godrej

A

PROJECT REPORT

ON

MARKETING RESEARCH

OF

RECENT TRENDS OF THE CONSUMER PRODUCTS IN THE

INDIAN MARKET

BY

DEBROOP PANDIT PHONE NO :09953955608

E-mail ID: [email protected] STUDENT OF I.I.P.M.( NEW DELHI)

ROLL NO:21 SECTION: FN-2

SUBMITTED

TO MR.TEJWANCH SINGH BEDI(SIR)

MR.KALIKINKAR ROY CHAWDHARY(SIR) MR.ARVIND MIDDHA(SIR)

2

RECENT TRENDS OF THE CONSUMER PRODUCTS IN THE INDIAN

MARKET

By

Debroop Pandit Management trainee

GODREJ CONSUMER PRODUCTS LIMITED SECTOR-5 ,SALT LAKE CITY

3

ACKNOWLEDGEMENT

I would like to express my gratitude to our respected seniors to give us the privellege to do report work on consumer products. I am deeply indebted to our MR. TEJWANCH SINGH BEDI(SIR), MR. KALIKINKAR ROY CHAWDHARY(SIR), MR. ARVIND MIDHA(SIR) whose help, stimulating suggestion and encouragement helped me in all time of work. I would also like thank my seniors who has also stimulate me in finding real field data which leads me not only to complete it but to give the project a competitive edge.

By

Debroop Pandit

4

INDEX .

• INTRODUCTION:ORGANISATION GROUP PROFILE - COMPANY OUTLOOK………………………………………………………. 6

• BRANDS ASSOCIATED BY GODREJ………………………………………. .7 • FEW BRANDS REVIEW WITH PERFORMANCE

-RENEW………………………………………………………………………… 11 -NO.1……………………………………………………………………………. 16 -EXPERT………………………………………………………………………... 18 -CINTHOL………………………………………………………………………. 20

• PERFORMANCE HIGHLIGHTS CONSOLIDATED -FINANCIAL HIGHLIGHTS………………………………………………….... 23 -FINANCIAL OVERVIEW…………………………………………………….. 25

• BUSINESS REVIEW……………………………………………………………. 26. • OPERATIONS…………………………………………………………………... 32 • KEY INITIATIVESQ2……………………………………………………………33 • GCPL STANDALONE FINANCIAL & RATIOS

-FINANCIAL HIGHLIGHTS…………………………………………………… 35 -SALE MIX…………………………………………………………………….. 36 -COST STRUCTURE…………………………………………………………… 37 - FINANCIAL OVERVIEW……………………………………………………. 39

• INTERNATIONAL OPERATIONS………………………………………….. 40 • BRAND PORTFOLIO………………………………………………………… 49 • FUTURISTIC OUTLOOK……………………………………………………. 64 • QUESTIONNAIRE…………………………………………………………….. 70 • BIBLIOGRAPHY……………………………………………………………… 79

---------------------------------------

5

ORGANISATION’S GROUP PROFILE

6

COMPANY OUTLOOK: INTRODUCTION

Started in 1897 as a locks manufacturing company, the Godrej Group is today one of the most accomplished and diversified business houses in India. Godrej's success has been driven by the company's commitment to delivering innovation and excellence. Through the consistent application of this commitment and a century of ethical business conduct, Godrej has earned an unparalleled reputation for trust and reliability.

In 1930, Godrej became the first company in the world to develop the technology to manufacture soap with vegetable oils; that spirit of innovation has continued throughout the organization's history. Today Godrej is delivering consumers exciting innovations across a spectrum of businesses. The company's pursuit of excellence is equally well established and enduring. In the 1944 Mumbai docks blast, Godrej safes were the only security equipment whose contents were unharmed; an equal level of product quality continues to be expected from every product bearing the Godrej brand name. Godrej management understands that the company's greatest asset is the trust and faith that consumers have reposed in it, and recognizes that the company must continue to earn this trust. This translates to the organization delivering outstanding quality and value in everything it does.

Godrej's ethical and visionary practices have allowed the company to successfully expand into a number of businesses. Today Godrej is a leading manufacturer of goods and provider of services in a multitude of categories: home appliances, consumer durables, consumer products, industrial products, and agri products to name a few. A recent estimate suggested that 350 million people across India use Godrej products. The group has more recently entered the real estate and information technology sectors, and management views these as avenues for enormous growth.

The Godrej Group stands in a strong position today. With annual sales in excess of $1 billion, a workforce of approximately 18,000, and a strong diversified portfolio, Godrej has proven its ability to deliver strong financial performance.

7

BRANDS ASSOCIATED BY

GODREJ

8

WHAT ARE THE ASSOCIATED WITH ????

Godrej Consumer Products Ltd.(GCPL) is a major player in the Indian FMCG market with leadership in personal, hair, household and fabric care segments. The company employs 950 people and has three state-of-the-art manufacturing facilities at Malanpur (M.P.) Guwahati (Assam) and Baddi ( H.P.).

Their focus is on providing our customers with innovative, value for money solutions for meeting their daily needs and improving the quality of their life. This is achieved through the brands the company markets.

They are among the largest marketer of toilet soaps in the country with leading brands such as CINTHOL , FAIRGLOW , GODREJ NO 1 . Their FAIRGLOW brand, India's first Fairness soap, has created marketing history as one of the most succesful innovations.

They are the leader in the hair colour category in India and have a vast product range from GODREJ RENEW COLOURSOFT LIQUID HAIR COLOURS, GODREJ LIQUID & POWDER HAIR DYES to GODREJ KESH KALA OIL, NUPUR based Hair Dyes.

Their Liquid Detergent brand EZEE is the market leader in its category.

They are also the preferred supplier for contract manufacturing of toilet soaps be some of the most well-known brands in the country.

They are supported in our endeavour by a state-of-the-art Research Centre based in Mumbai.

Their quality products have been recieved very well in the international market and they are present in more than -- countries across the world.

They are an Equal Opportunity Employer and offer very rewarding career opportunities to people who join them.

They have adopted the Total Quality Management system and our factories have recived ISO certifications.

Established in 1990 by Brian Boyce and Vicki Dryden Wyatt, Keyline Brands Ltd was acquired by the Godrej Group in October 2005. Keyline operates in the toiletries and personal care sector, and its portfolio includes a number of important niche brands, some of which are household names such as Cuticura, Aapri, Erasmic and Nulon.

9

Godrej Consumer Products Ltd. (GCPL) acquisition of the South African business of Rapidol, U.K. as well as its subsidiary Rapidol International gives the company ownership of strong ethnic hair colour brands like ‘INECTO’ and ‘SOFLENE’ in ten countries. It also gives GCPL an opportunity to enhance its global presence through the Modern Trade Network and the ownership of customer listings of the INECTO and SOFLENE brands.

Godrej Consumer Products Ltd. (GCPL), one of India's leading Fast Moving Consumer Goods (FMCG) companies acquired Godrej Global Mideast FZE on October 1, 2007.

Godrej Global Mideast FZE is a 100% subsidiary of Godrej International Limited. It was established in Sharjah with the objective of distributing Godrej FMCG products in the Middle East. It has a strong network of distributors and sales personnel in countries such as Oman, Saudi Arabia, Kuwait and Bahrain.

Godrej SCA Hygiene Limited is a Joint Venture Company between SCA Hygiene Products AB, Sweden, (SCA) and Godrej Consumer Products Limited (GCPL) It will manufacture and market paper based absorbent hygiene products, specifically sanitary napkins and baby diapers, in India, Nepal and Bhutan. SCA and Godrej Consumer Products Limited will be equal partners in the Joint Venture.

10

FEW BRANDS REVIEW WITH PERFORMANCE

11

Renew cream hair colour is a breakthrough formulation from the Godrej Hair Care Institute, a centre dedicated to the art and science of hair care in India. The renew cream hair colour is specially designed to give vivid colours on Indian hair so that The new Renew conditions your hair, not once but twice. Thus you get twice the shine and softness.

New Renew cream hair colour contains Aloe + Protein conditioners that protect and revitalise your hair while you colour it. The special after colour conditioner provides nourishment and moisture to your coloured hair, giving it a healthy shine.

Renew transforms your hair and personality effortlessly. The rich, non-drip formulation is so easy to apply that it makes hair colouring a real pleasure. Renew spreads evenly on your hair to give a rich attractive colour all over that lasts for a long time.

Renew cream hair colour is available in two sizes. 50ml priced at Rs. 65 (after a price discount of Rs. 15) and the new 20ml pack priced at a never before Rs. 35 (after a price discount of Rs. 5).

The bigger pack is sufficient for colouring shoulder length hair and offers a range of attractive shades viz. Natural Black, Natural Brown, Burgundy, Light Brown, Light Golden Brown and CINNAMON RED (New shade).

