Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON.

1.0 Introduction

As the final requirement of the BBA program in Independent University, Bangladesh, it is a

must for every student to undergo a three months internship program in an organization. The
interns are required to carry an extensive analysis of real world business problem in this
program. Therefore, I had been placed at Advanced Chemical Industries (ACI) Limited and get
the opportunity to see the overall aspects of that organization specifically the consumer brand
during the internship program. Mr. Aminur Rahman, Associate Professor, School of Business,
Independent University, Bangladesh was my internal supervisor and external supervisors was
Ms. Mosarrat Farhana, Product Executive, Consumer Brand, ACI Ltd. and Mr. Qamrul Hasan,
Marketing Manager, Consumer Brand, ACI Ltd.

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The soap markets of Bangladesh are developing rapidly now a day. In our country we can see
the two different segment of soap in the market which are “Health soap” and ‘Beauty soap”.
Under health soap segment in existing situation, there are two prominent brands in Bangladeshi
soap market which are Lifebuoy and Dettol. In the case of health soap Dettol has gain the
maximum market share and then Lifebuoy. Again, under beauty soap segment Lux is the market
leader in existing situation in the Bangladeshi soap market and then Meril, Keya, Aromatic etc.
has come under consideration. Moreover, few years back ACI has launched bar soap under
beauty soap segment which was Angelic beauty care soap but this idea was not worked out well.
Not only that, ACI has also launched bath soap under health soap segment with two separate
categories which are “SAVLON Antiseptic Soap” and “SAVLON Skin Care Soap” with the
slogan of everyday protection from germs. Moreover, at previous time a good number of studies
had been undertaken by ACI to determine the consumers’ perception on SAVLON brand,
strength and weakness of the product of this brand, prevailing market opportunities and threats
etc. AC-Nielsen also conducted a focus group discussion in this regard. Through the focus group
discussion, consumers’ perceptions regarding the product of SAVLON brand against other
competitive brands and different strength, weakness, opportunities and threats in the existing
market have also been found out. So, the company already found out the consumers perception
of SAVLON brand. Now, through out this internship in-depth interview has been conducted on
gaining the consumer insights for a new kind of soap which contains both antiseptic and beauty
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 2

care quality in a single soap under the parent brand which is SAVLON. Also, it is found out that,
the positive reciprocal effect on vertical brand extension will make the prior nonuser to the user
of the parent brand SAVLON for the company ACI.

2.0 Statement of the Problem

It has been mentioned earlier that, few years back ACI has been launched soap under both of
the segment which are health soap and beauty soap. But they were unable to capture the
maximum market share than other companies in both of the segment. The reason was that, they
were incapable to compete with the dominant brand Lux under beauty soap category and with
Dettol and Lifebuoy under health soap category. Furthermore, they were incapable because of
their inconsistency in distribution and lack of product uniqueness. That is why, the company has
come up with a new idea and they want to launch a new kind of soap which will contain both
antiseptic quality and beauty care quality. Then, this vertical brand extension will make the
reciprocal effect on the parent brand. So, here the studying issue is that, with the help of in-depth
interview we want to check out first the existing perception level of consumers’ about using bar
soap and then it will come to the main issue which is the acceptance level of the consumers for
the upcoming new kind of bar soap. Thus, these insights will reflect to explore the theme that
reciprocal effect on vertical brand extension will be positive or negative towards the parent
brand. Finally, it will be further anticipate that whether this new kind of soap make the SAVLON
brand more popular, will make the non-user become user for the parent brand under bar soap
division and ultimately will increase the market share for the brand SAVLON.

3.0 Purpose of the Study

The purpose of this study primarily is to explore the knowledge on bar soap usage pattern and
then to gain the consumer insights for the acceptance of a new kind of soap which will contain
both antiseptic quality and beauty care quality. Also, the information will lead to draw the
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 3

conclusion for the reciprocal effect on vertical brand extension for the parent brand Savlon in the
context of Bangladesh.

