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Summer Training Project Report

A Analytical Study on Soap

Submitted in lieu of the partial fulfillment of the Degree of Master of Business Management

Submitted By:

Arun Japani MBA-IIIrd Sem. 087609

DAYALBAGH EDUCATIONAL INSTITUTE DAYALBAGH AGRA

Introduction
Soap was probably discovered by Stone Age woman who saw that the combined residues of ash and fat found in a fire after roasting a beast made a useful cleaning compound. In 600 BC the soap made by the Phoenicians from tallow and beech ashes was probably used as hair pomade, rather than for washing. The use of soap in personal hygiene is first recorded in the second century AD when the physician Galen (130200AD) mentions its use for washing the body. Soap making in Europe was established by the end of the first millennium, with important centres at Marseilles and Savona, where olive oil was used instead of tallow. Soap making was carried out in these centres by soapmaking guilds, who guarded their recipes closely. Soap attracted heavy taxation from Stuart times in England - this only stopped when the tax was abolished in 1852 as the Victorians became increasingly obsessed with cleanliness (Hunt, 1999).Soap still attracts tax in markets across the world and considerable effect is shown on the market when tax is reduced, as happened in India in 1995, when sales of soap and detergent were effectively doubled.

Toilet soap industry is one of the oldest Fast Moving Consumer Goods (FMCG) industries in India. It is among the highest penetrated category within FMCG sector reaching an estimated 98% urban and 70% of the rural households. There are scores of brands national, regional, rural that are vying for the attention of India's 1,100 million users. The toilet-soap industry contributes about 10% to the total 97,800 crores FMCG sector. Currently this industry is estimated to be 9800 crores annually in terms of sales and 5, 50,000 tonnes in terms of volume (As reported by ACNielsen India Retail Store Audit 2008). It is therefore not a surprise to see aggressive advertising, price wars and promotional schemes in this industry.

2.1 Industry Overview


A report on toilet soap manufacture in India by K.S. Holla and R.R. Press of Tata Oil Mills Co. Ltd. notes that toilet soap consumption in India is expected to rise about9.5% a year, to 374,000 metric tons IMT) by 1990, 580,000 MT by 1995 and 11,914,000 MT by the year 2009. This, the authors add, will require expanding manufacturing capacity to approximately 735,000 MT by 1995 and 10,150,000 MT by the year 2008. According to the report presented at a toilet soaps seminar conducted by the Oil Technologists' Association of India {Northern Zone} April20, 1986, the largest growth potential is in rural markets. The main raw native materials used in India for soap manufacturing, the report said, are rice bran oil, hardened rice bran oils and oils from mowrah, sal, neem, karanja and khakhan. Imported sources used include coconut and palm kernel oils. India currently has a total ban on the use of animal tallow. Also, groundnut is not permitted for soap manufacturing; it is solely used for edible purposes. In urban sales of premium toilet soaps in 1984, the Liril brand manufactured by Hindustan Lever had sales of 3,500 MT, representing24.4% of the market share. Mysore Sandal made by

Karnataka Soaps sold 1,588 MT, or 11% of the market share, and Shikakai manufactured by Swastik sold 1,500 MT, representing10.6% of the market. For the same year, Hindustan Lever produced the three top brands of popular toilet soaps--Lifebuoy, with sales of 36,000 MT and a 38.5% market share; Lux, with sales of17,600 MT for an 18.6% market share; and Rexona, with 11,300 MT for an 11.9% market share.

Table 1: Long Term Growth of Largest Categories S.No 1 2 3 4 5 6 7 8 9 10 Category FMCG Total Toilet Soaps Washing Powders/Liquids Biscuits Packaged Tea Detergent Cakes/Bars Refined Oil Consumer Pack Tooth Pastes Skin Creams Vanaspati Consumer Pack Beverages Contribution 2008 97,800 crores 21% 7% 7% 6% 5% 4% 4% 3% 3% 2% Source: ACNielsen India Retail Store Audit CAGR % 2008/2003 7.4 1.1 5.5 9.8 -3.7 0.2 26.5 0.9 7.7 6.5 6.6

The Indian Fast Moving Consumer Goods (FMCG) industry grew 1.4% over the last year and 6.4% over a five year period from 1993-2008 according to ACNielsen India. Categories like toilet soaps and washing powders that have struggled with growth over the last three years, indicate a positive compounded annual growth rate. The personal care and detergents segment in India has grown at a CAGR of 7-8 per cent in the past 3 years from 2001-2003.The demand for toilet soaps will be restricted to 5 per cent over the medium term, as current penetration levels are already high (As reported by CRISIL Impact analysis 2004). The fairly high contribution from rural market makes this category sensitive to the fortunes of the agricultural economy. In terms of volume the market has grown at a rate of 6 percent but the same growth does not show in the revenues because of two prime reasons Reduced prices/promotional campaigns and Down trading i.e. customer shifting from a higher segment product to a lower segment product. This, to some extent, neutralizes the volume growth.