Renew 20ml is specially formulated for men and women with short hair. The new Renew 20ml pack is also ideal for touch ups. This means that you use and pay only for the quantity that you require. Now that’s a great colour at a great value. The 20ml pack is available in popular colours – Natural Black and Burgundy. About Godrej Hair Care Institute (GHCI)

The Godrej Hair Care Institute is dedicated to the art and science of hair care. Set up by Godrej Consumer Products Ltd. (GCPL), the leaders in the hair colouring business in India, GHCI’s key objectives are to; Promote the cause of hair care in India, Develop products to meet the unique needs of Indian consumers, Bring international quality products within easy reach of Indian consumers, Break attitude barriers, Change perceptions and create an understanding in

12

the consumer about hair care and Provide a knowledge base and hands-on experience to Indian professionals through world-class hair care educational programmes.

Renew Highlights:

Renew Highlights is a breakthrough formulation from the Godrej Hair Care Institute, a centre dedicated to the art and science of hair care in India. Renew Highlights is a specially formulated kit that can give vivid highlights on Indian hair so that it enhances your personality. It can also be used on previously coloured hair.

The special after colour conditioner provides nourishment and moisture to your coloured hair, giving it a healthy shine.

You can use it at home without the hassles of going to a salon. Renew Highlights transforms your hair and personality effortlessly. The rich, non-drip formulation is so easy to apply that it makes hair highlighting a real pleasure.

Renew Highlights is available in 2 vibrant shades – Blonde and Red. The product is so versatile that you can get a range of shades from a dramatic look to a subtle look by varying the time. Thus you can easily get the look that you desire. You can vary the timings to get a range of shades from Luminous Copper to Vivid Gold through the Blonde Highlights kit and from Red Burgundy to Vivid Red Streaks through the Red Highlights Kit.

Renew Highlights is available at an unbelievable price of Rs. 125.

“From just wanting to camouflage grey hair, colouring has evolved to a fashion and grooming accessory. There is growing awareness and appeal of different techniques of enhancing hair. The launch of Renew Highlights now offers the convenience of highlighting one’s hair within the comforts of your home. Its attractive price point of Rs. 125 will allow consumers all over the country and from all socio-economic backgrounds to transform their hair and personality in a jiffy.”

All Renew Hair color Products:

Renew Powder Hair Colour

• Uses Water as its developer. • Easy to apply and does not drip. • Gives natural colour to hair from root to tip. • Ensures 100% grey coverage

13

Renew

• a unique cream hair colour. • breakthrough formula from Godrej Hair Care Institute. • contains Aloe and Protein conditioners that protect your hair while you colour. • giving revitalized coloured hair that shines with health

15

Aloe Protein Conditioners

• a unique cream hair colour. • breakthrough formula from Godrej Hair Care Institute. • contains Aloe and Protein conditioners that protect your hair while

you colour. • giving revitalized coloured hair that shines with health.

Renew Highlights : Home use Kit for Permanent Highlights Renew Highlights gives you the perfect way to give an attractive streak to your persona.

• suitable for people of all ages • works on coloured as well as uncoloured hair • This specially formulated non drip product with an easy-to-use brush, gives your

hassle free application. • Available in unique shades – Red highlights and Blonde Highlights. • You can vary the time for which you keep the product on the hair, and get results that

you desire. • Red pack can give you a shade result from Red Burgundy streaks to vivid Red streaks. • Blonde pack can give you a shade result from Copper Brown streaks to Gold Blonde

streak.

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Godrej No.1, the flagship brand of Godrej Consumer Products Ltd., is now the largest selling Grade I Soap in India. Grade 1 is the highest quality standard laid down by the Bureau of Indian Standards (BIS). A Grade 1 soap is a soap which has a minimum TFM (Total Fatty Matter) content of 76% and also has the least number of additives, thus making it a pure soap. In a similar manner, depending on the TFM content and the level of additives present in the soap, they can be further classified as Grade 2, Grade 3 as well as Bathing Bars.

Requirement for Toilet soap as per IS : 2888 - 1983 (Clauses 4.4,6.3,1 &7.1)

Requirement for bathing bar as

per IS : 13498 - 1997

Characteristics Grade I Grade II Grade III Bathing Bar Total fatty matter

percent by mass, Min 76.0 70.0 60.0 40

Rosin acid, percent by mass, of total fatty

matter, Max 3.0 7.0 7.0 -

Free caustic alkali, as sodium hydroxide

(NaOH), percent by mass, Max

0.05 0.05 0.05 0.05

Matter insoluble in alcohol, percent by

mass, Max 2.5 5.0 6.0 -

Chlorides (as sodium chloride), percent by

mass, Max 1.50 1.50 1.50 -

Free carbonate alkali, percent by mass, Max 1.0 1.0 1.0 1.0

Lather 280 240 200 -

* Methods of sampling and test for soaps (second revision) + Bathing bar - Specification.

++ Synthetic surface active agent(% by mass) : 4 min

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Consumer Feedback:

-"The name of my Godrej product is Godrej No.1 Ayurvedic soap ( healthy skin ). By using this soap i feel my skin starts to glow and I think it also helps in cleaning my skin complexion. You product is very good.... -- Mohsina Khan (M.P.)

-"The True Natural Beauty" Godrej No.1 soap available in six fragrances is a wonderful product by Godrej.The soap lasts longer.Many soaps from Sunlight to Lifebouy have come in market but Godrej No.1 Sandal is a soap with difference. Congratulations to the R&D team of Godrej !!! -- Ghanshyam Bahadur Singh (U.P.)

- Hi I have been using your Godrej No.1 Sandal soap for some time now.I came to know the Goodness of this soap from my mother who has been using it for many years now. After constant use I have seen that your soap makes my skin soft and smooth. Thank u very much for discovering such a good product I will never stop using this soap. -- David Majhi (Hooghly)

-We lived in India for two years and its been a few years now since we left India. We miss India terribly. But the strangest thing is we miss your Godrej No.1- Sandal soap the most. We feel your product Godrej No.1- Sandal is the nicest soap we have ever tried. -- Bonne Wagenaar (Netherlands) -I used your Godrej No.1 Ayurvedic some for a month and felt the difference. I no more get pimples when I use this soap. Even my marks have reduced. I dont think I will ever be able to stop using this soap. -- Pushpa (Nagpur) - Godrej No.1 is really No.1 in my opinion. I have been using it for a long time and I am highly satisfied with this soap because of its good quality and reasonable price. -- Gaurav - Hi I have been using your No.1 sandal soap for quite some time now. Its a beautiful soap and not so costly as all the other soaps in the sandal variant. This soap is real value for money.. -- Mayura (Mumbai)

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Godrej powder hair dye, the flagship brand of GCPL and market leader in the hair of colourants has won the most trusted brand award, from reader’s digest in the colour category. About product: Godrej powder hair dye, is the world’s largest selling hair dye, trusted and used by millions everyday. With its decades of expertise and unparalleled understanding of Indian hair godrej expert now brings to you 5 experts benefits to get youthful looking hair. Experts benefits:

Colour lock formulation: It ensures uniform

color absorbtion in each strand of hair and gives you longer lasting 100% grey coverage.

Shampoo based dye: It helps in convenient and easy application of color. This dye spreads evenly through your hair right to its root and leaves your hair soft, young and natural.

No ammonia: It assures gentle and safe dying of your hair.

Nourishing conditioner:It makes hair luxury, soft, silky and shiny. Perfume: It gives you pleasant fragrance.

It is available in 2 convinient sizes- a 3gm sachet for men and 6gm sachet for women which is adequate for long hair. Facts:

• Every second 6 experts sachet are purchased in India . • If all sachets GCPL sold in year 2007-08 are lined up , they would more than

cover entire parameter of India . • If all experts cartoons GCPL were to be stacked the height would 300 times of

that Mt. Everest.

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Godrej researches spent decades in researching for hair color solutions to youthful looking hair. Researchers experienced understanding of the unique hair colouring needs of Indian men and women, they continuously strive to develop products and solutions that ensure youthful looking hair. It is their appreciation and trust that has propelled godrej expert to use by millions everyday. The expert offers consumers 5 benefits which ensures that your hair looks young and so that young at heart can also look young for longer. With its unique and innovative color lock formulation the color is absorbed uniformly in each and every strand of your hair thus ensuring a longer lasting 100% grey coverage. So godrej expert has unique solution to combat effectively and ensure 100% grey coverage. It is available in super convenient powder form with a wick presence in 22lakh outlets across the nation – so you can find right near you. When it comes to looking younger trust the expertise of godrej expert – expert solutions to younger looking you.

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Godrej Consumer Products Ltd. a major player in the Indian FMCG Market with leadership in the personal care, hair care and fabric care categories, today unleashed 24-hour Confidence with the launch of the new, improved and expanded Cinthol range of soap, talc and deo with Bollywood’s hottest hunk Hrithik Roshan as the new brand ambassador.

Cinthol the popular and much-loved brand of Godrej Consumer Products Limited (GCPL), now offers a Deo range of soaps, talc and deo sprays in three exciting fragrances - Classic, Cologne and Sport in a trendy new packaging. It also offers Cinthol fresh soap and Cinthol Regular soap with new exciting packaging. The eye-catching and vibrant packaging symbolizes a sense of adventure, zest and action.

