Marketing Project

Category: Bathing SoapsSubmitted by: Group1

Aakash Goel (231001)Abhishek Tyagi (231011)

Amit Kaushik (231021)Anurag Goel (231031)

Bhavika Syal (231041)DhanunjayIlluri Reddy (231051)

Industry Analysis

The Indian bathing soap market is estimated to be around 9,800crores holding around 700 companies. They constitute the following market share:

FMCG Industry(78,000 crores)

30%

70%

Soaps are available in India in around five million retail stores out of which nearly 75% are in the rural areas. In this particular category, brand loyalty is not fixed, products are used atleast once amonth and consumers change their preferences based on various factors such as increasing media campaign etc. Hence, the market becomes highly fragmented with the presence of both large and small players.

The market can be divided into the following categories as per price:

Others

Personal Out of this 30% (22,000 crores), nearly 42% (9,800 crores is contributed by soaps)

The popular category (Hamam, Lux, Cinthol) drives the soap market.

Penetration has never been a major issue for bathing soaps in the Indian market. In rural areas the penetration is 97% - with 50% of theproducts being sold in the rural market; and in urban areas the penetration is 99%.

Major players being Unilever, Nirma, Godrej, Johnson & Johnson, Colgate - Palmolive.

Industry SWOT Analysis

Strengths

1) Well-established penetration in rural as well as urban areas2) Presence of strong global as well as domestic brands3) Low cost operations

Weakness

1) Low investment in technology and innovation2) Low exports

Opportunities

1) Domestic market can be expanded

2) Exports3) Higher disposable income

Threats

1) Imports2) Better global value-added products3) Use of new products such as shower gels, liquid soaps

Growth trends

The bathing industry has been showing a moderate CAGR of around 5% in the last five years (2009 – 2013) and is expected to show a higher growth rate of around 8% in the coming 2 – 3 years.

Explained in the figures as follows:

2009 2010 2011 2012 2013 2014 2015 2016

7000 7600 8000 8200 8500

CAGR5%

8%

Some of the major drivers for an expected growth of 8% are:

1) Consumers are becoming more hygiene – conscious

Indian bathing soap market sales (2009-13) & forecasts

2) Increase in disposable incomes in the rural areas3) Launch of more value-added premium soaps has led to an increase

in the demand of cheaper (or the popular category) substitute products

4) Moving trend towards ayurvedic/herbal soaps due to increasing awareness about their medicinal value, hence fast growth observedin this segment as well.

5) Growing population of women in the age group of 25-446) Growing demand of beauty soaps amongst men also

Organised/ Unorganised sector: The share of the unorganized market (Breeze, Dyne) last year has been around 20%. The organized market continues to dominate the soap industry due to presence of strong multi-national brands.

However, in the coming three years the rate is share is expected to decline a bit to around 17-18% (lesser decline in rural areas) because of the following reasons:

1) Since penetration is high in the rural areas, and global brands are now targeting these areas and hence launching cheaper SKUs (stock keeping units).

2) Increase in disposable income in the rural areas may result in increased sales of popular products such as Hamam, Lifebuoy and lesser sales for the unorganized market.

Competitive Analysis

Present market share of competitors

54%

10% 9% 7% 4% 3%14%

HUL

Unilever is the market leader with over seven brands in the soap category: LUX, LIFEBUOY, HAMAM, REXONA, BREEZE, DOVE and PEARS. Also, one of the major exporters to various countries, Unilever produces different varieties of soap – beauty, herbal, medicinal, glycerin and premium.

The company has strong R&D capabilities and a strong reach within bothrural and urban areas.

The company’s target consumer segment for soaps has always been women,it promoted LUX as a brand that meant beauty reflecting from a woman’sbody, it used beautiful celebrities to build its brand image.

Similarly, Dove has been promoted as moisturizing soap for woman who consider soap hard for their skin and prefer a creamy soap for softer skin.

Breeze has been used to accomplish the aspirations of women in rural India at an affordable price.

Hamam is a brand associated with therapeutic values promoting a balanced life while Lifebuoy assures great health for the entire family.

Liril has always been promoted as a brand associated with freshness, energy and excitement.

Godrej Consumer Products Limited

Godrej was the first company to launch a soap with vegetable oils in 1930s.Some of its leading brands are: CINTHOL, FAIRGLOW, GODREJ NO.1.

The brand is supposed to be generating maximum sales from Punjab (where celebrity Mona Singh promotes Godrej no.1), and is now growing in the rural areas as well. The Godrej No.1 soap is the most selling soap for Godrej because of its low price and presence of variants suchas the ayurvedic herbal Godrej No.1 soap

After its disintegration with P&G, the company launched FAIRGLOWin 1999promoting it as India’s first soap that would make consumers fair. It adopted a strong ad campaign before launching this product, with ad that showed how using the soap would block the sun UV rays and hence bring fairness. This helped in increasing the sales of the brand by 17% that year.

Cinthol has always targeted youth again promoting freshness (ads showing consumers getting fresh after a tired day when they used Cinthol), with tag lines such as ‘Alive is awesome’.

Wipro

Wipro, along with being a leader of IT solutions and services, has a strong presence in the toilet soap industry as well. It has two main brands – SANTOOR and CHANDRIKA.

Santoor herbal soap holds a significant share in the ‘popular category’. Its past performance has further been explained in the

latter part of the project. It has been promoted as a herbal beauty soap offering twin benefits of both Sandal and Turmeric. It comes in three variants and became widely popular when it was promoted using the concept of ‘mistaken identity’. In one of the ads, a dance traineris mistaken as the heroine of a film by Saif Ali Khan, while in another ad, a mother is mistaken as a college student. Thus, the idea that is built up in a consumer’s mind is that by using the soap, skin becomes so healthy and beautiful, that it lies about your actual age.

PESTLE Analysis (beauty herbal soap category)

Political

Setting up of manufacturing plant based on different locations, for eg – Himachal Pradesh is a tax free zone with minimal political issues

Focus more in rural areas as the political scenario in those areas can help with trade fairs and events

Economic

Excise duty on soaps is presently lower than the previous years –8%

Disposable income in rural areas is increasing Lower prices of palm oil etc ( that is used for herbal soaps)

will lead to lower production cost

Social

Target to improve hygiene along with making the skin soft and beautiful

Increased awareness about benefits of herbal and ayurvedic soaps Consumers are moving towards value-added products, not just

beauty soaps

Technological

Use better R&D scientists to keep the benefits of the herbs intact while developingan innovative product

Make sure that the ingredients used adhere to the Grade 1,2 or 3 of the BIS standards

Develop a product of a fresh bright colour and a calm fragrance to assure consumers of its herbal properties

Legal and Environmental

The manufacturing process should not harm the environment and abide by the legal norms. No hazardous chemicals (as per the legal limit) can be used.

Launch of a new product

We plan to launch a product in the category of Herbal Beauty Soap by P&G. Following is the STP for the product:

Segmentation:

Geographic

Region: Overall major cities in India, with special target group in south India where brands like Santoor(another herbal beauty soap) and Hamam are more popular than just normal beauty soaps.

Major Market lies in:

Urban and Semi-Urban: People in Urban areas are more conscious about value addition rather than just beauty soaps. P&G is a brand known in the urban areas, not much popular in the rural areas. Rural is not a good option as people either go for the extremely advertised brands orthe cheap established ones.

Age Group: Mostly females of age 25-40.

Gender: Females, more conscious of their skin’s health and texture along with the beauty part of it.

Income Group: Middle and Upper-middle income group, willing to pay as much amount for the soap as they pay for other existing products.

Lifestyle: Well informed customers: the people who are more sensitive about their skin and are into buying soaps carefully and selectively as per its benefits.

Brand loyal customers: P&G is a known brand. It produces soaps outsideIndia and people already using P&G products in India would be willing to try a herbal soap by them if advertized in the correct fashion. Allthe stores where P&G products are sold will attract customers.

Targeting:

Selective Marketing: In order to set up a base in India, P&G needs to target the urban markets, given the fact that most P&G products are known and popular to urban population only (mainly women in the age group of 25 to 40). It can be difficult to establish foot hold in rural markets given the existing monopoly of antiseptic brands like Lifebuoy and Herbal soaps like Hamam and Santoor. Women in this age group are specifically nowadays growing their attention towards the herbal benefits of a soap on their skin.

Promotion of the given company

Stores and malls having explicit varieties of such herbal soaps shouldbe targeted in order to bring the product in notice of potential buyers..

Customers coming to buy pampers are potential customers of P&G who canbe another target for selling soaps, especially the mothers.

An advertizing technique that can be used can be the ‘market basket analysis’ where along with P&G sanitary napkins or hair colors (home care products), soaps can be placed. This will help in inceasing awareness about the new soap.

Positioning

It can be projected in the minds of people as a brand which does not make anyone fair or beautiful, but also keeps their skin healthy. It should be shown as a brand which balances both beauty and skincare with a promise of quality of P&G. Think of launching it as a product giving dual advantages in the same price as its contemporaries, both in terms of beauty as well as health of skin.

Past Performance of Existing products

Hamam

Hamam has Neem, Tulsi and Aloe Vera which give effective protection from 10 skin problems like rashes, pimples, prickly heat, body odouretcLaunched in 1931 as a ‘mild, family soap. It drew a large following long before it was trendy or fashionable to use products with natural ingredients.It was the only Indian-made natural soap at the time.It was mostly used by mothers and doctors for its purity and skin safety.

Santoor

A combination of sandal and turmeric, it was bought into market by Wipro in 1986.In the next two decades Santoor became the third largestselling popular soap in India.

During this time Santoor steadily became synonymous with younger looking skin and advertised in a way to show how a married woman is considered as a young college lady because of using Santoor.

Having established itself as a major herbal beauty soap brand in India, now santoor offers a number of exciting new variants- Santoor White, SantoorGlycerine and more recently Santoor Honey and Apricot

Medimix

While not as popular as other existing herbal soaps, medimix managed to maintain its position owing to it’s pure quality and a high rate of recommendation by dermatologists.

Needs and expectations of people going for Herbal Beauty Soaps

Healthy Skin Soothing and softening effect Glowing effect after use A good fragrance Good appearance and shape in order to appeal to customers

Objective

We plan to launch a product that can help us over shadow the image build up popular brands such as Hamam and Santoor, by occupying a

market share of atleast 4-5% in the next six to seven years after launching the product. Vigoroous advertising and creating a fresh brand image about ‘herbal soaps’ will be our prime focus to achieve this objective.