Fevicol and Pidilite
Look carefully at this person. This person used to work as a peon in a wooden warehouse and was so poor, He also lived with his family in the same warehouse. However, look at the wonder of entrepreneurship. He set up a company with annual sales exceeding ₹10,000 crores. He sells goods worth ₹29 crore every day. Sells goods worth ₹1 crore every hour. His company's valuation is ₹1,28,000 crore. His personal valuation is ₹90,000 crore. He has a one-sided monopoly in the market. He has captured 70% of the market and he himself not only became rich. However, made many people rich. If you had invested ₹1 lakh in his company 25 years ago in 1998, then today its net worth is ₹4 crore. The name of this person is Balwant Rai Parekh and the company he established, its name is "Pidilite Industry". This company makes Fevicol and its work is to stick. Everything sticks Sticks paper, furniture, Either it is cement and tile work or Waterproofing work on the roof. It sticks everything. In today's date, do any work of sticking. The money will go into Pidilite's pocket. Just like we call paste as Collgate, 'give us the Collgate' and call water as Bisleri, Similarly, whatever the work of sticking, We remember Fevicol. Hence, in today's case study, We will learn how a peon has created such a huge empire. Even MBAs from big companies learn from his case studies. There are such lessons in his story i.e., product, packaging, marketing and finance. That big MBA and CA will be embarrassed. This case study must be watched by every businessman, Anyone who is doing business or wants to do it or every student who has a desire to do business. Should watch it and it is your responsibility that If this article touches your heart or teaches you, Then, share this article to at least 10 people Before that, there is a subscribe button Click on it. Are you ready to hear the story of a peon becoming a ₹90,000 man? Let's start the story from the beginning.
History of Fevicol Pidilite
First of all let's come to the product, How the idea of the product came? I always say that brother, look You do not need to go searching for a product or service Find the problem around you and whatever problem is solved and your business is ready So, Balwant Rai Ji also did the same Balwant Rai Ji worked as a peon at a wood merchant As it was a furniture work, So, everyone needed edible gum. The edible gum which was used was animal fat-based glue. It means that it was made from animal fat. Now, first, boil it, then cool it, Then apply it and in this entire process, the filth and smell was terrible and there were many people who did not even want to touch the animal fat material. Well, it used to take a carpenter's whole day to complete this entire process. Apart from that, there was another tension. It is being made with so much hard work and yet it is not durable. After two, three or four years of work
Complaints started coming. Like brother, this has been removed, this has been removed! That time, Balwant Ji said, It would be great if we find a solution for this. He did research on his level and made things. He found a product that can be used to make a material from synthetic resin. Which can be applied directly, There is no tension of heating or boiling and it is 10 times stronger than animal fat. Now, he made this thing and after making it, He told the carpenters to apply this. The carpenters said it is sticking quickly and it is very strong, time is also being saved, There is no smell and rot. It was great and when they got the motivation I have got a product in my hands which has a huge demand, So, he started his own company in 1959. Named as "Parekh Dyechem". This is Parekh Dyechem. Later, it became Parek Dichem Lite And then it became PIDILITE and the product that was launched for the first time, What was its name? "Fevicol".
"Find your surrounding problems"
Surrounding Problems and Distribution. The business will be established and secondly, your product should be awesome. It should be better in comparison to the current product. Now, the first thing is, that the product has been made, 'Very wonderful, Vert Great'. However, what happens just by making a product? There are many such traders who are sitting with a wonderful product. Unless it is sold, then what is the meaning? So, they asked how to do its distribution? So, in the past, what was the simple way of distribution? As your product is there, So, first make the product and then give it to the wholesaler. The wholesaler will give it to the distributor. The distributor will give it to the shopkeeper and the customer will take it from the shopkeeper. There will be a margin in the entire chain; There is no problem. However, Balwant Rai Ji said, First of all, listen that our margin is less and If the entire chain got eaten up in between, then? and secondly, they said that this works in B2C product. Where the customer comes directly and asks for the thing Now, they said that the customer is asking for a furniture. Like, you want a sofa. Now, what gum is being used on the sofa. It doesn't matter to him.
Secondly, assume that you are making a sofa, You will bring the wood, You will bring the gum. Then, you tell the carpenter, Brother, tell me what to bring and what the carpenter says, we write down and bring the goods So, he said that whether the customer's money is being used, The decision of which type of Gum will be used is made by the carpenter. So, I am not going in this model I will not go to the distributor or the wholesaler, I will go straight to the carpenter. So, after making his product, filling it in the bottles, After explaining it to each carpenter, he used to sell it directly. And this was the best decision of his life. He didn't get into this whole process. Astral had done the same thing with the plumber. Astral Pipes told the plumber to come with him. Asian Paints had done the same thing with the painters. They had gone directly to the painters, They had skipped the channel
"Understand Who the Real Buyer Is"
Real Buyer and Fevicol Champions' Club Understand the influencer Anyone who gives money is not only a customer. Who influences that decision? For example, in all the items for the children, Father's money is being invested in them, But it is the children who have the say in making those decisions. So, the main attention should be given to the children in that So, you see who is making the decisions in the product or service you are selling.
