Evaluation of child promo items for Harpic consumer

promotions

by

Mehra Arjun Arun

10P029

Management Development Institute

Gurgaon 122 001

June, 2011

Evaluation of Child promo Items for Harpic Consumer

Promotions

by

Mehra Arjun Arun

Under the guidance of

Shri Gunjan Khetan

Brand Manager, Harpic

Reckitt Benckiser India Ltd

Management Development Institute

Gurgaon 122 001

June, 2011

Executive Summary

In this project we have a dual objective. In the first part of the project we look to identify a

promotional item for Harpic Consumer promos. This item should be a strategic fit with the

parent brand and should achieve sales lift targets.

We progress by evaluating the item with respect to several parameters.

In the final lap of this part, we negotiate with vendors to decide the item that should be

given free with Harpic.

In the 2nd part of the project, we look to roll out a 123 communication campaign for Harpic

across 6 metros. Due to decisions beyong my control, this part has been delayed.

Table of Contents Introduction: .............................................................................................................................. 5

Part 1: Evaluating child promo items for Harpic promos .......................................................... 5

Problem formulation: ............................................................................................................. 5

Objective: ............................................................................................................................... 6

Project brief: ........................................................................................................................... 6

Phase 1: Scanning the environment ...................................................................................... 8

market visits: ..................................................................................................................... 8

Observations from the market visit: .................................................................................. 9

Competitor Mapping: ....................................................................................................... 12

Exploring the previous offerings of Harpic: ...................................................................... 13

Phase 2: Consumer Insights ................................................................................................. 14

Methodology: ................................................................................................................... 14

Primary Research: ............................................................................................................. 14

Learnings from Phase 2: ................................................................................................... 21

Phase 3: Evaluation .............................................................................................................. 22

Pre-evaluation .................................................................................................................. 22

Top 20 options .................................................................................................................. 28

Top 14 offerings: ............................................................................................................... 29

Top 7 offerings: ................................................................................................................. 31

From 7--> 3 offerings

Consumer Survey: ........................................................................................................... 31

Findings from Survey: .................................................................................................... 34

Recommended Offerings: ................................................................................................. 38

Pril utensil bar on 500ml SKU ........................................................................................... 38

Scotch Brite floor cloth on 750ml SKU ............................................................................. 38

Negotiations: .................................................................................................................... 38

Pril Utensil bar ................................................................................................................. 39

Scotch Brite Floor Cloth: ................................................................................................ 41\

Final Recommendations

Evaluating child promo items for Harpic promos

Introduction: As discussed in the blueprint submitted earlier, I have approached this project in 3

phases.

In the following pages, I will discuss the study of the three phases in depth.

Problem formulation:

Harpic, the leading brand for toilet cleaning (also known as lav care) in India had

witnessed phenomenonal growth in recent years beginning early 2000s. Launched

in India in 1984, Harpic created the product category 25 years ago. Being the pioneer

in the Toilet cleaner market commanding a share of 75%, the brand growth has

paralleled the growth of the toilet cleaner product category in India.

The heady growth seen by this product category 2002 onwards had attracted the

attention of the competition which had started to become very active and gave

much more focus to their products and marketing efforts. Fresh competition from

international players in recent times has also made its entry in the promising Indian

home cleaning care market.

(Source: www.rb.com)

Competition, especially from private labels is keeping Harpic on its toes.

In the past two years, Harpic has provided only two promo offers: 40% extra free and

Dettol Skincare soap free. Although, both of these have been reasonably successful,

the company is on the lookout for fresh ideas that could provide a higher sales lift.

Objective:

The Objective of my project is precisely this.

The key deliverables of the project are:

1. Evaluate various promo items (Not soap or volume free) for Harpic

2. Recommend promo items basis sales uplift and strategic fit

3. Negotiate with vendors for final costings on the top 3 items

Project brief:

At the outset, I was given a briefing by my guide. I was informed that I need to identify and

evaluate an item free for the following promos:

SKU Harpic Power 500ml

No. of units on which promo will be run 50Lakh-60Lakh units

Cost of item free Rs. 8 per unit

Channels All(Modern Trade and Traditional Trade)

Geography All India

Table 1: Project brief

SKU Harpic Power 750 ml

No. of units on which promo will be run 3 Lakh-4 Lakh

Cost of item free Rs. 14

Channels All

Geography All India

Before we proceed, there are a few relevant terms that need to be clarified at this stage.

