Fore School of Management Report on Launch of a bathing soap Pristine by

Submitted on: 4th September, 2014

Fore School of Management Report on Launch of a bathing soap Pristine by

Submitted by: Group1

Acknowledgement

It gives us great pleasure to thank all the people who have been a real help in completing this project, which is a part of Marketing Management course. We are really thankful to Prof. Bhalender Singh Nayyar, FORE School of Management, New Delhi for giving us the opportunity to work upon a project that connected us with some real life instances and their applications.

We would like to express our gratitude to Mr. Pankaj Tyagi, Manager R&D, Reckitt Benckiser for his co-operation in research and inspiration without which this project would never have been possible.We are also thankful to our friends for their constant support and encouragement to answer our surveys and queries towards providing us deep insight on the topic and helping us in compiling the report.

Industry AnalysisThe Indian bathing soap market is estimated to be around 9,800crores holding around 700 companies. They constitute the following market share:

OthersPersonal CareOut of this 30% (22,000 crores), nearly 42% (9,800 crores is contributed by soaps)1,100 crores is contributed by herbal soapsSoaps are available in India in around five million retail stores out of which nearly 75% are in the rural areas. In this particular category, brand loyalty is not fixed, products are used atleast once a month and consumers change their preferences based on various factors such as increasing media campaign etc. Hence, the market becomes highly fragmented with the presence of both large and small players.The market can be divided into the following categories as per price:

The popular category (Hamam, Lux, Cinthol) drives the soap market. Penetration has never been a major issue for bathing soaps in the Indian market. In rural areas the penetration is 97% - with 50% of the products being sold in the rural market; and in urban areas the penetration is 99%.Major players being Unilever, Nirma, Godrej, Johnson & Johnson, Colgate - Palmolive.

Industry SWOT AnalysisStrengths1) Well-established penetration in rural as well as urban areas2) Presence of strong global as well as domestic brands3) Low cost operationsWeakness1) Low investment in technology and innovation2) Low exportsOpportunities1) Domestic market can be expanded2) Exports3) Higher disposable incomeThreats1) Imports2) Better global value-added products3) Use of new products such as shower gels, liquid soaps

Growth trendsThe bathing industry has been showing a moderate CAGR of around 5% in the last five years (2009 2013) and is expected to show a higher growth rate of around 8% in the coming 2 3 years.

Explained in the figures as follows:

Indian bathing soap market sales (2009-13) & forecasts

Some of the major drivers for an expected growth of 8% are:1) Consumers are becoming more hygiene conscious2) Increase in disposable incomes in the rural areas3) Launch of more value-added premium soaps has led to an increase in the demand of cheaper (or the popular category) substitute products4) Moving trend towards ayurvedic/herbal soaps due to increasing awareness about their medicinal value, hence fast growth observed in this segment as well.5) Growing population of women in the age group of 25-446) Growing demand of beauty soaps amongst men also

Organised/ Unorganised sector: The share of the unorganized market (Breeze, Dyne) last year has been around 20%. The organized market continues to dominate the soap industry due to presence of strong multi-national brands. However, in the coming three years the rate is share is expected to decline a bit to around 17-18% (lesser decline in rural areas) because of the following reasons:

1) Since penetration is high in the rural areas, and global brands are now targeting these areas and hence launching cheaper SKUs (stock keeping units).

2) Increase in disposable income in the rural areas may result in increased sales of popular products such as Hamam, Lifebuoy and lesser sales for the unorganized market.

Competitive Analysis

Present market share of competitors

HULUnilever is the market leader with over seven brands in the soap category: LUX, LIFEBUOY, HAMAM, REXONA, BREEZE, DOVE and PEARS. Also, one of the major exporters to various countries, Unilever produces different varieties of soap beauty, herbal, medicinal, glycerin and premium.The company has strong R&D capabilities and a strong reach within both rural and urban areas.The companys target consumer segment for soaps has always been women, it promoted LUX as a brand that meant beauty reflecting from a womans body, it used beautiful celebrities to build its brand image. Similarly, Dove has been promoted as moisturizing soap for woman who consider soap hard for their skin and prefer a creamy soap for softer skin. Breeze has been used to accomplish the aspirations of women in rural India at an affordable price.Hamam is a brand associated with therapeutic values promoting a balanced life while Lifebuoy assures great health for the entire family.Liril has always been promoted as a brand associated with freshness, energy and excitement.

