DETERGENT INDUSTRIES

A PROJECT SUBMITED IN PARTIAL FULFILLMENT FOR AWARD OF

DEGREE

OF POST GRADUATE DIPLOMA IN MANAGEMENT

Submitted
by :

AWDHESH KUMAR SAW

PGDM (2009-11)
ROLL NO. G209018

INSTITUTE OF PRODUCTIVITY & MANAGEMENT, INDIA

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 Executive summary of project

A) Title of the project :-

“Fundamental analysis of Indian DETERGENT INDUSTRIES”.

B) Objective of the project

The main objective of this project is to analyze the emerging
trends in the detergent sector in India. This project was also
carried out to understand the future Outlook of the detergent
market in India. Another motive includes finding about the key
players in the detergent Market in India, their performance,
growth potential and also the opportunities that exist for the
Indian Detergent market.

C) Scope of the project

The scope of this project is limited to study of four companies in

Indian detergent sector.

D) Limitations of the project

Only 4 companies out of a very large Indian Detergent industry
could be studied in this process. Fundamental analysis involves
lots of tools, but only selected tools were studied .The study

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frame considered is very limited. The data used is secondary
data.

F) Research Methodology
Research refers to the systemic method consisting of enunciating
the problem, a hypothesis, collecting the facts, analyzing the
facts and reaching the certain conclusion either in form of
solution towards the concerned problem or for some theoretical
formulation. The study is based on the facts collected by
observation and internet.

Method of Data collection

Sources of secondary data:-
1. Internet & Websites
2. Business Magazines.
3. Annual report of the company

• Secondary data: - It is the data which is already present in the

secondary form like press releases, magazines, newspaper,
journals, newsletters which are derived by any other person or
institute.

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Here in this project, I have adopted the descriptive research
approach. This project involves mainly secondary data, which has
been collected from various websites.

Contents of project

 INTRODUCTION ……..5

 RESEARCH METHODOLOGY
(a) SCOPE
………6
(b) LIMITATION
………7
 INDUSTRY PROFILE ANALYSIS AND INTERPRETATION
i. INDIAN DETERGENT SECTOR PROFILE
……….8-13
ii. CLASSIFICATION OF MARKET
……….14-17
iii. MICHAEL PORTER’S FIVE FACTOR ANALYSI
………18-21
iv. FUTURE GROWTH PROSPECTS OF DETERGENT POWDER
……..22-25

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  SWOT ANALTSIS
……….26

 CONCLUSION ……….27

 RECOMMENDATION ……28-29

 BIBLIOGRAPHY …….30

INTRODUCTION

The size of the detergent market is estimated to be Rs. 12,000 Cr. Householdcare
segment is characterized by high degree of competition and high level
ofpenetration. With rapid urbanization, emergence of small pack size andsachets,
the demand for the household care products is flourishing.
Thedemand for detergents has been growing but the regional and small
unorganized players account for a major share of the total volume of the
detergent market. In washing powder HUL is the leader with ~38 per cent ofmar-
ket share. Other major players are Nirma, Henkel and Proctor & Gamble.

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 RESEARCH METHODOLOGY

Scope of the study

In detergent powder sector includes many players, but out of
these players I have selected only four big player service provider
companies .The study gave me a chance to carry fundamental
analysis along with its various tools used in fundamental analysis
which helps to understand the basics of financial statements and

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provides the tools that help to decide which companies make
worthwhile investments. This type of analysis examines key ratios
of a business in order to determine its financial health and gives
an idea of the future value of its stock. The study was mainly
based on the detergent powder service provider companies only
not the whole detergent sector.

Data collection Methodology

Research refers to the systemic method consisting of

enunciating the problem, a hypothesis, collecting the facts,
analyzing the facts and reaching the certain conclusion either in
form of solution towards the concerned problem or for some
theoretical formulation.. The study is based on the facts collected
by observation and internet.

Method of Data collection

Sources of secondary data:-
• Websites
• Business Magazines
• Annual reports of company

Limitations of the study

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• Only 4 companies out of a very large Indian detergent
industry could be studied in this process.

• Availability of data was the main limitation of this study.

• Fundamental analysis involves lots of tools, but only

selected tools were studied.

• The study frame considered is very limited.

• The study is limited to fundamental analysis.

• The data used is mostly secondary data.