What are consumer sales promotions?

Sales promotion is one of the four aspects of promotional mix. (The other three parts of the

promotional mix are advertising, personal selling, and publicity/public relations.) Media and

non-media marketing communication are employed for a pre-determined, limited time to

increase consumer demand, stimulate market demand or improve product availability.

Examples include contests, coupons, freebies, loss leaders, point of purchase displays,

premiums, prizes, product samples, and rebates

Sales promotions can be directed at either the customer, sales staff, or distribution channel

members (such as retailers). Sales promotions targeted at the consumer are called

consumer sales promotions. Sales promotions targeted at retailers and wholesale are called

trade sales promotions. Some sale promotions, particularly ones with unusual methods, are

considered gimmicks by many.

(ref Wikipedia: http://en.wikipedia.org/wiki/Sales_promotion)

What are the different types of Consumer sales promotions offered at RB?

At Reckitt, there have been three types of promotional offerings:

Volume free: Giving extra quantity free in the pack. Most recently observed at Reckitt was

40% extra free on 500ml Harpic Power SKU.

Price-off/Discount: A discount off a pack.

Item free: Giving a free gift to the customer with every purchase. This item can be an in-

house item or an item of another company.

These offerings are made across 1 or more marketing channels.

What are the different marketing channels?

Primarily, there are two marketing channels at RB. These are known as Modern Trade and

Traditional Trade.

As the name suggests, Modern Trade includes modern retail outlets and standalones. Stores

such as Big Bazaar, Spencers, Easy Day, and several standalones such as SRS Bazaar, Sangam

Bazaar are included in this channel

The other channel, known as traditional trade caters to kirana stores.

What is a promo item?

A promo item is essentially an item free that may be an in-house product or an external

product that is used in consumer sales promotion.

Examples include pasta free with ketchup or exam starter kit free with Chocos.

By child promo item, do we mean a promo item for children?

No. To understand this, let us consider an example:

Suppose Lizol is given free with Harpic. In this case, Harpic is known as the parent item and

Lizol is referred to as the child item. A child promo item has nothing to do with children.

Now, that we have gained some understanding on important terms, let us get straight to

each phase of part 1 of the project.

Phase 1: Scanning the environment

My first step in the project was to scan the environment. The objective of scanning the

environment was:

To explore the various offerings in the market across products, across all channels

To do a competitor mapping

To analyse the preferred option: volume free, item free or discount

To explore the previous offering of Harpic

Start of phase 1: 4th April 2011

End of Phase 1: 13th April 2011

Towards this objective I made the following

market visits:

Market Visit 1:

Location: Madangiri Central Market, South Delhi

Day: Friday, 8th April, 2011

Time: 11.00 am to 4.00 pm

Guide: Mr. Surinder Mishra, DBSR, Affiniti Enterprises

Total stores visited: 25

Number of retail stores: 19

Number of wholesale stores: 6

Market Visit 2:

Areas visited: Sector 56, Sector 15

Malls/standalones:

Sangam Bazaar, SRS Bazaar, Easy Day

Day: Wednesday, 13th April, 2011

Time: 10.00am to 5.00 pm

Observations from the market visit:

A total of 38 item free offerings were explored in these market visits. The observations are

in the table below:

