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Indian consumerBehaviorTid tetergents
CHAPTER PARTICULARS PAGE
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NO. NO.
1 CONCEPT OF CONSUMER BEHAVIOR 5
1.1 Introduction 7
1.2 Need for studying consumer behavior 7
2 INDIAN CONSUMER AND CHANGING DEMANDPATTERN
11
2.1 Different segment 11
2.2 Increasing Awareness 12
2.3 Changing trend in Indian Indian consumer 14
3 RESEARCH METHODOLOGY 19
3.1 Research Design 19
3.2 Source of data 21
4 INDIAN FMCG MARKET 33
4.1 Impulse to go Indian 34
4.2 Impact of Globalization 36
4.3 Indian v/s Urban consumer 38
4.4 Branding Positioning 40
4.5 Branding strategy in Indian price 52
5 DETERGENT AND SOAP IN INDIAN INDIAN MARKET 57
5.1 TID v/s NIRMA 57
5.2 SWOT analysis 57
5.3 Price strategy 58
6 CONCLUSION 607 BIBILOGRAPHY 60
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SYNOPSIS
This study on Indian consumer behavior is aimed to get a better understanding of
the Indian market place thus enabling them to embark on selected strategies to
effectively reach the Indian INDIAN consumers.
India is a big country with 28 states, over one billion people and 120dialects/languages.
From the market perspective, people of India comprise different segments of
consumers, based on class, status, and income.
An important and recent development in Indias consumerism is the emergence of
the Indian market for several basic consumer goods. Three-fourths of Indias
population lives in Indian areas, and contribute one-third of the national income.
India is a lucrative market even though the per capita income in India is low and
it remains a huge market, even for costly products.
This project report focuses on changing behavior of Indian consumers. However I
have restricted report finding and analysis to detergent and soap category. This is done
in-order to draw boundary lines of project and make the report specific. Moreover
the study includes primary analysis of survey done in Indian area on detergent and
toilet soaps. The survey focuses on understanding consumer behavior towards toilet tid
tetergents .
I hope this report of mine will be useful for furtherlearning.
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CHAPTERI
CONCEPTS OF CONSUMER HAVIOUR-
INTRODUCTION
Analyzing consumer behavior is perceived as cornerstone of a successful
marketing strategy. Consumer behavior is the mental and emotional processes and
the observable behavior of consumers during searching purchasing and post
consumption of a product and service. Similarly consumer behavior as the action and
decision process of people who purchase goods and services for personal
consumption.
There are four different views related to consumer decision making process and
behavior. It is argued that first of them is economic view that consumers are
primarily facing imperfect competition and they are always expected to make
rational decision on the basis of assumptions that they are aware of all product
alternatives, they can rank benefits and limitation of each alternative and are able to
identify one best alternative. Second Passive View is absolutely opposite to
economic view and suggests that consumers are irrational and impulsive as they are
submissive to self-centered interests of marketers and got influenced by marketing
tools. Similarly third, Emotional View is related to perceive consumers
decision making based on their emotional association or feeling about some
products and services. For instance, a person loosing red color specific pen neither
go for rational decision by evaluating alternatives ( economic view) nor will the
person get influenced by marketers ( passive view). Rather the person will try to
purchase any pen closely resembled with his favorite possession.
Fourth and arguably most acknowledged view is Cognitive View where
consumers are considered as thinking problem solver which are receptive as well
as actively searching for the products and services that can fulfill their need.
Consumers behavior under this view is based on information seeking and processing
attributes usually directed by a goal. For instance, buying a tooth paste from shop
can have a certain goal of choosing product that can taste good. Despite of critiques
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for each viewpoint, it can be considered a valid argument, that all four types of
decision making behavior exist and provide marketer guidelines to analyze
consumer accordingly. Based on general perception about most acknowledged and
common cognitive view, asserts broader stages of a consumers decision making
process that includes problem identification , information search, evaluation
of alternatives, outlet selection and purchase and post-purchase action.
1.2 Need for studying consumerbehavior
Consumer behavior can be said to be the study of how individuals make decisions on
how to spend their available resources (time, money, effort) on various consumption-
related items. This simple definition of consumer behavior tells marketers to resolve
every activity around the ultimate consumer and gauge their behavior by specifically
focusing on:
Who buys the products or service?
How do they buy products or services?
How often do they buy them?
When do they buy them?
Why do they buy them? And
How often do they use them?
This questions will help in understanding better what factor influence the decision
making process of the consumers. The decision making process identifies the number of
people who are involved in this process and ascribes a role to them like the users,
decider, influencer, and buyer.
It is believed that consumers or customers make purchase decision on the basis of
receipt of a small number of selectively chosen pieces of information. Thus it will be very
important to understand what and how much information is required by the customer to
help them to evaluate the goods and services offerings.
The involvement of the customer in the decision making process will vary with
the type of purchase involved like incase of complex product there will be high
involvement and so on. Thus it is very important to understand what customers feels will
help them to able to evaluate goods and services.
The consumer decision making process goes beyond the facets such as what features or
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the product design will be acceptable to consumers, what benefits are they seeking from
their products, what price will be suitable etc. Today consumer behavior also includes
the post purchase satisfaction or dissatisfaction behavior. Because the post purchase
behavior will have repercussions on the communication (word of mouth) they have with
the firms prospective customers. Usually there are two types of customers the personal
consumer and organizational consumer.
1.2.1 Personal consumer:
Right from the stimuli till the consumer response, there are many individual and
environment influencing the consumer purchase decisions.
1.2.2Organizational consumer:
The type of buying situation will be different but the categorization in terms of low
involvement and high involvement purchases made by individual is similar.
The marketers look into the decision-making unit in both the cases i.e. personal purchases
as well as the industrial purchases. Then depending upon the role of the person who is
most likely to influence the decision they decide to more of the promotional efforts at
them.
1.3 OBJECTIVES OF THE STUDY
To study the general causes forChanging Indian Indian consumerBehavior
To analyze changing mentality of the consumer and their behavior
To find out the most prominent general and various factors that leads tochanging behavior of the consumer.
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1.5 LIMITATIONS OF THE STUDY
The information provided by them may be subjected to
personal bias. Some of the respondents were not interested
to express their views.
It is possible that some of the respondents feel uncomfortable and
has backed the study and hence the reliability of the response.
Due to time constraints and busy schedules it was difficult to interactwith the consumer completely.