Godrej Consumer Products LimitedGodrej was the first company to launch a soap with vegetable oils in 1930s.Some of its leading brands are: CINTHOL, FAIRGLOW, GODREJ NO.1.The brand is supposed to be generating maximum sales from Punjab (where celebrity Mona Singh promotes Godrej no.1), and is now growing in the rural areas as well. The Godrej No.1 soap is the most selling soap for Godrej because of its low price and presence of variants such as the ayurvedic herbal Godrej No.1 soapAfter its disintegration with P&G, the company launched FAIRGLOWin 1999 promoting it as Indias first soap that would make consumers fair. It adopted a strong ad campaign before launching this product, with ad that showed how using the soap would block the sun UV rays and hence bring fairness. This helped in increasing the sales of the brand by 17% that year.Cinthol has always targeted youth again promoting freshness (ads showing consumers getting fresh after a tired day when they used Cinthol), with tag lines such as Alive is awesome.

WiproWipro, along with being a leader of IT solutions and services, has a strong presence in the toilet soap industry as well. It has two main brands SANTOOR and CHANDRIKA.Santoorherbal soap holds a significant share in the popular category. Its past performance has further been explained in the latter part of the project. It has been promoted as a herbal beauty soap offering twin benefits of both Sandal and Turmeric. It comes in three variants and became widely popular when it was promoted using the concept of mistaken identity. In one of the ads, a dance trainer is mistaken as the heroine of a film by Saif Ali Khan, while in another ad, a mother is mistaken as a college student. Thus, the idea that is built up in a consumers mind is that by using the soap, skin becomes so healthy and beautiful, that it lies about your actual age.

4 Ps Analysis of 4 Major Competitors

Company/4PsProductPlacePricePromotion

HULLux, Dove, Lifebuoy and Pears. Currently Both Urban and Rural areas with almost all retail outlets and malls.Moderate to low, in all ranges but most revenue comes from moderately priced soaps like Lux.Extensive T.V. advertisements and Hoardings

Reckitt BenckiserDettol(Hand wash variant very popular)Mostly Urban, reach to rural areas alsoModerateMostly Television, Dettol focuses on content rather than brand ambassadors. Promotion as an anti -germ brand for entire family

WiproSantoorSouth IndiaModerateGood reach through male brand ambassadors and a different idea of advertisement. (Concept of mistaken Identity)

GodrejCintholGood reach in Rural as well as Urban areas, good identification in even interior regions.Low to moderate, affordable to people of almost all income ranges. Popular male brand ambassadors like Shahrukh Khan, Hrithik Roshan, Virat Kohli, depicting strong male centric image, promoting it as a cool and energetic brand.

PESTLE Analysis (beauty herbal soap category)Political Setting up of manufacturing plant based on different locations, for eg Himachal Pradesh is a tax free zone with minimal political issues Focus more in rural areas as the political scenario in those areas can help with trade fairs and eventsEconomic Excise duty on soaps is presently lower than the previous years 8% Disposable income in rural areas is increasing Lower prices of palm oil etc ( that is used for herbal soaps) will lead to lower production cost Social Target to improve hygiene along with making the skin soft and beautiful Increased awareness about benefits of herbal and ayurvedic soaps Consumers are moving towards value-added products, not just beauty soapsTechnological Use better R&D scientists to keep the benefits of the herbs intact while developingan innovative product Make sure that the ingredients used adhere to the Grade 1,2 or 3 of the BIS standards Develop a product of a fresh bright colour and a calm fragrance to assure consumers of its herbal propertiesLegal and Environmental The manufacturing process should not harm the environment and abide by the legal norms. No hazardous chemicals (as per the legal limit) can be used.

SegmentationGeographicSouth, North, East, WestCity: Tier 1 cities: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore,PuneTier 2 cities: Chandigarh, Jaipur, Lucknow, Bhopal, Dehradoon, Guwahati, Ahemedabad, CochinTier 3 cities: All small townsRural Areas: All villagesDemographicAge GroupBabies, Kids, Teenagers, Young Adults, Middle AgedGender: Males and FemalesIncome GroupsLower Income Groups, Higher Income Groups, Middle Income GroupsEducationIlliterate (mostly in Rural), Educated and InformedOccupationWorking class people, Students, Housewives

Lifestyle and PersonalityBeauty focusing, Quality oriented, Herbal and medicinal requirement, Fragrance, Manly.