Speaking at the launch, Mrs. Tanya Dubash, Executive Director and President (Marketing) Godrej Industries, said “The new Cinthol range is a result of research with consumers and stands for Confidence of Achievers who constantly strive to realize their aspirations without stopping. Cinthol give them 24-Hour Confidence and enables them to lead a “Don’t Stop Life”.

“Hrithik Roshan with his boundless energy and passion to excel was our obvious and most appropriate choice for Brand Ambassador. He exudes Confidence and doesn’t stop till he meets the high benchmarks he sets for himself.”

Cinthol Brand Ambassador, Hrithik Roshan added, “It’s an honour for me to be associated with a brand likeCintholwhich has such a strong legacy. As Cinthol is all about 24- Hour confidence, energy and a 'Don’t Stop' attitude it was very natural for me to associate with this brand. Its in perfect sync with my lifestyle & attitude”

The new Cinthol range brings 24-Hour Confidence through Active Deo Formula, which controls body odor, Powerful Dry Shield that absorbs sweat, Ultra Scent Technology for long lasting fragrance and Freshness that revitalizes you 24x7.

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The New Cinthol range will be available across the country at modern retail and other outlets and will be supported by high-impact advertising on television, print, out-door, on-line and radio.

In a significant move, Godrej Consumer Products Ltd is currently test-marketing ‘Cinthol Skin Stimulating Deo Soap’ in West Bengal and Gujarat. Depending on the consumer response, the company can going to plans a national roll-out of the new product in the near future.

Godrej aim to provide consumers with their new technological breakthrough soap that has skin-stimulating beads producing essential oil.

The company is also planning to beef up its distribution network by an additional 15 per cent—includes both urban and rural markets—within a year. At present, the company has around 2,000 distributors across the country.

Researches revealed that the company are also planning to extend our on-going customer relationship management (CRM) initiatives called ‘Collaborative Planning, Forecasting And Replenishments (CPFAR) to additional distributors in the near future. Thus, they will reduce our inventory levels by 10 per cent.”

They have also released an advertising campaign with a new tagline called ‘Get Ready’ to promote their existing product ‘Cinthol Lime Fresh’ in West Bengal and Gujarat. In the near future, they will be nationally rolling out an advertising campaign for this product as well.

Cinthol Lime Fresh is the largest urban lime soap brand and its psychographic research has revealed a high correlation with the vitality segment.

For the purpose, the company’s ad budget this year will grow by an additional 10 per cent, compared to the previous year.

According to experts, at present, Cinthol operates in three categories and its contribution to topline is soaps 92 per cent, talcum powders 6 per cent, and deodorants two per cent. The size of the total soap market is 4.2 lakh metric tonnes.

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Performance Highlights

Consolidated

23

PAT (Rs. Crore)

34.7 37.1

73.8 75.4

0

25

50

75

Q2 0809 Q2 0708 H1 0809 H1 0708

PBT (Rs. Crore)

42.8 43.7

91.5 87.9

0

25

50

75

Q2 0809 Q2 0708 H1 0809 H1 0708

PBDIT (Rs. Crore)

42.751.5

95.8103.6

0

25

50

75

100

Q2 0809 Q2 0708 H1 0809 H1 0708

Financial Highlights - Consolidated

Net Sales (Rs. Crore)

346.5274.0

708.1

560.3

75175275375475575675775

Q2 0809 Q2 0708 H1 0809 H1 0708

24

EPS (Annualised Rs.)

5.4

6.6

5.9

6.7

4.5

5.5

6.5

7.5

Q2 0809 Q2 0708 H1 0809 H1 0708

EVA (Rs. Crore)

19.6

29.9

45.5

59.9

0

10

20

30

40

50

60

Q2 0809 Q2 0708 H1 0809 H1 0708

Financial Highlights - Consolidated

14% 14% 16% 19% 8%

Q2 0708

10% 10% 13% 14% 8%

H1 0809

13% 13% 16% 18% 8%

H1 0708

10% Net Profit / 10% PAT / Sales 12% PBT / Sales 12% PBDIT / 7% A&P / Sales

Q2 0809 Consolidate

Ratios - Consolidated

25

FINANCIAL OVERVIEW (Consolidated)

Q2 FY2008-09 (July – September 2008) v/s Q2 FY2007-08 (July - September 2007) • Sales revenue (net of excise) increased by 26% to Rs. 346 crore from Rs. 274.0

crore

• Steep depreciation of the Rupee versus USD

• Board of Directors recommended an interim dividend of 75% and resulting in

total outflow of Rs 22.6 crore including dividend distribution tax

• Profit Before Tax (PBT) at Rs. 42.8 crore as compared to Rs. 43.7 crore

• PAT decreased by 6% to Rs. 34.7 crore from Rs. 37.1 crore

• EPS at Rs. 1.3 compared to Rs. 1.6 (Both figures not annualized)

HI FY2008-09 (April- September 2008) v/s HI FY2007-08 (April-September 2007) • Sales revenue (net of excise) increased by 26% to Rs. 708.1 crore from Rs.

560.3 crore

• Profit Before Tax (PBT) up 4% at Rs.91.5 crore as compared to Rs. 87.9 crore

• PAT decreased by 2% to Rs. 73.8 crore from Rs. 75.4 crore

26

Business Review - Domestic Q2 FY 2008-09

27

• Industry Scenario

– FMCG sector growth continues to be satisfactory – Strong GDP growth & good economic fundamentals – Vegetable oil prices high but show declining trend – Rupee weakened versus the USD

• The Company has one business segment in which it operates viz. Personal & Household Care

• GCPL Performance

Q2 FY 2008-09 Scenario: Domestic

(6%)

26%

Q2 ‘0809

GCPL Standalone (Sales Growth)

17% Hair Colours

17% Toilet Soaps

Q2 ‘0809

Industry Growth (AC Nielsen Off Take)

28

Sales Growth (Standalone)

Toilet Soaps (Rs. Crore)

183.4145.3

359.6308.1

050

100150200250300350400

Q2 0809 Q2 0708 H1 0809 H1 0708

Hair Colour (Rs. Crore)

41.9 44.5

104.196.8

0

25

50

75

100

Q2 0809 Q2 0708 H1 0809 H1 0708

Liquid Detergents (Rs. Crore)

4.4

2.8

6.0

3.9

012345678

Q2 0809 Q2 0708 H1 0809 H1 0708

Toileteries (Rs. Crore)

14.7 13.7

34.7

29.3

05

101520253035

Q2 0809 Q2 0708 H1 0809 H1 0708

29

Soaps - Revenue & Market Share

162.

81

117.

9

106.

7

124

145.

31

134.

08

124.

42

183.

29

183.

37

10.210.0

9.49.29.2

9.7

9.1 9.1

9.5

45

65

85

105

125

145

165

185

Q2 FY07 Q3 FY07 Q4 FY07 Q1 FY08 Q2 FY08 Q3 FY08 Q4 FY08 Q1 FY09 Q2 FY09

Reve

nue

Rs.

Cror

e

5

6

7

8

9

10

11

Mar

ket

Shar

e (%

)

Revenues Market Share

Market Share is % for Q2 08-09

30

Hair Colours - Revenue & Market Share

52.4

39.7

47.2

47.7

44.5

50.1

57.8

62.2

41.9

37.6

33.736.2

35.9

34.9

34.9 35.1 34.2

38.0

0

10

20

30

40

50

60

70

Q2 FY07 Q3 FY07 Q4 FY07 Q1 FY08 Q2 FY08 Q3 FY08 Q4 FY08 Q1 FY09 Q2 FY09

Rev

enue

(R

s. C

rore

)

20

22

24

26

28

30

32

34

36

38

40

Mar

ket

Shar

e (%

)

Revenues Mkt share


31

Liquid Detergents - Revenue & Market Share

3.14.42

2.83.9

27.9

28.7

31.2

1.561.11

4.4

5.36.68

80.2

85.481.078.5

77.175.6

82.080.781.879.8

70.668.1

80.1

0

5

10

15

20

25

30

35

Q2FY06

Q3FY06

Q4FY06

Q1FY07

Q2FY07

Q3FY07

Q4FY07

Q1FY08

Q2FY08

Q3FY08

Q4FY08

Q1FY09

Q2FY09

Reve

nue

(Rs.

Cro

re)

0

10

20

30

40

50

60

70

80

90

100

Mar

ket

Shar

e (%

)

Revenues Mkt share


32

OPERATIONS

DOMESTIC BUSINESS

Soaps

• Soap sales expanded by 26% to Rs. 183.4 crore from Rs. 145.3 crore during the quarter .