2.2 Industry Analysis


PESTN Factor Analysis
Political Factors The political arena has a huge influence upon the regulations on the soap industry. The industrial policies and tax structure of government influences the manufacturers costs. The cost of industrial oils constitutes a major input and significantly impacts the cost of soap. The high rates of customs duty of 30% (till 2007-2008) on such oils have adversely affected the growth prospects of the toilet soap manufacturers. In the Budget 2005-2006, the customs duty on industrial oils and cosmetics and toiletries has been reduced from 30% to 25%. Excise duty on toilet preparations using alcohol/narcotic substances has been reduced to 16% from 20 % (source Indian Budget 2005-2006).

Economic analysis
1. GDP growth 2007-08 is estimated to be 9.1 per cent with the manufacturing sector expected to grow at 12.9 per cent. 2. Prospects of good agricultural growth looking bright with expectation of normal monsoon; stable agricultural incomes expected. 3. Higher disposable income is driving demand. Per capita income has grown by 7.2%. 4. FMCG sector is witnessing a surge in demand, with encouraging trends in most segments. 5. Special focus on the Rural Segment by the Government of India to increase prosperity in the rural regions. As a result, rural market will become more lucrative (source Indian Budget 2007-2008). Social Factors The primary motives in using soaps are cleanliness and hygiene. Fear of disease and bad odor are the main motivators. This factor varies across different sections of society, depending on various socio economic factors, level of awareness, literacy etc. In mature markets, soaps are vastly differentiated and available in varieties of fragrances, colours, sizes and shapes. Indian Society is becoming more Beauty conscious and therefore, the purpose of the toilet soap has extended to the realm of beauty soaps. This had led to the emergence of a niche segment among beauty soaps- the fairness soap. The Rural markets are also becoming more aware of the bigger brands, with increasing penetration of print and electronic media.Technological Factors A lot of new Research is being done in the industry to improve the soap, like development of a transparent soap (Ref- HLL Annual Report). According to The Bureau of Indian Standards soaps are graded on the basis of TFM (Total Fatty Matter) content in them. Grade 1 has the highest quality standard. A Grade 1

soap has a minimum TFM (Total Fatty Matter) content of 76% and also has the least number of additives, thus making it a pure soap. Besides this grade, soaps are also classified as Grade 2, Grade 3 as well as bathing bars (source BIS website). Also efforts are being undertaken to manufacture soaps from vegetable oil than animal oil, as former is economically more viable.

Natural Factors
The current emission norms do not set stringent guidelines for soap manufacturers. But the major environmental concerns for the companies are the particulate emissions from the boilers and oil loss to the water stream. Soaps are also affected by the change in demand due to seasonal variations and supply of vegetable and animal oils as raw materials. The effect of the weather conditions, on the soap usage varies from region to region. In the Northern part of the country where the temperatures go down in the winters, the consumption of soaps decreases during the winters.

2.3 Industry Structure


The toiletries market in India is well developed and dominated by multinational companies and a few large Indian companies. A few major players, high entry barriers, fairly high rate of new product launches, and high advertisement spending characterize this segment. HLL is the market leader in majority of the toiletries and personal care segment such as soaps/personal wash, oral care, fabric wash and talcum powder. The toilet-soap market is dominated by three major players - Hindustan Lever Limited (HLL), Nirma and Godrej. Together they have 88% of the market share. While HLL has clearly been the market leader over the last many decades, Nirma has grown in the past 15 years to command one-fifth of the market .The remaining market is held by Palmolive, Wipro, Dabur, Reckitt & Coleman, and Medimix etc. Since the market power is concentrated with a few major players, toilet soap market is a perfect example of an Oligopolistic market structure. Table 2 The Major Players, their Market Share and Popular Brands Company HLL NIRMA GODREJ OTHERS % Market Share 60 20 8 12 Popular Brands Lux,Lifebuoy,Hamam,Breeze,Li ril, Dove Nirma Bath, Nirma Lime Fresh, Nirma Beauty Soap, Nima Rose Cinthol, Fairglow, Godrej No. 1 Dettol Medimix, Nivea etc.

Source: ACNielsen India Retail Store Audit 2008 The penetration level for Toilet Soaps is almost saturated in the urban market and the rural market is not lagging behind. Indian marketers are looking at ways

to push higher usage. That's why the players are using every trick in the book to boost per capita consumption as that is the only way to grow.

Consumer Behaviour Analysis 3.1 Segmentation


Introduction and Definition When it comes to marketing strategies, most people spontaneously think about the 4P (Product, Price, Place, Promotion) may be extended by three more Ps for marketing services (People, Processes, Physical Evidence). Definition: Market segmentation is the segmentation of markets into homogenous groups of customers, each of them reacting differently to promotion, communication, pricing and other variables of the marketing mix. Market segments should be formed in that way that differences between buyers within each segment are as small as possible. Thus, every segment can be addressed with an individually targeted marketing mix.

