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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.
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
1. This study helps to understand the consumer buying pattern. 1.3 Scope of the study • This study helps to understand the consumer buying pattern.two segments is not very large. The task of data collection begins after a problem has been defined and research design/plan chalked out. margins come from the urban sector. • To find out category preference.4 Research Methodology The present study is carried out among the toilet soap users in Kolenchery town. • To rank the various attributes while selecting a brand. • To find out the source of influence of customer purchase. • To find out brand loyalty of customers. primary and secondary. 1. to study the consumer buying behaviour with respect to the same. While deciding about the method data collection. The secondary data are those which have already been collected by someone else and which have already been passed through the statistical process. • The result can be used in deciding the channel selection for distribution of toilet soap. the research should keep in mind two types of data viz. 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. The primary data are those which are collected fresh and for the first time and thus happen to be original in character. 4 .
1. pie chart and bar chart. periodicals. Tools used for data collection: Data was collected by using a self-constructed questionnaire from 30 respondents.Population and size of the sample: A sample of 30 respondents was taken for the study. Chi-square test is conducted to determine the acceptability of the null hypothesis formulated for the study. Secondary Data Data on industry profile and market profile has been collected from text books. The study was conducted for a period of two weeks. Statistical Analysis: Percentage analysis has been used for analysis and interpreting data. Analysed data are displayed in the form of table. brochures and internet. Convenience sampling method was used. Data Collection: Primary Data A structured questionnaire was prepared and data was collected from respondents. The sampling technique used in this survey is convenience sampling. 5 .4 Limitation of the study The study was conducted on a small sample size of 30 respondents due to time and other resource constraints.
CHAPTER 2 INDUSTRY PROFILE 6 .
The FMCG sec provides largest amt of revenue. The consumer keeps limited inventory of these products and prefers to purchase them frequently. Typically. Individual products are of small value. 2.FMCG sector is one of the largest growing sectors in Indian market. But all FMCG products put together account for a significant part of the consumer’s budget. Some FMCG Products are: Detergents Toilet soaps Toothpaste Shampoos Creams Powder Food products Confectionaries Beverages Cigarettes Typical characteristics of FMCG products: 1. 3. FMCG refers to consumer nondurable goods required for daily or frequent use . 7 . there are lots of companies competing with each other. as and when required. In this sec. a consumer buys these goods at least once a month. Many of these products are perishable.
Toilet soap industry in India:  Toilet soap industry is one of the oldest FMCG industries in India. recommendations of the retailer or friends. 6.6%. Trial of new product. 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. These products cater to necessities. brand switching is often induced by heavy advertisement. The prod categories can be classified into 3 segments. 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.e. Brand loyalties or recommendations of reliable retailer/ dealer drive purchase decision. 7. In value terms the industry is worth Rs 6500 Cr. 8 .4.. i. comfort as well as luxuries. The consumer spends little time on the purchase decision. Rarely does he/she look for technical specifications. Penetration of toilet soaps is high at 88. And in volume terms it is worth 6 million as of 2008. 5. Soaps form the largest pie of FMCG market with bathing and toilet soaps accounting for around 30% of the FMCG market. The Indian toilet soap industry is growing at approx 3-4 % in volume terms and around 10% in value terms.
Abrasives to enhance the texture of soap include talc. Additives are used to enhance the color. The alkali most commonly used today is sodium hydroxide. are also used in soap making. alone or in combination with sodium-based soap. Animal fat in the past was obtained directly from a slaughterhouse. Many vegetable fats. 25 for 75gm) . Modern soap makers use fat that has been processed into fatty acids. silica. 15 for 75 gm) . This eliminates many impurities.Lux. Potassium-based soap creates a more water-soluble product than sodium-based soap. and so it is called "soft soap. and marble pumice (volcanic ash). but modern manufacturers 9 .Cinthol. Fragrances and perfumes are added to the soap mixture to cover the odor of dirt and to leave behind a fresh-smelling scent. Potassium hydroxide can also be used.• Premium soap category (>Rs. Dettol etc • Economic soap category (<Rs. Pears etc. Dove. Godrej No. is commonly used in shaving products. • Popular soap category (Rs.1. and it produces as byproduct water instead of glycerin. palm kernel oil." Soft soap.Lifebuoy. Soap made without dye is a dull grey or brown color. texture. and scent of soap. Santoor etc Raw materials for soap: Soap requires two major raw materials:  fat and alkali. 15-25 for 75 gm) . and coconut oil. including olive oil.
