CHAPTER 1 INTRODUCTION

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1.1 Introduction
Toilet soap industry is one of the oldest Fast Moving Consumer Goods (FMCG) industry in India. It is among the highest penetrated category within FMCG sector reaching an estimated 95% urban and 87% of the rural households. It is also a sector which is characterized by a high level of intense competition. The competitors in this sector ranges from MNC’s like Unilever, Henkel, P&G to local bigwigs like Wipro, Nirma and Godrej. With an array of products in all category of soap markets HUL is the market leader in all category. They are the leaders in economic category with Lifebuoy, in popular category with Lux and in premium category with Dove. There is a paradigm shift taking place in toilet soap industry. The economic category which used to be the most popular category in the past has been experiencing sluggish growth for the past few years. The premium category and the popular category are the sectors which are experiencing high growth rate. The popular and economy segments account for about four-fifths of the entire market for soaps. The future growth of toilet soap is in the premium category. To fight competition, major players HUL, GCPL, Dabur India and Wipro consumer care & lighting are now drawing up fresh game plans. And the accent is clearly on the innovation to gain mind share as well as market share in this overcrowded category.

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Toilet soaps, despite their divergent brands, are not well differentiated by the consumers. It is, therefore, not clear if it is the brand loyalty or experimentation lured by high volume media campaign, which sustain them. A consequence is that the market is fragmented. It is obvious that this must lead to a highly competitive market. Toilet soap, once only an urban phenomenon, has now penetrated practically all areas including remote rural areas. The incremental demand flows from population increase and rise in usage norm impacted as it is by a greater concern for hygiene. Increased sales revenues would also expand from up gradation of quality or per unit value. As the market is constituted now, it can be divided into four price segments: premium, popular, discount and economy soaps. Premium soaps are estimated to have a market volume of about 80,000 tonnes. This translates into a share of about 14 to 15%. However, by value it is as much as 30%. Soaps are also categorized into men's soaps, ladies' soaps and common soaps. There are a few specialty soaps as transparent Glycerine soaps, sandal soaps, specially flavored soaps, medicated soaps and baby soaps. Specialty soaps are high valued but enjoy only a small share of the market in value terms. The market is growing at 7% a year. This means that the incremental demand generation is 5% over and above the population growth. With increasing awareness of hygienic standards, the market could grow at a rate higher than 8% annually. Interestingly, 60% of the market is now sourced from the rural sector. This means that the variance between the
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margins come from the urban sector. • To find out category preference. the research should keep in mind two types of data viz. The primary data are those which are collected fresh and for the first time and thus happen to be original in character. to study the consumer buying behaviour with respect to the same. 1. Since upper-end market focus is the urban areas.2 Objectives of the study • To find out brand preference of customers in a particular town.4 Research Methodology The present study is carried out among the toilet soap users in Kolenchery town. • To find out the source of influence of customer purchase. This study helps to understand the consumer buying pattern. • The result can be used in deciding the channel selection for distribution of toilet soap. primary and secondary. • To rank the various attributes while selecting a brand. 1.3 Scope of the study • This study helps to understand the consumer buying pattern. 1. The task of data collection begins after a problem has been defined and research design/plan chalked out.two segments is not very large. The secondary data are those which have already been collected by someone else and which have already been passed through the statistical process. While deciding about the method data collection. • To find out brand loyalty of customers. 4 .

1. Chi-square test is conducted to determine the acceptability of the null hypothesis formulated for the study. The study was conducted for a period of two weeks.4 Limitation of the study The study was conducted on a small sample size of 30 respondents due to time and other resource constraints. The sampling technique used in this survey is convenience sampling.Population and size of the sample: A sample of 30 respondents was taken for the study. 5 . Data Collection: Primary Data A structured questionnaire was prepared and data was collected from respondents. periodicals. Secondary Data Data on industry profile and market profile has been collected from text books. pie chart and bar chart. Statistical Analysis: Percentage analysis has been used for analysis and interpreting data. Tools used for data collection: Data was collected by using a self-constructed questionnaire from 30 respondents. brochures and internet. Analysed data are displayed in the form of table. Convenience sampling method was used.

