Case summary

Household Product limited, a Public limited company set up in 1940. Leading marketing
organization involved in manufacturing and marketing of all kinds of consumer products.

Profit center organization.

The Toilet soap group was one of the important divisions of the company.

Nearly 90% of toilet soaps marketed at around Rs 5/cake, remaining price between 6-25/cake
with the majority around 8/cake

Value by the market of remaining 10% (High price sector was 25% and growing at 15%per
annum), whereas 90% (low price sector was 75 % in value and growing at 4% per annum)

3 products- 2 at 5rs (40% of low-price sector) & 1 at 10rs (Not disclosed because very low)

The company did not see a price increase in the low-price sector because of fierce
competition & the political climate of the country. As well as the expenditure had increased
Bcz of advertising & promotion, and increase in manufacturing cost, and therefore profit
marginally decreased.

Rahul, the new Marketing manager, wants to introduce 2 to 3 brands in the high price sector
for stable profit and & potential growth.

In the high price sector, 30% accounted for soaps offering medical benefits, 2nd section
based on perfumes appeal, 3 section based on cosmetic appeal.
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Jaimala, a competitor who sold soap with fragrance of Jasmine in High price sector had
achieved 10% market share in the High price sector in less than two years. Therefore Rahul
opined that perfume section had good opportunity and thus he proposed a plan to introduce
soap made with jasmine perfume + made of vegetable oils (Considering the religious aspect
of vegetarianism & free from animal fats).

The product manager recommended that 7.5rs is viable for this kind of soap against 7rs of
Jaimala.

Packaging of an attractive foil with 2 color printing was used.

Sehra's name was decided as a marketing campaign showing there is the sound of wedding
bells in the jasmine perfume of sehra. It was shown as Jasmine flower in decoration + garden
in context to the perfume.

But before moving forward and allocating all the resources nationwide, the Marketing and
product manager wanted to test marketing the effectiveness of the marketing mix & the
promise of purity they wished to claim.

They selected two cities:

1. Hyderabad- Large population but mostly muslim who might not care about the purity
aspect

2. Indore- large population majority Hindu, who might care about purity.

They decided to test it for 9-12 months.

Objectives of test marketing

1.  Should be able to achieve market share similar to Jaimala

2. Should be able to position as distinct soap in the luxury market for purity and fragrance.

Promotion:

two weeks later, sales started & they streamed ads in cinema & local press + In 2 month they
offered a discount coupon of 2.5 rs + leaflets were provided with information about the purity
and fragrance.

Results:

Initial sales figures were encouraging but after a few months sales tapered off & stabilized at
a lower level.

For the Consumer panel- 600 households were selected for 2 groups each. Group A with
income of 1000 & B with 500-1000

repeat buying for sehra in Hyderabad was 30% and in Indore 20%

Market research findings

The preliminary result stated that fragrance was weaker than jaimala, and people didn’t recall
purity aspect/positioning.

The exhibits depicts that the following characteristics in the 2 cities

Hyderabad:

a) Low penetration (9.9%) suggesting that the marketing communications were ineffective.

b) Moderate repurchase rate(35%) suggesting that the product was perceived as providing
value by 35% of the households who tried the product.

Indore:

a) High penetration rate (18%) in the High Price Segment of the market suggests that the
marketing communication was effective in getting across the value of the product.
b) Low repurchase rate (10% in last 3 months) suggesting that only 10% of the households
who tried the product found value in it.

The target segment of the soap is women in the age group 18-35 years. The name “Sehra” is a
headdress worn by grooms during weddings. Giving a masculine accessory’s name to a soap
targeted at women is a case of incorrect positioning.

The ad campaigns developed focused more on the Jasmine fragrance than the ‘purity’ aspect.

Decision: “Sehra” should be launched nation-wide.

Marketing Plan:

Price: The purchase value as well as quantity increased when the price was decreased through
the Rs 2.50 coupons. However, the higher cost of producing soap out of vegetable oils means
that the price should remain Rs 7.50

Product: The name of the product should be changed from “Sehra” to something more
feminine.