II.

Category

A. Threat of new entrants/exists

The threat of new entrants is high in case of the soap industry. This is because of not very high
fixed costs and low switching costs. We have already seen that the potential market is huge and hence
economies of scale can be achieved if properly directed efforts are taken. If a product, which is not
available, is introduced by the new firm then it’s can achieve the desired sales in a short span of time. If
one firm increases its products price beyond a certain limit, then it is likely that the consumer will switch
the brand. There is increasing popularity of body wash as against the use of soaps. Hence, the threat of
substitutes is increasing.

III. Environmental

A. Social

Social trends in the Pakistan are changing. Now, people are getting more conscious of their
health. They are more aware of threats posed by bacteria and other germs and want to protect
themselves against germs. The campaigns launched by Safeguard also make people recognize that they
should protect themselves against germs, because these germs are the biggest cause of diseases. With
the rising education and disposable income levels, the need for hygiene and personal / skin care
becomes important. Premium soaps are thus targeted at the audience to change their habits by raising
their aspiration levels. Fragmented approach of govt. and NGO’s towards inefficient PHC-primary health
center also aggravates the problem. The growing reach of advertising medias like satellite and cable TV
too is expected to give a boost to the market penetration initiatives of the industry players

B. Political Factors

Politically there is no much of a problem for the soap and will create an impact that will not
affect our product. Government banned the import of tallow, a soap making raw material (which was
requiring a very little processing to make soap). It then followed an incidence of adulteration of
Vanaspati by unscrupulous manufacture.

C. Economic

Soaps in India cost very high in India as compared to other countries like Indonesia. This is
primarily attributed to the high cost of imports due to high import duties. Since India is now a WTO
member India will have to bring down the import duty rates to as much as 20% from35%. Also the excise
rate at 16% forms form edible portion of the cost. For toilet soap, the average expenditure per user
household for low-income households is Rs. 237, while itis Rs. 706 for high-income groups.

D. Technological
E. Safeguard is attractive on technological, it’s advertised through electronic and print media
like the Commander Safeguard advertisement is aired on TV and radio. The internet is also
very effective media that is used by safeguard. Company launched their website to convey
their message about Safeguard. All information about the product is available on the
website. Basically the website is to attract children