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CHAPTERII
INDIAN CONSUMER AND CHANGING DEMAND PATTERN
2.1 Different Segments of Indian Consumers
2.1.1 The socialites
Socialites belong to the upper class. They prefer to shop in specialty stores, go to clubs on
weekends, and spend a good amount on luxury goods. They are always looking for
something different. They are the darlings of exclusive establishments. They go for high
value, exclusive products. Socialites are also very brand conscious and would go only for
the best known in the market.
2.1.2 The conservatives
The Conservatives belong to the middle class. The conservative segment is the reflection
of the true Indian culture. They are traditional in their outlook, cautious in their approach
towards purchases; spend more time with family than in partying and focus more on
savings than spending. Slow in decision making, they seek a lot of information before
making any purchase. They look for durability and functionality but at the same time is
also image conscious.
They prefer high value consumer products, but often have to settle for the more
affordable one. These habits in turn affect their purchasing habits where they are trying to
go for the middle and upper middle level priced products
2.2 Indian consumer
About three quarters of the Indian population are in the Indian areas and with the
growing middle class, especially in the Indian cities; the spill over effect of the
growing urban middle class is also felt in the Indian areas.
The Indian Indian market has been growing at 3-4% per annum, adding more than 1
million new consumers every year and now accounts for close to 50% of the volume
consumption of fast-moving consumer goods (FMCG) in India. The market size of the
fast moving consumer goods sector is projected to more than double to US$ 23.25 billion
by 2010 from the present US$ 11.16 billion. As a result, it is becoming an important
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market place for fast moving consumer goods as well as consumer durables.
Over the years, as a result of the increasing literacy in the country, exposure to the west,
satellite television, foreign magazines and newspapers, there is a significant increase of
consumer awareness among Indian consumers.
Today more and more Indian consumers are selective on the quality of the
products/services.
This awareness has made the Indian Indian consumers seek more and more reliable
sources for purchases such as organized retail chains that have a corporate background and
where the accountability is more pronounced. The consumer also seeks to purchase from a
place where his/her feedback is more valued. Indian Indian consumers are now more
aware and discerning, and are knowledgeable about technology, products and themarket and are beginning to demand benefits beyond just availability of a range of
products that came from trusted manufacturers.
The Indian Indian consumers are price sensitive and prefer to buy value for
money products.
2.3 Changing Trends in Indian consumerbehavior
2.3.1 Bulkpur
chasingUrbanization is taking place in Indian India at a dramatic pace and is influencing the
life style and buying behavior of the consumers. The Indian consumers are depending
more on fast and ready-to-serve food, they take less pain in traditional method of
cooking and cleaning.
Bulk purchases seems to be the trend these days with purchasing becoming more of a
once-a-week affair, rather than frequent visits to the neighborhood market/store/vendor.
The popular growing shopping trend is purchasing from malls to supermarkets.
2.3.2 Lifestyle
The current Indian consumer buying behaviour to a large extent has urbanize
influence. There is an increase in positive attitude towards trends. The Indian
consumer has become much more open-minded and experimental in his/her perspective.
There is now an exponential growth of trend reaching the Indian consumer by way of the
media and other mediums.
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Indian consumers have also developed lifestyles which have emerged from
changing attitudes and mind sets; exposure to western influences and a need for self-
gratification. Beauty parlors, eateries, designer wear, watch, hi-tech products are a few
instances which reflect these changes.
2.3.3 Buyers market in the making
The sellers market is slowly moving towards becoming the buyers market.
Since, Indias economic liberalization policies were initiated in 1991, many new product
offerings have entered the Indian market and product variety has also increased manifold.
Import licensing restrictions are being eliminated and tariffs significantly reduced and
this has led to large range of consumer goods made available in India.
2.4 Consumer Spending Behavior
The Indian consumer spending has increased from US$ 133.60 in 1992-93 to US$
350.74 in 2002-03, a compound annual growth of 10.13 per cent at current prices.
The way Indian consumers are spending their money on various items has changed in
recent years. The share being spent on the basis (food and beverages) has fallen from
54.07 per cent in 1992-93 to 44.8 per cent in 2002-03. Other items have increased in
importance, for example, medical and healthcare spending has increased from 3.5 per
cent to 8.5 per cent of total expenditure over the same period, a compound growth rate of
19.71 per cent. Similarly spending on transport and communication has grown at 13.2 per
cent.
While the Compound Annual Growth Rate (CAGR) in total consumer spending has been
around 12 per cent a year over the past decade, there have been sharp ups and downs.
Consumer expenditure has been in tandem with the annual GDP growth.
For Indian India, percapita 30 days'consumerexpenditure of US$ 12.34 was split
up into US$ 6.78, on an average, for food, and US$ 5.56 for non-food. Food
expenditure included US$ 2.25 forcereals and cereal substitutes, and US$ 2.37 for
milk, milkproducts, vegetables, edible oil and US$ 2.16 on others. on-food
expenditure included US$ 1.11 forfuel and light, andanotherUS$1.00 forclothing,
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footwearand US$3.45 on othernon-food expenditure.
For the urban sector, average Monthly Per Capita Consumer Expenditure (MPCE) of
US$ 23.53 was split up into US$ 10.00 for food and US$ 13.53 for non-food. Of food
expenditure, US$ 2.37 went towards cereals and cereal substitutes while US$ 3.67 was
spent on milk, milk products, vegetables and edible oil and US$3.96 on other food items.
US$ 2.11 was spent per person per month on fuel and light, and US$ 1.65 on clothing and
footwear and US$9.77 on other non-food items.
Urban expenditure levels per capita exceeded Indian levels for all the product
groups, except on cereals and cereal substitutes. The average monthly per
capita expenditures on cereals and cereal substitutes for Indian and urban areas
are very close to each other.
The gap between Indian and urban averages of MPCE was of the order of US$
11.16. The item-groups viz. milk and milk products, beverages etc, fuel and
light, education, miscellaneous consumer goods & services, conveyance and
rent contributed to the gap significantly.
Non-food expenditure per person in the urban sector was more than double of that for the
Indian sector, where it was about US$ 5.55.
In India, the higher income group (>US$2,465) spends more amount of their income on
luxury goods and trendy products than fact moving consumer products.
The middle income group (US$1,162 US$1,190) spends more on consumer
expendables than the rich.
Combined the middle and the lower income group provide 60 per cent of the value of the
Indian market.
