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PREFACE
This study gives the comprehensive view of the Indian FMCG Sector. The FMCG
sector being the fourth argest sector in the economy has the tota mar!et si"e of #S$
%&.% biion. It is set to trebe from #S$ %%.' biion in (00& to #S$ &&.) biion in
(0%*. This sector is characteri"ed by products of day-to-day use+ products which are
generay treated as ow invovement products but sti they attract high advertising
spend because of the !ind of intense competition among the industry payers.
The Indian FMCG industry has e,perienced a maor sowdown and has been on a
recovery path since the past coupe of years. This study e,pains the changingdynamics in the FMCG sector+ which has forced the FMCG maors i!e #/ to
revamp their product+ mar!eting+ distribution formats to meet the changing customer
reuirements or preferences.
The recovery in the FMCG sector in India is uite broad-based+ covering most
product categories and companies+ athough the degree of recovery differs.
Importanty+ most companies are aso demonstrating renewed optimism in the sector
by increasing ad spend and investment in new initiatives. The mar!et is not fuyappreciative of the sustainabiity of the recovery and hence wi i!ey be positivey
surprised.
The Toiet soap industry+ which is one of the odest Fast Moving Consumer Goods
1FMCG2 industries in India+ is among the highest penetrated category within FMCG
sector reaching an estimated 3*4 urban and 564 of the rura househods. 7part from
that+ this segment has witnessed an outburst of saes promotion scheme and the
tremendous 7d spends as compared to other segments of the FMCG industry. This
study aso accesses the perceptions of the consumers on these new strategies adopted
by various FMCG companies.
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ACKNOWLEDGEMENT
Through this report+ I ta!e the opportunity to e,press my sincere gratitude and
than!funess to a those who have heped me in ma!ing my dissertation report.
First of a I woud i!e to than! J.I.E.I+ for having such a system in pace+ where
students are given opportunities to earn about their areas of interest.
I woud i!e to than! Mr. Prashant Tiwari (Facult! for providing with his abe
guidance and visionary support to me without which this proect woud not been
possibe.
(RAJAT "ING# TOMAR!
(
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TA$LE OF CONTENT"
Chapter - %
Introduction
8bective
Scope
9esearch Methodoogy
/imitations
Chapter - (
Company :rofie
;ata 7naysis
Concusion
Chapter -&
9ecommendations
<ibiography
7ppendi,
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C#APTER % &INTROD'CTION
O$JECTIE
"COPE
RE"EARC# MET#ODOLOG)
LIMITATION"
)
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INTROD'CTION
MARKET OERIEW
The overa picture of the corporate sector emerging after the first uarter resut shows
that the tempo of the Indian economy=s integrating into the goba economy is
gathering momentum at a rapid pace. This can be seen from the rise in outsourcing in
the Information Technoogy 1IT2 and IT-based service sectors+ growth in e,port-
import trade and in goba acuisitions.
9apid urbani"ation+ increased iteracy and rising per capita income+ have a caused
rapid growth and change in demand patterns+ eading to an e,posion of new
opportunities. Consumption demand for consumer is increasing which can be seen
from the improvement in the performance of the fast moving consumer goods
1FMCG2 companies.
FMCG IND'"TR) * TREND" AND PLA)ER"
TREND"+
>stimated at around #S$ %).* biion 1appro,imatey 9s.'*+ 000 crores2 in (00*+
India=s fast moving consumer goods 1FMCG2 sector is the fourth argest industriasector in the country=s e,panding economy. It has a strong M?C presence and is
characterised by a we estabished distribution networ!+ intense competition between
the organised and unorganised segments and ow operationa cost. 7vaiabiity of !ey
raw materias+ cheaper abour costs and presence across the entire vaue chain gives
India a competitive advantage.
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The FMCG mar!et is set to trebe from #S$ %%.' biion in (00& to #S$ &&.) biion
in (0%*. :enetration eve as we as per capita consumption in most product
categories i!e ams+ toothpaste+ s!in care+ hair wash etc in India is ow indicating the
untapped mar!et potentia. <urgeoning Indian popuation+ particuary the midde
cass and the rura segments+ presents an opportunity to ma!ers of branded products to
convert consumers to branded products. Growth is aso i!ey to come from consumer
@upgrading@ in the matured product categories.
7nother is the stri!ing contrast between the rura and urban segments - the average
consumption by rura househods is much ower than their urban counterparts. /ow
penetration indicates the e,istence of unsaturated mar!ets+ which are i!ey to e,pand
as the income eves rise. This provides an e,ceent opportunity for the industry
payers in the form of a vasty untapped mar!et. Moreover+ per capita consumption in
most of the FMCG categories 1incuding the high penetration categories2 in India is
ow as compared to both the deveoped mar!ets and other emerging economies. 7 rise
in per capita consumption+ with improvement in incomes and affordabiity and change
in tastes and preferences+ is further e,pected to boost FMCG demand. Growth is aso
i!ey to come from consumer AupgradingA+ especiay in the matured product
categories. Most Indian FMCG companies focus on urban mar!ets for vaue and rura
mar!ets for voumes. The tota mar!et has e,panded from #S$ %6.' biion in %33(-
3& to #S$ (( biion in %335-33 at current prices. 9ura demand constituted around
*(.* per cent of the tota demand in %335-33. ence+ rura mar!eting has become a
critica factor in boosting bottomines. 7s a resut+ most companies@ have offered ow
price products in convenient pac!aging. These contribute the maority of the saes
voume. In comparison+ the urban eite consume a proportionatey higher vaue of
FMCGs+ but not voume.
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PLA)ER"+
7 distinct feature of the FMCG industry in India is the presence of domestic as we as
goba payers through their subsidiaries 1#/+ :BG+ and ?este2.
