Chik Satin Shampoo

Consumer Behavior Project

Table of Contents
Acknowledgement.............................................................................................................. ....................3 Introduction ................................ ................................ ......................... Error! Bookmark not defined. Market Size in India................................ ................................ ................................ ................... 3 Existing Competitors: Few players -HUL dominates ................................ ................................ .. 4 Growth Trajectory: A blip in growth rates ................................ ................................ .................. 4 The reasons for the slowdown................................................................ ................................ .......5 Scaled Down Versions................................. .................................................................................... 5 Functional Benefits.................. ....................................................................................................... 6 Future Prospects: Herbal opportunity.................. .......................................................................... 7 Moving across category barriers....................................................................................................7 Factors affecting the consumer behaviour in Shampoo Industry..........................................................8 Comparison between Brands................................................ ........................ ...................... .........10 Fishbein Multi Attribute attitude Model.......................................................... ...........................10 Comparison between the consumer behaviour of males and females.................. ..............................17 Consumer Profile...................................................................................................................... ............19 Target Countries for Cavincare to enter with the Chik Satin Shampoo brand..................................... 22

Acknowledgement
This project has been an opportunity for all of us to gain vital knowledge on Consumer Behaviour. We would like to convey our heartfelt thanks to Prof Bikramjit Rishi to give us the opportunity to take up this project. His suggestions have been the only source of guidance for us throughout.

Introduction Market Size in India: In India, hair care products are the fastest-growing category within personal products. Between 1994 and 1998, the market size of products such as skincare and toothbrushes doubled in value. But the size of the shampoo market expanded two -and-a-half times over the same period. Not surprisingly, shampoos are a high priority area for major players such as Hindustan Lever. The current size of the shampoo market, according to ORG-MARG, is Rs.850 crore - equivalent to 30,000 tonnes in volume terms.

Unlike other FMCG categories such as soaps and detergents, which boast of a penetration level of more than 90 per cent, shampoos remain a low penetration category. Industry sources estimate that the urban market penetration of shampoos is a modest 36 per cent. Shampoo usage in the rural markets is even more infrequent, with a penetration level of 12 per cent. Thus, even for the largest player in this industry, there is considerable scope for volume expansion by converting non -users.

Existing Competitors: Few players -HUL dominates For a market with high potential, the shampoo market in India is dominated by just a few players. From scores of brands five years ago, the shampoo market has now been whittled down to a handful. Hindustan Lever (HLL), with a 65 per cent volume share (68 per cent share by value), dominates the market with brands such as Sunsilk, Clinic Plus and Clinic All Clear. Cavin Kare Limited with brands such as Chik and Nyle follows with a 19.8 per cent volume share. Procter & Gamble (P&G) is the only other large player in this category with brands such as Pantene Pro-V and Head & Shoulders. P&G discontinued its shampoo manufacturing operations in India in 2000. Most of its brands are today directly imported from other Asian countries such as Thailand, Taiwan and Vietnam. New entrants are probably discouraged by the formidable task of establishing a distribution network from scratch. HLL's long established ties with retailers and its extensive distribution reach probably acts as an entry barrier for new entrants. CavinKare Limited, which has managed to garner a significant share of the shampoo market despite this handicap, has focussed on scaled -down versions of its brands and herbal shampoos -- two segments where the market leader did not have a presence. Cavin Kare's shampoo business has grown faster than the overall market, at 20 per cent in 1998, 4 per cent in 1999 and 34 per cent over the past four quarters. Growth Trajectory: A blip in growth rates Despite its undisputed potential, the rapid expans ion of the shampoo market was interrupted in 1999. Overall growth rates in the market slowed to 1.7 per cent in 1999, from 16 per cent the previous year. Between January and November 2000, however, the market appears to have recovered some, and the shampoo category has grown by around 10 per cent.

The reasons for the slowdown The main factor is lack of innovation. HUL has identified three major barriers to shampoo use in India The perception that shampoos contain harsh chemicals that could damage hair High price of shampoos The view that the shampoo is more of a glamour product rather than a hygiene product. FMCG companies are working at getting consumers to switch over from alternatives, such as natural products and soaps, to shampoos. CavinKare attributes the slowdown in growth rates to the contraction of agricultural incomes. Roughly a fourth of the shampoo market is in rural India. But the rural market is the key driver for sachets, which make up 70 per cent of the total shampoo sales. HUL has higher stakes in the rural market with an 80 per cent share. Scaled down versions Therefore, the strategies of the major players have revolved around attacking these barriers to usage. The players obviously believe that the key obstacle to recruiting new users lies in the high price of shampoos as a product. Unlike other FMCG categories, where marketers are experimenting with low unit packs, as a concept, the low unit shampoo packs have been around for over a decade. Therefore, marketers have been working at scaling down prices further. CavinKare made the first such attempt. It introduced a smaller 50 paise sachet of Chik, when most other sachets retailed at Rs.2. The effort appears to have been an unqualified success, with the Chik brand expanding by 40 per cent after the launch. A new 50 ml bottle of Chik priced at Rs.6 (when most other brands were available in 100 ml bottles and above) has also helped expanded the brand.