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CHAPTER - III
RESEARCH METHODOLOGY
3.1 Research Design
A research design is the arrangement of conditions for collection and analysis data in
a manner to combine relevance to the researcher purpose with economy in procedure
It constitutes the blueprint for the collection, measurement and analysis of
data. As such design includes an outline of what the researcher will do form
writing the hypothesis and its operational implications to the final analysis of data.
As such the design includes an outline of what the researcher will do from
writing the hypothesis and its operational implications to the final analysis of data. More
explicit, the decisions happen to be in respect of:
What is the study about?
Why is the study being made?
Where will the study be carried
out? What type of data is required?
Where can the data found?
What periods of time will the studyinclude? What will be the sample design?
How will the data be analyzed?
In what style will the report be prepared?
What techniques of data collection will be used?
The Research Design undertaken for the study is Descriptive one. A study,
which wants to portray the characteristics of a group or individuals or situation, is
known as Descriptive study. It is mostly qualitative in nature. The main objective of
Descriptive
study is to acquire knowledge.
3.2 Source of Data
Data are the raw materials in which marketing research works. The task of datacollection begins after research problem has been identified and research design ischalked out. Data collected are classified into primary and secondary data.
Primary data
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In this study, the primary data is collected to understand the main reasons behindchanging consumer behavior of soap and detergent. This is collected using aquestionnaire specifically designed for the consumer of all levels.
Secondary dataSecondary data were collected from the newspapers, journals, websites, and from
library books.
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CHAPTERIV
INDIAN FMCG MARKET
4.1 INTRODUCTION
The Indian Fast Moving Consumer Goods (FMCG) industry began to shape
during the last fifty odd years. The FMCG sector is a cornerstone of the Indian
economy. This sector touches every aspect of human life. Indian FMCG market has
been divided for a long time between the organized sector and the unorganized sector.
Unlike the US market for FMCG which is dominated by a handful of global players,
Indias Rs. 460 billion FMCG market remains highly fragmented with roughly half
the market going to unbranded , unpackaged home made products.
This presents a tremendous opportunity for makers of branded products who can convert
consumers to buy branded products. Globally, the FMCG sector has been successful in
selling products to the lower and middle income groups, and the same is true in India.
Over 70% of sales is made to middle class households today and over 50% is in Indian
India. The sector is excited about a burgeoning Indian population whose incomes are
rising and which is willing to spend on goods designed to improve lifestyle. Also with a
near saturation and cut throat competition in urban India , many producers of FMCGs
are driven to chalk out bold new strategies for targeting the Indian consumer in a big way.
MART, the specialist Indian marketing and Indian development consultancy, has foundthat
53 per cent of FMCG sales and 59 per cent of consumer durable sales lie in the Indian
areas. Of two million BSNL mobile connections, 50 per cent went to small towns and
villages; of 20 million Rediffmail subscriptions, 60 per cent came from small towns; so
did half the transactions on Rediff's shopping site. According to a study by Chennai-
based Francis Kanoi Marketing Planning Services Pvt Ltd, the Indian market for FMCG
is worth Rs.65,000 crore, for durables Rs 5000 crore, for tractors and agri-inputs
Rs.45,000 crore and two- and four-wheelers, Rs.8000 crore. In total, a whopping
Rs.123,000 crore. This could be doubled if corporate understood the Indian buying
behaviour and got their
distribution and pricing right.
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4.2 Impulse to go Indian
There are many reasons that has urged the FMCG companies to enter the uncharted
territory of Indian India. Some of the attractions are discussed below;
4.2.1Large Population
The Indian population is large and its growth rate is also high. Over 70% Indias one
billion plus population lives in around 627,000 villages in Indian areas. This simply
shows the great potentiality Indian India has to bring the much needed volumes and
help the FMCG companies to bank upon the volume driven growth.
Percentage distribution of households and income
4.2.2 Rising Indian prosperity
India is now seeing a dramatic shift towards prosperity in Indian households. To drive
home the potential of Indian India just consider some of these impressive facts aboutthe Indian sector. As per the National Council for Applied Economic Research
(NCAER) study, there are as many middle income and above households in the Indian
areas as there are in the urban areas. There are almost twice as many lower middle
income households in Indian areas as in the urban areas.
Distribution of people income-wise
According to NCAER projections, by 2006 07, the lowest income class (i.e.Rs.2500
and below) will shrink by more than 60%. The higher income classes are likely to double
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by 2006 07. This apparently is the result of development work, which happened under
the five years plans and other special programmes such as land reforms, Indian
electrification Indian communication, and Indian credit facilities, etc. The absolute size
of the Indian market is thus expected to double that of urban India. But despite the high
Indian share in these categories, the Indian penetration rates are low, thus offering
tremendous potential for growth.
According to Mr. D. Shiva Kumar, Business Head (Hair), Personal Products Division,
Hindustan Lever Limited, the money available to spend on FMCG (Fast Moving
Consumer Goods) products by urban India is Rs. 49,500 crores as against is Rs. 63,500
crores in Indian India.
4.2.3 Growth in Market
The purchasing power in Indian India is on steady rise and it has resulted in the growth
of the Indian market. The market has been growing at 3-4% per annum adding more than
one million new consumers every year and now accounts for close to 50% of
volume consumption of FMCG. The growth rates of lot of FMCG are higher in Indian
markets than urban markets. In product categories like toilet soaps, talcum powder,
cooking oil, vanaspati ghee, tea, cigarettes and hair oil, the share of Indian market is more
than 505.
The estimated annual business from Indian markets was Rs 1,23,000 crore, comprisingRs
65,000 crore of FMCG, Rs 5,000 crore of durables, Rs 45,000 crore of agricultural inputs
including tractors and Rs 8,000 crore of two-wheelers and four wheelers.
Twenty nine per cent of the Indian people own cars, 27 per cent own colour televisions,
24 per cent own refrigerators and 10 per cent own washing machines, which points to
the untapped potential in the Indian areas. Companies therefore have to look at the
Indian
market very seriously for future expansion.
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Indian FMCG market Projections (the below table indicates past data in-order to
show upcoming Indian market)
4.2.4 Effectiveness of Communication
An important tool to reach out to the Indian audience is through effective
communication. A Indian consumer is brand loyal and understands symbols better. This
also makes it easy to sell look -alike. The Indian audience has matured enough
to understand the communication developed for the urban markets, especially with
reference to FMCG products. Television has been a major effective communication
system for Indian mass and, as a result, companies should identify themselves with their
advertisements.