3.2 Need for market segmentation


Marketers understand that they cannot be all things to all people, all of the time. Buyers and markets are too complex and diverse for one simple marketing formula to adequately address the needs of all. Market segmentation and the identification of target markets, however, are an important element of each marketing strategy. They are the basis for determining any particular marketing mix. Literature suggests the following steps:

It involves aggregating prospective buyers into groups that: 1. Have common needs and 2. Will respond similarly to the marketing action. The groups that result from the market segmentation process are called market segments, a relatively homogeneous collection of prospective buyers. The importance of market segmentation results from the fact that the buyers of a product or a service are no homogenous group. Actually, every buyer has individual needs, preferences, resources and behaviours. Since it is virtually impossible to cater for every customers individual characteristics, marketers group customers to market segments by variables they have in common. These common characteristics allow developing a standardized marketing mix for all customers in this segment.

3.3 Criteria for Market Segmentation


There are a huge number of variables that could be used for market segmentation in theory. They comprise easy to determine demographic factors as well as variables on user behaviour or customer preferences. In addition, there are differences between private customers and businesses. The following table shows te most important traditional variables for segmentation. Consumer Markets Geographic: Land or region Rural or metropolitan area Demographic: Age, sex, marital status Income, occupation, education Religion, nationality, ethnical group Psychographic: Social status Industrial Markets / Business Markets Industry Intermediary or final consumer Type of corporation (public or private sector) Size of corporation Geographical location Intensity of product use Organization of purchasing function

Lifestyle-type Personal type Behavioral: Intensity of product use Brand loyalty User behaviors

- Centralized or decentralized - Purchasing policies, rules criteria

and

Since customer orientation of organizations is growing, segmentation as the basis for establishing customer relationships and customer loyalty gains importance. In this context, the elements of the loyalty ladder model could be used as segmentation variables: Loyalty Ladder Model

Marketers have to choose those variables that are relevant for segmenting the market for a particular product. The basic rule is to focus on a limited number of important variables. To segment the market into too many small, slightly distinct segments would require splitting up the marketing budget into too many ineffective chunks. Such varied marketing activities in the diverse segments could confuse customers and would lead to cannibalization effects.

3.4 Levels of Marketing Segmentation


The starting point for segmentation is mass marketing. In mass- marketing, the seller engages in the mass production and mass production of one product for all buyers. Henry Ford epitomized this marketing strategy when he offered the Model-t Ford in any colour, as long as it is black. Many companies today are going for micro-marketing at one of the four levels: Mass marketing Assumes market is homogenous and uses the same product, promotion and distribution to all consumers. Segment marketing Adapting a companys offerings so they more closely match the needs of one or more segments. Niche marketing Adapting a companys offerings to match the needs of one or more subsegments more closely where there is little competition.

Micro marketing Marketing programmes tailored to narrowly define geographic, demographic, psychographic behavioural segments. Micro Marketing consist of: 1. Local Marketing Tailoring brands and promotions to the needs and wants of local customer groups. 2. Individual marketing Tailoring products and marketing programmes to the needs and preferences of individual customers. 3. Mass customisation Preparing individually designed products and communication on a large scale. Kotler mentions five criteria for an effective segmentation: Measurable: It has to be possible to determine the values of the variables used for segmentation with justifiable efforts. This is important especially for demographic and geographic variables. For an organization with direct sales (without intermediaries), the own customer database could deliver valuable information on buying behaviour (frequency, volume, product groups, mode of payment etc). Relevant: The size and profit potential of a market segment have to be large enough to economically justify separate marketing activities for this segment. Accessible: The segment has to be accessible and servable for the organization. That means, for instance, that there are target-group specific advertising media, as magazines or websites the target audience likes to use. Distinguishable: The market segments have to be that diverse that they show different reactions to different marketing mixes. Feasible: It has to be possible to approach each segment with a particular marketing program and to draw advantages from that. Market segmentation is the selection of groups of people who will be most receptive to a product. The most frequent methods of segmenting include demographic variables such as age, sex, race, income, occupation, education, household status, and geographic location; psychographic variables such as lifestyle, activities, interests, and opinions; product use patterns; and product benefits.

3.5 Reasons for Market Segmentation


As already stated, segmentation is the basis for developing targeted and effective marketing plans. Furthermore, analysis of market segments enables decisions about intensity of marketing activities in particular segments. A segment-orientated marketing approach generally offers a range of advantages for both, businesses and customers.

Better serving customers needs and wants It is possible to satisfy a variety of customer needs with a limited product range by using different forms, bundles, incentives and promotional activities. The computer manufacturer Dell, for instance, does not organize its website by product groups (desktops, notebooks, servers, printers etc), but by customer groups (privates, small businesses, large businesses, public/state organizations). They offer the same products to all customer groups. Nevertheless, they suggest product bundles and supporting services that are individually tailored for the needs of each particular group. As an example, Dell offers to take on all ITadministration for companies. This service provides a huge potential for savings for corporate customers. However, it would be absolutely useless for private customers. Thus, segment-specific product bundles increase chances for cross selling. Higher Profits It is often difficult to increase prices for the whole market. Nevertheless, it is possible to develop premium segments in which customers accept a higher price level. Such segments could be distinguished from the mass market by features like additional services, exclusive points of sale, product variations and the like. A typical segment-based price variation is by region. The generally higher price level in big cities is evidence for this. When differentiating prices by segments, organizations have to take care that there is no chance for cannibalization between high-priced products with high margins and budget offers in different segments. This risk is the higher, the less distinguished the segments are. Opportunities for Growth Targeted marketing plans for particular segments allow to individually approach customer groups that otherwise would look out for specialized niche players. By segmenting markets, organizations can create their own niche products and thus attract additional customer groups. Moreover, a segmentation strategy that is based on customer loyalty (see loyalty ladder model) offers the chance to attract new customers with starter products and to move these customers on to premium products.