CHAPTER 2 INDUSTRY PROFILE 6 .

7 . The FMCG sec provides largest amt of revenue. The consumer keeps limited inventory of these products and prefers to purchase them frequently. Typically. But all FMCG products put together account for a significant part of the consumer’s budget. there are lots of companies competing with each other. Individual products are of small value. as and when required. In this sec.FMCG sector is one of the largest growing sectors in Indian market. Many of these products are perishable. 2. Some FMCG Products are: Detergents Toilet soaps Toothpaste Shampoos Creams Powder Food products Confectionaries Beverages Cigarettes Typical characteristics of FMCG products: 1. FMCG refers to consumer nondurable goods required for daily or frequent use [1]. 3. a consumer buys these goods at least once a month.

In value terms the industry is worth Rs 6500 Cr.6%. It is among the highest penetrated category within FMCG sector reaching an estimated 95% urban and 87% rural households. The main characteristics of the industry were severe competition and high level of brand proliferation. i. Trial of new product. Brand loyalties or recommendations of reliable retailer/ dealer drive purchase decision. comfort as well as luxuries. 5. 8 . These products cater to necessities. Penetration of toilet soaps is high at 88. Toilet soap industry in India: [1] Toilet soap industry is one of the oldest FMCG industries in India.e. The Indian toilet soap industry is growing at approx 3-4 % in volume terms and around 10% in value terms. The prod categories can be classified into 3 segments. However per capita consumption levels remain low India’s per capita consumption of soap at 460 gms/ annum is lower than that of Brazil at 1100 gms per annum. recommendations of the retailer or friends. 6. Soaps form the largest pie of FMCG market with bathing and toilet soaps accounting for around 30% of the FMCG market.4. And in volume terms it is worth 6 million as of 2008. brand switching is often induced by heavy advertisement. Rarely does he/she look for technical specifications. The consumer spends little time on the purchase decision.. 7.

palm kernel oil. alone or in combination with sodium-based soap. This eliminates many impurities. but modern manufacturers 9 . Additives are used to enhance the color. Potassium hydroxide can also be used.1. The alkali most commonly used today is sodium hydroxide. Animal fat in the past was obtained directly from a slaughterhouse. Santoor etc Raw materials for soap: Soap requires two major raw materials: [11] fat and alkali. Dettol etc • Economic soap category (<Rs. and scent of soap. is commonly used in shaving products. are also used in soap making. Many vegetable fats. Soap made without dye is a dull grey or brown color. 15-25 for 75 gm) . 25 for 75gm) . silica." Soft soap. Abrasives to enhance the texture of soap include talc. Dove. Godrej No. Modern soap makers use fat that has been processed into fatty acids. texture. Fragrances and perfumes are added to the soap mixture to cover the odor of dirt and to leave behind a fresh-smelling scent. Pears etc.Cinthol. and it produces as byproduct water instead of glycerin. and so it is called "soft soap. Potassium-based soap creates a more water-soluble product than sodium-based soap.Lifebuoy. including olive oil. 15 for 75 gm) .• Premium soap category (>Rs. and coconut oil. and marble pumice (volcanic ash).Lux. • Popular soap category (Rs.

The slab is cut into smaller pieces of bar size. The steps in the continuous process of making soap are explained below. The equipment used is a vertical stainless steel column with the diameter of a barrel called a hydrolizer. Molten fat is pumped into one end of the column. Pumps and meters attached to the column allow precise measurements and control of the process. Mixing The purified fatty acids are next mixed with a precise amount of alkali to form soap. It may be as tall as 80 feet (24 m). can be accomplished in several hours. The hot liquid soap may be then whipped to incorporate air. It may also be cooled in a special freezer. The entire continuous process. Cooling and finishing The soap may be poured into moulds and allowed to harden into a large slab. Splitting The first step of the continuous process splits natural fat into fatty acids and glycerin. The fatty acids are then distilled for purification. while at the other end water at high temperature (266°F [130°C]) and pressure is introduced. from splitting to finishing. This splits the fat into its two components. 10 . Other ingredients such as abrasives and fragrance are also mixed in.color soap to make it more enticing to the consumer. which are then stamped and wrapped. The fatty acid and glycerin are pumped out continuously as more fat and water enter.