TargetingNorth India and Mumbai regionMajor Market lies in:Urban and Semi-Urban: People in Urban areas are more conscious about value addition rather than just beauty soaps. P&G is a brand known in the urban areas, not much popular in the rural areas. Rural is not a good option as people either go for the extremely advertised brands or the cheap established ones.Age Group: Mostly females of age 25-40.Gender: Females, more conscious of their skins health and texture along with the beauty.Income Group: Middle and Upper-middle income group, willing to pay as much amount for the soap as they pay for other existing products.

Lifestyle: Well informed customers: the people who are more sensitive about their skin and are into buying soaps carefully and selectively as per its benefits.

Brand loyal customers: P&G is a known brand. It produces soaps outside India and people already using P&G products in India would be willing to try a herbal soap by them if advertised in the correct fashion. All the stores where P&G products are sold will attract customers.

Perceptual Mapping:

VOIDDoveHigh Artificial IngredientsNormal PackagingAttractive PackagingLow Artificial Ingredientsdove

Objective To launch a product that can help us over shadow the image build up by popular beauty soaps like Lux and offer a herbal soap without compromising the quality To occupy a market share of atleast 4-5% in the next six to seven years after launching the product Vigorous advertising and creating a fresh brand image about herbal soaps will be our prime focus to achieve this objective

Sale of 30 crores units (after 7 years)

Turnover of 600 crores in 7-8 years.

Promotion cost 15-20 crores (Breakup given with respective channels of promotion)

3-4 SKUs in the first year of launch

Positioning Statement

P&G presents Indias first Aloe-vera as well as Cucumber soap for the Indian beauty Product Name: PristineFor: Women of 25-40 years of age who want to have beautiful, clean as well as healthy skin initially in the North Indian market plus Bangalore and MumbaiThat: is a herbal beauty soap available in three variants namely cucumber, aloe vera and mint with odour of its variantWhich Provides: Skin care in terms of health and beauty specific to skin requirements that is, a) Aloe Vera variant for moisturizing your skin, treating skin acne and sunburn, fighting skin ageing and making your skin more glowing.b) Cucumber variant cools, invigorates refreshes and helps maintain the skins moisture (for dry skin). It also keepsskinsoft, has healing and soothing effects on damagedskin, simultaneously acting as a sunscreen. c) Mint Variant especially for skin that needs extra care and treatment like for severe acne recommended by dermatologists.Unlike: a) LUX (HUL) Primarily a beauty soap with no herbal ingredients. Manufactured for masses, both in urban as well as rural areas b) Medimix(Cholayil), Hamam(HUL): that mainly focuses only on acne treatment but not on freshness of skin separate variant for separate types of skin.c) Santoor(of Wipro): does not have no specific variants for different types of skin, focus mainly on young looking skin and not on the richness of herbs

Brand Positioning Bulls-eye

Marketing StrategyP&G has been very passionately delivering personal care products in India over the last many years. We plan to launch a herbal soap, initially in North India and Bangalore and Mumbai, as most of the herbal soaps are popular only in South India which makes the North Indian market lucrative. Following are the strategies that will be adopted to Initially, before launch and promotion, trials will be conducted in 5 cities in North India to understand the penetration of this herbal soap in these markets. The trials will be conducted after around 5,000 sales representatives will personally endorse this product n these areas through fun activities in cities of Ludhiana, Indora and Kanpur. Promotional activities in shopping malls etc.Budget: 25 lakhs

Offensive Warfare strategyThis strategy is used to secure a competitive advantage. Herbal soaps like Hamam, Santoor have been using herbs such as sandal thathave now become common, a new ingredient (such as aloe vera and cucumber) would give a competitive edge P&G, plus the companys already strong brand image would definitely help.

Distribution strategyProducts such as soaps are usually distributed through a single regional distributor. We will follow this channel only with one distributor in one region. The product will be available in the following markets and will be placed on the outermost shelves (highlighting the free Head & Shoulders sachets offer) at eye level.RetailersSupermarketsE-tailers

If the adoption through the trials seems to be more than 20%, then we go ahead with the launch.The strategy will be to promote the brand by giving it a feel of beauty through herbs, for which a famous Bollywood actress with a typically Indian look will be chosen as the brand ambassador. The concept of forests can enrich your skin will be used to promote the product.Also, we plan to target the economic class priced at Rs25/- (lower, middle and upper middle class) in urban areas (rural areas through line extension). Target segment would be women 25 to 40 years.

