Baby Cheramy Re Positioning

Managing Customer Value - Group Assignment

EXECUTIVE SUMMARY

Hemas is one of the top diversified conglomerates in Sri Lanka. Out of Hemas’ various business

stances in Sri Lanka, FMCG industry plays a significant part in generation of profits which help

them to be market leaders.

Baby Cheramy is the flagship brands in Hemas’ FMCG sector. It is being in the market for baby

products for more than 40 years. Due to immense competition emerging from existing local and

international products for babies Hemas is now facing threats.

Author’s carried out a primary survey to recognize what is the current positioning about the

brand in the customer’s mind and what are their expectations. After identifying the current stance

in the customer’s mind author’s developed repositioning strategies which could be adopted by

Hemas to retain the market leadership and to improve the market share.

The following report has been prepared based on the analysis carried out in the following areas:

Introduction to the company (SWOT, Porter’s 5 force Analysis and strategic group

mapping)

Gap Analysis

Repositioning strategies and justifications

Relevant appendices to give support to the analysis

Based on the research findings possible recommendations are also been given at the end of the report.

Group 1 – HF10C1BAPage 1


ACKNOWLEDGEMENTThe authors are heart fully thankful to their “Managing Customer Value” lecturer Mr. Rajitha

Silva, whose encouragement, guidance, and support from the initial to the final level enabled to

the authors’ to develop an understanding about the subject. Also the authors are thankful to Dr.

Mahesha Samarathunga, for directing them in the correct path regarding citation and references.

The authors also wish to thank the librarian.

Lastly, the authors offer their regards to all those who supported them during the completion of

this group assignment.

The authors are responsible for any errors that remain in this assignment.



TABLE OF CONTENTSEXECUTIVE SUMMARY.........................................................................................................................1

ACKNOWLEDGEMENT...........................................................................................................................2

TABLE OF CONTENTS............................................................................................................................3

1. COMPANY BACKGROUND............................................................................................................5

1.1 Introduction to Hemas.................................................................................................................5

1.2 Marketing Philosophy..................................................................................................................5

1.3 Product Portfolio..........................................................................................................................6

2. SITUATION ANALYSIS.......................................................................................................................7

2.1 SWOT Analysis.................................................................................................................................7

2.1.1 – Strengths..................................................................................................................................7

2.1.2 – Weaknesses..............................................................................................................................7

2.1.3 – Opportunities...........................................................................................................................7

2.1.4 – Threats.....................................................................................................................................7

2.2 Porter’s Five Forces Analysis...........................................................................................................8

2.3 Strategic Group Mapping..................................................................................................................9

3. GAP ANALYSIS..................................................................................................................................10

4. REPOSITIONING STRATEGIES........................................................................................................14

5. RECOMMENDATIONS.......................................................................................................................16

REFERENCES..........................................................................................................................................17

APPENDICES...........................................................................................................................................18

1) SWOT Analysis.............................................................................................................................18

2) Porter’s 5 Forces Analysis.............................................................................................................23

3) Strategic Group Mapping...............................................................................................................24

4) Sample Questionnaire....................................................................................................................27

5) Survey Analysis.............................................................................................................................31

WORK LOAD MATRIX..........................................................................................................................39



LIST OF FIGURESFigure 1 - Piyawera CSR scheme of Hemas..................................................................................................5Figure 2 - Product Portfolio.........................................................................................................................6Figure 3 - Porter's 5 Forces..........................................................................................................................8Figure 4 - Positioning Map...........................................................................................................................9Figure 5 - Repositioning Strategies............................................................................................................14Figure 7 - Market Share for soaps..............................................................................................................19Figure 6 - Market share of toiletries..........................................................................................................19Figure 8- Taxation on Profits......................................................................................................................22Figure 9 - Preference Level........................................................................................................................32Figure 10 - Attribute Preferences..............................................................................................................33Figure 11 - Brand Switching.......................................................................................................................34Figure 12 - Brand Perception.....................................................................................................................34Figure 13 - Purchase Decision....................................................................................................................35Figure 14 - Customer Awareness...............................................................................................................35

LIST OF TABLES

Table 1 - Gap Analysis..............................................................................................................................13Table 2 - Product Range.............................................................................................................................18Table 3 - Ratios..........................................................................................................................................20Table 4 - Product Varieties........................................................................................................................26Table 5 - Preference Rates.........................................................................................................................31Table 6 - Attribute Preferences..................................................................................................................33Table 7 - Brand switching rate...................................................................................................................33Table 8 - Perception...................................................................................................................................34

LIST OF ABBRIVIATIONS

CDDA – Cosmetics Drugs and Devices Authority J & J – Johnsons & Johnsons

5S – Japanese Quality Management System FMCG – Fast Moving Consumer Goods

ECCD – Early Childhood Care & Development B/C – Baby Cheramy

SL- Sri Lanka



1. COMPANY BACKGROUND

1.1 Introduction to HemasHemas is one of the top diversified conglomerates in SL with 20 active subsidiaries which

operates in 5 different sectors – FMCG, healthcare, transportation, power and leisure, started its

operations in 1948 (Hemas Annual Report, 2009).