Sustainable customer relationships in all phases of customer life cycle

Customers change their preferences and patterns of behaviour over time. Organizations that serve different segments along a customers life cycle
can guide their customers from stage to stage by always offering them a special solution for their particular needs. For example, many car manufacturers offer a product range that caters for the needs of all phases of a customer life cycle: first car for early teens, fun-car for young professionals, family car for young families, etc. Skin care cosmetics brands often offer special series for babies, teens, normal skin, and elder skin. Targeted communication

It is necessary to communicate in a segment-specific way even if product features and brand identity are identical in all market segments. Such a targeted communications allows to stress those criteria that are most relevant for each particular segment (e.g. price vs. reliability vs. prestige). Stimulating Innovation An undifferentiated marketing strategy that targets at all customers in the total market necessarily reduces customers preferences to the smallest common basis. Segmentations provide information about smaller units in the total market that share particular needs. Only the identification of these needs enables a planned development of new or improved products that better meet the wishes of these customer groups. If a product meets and exceeds a customers expectations by adding superior value, the customers normally is willing to pay a higher price for that product. Thus, profit margins and profitability of the innovating organizations increase. Higher Market Shares In contrast to an undifferentiated marketing strategy, segmentation supports the development of niche strategies. Thus marketing activities can be targeted at highly attractive market segments in the beginning. Market leadership in selected segments improves the competitive position of the whole organization in its relationship with suppliers, channel partners and customers. It strengthens the brand and ensures profitability. On that basis, organizations have better chances to increase their market shares in the overall market. Market segmentation differentiation. is the basis for customer orientation and

4.1 Positioning
Positioning is a perceptual location. It's where your product or service fits into the marketplace. Effective positioning puts you first in line in the minds of potential customers. As individuals, we continually position ourselves. The responsible older sibling, the class clown, a number cruncher, a super genius are all examples of

positioning. These identifiers help us define ourselves and distinguish our abilities as unique and different from other people. Positioning is a powerful tool that allows you to create an image. And image is the outward representation of being who you want to be, doing what you want to do, and having what you want to have. Positioning yourself can lead to personal fulfilment. Being positioned by someone else restricts your choices and limits your opportunities. It refers to the place an offering occupies in consumers minds on important attributes relative to competitive offerings. That's why it's so important for entrepreneurs to transform their passion into a market position. If you don't define your product or service, a competitor will do it for you. Your position in the market place evolves from the defining characteristics of your product. The primary elements of positioning are: Pricing. Is your product a luxury item, somewhere in the middle, or cheap, cheap, cheap. Quality. Total quality is a much used and abused phrase. But is your product well produced? What controls are in place to assure consistency? Do you back your quality claim with customer-friendly guarantees, warranties, and return policies? Service. Do you offer the added value of customer service and support? Is your product customized and personalized? Distribution. How do customers obtain your product? The channel or distribution is part of positioning. Packaging. Packaging makes a strong statement. Make sure it's delivering the message you intend. Positioning is your competitive strategy. What's the one thing you do best? What's unique about your product or service? Identify your strongest strength and use it to position your product. The term positioning was described by Trout and Ries as the basic position in the consumers mind occupied by brand. Positioning is often used nowadays as broad synonym or marketing strategy. However, the terms positioning and marketing strategy should not be used interchangeably. Rather, positioning should be thought of as an element of strategy, a component of strategy, not as the strategy itself. The term positioning is, and should be, intimately connected to the concept of target market. That is, a brands positioning defines the target audience. For example, an airline could position itself against other airlines, which defines the target audience as airline travellers. Or, it could position itself against all modes of transportation between two destinations, which then defines the target audience as all travellers between those two markets. The second positioning reaches but to a much larger target audience. Another example: Brand of peanut butter could position itself against all competing brands of peanut butter, which defines the audience as peanut butter users. Or, the brand could position itself against margarine and butter, which defines a very different target market. Positioning, then, is analogous to aiming an artillery field gun. How you position the cannon defines who and what the target is. So, the term aiming is not a bad definition of positioning, and the term targeting is not a bad definition f positioning. The positioning possibilities that exist for any given brand or service are almost infinite in number. Some commonly used positioning strategies are:

Positioning against broader market; for example, positioning bicycle brand as a substitute or the automobile, rather than as a substitute for other brands of bicycles. Positioning against price segment of the market; for example, positioning car brand against luxury imported cars. Positioning against usage segment of the market; for instance, positioning brand of cooking oil is the very best brand of oil for frying chicken. Positioning against geographic segment of a market; for example, positioning Ford trucks as made or driving conditions in Texas. Positioning against psychographic segment of the market; as an example, positioning the Volvo s the car for drivers who are primarily concerned about safety. Positioning against channel of distribution, season of the year, particular type of weather, human fear, etc.