Advertisements touching the emotions of the Indian folks, it is argued, could drive a
quantum jump in sales.
4.2.5 IT Penetration in Indian India
Today there are over 15 million villagers in India who are aware of the Internet
and over 300,000 villagers have used it! Ten years back, history was created with
Public Call Office phone booths (essentially manually operated payphone facilities),
opening in every corner of the country. This experiment was an instant success and
contributed to hundreds of thousands of jobs. Over the next two years, WorldTel is
expected to provide 1000 centers in Tamil Nadu with 2 to 20 terminals in each centre.
If successful, this experiment can be replicated easily to all 27 states leading to over half
a million Internet users through this experiment alone! The existing 600,000 public call
offices in India will soon be transformed into public 'tele-info-centres' offering a
variety of multimedia information services. The Indian consumers spend time and
money to access higher level
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information. Studies have indicated that if the content has direct relevance and will result
in commercial gains, people in Indian areas are willing to pay for information services.
Consumerism has altered Indian buying behavior in recent years. Spending patterns of
those who spend are now adapting to face the technology bug. Today's Indian children
and youth will grow up in an environment where they have 'information access' to
education opportunities, exam results, career counseling, job opportunities, government
schemes and services, health and legal advice and services, worldwide news and
information, land records, mandi prices, weather forecasts, bank loans, livelihood
options. If television could change the language of brand communication in Indian
India, affordable Web connectivity through various types of communication hubs
will surely impact the currency of information exchange. As the electronic ethos and IT
culture moves into Indian
India, the possibilities of change are becoming visible.
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4.3 Understanding Indian consumer
The Indian-urban divide does exist. In many cases, the Indian consumer, unlike the
urban one, can't appreciate ads that are clever, gimmicky, suggestive or hi-tech
The Indian consumer is very conscious about getting value formoney.
He understands symbols and colors better, and looks for endorsement by local leaders
or icons.
He doesn't like to pay extra for frills he cannot use.
He has his daily routine, and there is no sense of urgency in his lifestyle.
He has a very high involvement in any product purchased, especially when he decides
to buy high-end products, which cost a few hundreds or thousands of rupees.
Divisions based on caste, community and other hierarchical factors continue to exist in
Indian areas. Perceptions, traditions and values vary from State to State and, in some
cases, from region to region within a State.
The case of a well-known brand of shampoo. When it entered the Rajasthan market some
decades ago, with a theatre commercial that showed a beautiful model featuring bouncing
hair, the product bombed. Post-research showed that it was considered indecent for a girl
to show off her hair, and the audience refused to connect with the brand.
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Similarly, MRF bullock cart tyres, there was glaring differences between Western UP and
Eastern UP. While bullock carts in Western UP were smaller vehicles with single
buffalos, in Eastern UP, they were bigger vehicles pulled by two bullocks. In Western
UP, villagers spoke Hindustani whereas in Eastern UP, they spoke Bhojpuri. When we
developed the communication package, we had to keep the above factors in mind.
The first step in the development of any communication package is the in-depth study of
the mindset of consumers of each region for each product category. Remember, it is
suicidal to blindly extend the experience of one product category to another.
While the importance of conceptualizing in the local languages (to capture the local spirit
in the communication aimed at specified Indian audiences) is known, what is very often
overlooked is that a Indian consumer is not in a hurry and you can take your time to
communicate a message. The quickies beamed on television media, which very often go
over his head, are not for him. In fact, commercials or short tele-films of two minutes or
more do much better.
Indian folks do not understand clever, gimmicky, quick (fast-paced), suggestive and
hi-tech films.
Use of unrelated symbols, characters and icons confuse and distance them. They want a clear connection between the problem and the solution offered by a
brand.
It is important to be clued to the region-specific requirements and cater to the typical
tastes of the regional consumers, both in terms of product offerings and
communication packages."
Creating brands for Indian India is a science that will require many ardent students
who are willing to participate in this great big task of doing the different thing
altogether
in Branding
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4.4 Brand Positioning in Indian Markets
Branding correlates with Image Building in an organization vis--vis its products
produced/services rendered. In the vicinity of today's Marketing scenario along with
advancement in technology, Brand Management is the order of the day. In the process of
branding, the aspect of brand activation at ATL (above the level) and BTL (below the
level) makes a vital contribution for the marketing journey.
To attain a safe platform in Brand activation, the Marketing Managers pay attention and
focus in a diligent manner on the value based credentials of the users in the Marketing
arena. A full-fledged dedicated team with multi focused thoughts only can do the needful
for the successful brand management.
Good branding strikes a chord with viewers help them relate with the product and reflect
their aspirations.
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The research approaches to get at brand objective.
Word Associations:
While using the logo, hoardings and exhibits, suitable jargons have to be deployed in the
word association. People can be asked what strikes in their mind when they hear the
brand's name.
Personifying the Brand:
Visual control mechanism plays a vital role in identifying the brands in terms of
personification. People can be identified the brands when seeing the visual pictures
described.
Laddering up to find the brand essence:
Brand essence relates to the deeper, more abstract goals consumer and trying to satisfy
with the brand. The attribute, a functional benefit and an emotional benefit brand essence
constitute a technique known as laddering up.
Brands are increasingly getting more entwined with our lives. The debate today is not as
much about 'why branding' as above defining a meaningful role for a brand in the
consumer's life.
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4.4.1 Flow chart onbrandingprocess
4.4.2Whybranding in Indian areas
1. Separate your brand from your competitors in a unique way
2. Relevant and motivating to your customers
3. Prospects and channels-it gives you value and make you special.
4. Enhance your perceived value, there by supporting premium pricing, sheltering you
from low price competition.
5. Contributing to share holder value.
6. Provide resilience in times of negative press.
7. Enable you to launch new products more quickly and cost effectively
4.4.3 Successful Branding:
As branding can make or break a product, marketer should handle it with the same
concern as the artisans show in their work. All the activities that are taken under the
umbrella of a brand add to or subtract from the value. The customer's evaluation of a
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brand is a result of all the consumer experiences he has had with the brand. Consumer
experience includes product, services, personal contacts, advertising, promotions, word of
mouth, etc.
This mix of memories, which are built up over a long time, makes the brand potentially
the most powerful liver of the intangible perceived values. After all the first thought that
comes to the mind of the customer prior to the purchase of the product is 'who has made
it', if that brand has good reputation, it raises the level of confidence on the part of the
customer to buy the product.