• Only listed companies were considered for the study (on NSE
or BSE )

INDIAN DETERGENT SECTOR PROFILE

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Hindustan Lever Ltd:

Hindustan Lever Ltd (HLL) is India'largest Moving Consumer Goods (FMCG)

company. HLL's brands like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair &
Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond,
Kissan, Knorr-Annapurna, Kwality Wall's are household names across the country
and span a host of categories, such as soaps, detergents, personal products, tea,
coffee, branded staples, ice cream and culinary products. These products are
manufactured over 40 factories across India and the associated operations involve
over 2,000 suppliers and associates. Hindustan Lever Limited's distribution
network comprises about 4,000 redistribution stockists, covering 6.3 million retail
outlets reaching the entire urban population, and about 250 million rural
consumers. HLL is also one of India's largest exporters. It has been recognised as a
Golden Super Star Trading House by the Government of India. Presently, HLL has
over 16,000 employees including over 1,200 managers. Its mission is to "add
vitality to life." The Anglo-Dutch company Unilever owns a majority stake in
Hindustan Lever Limited.

Generate revenue in the year 2009-2010 of differert

product sector of hul

This diagram show the generate revenue of hul in

different sectors.

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 SALES BEFORE EXCISE DUTY CHARGE OF HUL IN SOAPS &
DETERGENT SECTOR

This diagram show the figure of sales force of detergent sector of

hul before excise duty form year 2001 till 2010 ending month.this
diagram show the continuous growth in soaps & detergent
industries in india over dynamic time of period.

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Nirma Ltd:
In the summer of 1969, a Gujarati entrepreneur, Dr. Karsanbhai
Patel, set up his first detergent-making unit in the backyard of his
home in Ahmedabad - measuring all of 100 square feet. With bare
hands and a bucket, he would prepare the dry mix detergent
powder that he had invented, pack them in polythene bags and
then set off on his bicycle to sell the packets door to door.

Every packet of Nirma that Karsanbhai Patel sold to his

consumers came with a moneyback guarantee. Soon, Nirma had
established itself as a brand to be reckoned with. As sales grew,
so did Nirma's scale of operations and along with that the brand's
competitive edge. The cost-conscious approach of the initial years
was to evolve into a strategic perspective. Dr. Karsanbhai Patel
put enormous stress on operating efficiencies and marketing
practices to ensure that consumers got their money's worth. By
the 1980s, Nirma was the toast of marketing gurus.

The launch of Nirma detergent cake came sixteen years after the
introduction of the detergent powder. Its success was almost a
foregone conclusion. In 1990, Nirma Super Detergent, a spray-
dried blue detergent powder, was launched. With the launch of
the high-TFM content Nirma Beauty Soap, Nirma began to expand
its product portfolio. To counter the success of Nirma Beauty
Soap, Hindustan Lever Limited launched Breeze. In a flanking
operation that would have done military strategists proud, Nirma,
launched another brand: Nima. Both the brands from the Nirma
stable have been successful in grabbing a huge chunk of all
incremental sales growth in the soap category in the past twelve
years

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P & G:
In 1993, Procter & Gamble Home Products is incorporated as a
100% subsidiary of The Procter & Gamble Company, USA. Procter
& Gamble Home Products launches Ariel Super Soaker.
In 1993, Procter & Gamble India divests the Detergents business
to Procter & Gamble Home Products.In 2000, Procter & Gamble
Home Products introduced Tide Detergent Powder - the largest
selling detergent in the world.
In August 2000, Procter & Gamble Home Products Limited
launched New Ariel Power Compact detergent with a new global
technology that breathes new life into clothes, by removing
dinginess from them and restoring the original colors of the
fabric, by detecting and removing deposits which are left behind
from successive washes.
In January 2001, Procter & Gamble Home Products Limited and
Whirlpool India Ltd. launched a special 'Ariel - Whirlpool
Superwash' offer, making washing machines more affordable to
the people of Hyderabad. On purchase of either a 500gms, 1kg or
1.5kg economy pack of New Ariel Power Compact, consumers are
automatically eligible to buy a Whirlpool Washing Machine for as
low as Rs.238/- in Equal Monthly Installments for 24 months, by
filling in the application form that comes with the Ariel pack and
contacting any one of the Whirlpool dealers mentioned on the
pack.
In July 2001, Procter & Gamble Home Products Limited launched
New Ariel Total Compact with Magicare a New System of Washing
that completely removes stains without scrubbing, significantly
reducing time spent on washing clothes.