4.0 Limitations of the Study

Strength Limitations:
Adequate efforts have been taken to accomplish the research according to the objectives. But
as the research team is consisted of only one member therefore it was not possible to cover more
additional areas, which would obviously give better result.
Cost limitations:
The in-depth interview should be conducted with the help of experience moderator but it was
very cost sensitive. So, the interview was taken by self which might crept few errors on the
research.
Time Limitation:
The type of the study required a detail interview of both man and women residing at homes.
Thereby a tremendous difficulty was faced in getting access to different houses, especially in the
absence of some male and female during daytime whom are service holder. Again these people
usually fallback from different offices or businesses after dusk and enjoy their times at home, so
taking interview during that time became an irritation for them. On the other hand, maximum of
the female whom were housewives residing at home found busy after 11 am with their daily
routine jobs like cooking. Therefore a very limited period of day was found suitable for
conducting the survey. Many times the respondents were found after answering few questions
left the interview for looking after their housework, which resulted in discontinuity in interview
and the wastage of time and effort. Also, the interview was conducted only on the people of
Dhaka city for the time limits of internship periods.
Literature review limitation:
As this study has been done first time in Bangladesh, the literature reviews were not very
healthy enough. Moreover, there was very little information found of some of the topic for the
literature review.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 4

5.0 Literature Review

Brand

A brand is a product, service, or concept that is publicly distinguished from other products,
services, or concepts so that it can be easily communicated and frequently marketed. Moreover, a
brand name is the name of the distinctive product, service, or concept. Branding is the process of
creating and disseminating the brand name. Branding can be applied to the entire corporate
identity as well as to individual product and service names.

Brands are usually protected from use by others by securing a trademark or service mark from
an authorized agency, usually a government agency. Before applying for a trademark or service
mark, people need to establish that someone else has not already obtained one for the name the
company has proposed. Once the company found that no one else is using it, the company can
begin to use this brand name as a trademark simply by stating that, it is a trademark using the
"TM" symbol where it first appears in a publication or Web site. After the company receives the
trademark then it can use the registered symbol after the trademark.

Brands are often expressed in the form of logos, graphic representations of the brand. In
computers, a recent example of widespread brand application was the "Intel Inside" label
provided to manufacturers that use Intel's microchips.

A company's brands and the public's awareness of them are often used as a factor in
evaluating a company. Corporations sometimes appoint market research firms to study public
recognition of brand names as well as attitudes toward the brands.

However, today brand is what they do for people that matters much more, how they reflect
and engage them, how they define their aspiration and enable them to do more. Powerful brands
can drive success in competitive and financial markets, and indeed become the organization's
most valuable assets.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 5

Brand Extension

Brand extension or brand stretching is a marketing strategy in which a firm marketing a

product with a well-developed image uses the same brand name in a different or same product
category. Moreover, brand extensions are further described as, the stretch of the established
franchise to a different or same product class (Aaker and Keller, 1990) have become an
increasingly popular way of gaining growth ( Springen and Miller, 1990). Organizations use this
strategy to increase and leverage brand equity.

A brand's "extendibility" depends on how strong consumer's associations are to the brand's
values and goals. In 1990s, 81% of new products used brand extension to introduce new brands
and to create sales. Moreover, launching a new product is not only time consuming but also
needs a big budget to create awareness and to promote a product's benefits. Brand extension is
one of the new product development strategies which can reduce financial risk by using the
parent brand name to enhance consumers' perception due to the core brand equity (Chen and Liu,
2004).

While there can be significant benefits in brand extension strategies, there can also be
significant risks, resulting in a weak or severely damaged brand image. Poor choices for brand
extension may dilute and deteriorate the core brand and damage the brand equity. Most of the
literature focuses on the consumer evaluation and positive impact on parent brand. Some studies
show that negative impact may dilute brand image and equity. In spite of the positive impact of
brand extension, negative association and wrong communication strategy do harm to the parent
brand even brand family.

Given the large literature on brand extension success factors, and as an aid to review, the
various components are grouped as:

• Parent brand characteristics;

• Brand extension characteristics; and
• Consumer’s characteristics.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 6

Brand extension strategy comes in two primary forms which are horizontal and vertical. In
horizontal brand extension circumstances, an existing brand name is applied to a new product
introduction in either a related product class or in a product category completely new to the firm
(Sheinin and Schmitt, 1994). In addition, in a vertical brand extension, on the other hand,
involves introducing a brand extension in the same product category as the core brand, but at a
different price point and quality level which is originally described by Chen and Liu (2004) with
reference to Keller and Aaker (1992) and Sullivan (1990).

Furthermore, literature on extensions dominantly addresses the question of how the parent or
core brand helps the new product during its launching stage. Also, literature touches on the
possible reciprocal effects of the new product launching on the equity of the core brand.