Table 2: Scanning the environment

Parent Item Child Item Fit

Gillette Mach 3 Razor Gillette foam Complementary

Surf Excel Blue(3kg) Bucket Complementary

Boro Plus Emami glycerine bar Complementary

Surf Excel Blue Comfort Complementary

Vatika Hair oil Gulabari cream Complementary

Lakme Sun Expert Dove Soap Complementary

Parachute Hair oil Head Massager Complementary

Boro plus Emami glycerine bar Complementary

Dabur Gulabari Neha Herbal Mehndi Complementary

Dettol Pump Dettol refill pouch Complementary

Vaseline Aloe Vera Dove Soap Complementary

Pond's magic talc Pond's Daily face wash Complementary

Sunsilk Shampoo Lux Bodywash Complementary

Mr. Muscle All in one cleaner Complementary

Kissan Orange Squash Water bottle complementary

Golden Time tea Steel Glass complementary

Haryali Tea Bone china glass complementary

Bajaj Almond Hair Oil Garnier Shampoo Complementary

Parachute Hair Oil Pantene Shampoo Complementary

Medimix soap Soap Dish Complementary

Sensodyne Toothpaste Vivel Soap Complementary

Sach Soap Parachute hair oil free Complementary

Alive coffee Hippo Snacks Complementary

Pasta Maggi Ketchup Complementary

Saffola Gold Oil Arise Basmati rice Complementary

Sundrop Oil Act 2 popkorn Complementary

Maggi Sauce Maggi Bhuna Masala complementary

Knorr Soup Soupy noodles complementary

Junior Horlicks Nursery rhymes CD Same TG

Junior Horlicks School starter kit Same TG

Boost Badminton racket Same TG

Dabur Red toothpaste School Kit Same TG

Horlicks cream biscuit Narnia tattoo Same TG

Horlicks Exam Starter kit Same TG

Mortein All insect killer Dettol pump Same TG

Vivel Soap Notebook Same Company

Harpic 500ml Dettol Soap same TG

Castrol Soaps No fit

Table 1: Item free offerings explored during market visit

27 of the 38 products above, made a complementary offering(child item is either of

the same category or aiding in the usage of the parent item).

That is 70% of the offerings explored.

Competitor Mapping:

Brand Offer Description SKU MRP Company Channel

Clean Home B1G1 Buy 1 get 1 free 500ml blue Rs. 65 Spencers All

Cleanmate Combo pack

Cleanmate(700ml) + care mate

handwash(250ml) = Rs. 89;save Rs.38 700ml blue 72/55 Future Retail All

Cleanmate Combo pack 2x500ml; save Rs. 38; 110---72 500ml blue Rs. 55 All

Cleanmate Discount Save Rs. 23 on 700 ml blue 700 ml blue Rs. 72 All

Domex Volume free 50% extra free on 500 ml pack 500ml blue 54 HUL All

Expelz B1G1 blue 500ml pack. MRP=Rs 55 500ml blue 55 Reliance Wellness Ltd All

Expelz Citrus Discount Save Rs. 16 on 500ml pack. MRP=Rs. 55 500ml citrus 55 Reliance Wellness Ltd All

Expelz ITC Combo pack 2 pack, Save Rs. 15 on combo ITC 30 Reliance Wellness Ltd All

Kiwi clean Discount 700ml blue; 67---48 700ml blue Rs. 67 Sara Lee All

Mr. Muscle Blue Volume free 40% extra free on 500 ml pack 500ml blue 55 SC Johnson All

Sani Fresh Combo Pack 2x500ml for Rs. 75. Save Rs. 29 500ml blue 52 Dabur All

Sani fresh Discount Save Rs. 10 52---42 500ml blue 52 Dabur All

Toilet cleaner Combo pack price off 2x500ml for Rs. 58 500ml blue 36*2=72 Bharti Walmart All Table 3: Competitor mapping

Observations:

Most of the offerings are combo packs of either another or same SKU of the same product

Cleanmate (private label of Future Retail) and Sani Fresh are probably the most dynamic

brand as far as offerings are concerned. They are giving more than one offer on the same

SKU in the same channel

I believe this gives more options to the consumer which is preferred

Cleanmate is the only brand that is offering another product in a combo pack. It is offering

Cleanmate 500ml and liquid Handwash in a combo pack with a price off.

All competitor offerings are traditional.