An essential part of the strategy would be innovation. We plan to launch an Aloe-Vera soap as presently there is not any soap completely of Aloe Vera or Cucumber. This will give P&G the first mover advantage.

Line Extension

In order to focus on the category of bathing soaps and owing to the already existing long range of P&G products, it is not feasible (as of now) to extend the product line of soap by going into Face washes or face creams.The soap will be primarily focusing the urban and semi-urban people in the beginning period post the launch, as a completely new strategy will be required to promote the soap in rural areas.

Down Market Stretch After gaining a foothold in urban and semi-urban areas, the soap can be introduced with variants in the rural market in order to meet the requirements of people in the slightly lower end and to attract the people conscious about a beautiful skin in rural areas. It can/will have to present good offers to set a foot into rural market, given that this market already has a number of soaps like Lifebuoy and Lux dominating the rural market scene. Therefore, our product can be named Pristine, a word meaning fresh and clean, which not only justifies the function of a soap but will also relate to both rural as well as urban buyers. The word also describes purity in ingredients of the soap suggesting that it is a herbal product and not full of fairness enhancing chemicals.

Packaging:Packaging should be simple yet attractive, in a hard cover, showing a leaf, signifying the herbal and freshness component of soap.

Labelling:The soap will carry a tagline of Pristine, Freshness your skin deserves!The taglines of the soap variations will be given below the names and the image on front. The labeling section at the back will carry explicit details of the reason why the particular variant added to the soap is good for skin and its health. The backside of the cover will also carry the composition of soap highlighting what important components the soap carries not in explicit details but the relevant ones. The price, Rs 25 for a 100 grams soap, manufacturing date and address of unit manufacturing the soap will be mentioned on the sides of soap cover. Chemical composition will cover 1/4th of the back side, highlighting the components. It should clearly show how much amount of the component, which the company is claiming to be the main ingredient, is present inside. As like other P&G products, Re.1 on purchase of each soap will be contributed to the building of schools and it will be mentioned on one of the sides of soap cover as well as in the advertisements.

Warranties/Guarantee The soap will not promise any fairness level but will offer a guarantee of acne removal (recommended by dermatologists), treating sunburn and making the skin fresh and healthy. It will give an exchange offer over buying a complete packet of 4 soaps, in case a person wants to replace it after using a soap of a particular variation. Money back guarantee will not be offered.

Design of CommunicationAs our product targets the consumer belonging to both the lower and middle class, it is essential to communicate the launch of the product in a proper manner. We need to make sure that the product is given its due importance in all markets. The soap should be strategically placed in all the leading supermarkets and departmental stores which would make it stand out from the other products, and bring it into the notice of the people in the front rows and at eye level. Salesmen should be given field jobs in order to ensure that the product reaches even the smallest of the shops and accessibility does not become an issue in the growth of our product. A good advertising team should be engaged in order to create a commercial that is both creative and innovative, and creates an emotional and mental connect with the audience. Ad gurus like Prasoon Joshi, PiyushPandey, etc. can be relied upon to work in accordance with the needs of P&G and create such an advertisement.

The shape of the soap should be new compared to other existing soaps. As, we have the soaps of rectangular and oval shapes, the new shape can be circular and it cannot be square or triangle since circular shape covers maximum area. Face to face marketing in different areas of major cities.Offering free samples with a majorly circulated magazine in minimum of 5 cities on the day of the launch.Providing YouTube advertisements before the video commence.To increase the reliability among customers, later the advertising campaign can be made by bringing up the new real women who used the soap unlike the movie stars.By direct way communication with different beauty experts and dermatologists, will make our soap as a major suggestion by them will result in a great impact in the beauty concerned market.