Distribution Network Soaps are available in 5 million retail outlets in India. Perfumes can best be incorporated at this time because their volatile oils do not evaporate in the cold mixture. Glycerin is a very useful byproduct of soap manufacture. 75% of India’s population is in the rural areas. Growth Rural demand growth is expected to occur mainly with consumers moving up towards premium products. as growth in soap prices has generally outpaced overall consumer inflation. 3. After the soap emerges from the mills. the proportion of premium soaps to economy soaps has not changed much. It is used to make hand lotion. which crush and knead it. and nitroglycerin. drugs.Milling Most toiletry soap undergoes additional processing called milling. in volume terms. stamped and wrapped.75m of which are in the rural areas. But in the past. The milled bar lathers up better and has a finer consistency than non-milled soap. some consumers move down looking for cheaper substitutes as prices move up. This has been the case especially. This is because as some consumers move up the value chain with increase in disposable incomes. it is pressed into a smooth cylinder and extruded. The extruded soap is cut into bar size. The cooled soap is fed through several sets of heavy rollers (mills). Therefore the availability of these products is not a problem. 11 . hence about 50% of the soaps are sold in the rural markets. the main component of explosives such as dynamite.

Most soap marketers are busy making the best.030 million people. Brand Positioning Soap manufacturers originally targeted their products to the lowest income strata in urban as well as rural areas. positioning their brands as a way to remove dirt and clean the body. that positioning persists even today with a focus on removal of body odour and keeping the user healthy. of what they can overall a sharpened consumer focus has meant better corporate performance. soap positioning is moving towards skin care as a value-added benefit. with more and more soap brands being launched in the discount segment targeting the lower socio-economic strata of consumers. which fall under different segments (see table below). Overview of the Indian Soap Category [2] India is a vast country with a population of 1. Rural demand is growing. making it the second largest category in India (detergents are number one). Rural consumers in India constitute 70% of the population. People belonging to different income levels use different brands. Household penetration of soaps is 98%. Forms as well as companies have products that could once be found only on in hand up squeeze tubes not to mention liquid soaps in pump raising the consumers outlay on personal hygiene is vast even where usage penetration is high.Indeed innovation has encompassed product. In village heat and dust is reason enough to press on. For some brands. 12 . However. but all income levels use soaps.

there were 45 leading national brands. which they call test launch markets. Here the fragrance preference is for more sophisticated profiles reflecting their lifestyles. primarily rose. Toilet soap market in India is a highly fragmented mkt. Medicated positioning like germ killing and anti-bacterial are marketed to families. Freshness soaps with lime and citrus notes are also popular preferences as the climate in the North is very hot and citrus/lime scented soaps are seen to be refreshing. the skew is towards specific soap segments like the Herbal/Ayurvedic profiles and also the Sandal profiles.Consumer Preferences Consumer preferences are varied and are more regionally specific. Consumers here do not exhibit high brand loyalty and are ready to experiment and try out new brands. most fast moving consumer goods companies tend to launch their new brands in these markets. Consumers in the North prefer pink coloured soaps. which have floral profiles. Marketing Soap is primarily targeted towards women. East. 13 . The East is not a big soap market. Consumers in the West exhibit preferences for strong. hence no particular preference skews. as they are the chief decisionmakers in terms of soap purchase. India is divided into four regions: North. West. In the South. Preferences are more for the pink soaps with floral fragrances. Hence. None of the national brands had more than 5% market share and many more regional and unorganised sec/local brands. which are positioned on the beauty platform. and South. impactful fragrances and somewhat harsher profiles compared to the North.