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 t
The above diagram show the figures of
segmented business of P & G in the different
market of the.world.according to this diagram 48
% market segmented by p & g for household
care.

By geographic region:

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According to this diagram show the business segmented market
of P & G in the world.here in aisa 42 % market of p&g
expanded.the reason behind it here there are two largest
population’s country of the world are india and china.

FENA:

FENA is a first generation entrepreneurial venture, which was

started in 1976 by Dalip Jolly with very modest resources, soon
joined by his brother Pradeep Jolly, in the name & style of "M/s
Syndet & Chemical Industries". The name of the enterprise was
later changed to M/s Fena Private Limited - FENA being the first &
flagship brand of the company.
Over the years it has grown steadily to its present position and is
recognized as one of the leading players in the field of Fabric care
& Home care products in India and has a growing export business
with diversified product range. The flagship brands of the
Company, namely FENA, NIP, PARA & IMPACT enjoy strong brand
equity in their respective segments due to excellent value for
money proposition and strong media advertising.

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CLASSIFICATION OF MARKET:

The population of India is growing as well as Indian economy is

also growing. To capture the market of rural India as well as
urban India the major detergent big player in India have some
classification of marketing strategy to fight with others
compititors.These classification of market and there products
are given below.

ACCORDING TO INCOME LEVEL:

According to income level market is divideg into two category:
 :high buying capacity power
 :Middle & low buying capacity power

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  :high buying capacity power

According to high buying capacity customer there are two

major detergent player in the Indian market:
 HUL:hul have premium product of detergent to segment
high buying capacity power.
 Surf excel detergent powder
 Rin detergent powder & bar
 P&G: P&G have its brand of detergent product for high

buying capacity power consumer’s

• Tide
• Ariel
• Tide bar

: Middle & low buying capacity power

According to middle buying capacity customer there are four
major detergent player in the Indian market:
 HUL:
• Wheel
• Surf excel(sachet)
• Rin powder & bar
 P&G:

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 • Tide(sachet)
• Ariel(sachet)
• Tide bar
 NIRMA:
• Super nirma detergent powder
• Super nirma bar
• Nirma detergent cake
 FENA:
• Fena detergent powder

ACCORDING TO DEMOGRAPHY:
 Urban
 Rural

 Urban:
HUL:
• Surf excel detergent powder
• Rin detergent powder & bar

P&G:

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 • Ariel
• Tide

 Rural:

Hul:
• Wheel
• Surf excel(sachet)
• Rin detergent bar

P&G:
• Tide(sachet)
• Ariel(sachet)
NIRMA:
• Super nirma detergent powder
• Super nirma cake
• Super nirma bar

FENA:
• Fena detergent powder

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 The Detergent Industry in India in Michael Porter’s
Five Forces Analysis

It uses concepts developed in Industrial Organization economic

to derive five forces that determine the competitive intensity and
therefore attractivenesss of a market. Porter reffred to these
forces as the micro-environment, to contrast it with the more
general term macro-environment. They consist of those forces
close to a company that affect its ability to serve its customers
and make a profit. A change in any of the forces normally
requires a company to re-assess the marketplace.

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1. RIVALRY AMONG EXISTING COMPETITORS

Competition in Detergent Industry

Major Players

There are four players in detergent industries:

 Hindustan unilever ltd
 P& G

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  Nirma
 fena

2. BARGAINING POWER OF CONSUMERS

Indian Detergent Industry is one of the continuous growing

markets in the world. In detergent industry, service providers are
the main drivers; whereas equipment manufacturers are
witnessing growth and decline in successive quarters as sales in
dependent on order undertaken by the
companies.HUL,P&G,NIRMA & FENA are some of the companies
that are expected to spur the growth overs the upcoming years.In
india the urban market is already targetd by some of the big
player of Indian market like hul,p&g, fena, nirma,ghadi.they have
there own market share already capture in india,inspite of these
rural market is also growing and there is wider scope to survive
and target the rural customer towards the company for future
prospective. Due to some of the big players in the rural & urban
market the capacity of the bargaining powe is growing,that is
beneficial for rural as well as urban consumers.