Reciprocal Effect

Reciprocal effect could be positive or negative. Positive reciprocal effects exist only when an
average-quality parent brand (in comparison to competitors) introduces a successful extension
(Keller and Aaker, 1992). On the other hand, negative reciprocal effects can occur when the
extension similarity to the parent brand is extremely low. However, this can also happen when
the extension is highly similar to the parent brand, but not noticeable. Reciprocal effect
manipulates the brand extension positively or negatively which reveal on the parent brand. When
the brand extensions are positively manipulated that time the non-users of parent brand becomes
the users of that brand and sometimes they turn into loyal customer. Again, if it is negatively
manipulated then the parent brand might loose their loyal customers.

Bar Soap

“Soap is a surfactant used in conjunction with water for washing and cleaning that is available
in solid bars and in the form of a viscous liquid”(whatis.techtarget.com/definition, 2008) .
Chemically, soap is a salt of a fatty acid. Traditionally, soap is made as the result of a reaction
between fat and lye (sodium hydroxide), potash (potassium hydroxide), and soda ash (sodium
carbonate), which are all alkalis historically leached from hardwood ashes. The chemical
reaction that yields soap is known as saponifications. The fats and the bases are hydrolyzed by
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 7

water; the free glycerol heads bond with the free hydroxyl groups to form glycerin and the free
sodium molecules bond with the fatty acid tails to form soap.

Again, we are saying that we are concerning only on bar soap. Bar soap means the soap which
is in solid form. Moreover, bar soaps are still widely used. With regard to cost and aesthetics,
wear rate (also called use up rate) is an important property. Consumer perceived economy of bar
soaps is determined by the amount of mush or paste that occurs as the bar surface hydrates. The
mush is considered undesirable by consumers since it is easily removed and washed off of the
bar surface, leaving the user with less usable soap. Bar use up rate is another indication of the
economy of the bar soap. Use up is determined by the physical abrasion (mechanical action) on
the bar and is related to bar hardness and shape.

In addition to the economy of a bar soap, there is also a desire to maintain good foaming and
cleaning abilities. The quality and quantity of lather produced by washing with a bar is
associated with the cleansing ability of the bar. Other qualities desired are good rinsability,
mildness to the skin, shape, stability, ingredients and delivery of fragrance to the user's skin. The
combination of an efficient bar soap with effective cleansing and bar aesthetics has been often
attempted.

Health soap

Health soaps markets are covering huge ground for business. Health soaps are divided into
health care and health freshness category. Under health care the marketer can produce derma
protection soap and natural care soap. Again, under health freshness the marketer can produce
anti-bacterial soap and active-balance soap. In health soap market, there is nothing more which
can differentiate uniquely or where more value can added to soap.

Beauty Care Soap

Beauty care soaps are communicating only to enhance beauty. It can be luxury soap,
traditional soap, moisturizing soap etc. Though it is a very short arena for business but in reality
most of the companies are doing business utilizing this field. Here, many variables can be added
to a soap and can differentiate its position in a unique area.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 8

6.0 Research Questions

This study proposes to examine the following research questions:

R.Q.1 What is the general overview of using a bar soap among the consumers mind?

R.Q.2 How the consumers will accept or react towards the upcoming new kind of soap which
will contain both antiseptic quality and beauty care quality?

R.Q.3 Does this new kind of soap uphold to positive reciprocal effects on vertical brand
extension of the parent brand “SAVLON”?

7.0 Research Methodology

Research Design

The purpose of this study is to gain consumer insights about the fundamental idea of using
bath soap and then monitoring the acceptance of the proposal of such a new kind of SAVLON
bath soap which is containing both antiseptic quality and beauty care quality in the context of
Bangladesh. Moreover, using the above information the study will also pursues the reciprocal
effect of vertical brand extension on the parent brand SAVLON. As this is a new concept in
Bangladesh so that an exploratory research will be more appropriate for that.

Research Approach

The respondents will be the consumer of bath soap (bar shape) whom are interested to
cooperate. To collect the data the laddering technique under the in-depth interview method will
be preferable.

Sampling Method

The in-depth interview for this study will be limited to Dhaka city only due to certain
limitations. Also, it has been mentioned earlier that, the interview will be only on the consumer
of bath soap. Moreover, the researcher will have to ask the respondents whether they fall into the
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 9

category or not. If they fall then they will be interviewed for 30 minutes. The sample size will be
30 for this study.