Promotional StrategyProcter & Gamble being a huge company with a wide range of products stands proud as one of the top companies maintaining their position in India. This gives it the advantage of abundant funds which can be used to market the product in an extensive manner. Advertising being a major portion of the marketing strategy of any product would help in creating a solid structure for it, even before the actual launch. Investments in TV commercials, newspaper ads, etc. would go a long way and a known Indian face can be roped in to act as Brand Ambassador for our product. For example, Parineeti Chopra would capture the essence of a typical Indian girl, and have a stronger connect with the audience rather than a foreign origin model. Since she is a new and popular face in the industry,it represents freshness of the product. A limited period offer for the initial promotion could boost the sales, in which some other established product from P&G can be given along with our soap in order to create a reputation. For example, Head & Shoulders is one of the best products of P&G with a huge database of loyal customers, so giving a small sachet as a complimentary product with each soap would increase sales and credibility of our soap at the same time. Advertising on the internet is yet another step, which would allow increased visibility for our product on Google searches, YouTube, etc. Providing a television advertisement and radio advertisement with the jingles . By the new way of advertising campaign we can put up counters with different events in malls where the faces of the participants in the events are washed and the photographs of their faces are gifted to them. The campaign can be taken up as early walk in the morning during Sundays in parks or public places.

Channel and Media MixThe following channels would be used for promotion:

1) Television AdvertisementsThe advertisement will feature a normal average looking lady of 30-35 years of age going into a forest, passing through herbs all around. She comes out as a young lady, Parineeti Chopra who has a healthy and better skin with extreme freshness.She is a fresh and well accepted face, mostly popular for not just looks but also for her talent and skills. Similarly, the soap will not be just a beauty soap but will also be identified for its herbal traits.Target segment being mostly females, the best time to advertise on television would be when most of the daily soaps are aired i.e. between 8-11 PM. It is primetime, when TV viewership is highest and the advertisement would make the greatest impact. The cost of a 10 second slot at this time, for different channels is given below Star Plus54390Sony Entertainment Channel16730Colors10487Zee TV36814Now, for maximum visibility, ads for our soap need to be run for at least 4 shows on 3 channels. Considering the prices given above, a 20 second ad on Star Plus would cost Rs.1,10,000 approximately. That results to a daily expenditure of Rs.4,40,000 on Star Plus. Similarly, the daily cost would be 1,35,000 and 85,000 for Sony and Colors respectively. That gives us a total expenditure of around 6.5 lakhs on a daily basis, and 2 crores for the entire month. Considering the need for heavy publicity required in the initial phase, this should prove to be a good investment Parineeti Chopras endorsement fee according to the current market demand by her for other brands is Rs. 50 lakh a day, which will turn out to Rs. 1.5 crore . Other expenses of advertisements will be approximately 1 crore, hence total cost for making of advt. will be 2.5 crores.2) Social Networking SitesSocial networking sites are a major attraction, and an official page of the soap will cost nothing and will appear in news feed of people, will reach out to young audience. It will be promoted on Facebook through advertisements on the side bars on Facebook, solely for the purpose to reach out to the audience that uses internet more than watching television (The youth).

3) Hoardings by roadsideHoardings of size 18*20 feet on roadside, the budget will be Rs 3 crores, which will be divided in different cities as per the requirement of hoardings, per unit costs and the area of the hoardings.A hoarding at roadside in Haji Ali area will cost approx.. 10 -12 lakhs for 30 days.10 such hoardings at places like Vile Parle, Santa Cruz, etc, costing total of approx.. 1 crore. The same goes for Delhi.For tier two cities, namely Jaipur, Chandigarh, Lucknow, Dehradun and Bhopal.The hoardings cost at the most popular 10 places in these cities will be approx. Rs. 50000 in areas of moderate footfalls per hoarding and a lakh for the ones with high footfalls.Hence, the overall budget for one city will be around 15 lakhs, which sums up to atleast 1.2 crores for all tier two cities mentioned. Hence total cost for hoardings will be Rs. 7 crores in 2 months.

4) YouTube Advertisements : It costs approximately Rs.15 for a 30 seconds advertisement per view, and inserting it in youtube videos of movie trailers for 2 lakh clicks will cost Rs. 30 lakh. This will increase reach to people who are more online than watching television. Therefore total cost for YouTube advertisements for a month will be, assuming 10 lakh hits, is 1.5 crores. For two months, it will be 3 crores.

5) Magazines: (GrehShobha, Vineeta, Meri Saheli): The magazines received at homes still have some reach to women who have subscribed them and have more access to them than newspapers. Advertisement can be printed on full length pages of cover. Total budget will be approximately2 crores for 2 months.

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