Now, let's come to Marketing Phase 1.
How did they do marketing in the beginning? They came to know one thing who is our God 'Carpenter'. They do all the work. They created FCC. What is this? - 'Fevicol Champions Club'. What did they do in this? They used to invite all the carpenters Like, brother, come today, We will give you the training, Will give you new tools, We will give you wood, Will teach you to make designs, Develop many of your skills Used to organize Kite Festivals, Used to take you on pilgrimages, Used to have tea and snacks, Used to welcome like a wedding procession. Then you tell - Sir Ji, What is their benefit of doing all this?
First of all, those who get such a warm welcome like a wedding procession. Those who see these new designs and learn new things, Then they say, brother, who did this to us? "Fevicol". So, when we go to the market and buy something, We buy Fevicol products.
Secondly, they used to use these gatherings in the launch of a new product. Like, we have launched a new product. So, look at the launch of this new product, See how it works? Tell us what is your feedback on it and they used to take new market insights from them. Like, tell us what is going on in the market these days? What is the demand for which item? So, there is a lot of gathering involved in developing a new product, testing it and launching it. For example, In the gathering, someone said, Sir Ji, where we make a furniture product and if water comes there, Then, it creates many problems, The product does not last long
Ohh! This happens (By PIDILITE). They made Fevicol Marine and if they said like, that we make the furniture, and it gets spoiled in sunlight. So, they (Pidilite) said ok, They made Fevicol Heatx. Now they said, Sir Ji, - As there are big projects, It takes time to do this slowly. They made Speedx. Hence, as soon as they took the feedback, Like this is a gap in the market, They researched and launched a new product. They get it tested by them only and also spread it in the market through them and like this, based on such feedback. They launched many products for tiles, marble, ceiling
and in today's FCC, there are 380 such small clubs and A total of 40,000 carpenters are directly associated with Fevicol. So, Fevicol said that they will develop the product as per the needs of people Brand Integration And this is the rule of the market, If you work according to the market. Then you will get a lot of money, Whether it is business or job, So, I have already told the business individuals, Will tell further.
"Boosting Consumer's Well-Being"
You help your consumer increase their knowledge and income while also having fun. You will start enjoying it automatically. They said that our carpenter is God, If the carpenter will be happy, the Carpenter will earn, If the carpenter will be happy, Our brand will do great, will be great. Product Done, Distribution Done, Marketing Phase -1 Done. What happened now?
Expansion
Now, they have done one thing like how much will they sell Fevicol, How much? Till now, Fevicol is being used only in furniture. There is over-dependence on it, If there is so much dependency on one person, Then that is also bad. What to do? They said, - Let's go to different areas. So they said that if we work in different areas and make new products, It takes a lot of time. First, take feedback, then do research on a new product. Then it will fail two or three times and become a thing, Then, make it deployed, So they said, how will growth happen like this? So, this growth, i.e. the first one, like think new and make it from zero. It is called organic growth. They said that we should not do organic growth. We will do in-organic growth Means? Let's buy already established brand. For example, M-Seal belonged to Mahindra & Mahindra, They bought that brand. Now, M-Seal had already captured 60% of the sealing market and reigned as the king. They first bought it. Then, they mentioned a product designed for sticking tiles and marbles called Roff. They bought it. Then, in the steel industry, there was a product called Steelgrip, They purchased it too.
In today's date, Pidilite has more than 20 different brands. In which, there are only a few made by them. Mostly, they are brands that have been purchased And what is the benefit of buying them? The first thing is having multiple products. Dependency has been removed from Fevicol.
The second thing - As they have gone to every sector and the customer is only one. Now, there is only one customer and if he asks for anything, Like, if you want to stick anything, For instance, if you want some work to be done on the roof, Take the "allfix", It is ours. Do you want to stick the tiles? Take the "Roff", It is ours, If you want to paste anything, there is only one synonym for it "Fevicol". What is the other benefit? Look inside, they have not allowed the competition to flourish Competition; somewhere it kept its feet, somewhere it put its hands. They said that they will now allow it to come nearby" Fevicol is the king in its category and all others are the kings of their own category. They do not allow a new man to be born. On the 70% market; They are only the king in the market. And in the remaining 30%, everyone is eating collectively.Fevicol is only enjoying its 70% market, By following these strategies only Expand Product Portfolio.
"Expand the product portfolio within the domain"
When you have a customer who buys goods from you and trusts you, You sell one product to him. Now, he is using four things And so, why are you sending him somewhere else for the remaining three? Start selling those three as well, Only if it belongs to your domain. I am not telling the man who is selling clothes to start selling shoes as well. However, Yes, if you are selling clothes for the men's, and if you feel that the belt will also be sold out, and yes, if the deodorant will also be sold out, Then, sell it too The first decision of distribution was as a masterstroke. They played one more masterstroke. They said that Fevicol sells the best. However, who takes it? Carpenter and how they take it? Boxes of 5kg, 10kg and 1kg. Well, smaller people tend to stay away from us and, this is a (Business to Business) B2B market. We didn't come in the (Business to Customers) B2C market. So, they said listen, we already have boxes of 5 kg and 10 kg. We will also make something worth ₹5 and ₹10. So, they also made Fevi Stik, and they also made Fevi Kwik. They said that when a small child is doing a school project, Then, he should use my product. Because when the same child grows up, Then he will use my second product and when it grows bigger, He will use my third product of Fevicol.