Exploring the previous offerings of Harpic:

Harpic Power

500ml

Channel Offering SKU offering Period

All 40% extra free Nov, Dec 2010

All Dettol Soap 70g SC free 70g SC soap Aug-10

All Dettol Soap 70g SC free 70g SC soap Mar-10

All 40% extra free Aug-09

All Dettol soap 70g free 70g original soap Jun-09

All Lizol 200ml citrus free 200ml citrus Jun-09

All EOB degreaser free worth Rs. 75 Jun-09

All 20% extra free Mar-09

MT buy 2 get 200ml free 200ml Harpic power Jan-09

MT Buy 2 get Rs.10 off Dec-08

Db Scrub free Oct-08

MT Buy 2 get Rs.10 off Aug-08

Db 20% extra free Jun-08

MT Lizol free on 2pc 200ml lizol Mar-08

All Dettol soap free 75gm Jan-08

Harpic Power 750

ml

Channel Offering SKU offering Period

MT Lizol 200ml free Lizol 200ml Feb-11

MT+gold accounts Harpic Pwr fragrance free Power fragrance 200ml May-09

MT+gold accounts Dettol SC soap free 75gm SC soap Feb-09

MT Vanish 120g free Sep-08

MT Rs.7 off Aug-08

Table 4: Previous offering of Harpic

Observations:

On Harpic 500ml Power SKU:

In the past 2 years, only 2 offerings have been provided with Harpic: Dettol soap free and

40% extra free

Two years prior to that (in 2008 and 2009), Harpic offered 11 different offers at quick

succession

Only 1 offer where the item free wasnt in-house(scrubber)

On Harpic 750 ml SKU:

Only one offering in the last two years

All offering have been made in the MT channel alone. This is done to align with the

consumption pattern of 750 ml SKU.

As far as consumer promotion offerings are concerned, there has been more emphasis on

the 500ml SKU than the 750 ml SKU. This is done keeping in mind the fact that 500ml is the

most preferred SKU amongst consumers(RB sales data)

Phase 2: Consumer Insights

In the next phase of my project, I look to understand the voice of the consumer. In my

understanding, as we are giving the offering to the consumer, it is necessary to understand

his preferences

For this purpose, I conducted a consumer survey. The process followed to achieve the end

objective is outlined below:

Methodology:

Primary Research:

Methodology:

Secondary Research to

support it

Apart from my organization guide as well as other seniors of the company, I also deliberated

with the Market Research Head of RB(South Asia) to finalize my hypotheses and the ensuing

questionnaire.

I personally administered the survey. As I was conducting the survey in modern retail outlets

as well as outside kirana stores, and since I wanted to reduce my time with each

respondent(which would allow me more respondents), I decided to use placards or posters

to aid my questions.

The photographs below depict the methodology followed

Framing the hypotheses:

The W5H Decision making model:

We knew where and when to run the promo. We were well aware of why and How we are

going to run the promo. However, What the item free will be and for whom was yet to be

decided.

Secondary Research indicated:

56% of the offerings on the shelves are item-free offerings

Sweepstakes are the next most frequented offering(10%)

Toiletries is the 2nd most frequently promoted product(14%)

Hypotheses:

Consumers prefer item free over volume free and discount

Promotional items that are complementary(aid in usage or same category)are preferred

over items for the consumers personal usage

The consumer is influenced by family members while purchasing toilet cleaners

Pilot Experiment:

Location: Reliance Mart, Gurgaon

Date:

Time:

No. of respondents: 17

Consumer Survey:

After reviewing the questionnaire , I set forth to conduct the final survey. I had a target of

100 respondents.

Locations for Modern Trade: Reliance Mart and Easy Day. Gurgoan

Location for Traditional trade: Sector-14 Gurgaon

Findings from survey:

Location Number of responses

Reliance Mart Gurgaon 48 MT

Easy Day Gurgaon 10

Sec-14 Gurgaon 42 TT

Total 100

Table 6: TG mapping of survey

In the above table, the yellow highlighted areas is the TG of Harpic and the green

highlighted area is that part of the TG that was covered in the survey. As it is

observed, the survey covered the entire range of the TG of Harpic(SEC A, B, and C)

Survey findings

Which of these offers do you thinkare most frequently offered bytoilet cleaners?

item free 9 9.00

volume free 68 68.00

discount 13 13.00

don't know 10 10.00

100

9%

68%

13%

10%

item free volume free discount don't know

Which of these schemes do youprefer with toilet cleaners?