• GCPL continues to be the second largest toilet soaps player with a market share of 9.5% for

Q2 FY2008-09

Hair Colorants

• Launched a new range of colours, in ammonia free powder and liquids, under the ‘Godrej

Expert Hair colour’ brand

- Formulation incorporates colour balance technology which delivers a uniform

shade to every strand of hair

- Powder range is available in 4 shades –Gentle Black, Burgundy, Dark Brown

and Natural Brown each priced at Rs. 10 per sachet

- The liquid form is available in 3 shades – Gentle Black, Dark Brown and

Natural Brown.

• This offers a quality colour brand at an affordable price

• Overall market share of the Company stood at 33.7% for the quarter under review

Liquid Detergents

• Launched a new range of detergent, Ezee Bright and Soft

- Product possess a unique Colour Guard Technology which protects the colours

of the clothes

- Available in 3 sizes – 500 g pack, 200 g pack and 18 g sachet

Toiletries

• All offerings including the Cinthol range of talc and deo sprays and Godrej Deluxe shaving

cream continue to deliver strong growth

• New range of Cinthol Deo Sprays launched in compact 75ml bottles. Category endorsed by

popular Bollywood star and youth icon Hrithik Roshan

33

Q2 Highlights

Key initiatives during Q2 FY 0809

• Soaps – Market share for Q2 FY 0809 is 9.5 %.

– Cinthol Deo Musk Soap Launched

– Price Increase effected

• Hair Colours – Market share for Q2 FY 0809 is 33.7%.

– Godrej Expert Hair Powder Hair Colour launched in 4 shades - Burgundy, Gentle black, Natural Brown & Dark Brown

• Liquid Detergents – Market share for Q2 FY 0809 is 77.1%.

– Ezee Bright & Soft Liquid Detergent launched with Colour Guard Technology for non woolen clothes

34

GCPL Standalone Financials & Ratios

35

PAT (Rs. Crore)

32.3 33.7

66.5 69.5

0

25

50

75

Q2 0809 Q2 0708 H1 0809 H1 0708

PBT (Rs. Crore)

37.6 38.7

77.0 79.0

0

25

50

75

100

Q2 0809 Q2 0708 H1 0809 H1 0708

PBDIT (Rs. Crore)

34.044.9

74.6

91.7

0

25

50

75

100

Q2 0809 Q2 0708 H1 0809 H1 0708

Financial Highlights - Standalone

Net Sales (Rs. Crore)

259.0210.3

536.7

446.1

75

175

275

375

475

575

Q2 0809 Q2 0708 H1 0809 H1 0708

36

Sales Mix (Standalone)

Soaps71%

By-Prod's5%

Hair Colour16%

Toileteries6%

Liq. Dets2%

37

Cost Structure (Standalone)

100%

16%

2%

1%

19%

6%

2%

5%

49%

% of Sale

s

1.4

210.2

33.7

5.0

2.0

40.8

12.3

4.0

10.9

102.8

Q2 0708

100%

12%

2%

(2%)

17%

6%

2%

6%

58%

% of Sale

s

7.5

536.6

66.5

10.4

(10.5)

92.8

32.8

8.0

30.7

313.2

H1 0809

2% 7.9 1% 3.4 Depreciation

100%

16%

2%

1%

17%

6%

6%

51%

% of Sales

2.9

446.1

69.5

9.5

4.7

77.8

27.6

26.4

225.6

H1 0708

3.5 Other Total Income

100% 259.0 Net Sales

12% 32.3 PAT

2% 5.3 Provision for Taxation

(3%) (7.1) Interest & Fin. Charges

18% 47.1 Other Expenses

4% 10.7 Advertisement

6% 15.1 Staff Cost

60% 155.6 Materials Cost

% of Sales

Q2 0809

Amount in Rs. Crore

38

Ratios - Standalone

84%

59%

3.9

16%

16%

18%

6% 21%

Q2 0708

24%

22%

6.1

12%

12%

14%

6% 14%

H1 0809

87%

60%

4.1

16%

16%

18%

6% 21%

H1 0708

5.9 Fixed Asset /Sales Ratio

24% RONW

20% ROCE

12% Net Profit / Sales

12% PAT / Sales

15% PBT / Sales

4% 13%

A&P / Sales PBDIT / Sales

Q2 0809

39

FINANCIAL OVERVIEW (Standalone)

Q2 FY2008-09 (July – September 2008) v/s Q2 FY2007-08 (July - September 2007) • Sales revenue (net of excise) increased by 23% to Rs. 259.0 crore from Rs.

210.3 crore


• PAT at Rs. 32.3 crore compared to Rs. 33.7 crore in Q2 FY2007-08

• EPS at Rs. 1.2 compared to Rs. 1.5

HI FY2008-09 (April- September 2008) v/s HI FY2007-08 (April-September 2007) • Sales revenue (net of excise) increased by 20% to Rs. 536.9 crore from Rs.

446.1 crore

• Profit before Interest Depreciation and Tax (PBIDT) at Rs. 74.6 crore

compared with Rs.91.7 crore


• PAT at Rs. 66.5 crore from Rs. 69.5 crore

40

International Operations

Subsidiaries

Kinky Group Proprietary Ltd.

41

INTERNATIONAL BUSINESS

Godrej Netherlands B.V. (Consolidated) - Comprises performance of Godrej Netherlands BV, Godrej Consumer Products (UK) Limited, Keyline Brands Limited, Inecto Limited & Inecto Manufacturing Limited) • Revenue for the quarter was GBP 7.7 million compared to GBP 6.4 million in

the same quarter of the previous year .

• PAT for the quarter stood at GBP 0.3 million in Q2

FY2008-09.

• The “Cuticura” Hand Hygiene range was re-

launched, featuring new products such as Hand

Foamer, Kids Foamer, Kids wipes and Crackling

Mousse

• The hair color brand “Hint of Tint” was launched in Canada.

• Bio Oil achieved a “Signature Brand Status” in Boots – one of the highest

rated qualifications for a product finding excellent consumer franchise.

Rapidol Pty Ltd.

• Sales for the quarter were ZAR 21.17 million as compared to ZAR 20.50

million in the same quarter of the previous year .

• PAT for the quarter was ZAR 2.6 million compared to ZAR 1.3 million in Q2

FY2007-08 .

• Inecto” – Super Black, the largest selling hair color

sub-brand in Rapidol portfolio launched its 30 Years

Birthday celebrations promotions achieving a record

growth in sales during the quarter.

• Launched two new colors under the “Inecto” Powder Hair Colors (PHC)

range. The new colors Natural Brown and Auburn have been extremely

successful.

42

Kinky Group Proprietary

Ltd.

• “Renew” Hair Colors marketed and distributed by Rapidol in South Africa for

GCPL, has found excellent support

Godrej Global Mideast FZE (GGME)

• GGME is a 100% subsidiary of Godrej International Ltd and distributes its

soaps, hair colours and toiletries in the GCC and other adjacent countries

• Sales for the quarter under review were AED 2.4 million

• New Cinthol Deo Spray launched is rolling out successfully in to new markets

of GCC and the Middle East and getting new listing in retail chains

Kinky Group (Proprietary) Ltd. (Kinky)

• This represented the second quarter of performance of the Company as a

subsidiary of GCPL. For the quarter under review the Company’s sales

amounted to ZAR 22.45 million.

• Kinky sells a variety of products which include hair braids, hair pieces, wigs

and wefted pieces along with hair accessories like styling gels, hair sprays and

oil free shampoo.

• Kinky products are manufactured at plants located in South Africa at

Johannesburg and Durban and the final products are sold through cash n carry

outlets and owned stores.

• Opened a new “Kinky” Owned store in King Williams

town, which became the 17th Owned Store for the

Company. This was in quick succession to the 16th

Owned store that was opened in the previous quarter

after GCPL’s acquisition of the “Kinky” business. Owned Store model for the

“Kinky” business is the driver for the image of the “Kinky” products, service

to the consumers, pricing power and execution of high standard of

merchandising which differentiates “Kinky” from the rest of the brands in this

43

category. Installed new Information Technology systems, including Syspro

and upgrading hardware as well as connectivity between factories and the

H.O. and between H.O. and the Owned retail stores.Tied-up strong suppliers

for raw material from China to ensure sufficient stocks to meet the growth

plans

• The Company increased prices to match up with sharp increase in input costs

which were rising in Q 1 and Q 2 and the Rand depreciating vs. US $.

Godrej Consumer Products Limited. (GCPL) is one of the leading companies in the Indian FMCG market with presence in the personal and household care products. It is also one of the largest marketers of toilet soaps in the country with leading brands such as Cinthol, Godrej Fairglow and Godrej No.1. The Company has manufacturing facilities at Malanpur (Madhya Pradesh) Baddi- Thana (Himachal Pradesh), Baddi- Katha (Himachal Pradesh), Sikkim and Guwahati (Assam). With the acquisition of 100% ownership of Keyline Brands Limited, a FMCG Company in the United Kingdom, GCPL now owns international brands and trademarks in developed markets that include Europe, Australia and Canada. The acquisition of Rapidol (Pty.) Ltd., South Africa has given GCPL ownership of Inecto and other brands in several African countries. GCPL has a 50:50 joint venture with SCA Hygiene Products AB, Sweden, known as Godrej SCA Hygiene Limited. GCPL acquired Godrej Global Mideast FZE, a 100% subsidiary of Godrej International Limited. GCPL completed the acquisition of Kinky Group (Proprietary) Ltd., one of the leaders in the South African hair business. With this GCPL gains entry into a new line of business in the hair product portfolio.