Data Collection

The primary data will be collected from the buyer and user of bath soap (bar shape).
Moreover, these data will be gathered directly from the respondents through an in-depth
interview. In addition, the secondary data will be colleted from ACI stuffs, different articles and
from internet.

Data Analysis Method

The data analysis of this research will be mostly represented on qualitative manner. It has
been mentioned earlier that, the data will be gathered by in-depth interview so most of the
analysis will be qualitative. However, there will be few quantitative solutions. For efficient
analysis and presentation, application packages like Office XP (Microsoft Word, Microsoft
Excel) will be used.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 10

8.0 Results

The results are derived from the questionnaire of in-depth interview. The questionnaire has
been already given on the Appendix (A) and the outcomes are given in the following
simultaneously:

• Soap Usage Pattern

Regular user of soap

6.67%

90.00%

95.00%

Yes Male Yes Female No Both male & Female

Figure 1: Regular user of soap

From the above pie chart we can see that, except 6.67%, 90.00% male and 95.00% female
respondents replied positively that they use soap regularly for bathing. However, among male
and female who is not use soap on regular basis because they feel that soap trim down the
smoothness of skin.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 11

• Soap Usage Purpose

Purpose of using soap

7% 3%
3%

37%

23%

27%

Clean Germ Protection Beauty Care Health Conciousness Feel Fresh Feel Skin Smooth

Figure 2: Purpose of using soap

From the above pie chart we can see that, 37% people are using soap first and foremost
for cleaning purpose. Then, 27% people recommended about germ protection and 23%
people suggested about beauty care. After that, few more variables come to their mind such
as, they use soap for feeling fresh, for health consciousness and for feeling skin smooth. So,
cleaning is the basic purpose which is apparent but there are two more key purposes for using
soap which are protection from germs and beautification.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 12

• Variety of Soap Usage

Variety of Soap Use

3%
10%

10% 38%

3%
3%

33%

Antiseptic Beauty Care Herbal Medicated Skin Care Flower Extract Fruit Extract

Figure3: Variety of soap use

From the above doughnut chart we can see that, among male and female respondents 38%
people advocated for antiseptic soap and 33% people advised for beauty care soap. After that,
10% people directed about both skin care soap and flower extract soap. Also, there is little
number of respondents which is only 3% people recommended about medicated soap, herbal
soap and fruit extract soap. So, it is clearly viewed that, antiseptic soap and beauty care soap
are more preferable among all the respondents.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 13

• Physical and Functional Attributes of Soap

Physical attributes of soap

Physical Attributes of Soap

45.00%
40.00%
40.00%
Respondents Percentage

35.00%

30.00%

25.00%
23.33%
20.00%
16.67%
15.00%
10.00%
10.00%
6.67%
5.00% 3.33%

0.00%
Ingredients Foaming Fragrance Color Shape Duration

Different Attributes
Physical Attributes

Figure4: Physical attributes of soap

On the account of physical attributes of soap, from the above column diagram we can see
that, among male and female respondents most of them prefer for ingredients at the first
position. Second, they prefer foaming of the soap. Third, they prefer fragrance of the soap.
Fourth, they prefer color of the soap. Fifth, they prefer shape of the soap. Finally, they prefer
duration of the soap i.e. the length of the time they can use a single soap.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 14

Functional attributes of soap

Functional Attributes of Soap

Respondents Percentage

30.00%
26.67%
25.00% 23.33%
20.00%
20.00%
16.67%
15.00% 13.33%
10.00%
10.00%
6.67%
5.00% 3.33%

0.00%

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24
Different Attributes
Functional Attributes

Figure5: Functional attributes of soap

On the account of functional attributes of soap, from the above column diagram we can see
that, among male and female respondents most of them prefer cleaning capability of the soap at
the first position. Second, they prefer moisturizing capability of the soap. Third, they prefer
antibacterial capability of the soap. Fourth, they prefer beauty care capability of the soap. Fifth,
they prefer fresh feeling capability of the soap. Sixth, they prefer nourishment capability of the
soap. Seventh, they prefer 24-hour body odor protection capability of the soap. Last but not the
least, they prefer anti – ageing capability of the soap.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 15