Overall, they have made their product an OTC product OTC means over-the-counter product. Which is sold directly at a shop like Fevicol. You will get any item of Fevicol such as Fevi Kwik in the general store, Will get Fevi Stik, You will get them at the stationary shop. So, they have reached every street corner.
"Packaging Innovation"
You have the same goods, However, if you put different packets. Then, different price points will also be covered. For example, there is an example of 'Chik'. The world says that we will only sell 1-litre shampoo bottles. However, the Chik said we have bottles of 1-litre also 1/2-liter bottles and 100ml as well, And, we have also available in the pouch worth ₹2. So, as soon they make it ₹2, that target audience is also covered. So, your product is the same, but if you differentiate the packaging, You will be able to catch many TG (Target Audience)
B2C Marketing
Now, let's talk about marketing again, That was a phase - 2 of the marketing. Where carpenters were involved (caught). Now marketing has come from B2C. They wanted to reach the masses. Hence, they started TV commercials and what were the TV commercials? Even today, if you sit and watch the ads of Fevicol. You will keep watching and smile. Those ads hit the heart directly. Why? They kept in mind 2-3 things. First of all, they did not take celebrities. Like, we do not take celebrities, we will take the common man. And many times, in their ads, they included their own carpenters. So that they looked like real people and used real locations. It was not like that i.e., a beautiful house or a nice ad. No, that is the same place as the carpenter, Some old places; there is wood and dirt lying there. There is sunshine, a common man is standing, his hair is scattered, A man who can connect with the heart. Yes, this is my story. This is how it happens, They developed the relatability. They didn't use the celebrities.
Second thing, they made us laugh in the ads Connect with the emotions and, various great taglines. So, the marketing was done in such a way, Like we say for the paste i.e., Brother, Give us the Colgate, For water, we say, brother, give us the Bisleri. Just like that, Nowadays, the world asks for gum, brother, Give us the Fevicol. Their marketing brilliance is also visible in their logo What is their logo? Two elephants are pulling something in opposite directions. It is a piece of wood which is tied with the Fevicol. Well, in the beginning, when Fevicol was sold. The name Fecal was not remembered. So in the beginning, the carpenter used to say, 'Woh Hathi Wala Dena, Hathi Wala'. So, due to this 'Haathi Wala', They got the brand recall done very well.
"Always remember your user"
There is no point in showing glitter or celebrities Like, it increases the numbers. There is no increase in the numbers. Make whatever connects your users, Supply Chain Management.
One more important thing in the business has been left out, If an individual operates such a big business, It is very important for his supply chain to be strong. Supply chain means you are selling, Tell me what you are making from? Our sales have increased from 100 crores to 200 crores, However, from whom we buy the goods, They are not able to deliver that. They are not giving the quality that we want And we want to give good products to the market.However, if the quality that we are getting is inadequate, Then what will we do then? Hence, such companies which operate on such big levels, It also manages its own supply chain. So, they did backward integration.
Backward Integration.
The people from whom they used to buy the goods said. That they didn't know what to sell and what to make. So, they acquired the plant itself. Like, they are acquiring brands in the front. They also acquired suppliers from behind. Like, it's okay. We will make it by ourselves. So, they are making their own raw material that is being used. So that they do not face any problem. Meanwhile, on a global level, They have more than eight large manufacturing plants. And have more than 30 subsidiaries which, Sell goods in countries like the US and Singapore And have more than 500 products which are exported to more than 70 countries. Due to all these things, Their dominance in the market, Like Fevicol does not give credit. The biggest problem faced by the businessman is that Like, need to give credit, give credit. Individuals who came in their competition said that, Like Fevicol does not give a loan, we will give you the loan. The carpenter refused to take the loan. They said, brother, listen, How much will the raw materials/products cost? Suppose, if we are making a chair, The chair will be made for ₹10, 000. It costs around 150-200 rupees for that gum. And if you give ₹200 worth item in ₹150, Gives a break of 10 days,
What difference will it make to us? If your product turns out to be faulty, Then my chair worth ₹10,000 will be damaged. So, I am not looking at ₹50-60, If I buy it, I will only buy Fevicol, If some other person comes and tells them, You should not buy Fevicol. Make it from our product only. Then, the carpenter says, I'll build it, but there's no responsibility, I will take responsibility only when Fevicol comes into use, This is a trust. Because of this, it is sold expensive and does not even give a credit.
"Strategic Supply Chain Management"
Take care of your supply chain as well And if you once get successful, Pay attention towards global expansion
Call to Actions So, this was a complete case study in which. We talked about its product, talked about marketing, Talked about expansion, talked about its strategies.