44

L'oreal Group and Godrej Consumer Products dominate Spends on Hair Dyes in Television Advertising

Last time, it has noted that Shampoos was not a very seasonal category in terms of advertising on TV. Let's check out the trends for another similar category from the Personal Care Sector-Hair Dyes. The below graph suggests that like Shampoos, Hair Dyes do not show any seasonality in terms of advertising peaks.

Let's look at the top players in the Hair Dyes category. L'oreal Group and Godrej Consumer Products Ltd are the two big giants in this category. Their share of expenditures on this category on Television are close to each other with L'oreal getting the top slot with nearly 38% share of the advertising pie whereas Godrej Consumer Products gets 33% share of advertising. At the 3rd place they have Hygienic Research (although the margin between the 2nd and 3rd position is large) with nearly 18% share of advertising followed by Henna Export Corporation and Cavin Care Ltd with 5.5% and 3.8% shares of advertising respectively.

45

Moving on to the Top Brands in this category-it's once again flooded by L'oreal Group & Godrej Consumer Products. Garnier Color Naturals (L'oreal) is in the top position whereas its other product - Nutrisse Hair Colour Mask and Loreal Excellence Cream are at the 4th and 5th position. Super Vasmol 33 (Hygienic Research) is at the 2nd position. At the 3rd position, they have Godrej Powder (Godrej Consumer Products) whereas its other products - Godrej Color Soft, Godrej Kesh Kala Tel and Godrej Herbal Hair Dye are at 6th, 7th & 9th position respectively. Black Rose Kali Mahendi at 8th while Indica Hair Dye gains the 10th position.

46

Where do godrej see ads for Hair Dyes? Hair Dyes as a product are again mainly targeted towards the common masses. The graph proves this right. Almost 68% of the total spends on Hair Dyes are across the two program genres most common amongst masses- Drama/Soap & Feature Films. The other program genres, which are favored by Hair Dyes category, are News Bulletin, Comedies, Action/Thriller, Events/concerts/awards/show, Film Based Magazines and so on.

47

Godrej to develop more hair colour products Godrej Consumer Products (GCPL) is focusing on expanding its product portfolio in the mid-priced hair colour segment as part of strategy to cement its lead in the category instead of competiting with French cosmetic major L’Oréal’s super premium brands like Garnier and Excellence. Godrej doesn’t plan to enter the segment for now.

The company is lining up its research and development investments towards developing newer technologies in mid-price hair colour segment.

Hoshedar Press, executive director and president, GCPL said, “The number of consumers using powder hair dye is still very huge as powder hair dyes are much cheaper. Hence they will continue to develop products in the popular, sub-popular and premium categories.”

For GCPL, hair colour is the second biggest business for the company making up 23 per cent of its net sales in the last financial year.

Also being one of the most inflation-resistant categories in the fast moving consumer goods sector, GCPL should plan to launch more products in this space in the coming decades.

The powder hair dyes, make up 50 per cent of the Rs 580 crore hair colour market in India. However, in terms of volumes it makes up an even greater share of 75 per cent of the total market. The rest of the market is made up of cream based hair colourants, which are catching up fast among the affluent consumers.

GCPL is still the market leader in the overall category with a share of 35.2 per cent. Although its share has gone down in the last six years from 43.9 per cent in 2002 as many players both global and local have entered the Indian market since then like Schwarzkopf and Cavin Kare.

L’Oréal, which entered the Indian personal care market in 1994 has already garnered a share of nearly 20 per cent from local hair dye brands with its cream based colourant Garnier.

Whereas powder hair dye satches are available at a price as low as Rs 9 per sachet, cream based colours are priced in the range of Rs 80 to Rs 100 and super premium brands like L’Oréal’s Excellence cost about Rs 500 per pack.

GCPL’s focus on powder hair dyes also resulted in the relaunch of its largest selling powder hair dye Godrej Expert. Witnessing higher growth rates in the premium colour segment the company also launched the powder hair dye extension of its cream based colourant Renew .

48

Matching up with competitor L’Oréal’s aggressive marketing strategy, GCPL then roped in bollywood celebrity Katrina Kaif as the brand ambassador for Renew. GCPL’s other hair colour brands include Anoop, Kesh Kala oil, permanent liquid hair dye, Kali Mehndi and Colour Soft.

Researches revealed that only 20 per cent of Indian women use hair colour in India compared to 90 per cent in developed markets.

In value terms as well, the hair colour market is just one-tenth of the soap market in India, which is in sharp contrast to world over where hair colour market is double the size of the soap market. This makes hair colour category much under penetrated one in the country.

49

BRAND PORTFOLIO

50

No products is dramatically competetive. They are uniform in demand. But what matters is the brand recall which strikes the customer mind repeatedly and tends them to buy the product. It has been dealing with consumer products. Their necessity is abundance in every aspect or every day in a life. So meer products up gradation will not going to work. Vertical as well as horizontal segmentation is necessary. But above all is necessary is – Advertising. Effect on product due to Advertisement-

• Raises standard of living. • Better effect on product of public . • Most efficient way to stimulate mass buying. • To hasten recovery in a recession substantially increase ads. • Proper advertisement lowers the price and increase revenue.

It is to be noted advertisement should properly channelised to regional as well as national channels, respectively in their respective languages and in a respective way which appeals the customer in a big way. Others things need to be focus which are described below; CREATING BRAND EQUITY : BUILDING A STRONG BRAND REQUIRES CAREFUL PLANNING & GREAT DEAL OF LONG-TERM INVESTMENT. AT THE HEART OF A SUCCESSFUL BRAND IS A GREAT PRODUCT OR SERVICE, BACKED BY A CREATIVELY DESIGNED& EXECUTED MARKETING. scope of branding:

All about creating differences

Differences often related to attributes or benefits of product itself, or

By understanding consumer motivations & desires & creating relevant & appealing images round their products

Branding can be applied virtually anywhere a consumer has a choice

A BRAND IS SAID TO HAVE A POSITIVE CUSTOMER-BASED BRAND EQUITY WHEN CONSUMERS REACT FAVOURABLY TO A PRODUCT & THE WAY IT IS MARKETED WHEN THE BRAND IS IDENTIFIED AS COMPARED TO WHEN IT IS NOT: 3 main ingredients to this definition:

• Brand equity arises from differences in consumer response

51

• Differences as a result of consumer’s knowledge about the brand

• Reflected in perceptions, preferences, & behaviour related to all aspects of the

marketing of a brand BRAND EQUITY AS A SET OF 5 CATEGORIES OF ASSETS & LIABILITIES LINKED TO BRAND THAT ADD OR SUBTRACT FROM THE VALUE PROVIDED BY THE PRODUCT OR SERIVICE TO FIRM AND/OR TO THE FIRM’S CUSTOMERS: These categories of brand assets are:

1. Brand loyalty 2. Brand awareness 3. Perceived quality 4. Brand association 5. Other proprietary assets (patents, trademarks, channel relationships)

BRAND IDENTITY IS A UNIQUE SET OF BRAND ASSOCIATIONS THAT THE BRAND STRATEGIST ASPIRES TO CREATE OR MAINTAIN THESE ASSOCIATIONS REPRESENT WHAT THE BRAND STANDS FOR & IMPLY A PROMISE TO CUSTOMERS FROM THE ORGANIZATION MEMBERS BRAND IDENTITY SHOULD HELP ESTABLISH A RELATIONSHIP BETWEEN THE BRAND & THE CUSTOMER BY GENERATING A VALUE PROPOSITION INVOLVING FUNCTIONAL, EMOTIONAL, OR SELF-EXPRESSIVE BENEFITS CONSISTS OF 12 DIMENSIONS OF BRAND ORGANIZED AROUND 4 PERSPECTIVES:

As a product: product scope, product attributes, quality/value, uses, user, country

of origin As an organization: organizational attributes, local vs. global As a person: brand personality, brand-customer relationships As a symbol: visual imagery/metaphors, heritage

CORE & EXTENDED IDENTITY:

Core identity: central timeless essence of the brand – remains constant as brand travels to new markets/products

Extended identity: includes various brand identity elements, organised into cohesive & meaningful groups .