Volume free 67 67.00

Item free 9 9.00

discount 13 13.00

indifferent/don't matter 11 11.00

100

67%9%

13%11%

Volume free Item free discount indifferent/don't matter

Hypothesis 1: Consumers prefer item free over volume free and discountNull Hypothesis: Consumers equally prefer item free, volume free and discount schemes

Conclusion: The null hypothesis cannot be rejected

Which item free would you desirewith a shampoo?

Soap 21 21.00

Hair Oil 54 54.00

Detergent 24 24.00

bindi pack 1 1.00

100

21%

54%

24%

1%

Soap Hair Oil Detergent bindi pack

Which item free would you desirewith tea?

tea cup 22 22.00

biscuits 62 62.00

cosmetic item/skin cream 15 15.00

soap 1 1.00

100

Which item would you desire freewith a toilet cleaner?

toilet brush 21 21.00

floor cleaner 63 63.00

cosmetic items/beauty creams 6 6.00

Detergent 10 10.00

100

22%

62%

15%

1%

tea cup biscuits cosmetic item/skin cream soap

21%

63%

6%10%

toilet brush floor cleaner cosmetic items/beauty creams Detergent

Hypothesis 2: Consumers prefer complementary items over items for their personal usageConclusion: Hypothesis 2 is accepted

Are you influenced by familymembers while purchasinghousehold items?

Yes 12 12.00

No 88 88.00

100

12.00

88.00

Yes No

Do you consult anybody whiledeciding the brand of toiletcleaners?

Yes 12 12.00

No 88 88.00

100

12.00

88.00

Yes No

With whom do you go shoppingfor cleaners most often?

Children 3 3.00

Spouse 18 18.00

parent 7 7.00

friends 6 6.00

alone 66 66.00

3%

18%

7%

6%

66%

Children Spouse parent friends alone

Hypothesis 3: Consumers are influenced by family members while purchasing toilet cleaners

Learnings from Phase 2:

Consumers prefer volume free over item free and discount

Consumers prefer complementary items as item free as compared to items for

personal use

Consumers are not influenced by their family members while purchasing toilet

cleaners

Toilet cleaner is a low involvement product

Consumer concern is on the functional aspect

Phase 3: Evaluation

The main tasks in this phase of the project are described below:

Pre-evaluation:

Parameters to decide item free: The intangibles and tangibles

Evaluating last 3 years promos of RB:

I went through the offerings of Reckitt Benckiser over the last 3 years. Specifically I

studied RB promos

Analysis of:

All RB consumer promo offers of last 3 years

2+1 offerings of RB

promo offerings of Harpic in last 3 years

The financial appraisals used to judge the effectiveness of any promo are essentially

of three types: combined ROI, PSI and PER

Combined ROI: D NR/D (TI +MKTG)

PSI (Promo Sales Index) - Promo NR / Base NR

PER (Promo Efficiency Ratio) - Promo GM/ Base GM

ROI= Return on investment

PSI=Promo Sales Index

PER= Promo Efficiency Ratio

D= absolute change in value

NR=Net revenue

GM= gross margin

Base values are the values before the promo is rolled out

The most successful promo for Lizol had been a scotch brite mop free. Scrubber free

with Harpic 500ml also occupied a top 3 position for its promos in the last 3 years.

This revalidated he hypothesis that complementary items are preferred by

consumers.

There were some very successful promo offerings such as Lizol+Harpic

(complementary).

There were also some child items which did not work with any parent irrespective of

the channel or the geography.