Mixing The purified fatty acids are next mixed with a precise amount of alkali to form soap. The fatty acid and glycerin are pumped out continuously as more fat and water enter. can be accomplished in several hours. 10 . The equipment used is a vertical stainless steel column with the diameter of a barrel called a hydrolizer. which are then stamped and wrapped. The entire continuous process.color soap to make it more enticing to the consumer. The hot liquid soap may be then whipped to incorporate air. Splitting The first step of the continuous process splits natural fat into fatty acids and glycerin. Molten fat is pumped into one end of the column. The slab is cut into smaller pieces of bar size. Pumps and meters attached to the column allow precise measurements and control of the process. while at the other end water at high temperature (266°F [130°C]) and pressure is introduced. The fatty acids are then distilled for purification. This splits the fat into its two components. Other ingredients such as abrasives and fragrance are also mixed in. from splitting to finishing. It may be as tall as 80 feet (24 m). It may also be cooled in a special freezer. Cooling and finishing The soap may be poured into moulds and allowed to harden into a large slab. The steps in the continuous process of making soap are explained below.
some consumers move down looking for cheaper substitutes as prices move up. After the soap emerges from the mills. stamped and wrapped. the main component of explosives such as dynamite. The extruded soap is cut into bar size. This is because as some consumers move up the value chain with increase in disposable incomes. hence about 50% of the soaps are sold in the rural markets. the proportion of premium soaps to economy soaps has not changed much.75m of which are in the rural areas. Perfumes can best be incorporated at this time because their volatile oils do not evaporate in the cold mixture. and nitroglycerin. it is pressed into a smooth cylinder and extruded. Glycerin is a very useful byproduct of soap manufacture. It is used to make hand lotion. But in the past. 75% of India’s population is in the rural areas. which crush and knead it. Growth Rural demand growth is expected to occur mainly with consumers moving up towards premium products. The milled bar lathers up better and has a finer consistency than non-milled soap.Milling Most toiletry soap undergoes additional processing called milling. drugs. Therefore the availability of these products is not a problem. The cooled soap is fed through several sets of heavy rollers (mills). in volume terms. Distribution Network Soaps are available in 5 million retail outlets in India. 3. as growth in soap prices has generally outpaced overall consumer inflation. 11 . This has been the case especially.
but all income levels use soaps. that positioning persists even today with a focus on removal of body odour and keeping the user healthy. In village heat and dust is reason enough to press on. 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. Brand Positioning Soap manufacturers originally targeted their products to the lowest income strata in urban as well as rural areas. People belonging to different income levels use different brands. which fall under different segments (see table below). Overview of the Indian Soap Category  India is a vast country with a population of 1. For some brands. Rural demand is growing.Indeed innovation has encompassed product. positioning their brands as a way to remove dirt and clean the body. 12 . Household penetration of soaps is 98%. with more and more soap brands being launched in the discount segment targeting the lower socio-economic strata of consumers. Most soap marketers are busy making the best. However.030 million people. making it the second largest category in India (detergents are number one). soap positioning is moving towards skin care as a value-added benefit. of what they can overall a sharpened consumer focus has meant better corporate performance. Rural consumers in India constitute 70% of the population.
Consumers in the West exhibit preferences for strong. Here the fragrance preference is for more sophisticated profiles reflecting their lifestyles. as they are the chief decisionmakers in terms of soap purchase. and South. the skew is towards specific soap segments like the Herbal/Ayurvedic profiles and also the Sandal profiles. 13 . primarily rose. Preferences are more for the pink soaps with floral fragrances. Toilet soap market in India is a highly fragmented mkt. 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.Consumer Preferences Consumer preferences are varied and are more regionally specific. which they call test launch markets. most fast moving consumer goods companies tend to launch their new brands in these markets. impactful fragrances and somewhat harsher profiles compared to the North. West. None of the national brands had more than 5% market share and many more regional and unorganised sec/local brands. The East is not a big soap market. Hence. Consumers in the North prefer pink coloured soaps. Consumers here do not exhibit high brand loyalty and are ready to experiment and try out new brands. East. there were 45 leading national brands. hence no particular preference skews. which have floral profiles. which are positioned on the beauty platform. India is divided into four regions: North. In the South. Medicated positioning like germ killing and anti-bacterial are marketed to families. Marketing Soap is primarily targeted towards women.