4.4.4 India's USP
India is shining then! India is Unique in many ways. A population that is large,
heterogeneous, largely English speaking and a cultural heritage that runs back to
thousands of years. India is young. India is vibrant. The major segmentation of mass
population is located in Indian area. So, the market potential is large in number. So we
can expect the market strength in Indian area. Now, the educational Institutions are
also concentrating on Indian marketing and doing market research in Indian places.
Indian markets are rapidly growing in India but have often been ignored by marketers.
Most of them are remote-fully ignorant due to the reason of diversification of products
produced thereby slitting into disposable income.
4.4.5 Branding strategy in Indian
place. IndianProduct Development:
The Indian market is a fast growing one and has a huge population with a great level
of disposable income. To encash this, products have to be specifically developed to meet
the needs of Indian markets. Sometimes, existing products might have to be modified to
suit
these markets too accordingly.
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Indian product development has the strong edifice on a great deal of research like
feasibility studies, Indian aspiration, Indian profiling and so on. This paves way for a
great deal of infrastructure and expertise in this area.
IndianBranding
Indian branding bears quite different stand from urban branding. The first step towards
Indian branding is to research and gain insight into the working of Indian markets. Based
on this communication campaigns have to be developed with a lot of Indian sensitivity.
Indian branding is attained by way of opting to a greater percentage of local media and a
smaller percentage of the mass media. Indian gatherings like temple festivals, melas, and
cinema halls and so on can be used as venues to promote brands. Direct Marketing and
events like road shows; film shows, melas, street theatre can also be used to promote
brands.
A well-planned Indian branding campaign cannot just create brand awareness but help
your target relevant to your brand and promote sales. A long-term campaign will keep
your brand at the top-of-the-mind and build brand loyalty. So the brands are in safe hands.
Indian Market
Research
Indian markets behave most differently from urban markets. While many marketers have
tried to market their products in Indian areas, just a handful of the same only
has succeeded. A strong insight into Indian consumer behavior and sensitivity to their
values and beliefs is essential; to upgrade the Indian market Indian market research
encompasses not just gathering data but analyzing them and linking the findings to
promoting your products.
Indian Communication
Campaigns:
Communication for Indian markets calls for a different kind of outlook. There must be
a strong accent on helping the target relate to the message.
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The entire communication and media strategy has to devise a system based on research
findings. These have to be developed in the regional vernacular languages and set in the
local culture for easier acceptance and reach. Unlike communication campaigns in urban
areas that rely greatly on the mass media, the strategy will be of crying in the wilderness
in Indian areas. Besides mass and outdoor media, Indian extravaganza like temple
festivals, melas and other events where the villagers come together can be used for
promotions.
IndianEvents:
In the Indian context, one of the best ways to capture the attention of the audience is
through Event-management. Since Indian areas have limited venues for entertainment,
conducting an event in Indian areas can bring a good response.
A well-planned event can get the product the mileage that we want. Some of the
interesting events that can be conducted are Road Shows, Melas, Street-Theatre, Film
Shows and so on. These make a visually strong impact and build long term brand recall.
Indian public are the target audience and hence the portfolio of event management has to
be handled professionally with diligent care and broad perspective.
Indian DMCampaigns:
Direct Marketing (DM) is one of the most powerful way to meet the target on their turf
and build product awareness as well as promotion. The success of any DM campaign
depends on the field workers and their sensitivity and emotional connectivity to Indian
markets.
In the area of Direct Marketing, Indian team has to be trained, to be sensitive to
Indian culture and beliefs. They can handle activities like Door-to-Door sampling,
marketing and product promotion. These activities can also be carried out innovatively at
places like local cinema halls, melas and festivals, in the midst of cross-cultural
gatherings and
conglomerations.
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CHAPTERV
DETERGENT AND SOAP IN INDIAN INDIAN MARKET
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5.1 Detergents and soaps in Indian Indianmarket
The consumer product industry consists of personal care, cosmetics and home products.
The sector is sub divided into dental care, soaps, detergents, surface cleaning products,
skin care and hair care products.
5.1.1 Market share of consumer products penetration in IndianIndia
Segments Market Size Penetration
Rs bn Urban Indian
Toilet Soaps 46.0 95 % 85.0 %
Detergents 38.0 95% 85.0 %
Hair Color 2.4 20 % 10.0%
Skin Care 7 40% 0.0%
Oral Care 21 75% 20.0%
FMCG products like detergents are of low value but the cumulative budget allocated to
FMCG products by consumers is significant. The price and income elasticity of demand
varies across products. FMCG products are backed by heavy advertising and sales
promotion to induce consumers to buy. FMCG products are neither capital intensive nor
technology intensive. That is, technology is easily available and stable. One of the key
features of the FMCG industry is third party manufacturing (TPM). TPM used to offer
fiscal advantages, especially excise- duty, that has now been rationalized. It provides
other benefits like:
Allowing the company (say HLL) to concentrate on marketing and liberate
manufacturing and the associated overheads & inventory.
Reduction in labor costs. Third party manufacturers are usually small because of
which overheads and labor costs are low. These companies do not have the problems
arising out of unionization that big companies face.
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Greater control over logistics. It is often necessary to get the product manufactured
near the market to control logistics. A company may enter into agreements with many
third party manufacturers instead of setting up plants all over the country.
The market for detergents is dominated by HLL and Procter & Gamble with four other
companies in the organized sector - Godrej Soaps, Shaw Wallace, Colgate Palmolive and
Nirma. In addition there are numerous players in the unorganized sector. In 1995 the
detergent market was estimated at Rs 6500 cr. Exhibit 10-3 presents a snapshot of the
detergents market. The tid tetergents industry does not face shortages of raw material
as major ingredients like soda ash, vegetable oils; Linear Alkyl Benzene and
Sodium Triphosphate are available. .
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5.1.3 Segment Wise Operation of Various Detergents
Premium Segment Economy Segment
Product Company Price Per Kg.Product Company Price
PerKg.
