Meet Ramdev the marketing guru

From toothbrushes to night suits, from breakfast cereals to body cleansers, there is a spiritual touch in each item up for sale.

Consumerism blended with spiritualism, courtesy religious gurus and organisations, is giving companies a run for their money.

Yoga guru Ramdev's credentials as a politician are yet to be established, but his pioneering marketing strategies as head of a Rs 1,100-crore (Rs 11-billion) diversified conglomerate are already the subject of case studies.

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According to Mrinalini Pandey of Indian School of Mines University, Dhanbad, who has done a study, 'Baba Ramdev: A cult brand in making', every minute products worth Rs 3,000 are sold by Ramdev's companies.

It is not just Ramdev.

Several small and big spiritual leaders are making their presence felt in sectors such as fast moving consumer goods and over-the-counter medicines.

For example, the products sold by Sri Aurobindo Ashram at Puducherry in south India include hand-woven bedspreads, stuffed toys, snacks, cool drinks and ayurvedic products.

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At International Society for Krishna Consciousness' outlet, Dharani, product basket includes vegetables, fruit, grain and spices free of chemicals.

But Ramdev's success in cult branding is unmatched, says Pandey.

It is through creation of customer communities, determination to build Patanjali Yogpeeth as a rival to the World  Health Organisation and going beyond medicines to lifestyle that Ramdev has emerged as a cult marketer, say experts.

"Legendary brands have a unique feature. They have the ability to transform their customers into brand evangelists.

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"They have a fan base that is so emotionally connected with the brand that it becomes a cult or religion for them," says Pandey.

Patanjali reported a three-fold jump in profit after tax to Rs 63 crore (Rs 630 million) for 2008-09, as against Rs 21.20 crore (Rs 212 million) in 2007-08.

According to a Crisil report, the trust's operating margin was a healthy 83 per cent in 2009-10.

During 2009-10, Patanjali undertook a capital expenditure of Rs 50 crore (Rs 500 million) for a yoga ashram.

It plans to spend Rs 300 crore (Rs 3 billion) to set up a university.

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Pitfalls and transparency

Yet, such branding has pitfalls.

A Crisil report on the term loan facility of Patanjali Yogpeeth Trust (Patanjali) says the trust continues to reflect uncertainty in revenue streams and funding, besides dependence on Ramdev and his mass following.

These weaknesses are partially offset by the benefits it derives from Ramdev's established position as a yoga guru.

Movement of funds and transparency remain as challenges.

Maintaining a 'stable' outlook, Crisil says Patanjali will continue to be vulnerable to the level of donations over the medium term.

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The outlook may be revised to 'positive' if there is more transparency in policies related to the expected movement of funds among the various trusts under the management, says Crisil.

The outlook may be revised to 'negative' if the "trust's financial risk profile deteriorates on account of considerable outflow of funds to other trusts or if it contracts large debt to fund capital expenditure."

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In fact, Patanjali's operating income is estimated to have declined to Rs 50 crore (Rs 500 million) in 2009-10 (financial year April 1 to March 31) from Rs 69.90 crore or Rs 699 million in 2008-09 because of lower donations from related trusts and fewer yoga camps organised by Ramdev during the year.

"If babas and swamis are willing to become brand ambassadors, then obviously there will be a large number of devotees who will follow their advice.

"However, I think by doing this they will be seen as commercialising their image, which will have a negative effect," said advertisement guru Alyque Padamsee.