y y y

HUL acknowledges that the Chik innovations have expanded the overall market, trimming HLL's volume shares by 2-3 percentage points. HUL has responded with its own 50 paise version of Lux shampoo. The company claims their launch of 30 ml bubble pack for Clinic Plus ( Rs.8), is an innovative and cost-effective alternative for sachet users. While sachets are difficult to store and re-use, the bubble pack allows the user to extract just the right quantity for a single wash. The scaled down versions could help pep up volume growth rates for major players. But they have also had the effect of lowering the per ml cost of the major brands retailed through sachets. Till the time the players upgrade users to the larger pack sizes, the sachet revolution could restrict margin expansion for the players. Functional benefits Players have also tried other routes to expand the shampoo market. Fighting the perception that shampoos are essentially glamour products, marketers have tried to add a utility value to shampoos by offering functional benefits. Anti -dandruff shampoos represent this attempt. Clinic Plus, one of the first anti-dandruff brands, is the largest shampoo brand today, with a market share of 31 per cent. Clinic All Clear, an anti-dandruff extension targeted at the youth has also managed to garner a 13 per cent share. Due to its low pricing ( Rs.71 for a 160 ml bottle against Rs.68 for a 100 ml bottle of Head & Shoulders anti -dandruff shampoo), the brand also has a significant rural market share of 44 per cent. HUL has also experimented with different versions of Sunsilk for dry, normal and oily hair. Procter & Gamble's Head & Shoulders Menthol and Pantene Lively Clean also offer functional benefits to users. Since these add -ons enable brands to command a price premium over the plain shampoos, this strategy could aid both volume and margin expansion.

Future Prospects: Herbal opportunity One of the key barriers to shampoo usage lies in the reluctance to use a synthetic product on hair. Worldwide, therefore, herbal shampoos or botanicals are a fast growing category. Ayur from RDM Traders Private Limited and Nyle Herbal, a herbal shampoo launched by CavinKare, have been some of the early entrants in the Indian herbal shampoos market. These products claim to use traditional Indian herbs such as shikakai, soap nuts and amla as ingredients and have been a success. Nyle Herbal is among the top five shampoo brands in the country and herbal shampoos today account for 10 per cent of the market size. That industry leader, HUL, does not as yet have a presence in this segment is noteworthy. However, brands such as Sunsilk have been emphasising natural ingredients such as `fruitamins'. High price could be a key barrier when it comes to herbal shampoos. The key challenge in manufacturing herbals lies in efficacy. Users typically require larger quantities or higher concentrations of herbal shampoos to replicate the results of synthetic shampoos. Bringing down prices can therefore be quite difficult in this case. This is probably why 90 per cent of the herbal shampoos still sell only in the urban markets. Moving across category barriers Meanwhile, the value-added shampoo segment is getting quite crowded, with a range of pharmaceutical and cosmetics companies launching specialised products. While Dabur has leveraged Vatika's brand equity to launch Vatika Herbal shampoo, Godr ej Soaps has leveraged its dominance of the hair colour market to launch Godrej Colour gloss shampoo, for users with coloured hair. This apart, several pharmaceutical companies (including Johnson & Johnson) have launched medicated anti -dandruff shampoos (which will probably carry higher credibility with buyers), while cosmetic companies such as Biotique and Lotus Herbals also have herbal shampoos on the shelves.

Factors affecting the consumer behaviour in Shampoo Industry We conducted a survey consisting of 60 respondents, 30 males and 30 females to find the factors affecting the consumer behaviour in Shampoo segment. The following graph shows the importance of factors that consumers consider before buying a shampoo.