Detergent industries Market Share

HUL 23%
P&G 15%
FENA 25%
NIRMA 31%
OTHERS 6%

3. BARGAINING POWER OF SUPPLIERS

As far as detergent industry is concerned, it is product based

industry which is tangible, so in this case there are large no of
suppliers or we can say the role of suppliers are almost
important in the case of telecom industry. We are trying to
analyze the major role
Detergent suppliers:- There can be many suppliers for products
like hul, fena ,nirma,ghadi,p&g etc.

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 • This is a tangible product, due to this cause the
probability of bargaining power of supplier will increase.

• There are many big player is already available in rural as

well as urban, they have opportunity to switch one
company to others that increase the possibility of the
bargaining power of suppliers.

• This is a totally fmcg products industries .the services or

supply of these product is totally depends on suppliers
they use their power in bargaining with profit motive.

4. THREAT TO NEW ENTRANTS

The Indian detergent sector offers unprecedented opportunities

for foreign companies in rural areas as well as urban areas, these
are describe by following diagram.

Less Increasing
competition buying
in rural power
areas

Changin
Rural g life
population

Infrastructure
Availability of Sharing
land

Low labor cost Changing

mindset

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5. SUBSTITUTE TO PRODUCT

Detergent sectors offers a wide range of product & services in

India, such as washing power, washing bar, washing bar with
fragrance due to many reason for capture the huge market
share of urban as well as rural.

 Availability of land
 Low labor cost
 Change in technology
 Change in market situation
 Change in preferences of customer
 Competitors provides better services with same or low
cost
 Gap in marketing communication.

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 FUTURE GROWTH PROSPECTS OF DETERGENT POWDER:

Growth Prospect:

Labor cost comparison:-

The population of china in the world is highest but now china had
control over increased population in spite of this china is number
in population in the world and second in india.In these two
country availibity of labor is more than requirement due two this
cause labor cost per worker is low in compare of others country,
that is beneficial to grow organization in dynamic market.

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Large Market:
India has a population of more than 1.150 Billions which is just
behind China.
According to the estimates, by 2030 India population will be
around 1.450
Billion and will surpass China to become the World largest in
terms of
population. Detergent Industry which is directly related to the
population is
expected to maintain a robust growth rate.

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Spending Pattern:
An increase is spending pattern has been witnessed in Indian
FMCG market.
There is an upward trend in urban as well as rural market and
also an increase
in spending in organ-ized retail sector. An increase in disposable
income, of
household mainly because of in-crease in nuclear family where
both the
husband and wife are earning, has leads to growth rate in
detergent sector.

Changing Profile and Mind Set of Consumer:

People are becoming conscious about health and hygienic. There

is a change in
the mind set of the Consumer and now looking at “Money for
Value” rather
than “Value for Money”. We have seen willingness in consumers
to move to
evolved products/ brands, because of changing lifestyles, rising
disposable
income etc. Consumers are switching from economy to premium
product even
we have witnessed a sharp increase in the sales of premium
detergents

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  Market Opportunities:

Vast Rural Market:

Rural India accounts for more than 700 Million consumers, or ~70
per cent of
the Indian population and accounts for ~50 per cent of the total
FMCG market.
The working rural population is approximately 400 Millions and an
average
citizen in rural India has less then half of the purchasing power as
compare to
his urban counterpart. Still there is an untapped market and most
of the
FMCG Companies are taking different steps to capture rural
market share.
The market for FMCG products in rural India is esti-mated ~ 52
per cent and is
projected to touch ~ 60 per cent within a year. Hindustan
Unilever Ltd is the
largest player in the industry and has the widest market
coverage.

Export - “Leveraging the Cost Advantage”:

Cheap labor and quality product & services have helped India to
represent as
a cost ad-vantage over other Countries. Even the Government
has offered zero
import duty on capital goods and raw material for 100% export
oriented units.

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Multi National Companies out-source its product requirements
from its
Indian company to have a cost advantage.
India is the largest producer of livestock, milk, sugarcane,
coconut, spices and
cashew apart from being the second largest producer of rice,
wheat, fruits &
vegetables. It adds a cost advantage as well as easily available
raw materials.