Ariel Green P&G
180
Super Nirma NIRMA
50
Ariel Front O Mat P&G
175
Ariel Gain Super Soaker P&G
49
Ariel Power Compact P&G
155
Rin Shakti HLL
37
Tide Detergent P&G
85
Mr White HENKEL SPIC
35
Surf Excel Matic HLL
160
Surf Excel HLL
135Popularsegment
Surf Washing Powder HLL
82
Nirma Washing powder NIRMA
18
Rin Supreme HLL
75
Nima Green NIRMA
18
Henko Compact HENKEL SPIC
135
Wheel Blue HLL
22
Henko Matic HENKEL SPIC
95
OK detergent HLL
18
Henko Stain Champion HENKEL SPIC
81
Wheel Green HLL
18
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Reg onW se Sa es O Wash ngPowde
sou heas
14%17%
wes
23%no h
46%
Ove a Ma ke Sha e
O he s5% HLL
Sma 35%Sca e30%
N ma30%
MARKET
PLAYERSA DTHEIRSHARE
The major players are: HLL, Nirma,
Henkel Spic (included in others), P & G
(included in others), Small-scale players
t
rt EndUsers
country
Detergents are used by every
household throughout the
North India is the largest detergent market in India while south India is the
smallest detergent powder market across the country
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Consumer habits, practices & perceptions
Most Indian urban
housewives do a system wash
ie they first soak the clothes
in a bucket with powder for
some time followed by
scrubbing with bars
Laundry soaps and synthetic
detergent Bars are relatively
more popular in the
Indian areas as tap wateris not easily available
in many
villages.
In Synthetic Detergents, bars are also more popular than powders due to cheaper
pricing.
Fragrance is one of the key benefits sought after by consumers, as it connotes
freshness and newly washed clothes.
Consumers attribute greatest importance to whiteness while washing.
Many consumers in lower and lower middle class feel that daily washing of
clothes leads to faster and higher wear and tear of clothes
Washing powders are more popular in the western and northern regions whereas
cakes/bars are more popular in the South.
There is widespread use of detergent powder for other purposes such as washing
utensils and cleaning floors.
Liquid detergents are still not widely used. Usage is restricted for special fabrics
and expensive clothes.
Niche products like fabric softeners, stain removers; color fixers are not widely
used.
Homemade remedies such as application of kerosene/lemon for stain removal,
Salt as color fixer etc are popular.
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5.2 HLL Vs NIRMA
Point of comparison irma HLL
Product range (wide)
Pricing
Packaging (sachet)
Place in world
Turnover
Profits
SWOT Analysis
5.3.1 Nirma
STRENGTHS
Backward integration on the
manufacturing process
Focused on mass market mainly
Indian India - household name
Low price high quality
Distribution network
WEAKNESS
Weak financial position
High interest cost on new projects
Minimal focus on urban market
OPPORTUNITIES
Introduce detergents in the
premium segment
Markets abroad like Bangladesh,
Nepal & parts of Africa
Acquiring global market share
THREATS
Price wars among detergents in the
premium and economy segments
Competition from HLL
Unorganized sector proving products
at the same or lower price
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5.3.2 HLL
STRENGTHS
Market leader
Distribution network
Caters to all the 3 segments of
detergent market
Strong brand equity
WEAKNESS
Finding funds for long term growth
without depressing margins further
Declining sales and profits
OPPORTUNITIES
Expanding in out-of-home
segment
THREATS
A reprising strategy in detergents has
eroded HLLs profitability.
5.4 Pricing Strategy
HLL operates in all the three segments of the market segment wherein the
premium segment includes detergents falling in the price range of Rs. 75 to Rs.
160 per kg, the economy segment includes Rin Shakti at Rs. 37 per kg and the
popular segment includes detergents falling in the price range of Rs. 18 to Rs. 22
per kg
HLL has incurred losses in the last quarter due to their price reduction under itscompetitive price war. Earlier it was incurring profits through its detergents
having high prices and maintaining its leadership.
Nirma operates in the popular and economy segment whrein the economy
segment includes super Nirma at Rs. 50 per kg and the popular segment includes
detergents at Rs. 18 per kg
P&G operates in the premium and economy market wherein the premium
segment includes detergents falling in the price range of Rs. 85 to Rs. 180 per kg,
the economy segment includes Ariel Gain Super Soaker at Rs. 49 per kg
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5.5 Marketing Ps
4 Ps
4 Ps Nirma HLL
Price
Place
Product
Promotion
5.5.1Price:
Nirma detergent powder launched in the mid- Seventies at one-third the price of
its competitor HLLs Surf. It proved to be hugely successful. To counter Nirma,
HLL brought in its own low-priced detergent powder called Wheel, which also
emerged successful. Launching such low priced variants might mean diluting apremium brands quality and more importantly equity. MNCs are therefore wary of
doing this.
Nirma products are usually priced at a lower rate while HLL uses mid range or high
prices
5.5.2 Place,product &promotion:
The reach of Nirma and HLL is listed in the table. HLL promotes its products
heavily leading to increased customer awareness and it also has a wider product
range, which differentiates it from Nirma.
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5.6 Strategy
5.6.1 Hindustan LeverLtd
Flagship BrandSurf
Positioning - Premium
Other brandsRin, Wheel, Sunlight, OK, 555, Ala, Comfort
Surf Excel has been positioned as detergent which has excellent stain removing
capability. However surveys revealed that consumers worried that colored clothes
might wear off faster due to regular use of such high powered detergents. HLL
has therefore changed its advertising theme line from Surf Excel Hai Na to
Daag Hataye, Rang Nahin.
HLL has adopted a flanking strategy with its brands catering to every customersegment. Rin and its variants cater to economy segment and premium segments.
Wheel was launched to fight Nirma in the popular end of the market.
Project Shakti
Reinventing the distribution channel
Health and beauty services like Lakme beauty Saloon & Ayush Therapy Centers.
5.6.2 Nirma Ltd
Flagship BrandNirma
Positioning - Popular
Other brandsNirma, Super Nirma
Nirma follows the Value for Money strategy for all its products and both its
brands cater to the popular segment of the market. Super Nirma, its brand in the
high end of the economy segment is not a focus area for growth.
Nirma follows the backward integration strategy to become the lowest cost
detergent manufacturer in the worldThe company has set up a parallel distribution and sales channel for Nirma. This
consists of 2000 distributors and an independent sales force. A two-tier network
(as against the traditional three tier), the Nirma distribution channel is 'flat'
enabling swift market response
Initiative to expand business in Bangladesh & Pakistan
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Nirma will employ effective marketing strategies & continue to reduce cost to
counter increasing price competition
5.6.3 Procter& Gamble
Flagship BrandAriel Compact
Positioning - Premium
Other brandsAriel Super Soaker, Tide
Ariel is positioned in the premium category and is among the most expensive
hand available in the Indian market. The company has launched mid priced
brands like Ariel Super Soaker to cater to the lower income group consumer,
which forms a significant potion of the Indian market.