52

STRATEGIC BRAND ANALYSIS Customer analysis Competitor analysis Self-analysis

Trends Brand image/identity Existing brand image Motivation Strengths, strategies Brand heritage

Unmet needs Vulnerabilities Strengths, capabilities Segmentation Organization values

BRAND IDENTITY SYSTEMS BRAND IDENTITY

Extended

Core Brand as Brand as Brand as Brand as

Product organization person symbol 1.Product scope 7.Organization attributes 9.Personality 11.Visual 2.Product attributes 8.Local vs. global 10.Brand- imagery & 3.Quality/value customer metaphors 4.Uses relationships 12.Brand 5.Users heritage 6.Country of origin

VALUE PROPOSITION CREDIBILITY *Functional *Emotional *Self-expressive *Support other brands

BRAND-CUSTOMER RELATIONSHIPS

BRAND IDENTITY IMPLEMENTATION

BRAND POSITION

*Subset of the brand identity& value proposition *To be actively communicated *At a target audience *Providing competitive advantage

EXECUTION *Generate alternatives *Symbols & metaphors *Testing

TRACKING

53

BRAND BUILDING MODEL

Building brands, according to CBBE model, can be thought of as a sequence of steps, in which each step is contingent on successfully achieving the previous step:

1. Ensure identification of the brand with customers & an association of the brand in customers’ mind with a specific product class or customer need

2. Firmly establish the totality of brand meaning in the minds of customers by strategically linking a host of tangible & intangible brand associations with certain properties

3. Elicit the proper customer responses to this brand identification & brand meaning 4. Convert brand responses to create an intense, active loyalty relationship between

customers & the brand These 4 steps constitute fundamental questions customers ask about brands:

1. Who are you? (brand identity) 2. What are you? (brand meaning) 3. What about you? What do I think or feel about you? (brand responses) 4. What about you and me? What kind of association & how much of a connection

would I like to have with you? (brand relationship) THERE IS AN OBVIOUS ORDERING OF THE STEPS IN THIS “Branding Ladder”

Resonance

Judgement Feelings

Performance Imagery

Salience

4. Relationship What about you & me?

3. Response What about you?

2. Meaning What are you?

• Identity Who are you?

54

PRODUCT ITSELF IS AT THE HEART OF BRAND EQUITY, BECAUSE IT IS THE PRIMARY INFLUENCE ON WHAT CONSUMERS EXPERIENCE WITH A BRAND, WHAT THEY HEAR ABOUT A BRAND FROM OTHERS, & WHAT THE FIRM CAN TELL CUSTOMERS ABOUT THE BRAND IN THEIR COMMUNICATIONS:

• Designing & delivering a product that fully satisfies consumer needs & wants is a prerequisite for successful marketing

• To create brand loyalty & resonance, consumers’ experiences with the product must at least meet, if not actually surpass, their expectations

Brand performance: Brand performance relates to way in which the product/service attempts to meet customers’ more functional needs:

• How well does the brand rate on objective assessment of quality? • To what extent does the brand satisfy utilitarian, aesthetic, & economic customer

needs & wants in the product or service category? There are 5 important types of attributes & benefits that often underlie brand performance:

1. Primary ingredients & supplementary features 2. Product reliability, durability, & serviceability 3. Service effectiveness, efficiency, & empathy 4. Style & design 5. Price

BRAND BUILDING BLOCKS

55

Brand imagery: Brand imagery is how people think about a brand abstractly, rather than what they think brand actually does.Imagery associations can be formed:

• Directly: from consumers own experiences & contact with product, brand, target market, or usage situation

• Indirectly: depiction of these same considerations as communicated in brand advertising or by some other source of information, such as W.O.M.

• 4 categories can be highlighted: 1. User profiles 2. Purchase & usage situations 3. Personality & values 4. History, heritage & experiences

Brand judgement: How customers put together all the different performance & imagery associations of the brand to form different kinds of opinions .4 types of summary judgments particularly important:

1. Brand quality 2. Brand credibility 3. Brand consideration 4. Brand superiority

Brand quality:

• There are a host of attitudes customers hold towards a brand, but the most important relate in various ways to perceived quality of the brand

• Other notable attitudes related to quality pertain to perception of value & satisfaction

Brand credibility:

• Perceived expertise: competent, innovative, & market leader • Trustworthiness: dependable & keeping consumer interests in mind • Likability: fun, interesting, & worth spending time with

Brand consideration:

• How personally relevant is the brand • Depends on extent to which strong, & favourable association created as a part of

brand image Brand superiority:

• Uniqueness

56

• Absolutely critical to building intense & active relationship with customers Brand feelings: EMOTIONS EVOKED BY A BRAND CAN BECOME SO STRONGLY ASSOCIATED THAT THEY ARE ACESSIBLE DURING PRODUCT CONSUMPTION OR USE:

• Researchers have defined transformational advertising as advertising designed to change consumers’ perception of the actual usage experience with the product

Following are 6 important types of brand-building feelings: 1. Warmth 2. Fun 3. Excitement 4. Security 5. Social approval 6. Self-respect • First 3 types of feelings are experiential & immediate, increasing in level of

intensity • Later 3 are private & enduring, increasing in level of gravity

Brand resonance: RESONANCE IS CHARACTERISED IN TERMS OF INTENSITY, OR DEPTH OF THE PSYCHOLOGICAL BOND THAT THE CUSTOMERS HAVE WITH THE BRAND, AS WELL AS THE LEVEL OF ACTIVITY ENGENDERED BY THIS LOYALTY:

1. Behavioural loyalty 2. Attitudinal attachment 3. Sense of community 4. Active engagement

Finally, perhaps the strongest affirmation of brand loyalty is when customers are willing to invest time, energy, money, or other resources in the brand beyond those expended during purchase or consumption of the brand Strong attitudinal attachment or social identity or both are typically necessary, however, for active engagement with the brand to occur. THE IMPORTANCE OF CBBE MODEL IS IN THE ROAD MAP & GUIDANCE IT PROVIDES FOR BRAND BUILDING:

• It provides a yardstick by which brands can assess their progress in their brand-building efforts as well as guide for marketing research initiatives.

57

Customers own brands: THE BASIC PREMISE OF THE CBBE MODEL IS THAT THE TRUE MEASURE OF THE STRENGTH OF A BRAND DEPENDS ON HOW CONSUMERS THINK, FEEL, & ACT WITH RESPECT TO THE BRAND:

• Though marketers responsible for designing & implementing most effective & efficient brand building programmes, success depends on how consumers respond

A GREAT BRAND IS NOT BUILT BY ACCIDENT BUT IS THE PRODUCT OF CAREFULLY ACCOMPLISHING – EITHER EXPLICITLY OR IMPLICITLY – A SERIES OF LOGICALLY LINKED STEPS WITH CONSUMERS: The length of time to build a strong brand will, therefore, be directly proportional to the amount of time it takes to create sufficient awareness & understanding so that firmly held & felt beliefs & attitudes about the brand are formed that can serve as the foundation for brand equity. STRONG BRANDS BLEND PRODUCT PERFORMANCE & IMAGERY TO CREATE A RICH, VARIED, BUT COMPLEMENTARY SET OF CONSUMER RESPONSES TO THE BRAND. BY APPEALING TO BOTH RATIONAL & EMOTIONAL CONCERNS, A STRONG BRAND PROVIDES CONSUMERS WITH MULTIPLE ACCESS POINTS TO THE BRAND WHILE REDUCING COMPETITIVE VULNERABILITY. THE VARIOUS ASSOCIATIONS MAKING UP THE BRAND IMAGE MAY BE REINFORCING, HELPING TO STRENGTHEN OR INCREASE THE FAVOURABILITY OF OTHER BRAND ASSOCIATIONS, OR MAY BE UNIQUE, HELPING TO ADD DISTINCTIVENESS OR OFFSET SOME POTENTIAL DEFICIENCIES:

• Strong brands thus have both breadth & depth • At the same time brands should not necessarily be expected to score high on all the

various dimensions & categories making up each core brand value

Building blocks can have hierarchies

• Brand awareness: It is typically important to first establish category identification

in some way before considering strategies to expand breadth via needs satisfied or benefits offered

58

• Brand performance: Often necessary to first link primary characteristics & related features before attempting to link additional, more peripheral associations

• Brand imagery: Often begins with fairly concrete initial articulation of user & user

imagery that, over time, leads to broader, more abstract brand associations of personality, value, history, heritage, & experience

• Brand judgment: Usually begin with positive quality & credibility perceptions that

can lead to brand consideration & then perhaps assessment of brand superiority

• Brand feelings: Usually start with either experiential ones (i.e, warmth, fun, excitement) or inward ones (i.e., security, social approval, self-respect)

• Brand resonance: Behavioural loyalty is a starting point but attitudinal attachment

or a sense of community is almost always needed for active engagement to occur BRAND RESONANCE IS THE PINACLE OF CBBE MODEL & PROVIDES IMPORTANT FOCUS & PRIORITY FOR DECISION MAKING- REGARDING MARKETING:

• To what extent is marketing activity affecting the key dimensions of brand resonance?

• Is marketing activity creating brand performance & imagery associations & consumer judgments & feelings that will support these brand resonance dimensions?

In a application of CBBE model, the M.R. firm, Knowledge Network, found that brands that scored highest on loyalty & attachment were not necessarily same that scored high on community & engagement (see Chart in next slide) However, by defining the proper role for the brand, higher levels of brand resonance should be obtainable.