This is a listed company guided by its core values passion for customers, obsession for

performance, driven by innovation and concern for people (Hemas Annual Report, 2009).

The following report is prepared based on the flagship brand – Baby Cheramy – of Hemas.

According to Hemas corporate website (2011), “In its life span of over 40 years B/C has grown

into a complete range of toiletries and accessories for babies. Renowned for simple purity of

product, using ingredients carefully tested for mildness and suitability for use on babies”.

1.2 Marketing PhilosophyHemas has adopted societal marketing concept. They have invested in “Piyawera” scheme which

has the motive to improve ECCD developments in early childhood of children in SL. This has

started 32 pre schools all round the nation which educates more than 3000 students.

Figure 1 - Piyawera CSR scheme of Hemas Source: Hemas corporate website, 2011



1.3 Product Portfolio

FMCG Transportatio Leisure Health Power

Personal Care Home Care Foods Paper Products

Traded Brands

Figure 2 - Product Portfolio Source: Austceyl corporate website (2011) & Authors’ work



2. SITUATION ANALYSIS

2.1 SWOT Analysis

2.1.1 – Strengths

Hemas is a Sri Lankan company with 20 active subsidiaries and shares being traded in stock

exchange (Hemas corporate website, 2011). B/C product range has been in the market since 1962

(austceyl corporate website, 2011) with a wide range of products. As said by super brands

corporate website (2011) it has the market share of 47% currently in toiletries segment. Hemas

has adopted lean manufacturing systems recently and won various prices for brand excellence

especially for B/C (you tube corporate website, 2011 & hemas annual report, 2009). Financial

policy is in a good position. (Refer appendix 1.1)

2.1.2 – Weaknesses

B/C has to face various competitive activities from its close rivals like Pears and J & J which

make Hemas to retaliate based on their strategies. Customers mostly prefer foreign brands

thinking that they have more quality than B/C. Maybe due to the above reasons Hemas facing

difficult times in certain segment like baby soaps. B/C racks in super markets are filled with

some other brands which could have an impact on the purchase behaviour.

(Refer appendix 1.2)

2.1.3 – OpportunitiesTormenting war came to an end in SL which has created a gateway to enter into North and

Eastern markets. According LBO corporate website (2011), customer spending patterns has

increased to a certain extent. On average 340000 children are born in SL gives a available market

for B/C (super brands corporate website, 2011). Many universities offer industry oriented

degrees which the company can adopt. (Refer appendix 1.3)

2.1.4 – ThreatsUnregistered CDDA imports are dominating the market (LBO corporate website, 2011). Tax rate

has gone up from 14.6% - 16.1% (Hemas annual report, 2011). More recognition is there

towards Unilever and P & G. Environment can get polluted by the polythene based packages.

(Refer appendix 1.4)



2.2Porter’s Five Forces Analysis

Figure 3 - Porter's 5 Forces

Source: Done by Authors

(Refer appendix 2)

Threat of Substitutes-Herbal products:Aloe vera soap-Home made remedies: Egg york, neem oil-Aromatherapy products.

-Organic products.

Threat of new entrants and entry barriers

-Government policies.-Health and safety rules.-Legislation process.

-Trade barriers.-Initial investment.-Registered trademarks with high brand loyalty.-Benefit over the economies of scale

Buyer Bargaining Power

-Low bargaining power over suppliers.

-Cost of changing brand-Buyer fragmented and dispersed.-Higher switching cost.

Supplier Bargaining Power-Moderate power-Labour inputs-Raw material supplies-Utilities

Existing Rivalry- More than 11 competitors. -High switching cost-Monopolistic competition-Constant changes in prices and differentiation in product.-High asset specificity-High exit barriers



2.3 Strategic Group Mapping

Figure 4 - Positioning MapSource: Done by Authors

(Refer appendix 3)



3. GAP ANALYSIS

Attributes Available Expected Market

(Local/Foreign)

Product

Variety

B/C offers a large

range of baby care

products and customers

are extremely happy

about it.

There are some more

varieties that the present

and potential customers

expect from the brand

such as baby bath,

bottom balm, toothpaste,

lotion etc

J & J, Pears have almost

launched similar

products like B/C.

Foreign brand does not

offer all the variety as

they offer in their

mother countries.

Other local firms still

have to improve their

product range to make it

comparable with B/C.

Package In 2009 October B/C

re-launched its product

packaging to enhance

customer acceptance

(Hemas annual report,

2010).

Customers relatively

satisfied with new

packaging but Hemas

could use various shapes

relating to kids and also

could thing of attractive

colors.

J & J uses see through

bottles.

Other brands do not

make any difference in

packing.

Features Very few

differentiations are

available regarding the

products.

Customers expect

various fragrances in

B/C.

J & J offer various

fragrances which are

favored by babies.

Size Shampoo size is only

available 40ml – 400ml

Can improve the size of

the bottles to 600ml – 1

liter where they do not

J & J offers 1 litre

bottles at a different

package.

Group 1 – HF10C1BA Page 10


need to go to purchase

them eventually

Price

Market

Price

Price available in the

market is the lowest

price.

According to the survey

young parents seek to

look at other attributes

like quality and sense of

satisfaction rather than

only price.