• Influencing Factors in New Soap Purchase Decision

Influencing Factors in New Soap Purchase Decision

100% Shopkeeper's Opinion, 3.33%
Advertisements, 3.33%
Pack Size , 3.33%
90% Availability, 6.67%
Packaging, 6.67%
Respondents Percentage

80%
Price, 10.00%
70%
Ingredients, 10.00%
60%
Beauty Care Quality,
50% 23.33%

40%
Antiseptic Quality,
30% 23.33%

20%

10% Brand, 26.67%

0%
1

Different Factors

Figure 6: Influencing factors in new soap purchase decision

From the above column diagram we can see that, while purchasing new soap both male
and female respondents firstly look for brand and their percentage is 26.67%. Then, secondly
they prefer both antiseptic quality and beauty care quality and for these the percentage is
23.33%. After that, 10.00% consumers seek for both price and ingredients. Again, 6.67%
people search for both availability and packaging. Finally, only 3.33% people hunt for few
other factors which are pack size, advertisements, and shopkeeper’s opinion.

• Acceptance of Antiseptic Soap

Most of the male and female consumers have been agreed to use antiseptic soap for
family. The reason they proposed, it kills the germs and ensures personal hygiene. However,
there is little number of people who don’t think the need for antiseptic soap for their family.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 16

• Loyal Consumers of Antiseptic Soap and Recommended Brand

From the interview it is observed that, more than average numbers of people are loyal
consumers or using a fixed brand of antiseptic soap at present time. Moreover, there are few
male and female respondents whom are not loyal for using any brand of antiseptic soap
because some are not loyal towards any brand and some are eager more about beautification
and other things.

Preferable Brand of Antiseptic Soaps

60.00%
55.00%

50.00%
Respondents percentage

40.00%
40.00%

30.00% 30.00% Male

30.00%
Female
20.00%
20.00%
15.00%
10.00%
10.00%

0.00%
0.00%
Dettol Savlon Lifebuoy Bactoral

Different Antiseptic Soaps

Figure 7: Preferable brand of antiseptic soaps

Among both male and female consumers most of the people use Dettol antiseptic soap.
Then, Lifebuoy stands on second position and after that Savlon is preferable to the
consumers. Moreover, a small number of male consumers vote for Bactoral soap.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 17

• Acceptance of Beauty Care Soap

Majority of the female respondents agreed on the necessity of beauty care soap than male.
Moreover, some housewives said that they buy beauty care soap for their teenage daughter. The
reason behind of the necessity of beauty care soap is that, beauty care soap specially articulated
for enhancing beauty. It refers that, this kind of soap delivers the benefit like making skin
brighter, make the skin smooth and moisturize, furnish extra nourishment etc.

• Loyal Consumers of Beauty Care Soap and Recommended Brand

From the interview it is observed that, average numbers of female respondents are loyal
consumers or using a fixed brand of beauty care soap at present time. Moreover, except few,
most of the male respondents are not loyal towards any brand of beauty care soap.

Preferable Brand of Beauty Care Soap

80.00%
70.00%
70.00%
Respondents percentage

60.00%
60.00%

50.00%
Lux
Meril
40.00%
Aromatic
Keya
30.00%

20.00% 15.00%
10.00%
10.00% 5.00%
0.00% 0.00% 0.00%
0.00%
Male Female

Gender basis Distribution

Figure 8: Preferable brand of beauty care soaps

Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 18

Most of the female respondents are loyal towards “Lux” brand for beauty care soap. Then,
rest of the female respondents choices are scattered among other beauty care soaps such as
Meril, Keya and Aromatic. Though male respondents are not loyal towards any beauty care
soap, somehow they loyal for only one brand which is Lux.