thereby benefiting from the brand’s consumer image. Though these manufacturers' brands are more expensive than national brands and privately labelled products. Colgate Palmolive and Johnson & Johnson. are proving difficult to displace. This means concentration on a small number of key brands and dropping non-performing brands.2% in 2007. Rationalization is taking place among large players as a strategy in terms of the Brand portfolios. Such streamlining allows the manufacturers in general to improve margins by lowering costs for sourcing manufacturing and distribution. Despite the increasing number of brands and products on the global market.4% for the toilet soap category. GCPL continues to be the second largest toilet soaps player with a market share of 9. consumers seem to prefer familiar trusted brands. The top global players include Unilever. Creating a strong brand name through advertising is a primary strategy used by most companies in the industry. 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. Colgate-Palmolive etc. Procter and Gamble. They then diversify the brand into another sector or sectors. 14 . Johnson & Johnson. established brands from the key global players such as Unilever. There is cut-throat competition between these multinationals.HUL was the market leader with about 30 toilet soap brands with a total market share of 53.
CHAPTER 3 LITERATURE REVIEW 15 .
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. and disposing of products and services so as to satisfy their needs and desires. 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. 16 . 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.Consumer Behaviour Belch and Belch define consumer behaviour as the process and activities people engage in when search for. by which a consumer goes for the various segment of soap like premium. selecting. sub-popular and carbolic which are basically decided by the cost factor and fat content in the soap. popular. evaluating. using.. purchasing.
Various tactics like the price off’s.The promotional techniques help to boost sales. Hence the marketer has to adopt different strategy for such a market. which the products have in market. buy one get two free. Chi-Square Test  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. 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. 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%. which affect the demand of soaps. Men normally make purchase decisions in rural areas. is the penetration. 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. Thus the approximately the penetration is around 99% for overall India. Penetration One of the factors. A point to note is that women use more personal care product than men do and hence premium soaps are mostly targeted at them. free gifts and other schemes help boost sales in short run and also help in clearing stocks. or is it a real difference? Chi-Square Test Requirements  17 .
7. Adequate sample size (at least 10). 2. The chi-square formula used on these data is X2 = (O . 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 . 6. All observations must be used. Simple random sample. One or more categories. Independent observations. 5. Quantitative data.1. 4. 3.E)2/ E Where. Data in frequency form.
CHAPTER 4 DATA ANALYSIS AND INTERPRETATION 19 .
1 Age group This consists of classification of respondents according to age group.1.1 General Information 4. For this. Age Group 15-25 26-35 36-45 Above 45 Total Frequency 1 9 14 6 30 Percentage 3 30 47 20 100 20 .The purpose of the questionnaire was to identify the usage and buying pattern of the consumers of toilet soap. 4. questionnaires were administered to 30 respondents. The following pie chart illustrates this. The analysis is done on the basis of the answers given by the respondents to the questionnaire.
Fig 1: Classification according to age group The age groups of the respondents are divided into certain range and the range is 10.1. There is high proportion of females. The ages are grouped as 15 to 25. 36-45 and above 45. Here majority of the respondents belong to the age group of 36 to 45 and is about 47%. 30% of them are from the age group of 36 to 35. Gender Female Male Frequency Percentage 17 57 13 43 21 .2 Gender wise classification The respondents group includes males and females. 26 -35. 4. 57% of the respondents are females and 43 % are males.
Gender wise classification 4.1. The data analysed is shown in the table below. Frequenc Marital Status y Single Married Total ge 3 27 30 10 90 100 Percenta 22 . The respondents are 10% single and the rest 90% are married which shows a comparable distribution for the analysis. Fig 2.3 Marital Status The respondents are classified into married and single to see any difference in the usage pattern and the buying behaviour.Total 30 100 The following bar graph will illustrate the gender wise classification.
23 . The employed group forms the chunk of the user base as per the research with 44%. professionals. The data in table format is shown below. Professionals form 37% of the population. self-employed and others.employees. Fig 3: classification based on marital status 4.4 Occupation The respondents group includes 3 categories of people.1. 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.Hence majority of the user base lies in the married youth but the unmarried people also forms a comparable share in the bar graph.
once a day. This is illustrated in the bar graph shown below. 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.5 Usage pattern of soap The usage pattern has been divided as per the frequency and includes alternate days. 24 . 4.1.Fig 4: classification based on occupation. twice a day and others.