Local brands like

kekulu, kohomba, panda

etc. offers at the similar

price as B/C.

J/J, Avent, Curash &

Mother care offers at a

relatively high price.

.

Special

Schemes

B/C offers triple value

pack and BOGOF

schemes for cologne

consumption.

Gift packs available at

lower price consists of

most of the product

range of B/C.

People from sub urban

areas seek more value

for money from B/C

products.

Kohamba offers gift

packs at a high price

comparing to B/C.

J/J offers different sizes

of gift packs with a price

lower than B/C.

Promotion

Tag Line “Pure Love”

Tools B/C uses national level

TV advertisement,

radio announcements

etc to reach the

potential customers.

Hemas is one of the

conglomerate which

Comparing to J & J B/C

is lacking behind in the

development of emotion

which enhances the

bond between mother

and child. Imaginative

and creative ads can be

used to bridge the gap.

J & J uses repetitive

advertisements which

promotes bond between

mother and child.

Pears use animative

creatures to capture

small toddler’s attention.



tries to promote ECCD

development in Sri

Lanka. It has launched

“Piyawara” scheme to

improve early

childhood

development. (Hemas

corporate website,

2011). These CSR

activities improve its

awareness.

Stores are provided

with racks to shelf their

branded products to

promote them.

B/C can use repetitive

advertising on channels

as like J & J.

B/C and Pears TV

advertisement are

similar in nature so it

might confuse the

audience. B/C can

change it current ads

with taking the above

mentioned points into

consideration.

Mother care, Avent and

Curash are mainly

purchased through word

of mouth publicity by

the users in the foreign

countries and in SL.

Place

Channel

B/C is distributed

island wide through

second level of

distribution channels to

all the super markets

like Keels, Cargills etc

and boutique shops.

Current users of the

brand are satisfied with

the placing of B/C.

J & J and Pears products

are displayed in separate

racks provided. They are

available in most of the

regions in SL.

Reach B/C’s target segment

spreads from low

income to upper middle

income. So it is

distributed island wide.

Due to this they retain

their market leadership.

Hemas can establish

new strategies to make

sure that the brand is

available at all possible

locations in the areas

aftermath of war.

Other brands like Avent,

Mother care & Curash

are sold in baby care

shops which are very

few.

Local customers mostly

get these brands



imported or got them

from friends in other

countries.

Store Displays

B/C racks are displayed

in prominent places to

attract and make the

customers easily reach

what they wanted.

Online

shopping

E- Commerce websites

like Kapruka, Alibaba,

Keels online etc sell

B/C brands.

Most of these brands

were purchased online

through e- commerce

websites.

Table 1 - Gap Analysis

Source: Table was prepared based on survey findings and direct observations in supermarkets

4. REPOSITIONING STRATEGIESRepositioning is where a firm tries to change the perception that their customers’ hold in their

mind regarding a particular product (Lovelock &Wright, 2002). Repositioning has gained vital

importance in today’s context due to ever changing customer preferences (Jobber, 2010).

Jobber (2010) explained that there are four strategies that a firm can adopt into to reposition.



Source: Adapted from Jobber and Fahy, 2008.

Hemas can adopt “image repositioning strategy” to improvise the mental perception of people

about the brand. Image repositioning is where keeping the product and target market the same

but to change the image of the product (Jobber & Fahy, 2008).

In terms of the requirements to be in the baby care market B/C has required functionalities. But it

is lacking behind in creating a strong brand image to combat competition stemming from the

industry.

According to the primary survey conducted by the authors it is evident that customers’

perception on quality regarding B/C is considered to be low. This is because of the strong image

of quality regarding other brands created through promotional campaign, word of mouth etc.

Through image repositioning strategy Hemas could focus on how to implant the view that B/C is

a good quality product.

Hemas could focus on getting medical approvals that ensures that the brand is out of any harm to

the skin conditions of toddlers. Hemas could get advice from SL College of dermatologists who

can give advice regarding quality enhancements they can have in each product variety of B/C.

Hemas signed an MOU with UNICEF in 2001 relating to its ECCD development programs

initiated to enhance ECCD developments in SL (Hemas corporate website, 2011). So Hemas can

give more emphasis in this additional recognition from an international treaty to convince that

they are producing reliable baby care brand with giving more concern for the society in which

they operate.

Figure 5 - Repositioning Strategies



It is already said in SWOT analysis that there are chemical and bio technological degrees offered

through local universities in SL. So Hemas could make use of these graduates to enhance the

current ingredients to make it more effective on tender skin conditions.

Hemas could be benefited from carrying out promotional campaigns which would give more

focus to the relationship of mother and child rather than of limiting to animated creatures. The

TV ads would give more impression to the customers rather than in any printed medium.

Repetitive ads could be able to lift up the need to purchase a product variety of B/C.

Hemas could use celebrity endorsements that would be inspirations to mothers having kids.

Appearance of doctors would create more awareness towards the brands. Ads should not be of

high end standard but could be able be understood by low income level as well.

Another strategy that could be used by Hemas is “product repositioning”, where target market

would be the same but product will be enhanced.