Sum of all respondents
400 350 300 250 200 150 100 50 0 Sum of all respondents

As we can see in the graph, importance of different attributes for a shampoo varies a lot. The attributes of shampoo in descending order of their importance are: 1. Hair Cleansing 2. Hair Fall Protection 3. Hair Conditioning 4. Non-chemical Content

5. Anti-Dandruff 6. Good Fragrance 7. Good Brand Name 8. Different Varieties for different hair types 9. Attractive Packaging 10. 7ml shampoo sachet for less than Rs. 2 11. Celebrity Endorsement Our respondents are students from a B-School, all youngsters having age between 22 and 28. The survey brings forth the following main points regarding consumer behaviour: a. Youngsters from upper / upper middle class do not get affected by celebrity endorsements for a shampoo. For example Dove does not endorse any celebrity for its promotions. b. Youngsters today are opting for natural products rather than products with big brand names. For example many people are buying Himalaya products instead of products from big guns. c. Youngsters today care a lot about their looks. This is the reason they are not very much concerned about the price while buying a shampoo. d. Different shampoo varieties launched by different brands does not affect the consumer behaviour much and therefore does not result in increased sales.

Comparison between Brands On the 11 factors which we have taken above, respondents rated 4 prominent shampoo brands of Indian market. These brands are Vivel, Chik Satin Shampoo, Pantene and Head & Shoulders. Fishbein Multi Attribute attitude Model The attitude data obtained from the survey was used to construct the Fishbein Multi Attribute attitude model. Average of the 60 responses was taken. The following table shows the results: Head & Shoulders

Attribute 7ml shampoo sachet for less than Rs.2 Hair Cleansing Anti-Dandruff

Evaluation

Vivel

Chik Satin

Pantene

69.17 121.97 96.50

17.78 27.73 20.75 26.97 19.13 18.00 25.18 14.55

21.98 25.18 18.00 21.50 18.62 13.78 19.88 10.75

13.85 34.03 25.25 29.43 17.68 21.43 29.98 17.10

15.55 35.02 32.50 26.87 16.63 20.92 27.27 17.08

Hair Conditioning Non-Chemical Content Attractive Packaging Hairfall Protection Celebrity Endorsement Different Varieties for Different Hair Types Good Brand Name Good Fragrance Total Score

104.77 72.07 74.13 102.32 59.48

88.08 98.82 106.67

21.73 22.78 26.32 240.93

17.20 16.53 24.02 207.45

25.85 29.27 28.90 272.78

23.30 30.23 27.43 272.8

Comparison between the 4 brands for each factor could also be analyzed through the following pie charts:

7ml shampoo sachet for less than Rs.2

Consumers perceive Chik Satin Shampoo to be the cheapest among the 4 brands

Hair Ceansing

Head & Shoulders ranks first among the 4 brands for hair cleansing

   

ivel

Chik
Pantene H&S

ivel

Chik Pantene H&S

Anti- andr ff

Vivel Chik Pantene

H&S

Head & Shoulders is Anti -Dandruff specialist shampoo which is reflected through the pie chart

Hair Conditioning

Vivel Chik Pantene H&S

Pantene is suited best for hair cleansing according to the consumers

Non-

e ical ontent

Vivel Chik Pantene

H&S

Vivel is considered having non -chemical contents

Attractive Packaging

Vivel Chik
Pantene H&S

Consumers find Pantene most attractive with respect to Packaging

Hairfall rotection

Vivel Chik Pantene

H&S

Consumers trust Pantene the most when it comes to Hairfall Protection

Celebrity Endorsement

Vivel Chik
Pantene H&S

Celebrity endorses Head & Shoulders the most according to the c onsumers

Different arieties for Different Hair Ty es

Vivel Chik Pantene

H&S

Pantene provides with the maximum varieties as per consumers

Good Brand Name

Vivel
Chik Pantene

H&S

Head & Shoulders scores highest in Brand Name

Good

agrance

Vivel

Chik Pantene
H&S

Ran ing
3
Vivel Chik 4 2

According to the s rvey conducted, consumers rate Head & Shoulders as the best shampoo brand preceding Pantene The difference between the 2 brands is negligible though. After
rd these 2 brands, Vivel shampoo captures the 3 rank leaving Chik Satin shampoo at the last

place.