D,-stic Plars
Britannia India Ltd (BIL)
<ritannia India /td was incorporated in %3%5 as <ritannia <iscuit Co /td and
currenty the Groupe ;anone 1G;2 of France 1a goba maor in the food processing
business2 and the ?usi adia Group hod a )*.& per cent euity sta!e in <I/ through
7I< /td 1a *0D*0 oint venture2. <I/ is a dominant payer in the Indian biscuit
industry+ with maor brands such as Tiger gucose+ Marie god+ Fifty-Fifty+ Good ;ay+
:ure Magic+ <ourbon etc. The company hods a )0 per cent mar!et share in the
overa organi"ed biscuit mar!et and has a capacity of &00+000 tonne per annum.
Currenty+ the ba!ery product business accounts for 33.% per cent of <I/@s turnover.
The company reported net saes of #S$ (50 miion in (00(-0&. <ritannia Industries
/td 1<I/2 pans to increase its manufacturing capacity through outsourced contract
manufacturing and a Greenfied pant in #ttarancha to e,pand its share in the
domestic biscuit and confectionery mar!et.
D a/ur In0ia Lt0
>stabished in %55)+ ;abur India /td is the argest Indian FMCG and ayurvedic
products company. The group comprises ;abur Finance+ ;abur ?epa :vt /td+ ;abur
>gypt /td+ ;abur 8verseas /td and ;abur Internationa /td. The product portfoio of
the company incudes heath care+ food products+ natura gums B aied chemicas+
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pharma+ and veterinary products. Some of its eading brands are ;abur 7ma+ ;abur
Chyawanprash+ Eati!a+ amoa+ /a ;ant Manan+ :udin ara and the 9ea range of
fruit uices. The company reported net saes of #S$ (%5 miion in (00&-0). ;abur
has firmed up pans to restructure its saes and distribution structure and focus on its
core businesses of fast-moving consumer good products and over-the-counter drugs.
#nder the restructured set-up+ the company pans to increase direct coverage to gap
outets and gap towns where ;abur is not present. 7 roadmap is aso being prepared to
rationaise the stoc!ists@ networ! in different regions between various products and
divisions.
In0ian T,/acc, C,r1,rati,n Lt0 (ITCL!
Indian Tobacco Corporation /td is an associate of <ritish 7merican Tobacco with a
&6 per cent sta!e. In %3%0 the company@s operations were restricted to trading in
imported cigarettes. The company changed its name to ITC /imited in the mid
seventies when it diversified into other businesses. ITC is one of India@s foremost
private sector companies with a turnover of #S$ (.' biion. hie ITC is an
outstanding mar!et eader in its traditiona
businesses of cigarettes+ hotes+ paperboards+ pac!aging and agrie,ports+ it is rapidy
gaining mar!et share even in its nascent businesses of branded appare+ greeting cards
and pac!aged foods and confectionary. 7fter the merger of ITC otes with ITC /td+
the company wi ramp up its growth pans by strengthening its aiance with Sheraton
and through focus on internationa proects in ;ubai and the Far >ast. ITC@s
subsidiary+ Internationa Trave ouse 1IT2 aso aims to aunch new products and
services by way of boutiues that wi provide compete trave services.
Maric,
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Marico is a eading Indian Group incorporated in %330 and operating in consumer
products+ aesthetics services and goba ayurvedic businesses. The company aso
mar!ets food products and distributes third party products. Marico owns we-!nown
brands such as :arachute+ Saffoa+ Swee!ar+ Shanti 7ma+ air B Care+ 9evive+
Medi!er+ 8i of Maabar and the Si range of processed foods. It has si, factories+ and
sub-contract faciities for production. In (00&-0)+ the company reported a turnover of
#S$ (00 miion. The overseas saes franchise of Marico@s branded FMCG products is
one of the argest amongst Indian companies. It is aso the argest Indian FMCG
company in <angadesh. The company pans to capture growth through constant
reaignment of portfoio aong higher margin ines and focus on voume growth+
consoidation of mar!et shares+ strengthening fagship brands and new product
offerings 1(-& new product aunches are e,pected in (00)-0*2. It aso pans to e,pand
its internationa business to :a!istan.
Nir-a Li-it0
?irma /td+ promoted by arsanbhai :ate+ is a homegrown FMCG maor with a
presence in the detergent and soap mar!ets. It was incorporated in %350 as a private
company and was isted in fisca %33). 7ssociate companies@ ?irma ;etergents+ Shiva
Soaps and ;etergents+ ?irma Soaps and ;etergents and ?inita Chemicas were
merged with ?irma in %33'-%336. The company has aso set up a whoy owned
subsidiary ?irma Consumer Care /td+ which is the soe mar!eting icensee of the
?irma brand in India. ?irma aso ma!es afa oefin+ fatty acid and gycerine. ?irma is
one of the most successfu brands in the rura mar!ets with e,tremey ow priced
offerings. ?irma has pants ocated in Guarat+ Madhya :radesh and #ttar :radesh. Its
new /7< pant is ocated in <aroda and the soda ash compe, is ocated in Guarat.
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?irma has strong distributor strength of )00 and a retai reach of over % miion
outets. The company reported gross saes of #S$ *'% miion in (00&-0). It pans to
continue to target the mid and mass segments for future growth.
F,ri2n 1lars
Ca0/ur In0ia Lt0 (CIL!
Cadbury Indian /td is a 3&.* per cent subsidiary of Cadbury Schweppes :c+ #+ a
goba maor in the chocoate and sugar confectionery industry. CI/ was set up as a
trading concern in %3)6 and subseuenty began its operations with the sma scae
processing of imported chocoates and food drin!s. CI/ is currenty the argest payer
in the chocoate industry in India with a 60 per cent mar!et share. The company is
aso a !ey payer in the mated foods+ cocoa powder+ drin!ing chocoate+ mat e,tract
food and sugar confectionery segment. The company had aso entered the soft drin!s
mar!et with brands i!e @Canada ;ry@ and @Crush@+ which were subseuenty sod toCoca Coa in %333. >stabished brands incude ;airy Mi!+ :er!+ Crac!e+ * Star+
cairs+ Gems+ Fructus+ <ournvita etc. The company reported net saes of #S$ %'0
miion in (00&. The company pans to increase the number of retai outets for future
growth and mar!et e,pansion.