4.2 Approaches of Positioning


Head-to-Head Positioning It involves competing directly with competitors on similar attributes in the same target market Differentiation Positioning It involves seeking a less competitive, smaller market niche in which to locate a brand. RATIONALE (OR ASSUMPTIONS) OF POSITIONING Consumers generally use a small number (2~4) of product attributes when they think about a particular product or product class. In determining a brands position and the preferences of consumers, companies obtain three types of data from consumers: Evaluations of the important attributes for a product class. Judgments of the existing brands with the important attributes. Ratings of an ideal brands attributes.

4.3 PERCEPTUAL MAP


Objectives: It is to identify the relevant dimensions & to locate the positions of existing & potential new products along the dimensions. Products are represented by locations in a space of several dimensions that distinguish among the products Approaches: Attribute-based procedures: Factor analysis Similarity-based procedures: Multidimensional scaling (MDS)

FINDINGS and ANALYSIS 5.1 Segmentation of the Bathing Soap Market into segments and Sub-Segments.
The various segments that are found in the bathing soap industry and discussed below. Segmentatio n on basis Age Kid s Chil d Adult Price Segmentatio n Features Segmentatio n Premium Par Low Cost

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Where : 1= Fragrance 2= Skin Care 3= Health Care 4= Market 5= Form These are further segmentation as following: Fragrance Rose Lime Lavender Sandal Jasmine Skin Care Normal Skin Oily Skin Dry Skin Acne/Pimples Burns Health Care Germ Control Ayurvedic Market Rural Urban Form Solid Liquid

3.2 Brands of Bathing Soap available in Market. The observation of the shelf-space of soaps and stores and interview with the shop-owners has revealed the numerous brand of bathing soap in the market. A company wise description of the available brand is given as following.

5.2 A Brief Description of Brands of Soaps According to their Companies.


The observation of the shelf-space of shops and stores and interview with the shop-owners has revealed the numerous brands of bathing soaps in the market. A company wise description of the available brands is given as following: ( I ) HINDUSTAN LEVER LIMITED (HLL)

LUX
Lux, the international beauty soap has a very strong Sri Lanka Heritage that Stretches back almost 75 years. 1929 marked the first cake of Lux soap sold in

Sri Lanka. Production of Lux soap in Sri Lanka began in 1942 and it has never looked back since.

DOVE
A gallon of liquid Dove, gentle moisturizing hand cleaner is ideal for refilling existing dispensers. This extra mild hand cleaner is designed specifically for use in frequent hand washing environments. Dove minimizes the damage caused by repeated removal of essential oils from skin. Ultra-mild ingredients gently remove soil and bacteria from hands without dying, chapping or irritating. Doves gentle cleaners and moisturizers leave skin soft, smooth and healthy looking. Dove Nutrum-skin moisture nourishment bar with a unique dual formula of gentle cleaners and essential nutrients. Dove Nutrium goes beyond cleansing to nourish your skin with moisture to a healthy-looking glow.

PEARS
Pears soap is made from pure ingredients like glycerin, natural oils, rosemary, cedar and thyme. It contains NO animal Fat, nor is it tested on animal. Each bar is mellowed and aged for three months until it reaches a pure transparency. This unique again process, followed for nearly 200 years, makes Pears Soap extremely long lasting. Pears Junior Pears Oil Control Pears Pure & Gentle

( II ) GODREJ Godrej No. 1


Godrej No. 1 soap enriched with natural ingredients trusted by millions, the flagship brand of Godrej Consumer Products Ltd, is now the largest selling Grade 1 Soap. Grade 1 is the highest standard laid down by the Bureau of Indian Standards (BIS). Godrej No. 1 comes in following variants: Godrej No. 1 Ayurvedic Godrej No. 1 Natural Godrej No. 1 Lavender Godrej No. 1 Rose Godrej No. 1 Jasmine Godrej No. 1 Sandal

CINTHOL

Cinthol the flagship brand of Godrej Consumer Product Ltd. (GCPL), has came a long way since the early 1950s when it was launched. As consumer preference changed and market evolved, the Cinthol brand has kept pace with them. Confident in its promise, Cinthol has spread itself into well defined niches to fulfill these expectations. Now, there is a cinthol for different people with different needs. It keep the Skin Clean, keep the Skin tonned, and Protect the Skin. Cinthol comes in following variants: Cinthol Deo Spice Cinthol Deo Sports Cinthol Lime

Nikhar
Nikhar soap is considered for the skin care as it contains milk, haldi and besan which are very good for the skin. It comes in 4 packs. It does not have any variants. Fair Glow The Godrej fair Glow fairness soap contains a powerful fairness ingredients Natural Oxy-G, which makes you fairer by reducing the dark melanin without the changing the skins natural balance. In addition, it also removes blemishes to give you clear, glowing complexion. Godrej fair glow was Indias first and is the largest selling fairness soap. It helps you become fairer in a convenient way, simple through a daily bath.