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Ran in of th fou b ands bas d on all th facto s to th
¨ ¨ ¨ ¥

¤£

Pantene prov es the best fragrance according to the cons
¢

§ §¦

§

§

©

£ 

§

¡

ers

¦

Pantene H&S

Comparison between the consumer behaviour of males and females with respect to purchase of hair shampoos Now we will analyze the differences in the importance of different attributes of a shampoo between male and female consumers. The ranking given to different attributes by male consumers could be seen in the following graph:

Male Respondents
200
180

160
140

120 100
80

1
9

4

3

2

5 10
11

60
40

8

7

6

20
0

The ranking given to different attributes by female consumers could be seen in the following graph:

Female Respondents
180 1 3 7

160 140
120

2

3

5

6

4

8 9 10

100 80 60
40

20 0

The following points could be extracted from analysi s of the above 2 graphs: a. Both male and female respondents give hair cleansing top priority as expected as it is the basic function of any cleaning agent. b. While males give preference to hair fall protection quality of a shampoo, for females , quality of non-chemical content stands second only to hair cleansing. This brings forth the fact that males have fear of hair loss while they are young. His could also be seen in the advertisements of different brands which are promoting their hair fall protection shampoos nowadays. As females prefer non -chemical shampoos, a lot of advertisements are promoting shampoos with fruit extracts, natural extracts etc.

c. While females do care about the fragrance of shampoo, males do not give much heed to this quality. This depicts the typical stereotype of our society where males are not supposed to care about things like fragrance, beauty etc. d. Males give high preference to anti-dandruff quality while for females it seems that dandruff is not a problem. e. Attributes like attractive packaging, price, celebrity endorsements and brand name doesn t seem to be affecting either males or females. One reason of this indifference could be the consumer profile of the respondents. They all are well educated, know their brands and are from well to do families.

Consu er Profile The survey was conducted across 30 female and 30 male respondents. 

Gender
Male Female 50%

50%

The monthly household income is an important factor for consideration in this research study. Majority of respondents (46% had a monthl household income of Rs. 45,000 or y more. Another 27% of the respondents have a household income between 30,000 and 

45,000. Around 20% belong to the category of Rs 15,000 30,000 and 7% had monthly household income less than Rs. 15,000.

Monthl Famil Income
7% 46%

20%
27%

<=15000
15001-30000

30001-45000 >=45001

While 87% of respondents are students, 13% are employed in the public private sector or are self-employed.

Occupation
13%
Student

87%

67% of the respondents are graduates while 28% have completed their post graduation. The respondents educated till XII and holding professional certificates are2% and 3% respectively. 

Public Sector/Private Sector/Self Employed

Education
3% 2% XII 28% Graduation Post Graduation
67% Professional Certification

Target Countries for Cavincare to enter with the Chik Satin Shampoo brand Key characteristics of Chic Shampoo as identified by the consumers (Reference: Consumer Survey)

Cost Effectiveness Hair Conditioning

Hair Cleansing

Fragrance

As observed in the survey, consumers have identified the above four as the key characteristics (value adds) of chic shampoo.

Further, the same consumers were also asked to rate various drivers (characteristics) that influence a purchase decision, for a shampoo. Following which, the factor scores (brand specific and product specific) were multiplied and the resulting scores showed that main characteristics of chic shampoo, which influence the consumer purchase most are the same 4 characteristics

Chic Sha
1600 1400 1200 1000 800 600 400 200 0

oo

Score

Although, the sample contains Indian people only and their requirements might be different from consumers in other countries, we can still use the consumer data describing the product (chic shampoo) perception in studying other countries which might be a potential market for chic shampoo.

Countries where Chic Shampoo can be launched:Dubai 

As compared to other parts of UAE, Dubai is highly cosmopolitan in nature with
people from different cultures and communities residing 

Around 71 of Dubai is Expats from various parts of Asia, with Indians being t he
majority (51 ). 
 

The economy is stable, mostly due to the oil reserves  A consuming middle class, who is cost conscious (should not be misunderstood to
low cost buyers) and modern at the same time 

Liberal women (as compared to other parts of UAE) do try new fashionable products 

Finally, the hot, dry and dusty climate shows that the consumers do require a good
hair cleansing product

Argentina 

Is defined as an upper -middle income economy , an emerging market  Urbanization is on a rise and middle class doe s spend on utility products and also
considers spending on other products 

Thus, its highly likely that a normal house will have a tv, refrigerator, AC and a
microwave oven, but economical options of all 

Thus, it s a conservative yet growing economy and hen ce a perfect launch platform
for Chic 

The climate differ as we move from north to south (hot to cold) with north and
central part having hot and dry climate in summers, and south having cool winters. 

Due to growth in industrialization, pollution is on an i ncrease and hence we feel a
need for a good cleansing shampoo (more than shine or hair fall) will have good market

Libya 

4th richest country in Africa  Emerging economy  Family life is important in Libya and majority live in apartments  People have started spending on diversified products, but conservatively  A shampoo with high hair cleaning and conditioning capability, which is cost effective
will find good acceptance here

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