Advantages To The Sector:

Governmental Policy:

Indian Government has enacted policies aimed at attaining

international
competitiveness through lifting of the quantitative restrictions,
reducing excise
duties, automatic foreign in-vestment and food laws resulting in
an
environment that fosters growth. 100 per cent ex-port oriented
units can be set
up by government approval and use of foreign brand names is
now freely
permitted.
India is second largest
Country in terms of
Jan, 28
FMCG SECTOR
Central & State Initiatives:

Recently Government has announced a cut of 4 per cent in excise

duty to fight
with the slowdown of the Economy. This announcement has a
positive impact
on the industry.
But the benefit from the 4 per cent reduction in excise duty is not
likely to be

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uniform across FMCG categories or players. The changes in excise
duty do not
impact cigarettes (ITC, Godfrey Phillips), biscuits (Britannia
Industries, ITC) or
ready-to-eat foods, as these prod-ucts are either subject to
specific duty or are
exempt from excise. Even players with manu-facturing facilities
located
mainly in tax-free zones will also not see material excise duty
savings. Only
large FMCG-makers may be the key ones to bet and gain on
excise cut.

SWOT ANALYSIS
STRENGTHS:-
• Big players already have potential customer and loyal
customers.
• Substitutes products are also available in market for
retained customers.
• Big players already had brand image in the mind of the
customers
• Less competitors in the rural market.

WEAKNESS:-
• Gap of marketing promotional communication in rural
areas.
• Innovative products are requires for rural people
• Lack of customer relationship management in rural’
peoples.

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• No direct schemes provided by company to rural
consumers.

OPPURTUNITIES
• Large rural population
• Less competitors in rural areas
• Low labor cost after the china, Indonesia.
• Changing life style of rural areas as well as urban areas.

THREATS
• Entry of new player due to wider scope
• Lose market share due to better services provides by
competitors
• Lose market share due to change in market situation
• Lose of market share due to substitutes products.
• Probability to lose potential ,loyal customer lack of
marketing communication

FINDINGS AND CONCLUSION

 HUL launch active wheel for give the competiton to nirma

in the rural area.
 HUL product’s surf excel and P&G product’s tide are
competitors to each others in urban market.

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 In rural market there is huge competiton with fena
detergent powder, supur nirma powder,and some of the others
local brands like ghadi detergent powder etc.
 In indian market the price war is huge seen like the price
of actrive wheel detergent with super nirma,surrf excel with tide
and ariel,fena detergent with super nirma and ghadi detergent
powder.
 Two urban major players HUL and P&G are giving
competitons two each others inurban as well as rural like hul
product’s surf excel for urban where as in case of p&g’s products
are tide and ariel.
 In the case of HUL’s 48% generated revenue are comes
from soap & detergent sector approximatly from last decade.
 There are less market command in rurl area of p&g due to
no cheapest detergent for rural’s people.
 In the case of p& g 15 % business segmented in the asian
market.
 Only there are two major player in the urban market are
HUL and P&G.
 In case of nirma approximatly 30 % market share in rural
market where as fena ,hul are 25,23 % respectivily.

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 Big player should control in market

Indian market is dynamic in nature,there are increasing and

decresing is genrally seens,these big players should control
market activities like regural communication with existence
customers,potential customers,loyalcustomers and
accessing new customers,retaining customer in professional
and ethics manners. Big player should focus on competitors
activities and accordingly take rational decision for servive
in dynaimic market.

 Technology development and innovation

In urban areas is already covered by some of the big player
like HUL,P&G.
But in case of rural areas is also growing over’s up comings
years ,these big players should implement in technology
and innovations in products features for capture the large
volume of Indian rural market.

 Introduction of local products:

Inspite of these four players, the local detergent producers

company have golden opportunity to developed market
share in rural areas by introducing local detergent in local

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 market but in the case of these four big player may be
losemrket share.

 Changing the life style of the people

In rural market is growing due change in the life style in
rural’s peoples because they getting more employments
opportunities in rural areas. According to change in living
style major players should introduced or develop products
and services according there’s buying power

 Increase the production and labor cost

Due to growing rural market these big four players should

increase in production capacity in existing manufacturing
unit and establishing new unit,this activity increase the
employment in india and these manufacture increase the
labor cost for increasing buying capacity pf labors.

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 BIBLIOGRAPHY

 www.goggle.com
 Business Magazines.
 Annual report of the company

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