Consumer promos where item free was complementary

Harpic Power 500ml

Channel Offering SKU offering Period ROI PSI PER

All 40% extra free Dec -10 1.58 1.28 1.31

AllDettol Soap 70g SC free 70g SC soap Aug-10 4.23 1.68 1.42

AllDettol Soap 70g SC free 70g SC soap Mar-10 3.96 1.64 1.65

All 40% extra free Aug-09 2.08 1.26 1.30

AllDettol soap 70g free 70g original soap Jun-09 6.01 1.74 1.80

AllLizol 200ml citrus free 200ml citrus Jun-09 3.43 2.23 2.32

AllEOB degreaser free worth Rs. 75 Jun-09 1.93 2.78 2.89

All 20% extra free Mar-09 1.91 1.20 1.24

MTbuy 2 get 200ml free

200ml Harpic power Jan-09 2.16 1.38 1.42

MTBuy 2 get Rs.10 off Dec-08 16.41 1.33 1.40

Db Scrub free Oct-08 4.05 1.69 1.72

MTBuy 2 get Rs.10 off Aug-08 15.28 1.79 1.79

Db 20% extra free Jun-08 4.36 1.33 1.36

MT Lizol free on 2pc 200ml lizol Mar-08 2.32 1.52 1.55

All Dettol soap free 75gm Jan-08 2.92 1.52 1.55

Same 2 offerings over

the past 2 years

Moderately successful

10 different

offerings in 2 years

Only offering not of RB

In the top 10 offerings

Discussion with cross promotion agencies

Outcomes of discussions

Agencies had experience of this scale and reach

Useful in narrowing down options

Exposed to a wider range of offerings

Network of other company representatives

Identifying the pros and cons of doing cross promotions through an agent

Pros and Cons of using a cross promo agency:

Recommendations for using cross promo agency:

Top 20 options

Based on these discussions and the budgeted cost, I arrived at a list of 20 options to

consider:

Based on the intangibles discussed earlier, 6 options were rejected and we narrowed down

to 14 options

Top 14 offerings:

Assessing the top 14 offerings:

At this stage, we had a list of 14 petential offerings. Our next objective was to

shortlist the top 7 offerings.

Basis of Assessment:

Perceived value of item free

Frequency of purchase of item free

Expected Reach

Competitors product

The following table shows the assessment conducted. The red highlighted options

are those that were rejected.

Top 7 offerings:

We have narrowed down to 7 options as an item free with Harpic.

To choose the top 3 offerings, I decided to go back to the consumers and capture

their opinion on their favoured options.

From 7 offerings 3 offerings

Consumer Survey:

Methodology:

The offerings were physically displayed to the respondents. The survey was conducted

home to home as well as in Modern Trade outlets.

The break-up of the responses is shown below:

TG Mapping:

Illiterate

School

upto 4

years

School 59

years

SSC/HS

C

Some

college

but not

graduate

Graduate

/Postgra

duate

general

Graduate

/Post

Graduate

professio

nal

Unskilled E2 E2 E1 D D D D

Skilled Workers E2 E1 D C C B2 B2

Petty traders E2 D D C C B2 B2

Shop Owners D D C B2(4) B1(1) A2(1) A2Businessmen with No

employees D C B2 B1(2) A2 A2 A1Businessmen with 1-9

employees C B2 B2 B1(2) A2 A1 A1Businessmen with 10+

employees B1 B1 A2 A2 A1 A1(4) A1

Self Employeed professional D D D B2 B1 A2 A1

Clerical/Salesman D D D C(5) B2(4) B1 B1

Supervisory Level D D C C(4) B2(5) B1 A2

Officers/Executives-Junior C C C B2(3) B1(10) A2(24) A2(15)Officers/Executives-

Mid/Senior B1 B1 B1 B1(4) A2(5) A1(10) A1(15)

The blocks in green indicate the SEC classification of the respondents covered in the survey.

The yellow blocks show the TG of Harpic.

The numbers in brackets are the number of respondents in each SEC.

Respondents were asked to rank their top 3 offerings

The influence of MRP of the item free was checked

Findings from Survey:

75% respondents considered Pril Utensil Bar in their top 3 offerings

65% respondents considered Scotch Brite in their top 3 offerings

DLS was a top 3 offering for 65% of the respondents

This is shown in the pie-chart below:

Respondents were asked to Rank their top 3 offerings.

28% respondents considered Pril as their No. 1 offering

An equal number considered Scotch Brite as their No.1 offering

36% considered Pril as their 2nd most favoured offering

DLS and Scotch Brite were a distant second with only 20% respondents considering

wither of these offerings as their 2nd best option

It emerged that maximum respondents(23%) considered the lucky draw option(Trip

+Scrubber) as their 3rd best offering

Pril did not emerge even as a runner up here, with Scotch Brite and DLS being

preferred by an equal number of respondents(19%)

From the findings, I calculated a weighted average rank of the offerings. This is

shown in the table below:

As observed Pril had the lowest average rank or in other words was the most

preferred offering.