• Preference for Antiseptic Quality and Beauty Care Quality in One Soap

Preferance for Antiseptic and Beauty Care Quality in

One Soap

Both male & Female

No, 6.67%

Male
Yes, 90.00%

Female
Yes, 95.00%

Figure 9: Preference for antiseptic and beauty care quality in one soap

Almost equal numbers of female and male respondents are expecting two separate
categories which are antiseptic quality and beauty care quality in a single soap. Moreover,
they are very enthusiastic to buy it. Because, they think this soap will be deliver two benefits
at a time. Also, using this soap it will be more cost effective because there is no need to buy
two separate quality soap. However, only insignificant numbers of male and female
respondents are not considering this fact. So, there is a possibility of launching this new kind
of soap which will hold both antiseptic and beauty care quality in a single soap.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 19

• Preferable Price for Having Soap Containing Antiseptic and Beauty Care Quality

Both male and female respondents are preferred a price range of 25tk – 30tk for a 100 gm
of soap which has both antiseptic quality and beauty care quality. Basically, consumers are
preferred this price range because the existing soap they purchase (whether it is antiseptic
soap or beauty care soap) are priced within the range of 12tk – 22tk. As this soap will deliver
two quality at a time so that they can expense some extra amount for having it. So, the new
soap’s price should be within the range of 25tk- 30tk for satisfying the need of the middle
class to upper class people.

9.0 Discussion

Analyzing the above result we can discuss like that, basically people are using soap
primarily for cleaning purpose then for germ protection and beauty care. That is why; under
antiseptic soap Dettol soaps has noticeable demand in the market and it is widely consumed
by the loyal consumers of antiseptic soaps. Also, under beauty care soap Lux soaps has
visible command in the market and it is widely consumed by the loyal consumers of beauty
care soaps. Moreover, at the time of purchasing new soap most of the people initially look for
brand then antiseptic quality, beauty care quality and so on. So, it can be recommended like
that, brand is the most influential factors when new soaps are usually purchased and the
marketers have to create a clear and strong brand image on the consumers mind before
launching or promoting any product. Furthermore, in the case of physical attributes most of
the people given first priority for ingredients while using any soap. Then, it has been
prioritized as foaming, fragrance etc. Again, in the case of functional attributes most of the
people given first priority on cleaning capability while using any soap. Then, it has been
prioritized as moisturizing capability, antibacterial capability; beauty care capability etc. In
short, now it is visible that, while choosing any physical attributes of soap people are concern
for ingredients which is also reflecting when they choose functional attributes i.e. whether
the soap has antibacterial capability, moisturizing and beauty care capability. After that, we
can synchronize like that, there is a huge prospect of such a new kind of soap which
containing both antiseptic quality and beauty care quality because it will deliver two benefit
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 20

at one time. Not only the people are willing to buy that product but also they are willing to
buy it at higher price i.e. within the range of 25tk – 30tk for 100 gm pack size soap.
However, as we have mentioned earlier that brand is the most influential factor while
purchasing any new soap, so that brand should be highly focused at the initial stage.

Now from the above discussions, we can derive the answers for the research questions which are
given in the following:

1. Generally, at bathing time consumers use soap regularly for the three major purposes
which are cleaning, germ protection and beauty care. That is why; most of the people
usually purchase either antiseptic soap or beauty care soap. Moreover, at the time of
purchase new soap first and foremost people look for brand. If the soap is from well
known brand then it is more preferable to buy. So, brand is the most influential factor
in new soap purchase decision. Furthermore, when people using any soap under
physical attributes they look for ingredients, fragrance, color etc. and under functional
attributes they look for antiseptic quality, beauty care quality, moisturizing quality
etc.
2. Consumers have given perceptible positive response for the upcoming new kind of
soap which contains both antiseptic quality and beauty care quality. People believe
this soap will encounter two needs at the same time. So, this will be a positive vertical
brand extension of the parent brand “SAVLON” for the company ACI Ltd.
3. As this will be a positive vertical brand extension so that the reciprocal effect will
also be positive towards the parent brand SAVLON. That means, this new kind of
Savlon bath soap will make the non-user become user for the parent brand SAVLON
under bar soap division. In that way, it will be a successful extension which will also
increase the market share for the parent brand SAVLON.

10.0 Significance of the Study

Bangladesh has already developed a very good bar soap market. Under bar soaps prior ACI
has launched soap both for the health soap segment and beauty soap segment but they were
unable to gain most of the market share than other companies. This study will help us to know
the consumer preference of bar soap which will ultimately find out the acceptance to make the
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 21

new kind of soap which will contain both antiseptic quality and beauty care quality for the
Bangladeshi soap market. Moreover, it will also help the company to generate profit with the
increase of market share.