4% for the toilet soap category. Creating a strong brand name through advertising is a primary strategy used by most companies in the industry.2% in 2007. Rationalization is taking place among large players as a strategy in terms of the Brand portfolios.HUL was the market leader with about 30 toilet soap brands with a total market share of 53. They then diversify the brand into another sector or sectors. Such streamlining allows the manufacturers in general to improve margins by lowering costs for sourcing manufacturing and distribution. Johnson & Johnson. There is cut-throat competition between these multinationals. are proving difficult to displace. The top global players include Unilever. consumers seem to prefer familiar trusted brands. Colgate Palmolive and Johnson & Johnson. 14 . Procter and Gamble. Colgate-Palmolive etc. Despite the increasing number of brands and products on the global market. This means concentration on a small number of key brands and dropping non-performing brands. established brands from the key global players such as Unilever. GCPL continues to be the second largest toilet soaps player with a market share of 9. thereby benefiting from the brand’s consumer image. Though these manufacturers' brands are more expensive than national brands and privately labelled products. Global market of soaps The global market for soaps is dominated by a small number of multinational companies with strong brand identity and enormous advertising budgets.

CHAPTER 3 LITERATURE REVIEW 15 .

sub-popular and carbolic which are basically decided by the cost factor and fat content in the soap. The buying frequency is either monthly that is done by the families or in case of bachelors it is more than once in a month. by which a consumer goes for the various segment of soap like premium. selecting. using. and disposing of products and services so as to satisfy their needs and desires. popular. purchasing. The basic model of consumer decision making involves: • Problem recognition • Information search • Alternative evaluation • Purchase decision • Post purchase evaluation Factors affecting buying behavior Price is the most important factor which effects the buying behavior of consumer. 16 . evaluating.Consumer Behaviour Belch and Belch define consumer behaviour as the process and activities people engage in when search for. The occasions when premium soaps are purchased are usually when there are festivals and ceremonies.. Moti soaps are usually presented during festivals and occasions for presents and gifts.

Men normally make purchase decisions in rural areas. free gifts and other schemes help boost sales in short run and also help in clearing stocks. which affect the demand of soaps. Penetration One of the factors. In case of soaps this has not been a major issue as the penetration in the rural area is as high as 97% and that for urban area is around 99%. buy one get two free. Various tactics like the price off’s. Chi-Square Test [15] The chi-square (I) test is used to determine whether there is a significant difference between the expected frequencies and the observed frequencies in one or more categories. is the penetration. or is it a real difference? Chi-Square Test Requirements [5] 17 . Hence the marketer has to adopt different strategy for such a market. Do the numbers of individuals or objects that fall in each category differ significantly from the number you would expect? Is this difference between the expected and observed due to sampling error. which the products have in market.The promotional techniques help to boost sales. A point to note is that women use more personal care product than men do and hence premium soaps are mostly targeted at them. Thus the approximately the penetration is around 99% for overall India. One of the important points a soap marketer should note is that the soaps are usually purchased by women in urban areas as most of the day to day consumption of personal care products are made by women.

1. Independent observations. 6. 4. Data in frequency form. The chi-square formula used on these data is X2 = (O . 2. One or more categories. 7. 3. All observations must be used. Simple random sample. Quantitative data. 5. Adequate sample size (at least 10).E)2/ E Where. O is the Observed Frequency in each category E is the Expected Frequency in the corresponding category df is the "degree of freedom" (n-1) X2 is Chi Square 18 .

CHAPTER 4 DATA ANALYSIS AND INTERPRETATION 19 .

1 General Information 4. The following pie chart illustrates this.1 Age group This consists of classification of respondents according to age group. For this.1. questionnaires were administered to 30 respondents. 4.The purpose of the questionnaire was to identify the usage and buying pattern of the consumers of toilet soap. The analysis is done on the basis of the answers given by the respondents to the questionnaire. Age Group 15-25 26-35 36-45 Above 45 Total Frequency 1 9 14 6 30 Percentage 3 30 47 20 100 20 .