1. 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. The preference is shown in the bar diagram shown below. The remaining doesn’t have a specific brand preference. This is illustrated in the following bar graph.1. 4. 25 .7 Brand Preference The most popular soap brand among the customers is Lux. Pears is the second popular soap among the respondents. 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.6 Using Specific Brand Frequency of the people using a specific brand for a considerable period of time constitutes 34% of the population.
More than 50% of the customers favours popular category. go to another outlet for purchasing that particular brand or postpone the purchase to buy that 26 . 4.Fig 7: brand preference. 4. cinthol.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.1. pears. Fig 8: category preference.8 Category of soap Popular category soaps forms the most popular among the respondents. The following bar graph will illustrate this. It includes brands like lux.1. hamaam etc.select another brand.
10 Preferred Packet size Out of the sample surveyed majority of the people purchase 75 gm packets. This is illustrated in the bar graph shown below. 4.particular brand. The second position is for 125 gm packets. Fig 10: Packet size preference. Fig 9: buying behaviour when brand is not available. The buying behaviour is illustrated in the bar graph shown below.11 Store preference 27 .1. 4.1.
Fig 11: store preference. Majority of the respondents subscribed this as the major factor.1. 28 . Prior experience of the product is the major factor that influences purchase decision. 4. This is illustrated in the bar graph given below.12 Purchase decision Purchase decision of the consumers is governed by different factors.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. 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.
i. This is illustrated in the following diagram. The highest rank. Price is another criterion which is rated high but is found to have less rating than quality.e. The various factors are ranked from 1 to 7.Fig 12: factors affecting purchase decision. Brand name of the product is another criterion along with the fragrance of the soap. This shows a shift in consumer taste from being price conscious to quality conscious.1.13 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. i. 29 .e. 4. 7 is for quality and the last rank. This data shows that customers tend to have a liking for quality products and for famous brands. 1 is for packaging.
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 .2 CHI-SQUARE Test 4.Fig 13: ranking of factors.2. 4.
666 3 6 4 8 2.Total 10 20 30 Null Hypothesis (H0): The brand preference is independent of different age groups.333 0.2.815.2 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 7.1666 0.0410 0.1675 0.333 1 4 5 5 7 1 7 0.5210 df= (c-1)(r-1)= (2-1)(4-1)=3 χ2 = Σ (Oij – Eij )2/Eij  = 2.333 0.125 1.666 5. Since the calculated value of χ2 is much less than the table value the null hypothesis is accepted. 4.25 0.333 0. Chi-square test: Observed Value Expected Value (Oij – Eij )2/Eij 0 0.
Since the calculated value of χ2 is much less than the table value the null hypothesis is accepted. The table value of χ2 for 9 degree of freedom at 5 per cent level of significance is 16. Chi-square test: χ2 = Σ (Oij – Eij )2/Eij = 8. 32 .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.05.919.488 Degree of freedom is 9 and level of significance is 0.
CHAPTER 5 33 .
FINDINGS AND SUGGESTIONS 5. 6.1 Findings 1. 4. 75 g was found to be the most popular volume among customers. 3. Only 10% respondents use specific brand for a considerable period of time. value for money etc has a higher say in purchase decision. 34 . 5. The experience from the product in terms of its quality. Supermarkets are preferred by majority of the respondents to buy soaps. 7. More than half of the customers use soap twice a day. It is found that the people in the age group of 36-45 form the major chunk of customers. 2. The popular category soaps forms the most selling category of soaps. They form about 47% of the customers.
offers and discounts. buses etc Since advertising has a critical role in purchasing decision in store promotions.8. media advertisements etc for toilet brands should be increased. For a customer the quality of the soap is the paramount criteria while selecting soap. Efforts should be made to improve the purchasing volume of the customers. 5. • 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. Special measures must be taken to woo the customers. 35 . Brand name of the product is another criterion along with the fragrance of the soap. For that discounts can be given for multi packet purchase.2 Suggestions For soap: • Reduce burning sensation • Adopt aggressive marketing strategy for toilet soaps.
in order to 37 . the consumer is also caught in generic competition which may force him/her to downgrade in a few categories while testing other categories. the consumer.CHAPTER 6 CONCLUSION The average consumer has become sensitive to value offered by brands. The emergence of several discount brands and higherpriced improved offerings can be seen in the soap category. Godrej No. 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. For instance.
may alternate between a good brand of soap and a low-priced soap .balance her household budgets. 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. 38 . Balancing functional benefits.
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