11.0 Recommendation

Above all, from this exploratory study we can recommended like that, within the conscious or
unconscious mind consumers are basically need two kind of soaps which are antiseptic soap for
the protection from germs and beauty care soap for beautification. So, the upcoming new kind of
bar soap which contains both antiseptic and beauty care quality will achieve terrific success in
the Bangladeshi soap market. Moreover, the company ACI will get a successful vertical brand
extension for their parent brand Savlon with the positive reciprocal effect. As we have mentioned
earlier, positive reciprocal effect will eventually build the non-user become user of the parent
brand Savlon. Also, it will increase the market share for Savlon brand. As from the interview we
found that, brand is the most influential factors in new soap purchase decision so this will be an
excellent opportunity for the company. Because Savlon brand is already very popular in front of
the consumers and the only things the company have to do they have to focus more on product
differentiation or product uniqueness. At the end, one more thing should be mentioned that, this
is an exploratory study and it has only revealed the consumer insights for the upcoming new kind
of soap. Though, the outcomes are positive according to the anticipation but it has been done
mostly on qualitative manner. At the end, there is a requirement for further survey in all over
Bangladesh and immense quantitative analysis before launching this new kind of Savlon bath
soap.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 22

12.0 Research Timeline

2008 February Information search, problem statement and purpose of the study
writing.

2008 March Literature review writing and taking in-depth interview

2008 March Research question writing and taking in-depth interview

2008 April Research methodology, analysis and rest of the report writing

2008 May Submission of internship report

Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 23

References

Aaker, D.A. and Keller, K.L. (1990), “Consumer evaluations of brand extensions”, Journal of
Marketing, Vol.54 No. 1/90, pp. 27-41.

Chen and Liu (2004), “Positive brand extension trial and choice of parent brand” Journal of
Product and Brand management, Vol. 13, pp.25-36.

Definition (2008), Retrieved from “whatis.techtarget.com/definition/0,,sid9_gci211703,00.html”

Sheinin, D.A. and Schmitt, B.H. (1994), “Extending brands with new product concepts: the role
of category attribute congruity, brand effect, and brand breadth”, Journal of Business
Research, Vol. 31 No. 1, pp. 1-10.

Springen, K. and Miller, A. (1990), “Sequels for the shelf”, Newsweek, 9 July, pp. 3-42.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 24

Appendix A

Questionnaire for In-Depth Interview

(This interview is only for the educational purpose and all the information about the respondents
will be kept confidential)

• Do you use soap regularly for bathing?

Ans.:

• What are the purposes behind for using soap?

Ans.:

• What kind of soap do you usually use?

Ans.:

• When you are using a soap which physical and functional attributes you prefer most?
Ans.:

• What are the factors that influencing you at the time of purchasing new soap?
Ans.:

• Do you think antiseptic soap is necessary for family? Why?

Ans.:

• Do you use any fixed brand of antiseptic soap? Which brand?

Ans.:

• Do you think beauty care soap is necessary for family? Why?

Ans.:

• Do you use any fixed brand of beauty care soap? Which brand?
Ans.:

• If you get a soap which contains antiseptic and beauty care quality, will you buy it?
Why?
Ans.:

• At what price will you prefer to buy this soap which contains both antiseptic and beauty
care quality? Why?
Ans.:
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 25

Name:
Gender: ‡ Male ‡ Female
Age: ……………………….
Profession: ‡ Service ‡ Business ‡ Housewife ‡ Student
‡ Others (Please mention)…………………
Monthly Income: ‡ Below 15,000 ‡ 15,001 to 50,000 ‡ Above 50,000
Total family members: ……………..

***These questions are only to give an idea about the type of information expected to be
gathered from the in-depth interview. The patterns of the questions may be changed based on
circumstances and some answers form the interviewee. Some additional questions may be added
from the conversation.

THANK YOU VERY MUCH!!

I really appreciate your time and effort for this interview.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 26

Appendix B
Profile of Advanced Chemical Industries (ACI)

Company Preview:

ACI Limited is one of the leading companies in Bangladesh. It was established as a subsidiary
of Imperial Chemical Industries (ICI) plc, U.K. in 1968. At that time it was one of the oldest
industrial units in our country. After the liberation war, the enterprise was declared ‘abandoned’.
Then it had been incorporated in Bangladesh on the 24th of January 1973 as ICI Bangladesh
Manufacturers Limited as a subsidiary of ICI. On 24 June 1973, the factory restarted its
operations under the name ICI Bangladesh Manufactures Limited. On the 5th of May 1992, ICI
Plc divested 70% of its share to local (Bangladeshi) management and hence ACI Limited came
into existence.

