cost of production, labour, advertising and a percentage of
profit. It enable the company to get the cost involved in producing the
product and profit from it. There are different type of strategies that
followed by the company in pricing of its product include penetration
pricing, price skimming, discount pricing, product life cycle pricing and
also competitive pricing.
Penetration pricing means at the time of introduction of
product in the market the company will charge a lower price and
thereafter it will increases stage by stage. Price skimming means the
company will charge a high price at initial stage and after decrease it
stage by stage to increase the sales. Discount pricing means the product
will sell at a discounted price that is less than the normal price to capture
the market. Competitive pricing means the pricing of product based on
the price of close competitor.
Selection of pricing strategy of a company will based on the nature and
operation of the company. In this I try to evaluate the Pathanjali’s
pricing strategy with the help of comparison with other close substitute
brands and change in price during the last three years.
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COMPANY PROFILE
Company name : Pathnjali Ayurved Limited
Type : Unlisted public company
Industry : Consumer goods, Health care
Founded : 2006
Founder : Acharya Bal Krishnan and Baba Ramdev
Headquarters : Haridwar, Uttarakhand, India
Area served : Worldwide
Products : Foods, beverages, cleaning agents, personal care
Products, ayurvedic medicine, fashion.
Subsidiaries : Pridhan, Ruchi soya, Herboved, Advance
Navigation and Solar Technologies Pvt Ltd
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PRICING STRATEGY
Pathanjali Ayurved is an Indian FMCG company started in 2006. The
product range of Pathanjali had more than 400 products. Pathanjali is
one of the fastest growing company in India. One of the distinction
between the Pathanjali and other companies in the FMCG industry is the
product price. The pricing strategy followed by the company is
penetration pricing, because they knows that it cannot conquer the
market with higher price. Penetration pricing means the company
initially fix the lower price for the product and after capturing the market
it will increase the price stage by stage. Pathanjali follow the penetration
pricing for its products because the public accepted the products as a
part of daily life. It enable Pathanjali to reduce the cost of production
because the large scale operation.
LOWER PRICE AND NATURAL INGREDIENTS
Pathanjali uses more amount of natural ingredients for making its
products. By using natural and domestic ingredients the company can
reduce its cost of materials. It enable the company to fix the price of
product at lower and attract more customers. tn case of pathanjali
product price, there is a 20-30% difference in price as compared to other
brands of close competitors.
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OBJECTIVES BEHIND THE PENETRATION PRICING
Pathanjali argue that they are using natural or domestics ingredients for
producing the product. One of the main feature of natural ingredients is
it only cost lower rate as compared to other chemical ingredients. By this
way the Pathanjali can market the quality products at the lower price. As
above said, Pathanjali uses penetration pricing strategy for fixing its
products. Through this penetration pricing Pathanjali can capture the
whole market with in a less time period.
Following are the objectives for following the penetration pricing for the
new products of Pathanjali.
To introduce new product in the market.
To face the competition successfully.
To get the economies of large scale production by increasing the
sales of the product.
To attract the customers of low income family.
To capture the market.
PRODUCTS OF PATHANJALI AND OTHER BRANDS
Following are some of the popular products of Pathanjali and its close
competitive brands taken for the comparison study.
Types of Pathanjali Price Other brands Price
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products
Face wash (200 Pathanjali ₹120 Himalaya neem ₹190
ml) Neem & Tulasi face wash
face wash
Toothpaste (200 DantKanti ₹90 Colgate active ₹100
gm) salt nee,
toothpaste
Hair oil (100 Pathanjali Kesh ₹98 Emami Kesh ₹144
ml) Kanti Hair Oil King Hair Care
Honey(1 kg) Pathanjali ₹315 Dabur honey ₹395
Honey
Instant Noodles Pathanjali Atta ₹36 Maggi Atta ₹68
(240 gm) Noodles Noodles
Oats (1 kg) Pathanjali Oats ₹175 Saffola Oats, ₹199
Quaker Oats ₹190
Here we can see that the all products selected for the study are lower
price compared to the close competitor.
PRICE INCREASE OF PATHANJALI PRODUCTS
Following table shows the result of price increase of selected Pathanjali
products during the last three years.
Products Price 2018 Price 2021
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Pathanjali Neem & Tulasi ₹75 ₹120
face wash (200 gm)
DantKanti (200 gm) ₹70 ₹90
Pathanjali Kesh Kanti Hair ₹92 ₹98
Oil (100 ml)
Pathanjali Honey (1 kg) ₹280 ₹315
Pathanjali Atta Noodles (240 ₹20 ₹36
gm)
Pathanjali Oats (1 kg) ₹175 ₹178
Products Price
350
300
250
200
150
100
50
0
Pathanjali Neem DantKanti (200 Pathanjali Kesh Pathanjali Honey Pathanjali Atta Pathanjali Oats
& Tulasi face gm) Kanti Hair Oil (1 kg) Noodles (240 (1 kg)
wash (200 gm) (100 ml) gm)
Price 2018 Price 2021
Here we can see that the price increase of Pathanjali products during
three years. The penetration pricing used here will increase the price of
products in future also with keeping customers happy.
ROLE OF ADVERTISING IN PRICE FIXATION
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Pathanjali initially used low advertising to promote its products. It
advertise their products in a limited way like regional newspapers, news
tickets, digital advertising etc. the limited advertising expense helps
them to lower the price. The company uses the unique technique
“Information based advertising” for its product. It will help them to
increase the sales.
LOWER PRICING AND PROFIT
The brand ambassador of Pathanjali Ayurdev Ltd said that our profit
margin are miniscule because the main aim is not to make profit. So they
aim at minimum profit from its products. Their input cost is also low,
because they collect it from farmers directly, avoiding middlemen.
CONCLUSION
At the time of introducing the products of Pathanjali, they will generally
charge a price that lower that its competitor brands. After that they will
slowly increases its price. In conclusion they create an image in the mind
of customers that the products are lower priced as well as high quality in
nature.
REFERENCE
Website of Pathanjali
A research report on Pathanjali, Contemporary concern
study(2016) IIMB