4. Gender Female Male Frequency Percentage 17 57 13 43 21 . 26 -35.2 Gender wise classification The respondents group includes males and females. 57% of the respondents are females and 43 % are males. The ages are grouped as 15 to 25.Fig 1: Classification according to age group The age groups of the respondents are divided into certain range and the range is 10.1. 30% of them are from the age group of 36 to 35. There is high proportion of females. 36-45 and above 45. Here majority of the respondents belong to the age group of 36 to 45 and is about 47%.

Frequenc Marital Status y Single Married Total ge 3 27 30 10 90 100 Percenta 22 . Fig 2.1. The respondents are 10% single and the rest 90% are married which shows a comparable distribution for the analysis.Total 30 100 The following bar graph will illustrate the gender wise classification.3 Marital Status The respondents are classified into married and single to see any difference in the usage pattern and the buying behaviour. Gender wise classification 4. The data analysed is shown in the table below.

Fig 3: classification based on marital status 4. professionals. Category Employed SelfEmployed Professional Student Others Total Frequency Percentage 13 44 4 11 0 2 30 13 37 0 6 100 The analysed data is illustrated in the following bar graph. self-employed and others. The data in table format is shown below. Professionals form 37% of the population.4 Occupation The respondents group includes 3 categories of people.Hence majority of the user base lies in the married youth but the unmarried people also forms a comparable share in the bar graph.1. 23 . The employed group forms the chunk of the user base as per the research with 44%.employees.

twice a day and others. This is illustrated in the bar graph shown below.1. 4. 24 .5 Usage pattern of soap The usage pattern has been divided as per the frequency and includes alternate days. once a day.Fig 4: classification based on occupation. Usage Pattern Once a day Twice a day Alternate days Others Total Frequenc y 11 17 0 2 30 The percentage of respondents who uses soap twice a day forms the maximum.

6 Using Specific Brand Frequency of the people using a specific brand for a considerable period of time constitutes 34% of the population. The remaining doesn’t have a specific brand preference. The preference is shown in the bar diagram shown below. Fig 6: specific brand preference 4.Fig 5: based on usage pattern. This shows that brand loyalty among soap buyers in Kolenchery is very low. 25 . This is illustrated in the following bar graph. From the bar graph we can find that more than half of the respondents are those who does not use a specific brand for a considerable period of time. 4.1. Pears is the second popular soap among the respondents.7 Brand Preference The most popular soap brand among the customers is Lux.1.

go to another outlet for purchasing that particular brand or postpone the purchase to buy that 26 . The following bar graph will illustrate this. More than 50% of the customers favours popular category. It includes brands like lux.8 Category of soap Popular category soaps forms the most popular among the respondents.select another brand. hamaam etc. 4.9 Buying behaviour when brand is not available When a brand is not available in the store the possible events from the consumer side can be. Fig 8: category preference.Fig 7: brand preference.1. 4. pears. cinthol.1.

The second position is for 125 gm packets.11 Store preference 27 . The buying behaviour is illustrated in the bar graph shown below. This is illustrated in the bar graph shown below.1. 4. Fig 10: Packet size preference.particular brand. Fig 9: buying behaviour when brand is not available. 4.10 Preferred Packet size Out of the sample surveyed majority of the people purchase 75 gm packets.1.

12 Purchase decision Purchase decision of the consumers is governed by different factors. Majority of the respondents subscribed this as the major factor. This is illustrated in the bar graph given below.1. 28 . 4. Prior experience of the product is the major factor that influences purchase decision. This is illustrated in the bar graph shown below. Thus it is essential for soap companies to formulate strategies focused on customers who buy the product from supermarkets. Fig 11: store preference.From the survey it’s found out that majority of the people prefer to buy soaps from supermarkets. This may be due to the popping up of large number of supermarkets across Kolenchery town.

The highest rank. This data shows that customers tend to have a liking for quality products and for famous brands. Price is another criterion which is rated high but is found to have less rating than quality. This shows a shift in consumer taste from being price conscious to quality conscious. The various factors are ranked from 1 to 7. 4.Fig 12: factors affecting purchase decision.e. i. 1 is for packaging.13 Factors to be considered in soaps for ranking From the survey it is found that quality of soap is the paramount criteria while selecting soap. 7 is for quality and the last rank. Brand name of the product is another criterion along with the fragrance of the soap. This is illustrated in the following diagram. i.e. 29 .1.

