The “soap category” in the past was targeted at the mass market, i.e.

a soap for all, but, today, the category has been segmented creatively at different levels. All the major players have tried to create a niche market within the mass market to grow profitably. Bath soap is a Fast Moving Consumer Good, which forms a major part of the market. FMCG sector is the first segment to get affected, whenever macroeconomic factors change. Brand loyalty has become irrelevant where many homogenous products are flooded in the market. Informed customers are making rational purchasing decisions. Hence, marketing the product with a prominently designed USP has gained huge importance. If market reports are to be believed, after shampoos and oral care, fast-moving consumer goods (FMCG) companies are betting big on soaps. The soaps segment is expected to grow by 15 per cent in 2009-10 even as companies introduce more and more specialized products to create a differentiation in the market. Soap market in India has evolved over the years from a purely cleansing product to a product that now offers multiple benefits and functionality. Need to continuously differentiate and capture market in such highly price sensitive segment had made soap manufactures to move from a traditional mass market position to a more niche and specialized position. Current trend is introduction of soaps with various herbal and antibacterial actives that can offer personal protection and hygiene along with skin care properties like moisturizing, mildness, etc the demand for toilet soap is expected to grow at an annual rate of 4 per cent between2006-12 to 870,000 metric tones by 2011-12. Rapid urbanization is expected to propel the demand for cosmetics to 100,000 metric tones by 2011-12, with an annual growth rate of 10 per cent. Macro-Economic Envoirnment At the macro-level, over the long term, the efforts on the infrastructure front (roads, rails, power, and river linking) are likely to enhance the living standards across India. Till date, India's per capita consumption of most FMCG products is much below world averages. This is the latent potential that most FMCG companies are looking at. The companies are focusing on getting the consumer up the value chain. Going forward, much of the battle will be fought on sophisticated distribution strengths. Now let us take a broader look into the various macro-economic factors affecting the Indian Soap Industry.

We can use the following para in case of segmenting rural market

MARKET DEMAND Growth will come from increasing consumption and reach. The opportunities for increasing consumption in India are large because its per capita consumption is much lower than international levels. The scope to increase reach is huge. At least 50 per cent of India's population is not directly covered since market reach is restricted to urban areas and those villages connected by motor able roads. Here are some of the plausible strategies for HUL:  Focusing on the low-income group of consumers. (Rural India to be precise). This will help in the growth of current business(s), expansion into related businesses, and seeding options for future growth.  The steps may include: increasing consumption, expanding infrastructure to reach new geographies, and developing cost-effective business systems  Use of various information systems can be employed. This will maximize the business potential. Future Market Trends The Fast Moving Consumer Goods (FMCG) are likely to make a major dent in Rural and Semi-Urban Segments by 2012 with their demand growing @ of about 60% to carry forward its total market size to around Rs.1,23,363 crore from present level of Rs.70,000 crore with a projected (cumulative aggregate growth rate) CAGR of 12%. (Source: according to The Associated Chambers of Commerce and Industry of India) Today, the urban pockets which currently are the biggest market size for FMCG products like soaps, in next 4-5 years will switch over their consumption patterns for organic products to keep better their health, thus making erosion in their present consumption patterns for these products. In urban pockets, the current demand for FMCG products may stagnant by 2012 and force the FMCG manufacturers to shift their supplies with assured qualities towards rural and semi-urban folks. Soaps which currently have less than 30% penetration out of 100 people in rural and semi-urban areas will grow at least by 50% in next 5-7 years because of their demand on account of rising per capita income of rural and semi-urban folks. The per capita income of rural and semi-urban populace will increase as the economic activities will grow their due to government focus for their industrialization. As per current estimates, while the per capita income of semi-urban folk is around Rs.14-15,000 per annum, the per capita income of rural folk is measured at less than Rs.7000 per annum. As per reports, by 2012

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