FOR THE CONSUMER…

BRANDS HELP THE CONSUMERS TO CUT THROUGH THE PROLIFERATION

OF CHOICES AVAILABLE IN EVERY PRODUCT & SERVICE CATEGORY

59

THE TARGET & COMPETITVE FRAME OF REFERENCE CHOSEN WILL DICTATE THE BREADTH OF BRAND AWARENESS & THE SITUATIONS & TYPES OF CUES THAT SHOULD BECOME CLOSELY RELATED TO THE BRAND:

• Recognising the nature of competition has important implications for the desired brand association

• Arriving at the proper positioning requires establishing the correct P.O.D. & P.O.P. associations

P.O.D: PODs are strong, favourable, & unique brand associations:

• According to CBBE model, brand associations can be broadly classified on following consideration:

- functional, or performance related - abstract, or image related

• POD may involve: - performance attributes/benefits - imagery associations - “Overall superior quality” - “low cost provider”

BEST IDENTITIES ADVANCE A BRAND

COHERENCE

MEANING SUSTAINABILITY

VISION DIFFERENTIATION VALUE

AUTHENTCITY COMMITMENT

FLEXIBILITY

60

P.O.P: 2 basic forms:

1. Category POP: – Legitimate & credible offering within a certain product/service category – Specially critical for launches of brand extension into a new category:

POD may be clear from brand name, but what about POP 2. Competitive POP:

– Designed to negate competitors POD

Choosing POP & POD

IN TERMS OF CHOSING POD, BROADLY, THE TWO MOST IMPORTANT CONSIDERATIONS ARE THAT CONSUMERS FIND THE P.O.D. DESIRABLE & BELIEVE THAT THE FIRM HAS THE CAPABILITIES TO DELIVER ON IT

Desirability:

• Relevance: - Target consumers must find POD personally relevant & important - relevant considerations can easily be overlooked Eg “Clear”cola from Pepsi

• Distinctiveness: - Target consumers must find POD believable & credible - Challenge is to find a viable basis for differentiation, when entering category with established brands

• Believability: - Target consumers must find POD believable & credible - must offer compelling reason for choosing over other brands

61

Deliverability:

• Feasibility: - Ability of the product to perform at the level stated? - Easier to convince consumers some facts about the brand they are unaware of rather than make changes in the product & convince consumers of these changes.

• Communicability:

- can a consumer be given a compelling enough reason to believe that the brand will deliver the desired benefits.

• Sustainability: - sustainability of the actual & communicated performance over time: # is positioning pre-emptive, defensible, & difficult to attack? # is positioning likely to last for years?

Establishing POP & POD Creating a strong, competitive brand positioning requires establishing the right POP & POD. The difficulty in doing so, however, is that many of the attributes that make up the POPs or PODs are negatively correlated. Following 3 approaches are listed in increasing level of effectiveness – but also increasing level of difficulty:

• Separate the attributes: - launch 2 different ad campaigns for POP & POD: run concurrently or separately; expenses high - flip side, consumers may not develop as positive an associations as desired

• Leverage equity of another entity: - used “borrowed” equity to leverage equity of celebrities or ingredients for establishing POD or POP

• Redefine relationship: - powerful but difficult way is to convince consumers that the relationship is

positive: develop a credible story consumer will agree.

62

Updating positioning over time Updating positioning involves 2 main issues:

1. Laddering: How to deepen brand meaning to tap into or brand values or other more abstract considerations:

- involves a progression from attributes to benefits to more abstract values & motivations, i.e., moving up the Maslow’s Hierarchy

2. Reacting: How to respond to competitive challenges that threaten an existing positioning:

- When competitor challenges an existing POD or attempts to overcome a POP, 3 main options: (i) Do nothing: continue brand building (ii) Go on defensive: if it has potential to disrupt market, add some reassurance in product or advertising to strengthen POPs & PODs (iii) Go on the offensive: if it seems potentially quite damaging may be necessary to reposition brand - one approach is to launch product extension or ad campaign changing meaning of the brand

63

UNDERSTANDING THE LONG-TERM EFFECTS OF MARKETING ACTIONS OR BRAND EQUITY

Consumer responseTo PAST marketing

activity

Brand awareness & brand image

Consumer response To CURRENT marketing

activity

CHANGED brand awareness & brand image

Consumer response To FUTURE marketing

activity

64

FUTURISTIC OUTLOOK

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SCOPE FOR THE FUTURE Godrej hopes to take Cinthol to its place among the stars. Confidence, adventure, machoism…. You would associate all these attributes with bike advertisements or with films starring Bollywood hunks like Hrithik Roshan. But, jumping off cliffs or rafting over raging water-bodies for a toilet soap? As the country’s second largest toilet soap maker, Godrej Consumer decided to relaunch its flagship brand Cinthol, it decided to let Hindi film star Roshan do what he’s best at. Accompanying the new action-packed television commercial that’s currently on air, is an entirely repackaged offering from the Cinthol franchise. The company has relaunched its entire range of soaps, deodorants, and talcs in three fragrances — Classic, Cologne and Sport. To send one cohesive brand message across price points and variants a “24-hour confidence” stamp is also affixed on all products carrying the Cinthol nameplate. Revamp Rationale: Last year, Godrej Group unveiled the results of a brand valuation exercise undertaken by international brand valuation consultants, Brand Finance for the group. The report card showed that there was immense scope for improvement. While the potential value of its top five brands — Cinthol, Fairglow, Godrej No 1, Ezee and Godrej Powder Hair Dye — was Rs 3,900 crore, their realized value was at only Rs 2,600 crore. What explained the Rs 1,300-crore gap? Brands like Cinthol. The brand had a huge equity, but that was hardly being reflected in sales. For instance, in 2007, retail audits pegged the market share of Cinthol at less than 3 per cent in the Rs 6,000-crore toilet soap category. Then, toilet soaps were growing slower than hair colours in the Godrej portfolio. There was also a lot of gap to close with the market leader, Hindustan Unilever. With a combined market share of 9.4 per cent (a bulk of it coming from the volume soap, Godrej No 1), Godrej’s far behind Hindustan Unilever’s 54 per cent share of toilet soaps. Brand Cinthol is also a shadow of its former self. In the 1980s to a better part of the 1990s, Bollywood superstar Vinod Khanna and Pakistani cricketer Imran Khan, both of them at the peak of their careers, pitched for Cinthol. By 1993, the soap boasted of an 18 per cent share of the premium segment of toilet soaps. Then, Cinthol’s fortunes took a turn for the worse. Between 1993 and 1996, it got in-and-out-of a joint venture with Procter & Gamble (P&G), the aftermath of which saw Godrej’s overall market share in soaps slip to a measly 5 per cent. Post the P&G partition, Godrej relaunched its Cinthol International variant. But the results were negligible, says market observers with the brand being perceived by many as old-fashioned and male centric. In March 1999, the Rs 15-crore Cinthol advertising account shifted from Madison to Ambience D’Arcy. The campaign made a conscious effort

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to move away from its masculine perception and took a more unisex approach. But these efforts did little to push up market share. Godrej is now taking another shot at reinvigorating the brand. Cinthol is the flagship brand of Godrej. But they haven’t given it due attention. They stretched it too much without a unified platform. They now intend to bring it under one umbrella while making it more relevant to the young male audience. I will say a brand needs to be specific and every soap must have a niche appeal. Competitive Challenge: The company conducted a poll on 27 groups consisting of eight consumers in each group across eight cities. The focus group participants included both users of the soap as well as buyers of competing brands. The objective of the study was to understand the values associated with each brand, their strengths and weaknesses and finally the contribution of the different brands to the overall brand equity. The brief given to creative agency Orchard Advertising was to understand the equity of the Cinthol brand vis-à-vis its competition and translate what the brand stood for in the consumers’ mind into effective packaging and marketing communication. The communication had to be relevant to the target audience — the confident achiever who wants to live an active lifestyle. Yet because of the varying price points, the company needed to ensure that it delivered a single message to consumers of brand Cinthol, rather than design variant specific communication, he adds. “Cinthol has always stood for confidence”. Therefore,it is needed to decode what confidence meant to youngsters, which helped them develop a clearer position. This position needs to be attitudinal, therefore, the new 24-hour confidence and the ‘don’t stop’ concept,’ . The new ad represents just that. The racy campaign features Roshan pulling off dare-devil stunts. The ad starts off with the actor running through the wilderness and across roof tops. This is followed by the actor indulging in incredible feats of bungee jumping, rafting, and horse riding. The campaign ends with Hrithik playing football. He looks into the camera and says “Don’t stop.” Current researches revealed that it has been seen a complete fit between what Cinthol stands for and Hrithik’s values. He exemplifies energy, passion, and the ‘don’t stop’ attitude to achieve what he wants to. That is exactly what brand represents. Apart from the conventional TV, print, and cinema promotions, the company’s 360-degree campaign includes outdoor visibility, modern retail activation, digital marketing initiatives and communication through short messaging service (SMS). It also plans to beef up its rural distribution. The competition is unlikely to sit back and watch. Years ago, when Godrej relaunched the Cinthol International variant, its rival swooped in and relaunched Liril. Likewise, in 2004, HLL launched Fair & Lovely soap in response to Godrej’s successful FairGlow brand. If history is anything to go by, the action will not be restricted to just Cinthol’s TV commercial this summer.