Nimin
Targeted at the entire family, Godrej Nimin health soap is made from 100% vegetable oils and combines the goodness of natural ingredients like Neem, Tulsi and Lime. At 76% TFM, its the only grade 1 in the heath soap segment. Nimin comes with the promise of complete health Bath, with natural ingredients like Neem known for its medicinal and toxin- removing properties , Tulsi, which is highly effective for cuts, wounds, abrasions, bits and sstings and Lime known for keeping the body fresh and clean. Nimin removes germs from the body and krrps you healthy and full of zest all day long.

Evita
The beauty soap that you used in your 20s in no longer enough in your 30s. In your 20s your skin is supple, tight and glowing. When you go past 30, your skin begins to lose elasticity, becomes less supple and fine lines appear. Its time to change you old beauty soap. Godrej presents Evita, Age control soap. Evita has AHA that rejuvenates the skin from within and reduce fine lines. Use Evita regularly and feel the difference in just5 weeks! Have a bath with Evita. Feel younger with every bath.

Dettol
Dettol is concidering as o health and skin care soap, which comes in 3 variants: Dettol Original Dettol Cool Dettol Skin Care It is manufactured by Reekitt Bebekincer

Mysore Sandal Soap


It is manufactured by Karnataka & Detergent. This soap is made from pure vegetable ingredients and contains Mysore Sandalwood Oil distilled by the government of Karnataka. It does not have any other variant.

Johnson & Johnson


Johnson Baby The fundamental key to the success of Johnsons baby brand is the range itself superior quality products that are best for the baby. Other key factor include a commitment to upholding support, collaboration with health professionals and the introduction of innovative new products backed by consumer and technical support. Johnsons baby soap does not irritate babys sensitive skin. It has no strong perfumes, no coloring agents or any hard chemicals that will strip away the skins natural microbial flora. Causing no allergy or irritation to babys skin. Enriched with coconut oil, this is the mildest gentlest and is a completely safe soap to use on babys delicate skin. It comes in following variants: Baby Soap Baby Soap Bloosm Baby Milk Soap

Savlon
Savlon is also use for skin care and health care this is basically a germy clean which is used to keep the skin healthy and without germs.

Dabur Vatika
Dabur India Ltd (DIL) is exploring the possibility of a foray into the Rs 4,000-Crore soap market, probably under brand name Vatika. The company is expected to develop the product in-house, even though it is open to acquiring any soap brand that may be up for grabs and fits its requirements. The company has three to four formulations in Dabur Soaps, but these are meant purely for exports. It is unlikely that this formulation will be extended to the new brand and the company is studying both, launching a medicated soap on the Ayurvedic Plank and toilet soap that would be positioned in the herbal beauty slot. Dabur Vatika Honey & Saffron Which gives glowing and healthy skin. It comes in 100g pack costing Rs 13.

Himalaya
Himalaya Herbal health care has used its wealth of knowledge & research, in natural herbal remedies, to formulate the range PF personal care products that cater to your daily health needs. Himalaya Soaps come in two variants: Himalaya Cucumber for Oily Skin Himalaya Almond for Dry Skin

Margo
Deep clean your skin, while its astringent properly tones and nourishes it. Complete skin care from Natural with the antiseptic properties of Neem For health, glowing skin. The observation of the shelf-space of shops and stores and interview with the shop-owners has revealed the numerous brands of bathing soaps in the market. A company wise description of the available brands is given as following:

5.3 Weighted Preference of Bathing Soaps


The number of brands of bathing soaps available in the market was too large and therefore a survey was conducted on about 11 respondents to find out the preference of bathing soaps on a heuristic response basis. Heuristic response refers to the cognitive responses of the respondents i.e. without much thinking and evaluation. The respondents were asked to name 10 soap brands in the order of preference. The responses were given weights from .10 to .01 on the basis of rank and then the weights were added. The findings of the exercise are as following: Brand of Soap Lux Dove Mysore sandal soap Moti Pears Medimix Dettol Himalaya Johnson & Johnson Sandal Cinthol Lifebuoy Nivea Liril Nirma Neem Amway Fair and Lovely Premium Stella Nima No Marks Savlon Weighted Sum .98 .92 .18 .19 .90 .27 .37 .03 .10 .01 .19 .53 .32 .35 .15 .34 .06 .03 .02 .01 .15 .09 .03 Rank I II X III IX V

X IV VIII VI VII

No.1 Lavender Fairglow Sandalwood Santoor FEATURES Rexona Jova SOAPS Fa

PRICE

.09 .06 .17 .04 .10 SKIN .05 CARE .02 .01

FRAGNANCE

SHAPE

HEALTH CARE

BEAUTY CARE

LUX DOVE PEARS LIFEBUOY DETTOL LIRIL NEEM NIVIEA MEDIMIX MOTI CINTHOL

.6667 .5250 .7000 .7375 .7444 .7800 .6200 .5333 .6091 .5667 .6200

.5632 .7824 .7778 .4530 .7105 .5625 .6875 .6077 .6500 .5462 .5118

.7000 .7353 .6000 .4176 .5737 .7125 .5000 .6538 .5162 .6538 .6750

.6789 .7471 .7588 .4647 .6667 .6875 .6375 .6538 .4667 .5308 .6875

.6579 .6580 .6625 .6500 .8474 .5667 .7933 .6167 .7167 .5167 .5063

.5632 .7706 .7588 .5824 .6000 .5800 .6882 .7000 .7167 .6231 .5625

Out of the 31 soap brands the first 10 were taken to carry out Fuzzy Opinion Poll Survey.