Tide prices have been slashed by 30% to Rs85 per kg. The company hopes that a
semi premium price positioning will enable it to grow its market share, which has
been stagnating since the last 2-3 years. The price reduction has been possible due
to the company being able to save significantly on distribution costs through
supply chain initiatives and a successful distribution-restructuring project called
the Golden Eye
5.7 SurfExcel & Ariel
5.7.1 Surfexcel
1. Surf was launched in 1959.
2. In 1996, Surf redefined this completely when it launched Surf Excel.
3. A pioneer in the Indian detergent powder market.
4. Surf Excel is available in 3 variants:
SurfExcel BlueSurfExcel Quick Wash
SurfExcel Automatic
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Promotions
Various Schemes & Contests-
1. Bucket Scheme
2. 10/10 Contest
Benefits to Distributors & Retailers
1. Distributors-3%
2. Retailers -10%
5.7.2 Ariel
1. Ariel was introduced in India in 1991.
2. Ariel gives you impeccable cleaning in stain removal.3. Ariel contains unique ingredients that cannot be found in other detergents.
4. Ariel is available in 3 variants:
Ariel Fresh Clean & Spring Clean
Ariel Front-O-Mat
Ariel Ultra-Magic
Promotions
1. Tie-Up With Companies
2. Shiksha Programme
3. Advertisement
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5.9 TOILET SOAP
The toilet soaps market is estimated at 530,000 tpa including small imports. Hindustan
Lever is, of course, the market leader.
The market is littered over with several, leading national and global brands and a large
number of small brands, which have limited markets. The popular and premium brands
include Lifebuoy, Lux, Cinthol, Liril, Rexona, and Nirma.
Toilet soaps, despite their divergent brands, are not well differentiated by the consumers.
It is, therefore, not clear if it is the brand loyalty or experimentation lured by high volume
media campaign, which sustain them. A consequence is that the market is fragmented. It
is obvious that this must lead to a highly competitive market. Toilet soap, once only an
urban phenomenon, has now penetrated practically all areas including remote Indian
areas. The incremental demand flows from population increase and rise in usage norm
impacted as it is by a greater concern for hygiene. Increased sales revenues would also
expand from up gradation of quality or per unit value.
As the market is constituted now, it can be divided into four price segments: premium,
popular, discount and economy soaps. Premium soaps are estimated to have a market
volume of about 80,000 tones. This translates into a share of about 14 to 15%. However,
by value it is as much as 30%.
5.9.1 Factors affecting buying behaviour
Price is the most important factor which effects the buying behavior of consumer, by
which a consumer goes for the various segment of soap like premium, popular, sub-
popular and carbolic which are basically decided by the cost factor and fat content in the
soap.
The buying frequency is either monthly that is done by the families or in case of
bachelors it is more than once in a month. The occasions when premium soaps are
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Demand
1999 00
a 1996 97e
Y Tonnes1993 94
1990 91
0 200 400 600
Tonnes
purchased are usually when there are festivals and ceremonies. Moti Soaps are usually
presented during festivals and occasions for presents and gifts.
The promotional techniques help to boost sales. Various tactics like the price offs, buy
one get two free, free gifts and other schemes help boost sales in short run and also help
in clearing stocks.
One of the important points a soap marketer should note is that the soaps are usually
purchased by women in urban areas as most of the day to day consumption of personal
care products are made by women. A point to note is that women use more personal care
product than men do and hence premium soaps are mostly targeted at them. Men
normally make purchase decisions in Indian areas. Hence the marketer has to
adopt
different strategy for such a market.
-
r -
-
-
The market shows a seasonal behavior for some brands, i.e. the brands change as per the
customers' need for that particular season. For e.g. in summer - running brand popular
and sub-popular most of the buyer take bath twice in a day specially in northern belt, in
monsoon - running brand antiseptic and medicated soap, in winter running brand
premium (moisturizer and creamy soap).
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Ma ke Sha e
seya O he s 14 8P
44
168
HLL 64
0 10 20 30 40 50 60 70
%Shae
5.9.2 Benefits sought by various customers from various brands are
1. Beauty - Lux
2. FreshnessLiril, Cinthol
3. NaturalMedimix, Margo
4. BabyJohnson & Johnson, Doy
5. CreamDove, Doy Care (moisturizing)
6. MedicatedDettol, Savlon,
7. GlycerinPears, Emami
5.9.3 Penetration
One of the factors, which affect the demand of soaps, is the penetration, which the
products have in market. In case of soaps this has not been a major issue as the
penetration in the Indian area is as high as 97% and that for urban area is around 99%.
Thus the approximately the penetration is around 99% for overall India.
5.9.4 Market Share (Indianareas)
r t r
r
l t r .
.
.
r
In terms of market share, the data indicates that HLL had a market share of 64 per cent in
the soap market, followed by Nirma at 16.8 per cent and Godrej at 4.4 per cent. However,
when contacted by ET, Nirma officials said their market share was in the region of 21 per
cent.
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Hindustan Lever is the largest contributor to the toilet soaps market of India. It enjoys
almost a two-thirds share, with the second ranked Nirma Soaps placed at a distantly low
share of 16.8%. Lux and Lifebuoy have held the sway of the market for almost fifty
years. While the former brand remained the preserve of the high-end rich consumers,
Lifebuoy ruled the roost with health-conscious users as a hygienic soap. The products
underwent up-gradations with the introduction of versions like International Lux and
Lifebuoy Personal. In between came brands like Nirma Rose, Nirma Beauty Soap,
Breeze, Caress, and LeSancy. In 1993 came Dove. Earlier, Liril made waves with its
lemon touch and bathing acrobatics.
At the medium and lower rungs, brands like Hamam, Moti, Jai, Rexona (third largest
brand) were well supported by OK and later by OK NSD Bar.
While Pears has dominated as high profile specialty soap, HLL undertook, in 1992, a
project to manufacture the product for the world market at Khamgaon in Maharashtra.
Commercial production commenced in 1993.
To provide a sound base to its toilet soaps operations, HLL has also branched out into
other toiletries like shampoos and related products like glycerin, fatty acids.