The other question that emerges is why did respondents choose thes options?

This was assessed as well in the survey. The findings are shown below:

Are consumers influenced by MRP?

NO

61% of respondents were not aware of the MRP of the item free and did not make a

choice based on the MRP of the item free

Recommended Offerings:

Pril utensil bar on 500ml SKU

Daily Use Product

A new offering for Harpic

Most preferred offering according to consumer survey

It has a lower MRP. Negotiable at the lower budgeted cost

Since the 500ml SKU is driving sales revenue, the more exciting offering should be

offered on the 500ml SKU

Scotch Brite floor cloth on 750ml SKU

Higher MRP, so negotiable at the budgeted cost

2nd most preferred offering by consumers

Negotiations:

Procedure for negotiating with the company:

Pril Utensil bar

Product of Henkel India

SKU: 380 gms utensil bar

MRP: Rs. 21

Budgeted cost: Rs.8

For this purpose I directly negotiated with R. Venkitachilam, the Head of Corporate

Sales at Henkel India

Although this promo offer was to run on 60 lakh units, I began by considering 30

Lakh units only. This would allow me a buffer of 30 Lakh units later incase

negotiations did not pan out as per our expectations.

The details of the promo offer were communicated to Venkat:

Promo to run All India in All channels

Promo to run tentatively in October-November

Long term association desired

The benefits of reach and recall by associating with Harpic were reiterated

Budgeted Cost: Rs. 7

First Quote:

At this stage, It was discovered that Pril 380gms was considered as an item free with Robin

Blue(an RB product) the previous year at a base price of Rs.12.75

This was used to put pressure on Venkat to bring down his quote further. The long term

benefits of reach and recall was also reiterated.

2nd Quote:

At this juncture, I had the option of applying more pressure by using the buffer quantity of

30 lakhs.

Further negotiations

I had four options as shown below:

After taking advice from my guide and other seniors, I chose option A.

Venkat was compelled to further reduce his price:

Revised Quote

He revised his quote as follows:

As this too wasnt close to our requirements, we decided to negotiate on a special

SKU of Pril specifically for this promo.

What emerged was:

Pril 225 gms utensil bar at a price of Rs. 8.25 landed

Pril 250 gms at a price of Rs. 9.20 landed

My objective was fulfilled and I forwarded all the quotes to the costing

department.The finer details of the negotiations would be worked out by them.

Scotch Brite Floor Cloth:

I contacted Keshav Kumar, the Marketing Manager at 3M as well as Abhijit Ghone,

the Product Category Manager of Scotch Brite. A brief-up on the discussions and

what emerged:

Discussed broad findings of my research

Communicated benefit in reach and recall for 3M

No positive response. Their claim was that there was no fit between Harpic and a floor cloth

Plan B:

As Scotch Brite was the only recognized brand of floor cloth, we didnt have the

option of considering another brand of floor cloth. Instead, we decided to make our

own floor cloth. It would be similar in make to Scotch Brite floor cloth but would carry

the Harpic Logo instead.

The following vendors were contacted for this purpose

Sara Brushware Pvt. Ltd

Quote:

Rs. 16

Including abrasive

No logo

50cm x 55cm

Revised quote:

After rounds of negotiaiotns, I was able to bring Sara Brushwares quote down from Rs.16 to

Rs.12.

I also got a range of 16 options with quotes we could consider for the final offering.

Floor cloth1: Cotton cloth Size 50cm x 55cm

Floor cloth 2: Cotton cloth Size 40cm x 45cm

Abrasive: fiber

HL1: tag

HL2: woven small(3in x 1 in)

HL3: woven big(5in x 2in)

Quotes of other vendors:

Scotch Brite floor cloth was running a consumer promo on the Lizol 500ml SKU.

This was used as a barometer to judge the price effectiveness of the other vendors

These quotes were within our stipulated budget and were communicated to the costing

department for further discussions.