5.4 Fuzzy Opinion Poll Survey

5.5 Dominance Matrix


Soap s 1 2 3 4 5 6 7 8 9 10 11 1 * 5 4 1 3 3 4 3 4 2 2 2 1 * 2 0 1 0 1 0 1 0 0 3 2 4 * 0 1 1 1 1 2 2 1 4 5 5 6 * 5 3 5 5 6 5 3 5 3 5 5 1 * 2 2 2 2 3 3 6 3 6 5 3 4 * 4 4 5 2 1 7 2 5 4 0 4 2 * 4 3 2 2 8 3 6 3 1 3 2 2 * 3 0 2 9 2 5 5 0 4 2 3 3 * 3 2 10 4 6 4 1 3 4 4 5 3 * 2 11 4 6 4 1 3 4 3 4 4 4 *

5.6 Order of Preference


Row Total 29 53 42 8 31 23 29 31 33 23 18 Colum n Total Soap s 1 2 3 4 5 6 7 8 9 10 11 1 * 5 4 1 3 3 4 3 4 2 2 31 2 1 * 2 0 1 0 1 0 1 0 0 6 3 2 4 * 0 1 1 1 1 2 2 1 15 4 5 5 6 * 5 3 5 5 6 5 3 48 5 3 5 5 1 * 2 2 2 2 3 3 28 6 3 6 5 3 4 * 4 4 5 2 1 37 7 2 5 4 0 4 2 * 4 3 2 2 28 8 3 6 3 1 3 2 2 * 3 0 2 25 9 2 5 5 0 4 2 3 3 * 3 2 29 10 4 6 4 1 3 4 4 5 3 * 2 36 11 4 6 4 1 3 4 3 4 4 4 * 37

5.7 Comparison of Row and Column Totals


Brand Lux Dove Pears Lifebuoy Dettol Liril Comparison (RT-CT) 39-31= 8 53-6 = 47 42-15 = 27 8-48 = -40 31-28 = 3 23-37 = -14 = = = = = 1 6 4 -13 -19

Neem 29-28 Nivea 31-25 Medimix 33-29 Moti 23-36 Cinthol 18-37 * Negatives are considered as Zero

Result: The above analysis reveals that the Brand Dove has the highest position in the mind of surveyed consumers. Repeating the same procedure the II, III, IV and V order positions have been evaluated. These are as following: Brand Dove Pears Lux Nivea Medimix Dettol Position I II III IV V VI

Note: The entire, surveys and questionnaires are attached in annexure.

6.1 PROBLEM BRAND: Himalaya


Pegged on par with Lifebuoy's variant in the health care category, Lifebuoy Green, Himalaya was priced at Rs 10 for 75 gm and Rs 14 for 125 gm. At 76 % TFM (Total Fatty Matter), its the only Grade 1 soap in the health and herbal soap segment. But As far as the sale is concern this soap is not getting sold in the market. Upon analysing available data we have arrived at the following reasons as the possible cause of Himalayas failureIneffective and Improper Promotion: Himalayas promotional strategy does not seem aligned with the segment it was targeting, the electronic media campaign, which features an urban family did not connect with the rural audiences. Also, since the reach of mass media such as television is only 64%, a large segment of the targeted audience may have been uninformed about the product. The product is not considered as a premium product so the advertisement must be done as per the target segment. Pricing: At 10 Rs, Himalaya is a little bit on the expensive side for the rural customer who was accustomed to paying as less as Rs. 4 for a small packet of soap. (Source www.rediff.com).For the urban customer, with many similar (and more established) products to choose from, it was unlikely that he would try Himalaya(which he may have not heard of, given its ineffective advertising).

6.2 Marketing Strategy for Himalaya


We propose that Himalaya soap should be relaunched in the semi urban and rural areas. With the increase in the rural literacy levels and the exposure to media, people in rural media are also becoming conscious about their buying decisions like their urban counterparts. There has been a significant rise in the brand awareness among the people. At present 53 per cent of all FMCGs and 59 per cent of all consumer durables are being sold in rural India (source Business world white book). As a result they are becoming choosier and more demanding than ever before, so any company has to properly analyze the psychographics before entering this market. We have outlined a marketing strategy for Himalaya keeping the potential of rural markets in mind.

6.3 Target Market

Lower Middle income groups in the semi-urban and rural markets. They should focus on target people residing in rural areas and a part of population in semi urban areas.

6.4 SWOT Analysis of Himalaya


Strengths 1. It is a low price Product. 2. It offers the benefit of a germicidal protection and herbal ingredients in one product. 3. Its a good quality product. Weakness 1. It is strongly associated as a low grade product 2. The Fragrance and moisturising quality is not there

Opportunities 1. The Rural market in India is growing. The Urban market is already saturated and therefore the rural market provides a vast new potential for growth. 2. With increasing focus on rural development by the government, the amenities in the rural regions have improved. Better electricity, telecommunications and transportation facilities have improved the awareness of the people in the rural regions. Threats 1. With the growing focus of the companies on the rural regions, there is bound to be increased competition faced by the company.