Godrej Soaps had a disappointing experience in forging an alliance with Procter &
Gamble (P&G). Infact P&G is withdrawing itself from the premium soap segment like
Camay.
P & G has now a fully-owned subsidiary in India and now it is concentrating more on
personal care products..
Godrej is promoting a number of brands, Cinthol, Ganga, Shikakai, Fairglow, No.1 and
Crowning Glory, while it has others to bother about such as Vigil and Fresca. Cinthol
ranks third and accounts for 60% of all Godrej Soap's brands. It is an old brand launched
about five decades ago in early 1950s. New Cinthol Lime and Cologne gave it a new look
in 1985. Two variants were introduced in 1989 placing an added emphasis on their brand
of soaps. Its deodorant and complexion soap is styled as Cinthol Spice. Cinthol is
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perceived largely as a male soap, as Lux is a lady's soap. Ganga did well and a new
version Doodh Ganga has been introduced. Ganga had notched up a 5% market share but
declined to 2% later with sales at Rs 350 mn. Godrej wants to revive it.
Even Nirma has achieved a significant penetration and has notched up an impressive
60,000 tones sale in just three years. Nirma Ltd has been putting up a backward
integration plant to produce soda ash and linear alkyl benzene (LAB).
It seems Indians have sacrificed hygiene at the altar of thrift. If numbers are anything to
go by, Indians do seem to be washing themselves, as well as their clothes, rather less.
Data collated by industry certainly points to this rather unpleasant conclusion. The
consumption of tid tetergents has shrunk substantially with volumes declining by
11.5 per cent and consumption of detergents declining by 4.1 per cent in the year.
The evidence of this decline in consumption is somewhat perplexing in a country with a
growing population as the consumption of soap and detergents should logically be
directly proportional to population growth. "Tid tetergents are at the back of the house
and are not status products like TVs or refrigerators. Its possible that consumers may be
economizing on their use or buying cheaper brands during a downturn," explains an
official at a leading FMCG firm.
One possible reason could be increased production in the small-scale sector. For
instance, besides detergents sold as powders and bars, which is produced by organized
players, a large quantum of detergents are sold in the form of laundry soaps, which are
used for washing clothes. Production of laundry soaps are reserved for the small-scale
sector and data is not readily available. There is also a large cottage industry producing
cheap soap, used for personal wash, for which reliable numbers are not available.
Another possible reason for the apparent decline in consumption could be the free
samples of soap which have been handed out as part of incentive schemes, say industry
sources. The quantum of such samples may not be picked up in the data, said the
official.
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There is another whacky hypothesis. Many households earlier used soaps for twin
purposes: for body wash as well as shampoo substitutes.
However, successful sachet marketing in shampoo seems to have nowpenetrated this
market, which has directly impacted the sales of soaps.
A detailed analysis of the data shows that sale of premium soaps, the likes of HLL s Lux
or Godrejs Cinthol, declined by 13.1 per cent. But even the carbolic or discount soaps
the likes of HLLs Lifebuoy or Nirma saw volumes decline by 9.9 per cent. Even
though the market has shown de-growth in toilet soaps segment, analyst say that it will
grow at a meager rate of 3 to 4 per cent especially in the premium category, which was
previously looking attractive. This can be attributed to factors like excessive dependent of
Indian Indian sector on monsoon, which can be uncertain. Also due to high excise duty
prices have remained high enough to keep the huge middle class chunk away from this
market. Thirdly 80% of the raw materials used in premium soap are imports, which
attract high import duty. All this factors lead to increase in cost, which deters the players
to provide value for money product to the middle class consumer.
Price segments of toilet soaps
Segment Price/weight
Premium > Rs. 15 / 75 gms
Popular Rs. 8-15/75 gms
Economy < Rs. 8 /75 gms
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CHAPTER VI
CONCLUSIONS
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CAPTER VI
CONCLUSIONS
In the end it is certain that SOAP & DETERGENT companies will have to
really gain inroads in the Indian markets in order to achieve double digit growth targets
in future. There is huge potential and definitely there is lot of money in Indian India but
the smart thing would be to weigh in the roadblocks as carefully as possible. The
companies entering Indian market must do so for strategic reasons and not for tactical
gains as Indian consumer is still a closed book and it is only through unwavering
commitment that the companies can make a dent in the market. Ultimately the winner
would be the one with the required resources like time and money and also with the much
needed innovative ideas to tap the Indian markets.
The Fast Moving Consumer Goods (SOAP & DETERGENT) sector is a
corner stone of the Indian economy. This sector touches every aspect of human life.
The SOAP &DETERGENT producers now realize that there is a lot of opportunity for
them to enter into the Indian market. The sector is excited about the Indian population
whose incomes are rising and the lifestyles are changing. There are as many middle
income households in the Indian areas as there are in the urban. Thus the Indian
marketing has been growing steadily over the years and is now bigger than the urban
market forSOAPs &DETERGENTS . Globally, the SOAP & DETERGENT sector has
been successful in selling products to the lower and middle income groups and the same
is true in India. Over 70% of sales is made to middle class households today and over
50% of the middle class is in Indian India. Also with a near saturation and cut throat
competition in urban India, many producers of DETERGENTS are driven to chalk out
bold new strategies for targeting the Indian consumers in a big way.
But the Indian penetration rates are low. This presents a tremendous
opportunity for makers of branded products who can convert consumers to buy branded
products. While developing the strategies, the marketers need to treat the Indian
consumer differently from their counterparts in urban because they are
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economically, socially and psycho- graphically different to each other. This paper
covers the attractions for the DETERGENTSmarketers to go to Indian, the challenges,
the difference between the Indian and the urban market and the suitable marketing
strategy with the suitable example of companies and their experience in going Indian.
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BIBILOGRAPHY
1. Philip Kotler ,Marketing Management11E.
2. Branding India-Advertising Express ICFAI Journal Jan 2006
3. Indian ManagementMay 2007.
4. Warner Books , "Positioning"A1 Ries and Jack trint
5. Business line's Journal on ManagementThe Power of Branding praxis May 2005.
6. 2006 by business world 2E ,The Marketing White Book
7. Prof.Venkat Ramasamy Co-author with C.K. prahalad,
"The future of competition"
8. http://www.indianmba.com/Articles_on_Management/AOM35/aom35.html.
http://www.indianmba.com/Articles_on_Management/AOM35/aom35.htmlhttp://www.indianmba.com/Articles_on_Management/AOM35/aom35.html