It is a general issue that author’s came across that most of the customers are expecting more

variety from B/C. For example they were expecting baby bath, bottom balm and requested some

variations in term of cologne fragrances.

J & J seems to be the leader for varieties of products. So Hemas could use this strategy to make

their position better in terms of varieties. Hemas could improve their backward vertical

integration with their suppliers to get best quality products to manufacture requested product

varieties of the customers.

It is essential to look into the capabilities of the firm to get quality ingredients to manufacture

varieties of fragrances. If they going get imported from other regions of the world the cost aspect

should also be given much concern otherwise the current position of the brand in pricing would

be cannibalized.

Hemas could also use organic and natural ingredients to their new varieties or could introduce a

product range. Due to emerging concepts on organic product and Hemas’ societal marketing

concept this would aligned.



Hemas should again be able to promote it to the customers in a way which could get good reach.

By coming up with products satisfying customer expectations the culture could be enhanced on

being “customer focused”.

Hemas is doing relatively well in sub urban areas and as well as in urban areas. So shift of target

market is not essential. So above mentioned strategies could shift the current position of Hemas

to a different and yet desirable place to improve market position and profits in future.

5. RECOMMENDATIONS

As per the research findings illustrate it is clearly evident that Hemas is in a very crucial point to

reposition its flagship brand to bring up the perception of quality. Hemas could adopt

image/product or both repositioning strategies to get rid of the emerging competition from baby

care products.

Hemas could get adapted to the evolving changes in the current market to be successful in the

market. By using the strengths identified in SWOT, it could invest more in R & D and quality

standards. It could seek the unarticulated needs of their customers and should utilize its unique

resources and capabilities to develop new products.

Hemas could be able to develop marketing intelligence to gather useful information about any

moves of its rivals. By doing all the above it should be able to develop a customer centered

culture which would lead to the success of the repositioning of the business venture.

REFERENCES

Austceyl corporate website, (2011), [online], Available at: http://austceyl.com.au/index_files/Page820.htm [Accessed on 20th May 2011]

Daily mirror corporate website, (2011), [online], Available at: http://print.dailymirror.lk/business/127-local/19546.html [Accessed on 5th June 2011]


http://print.dailymirror.lk/business/127-local/19546.html

http://austceyl.com.au/index_files/Page820.htm


Hemas Holdings, (2009), Hemas Annual Report 2009, Sri Lanka

Hemas corporate website, (2011), [online], Available at: http://www.hemas.com/finrepos/98_Hemas%20Holdings%20AR%202009-10.pdf [Accessed on 19th May 2011]

Hemas corporate website, (2011), [online], Available at: http://www.hemas.com/index.php?action=nav&main=newsnmedia&sec=news&sel=15&ex=1&id=69 [Accessed on 28th May 2011]

Jobber. D, (2010), Principles and practice of marketing, 6th edition, UK, Mc Graw Hill.

Jobber. D & Fahy. J, (2008), Foundation for Marketing, 2nd edition, UK, Mc Graw Hill.

LBO corporate website, (2011), [online], Available at: http://www.lbr.lk/fullstory.php?nid=201006091528589716 [Accessed on 20th May 2011]

Lovelock, C. and Wright, L. (2002), Principles of Service Marketing and Management, USA, Pearson Education.

Quick MBA corporate website, (2011), [online], Availble at: http://www.quickmba.com/strategy/porter.shtml [Accessed on 30th May 2011]

Super brand corporate website, (2011), [online], Available at: http://www.superbrands.com/lkc1/pdf/07_consumerSB.pdf [Accessed on 18th May 2011]

Scribd corporate website, (2011), [online], Available at: http://www.scribd.com/doc/22046549/A-PROJECT-ON-BRAND-REPOSITIONING-STRATEGY-OF-TITAN-WATCHES [Accessed on 29th May 2011]

You Tube Corporate website, (2011), Baby Cheramy – Pure Love, [online], Available at : http://www.youtube.com/watch?v=Xf-NG7-ROqA [Accessed on 29th May 2011]

APPENDICES

1) SWOT Analysis

1.1 STRENGHS

Being a product of Sri Lankan company


http://www.youtube.com/watch?v=Xf-NG7-ROqA

http://www.scribd.com/doc/22046549/A-PROJECT-ON-BRAND-REPOSITIONING-STRATEGY-OF-TITAN-WATCHES

http://www.scribd.com/doc/22046549/A-PROJECT-ON-BRAND-REPOSITIONING-STRATEGY-OF-TITAN-WATCHES

http://www.superbrands.com/lkc1/pdf/07_consumerSB.pdf

http://www.quickmba.com/strategy/porter.shtml

http://www.lbr.lk/fullstory.php?nid=201006091528589716

http://www.lbr.lk/fullstory.php?nid=201006091528589716

http://www.hemas.com/index.php?action=nav&main=newsnmedia&sec=news&sel=15&ex=1&id=69

http://www.hemas.com/index.php?action=nav&main=newsnmedia&sec=news&sel=15&ex=1&id=69

http://www.hemas.com/finrepos/98_Hemas%20Holdings%20AR%202009-10.pdf


Baby Cheramy is a product from Hemas, which is one of the Sri Lanka’s top 10 diversified

conglomerates (Hemas corporate website, 2011). This has enabled the brand to reach the target

group without any difficulties.

Long term sustainability in the baby care market

Baby Cheramy is being in the market since 1962 (austceyl corporate website, 2011). As it is a

baby care brand this has created bond with mothers and children and the value has been

transferred from generation to generation.

Wide range of products

Baby Talc Napkin rash powder Baby Soap

Prickly Heat Powder Baby Cologne Pampers

Baby Cream Body Oil Cotton Buds

Napkin rash cream Baby Shampoo Gift Packs

Table 2 - Product Range

Source: Author’s Work

The product range satisfies almost every need of a baby.

Position as the market leader

Baby Cheramy is in the market leader position in the market of toiletries with 47% (Colognes

35%, Creams 54%, Talc 38%, and Soap 42%) and accessories for babies (Super brands corporate

website, 2011). It is in a healthy lead against Pears.

Figure 6 - Market share of toiletries



42%

41%

9%

3% 5%

Market Share - Baby Soaps

Baby CheramyPearsKekuluJ & JOthers

Figure 7 - Market Share for soaps

Source: Authors’ Work based on youtube corporate website (2011) and superbrands corporate website (2011)

Affordable pricing and island wide distribution

Baby Cheramy targets the lower income to upper middle target segments (super brands corporate

website, 2011). The pricing seems to be reasonable. According to super brands corporate website

(2011), “Baby Cheramy now permeates all geographical and socio-economic households in Sri

Lanka”. Product is also been distributed to Australia, New Zealand, Maldives etc.

Recognition through awards received

B/C has received SLIM brand excellence (2007), Brand of the year (2007), Best local brand

(2007), Best product brand (2007) and it is the No 1 brand for Hemas (YouTube corporate

website, 2011).

Financial Stability

The financial highlights through ratios show a steady improvement over the past few years.

47%

31%

19%

3%

Market Share - Toiletries

Baby CheramyPearsJ & JOthers



Source: Adopted from Hemas Annual Report (2009)

Lean manufacturing production systems

Hemas’ first step towards implementing 5S lean manufacturing system is now complete where

Hemas has also received Gold award in the manufacturing sector and Silver award in overall

category in the Taiki Akimoto award competition in 2010 (Hemas annual report, 2009).

Continuous product developments and product launches

In order to combat the immense competition in the market Hemas continuously launches new

product ranges time to time.

Eg: Aloe Vera cream – 2004, Plastic Cologne bottles – 2005

1.2 WEAKNESSES

Lacking back in certain Segments

Pears launched new soap range with flower fragrances which is new to the market. This activity

would increase the potential market share of Pears which is already the market leader in soaps

for babies.

Customer Perception

Hemas is yet to retaliate the misconception of the quality of the product range. Quality wise J &

J seems to be preferred first.

Lack of Promotion

Table 3 - Ratios



Hemas does promotion when they do product launches or when they do CSR to kids whereas,

foreign brands (J & J) promotes repetitively. Packaging is not that attractive compared to other

brands.

Other brands placed in B/C racks

B/C has provided certain racks which promotes its brands. In that various other brands were

placed. So this would have an impact on purchase decision at the store where as this is not the

case in J & J racks.

1.3 OPPORTUNITIES

End of civil war in Sri Lanka

"Aided by markets that were previously underserved, and the improvement in the local economy,

most FMCG categories saw double digit growth," Hemas chief executive Husein Esufally told

shareholders in the annual report (Lanka Business Online corporate website, 2011). Hemas can

reach the Northern Province markets easily.

Child Birth Rate

In SL approximately 340000 children are born each year on average (Super brands corporate

website, 2011). If Hemas tap these markets in could generate more revenue.

Qualified work force accessibility

Many universities in SL for example Moratuwa provides chemical engineering degrees and

Colombo University provides biotechnological degrees. Hemas can be able to access these

students to improve their R & D functions for better products.

Increase in consumer spending pattern

According to LBO corporate website (2011), “Hemas group’s said its FMCG division grew revenues at

double digit rates in the latest financial year and it re-launched brands as consumer spending rebounded.

Sri Lanka had high inflation in 2008. It hit a peak of 28 percent in mid-2009 but fell thereafter”.

1.4 THREATS

Competition from imported brands

There are many international companies which cater to the same market of baby cheramy. There

is a threat of reduction in the market share of the brand. "Over the years our fragrance category



has been adversely impacted by the plethora of unregistered with CDDA imported fragrance

produces available in the grey market," says Esufally (Lanka Business Online corporate website,

2011).

Increase in taxation rate

The taxation rate has increased from 14.6% - 16.1%

during last year which is a threat as it would have an

impact on the revenue generated by the product ranges of

baby cheramy.

Source: Hemas corporate website (2011)

Environmental Pollution

Product range often uses plastic and polythene based packages. This would have an impact on

the environment and would go against their “social responsibility” concept.

More recognition towards Unilevers and P & G

Hemas has to compete with Unilevers which has baby care brands targeted towards segment in

two extremes i.e. J & J for premium price and Pears for average price range. P & G’s pampers,

Farlin are also in the same markets. Overcoming this brand recognition creates immense threats

to the company.

2) Porter’s 5 Forces Analysis1. Existing Rivalry

Baby care market is highly concentrated as there are 3 dominant players i.e Baby Cheramy,

Pears and J & J. There are various foreign and local emerging players which makes the market

Figure 8- Taxation on Profits



monopolistic competition. The dominant players face difficulties in the market due to changing

prices, differentiation in products etc. Demand sometimes tends to be cyclical where it fluctuates

over birth rate (Quick mba corporate website, 2011). Asset specificity will be high as equipment

used in production is very unique in nature and wouldn’t be able to find a readily available

market price. So exit barrier would be high.

2. Threat of Substitutes

Most of the rivals produce chemical based baby cosmetics where as some of the new players like

Kohomba baby and kekulu came up with herbal products which created a threat for the market

leaders. In order to retaliate this threat now B/C and J & J has also launched herbal range. Home

remedies are also available such as egg yolk, gingili oil, neem oil etc. But this has not created

that intense threat. Organic products are been developed. If those brands enter the market it

would be a substitute. Aromatherapy remedies are also available. So the demand curve remains

inelastic due to lack of alternatives.

3. Buyer Bargaining Power

Buyers are fragmented and widely dispersed around the country. So there is no way that a

particular customer can have bargaining power over suppliers. Products are differentiated. There

are not standardized. When customers switch from one brand to another they have to face

switching costs where the brands offer products at different prices.

4. Supplier Bargaining Power

Suppliers are powerful to a certain extent as companies in the sector needs to get inputs from

various sources such as labour, raw materials, utilities etc.

5. Threat of new entrants and entry barriers

Government procedures are to be followed when a new competitor enter into the market. Health

and safety rules, legislation process and initial investments can be said as potential barriers for a

new comer. But as it is a monopolistic market there are very little barriers to ban the entry to



avoid cut throat competition as in oligopolies. All the brands in the segment are registered

trademarks with high brand loyalty. Firms are well established foreign or local companies which

has significant benefit over the economies of scale rather than of a new comer to the industry. It

can be said that this force’s impact is moderate.

3) Strategic Group MappingThe strategic group mapping was done based on the two variables mentioned below:

Product Variety

Product Prices

The bases for the analysis were taken from the table below consisting of the information for each

brand for the above variables.

Brand Variety Quantity PriceBABY CHERAMY SOAP 75G 33/=

SOAP ALOE 75G 33/=

SOAP FLOWERS 75G 33/=

COTTON BUDS 100S 43/=

CREAM 50ML 58/=

CREAM MILK 50ML 58/=

POWDER 100G 67/=

PRICKLY HEAT TALC 100G 70/=

NAPPY RASH CREAM 100ml 85/=

SHAMPOO 125ml 90/=

FEEDING BOTTLE 120ml 100/=

POWDER 200g 105/=

CREAM 100ml 105/=

CREAM ALOE 100ml 105/=

TALC FLOWERS 200g 105/=

CREAM MILK 100g 105/=

HA/BODY OIL ALOE 125ml 110/=

COLOGNE 50ml 110/=

COLOGNE FLOWER 50ml 110/=

FEEDING BOTTLE 240ml 110/=

DIAPERS SMALL 4S 135/=

DIAPERS MEDIUM 4S 135/=

DIAPARS LARGE 4S 135/=

SOAP 5S 75G 145/=

SHAMPOO 250ml 155/=

BABY CHERAMY TALC 400g 175/=



CREAM 200ml 178/=

CREAM ALOE VERA 200ml 178/=

COLOGNE BABY DOLL 125ml 180/=

COLOGNE TEDDY BEAR 125ml 180/=

BABY CHERAMY COLOGNE

100ml 195/=


OIL 250ml 195/=


COLONGE 200ml 290/=

GIFT PACK 300/=

CREAM 400ml 325/=

NAPPY WASH POWDER 1kg 335/=

DIAPERS X/LARGE 10S 380/=

DIAPERS LARGE 12S 380/=

DIAPERS MEDIUM 12S 380/=

J & J SOAP 75g 65/=

TIP TO TOE WASH 50ml 65/=

100ml 100/=

BABY CREAM 50g 115/=

COLOGNE 50ml 125/=

COLOGNE POWDER MIST 50ml 125/=

POWDER 100g 135/=

BABY LOTION 100ml 160/=

SHAMPOO 100ml 180/=

HAIR OIL 100ml 200/=

MILK CREAM 100ml 210/=

MILK BATH 100ml 225/=

GIFT BOX 280/=

BABY BATH 200ml 300/=

PEARS PEARS HERBAL SOAP 75g 33/=

SOAP 85g 33/=

SOAP FLORAL 75g 33/=

CREAM 50ml 58/=

PEARS BABY POWDER 100g 68/=

SHAMPOO 120ml 90/=

COLOGNE FLORAL 55ml 105/=

OIL 115ml 110/=

COLOGNE FRESH 50ml 110/=

HERBAL CREAM 100ml 115/=

CREAM 100ml 115/=

COLOGNE MAGIC DROPS 50ml 115/=

SOAP 75G 5S SAVE 20 155/=

HERBAL CREAM 200ml 178/=



CREAM 200ml 195/=

COLOGNE 100ml 210/=

COLOGNE MAGIC DROPS 100ml 210/=

BABY BONN MOSTURINSING LOTION 100ml 120/=

MILK BATH 100ml 120/=

SHAMPOO 100ml 120/=

BABY OIL 100ml 140/=

FACE CREAM 100ml 160/=

SOAP

NS – PANDA BABY SHAMPOO 120ml 110/=

BABY WASH 120ml 130/=

COLOGNE 100/=

CREAM 100ml 95/=

BABY TALC 100g 68/=

SIDDHALEPA KEKULU SOAP 75g 32/=

COLOGNE 50ml 95/=

TOOTHPASTE 50/=

FARLIN SOAP 75g 220/=

FEEDING BOTTLES

COTTON BUDS 431/=

CURASH BABY SOAP FREE BATH 200ml 767/=

400ml 1145/=

BABY WIPES 1031/=

MORRISON’S BABY SILICON TEAT LARGEMEDIUM

45/=45/=

FEEDING BOTTLE 98/=

CREAM 100g 140/=

COLOGNE 100ml 175/=

AVENT MOISTURIZING LOTION 200ml 1350/=

BOTTOM BALM 125ml 1250/=

FEEDING SPOONS 725/=

KOHOMBA BABY COLOGNE 100ml 175/=

GIFT PACK 380/=

BABY SOAP 80g 33/=

CREAM 100ml 105/=

Table 4 - Product Varieties

4) Sample Questionnaire

BRAND PREFERENCES – BABY CARE PRODUCTS IN SRILANKA

- PRIMARY SURVEY-




a) Location / Address:

________________________________________________________

b) No.of kids at home: _______

01. Income level

a. <10,000

b. 10,000-20,000

c. 20,000-50,000

d. 50,000-100,000

e. >100,000

02. Rate the brands which you are familiar with,

a. Baby Cheramy

b. J & J

c. Morrison’s baby

d. Rebeca Lee

e. Curash

f. Kekulu Baby

g. Pears

h. Baby Bonn

i. Panda

j. Kohamba Baby

k. Avent

l. Farlin

m. Other _________________________________

(Give ranking from 1-10)

03. What is your primary preference when it comes to brand for babies?

a. Quality

b. Price

c. Varieties

d. Availability



e. Other ______________________________________

04. How frequently would you switch from one brand to another?

a. Very Frequently

b. Sometimes

c. Never

05. What about your post purchase experience of the above preferred brand?

Brand ______________________________________

Very good

Good

Moderate

Bad

Very bad

06. What is the perception on your mind in relation to baby cheramy product range?

a. Value for money

b. Superior quality

c. Reasonable price

d. Availability

e. other ________________________________________________

07. What triggers/ affects your purchase decision on a baby product?

a. Family culture

b. Cost

c. Word of mouth

d. Variety

e. Status

08. How did you get to know about Baby cheramy?

a. Word of mouth (Family & Friend)



b. TV ads

c. CSR projects

d. Store display

e. Other ______________________________________________

09. Rate your satisfactory level after using Baby cheramy for your kids?

+ + + + +

1 2 3 4 5

10. Do you intend to change your brand in future?

a. Yes

b. No

If yes states the brand ______________________________________

11. Till what age do you use baby products for your kids? ______________________

12. Would you recommend your brand to other person?

a. Yes

b. No

Reason? ______________________________________________________________________

13. Are Baby cheramy brand readily available in the market?

a. Yes

b. No

14. Do you buy branded products?

a. Yes

b. No

15 Kindly choose an option,

a. I am price conscious.

b. I am quality conscious.

c. I am brand conscious

d. Both price & brand



e. Both price & quality

f. Both Quality& brand

g. Price, quality, & brand

16. Do you think that low price goods would have quality?

a. Yes

b. No

17. What is your most favourite variety in Baby Cheramy?

________________________________________________

18. What is your expectation from the brand mentioned above? Give your suggestions.

___________________________________________________________________________

Thank You.

5) Survey Analysis

According to the preferences of the sample group from whom information was gathered the

preference level of the baby care brands has been divided into three.

First Preference

Second Preference



Third Preference

Table 5 - Preference Rates

Source: Compiled by Authors


First Preference

Brand No of Respondents

Baby Cheramy 27

J & J 36

Curash 4

Pears 10

Baby Bonn 2

Mother Care 5

Second Preference


Baby Cheramy 34

J & J 14

Pears 20

Baby Bonn 2

Avent 8

Farlin 6

Third Preference


Baby Cheramy 16

J & J 12

Morrison's baby 2

Rebecca Lee 4

Curash 2

Pears 30

Baby Bonn 4

Kohomba Baby 6

Avent 4

Farlin 4


32%

43%

5%

12%

2%6%

First PreferenceBaby Cheramy J & JCurash PearsBaby Bonn Mother Care

40%

17%

24%

2% 10%

7%

Second PreferenceBaby Cheramy J & JPears Baby BonnAvent Farlin

19%

14%

2%5%

2%

36%

5% 7%

5% 5%

Third PreferenceBaby Cheramy J & J Morrison's baby Rebecca LeeCurash Pears Baby Bonn Kohomba BabyAvent Farlin

Figure 9 - Preference Level


Source: Compiled by authors



Next concern was on what attribute the parent prefers when it comes to the purchase of baby care products.

Attribute PreferenceAttributes No of Respondents

Quality 48Price 7Variety 13Availability 16

Table 6 - Attribute Preferences


Quality Price Variety Availability0

10

20

30

40

50

60

Attributes

No

of R

espo

nden

ts

Figure 10 - Attribute Preferences

Source: Done by authors

The next concern was on the frequency of switching from one brand to another.

Table 7 - Brand switching rate



Brand Switching

FrequencyNo of

RespondentsVery Frequently 7Sometimes 53Never 24


Next element was based on the perception

about B/C on customers.


Survey also focused on the triggers

which affects the purchase of a baby care product.


People get knowledge about the B/C brand

from various sources. The finding showed the

results below.

Figure 11 - Brand Switching

Figure 12 - Brand Perception

Figure 13 - Purchase Decision

Table 8 - Perception


Customer Perception about B/CPerception No of Respondents

Value for Money 8Superior Quality 16 Reasonable Price 29Availability 25Never Used 6

Triggers of Purchase DecisionStimuli No of RespondentsFamily Culture 21Cost 6Word of Mouth 23Variety 27Status 7


Customer awarenessVariables No of RespondentsWord of mouth 17TV ads 27CSR project 25Store display 15


An MCQ based question was asked to know which aspect of the product makes them take

conscious decisions. The table below is prepared based on the gathered information.

ElementsNo of

RespondentsPrice conscious -Quality conscious 22Brand conscious 2Price & brand -Price & quality 20Quality & brand 14Price, quality & brand 26


Another focus was on the perception of customers regarding price and quality. 57% of the

respondents said that they assume that low price doesn’t have quality.

Customer generally does not use only one brand satisfy their baby’s needs but pick different

products from 2-3 brands to get maximum satisfaction.

Customers are greatly satisfied with baby oil, cologne and soap varieties if B/C but they expect

more variations in flavors and quality aspect of it.

Figure 14 - Customer Awareness



Summary

As per the preference ratings,

Most of the customers preferred J & J (43%) where as B/C occupied the second place

(32%). Mainly in urban areas income level seems to be high and they are eligible to

spend significant amount on their baby’s daily needs. They gave more preference to

quality features of J & J and few foreign brands like Mother Care and Curash. B/C is

being the first preference among sub urban people. As SL is in the middle income

position in global rating of countries it has managed to sustain the market leadership

throughout these years. It is evident after the survey by the gathered information.

Second preference is given mostly to B/C (40%) and Pears got 24% of preference as

second. This shows that B/C is even used in urban households for their popular product

ranges such as baby cologne, baby soap etc.

In the third preference level Pears takes up its position of 36% and in B/C 19% which

shows that Pears is considered to be the second best to B/C in overall view.

Unilever’s product range J & J and Pears are considered as in the proceeding and succeeding

positions.

Regarding product attributes,

More than 50% of the respondents wanted good quality for their baby care products.

They always think of post purchase experience they gathered after consuming a particular

brand and always wanted to avoid rashes, itching or any skin effects.

Next preference is given to variety and availability of the specific product range.

Price is considered as the least preferred as the very last option for most of the

respondents as they are ready to spend more for the sake of their kids.

When considering about the willingness to switch from one brand to another,

29% of the respondents remain loyal to brands they use. There is very low room to

convince them to change their mind set unless some value addition is done to Baby

Cheramy.



71% of the people think of changing their brands if there is a better brand is available.

B/C has to focus more on R & D to create more value to the existing emphasizing on

quality to tap the people who prefer to change their mind set from other brands to B/C.

The post purchase perception of B/C,

B/C is well known among the sample group for the reasonable pricing (35%) and

availability (30%).

B/C’s perception for value for money and superior quality is lacking behind as very few

has voted for them.

Purchase decision of baby care products is triggered by,

Mainly the variety of goods impressed most of the sample group of the survey (32%).

28% of the respondents preferred positive word of mouth publicity received from their

colleagues and relatives.

The sample group got to know about the brand mostly from television advertisements (32%) and

30% of them came to know through their CSR projects carried out island wide. ECCD programs

conducted by Hemas group have been resulted in more awareness generated to the general

public.

Sample group seems to be more focused towards quality where price, brand comes the next.



WORK LOAD MATRIX

V.Archchana CB003654

J.F.FaristaCB3753

C.KugadhepCB3721

Executive Summary 100%Company Background 50% 50%Situation Analysis Swot 33.33% 33.33% 33.33%

Porter’s 5 force 50% 50%Positioning map 50% 50%

Gap Analysis 50% 50%Questionnaire 33.33% 33.33% 33.33%Questionnaire Summary 50% 50%Repositioning strategies 40% 30% 30%Recommendations 30% 40% 30%Documentation 30% 30% 40%Signature

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Documents

Baby Cheramy Re Positioning