2 CHI-SQUARE Test 4.2.Fig 13: ranking of factors.1 Age group and specific brand preference Age group Using specific brand Yes 15-25 26-35 36-45 Above 45 0 4 5 1 1 5 7 7 No 1 9 12 8 Total 30 . 4.

Since the calculated value of χ2 is much less than the table value the null hypothesis is accepted.1675 0.2.Total 10 20 30 Null Hypothesis (H0): The brand preference is independent of different age groups. 4.2 Age group and usage Age Alternate Once a Twice a Others total 31 .937 The table value of χ2 for 3 degree of freedom at 5 per cent level of significance is 7.815.333 1 4 5 5 7 1 7 0.333 0.1666 0. Chi-square test: Observed Value Expected Value (Oij – Eij )2/Eij 0 0.5210 df= (c-1)(r-1)= (2-1)(4-1)=3 χ2 = Σ (Oij – Eij )2/Eij [14] = 2.666 3 6 4 8 2.666 5.25 0.125 1.333 0.333 0.0410 0.

488 Degree of freedom is 9 and level of significance is 0. 32 . The table value of χ2 for 9 degree of freedom at 5 per cent level of significance is 16. Since the calculated value of χ2 is much less than the table value the null hypothesis is accepted.group 15-25 26-35 36-45 days 0 0 0 day 0 1 6 4 11 day 1 7 8 1 17 0 1 0 1 2 1 9 14 6 30 Above 45 0 Total 0 Null hypothesis (H0): Soap usage pattern is independent of different age groups.919.05. Chi-square test: χ2 = Σ (Oij – Eij )2/Eij = 8.

CHAPTER 5 33 .

34 . 3. 6. The popular category soaps forms the most selling category of soaps. More than half of the customers use soap twice a day.FINDINGS AND SUGGESTIONS 5. value for money etc has a higher say in purchase decision. They form about 47% of the customers. time. Only 10% respondents use specific brand for a considerable period of 4. The experience from the product in terms of its quality. 5. 7. 2. 75 g was found to be the most popular volume among customers.1 Findings 1. It is found that the people in the age group of 36-45 form the major chunk of customers. Supermarkets are preferred by majority of the respondents to buy soaps.

Special measures must be taken to woo the customers. For that discounts can be given for multi packet purchase. buses etc Since advertising has a critical role in purchasing decision in store promotions. Efforts should be made to improve the purchasing volume of the customers.8. media advertisements etc for toilet brands should be increased. • Smaller size of toilet soap’s to enable the travelling people to be brand loyal For sales: • Attractive Packaging • Incentive to dealers/ distributors • TV commercials telecasted especially during prime time • Advertisements through Radio channels during morning and evening • Outdoor media: billboards at railway stations. 5. For a customer the quality of the soap is the paramount criteria while selecting soap. 35 . Brand name of the product is another criterion along with the fragrance of the soap. offers and discounts.2 Suggestions For soap: • Reduce burning sensation • Adopt aggressive marketing strategy for toilet soaps.

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Godrej No. For instance. The emergence of several discount brands and higherpriced improved offerings can be seen in the soap category. Apart from expecting value. 1 is an example of how the brand initiated the strategy of offering several variants (like sandal) in the lower segment when such variants have been associated with higher segments in the category. either in terms of price or in terms of the intrinsic benefit offered at a higher price point. the consumer. the consumer is also caught in generic competition which may force him/her to downgrade in a few categories while testing other categories. in order to 37 .CHAPTER 6 CONCLUSION The average consumer has become sensitive to value offered by brands.

balance her household budgets. may alternate between a good brand of soap and a low-priced soap [8]. symbolic appeals and timing the right combination of good functional attributes and symbolic brand orientation (which can be beyond advertising like an event associated with beauty care/hair care) within a price band is likely to be a conceptual approach to get over the complexities of the FMCG markets. Balancing functional benefits. 38 .

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