At present ACI is a leading corporate body in Bangladesh. It is a Public Limited Company

with a total number of 15,550 shareholders, among which there are six foreign as well as
fourteen local institutional shareholders. The company is diversified in to six major businesses.
Besides, the company has a large list of international associates and partners with trade and
business agreement.

ACI is the first organization in Bangladesh to earn both the ISO 9001 certificate for Quality
Management System in 1995 and the ISO 14001 certification on Environmental Management in
2000. It is a transparent and customer focused company. It always strive for innovation,
continuous improvement and never compromise with the quality.

Today ACI Limited is one of the fastest growing companies in Bangladesh. The Company
consists of the followings divisions:

‰ Pharmaceuticals Division
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 27

‰ Consumer Brands Division

‰ Agro Division

o Crop Care and Public Health

o Animal Health
‰ Seed & Biotech Division

‰ Diagnostics and Medical Devices Division

Present Market Standing of ACI Limited

ACI has highly motivated productivity conscious, devoted and innovative work forces. Most
of its products are doing well. ACI’s market standing at present is:

• No 1 in seeds business.

• 3rd in Crop Care & Public Health.

• 5th in Animal Health business.

• 9th in Pharmaceuticals.

• Brand leader in household insecticides & antiseptics.

Subsidiary Companies
ACI Trading Limited: This is a 60% owned subsidiary. ICI, Zeneca, Exxon, Stahl are leaders
in their respective fields and ACI have excellent market share of their products in Bangladesh

The major responsibilities of ACI Trading are:

• Representing various international companies

• Procuring raw materials

ACI Formulations Limited: The factory at Gazipur of ACI Formulations Limited, a 100%
owned subsidiary of ACI Limited. It enjoys tax holiday status for its manufacturing
activities. It also undertakes:

• Seed Storage
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 28

• Aerosol filling

• Coconut hair oil canning for which an overhead charge is recovered from the
respective businesses

• ACI Mosquito Coil Production

Physical Facilities
‰ Pharmaceuticals and some Consumer Brands production facilities at Narayangonj.
‰ Other Consumer Brands production facilities at Rajabari
‰ Leased experimental fields for Agro Seeds progeny trials.
‰ Contract manufacturing used for production of soaps.
Distribution
o Total 151 distributors across the country.
o Emphasis on rural coverage.
o 19 serving depots throughout the country.
o Own fleet of 65 vehicles plying round the clock.
Above all, I have done my internship under consumer brand division and it is the time now to
discuss about it briefly:

Consumer Brands Division:

This division, "An Emerging Tiger" of ACI Limited was born on 01 January 1993. Its stable
boasts of leading brands like, Aerosol and Savlon leverage the other imported brands to achieve
second and third positions in the market. Manufacturing facility at Narayanganj and strong
distribution network throughout the country meets the growing needs of consumer demand. This
business accounts for 38% of ACI's turnover, which has increased by 52% to Tk. 542 million
over last year. Angelic range of personal care products and Colgate-Palmolive range of oral care
products contributed to this increase.

Mission
‰ To become one of the top most consumer product marketing companies in the country.
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 29

‰ To associate with any one of the major international Companies having excellent
reputation and market acceptability, around the globe.

Product List
‰ ACI Angelic Air Freshener.

‰ Hygiene Range:

o Savlon Liquid and Cream Antiseptics

o Savlon Hospital Concentrates
o Savlon Liquid Hand wash
o Savlon Bar Soaps
‰ Household Insecticides:

o Aerosol Insect Spray

o Mosquito Coil

‰ Toiletries:
o Vanish Toilet cleaner
o Angelic Beauty Soap
o ACI Coconut Hair Oil
o Savlon Femme Sanitary Napkin.

‰ Foods:
o ACI Pure Spice
o ACI Pure Flour etc.

Imported Products Marketed

‰ Oral Care products: Colgate Palmolive oral care range
Monitoring the effectiveness of positive reciprocal effects on vertical brand extension of parent brand SAVLON. 30

‰ Hair Care products: a)Vatika Hair Oil

b) Dabur Vatika Shampoo
c) Dabur Amla Hair Oil

‰ Food Products: a)Dabur Honey

b)Haldirams Food range.

Health Aid Products: Canderel Low Calorie Sweetener