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Godrej to expand product portfolio:

The Godrej Group should expands its product portfolio with new offerings and re-launching existing products across personal grooming, properties, furniture and appliance segments, as part of its new marketing and branding strategy.

The new strategy, uncorked by the Godrej Group at its Mumbai headquarters, involves a roadmap to invest in a renewed Godrej Master Brand and corporateidentity. The group unveiled a new Godrej logo, with green, blue and ruby colours. This is intended to support its targeted revenue growth of 25-30 per cent, compounded annually for the entire group.

It is also expected to leverage cross-business synergies in its FMCG portfolio with a view to tripling revenues in this segment by 2012. In essence, it is intended to bring out a closer coordination between the group companies at the branding level. It will be an informal coordination. The new strategy is an upshot of Godrej’s working with Interbrand, a global leading branding consultancy, which studied the Godrej brand across employees, consumers, investors and business partners over a period of 18 months.

The key initiative in the new strategy will be the group’s focus on ‘hero businesses’ across four segments. In the personal grooming segment, the group should invest in hair colours as a marquee category, through specific projects. This will see the group coming out with new offerings and re-launching existing brands, apart from leveraging strong brands like CintholThe other ‘hero business’ identified by the group is properties, where it intends to build its presence in the real estate market as a brand across a portfolio of residential and commercial projects. The other two ‘hero business’ identified were furniture and appliance businesses.

The idea is to revitalise the Master Brand to also appeal to a younger mindset. The group should make significant investments in the Godrej Master Brand as part of a systematic plan for creating a strong Godrej brand franchise through retail channel strategy. The initial phase of the initiative will build the Godrej Master Brand in tandem with the four hero businesses.

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Godrej Consumer Products gets A1 plus :

ICRA has assigned A1 plus rating to the Rs. 10 crore commercial paper programme of Godrej Consumer Products (GCPL), indicating highest safety. The prospect of timely payment of debt/obligation is the best.

Effective from April 1, 2001, Godrej Soaps (GSL) has been de- merged into two companies. The branded consumer product businesses of GSL have been spun off into a new company called Godrej Consumer Products (GCPL). The remaining businesses, that is, the chemicals business, the investment portfolio held by GSL and all other divisions such as medical diagnostics, real estate and the like have been retained in the existing company which has been renamed as Godrej Industries (GIL).

GCPL commenced business as a separate entity with effect from April 1, 2001 with a share capital of Rs. 23.93 crores and a total balance sheet size of Rs. 185 crores. The main products of GCPL are toilet soaps, cosmetics including hair colour, shaving products, talcum powder, fairness creams and liquid detergents.

The overall sales of the consumer products division increased by 22 per cent from Rs. 382.48 crores in 1999-2000 to Rs. 468.43 crores in 2000-01. Toilet soaps accounted for around 66 per cent of total sales while cosmetics and detergents accounted for 28 per cent and 6 per cent respectively during 2000-01. Toilet soaps witnessed a growth of 15 per cent, cosmetics 44 per cent and detergents 28 per cent during this period. The growth in toilet soaps was spearheaded by the good performance of the Fair Glow brand launched by the company during December 1999.

The cosmetics division also witnessed high growth as the company expanded its range of hair colours and launched a fairness cream under the Fair Glow brand. Most of the other products introduced by GCPL also received good response. As a result, in spite of a sharp increase in advertising and selling expenses from Rs. 44 crores during 1999-2000 to Rs. 86 crores during 2000-01, the PBDIT improved from Rs. 64 crores to Rs. 78 crores during this period. The operating margins have been maintained at around 17 per cent while the return on capital employed has improved to 53 per cent during 2000-01 from 38 per cent during 1999-2000. The gearing and the coverage ratios of GCPL are comfortable.

GCPL has strong brands such as Cinthol, Fair Glow and Godrej No.1 in its portfolio. The company is the market leader in hair colours and liquid detergents. Given these strong brands and a good management, ICRA expects GCPL's operating performance to improve over the medium term. The rating takes into account GCPL's position in the consumer product industry and its strong brand image.

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-‘While demand across all our product offerings continued to be healthy, profitability was impacted by higher raw material cost.

During the quarter they introduced several new products, including a range of hair colours which show a lot of promise.

Their international operations both in Africa and Europe continue to do well. Despite a challenging macro environment I remain

confident of GCPL’s strong growth and continued good performance’-

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QUESTIONNAIRE

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CONSUMER

QUESTIONNAIRE NAME – OCCUPATION – DATE - MEMBERS OF FAMILY – PLACE – (1) Which brand of soap and shampoo you consume ? (2) Approximately how much money do you expect to spent on consumer products ?

<20

20-40

40-60

60-80

80>

(3)If I talk about fragrance which soap you recall at the top of the mind ?

(4)About how often you use GPCL in your home ?

LUX PONDS

CINTHOL GODREJ NO.1 PALMOLIVE LIFEBUOY

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(5)Do you colour your hair- occasionally or weekendly ? Which brand you consider most suitable for colouring the hair ? (6) Do you think GCPL is doing well with its product ? (7)Are you aware of the grade 1 soap ? (8) Are you aware of the brand ambassador of RENEW & CINTHOL? (9)Do you know expert hair dye is the largest selling color in sachet in world?

BRAND

MOST USED

USE OCCA.

>ONCE AWEEK

ONCE AWEEK

ONCE IN 2 WEEK

ONCE IN 3WEEK

ONCE A MONTH

< ONCE A MONTH

RENEW EXPERT CINTHOL NO.1

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(10)Rank the following soaps in order of preference : CINTHOL – NO.1 – LUX – LIFEBUOY – DETTOL – (12) Why you use LUX & BREEZE / CINTHOL & NO.1 SMELL – IMAGE – COLOR – PACKAGING – PRICE – (13) Advertising is more important to you or quality of the product.

STATEMENT

AGREE CAN’T SAY DISAGREE

Effect on standard of living- -raises it -lowers it Effect on product on public- -better ones -poorer ones

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Most efficient way to stimulate mass buying- -advertisement - other methods To hasten recovery in a recession-

- substantially increase ads.

- substantially decrease ads.

Advertisement effects on price-

- lowers price - higher price

(14) Rank the following in order of importance to improve godrej soap & color renew sale- SOAP RENEW -MORE ADVERTISEMENT- -BETTER PACKAGING- - BETTER IMAGERY- - BETTER QUALITY- -BETTER AVAILIBITY IN STORES- (15)Do you feel Godrej gives “ value for money” product , if not, which company you feel giving so ?

OUTLET Questionnaire

INTERVIEWER: DATE : TIME STARTED: TIME ENDED : PLACE : (1) What is the great thing you like in the GCPL as compared to other brand ?

Easy available Cheaper rate Huge demand

(2) Do you want the availability of its product on your store ? (3) Weekly or Monthly turnover as compare to other to other product

GCPL SALE(Rs) Renew Expert Cinthol No.1

HUL P&G

<10000 10000-30000 30000-50000 >50000

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(4) As compare to godrej soap there are many fragrance soap are there. Do you think godrej soap has create a good edge in the market ? …….. RANK THEM (1-5)

LUX

CINTHOL

NO.1

PONDS

PALMOLIVE

MARGO

LIFEBUOY

(5) Since you have a better understanding about the demand of a product – do you think that godrej renew & expert are in a heavy competition in colours category with respect to Garnier and others ?

BRAND

OPINION

Strongly Disagree

Disagree

Nutral

Agree

Strongly Agree

RENEW EXPERT GARNIER OTHERS

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(6) Does the company is doing well with its product ? (7) Is there is a sufficient supply for which quantity is demanded. YES----------------------------------------- NO------------------------------------------ (8) Rate the service quality and visit frequency :

PRODUCT

SERVICE QUALITY

VISIT FREQUENCY

GCPL HUL COLORMATE VOZMOL RECKITT

(9) How do you rank GCPL in giving margin to retailer compared to HUL ?

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(10) Are you aware of grade 1 & that GCPL manufactures only grade1 soap. (11) Give your opinion what need to be done for better cometetion and penetration.

FOCUS

ON

RATING ADVERTISING QUALITY PACKAGING CHANEL PARTNERS PRICING PROMOTION PLACE CONSUMERS

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BIBLIOGRAPHY

• GOOGLE

• MAGAZINES/JOURNALS

• PAST RECORDS

• EXTENSIVE FIELD RESEARCH

• PRIMARY DATA ANALYSIS

• SECONDARY DATA ANALYSIS

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Thank You

godrej

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