6.5 Competitors Response Mapping


The following points list out in what possible ways competitors might respond to Himalays strategy. May Decrease Price May give higher margins to dealers May give discounts and multi pack offers to attract customers.

6.6 Marketing Mix (4Ps)


Product

The product concept will remain the same. It will still be a herbal germicidal soap. The composition of the soap will be Neem, Tulsi, Shirog and Lemon. Now since the soap has these natural components, therefore a green color will better associates with the non artificial feature. Fragrance plays a vital role while purchasing soap. So, the soap needs to have a peculiar fragrance, which the consumer will typically associates with it. Since, HLLs Lifebuoy green has a fragrance of Neem and Liril has that of Lemon, so we propose that Himalay should be given a light refreshing fragrance, which will be a mixture of Tulsi and Lemon. This way a rural consumer can relate it with its own environment. Moreover, Tulsi has never been targeted earlier in any product. So it wont lead to duplication. Packaging is also equally important. Packing of Lifebuoy, against which Himalaya is pitched, is quite simple in a dull coloured paper. We propose to give a touch of freshness to the cover by making it a glazed one that will shine by itself while on shelf and will catch the consumers attention. The packaging should also have the name Himalaya in hindi or the vernacular language. Price We propose to launch the soap in two packing. One will be a 100gm packing priced at Rs 8. Another will be a 50 gm packing priced at Rs 5. The motive of 50 gm packing is to increase affordability and flexibility among the consumers. A small packing is essential as firstly it will be cheaper than the usual large one. Secondly, the life span of the small sized soap will be shorter. So, a prospective consumer will not mind spending Rs 5 on it. This will motivate him to try it.

Place The product has presence in the country. It will be more focused in Semi Urban areas, small cities and towns. When the product is essentially established there, it will be moved deeper into the rural areas. It is beneficiary because it will enlarge our customer base by targeting the semi urban areas. Promotion First and foremost important activity in promoting is to get the people in rural and semi urban areas know about the quality and new dimensions of product. Now since the target segment is semi urban and rural, the media to be chosen must have a deep penetration in every home such as electronic media. Since Doordarshan National Network has the highest reach in rural India, it becomes the undisputed choice. Besides DD1, advertisement could also be given in regional DD channels. For this advertisements need to be dubbed in the respective languages. Regional newspapers can be used to target a wider audience.

Once the plan is to move in to the rural market, we need to employ some rustic means of advertising. Such means which are easily accessible to the rural consumers. Radio is one such media which villagers prefer even today. The advertisements can be placed on the All India Radio (AIR). Punch Line like Him sa swach kare, Tulsi neem ke hen gun Dhare will help in getting the message across to the consumers. In order to penetrate into the hearts of the rural people, some conservative means need to be followed, which could create a niche in their minds. They need to first be emotionally treated. For this purpose plays (popularly known as NUKKAD NATAKS), puppet shows could be organized. A little bit of Social Work can do wonders in attracting the villagers. Participants in these workshops could be given free samples, which wont cost much to the company. A very traditional method of publicizing is by playing loud songs and music on a rickshaw. Pamphlets could also be distributed among the village kids. This has the potential of attracting a large number of people. Hoardings could be put at nodal points of transportation like a bus stop. Advertising in interval timings in cinema halls could be another valid option. This will be quite cheap and effective too.

6.7 Financial Analysis


Break Even Analysis We calculate the break even for Himalaya. We calculate the quantity of Himalaya that needs to be sold in the market to recover the fixed and variable costs involved in the production. The formula for performing the break even is given by: Total fixed cost + Variable cost per unit*x = Price per unit*x Where x=Units (of 100 gram) of Himalaya to be sold for breaking even Total quantity of soaps sold =5000 Tonnes; (Approximate) Total cost of manufacturing soaps = 350 Crores Per capita usage of soaps in India = 500 grams/year (source www.rediff.com) Approximate cost of manufacturing Himalaya = 20.5 Crores; Approximate quantity of Himalaya manufactured = 2000 Tonnes; Approximate fixed cost component in Himalaya manufacturing = 10 Crores; Approximate variable cost component in Himalaya manufacturing = 8 Crores; Therefore variable cost component per 100 gram of Himalaya =Rs. 4 Taking the price of 100 gram bar to be Rs 8, we calculate the number of bars x to be sold to break even as: 100000000 + 3.16*x=8*x; => x=2.5 Crores bars (of 100 gram each)

Conclusion

Although urban market is saturated, there are growth opportunities in the rural markets. We therefore recommend that Himalaya soap should be repositioned in the market with an increased focus on the rural markets. We have calculated that for a breakeven in one year we need to capture a market size of 0.8%. The launch is very challenging given the increasing competition in the rural markets, and it has to be complemented by an aggressive and focused marketing mix. Also we have made the Final Strategy keeping in mind the competitors response and we feel that this strategy will be effective in countering the response of the competitor.