Car2ill
Cargi Inc is one of the word@s eading agri-business companies with a strong
presence in processing and merchandising+ industria production and financia
services. Its products and geographic diversity 1over )0 product ines with a direct
presence in over '* countries and business activities in about %&0 countries2 as we as
its vast communication and transportation networ! hep optimi"e commodity
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movements and provide competitive advantage. Cargi India was incorporated in
7pri %33' as a %00 per cent subsidiary of Cargi Inc of the #S. It is engaged in
trading in soyabean meas+ wheat+ edibe ois+ fertiisers and other agricutura
commodities besides mar!eting branded pac!aged foods. It has aso set up its own
anchorage faciities at 9osy near Hamnagar in Guarat for efficient handing of its
import and e,port consignments.
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C,ca C,la
Coca-Coa started its India operations in %33&. The Coca-Coa system in India
comprises (6 whoy company-owned botting operations and another %6 franchisee-
owned botting operations. 7 networ! of (3 contract-pac!ers aso manufacture a range
of products for the company. /eading Indian brands Thums #p+ /imca+ Maa"a+ Citra
and God Spot e,ist in the Company@s internationa famiy of brands aong with Coca-
Coa+ ;iet Co!e+ iney+ Sprite and Fanta+ pus the Schweppes product range. ;uring
the past decade+ the Coca-Coa system has invested more than #S$ % biion in India.
In (00&+ Coca-Coa India pedged to invest a further #S$ %00 miion in its
operations. Cogate-:amoive India Cogate :amoive India is a *% per cent
subsidiary of Cogate :amoive Company+ #S7. It is the mar!et eader in the Indian
ora care mar!et+ with a *% per cent mar!et share in the toothpaste segment+ )5 per
cent mar!et share in the toothpowder mar!et and a &0 per cent share in the toothbrush
mar!et. The company aso has a presence in the premium toiet soap segment and in
shaving products+ which are sod under the :amoive brand. 8ther we!nown
consumer brands incude Charmis s!in cream and 7,ion dish wash. The company
reported saes of #S$ ((' miion in (00&-0). The company@s strategy is to focus on
growing voumes by improving penetration through aggressive campaigning and
consumer promotions. The company pans to aunch new products in ora and
persona care segments and is prepared to continue spending on advertising and
mar!eting to gain mar!et share. Margin gains are being targeted through efficient
suppy chain management and bringing down cost of operations.
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# J #in3 C,
7 #S$ 5.) biion 7merican food maor+ H ein" Co comprises )+000 strong brand
buffet in infant food+ sauces and condiments. The company was the first to commence
manufacturing and botting of tomato !etchup in %56'. In India+ ein" has a presence
through its %00 per cent subsidiary ein" India :vt /td. ein" acuired the consumer
products division of pharmaceutica maor Ga,o in %33). ein"@s product range in
India consists of Compan mi! beverage+ heath drin! Gucon-;+ infant food Fare,
and ?yci pric!y heat powder+ besides the ein" !etchup range.
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#in0ustan 'nil4r Lt0 (#'L!
industan #niever /td is a *% per cent owned subsidiary of the 7ngo-;utch giant
#niever+ which has been e,panding the scope of its operations in India since %555. It
is the country@s biggest consumer goods company with net saes of #S$ (.) biion in
(00&. #/ is amongst the top five e,porters of the country and aso the biggest
e,porter of tea and castor oi. The product portfoio of the company incudes
househod and persona care products i!e soaps+
detergents+ shampoos+ s!in care products+ coour cosmetics+ deodorants and
fragrances. It is aso the mar!et eader in tea+ processed coffee+ branded wheat four+
tomato products+ ice cream+ ams and suashes. #/ enoys a formidabe distribution
networ! covering over &+)00 distributors and %' miion outets. In the future+ the
company pans to concentrate on its herba heath care portfoio 17yush2 and
confectionary business 1Ma,2. Its strategy to grow
incudes focussing on the power brands@ growth through consumer reevant
information+ cross category e,tensions+ everaging channe opportunities and
increased focus on rura growth.
Nstl In0ia Lt0 (NIL!
?este India /td a *3.5 per cent subsidiary of ?este S7+ Swit"erand+ is a eading
manufacturer of food products in India. Its products incude soube coffee+ coffee
bends and teas+ condensed mi!+ noodes 15% per cent mar!et share2+ infant mi!
powders 16* per cent mar!et share2 and cereas 150 per cent mar!et share2. ?este has
aso estabished its presence in chocoates+ confectioneries and other processed foods.
Soube beverages and
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mi! products are the maor contributors to ?este@s tota saes. Some of ?este@s
popuar brands are ?escafe+ Mi!maid+ Maggi and Cereac. The company has entered
the chied dairy segment with the aunch of ?este ;ahi and ?este <utter. ?este has
aso made a
foray in non-carbonated cod beverages segment through pacement of ?estea iced tea
and ?escafe Frappe vending machines. >,ports contribute to (& per cent of its
turnover and the company reported net saes of #S$ ))0 miion in (00&.
P1siC,
:epsiCo is a word eader in convenient foods and beverages+ with revenues of about
#S$ (6 biion. :epsiCo brands are avaiabe in neary (00 mar!ets across the word.
The company has an e,tremey positive outoo! for India. A8utside ?orth 7merica
two of our argest and fastest growing businesses are in India and China+ which
incude more than a third of the word@s popuationA 1:epsico@s annua report2.
:epsiCo entered India in %353 and is concentrating on three focus areas - soft drin!
concentrate+ snac! foods and vegetabe and food processing. :epsiCo@s success is the
resut of superior products+ high standards of performance and distinctive competitive
strategies.