Compiled recommendations:

What?

o The Item free Should be a complementary offering

o Recommended item free:

o Harpic 500ml: Pril Utensil Bar 380gm

o Harpic 750 ml: Harpic Floor cloth

o 2+1 offering with DLS can also be explored

o Who?

o Low involvement product

o Minimal family influence not for family member

o Not for personal usage

Who?

o Low involvement product

o Minimal family influence not for family member

o Not for personal usage

How?

o Evaluation

Intangibles: Complementary item,(x)family member, (x) personal use,

Strategic fit

Tangibles: ROIPSIPER

Perceived value, competitors product and other misc

o Execution

Cross promo agencies when

unitsRB

Short term association desired

Why?

o Private Label threat looming large

o Big Bazaar sells more cleanmate in its stores than Harpic

o Dynamic consumer promo offerings

o In comparison Harpic has made only two offerings in last 2 years

Annexure:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

1 Do you purchase toilet cleaners?

Yes 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 17

No

2

Which of these offers do you

think are most frequently

offered by toilet cleaners?

item free

volume free 1 1 1 1 1 1 1 1 1 1 1 11

discount

don't know 1 1 1 1 1 1 6

3

Which of these schemes do you

prefer with toilet cleaners?

Volume free 1 1 1 1 1 1 1 1 1 1 1 11

Item free 1 1

discount

indifferent/don't matter 1 1 1 1 1 5

4

What is the last promotional

item scheme for toilet cleaners

that you can recall? x x x x x x x x x x x x x x x x x

5

Which of these promotional

offers have you not seen in the

market? x x x x x x x x x x x x x x x x x

6

Which item free would you

desire with a shampoo?

Soap 1 1

Hair Oil 1 1 1 1 1 1 1 1 1 1 1 11

Detergent 1 1 1 1 1 5

bindi pack

7

Which item free would you

desire with tea?

tea cup 1 1 2

biscuits 1 1 1 1 1 1 1 1 1 1 10

cosmetic item/skin cream 1 1 1 1 4

soap 1 1

8

Which item would you desire

free with a toilet cleaner?

scrubber

floor cleaner 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 17

cosmetic items/beauty creams

Detergent

9

Are you influenced by family

members in your purchase

decision?

Yes 1 1 1 3

No 1 1 1 1 1 1 1 1 1 1 1 1 1 1 14

10

Do you consult anybody while

deciding the brand of toilet

cleaners?

Yes 1 1 1 3

No 1 1 1 1 1 1 1 1 1 1 1 1 1 1 14

11

If yes, who do you consult most

often?

Mother 1 1 1 3

spouse

children

friends

other

12

With whom do you go shopping

for cleaners most often? 0

Children 1 1 2

Spouse 1 1 1 3

parent 1 1 2

friends 0

alone 1 1 1 1 1 1 1 1 1 1 10

0

13

Can you recall the last item free

you received for yourself?wgat

was the product 0

Yes 1 1 1 1 4

No 1 1 1 1 1 1 1 1 1 1 1 1 1 13

Product Vim Pan

ten

e

Dav

at

Rice

(1+1

free

)

Gille

tte

razor

(free

blad

e)

Sun

dro

p +

mu

star

d

oil

fre

e

Kiss

an

squ

ash

+

bott

le

free

dett

ol

with

harp

ic

Niv

ea

crea

m

1 1 1 1 1 1 1 1 8

Questionnaire:

Do you purchase toilet cleaners?

Yes

No

Which of these offers do you think are most frequently offered by toilet cleaners?

Item free

Volume free

Discount

Which of these promotional schemes do you prefer with toilet cleaners?

Extra volume free

Buy one get one free(same or different item)

Discount scheme: eg. Rs.10 off

4. What is the last promotional item scheme for toilet cleaners that you can recall?

5. Which item free would you desire with a shampoo?

Soap

Hair oil

Detergent

Breakfast cereal

6. Which item free would you desire with tea?

Tea Cup

biscuits

Hair oil

Soap

7. Which set of products would you prefer free with a toilet cleaner?

Scrubber

Floor cleaner

Cosmetic item/creams

Detergent

8. Are you influenced by family members in your purchase decision?

Yes

No

9. Do you consult anybody while deciding the brand of toilet cleaners?

Yes

No

10. If yes, who do you consult most often?

Mother

Spouse

Children

Friends

11. Who do you go shopping for cleaners with most often?

Children

Spouse

Parent

Friends

Name:

Age:

Education:

Occupation: