CB (Fair n Handsome)

8/13/2019 CB (Fair n Handsome)

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INDUSTRY PROFILE

FMCG INDUSTRY

The Indian FMCG sector is the fourth largest sector in the economy with an estimated size of

Rs.1,300 billion. The sector has shown an average annual growth of about 11% per annum

over the last decade. Unlike the developed markets, which are prominently dominated by few

large players, Indias FMCG market is highly fragmented and a considerable part of the

market comprises of unorganized players selling unbranded and unpackaged products. There

are approximately 12-13 million retail stores in India, out of which 9 million are FMCG

kirana stores.

India FMCG sectors significant characteristics can be listed as strong MNC presence, well

established distribution network, intense competition between the organised and unorganised

players and low operational cost. Easy availability of important raw materials, cheaper labor

costs and presence across the entire value chain gives India a competitive advantage.

Products which have a swift turnover and relatively low cost are known as Fast Moving

Consumer Goods (FMCG). FMCG items are those which generally get replaced within a

year. Examples of FMCG commonly include a wide range of repeatedly purchased consumer

products such as toiletries, soap, cosmetics, oral care products, shaving products and

detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products,

and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged

food products etc.

Penetration level and per capita consumption in many product categories is very low

compared to world average standards representing the unexploited market potential.

Mushrooming Indian population, particularly the middle class and the rural segments,

presents the huge untapped opportunity to FMCG players. Growth is also likely to come from

consumer 'upgrading' in the matured product categories like processed and packaged food,

mouth wash etc. A distinct feature of the FMCG industry is the presence of international

players through their subsidiaries (HLL, P&G, Nestle), which ensures innovative product

launches in the market from their parent's portfolio.


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MAJOR SEGMENTS OF THE FMCG INDUSTRY:

Household Care

The detergents segment is growing at an annual growth rate of 10 to 11 per cent during the

past five years. The local and unorganized players account for a major share of the total

volume of the detergent market. The preference is given to detergents in urban area compared

to bars. Household care segment is featured by intense competition and high level of

penetration. With rapid urbanization, emergence of small pack size and sachets, the demand

for the household care products is booming. In washing powder segment, HUL is the leader

with ~38 per cent of market share. Other major players are Nirma, Henkel and Proctor &

Gamble.

Personal Care

Personal care segment includes personal wash products, hair care products, oral care

products, cosmetics etc. The Indian skin care and cosmetics market is valued at $274 million

and is dominated by HUL, Colgate Palmolive, Gillette India and Godrej. The coconut oil

market accounts for 72 per cent share in the hair oil market. The hair care market can be

segmented into hair oils, shampoos, hair colorants & conditioners, and hair gels. In the

branded coconut hair oil market, Marico (with Parachute) and Dabur are the leading players.

Sachet makes up to 40 per cent of the total shampoo sale. Again the market is dominated by


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HUL with around ~47 per cent market share; P&G occupies second position with market

share of around ~23 per cent. Personal wash can be further segregated into three segments

namely Premium, Economy and Popular. Here also, HUL is the leader with market share of

~53 per cent; Godrej occupies second position with market share of ~10 per cent. Swelling

disposable incomes of the Indian consumers, growth in rural demand and upgrading to the

premium products are the key drivers for future demand growth in major FMCG categories.

The skin care market is at a primary stage in India. With the change in life styles, increase in

disposable incomes, greater product choice and availability, people are becoming more alert

about personal grooming. The major players in this segment are Hindustan Unilever with a

market share of ~54 per cent, followed by CavinKare with a market share of ~12 per cent and

Godrej with a market share of ~3 per cent. The oral care market can be segmented into

toothpaste - 60 per cent; toothpowder - 23 per cent; toothbrushes - 17 per cent. This segment

is dominated by Colgate-Palmolive with market share of ~49 per cent, while HUL occupies

second position with market share of ~30 per cent. In toothpowders market, Colgate and

Dabur are the major players.

Food and Beverages

This segment comprises of the food processing industry, health beverage industry, bread andbiscuits, chocolates & confectionery, Mineral Water and ice creams. The three largest

consumed categories of packaged foods are packed tea, biscuits and soft drinks. Indian hot

beverage market is a tea dominant market. The major share of tea market is dominated by

unorganized players. Leading branded tea players are HUL and Tata Tea. Mjaor players in

food segment are HUL, ITC, Godrej, Nestle and Amul.


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History

The inception of Emami Group took place in the mid 1970s when two childhood friends, Mr.

R.S. Agarwal and Mr. R.S. Goenka, left their management jobs with the Birla Group to set up

Kemco Chemicals, an Ayurvedic medicine and cosmetic manufacturing unit in Kolkata in

1974. At that time the Indian FMCG market was still dominated by multinationals. Several

such companies headquartered in Kolkata were considering shifting out of West Bengal due

to labor unrest and political problems.

The company was established with modest capital of Rs. 20,000 and started manufacturing

cosmetic products as well as Ayurvedic medicines under the brand name of Emami from a

small factory in Kolkata, targeting sales at the Indian middle class.

In the early days the founders personally sold their cosmetics from shop to shop, using hand-

pulled rickshaws. They soon established recurring consumer demand, and gradually hired

additional staff. A chain of distributors was established and the sale of Emami products

spread from West Bengal to rest of Eastern India and gradually to other states. Emami

Talcum, Emami Vanishing Cream and Emami Cold Cream sold well. The company's

marketing techniques were to sell dreams of beauty to Indian women using radio and TV

advertising.

In 1978, Agarwal acquired Himani Ltd, a privately owned cosmetics company with a factory

in Kolkata. The business of Himani was almost 100 years old, although it had only been

incorporated in 1949 company; it had a good brand equity in Eastern India, but was in

financial trouble. Agarwal and Goenka managed to restore it to profit, at considerable risk

considering the small capital base of their own company at the time; this later proved to be

the turning point for their business.

In the 1983 Bollywood film Agar Tum Na Hote, one of the earliest brand placement

campaigns was achieved with lead actor Rajesh Khanna playing the managing director of

Emami.

In the 1990s, Emami launches another flagship brand under the Himani Umbrella, Navratna

Cool Oil, and expanded production by opening its second factory, at Pondicherry.

The introduction of new brands continued and the company extended its distribution network

to South India, with Navratna spearheading the process. In 1995, the partnership firm Kemco
http://en.wikipedia.org/wiki/Agar_Tum_Na_Hotehttp://en.wikipedia.org/wiki/Rajesh_Khannahttp://en.wikipedia.org/wiki/Rajesh_Khannahttp://en.wikipedia.org/wiki/Agar_Tum_Na_Hote


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Chemicals was converted into a Public Limited Company under the name Emami Ltd. In

1998, Himani Ltd was merged into Emami Ltd.

In 2000, with a view to concentrate on its core FMCG business, Emami's investment

undertaking was demerged by issuing shares in Pan Emami Cosmed Ltd to shareholders of

Emami. In 2003 a new factory unit was set up at Amingaon, Guwahati. A public issue of 50

lakhs equity shares at Rs.70 followed in 2005. The issue was oversubscribed by 36 times. The

share price later rose to Rs.210.

In 2005 Emami launched Fair and Handsome, the first fairness cream for men.

In 2006 the company decided to introduce a Health Care Division and a number of new

brands of AyurvedicOTC medicines.

Among the brands created by the company, annual sales of Navratna are at Rs.300 crore

followed by Boroplus at Rs.250 crore and Fairness at Rs.100 crore. Sona Chandi

Chyawanprash, Menthoplus and Fast Relief also among the top brands in their respective

categories.

In 2006, J B Marketing & Finance Ltd., the erstwhile marketing company of the Emami

Group merged with Emami Ltd. and the total turnover of Emami including sales in domestic

and export market stood at Rs 516 crores at the end of the fiscal year 2006-07.

Emami Limited acquired a major stake in Zandu Pharmaceuticals Works Ltd, a century-old

household name in India, for Rs 700 crore. Emami added some of Zandu's prominent brands

like
http://en.wikipedia.org/wiki/Demergerhttp://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Over-the-counter_drughttp://en.wikipedia.org/wiki/Crorehttp://makeupandbeauty.com/wp-content/uploads/2010/09/Emami-Fair-n-Handsome.pnghttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Over-the-counter_drughttp://en.wikipedia.org/wiki/Lakhhttp://en.wikipedia.org/wiki/Demerger


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CONSUMER BEHAVIOR STUDY OF FAIR AND HANDSOME CREAM

Marketing mix of Fair & handsome

PRODUCT

Core Product

The hugely successful womens beauty products segment inspired Emami to explore the

hitherto untapped mens fairness cream segment and theyve come up with a new product. It

helps to regulate melanin production and thus increase fairness and relieve stress and fatigue

signs. It also protects the mens face from harmful UV rays and gives the face a firm and

fresh appearance.

Quality

Being a popular segment product and an offering by Emami quality parameters are

thoroughly tested on Indian male skin ensuring consumer satisfaction.

Sizes

Emami Fair & Handsome is available in the 12 ml, 30 ml and 60 ml packs.

PRICE

The price plays a very significant role in decision making of a low involved customer. The

rural markets are the ones which will contribute heavily to the future growth, thus product has

to be made available in smaller and cheaper trial packs. For this, Emami has recently

launched Fair and Handsome in a new stout sachet for Rs.5/- only, making it convenient and

easy to pick up.

Fair & Handsome is available in the 12 ml, 30 ml and 60 ml packs priced at Rs. 10/-, Rs. 35/-

and Rs. 65/-. So, bigger packs prove to be more economical


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There are other products from competitors and thus company has adopted aggressive pricing

strategy to cater to youth from all income groups and has become the undisputed market

leader in this segment.

PLACE

As many brand choices of beauty products are made when customers enter the store, the

product should be properly visible to the consumer otherwise the manufacturer might face the

danger of losing the customer in favor of another brand, which is available.

Fair and Handsome is available at all leading general stores, departmental stores, chemists,

Kirana stores and all retail outlets across the country. This has been made possible due to

Emamis distribution network which spans across all Indian States. Emamis products reach

out to nearly 30 lakh retail outlets across India through 4,000 distributors. It has two sales

channels in urban sales territories i.e. Modern Trade channel and retail outlets.

Modern trade channel covers 2100 modern retail outlets and retail network has a coverage of

4, 00,000 outlets. In rural sales channels, Emami has tied up with Department of Post in

Maharashtra and ITC Ltd. They have also allied with Indian Oil Corporation (IOC) for

distribution through rural petrol pumps. The collaboration with ITC e-choupals is expected to

target rural men who would usually shun beauty products and cosmetics outlets, while the

post and telegraph tie-up in Maharashtra is to help get even more traditional customers.

It also has a super stockist network development plan in place to increase rural penetration

with a pilot project in the states of U.P, A.P, Gujarat, Rajasthan, Punjab and Maharashtra.

This is backed by their 7500 mobile traders 130 small village shops in states like West

Bengal, Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Orissa and Karnataka. The

company has also engaged consultant Ernst and Young to leverage value for Emamis supply

chain, sales and distribution. Fair and Handsome is also recently launched in African and

GCC countries.


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PROMOTION

AdvertisingFour main instruments used by Emami for advertising are Television media, print

media, online media and mobile services. In print media, they concentrate on Mens

magazines (Like Health, The week, Autodrive etc.) along with featuring in weekend

supplements of dailies like TOI, HT.

During first year of its launch, advertisement were aired on TV Channels: Star News, Zee

News, Star Gold, Zee Cinema, Max, Sahara TV, Star One, Sony, Zee Smile, MTV, Zoom,

ESPN, Discovery, Alpha Marathi Radio : Radio City and Radio Mirchi.

Emami spends more than 70 per cent of its advertising budget on television spots, favouring

cricket, music and new channels


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Market Segmentation

Characteristics Customer Profile

Family Income 1 lakh-5 lakh annually

Age 15-35

Gender Male

Education High school and college educated

Geography Anywhere in India

Loyality Loyal

Personalty Wishes to take charge of his destiny

Benefit expected Handsome look, Fairness

Target Market

INCOME

Full Size packTarget group: 1-10 lakh

User group: 3-5 lakh

Trial packTarget and user group< 1 lakh

AGE Target and user group: men

GENDER Target and user group: men

POSITIONING

Worlds no. 1 fairness cream for men Mardon wali cream


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MOTIVATION

Previously, domain of ladies only. Male became more conscious for their look. The growing demand of different cosmetics and skin care products for men proves

that men are now taking care of their skin.

Male skin in India Three times more exposed to the sun UV rays Five times more exposed to pollution Twice more exposed to stress, More Abused by abrasive shaving blade action than women's skin.

Need for male cream


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Other Aspects

o Operant Conditioning 5 Unique Power Fairness system (comparison) Positive Reinforcement

o Novelty New Product First Movers Advantage

o Values and Lifestyle (VALSTM) Strivers- trendy, fun- loving, narrow interests, stylish products Experiencers- impulsive, trying new, offbeat products, spend on fashion and

socilaizing.

o Maslows Need HierarchySocial Needs- love, affection, acceptanceEgoistic Needs- Pride, status, self- esteem, Confidence


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PERSONALITY

Personality is defined as the unique pattern of relatively stable behaviors and mental

processes that characterize an individual and how he or she interacts with their environment

Brand ambassador: Shahrukh Khan Consumer wants to be like him and wishes to take charge of his destiny so he choose

the cream for becoming handsome.

PERCEPTION

Fair and handsome cream is being positioned as the fairness cream that can make menhandsome and also attractive to girls.

Fair and handsome provides quality as per the price.


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ATTITUDE

Emami annual turnover has increased with the introduction of Fair And Handsomecream because of behavioural intention of consumer i.e. to buy the brand

Tricomponent Attitude Model

o Cognitive Fairness Cream Looking good

o Conation Usage More avg time spend in front of mirror 30% male users

o Affective Confidence Self esteem More attractive to females price


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Functional Approach- changing motivation

Utilitarian Approach- focusing on functional attributes of product (Moisturizer,UV protection, stress buster, etc.)

Ego- defensive function- protect self image (offering reassurance, focusing onself image, confidence, etc.)

Value- Expression function- attitude towards owning new products of theirinterest and being hi- tech, targeting the metrosexual male who want to look good

and confident

Knowledge Function- emphasizing on advantages over the fairness cream forwomen

LEARNING

It is process of purchase and consumption knowledge and experience that they applyto future related behavior

Behavioral learning theory(based on obs) Cognitive learning theory (based on others)


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SOCIO CULTURE FACTOR

Involvement

Emotional appeal of Fair and Handsome cream caused more involvement of mentowards this brand

It is identified with particular group of people i.e. men group only

Self Image

Aspiration, upward mobility Consumers want to become the dream boy of their girlfriends and wives, and of

course can go to any extent. This urge of a man has been well depicted in the Fair and

Handsome ad where a boy enters a girl hostel to steal their fairness cream

Imagery

Brand salience, as evaluated by the degree of "top of the mind recall" and "brandawareness" is good which leads to repeat purchase decision


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BIBLIOGRAPHY

Book:

o Consumer BehaviorAuthor: Leon G. Schiffman

Publication: PEARSON

Edition: 10th

Websites:

http://www.termpaperwarehouse.com/essay-on/Consumer-Behaviour-Of-Fair-And-Handsome/128318

http://marketingpractice.blogspot.in/2007/07/fair-and-handsome-be-fair-be-handsome.html

http://www.wikipedia/marketingmix/30232 http://gauravbhagtaniblog.wordpress.com/2013/10/06/marketing-mix-of-fair-handsome/ https://www.google.co.in/#q=emami+ltd http://economictimes.indiatimes.com/emami-ltd/stocknews/companyid-5619.cms http://www.ibef.org/artdisplay.aspx?art_id=33899 http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&cad=rja&ved

=0CEYQFjAE&url=http%3A%2F%2Fwww.ibef.org%2Fartdisplay.aspx%3Fart_id%3D33899&ei=jqVgUqK3H4mOrQfXzYG4Cg&usg=AFQjCNEhOSITMEUNtRQTJOfD9o

HqI2QdPQ&bvm=bv.54934254,d.bmk

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Documents

CB (Fair n Handsome)