Pr,ctr 5 Ga-/l #2in an0 #alth Car Li-it0
9ichardson industan /imited 19/2+ manufacturer of the Eic!s range of products+
was rechristened @:rocter B Gambe India@ in 8ctober %35*+ foowing its affiiation to
the @:rocter B Gambe Company@+ #S7. :rocter B Gambe ygiene and eath Care
/imited 1:GC/2 acuired its current name in %335+ refecting the two !ey
segments of its business. :BG+ #S7 has a '* per cent sta!e in :GC/. The parent
aso has a %00 per cent subsidiary+ :rocter B Gambe ome :roducts 1:G:2. The
overa portfoio of the company incudes heathcare feminine-care hair care and
fabric care businesses. :G operates in ust two business segments J Eic!s range of
cough B cod remedies and hisper range of feminine
%*
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hygiene. The detergent and shampoo business has been reocated gobay to Eietnam.
The company imports and mar!ets most of the products from South >ast 7sian
countries and China+ whie manufacturing+ mar!eting and e,port of Eic!s and sanitary
nap!ins has been retained in India. The company reported saes of #S$ 3% miion in
(00(-0&. The parent company has announced its pan to e,pore further e,terna
coaborations in India to meet its goba innovation and !nowedge needs.
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PE"T ANAL)"I" OF FMCG "ECTOR
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&.& P,litical
ecoogicaKenvironmenta issues
current egisation home mar!et
future egisation
>uropeanKinternationa egisation
reguatory bodies and processes
government poicies
government term and change
trading poicies
funding+ grants and initiatives
home mar!et obbyingKpressure groups
internationa pressure groups
&.6 Ec,n,-ic
home economy situation
home economy trendsoverseas economies and trends
genera ta,ation issues
ta,ation specific to productKservices
seasonaityKweather issues
mar!et and trade cyces
specific industry factors
mar!et routes and distributiontrends
customerKend-user drivers
interest and e,change rates
&.7 ",cial
ifestye trends
demographics
consumer attitudes and opinions
media views
aw changes affecting socia factors
brand+ company+ technoogy image
consumer buying patterns
fashion and roe modes
maor events and infuences
buying access and trends
ethnicKreigious factors
advertising and pubicity
&.8 Tchn,l,2ical
competing technoogydeveopment
research funding
associatedKdependenttechnoogies
repacementtechnoogyKsoutions
maturity of technoogy
manufacturing maturity andcapacity
information andcommunications
consumer buyingmechanismsKtechnoogy
technoogy egisation
%5
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innovation potentia
technoogy access+ icencing.
%3
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DEMAND ANAL)"I"
The Indian FMCG sector is the fourth argest sector in the economy and the demand
for FMCG products is set to boom by amost '0 per cent by (006 and more than %00
per cent by (0%*.
9apid urbani"ation+ increased iteracy and rising per capita income+ have a caused
rapid growth and change in demand patterns+ eading to an e,posion of new
opportunities. This wi be driven by the rise in share of midde cass 1defined as the
cimbers and consuming cass2 from '6 per cent in (00& to 55 per cent in (0%*. The
boom in various consumer categories+ further+ indicates a atent demand for various
product segments. For e,ampe+ the upper end of very rich and a part of the
consuming cass indicate a sma but rapidy growing segment for branded products.
The midde segment+ on the other hand+ indicates a arge mar!et for the mass end
products. India@s per capita disposabe income+ currenty at #S$ **' per annum+ wi
raise to #S$ %%*0 by (0%* - another FMCG demand driver.
;emand 7naysis of various segments of the FMCG industry is done beowD
The personal care and detergents segment in India has grown at a C7G9 of 6-5 per
cent in the past & years. hie the premium products of the industry+ consisting of
cosmetics+ s!in care products+ fragrances+ deodorants and antiperspirants+ and shaving products+ are growing at above %0 per cent due to ow penetration eves+ the mass
mar!et segments i!e detergents+ ora care products+ hair care products and toiet
soaps have aready achieved high penetration eves and are registering a sowdown in
demand growth. The atter segments aso compete with the price- competitive
unorganised segment+ which aso restricts vaue growth.
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The oral care market + which grew by %0 per cent in the past+ has sowed down in
recent years+ due to high penetration eves. ;emand in this segment is e,pected to
grow at about 5 per cent+ driven by rura demand. Eaue growth is i!ey to be under
pressure due to penetrative pricing for the rura mar!et and sow growth in urban
demand.
The hair care industry+ which was growing at 5-3 percent+ is aso e,pected to register
a sower growth of '-6 per cent in future+ due to high penetration eves and
competition from unbranded hair ois. Eaue growth in the segment is e,pected to be
derived argey through the sae of vaue-added products.
The demand for toilet soaps wi be restricted to * per cent over the medium term+ as
current penetration eves are aready high. owever+ since the growth wi occur on a
higher base+ the uantum of increase wi remain stabe. Eaue growth in the industry
is i!ey to be driven by the migration of consumers from ow-end products to upper
segments.
The demand growth for detergents has sowed down in the past few years from
historic eves of 6-5 per cent+ due to high penetration rate. Future demand growth is
estimated at )-* per cent. owever+ since the growth woud occur on a higher base+
the uantum of increase woud remain stabe. Eaue growth is i!ey to be driven by
the migration of consumers from ower-end products to the upper segments.
The Chairman of industan #niever+ after the resuts announcement for F%(K00+
outined to the investment community his pans for the company and the path for
Lsustainabe profitabe growth=. Two things ceary emerged from his ta!D
%. 7 greater focus on e,isting businesses rather than new businesses
(%
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(. :rofit growth rather than top ine growth is i!ey to drive future management
action
A chan2 in "trat2
The ast few years of #/=s growth was driven inorganicay through acuisitions and
venture into new businesses. The much harped about Miennium Growth :an of the
company was aso based on the same path of growth through e,pansion. <ut in sharp
contrast to his predecessor ;adiseth+ <anga=s growth pan appears to be based on
LContraction= rather than L>,pansion. For once there was no mention of new brand
aunches.
Thrust ,n a 9w /ran0s will -an /ttr 2r,wth an0 hi2hr
1r,9ita/ilit
The &0 brands have that been identified cover a !ey categories and a segments in
each category. The seected brands account for more than (K&rd of tota FMCG brand
saes of the company. 7nd what is more important is that the profit contribution of
these brands is even greater.
So a scenario is created where one wi see a greater resource aocation J be it
mar!eting+ innovation or peope support towards these &0 brands. The advertising and
mar!eting support spread over fewer brands is i!ey to be more efficient+ and wi
drive voume growth. 7nd stronger growth in the more profitabe brand portfoio wi
aid margin e,pansion.
((
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M,r 99icint utili3ati,n ,9 rs,urcs
<esides rationai"ation+ a few brands woud be migrated+ i.e. these brands woud
receive a regiona rather than a nationa support+ in its specific region of strength.
here the brands can neither be mi!ed nor migrated+ the company is aso open at the
option of divesting the same. So+ industan #niever is ta!ing of divesting rather
than acuiring brands
Nw 1r,0uct initiati4s 1ut ,n th /ac:/urnr
The management did not even discuss+ unti as!ed+ the status on the nine growth
engines that had been previousy identified as growth drivers. 7ready the
management has brought down to five the viabe options from the nine identified
earier. These are in the areas of Confectionery+ Consumer eathcare+ Minera ater+
;irect-To-ome 1;T2 distribution and a uniue distribution mode for rura
mar!ets. <ut the management is sti testing and is going rather sow on the new
initiatives. The fina decision on the entry into these categories wi be ta!en ony after
rigorous testing of waters throughout the current year. This essentiay means that one
is uni!ey to see the company venturing into these areas in the very immediate term.
To sum up <anga=s words+ the focus wi be on ATo do what you !now bestA. 7nd that
probaby is what is reuired for the company in the current scenario+ where
competition is at its hees in every segment of operation. 9ather than divert resources
towards new areas+ it ma!es sense to focus on e,isting businesses+ grow them and
ma!e them profitabe. 7nd that is what is going to be #/=s three pronged thrust in
the coming year.
(&
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Grow the FMCG business - by e,panding the mar!et itsef+ by growing the company=s
share in the mar!et+ by generating demand though innovating new channes of
consumption+ by everage on e,isting brand euity by offering services to the
customer.
or! towards ma!ing the foods business profitabe - uge investments have been
made in deveoping new food categories and setting up a distribution infrastructure in
pace for the foods business. ?ow that the base for the business has been aid+ the
company e,pects to drive the profitabiity of these businesses. <esides the traditiona
beverages and ois and fats business+ the new categories of stape foods+ cuinary
products and ba!ery products 1acuired through Modern Foods2 are i!ey to
contribute to the growth.
Strengthen the non-FMCG business by acuiring technoogy support -The non-
FMCG product categories incude chemicas+ fragrances B favours+ speciaty
chemicas+ thermometers+ etc The company is ta!ing steps to secure word cass
technoogy support in these areas for future growth. This coud mean a divestment of
these businesses to a separate oint venture in the ong term.
ANAL)"I" ;F T#E "TRATEG)+
i this strategy wor!N
The outined strategy is a significant deviation from the path foowed by the
company in the past. 9ather than grow in breadth at a fast pace+ the new strategy
appears to be focusing on consoidation of the aready e,panded businesses+ before
moving on. 7nd this appears appropriate given the current economic and competitive
environment. The overa mar!et demand growth is i!ey to be constrained by
()
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adverse economic factors such as poor agricutura and industria growth. 8n the other
hand+ #/ faces stiff competition from both M?C=s at the premium end and the oca
ow cost producers at the popuar end. The proposed measures are i!ey to ead to the
foowing gainsD
%. 7 greater mar!eting and management focus on rationai"ed product portfoio woud
ead to better growth rates for those brands
(. The contribution to profit of the &0 brands being higher+ overa profitabiity woud
rise+ as these brands grow at a faster pace.
&. hie the overa e,penditure on branding and saes promotions be ower as the
number of brands supported decine aso more efficient brands woud receive greater
support
). Cost cutting initiatives e,tended across the suppy chain as we as a conscious
effort towards owering fi,ed overheads woud aid margin e,pansion.
*. 7 sowdown in investments in new businesses+ and improved profitabiity in
e,isting businesses woud mean that 98C> growth woud be faster.
e fee that given the economic and competitive environment. #/ stands a much
better chance of improving its operating and financia performance with the outined
strategy. 7t the current price of 9s(%'+ the stoc! trades at &', F%(K00 earnings. 7 (*4
growth in profitabiity appears achievabe as the portfoio rationai"ation wi drive
margin e,pansion. /ower restructuring costs woud aso aid higher net profit growth.
8n an estimated F%(K0% >:S of 9s6.)+ we set a one-year price target of 9s(3'+ which
woud yied a &64 return.
(*
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DEMAND PROJECTION
Fast Moving Consumer Goods 1FMCG2 sector wi witness more than *0 per cent
growth in rura and semi-urban India by (0%0+ according to an anaysis carried out by
the 7ssociated Chambers of Commerce and Industry of India.
In totaity+ it is proected to grow at a C7G9 1compounded annua growth rate2 of %0
per cent and increase its mar!et si"e to 9s %00+000 crore from the present eve of 9s
)5+000 crore.
The growing penchant of rura and semi-urban fo!s for FMCG products wi be
mainy responsibe for this deveopment+ as manufacturers wi have to deepen their
concentration for higher saes voumes.
In the rura and semi-urban areas+ FMCG mar!et penetration is currenty ess than %
per cent in genera as against its tota growth rate of about '.( per cent.
The anaysis is based on the feedbac! obtained from various district industry centres
a over the country on the future demand-suppy situation of FMCG products.
Indian rura mar!et with its vast si"e and demand base offered a huge opportunity that
FMCG companies cannot afford to ignore. ith %(5 miion househods+ the rura
popuation is neary three times the urban. Though the rura and semi-urban demand
of FMCG products wi grow+ it wi put a severe pressure on the margins of
manufacturers of FMCG products due to cut-throat competition+ finds the anaysis.
Companies in the sector to benefit wi incude !nown names such as ?irma+ #/+
;abur+ ITC+ Godre+ <ritannia+ Coca-Coa+ :epsi+ among others. 9ura mar!et may be
auring but it is not without probems such as ow per capita disposabe incomes and
arge number of daiy wage earners.
Some of the other probems associated with rura mar!ets are acute dependence on the
vagaries of the monsoon+ seasona consumption in!ed to harvests+ festivas and
specia occasions+ poor roads and power probems.
('
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The other difficuty that FMCG companies are i!ey to face is that of ogistics. India@s
'(6+000 viages are spread over &.( miion s !m. ;eivering products to the 6*0
miion Indians iving in rura areas wi be a tough tas!.
The net profit of #/ for the fu year fe to 9s %+%36.&' crore 19s %%.36 biion2
from 9s%66%.63 19s %6.6% biion2 ast year.
(6
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O$JECTIE
%. To evauate current consumer saes promotion schemes in toiet soap mar!et.
(. To get an insight into retaiers= views regarding the schemes being offered in toietsoap category and consumer perceptions
&. To study consumer perceptions regarding various promotion schemes in this
category and responses toward them.
(5
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"COPE OF RE"EARC# +%
My scope is restricted to consumer perceptions and retaier view>s regarding variousschemes
(3
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RE"EARC# MET#ODOLOG)
Research Type: >,poratory 9esearch
Data Collection Tool: Ouestionnaire
In-depth interview
Research Area: Gha"iabad
Sampling Plan
Sample type: #sers of the Toiet Soap.
Sample SizeD %00 peope between the age of (0-)0 years.
Primary Data: The primary data is coected through uestionnaires and in-depth
interview.
Secondary Data: The sources of secondary data are various researches conducted by
#/+ business maga"ines and internet.
Ras,n 9,r ,1tin2 this T,1ic
The Indian FMCG sector is the fourth argest sector in the economy with a tota
mar!et si"e in e,cess of #S$ %&.% biion. It has a strong M?C presence and is
characteri"ed by a we estabished distribution networ!+ intense competition between
the organi"ed and unorgani"ed segments and ow operationa cost. 7vaiabiity of !ey
raw materias+ cheaper abour costs and presence across the entire vaue chain gives
India a competitive advantage. The FMCG mar!et is set to trebe from #S$ %%.'
biion in (00& to #S$ &&.) biion in (0%*. :enetration eve as we as per capita
consumption in most product categories i!e ams+ toothpaste+ s!in care+ hair wash etc
in India is ow indicating the untapped mar!et potentia. <urgeoning Indian
popuation+ particuary the midde cass and the rura segments+ presents an
opportunity to ma!ers of branded products to convert consumers to branded products.
The sow growth rate witnessed through the years (000 to (00) by the FMCG sector was revived in FP=0*+ registering a growth rate of about '4. The growth was mainy
&0
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driven by improved performance of persona care products such as shampoos+
deodorant+ hair dyes+ soap+ toietries+ etc and penetration into the rura and semi-urban
areas of India. 9ura mar!eting has become a critica factor in boosting bottom ines.
This study wi give the detaied insight of FMCG sector in India and how it has
surmounted the downturn faced in the past. ow the companies i!e #/ has
changed their mar!eting strategies to overcome their shrin!ing profit margins and
beat competition.
RE"EARC# AND "'RE) MET#ODOLOG)
The research study entaied two maor phases.
I. :re- fied Study
a. #nstructured in-depth interviews were conducted to create the initia uestionnaire
1the instrument2
b. >,pert opinions on the uestionnaire were coected and further improvements were
made to the uestionnaire.
II. Fied Study
a. 7 structured uestionnaire was prepared and the survey was conducted by
e,paining the purpose of the research to the respondents and administering the
uestionnaire.
b. 7 spit pane test was aso conducted to test certain uestions that were fet to be
inadeuate in their design+ to evo!e responses from the respondents and to test the
effect of changing the structure of these uestions. Most of the uestions in the survey
are not disguised but to assess certain non-factua variabes disguised uestions are
used. For e,ampe+ there are some uestions pertaining to the effectiveness of emai+
internet etc. which measure the attitudes of the respondent and we ta!e these data as
the pro,y for that of the organi"ation as a whoe. The rationa behind this is that the
respondents are typicay top management personne in the Information Technoogy
department of the organi"ation and they are in a position to assess the impact of these
&%
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technoogies on their organi"ation. In some cases+ to test the reevance of hypotheses
and to assess the impact of the uestionnaire on the respondent+ persona interviews
were combined with the competion of the uestionnaire.
<oth the panes received identica treatment. The uestionnaire version was changed
but the mode of administration etc. remained the same to preserve the integrity of the
comparisons. >vauation of the spit pane tests was done aong with the anaysis of
the origina uestionnaire. The techniues incuded comparison of response
distributions and e,amination of item non-response data.
Modifications in some uestionsK items used in the uestions were made to increase
the response rate and effectiveness of the uestionnaire.
Some of the respondents had reservations about some uestions in the initia
uestionnaire+ due to the sensitive nature of the topics addressed. This necessitated
some changes in the ater versions of the uestionnaire.
RE"PONDENT" AND DATA COLLECTION
The popuation addressed by the survey comprises of those+ who use various toietry
items. The main respondents were the genera pubic as toietry soaps are used by a
the peope.
Its main obective is to !now about the buying behavior and the i!es and disi!es of
the consumers. <asicay the research was done to !now what the consumer thin!s
before buying the product+ what they thin! about the product and what they want from
the product i.e. their need.
&(
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E<PLORATIE RE"EARC# ")"TEM
The mar!eting research process adopted by us is as foowsD
Define the problem and research objectives: The obective of this research is to studythe past and current mar!eting and demand trends. The research highights various
mar!eting and demand concerns faced by #/ in the soap category.
Develop the research plan: This incudesD
:rimary data
Focus-group research
Ouestionnaires
Samping panD #rban peope of the midde cass. <oth mae and femae
between the age of (0 to )0.
Samping Si"eD &*
INFERENCE" ON IMPLICATIE RE"EARC#
Foowing are the inferences made from the research which cosey matches with the
S8T 7naysis of #/.
"OME FACT" O$"ERED FROM T#E RE"'LT" "O
O$TAINED+
/#Q sti rues the soap mar!et with substantia mar!et share. 8thers which
incude ;8E> aso have some share in higher cass thus it serves as the
ST79S for #/.
Most of the customers are satisfied with the product they are using and theyare i!ey to retain the same product again.
Most of the customers thin! that the #/ soaps are good with respect to other
brands in the mar!et.
owever there is a cose tie between the peope who wi recommend #/=s
product to others to the peope who wi probaby not recommend it. This may
be a concern for #/ but due to there recent attac!ing mar!eting 1S9 I?
/#Q 7;2 strategy they are trying to regain there mar!et share.
&&
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LIMITATION" OF T#E "T'D)
%. The study was confined to Gha"iabad city ony and differences in perception and
profie may e,ist for other parts of the country.
(. The samping was based on convenience that coud have given rise to errors.
&. These resut may not be appropriate for the whoe popuation 1 i.e universe2.
&)
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C#APTER * 6
COMPAN) PROFILE
DATA ANAL)"I"
CONCL'"ION
&*
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#in0ustan 'nil4r Li-it0
eeting !veryday "eeds of People !very#here
&'
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COMPAN) PROFILE
Intr,0ucti,n
industan #niever /imited 1#/2+ a *%4-owned subsidiary of 7ngo-;utch giant
#niever+ has been prying its way into India since %555. India@s argest consumer
goods company+ / mar!ets products such as beverages+ food+ and home and
persona care goods. Its brands incude waity a@s ice cream+ /ifebuoy soap+
/ipton tea+ :epsodent toothpaste+ and Surf aundry detergent. #/ mar!ets atta 1a
type of mea2+ mai"e+ rice+ sat+ and speciaty chemicas+ and its e,port division ships
castor oi and fish. The company aso ses botted water and over-the-counter
heathcare products.
industan #niever /imited 1#/2 is India@s argest fast moving consumer goods
company+ with eadership in ome B :ersona Care :roducts and Foods B
<everages. #/@s brands+ spread across (0 distinct consumer categories+ touch the
ives of two out of three Indians. They endow the company with a scae of combined
voumes of about ) miion tonnes and saes of 9s.%0+000 crores.
The vision that inspires #/@s &(+)00 empoyees 1)0+000 incuding Group
Companies2+ incuding about %+)(* managers+ is to Rmeet everyday needs of peope
everywhere - to anticipate the aspirations of our consumers and customers and to
respond creativey and competitivey with branded products and services which raise
the uaity of ife. This obective is achieved through the brands that the company
mar!ets.
&6
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$usinss natur
#/ is India@s argest mar!eter of Soaps+ ;etergents and ome Care products. It has
the country=s argest :ersona :roducts business+ eading in Shampoos+ S!in Care
:roducts+ Coour Cosmetics+ and ;eodorants. #/ is aso the mar!et eader in Tea+
:rocessed Coffee+ branded heat Four+ Tomato :roducts+ Ice cream+ Soups+ Hams
and Suashes.
#/ is aso one of the country@s biggest e,porters and has been recogni"ed as a
Goden Super Star Trading ouse by the Government of India it is a net foreigne,change earner. #/ is India@s argest e,porter of branded fast moving consumer
goods. The company@s >,ports portfoio incudes #/@s brands of Soaps and
;etergents+ :ersona :roducts+ ome Care :roducts+ Tea and Coffe
Mar:t la0in2 /ran0s
#/=s brands have become househod names. The company=s strategy is to
concentrate its resources on &0 nationa power brands+ and %0 other brands which are
strong in certain regions. The top five brands together account for saes of over
9s.&000 crores.
Some of the big brands in Soaps and ;etergents are Li9/u,= Lu>= Liril= #a-a-=
$r3= D,4= 1a soaps2+ Surf >,ce+ Surf+ 9in+ hee 1the number one detergent
brand in India+ and #/@s argest2+ *0%+ Sunight 1a detergents2. #/ aso mar!ets
the Eim and ;ome, range of ome Care :roducts.
In the :ersona :roducts business+ #/@s air Care franchises are Cinic+ Sunsi! and
/u, shampoos the company mar!ets ?ihar oi. In 8ra Care+ the portfoio comprises
Cose-up and :epsodent toothpastes and toothbrushes. In S!in Care+ #/ mar!ets
&5
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Fair B /ovey S!in Cream and /otion+ the argest seing S!in Care :roduct in India
a brand deveoped in India+ it is now e,ported to over &0 countries. It has been
e,tended as an 7yurvedic cream+ an under-eye cream+ a soap and a tac+ in ine with
the strategy to ta!e brands across reevant categories. The other maor S!in Care
franchises are :ond=s+ Easeine+ /a!me and :ears. In Coour Cosmetics+ #/ mar!ets
the /a!me and >e-%5 ranges. In ;eodorants+ the !ey brands are 9e,ona+ 7,e+
;enim and :ond@s+ whie the Tac brands are :ond@s+ /iri+ Fair B /ovey+ Easeine
and /ifebuoy. 7,e and ;enim are #/=s franchises for Men=s toietries.
&3
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"WOT ANAL)"I" OF #'L
"TRENGT#"+
strong brand portfoio consumer understanding
9B; abiity
distribution reach
high uaity manpower
WEAKNE""E"+
Increased consumer spends on education+ consumer durabe+ entertainment+trave+ etc resuting in ower share of waet for FMCG
imited success in changing the eating habits of peope
compe, suppy chain configuration and unwiedy number of stoc! !eeping
units 1S#s2 with dispersed manufacturing ocations
price positioning in some categories that aows for ow price competition and
high socia costs in the pantation business.
OPPORT'NITIE"+
mar!et and brand growth through increased penetration especiay in rura
areas
<rand growth through increased consumption depth and freuency of usage
across a categories.
#pgrading consumers through innovation to new eves of uaity and
performance.
>merging modern trade to be effectivey used for introduction of more upscae
persona care products.
Growing consumption in out of home categories.
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:ositioning #/ as a sourcing hub for #niever companies esewhere and
everaging the atest IT technoogies.
T#REAT"+
ow-priced competition now being present in a categories
grey imports
Changes in fisca benefits and unfavorabe prices in ois+ tea commodity+ etc.
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TOILET "OAP IND'"TR) IN INDIA * $mplicative Study
Toiet soap industry is one of the odest Fast Moving Consumer Goods 1FMCG2
industries in India. It is among the highest penetrated category within FMCG sector
reaching an estimated 3*4 urban and 564 of the rura househods. In vaue terms the
industry is worth 9s.)*000 miion and in voume terms it is worth .*& miion 1in
(00% as reported by 8perations 9esearch Group 189G2 Survey2. The main
characteristic of the industry was severe competition and high eve of brand
proiferation. The industry witnessed 64 decine in vaue in year (00%.
There were )* eading nationa brands. ?one of the nationa brands had more than *4
mar!et share and many more regiona and unorgani"ed sectorKoca brands. industan
#niever was the mar!et eader with about &0 1number2 of toiet soap brands with a
tota mar!et share of '64 in (000-(003 in organi"ed sector as seen from Tabe beow+
which gives the ead payers and their respective mar!et share
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The eading brands in the mar!et are ;ove+ :ears+ /u,+ ;etto+ /iri+ 9e,ona+
/ifebouy+ ?irma+ :amoive and amam. The industry had witnessed many
innovative saes promotion activities in the recent past. ?umerous factors were
responsibe for such a phenomenon. The reasons areD
The mar!et being suggish+ companies were trying to increase mar!et share in
stagnant to decining 1voume terms2 mar!et in order to retain consumers+ to
encourage switching+ to induce trias and iuidate e,cessive inventories.ith the presence of so many brands the competition had increased severay
eading to fight for mar!et share and shef space.
ence+ saes promotion activities in toiet soap industry posed a very interesting
study and consumer and retaier perceptions thereof.
The brands in popuar segments were found to be freuenty promoted as there was
intensive price competition in this segment. The brands coud aso be cassified based
on medicina benefits+ cosmetic benefits+ perfumes+ naturaKherba properties.
7fter posting a modest singe digit growth in %336-(000+ figures for the first seven
months of this year suggest that the mar!et for toiet soaps has actuay shrun!.
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>stimates about the e,tent of the decine of mar!et si"e vary. industan #niever+
which straddes the category with a *3.3 per cent mar!et share by vaue+ says the
mar!et shran! by ).) per cent in vaue terms in the first haf of (00%.
The Indian Soaps and Toietries Manufacturers 7ssociation+ puts the decine at % per
cent. 8ther industry sources suggest that the e,tent of de-growth@ in the first eight
months of (00% coud be as high as 6 per cent.
This is despite the fact that this usuay seepy category has seen a spate of new
payers debut new offerings in recent times. 8ver the past coupe of years+ ?irma has
aunched a sew of ow-priced soaps under the banner of ?ima and ?irma <eauty.
Godre Consumer+ a ong-standing payer+ has reaunched od brands such as Cintho+
apart from new ones such as FairGow+ 7care+ and ?i!har.
<ut if the shrin!ing mar!et si"e suggests that Indian consumers have actuay been
cutting bac! on their use of toiet soaps+ this is not reay the case. In voume terms+
the mar!et for toiet soaps has continued to show a growth of ' per cent in the first
eight months of (00%.
The maor payers have certainy managed to se more toiet soaps by voume. <ut
price competition in the segment and a sew of promotiona campaigns have reduced
the effective reaisations per unit sod. This has probaby neutraised the gains from
voume e,pansion. Theories about the reasons for the shrin!ing the mar!et si"e vary.
L,w%1ric0 /ran0s
Industry payers commony attribute the de-growth@ in the soap mar!et to
downtrading. Toiet soaps are among the highest penetrated products within the
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FMCG mar!et+ reaching an estimated 3* per cent of the urban and 56 per cent of the
rura househods. The fairy high contribution from the rura mar!et ma!es this
category sensitive to the fortunes of the agricutura economy.
The proonged drought in the ?orth and est of the country 1unti (0002 and the
sharp fa in farm disposabe incomes 1brought on by faing farm product prices2 has
probaby persuaded ow-income househods to downtrade+ that is+ switch from high-
to ow-priced brands.
#/+ too appears to endorse the phenomenon of downtrading. There has been an
inter-sectora shift in the soap mar!et+ with consumers downtrading from premium
and popuar to discount soaps@@+ e,pains the company@s spo!esperson.
owever+ Mr oshedar . :ress+ Godre Consumer Care+ begs to differ. e thin!
consumers have aready pre-committed their incomes for instaments on durabes. The
substitution of soap with shampoos for hair wash has aso impacted growth@@+ he said.
$ttr ?ualit
The crowded mar!et pace has aso brought a few benefits to the consumer as
mar!eters of soap have tried to woo consumers through upgraded offerings and better
uaity soaps. 7ided by ow input prices+ the mar!eters of toiet soaps have increased
the TFM 1tota fatty matter2 content in their brands+ to offer better uaity soaps at a
ower price. