2015

Marketing Management
Group 4

Submitted By: Group 4

Ankur Chugh
Alok Arvind
Jahagirdar
Rohit Deo Shrinet
Rohan Gupta
Shiven Vasudeo
Kalelkar
Vivek Kumar
Agarwal

[PREMIUM SOAP MARKET

MARKETING MIX]
The scope of the project is to study the premium Indian soap market marketing mix.

Topic:
STUDY OF INDIAN PREMIUM SOAP MARKET'S MARKETING MIX.
Project Scope:
The scope of the project is to study the premium Indian soap market marketing mix. Though we have
analysed the marketing mix of the premium Indian soap market, we have taken specific example of
Dove soap of Unilever to add to our analysis.
Introduction:
The Indian Soap market consists of retail sales of bath and shower products. The Indian soap and hygiene
market has experienced strong double digit growth in recent years (13.4% in 2013 to a value of $ 23.16
Billion Dollars). This is predicted to continue through the forecast period, but at a decelerated rate (Market
Line Industry profile: Personal Hygiene in India, August 2014). Unilever is the biggest player in the Indian
Soap Market, generating 44.7 % share of the market value.
Additionally, Market consumption volume increased with a CAGR of 7.3% between 2009 and 2013, to reach a
total of 6,800.6 million units in 2013. The market's volume is expected to rise to 8,859.9 million units by the
end of 2018, representing a CAGR of 5.4% for the 2013-2018 periods.

Indian Soap Market 2009-2013 Market Value

Market Share
Unilever is the leading player in the Indian soap Market with multiple products across the price points. It has
44.7% share of the market value. Godrej is the second in the list with 12.2 % of the market.

The market has several, leading national and global brands and a large number of small brands. The popular
and premium brands include Lux, Cinthol, Liril, Rexona, and Dove.
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 14 to 15% of the market size.

Situation Analysis:
Market Structure
The Indian soap market is growing at a strong rate and there are opportunities to gain market share
particularly with a greater premiumisation requirement from increasingly discerning customer. This makes
the personal hygiene market attractive to prospective entrants.
The major companies are large firms whose scale economies allow them to compete more effectively on price,
and invest in research and development activities; therefore small companies entering the market may find it
difficult to compete. With companies like Unilever being able to saturate a market with a promotion of its
product, smaller companies need a strong strategy to gain brand recognition. Substantial funds are needed to
start a successful business, with investments required for investment in production, distribution, and also
advertising (which is crucial for success in this market).
Moreover, consumers are paying closer attention to what comes directly in contact with their skin to check
skin problems which has given rise to soap products with natural ingredients or at least products free from
synthetic chemical constituents and aluminum or alcohol.
Although this provides new entrants with an opportunity to enter this niche market; products with natural
ingredients can be expensive to produce and established players such as Dove (owned by Unilever) are
already well established in this sector. This can also act as a barrier to entry. It is also vitally important for
new entrants to find a place on the supermarket shelves to distribute their products widely; new entrants
must persuade retailers that it is worth displacing older brands to make way for a new, unknown product.
Competitive Strategy:
Porters Five Forces:
The soap market will be analyzed by taking manufacturers of soap as players. The key buyers will be taken as
distributors of personal hygiene products such as retailers, and packagers and suppliers of raw materials
such as surfactants, bio-fuels such as palm oil, Potassium and sodium salts, etc. as the key suppliers.

The market is well developed with many players selling similar products, leading to an intensely competitive
environment. Buyers within the market include supermarkets and hypermarkets, which are likely to exert
strong buyer power. Suppliers to the personal hygiene market are also weakened by the scale of market
players. Suppliers of ingredients and packaging are smaller relative to manufacturers, which decreases
supplier power in this market. However, suppliers provide for a diverse client base and correspondingly
supplier power is assessed as moderate overall. Attempting to enter this market is difficult, with new entrants
competing with numerous long-established companies that have large scale economies.
Bargaining power of Suppliers:

Several raw material suppliers available

India South-East Asia Free trade agreement allows easy availability of raw materials from south East
Asia

Overall supplier power is low.

Customer:

Multiple options available with little differentiation for end customers.

Intermediate customers/Organised Retails pushing its own brand offering.

Overall customer power is moderate.

Substitute:

Products like herbal gels, spa treatments, and ayurvedic alternatives reduce usage frequency.
Consider shower gel as a soap alternative; not much threat of substitution, as it in itself is a soap.

Overall threat of substitute is assessed as weak.

Threat of New Entrant:

No patent to protect products intellectual property

India South-East Asia Free Trade Agreement now enables easier/cheaper imports from south East
Asian countries.
Large investments required for plants, distribution, and above all promotion and advertisement.

Overall threat of new entrant is moderate (Last major entrant was ITC, which had a sizeable distribution
strength, with its Vivel and Fiama Di Wills brand).
Customer Decision Making Process for premium soap:
The customer decision making process for soap encompasses the following methodology, going through five
stages which are shown below:

Initial problem awareness and need recognition are often triggered by a feeling or desire to fulfill a need.
Individuals, who purchase premium soap, do so for personal reasons, but one of the main reasons is for skin
nourishment. Therefore, consumers purchase it to fulfill both the basic and the augmented needs. Family and
advertisements are often the first stimuli which trigger need recognition and problem awareness. Need
recognition and problem awareness could arise from perceived quality differences or be triggered by a desire
for higher quality product.
Information search is where individuals will obtain information. This could begin with members of his/her
peer group including friends, family regarding their own perceptions and knowledge. The decision maker
may also utilize other sources such as Marketing mix touch points to further his or her knowledge about the
product.
The evaluation of alternatives will be different for each individual, but would often include assessments of the
product itself for features such as skin care, hygiene, fragrance and other associated features such as
packaging, design, and branding. It would also include brand perception of the product and its parent
company. In the context of purchasing a soap, consumers feel it to be a low involvement but a habitual
purchase. The woman of the house is normally considered as the ultimate decision-maker in terms of this
kind of purchase.
After the final purchasing decision, the last stage includes the post-purchase evaluation, whereby the
individual would examine the purchase. Often, cognitive dissonance arises when the individuals
expectations are not met. Therefore, companies spend a lot of money on quality control and R/D so that the
consumers get a consistent and a good experience of using the product.

Marketing Mix: (Ordinary Market Vs Premium Market)

The focus of the market mix is to compare the ordinary soap market with the premium soap market. Each P
then further delves deep into Premium soap market in particular to cater to intricacies of the market.
PRODUCT:
Premium soap consumers have different needs, leading to companies going for differentiated product
portfolio strategy. Premium soap producers use specialized ingredients to differentiate its product in the
mind of the consumer. The premium product user looks for more differentiation as compared to that in a
normal soap. Body soaps with emollients and emulsifiers are the requirements of premium soap users.
Delving into the subject, we will use customer value hierarchy to do further analysis:

Core Product: At the core of any soap is the cleansing and hygiene need required by the consumer from the
product. To address this need the company uses products like sodium salts combined with fats and oil.
Expected Product: At this level the customer expects the soap to have attributes such as antiseptic and
perfuming (fragrance) properties. These attributes are provided by both normal and premium soaps.
Augmented Product Hierarchy: This is the level at which the main differentiation lies between the premium
and normal soap brands. To differentiate on this level the soap companies try to bring attributes such as skin
nourishment and moisturization provided by the product .For e.g. for a premium soap such as Dove,Unilever
came with a new idea of moisturizing of skin which was not there before its inception.
Potential Product: At this level companies may look at ingraining newer attributes such as medicinal
properties and anti-aging attributes to the product. E.g. of the above is P& G Olay brand of Hygiene products
and high end premium medicinal stores provided by exclusive organic stores.

Product Classification and product mix:

Nondurable product: Since soap is a non- durable product and is purchased frequently, the appropriate
strategy is to make it available in many locations, and advertise heavily to induce trial and to build
preferences. Also since soap is a convenience good which is bought immediately and with minimal effort,
premium soap companies use deeper understanding of customer needs to come out with differentiated
products and brands. The company uses a diverse product portfolio strategy to capture value at all price
points. E.g. the products line of Dove is developed after carefully examining the traits and behaviors of
customers, primarily women when it comes to beauty and personal care. The product line of dove has a lot of
products ranging from variety of skin care soaps, body wash, moisturizing lotions and body care products to
dove for men, which was launched in 2010. Unilever has reached its target group by producing a range of
products according to the needs of current and prospective consumers. Dove has five different classes of
product viz . Skin care Products, Men care, Lotions, Beauty Bars/body wash and Deodorants. Dove has a range
of products in its each main category i.e. in body Care Products it has 44 different products, in men care, in
lotion, in beauty Bars/Body Wash and deodorants has sub products.

Ingredient Branding:
The premium soap producers try to build brand equity for the product by using strategy of ingredient
branding such as by building on equity of ingredients such as potassium based salts in place of sodium based
salts in the product . Additionally, companies like Unilever try to differentiate its Dove soap brand by building
on product ingredients such as moisturizer. To implement the above strategy the company tries to
communicate the uniqueness of the product ingredients through its brand communication and also through
the usage experience and after effects of using the product. Secondly, companies try to position the
ingredients as proprietary and differentiated to create exclusivity for the brand. Thirdly, the companies use

distinguished brand and logo, e.g. the dove golden logo to position Dove as a cream bar rather than as soap.
Lastly, companies of premium soap use a coordinated push pull strategy to communicate the difference by
going for campaigns such as the Dove inner beauty campaigns combined with retail merchandising
programs to differentiate the product.

Design:
To differentiate premium soap from lesser offerings, companies make use of design features to differentiate a
product together with the packaging. The design is built into the premium soap by the way a soap looks, feels
and smells. The design features try to build on the aesthetics and functional points to appeal to the emotional
and rational side of the consumer. The companies go for design features through packaging, point of sale feel
and design (bright colored and attractive selling stands etc)

Packaging:
The packaging of the premium soap is attractive and distinctive from normal soaps. The package is buyers
first encounter with the product, therefore it should give a premium feel for product such as the hard packing
of Dove and that of ITCs Fiama De Wills. The packaging also helps the later product experience when the
customer opens the package to use the product. Also packaging is accompanied by distinctive and attractive
logo and ingredient markings on the product to create differentiation. Therefore labeling combined with the
product packaging is an important feature in differentiating the premium soap from ordinary soap.

PRICE:
(Note we did empirical analysis, provided in Appendix B, to arrive at several insights in the following analysis)
Pricing is an important signaling factor for soap brands. There are several pricing strategies used by soap
brands, which we will discuss below.
There are certain lower end premium brands that do go for mixed bundling such as pears. However, the
bundling process is not common in premium soap market.
Taking Dove as an example, with the brand now priced at Rs 50/100gm, the price has somewhat become
reasonable. We feel that still the brand does not fit into the value for money" proposition for the Indian
consumer. In spite of the fact that consumer looks for Value even in premium products. Dove has a negative

point in that the soap usually does not last enough (partly because of Indian bathroom habits). This has
reduced the value proposition for this brand. With the emergence of an attractive market in the premium
cosmetic market in India, Dove has a potential to become a key player, as it has got its positioning right, and
Value" right for the Indian consumer.
We have observed premium market pricing being used for certain products like Dove Green. Dove green is
another variant of Dove and is priced at 50% higher than regular dove catering to the different market for
skin care oriented customer base.
There exists a sub ultra-premium soap market as well. The market is highly fragrance oriented apart from
great quality in soap ingredients. There is a Rustic art-sandal brand priced far above the other incumbents at
Rs 155/100gm.
Although Premium markets Soaps gives its customers a lot in terms of the product itself, it cannot provide a
better pricing. This is due to some constraints in the beauty soap industry. Beauty soap is a product with a
vulnerable demand in India. A change in price has a high risk of creating price war among the rivals which
will eventually cause a loss of profit. Its prices are almost equal to its competitor. Dove price is in comparison
with its major competitor such as Fiama di wills. Company carries out research on competitors price and
brand loyalty when it feels extreme necessity of changing price.
Brands are sometimes forced to increase price of its popular soap and skin care brands to offset high input
costs. The country's largest consumer products company increased the price of Lux soap in 2011 and
followed it up with 5-8 % hike in prices of other premium soap brands such as Dove and Pears.
HUL offers discounts in several of their brands for the Republic day sale period, which exhaust most of the
existing stock. However, premium soaps tend to stay out of this discount sale.
Premium soap like Dove and Pears saw price increase in 2011 due to steep increase in raw material prices. It
should be noted that increase in cost of some commodities was exceptionally high. Prices of palm oil, a key
ingredient for soaps, increased 45% year-on-year in 2011, forcing most companies to consider price increase.
Continuing inflation and soaring crude oil prices forced other companies to increase prices as well.
Despite of all the above mentioned factors, its not an easy decision to increase prices. Most companies have
managed double-digit volume growth by keeping prices low. Higher price tag may affect volume growth.
However, the positive characteristic of the premium market over the ordinary market is that the volume
growth is not much impacted by the price increase.
HUL for example, takes price increase to pass on raw materials inflation across brands or it attempts to
squeeze out competition by keeping their prices low and wean out smaller local players in this high inflation
time. HUL tries to pass on the cost more on the premium soaps compared to the ordinary market soaps such
as Lux. Companies prefer to attract consumers and gain market share while reducing other costs to protect
margins.

PROMOTION:
Promotion strategy
The premium soap product does not only call for a good product, pricing and making it accessible to target
customers. Companies need to also promote the product by following different promotional strategies such as
advertising, sales promotion, publicity, interactive marketing, word of mouth marketing and personal selling,
each geared towards the target group. Push strategy and pull strategies are used by companies for the above
categories, by using appropriate communication message targeted towards each customer segment.

For our analysis, we will analyze both the push and pull strategies used by the premium soap making
companies.
Target group for premium soap
We identified following segment for the premium soap market (For discussion on how we segmented the
market please refer to Appendix A)
Segment
a) Family
b) Commercial
Hospitality
c) Personal

Category

Benefits

Product

High Income
High End

Uniqueness
Luxury to
customer
Treat and feel
good factor

Dove
Expensive
Captive Soap
Dove

High
Aspirational

Decision
Maker
Mother/Wife
Purchase
Department
Self

Push Strategy
A push promotional strategy involves taking the product directly to the customer via various means and
ensuring the customer is aware of the brand at the point of purchase.
Push tactics followed by the companies in premium soap segment are
Direct selling to customers in stores using appropriate retail channel.
By entering into commercial agreements with retailers to incentivize retailers in selling the product.
By ensuring efficient supply chain allowing retailers to meet expected demand.
Attractive packaging, design and logos are used by companies in the premium soap market to
encourage purchase.
Points of sale displays are made attractive and distinctive to encourage purchase of premium soap.
An example of the above is the Push tactics followed by Dove such as posters displayed at retailers and
elegant design and packaging used to sell the product.

Pull Strategy
Pull strategy involves motivating customers to seek out the companies brand in an active process. Since the
target group for a premium soap market is a discerning customer with his or her own likes and dislikes, the
premium soap marketing company designs target group specific communication and advertising campaign.

Pull tactics followed in premium soap industry are

a) Using Advertising and mass media promotion such as Dove Self Esteem and inner beauty campaigns.
b) Word of mouth referrals by delighting the customer through the product experience.
c) Customer relationship management process is used to address customer requirements and
grievances.
d) Additional strategy involves sales promotions and random discounting which are used to get
customers to buy the product.

Promotional Channel
Different strategies such as Push/Pull strategy, Promotional Strategy, Advertising Strategy, Brand Awareness
among others support each other.
For e.g. Dove Evolution Film is a Pull Strategy using Promotional Channel of Digital Media.
Advertising Strategy
To illustrate the advertising strategy of premium soap we are using the advertising strategy of Dove as a point
of reference. Dove uses targeted advertising strategy to target different segment of consumers.
Firstly, Dove tried to provide a message that it is not Soap, but a moisturizing bar. It targeted the segment
which wanted their skin to be vibrant and moist.
Secondly it targeted Women with a simple message of Real Beauty. Its focus was women and message
was,real women wants real beauty, which gives them confidence and portrayed that these real women
make their own choices in life and that they believe in DOVE.
Brand Awareness
Through campaigns such as Real Beauty Campaign and program such as DOVE Self Esteem fund, Dove tried to
spread the awareness of the brand in the urban market (though the campaign was global , we can extrapolate
a similar effect in the Indian urban market)where it had the majority of the target customers.
Therefore, as described above the promotional strategy of premium soap is different from that of a normal
soap. Normal soap are more concerned about reaching the consumer to communicate its value proposition
whereas, premium soap such as Dove try to have more customer engagement and use innovative ways to
reach the consumer and create campaigns which make the user the star of the promotion.

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PLACEMENT:

Distribution channel structure for personal hygiene products in India

As shown in the table above, In India the main distribution channel for soap products are independent
retailers. Thus, the size of the average buyer (ultimate seller of the product to the end consumer) is not as
significant as in other countries, which often have supermarkets as the main distribution channel.
This reduces independent retailers negotiating position and in turn decreases buyer power. Retailers often
occupy a position of power in the supply chain which allows them to negotiate favorable contracts with
manufacturers. Consequently, this enhances buyer power. Although products are not so different in term of
ingredients, commoditization is not an issue here and branded soap products manage to stand out due to
certain benefits and specific qualities.
Branding is an important way of maintaining end-user loyalty, and as a result retailers are required to stock
the more popular brands, which reduce their bargaining strength and buyer power.
Further key points regarding placement of the premium product are as follows:Placing a product is the next key aspect in the marketing strategy. This is vital since its important to have the
right product available in the right quantities and in the right locations when the customer requires them.
The Place selection is chiefly driven by the target customers. The place so decided must be such that it
provides easy and convenient purchase point for the customer.
For premium category soap, the following is the Place of sale.

Independent retailers: This section mainly consist of local stores (without proper display and selfservice)and independent stores (display facilities and self-service).The shelves displaying these
soaps are easily visible from any corner of the store and preferably placed at the corners such that
they could even be seen through the shops outer facade . Independent store and Kirana stores are
volume drivers of Economic and medium segment of soaps. Some of the premium stores display
premium and high premium soap as relevant customer visit these store. Regular Kirana store get
most demand from economic and medium segment.

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Supermarkets: These are usually very large self-service shops selling food and house hold stuff.
These are the stores where one gets all the varieties of products in various price ranges. The
turnover at these stores is very large with customers having wide range of choices. Though the
number of premium products sold at these stores may be a small fraction of the total sales, but
nonetheless they are an attractive option for marketing the product and making the product familiar
to the consumer. Various promotional offers such as providing free sachet of the soap to the
customers at the billing counter are the means used by companies to reach out to a large segment of
people. Soaps are positioned in the shelves segregated by different categories. Supermarket is a place
that store whole range of soap (just leaving ultra-premium segment). Shelves are managed to
segregate these categories properly. Budget segment are kept in the lower shelves (mostly bundled
with discount offers). Premium segment soaps are kept in middle shelve to get maximum attention
from customers.

Medical stores: Soaps are one of many products sold in addition to medicines at such stores. Many
people prefer to purchase soaps from such stores and hence companies use this channel strategically.
Soap with meditational characteristics are sold in medical store as customer like to buy these
product with other medicines. Herbal and speciality soaps also marketed here to the targeted. The
soaps are placed on some of the lower shelves in the store which would also be closer to the counter.
An advertisement of the soap near counter helps in grabbing the attention of the customer.

Convenience stores: A convenience store is the one which is located within the close vicinity of a
locality, or at a petrol pump and which has extended opening hours, and which stock a limited range
of household goods. Even though these stores might not be a great source of revenues, the soap is
still displayed in limited number for those who might be the one-off buyers. In such stores, the
placing of the soap critical for its sales. Budget soaps are normally sold through this channel.

Other Channels: Selling ultra-premium segment soaps require very different channel strategy. This
category of soap cannot be placed with other category of soap in the conventional market places. Five
star hotels, premium spas, special kiosk in luxury malls are some point, where these categories of
soaps are placed. Another place gaining popularity recently is e-selling. Most of the customers using
premium quality, high priced soaps are tech-savvy and prefer convenience in purchasing.
Considering this fact, online revenue could turn into big revenues for speciality and niche soap
products. The online selling is done through online grocery retailers such as bread-and-basket.com
and producers own e-store.

Conclusion:
Our analysis regarding the marketing mix of premium soap makes it amply clear that companies can
only create sustainable value for its shareholders, if the company carefully combines all the
marketing mix attributes to carefully craft a strategy targeted towards customer segment in the STP
analysis done before implementing the 4P- strategy.

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Appendix A
Decision Role

Segment

Decision maker

Purchaser

Family

Homemaker

Commercial Hospitality

Purchasing
Department

Decision
Maker
Category
Low Income
household
Medium
Income
household
High Income
household
Low End

High End
Personal

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In-Person

Example

Value
Driven
Aspiration
driven

Lifebuoy

Uniqueness

Dove

Lux

ROI Driven
Cheap
Captive
Soaps

Medium End

User

Benefits

Value
Conscious
Image
Conscious

Future
Value
driven
Customer
Driven
Value
Driven
Uniqueness

Medium
Captive
Soaps
Expensive
Captive
soaps
Detol
Cinthol

Appendix B

Noramal

Budget Soaps

Soap name

bundle
size

weight
(gm)

price/
soap

price/
gram

Discount
%

68

64

100

17.00

0.17

5.88

Lifeboy

10

50

10.00

0.20

10.00

Cinthol

108

99

100

21.60

0.22

8.33

Lux

24

22

100

24.00

0.24

8.33

Rexona

24

22

100

24.00

0.24

8.33

Patanjali

19

19

75

19.00

0.25

0.00

Hamam

26

24

100

26.00

0.26

7.69

Santoor

145

145

125

36.25

0.29

0.00

Vivel

94

89

100

31.33

0.31

5.32

Park avenue

40

38

125

40.00

0.32

5.00

123

116

125

41.00

0.33

5.69

Dettol
Savlon

25

22

75

25.00

0.33

12.00

Camay

126

119

125

42.00

0.34

5.56

45

45

125

45.00

0.36

0.00

232

220

125

46.40

0.37

5.17

Liril

50

46

125

50.00

0.40

8.00

Himalaya

30

28

75

30.00

0.40

6.67

Khadi

55

52

125

55.00

0.44

5.45

Pears

168

159

125

56.00

0.45

5.36

Fiama di wills

Pears

Premium

Sale
price

Godrej

Aramusk

Ultra Premium

MRP

168

159

125

56.00

0.45

5.36

Dove

24

22

50

24.00

0.48

8.33

Dove

174

159

100

58.00

0.58

8.62

Biotique

90

81

150

90.00

0.60

10.00

Dove Green

46

43

75

46.00

0.61

6.52

Aloe veda

75

75

100

75.00

0.75

0.00

Vitro naturals

55

50

70

55.00

0.79

9.09

White House

105

97

100

105.00

1.05

7.62

Bodyherbals - neem

129

122

100

129.00

1.29

5.43

Bathing bar - Jasmine

129

122

100

129.00

1.29

5.43

Bathing bar - Lemon

129

122

100

129.00

1.29

5.43

Rustic art - sandal

155

139

100

155.00

1.55

10.32

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References
1.
2.
3.
4.

Market Line Industry profile: Personal Hygiene in India, August 2014

Data monitor industry profile: Indian Personal hygiene market, 2014.
Dove, beauty inside campaign case, YouTube
Secondary research on internet.

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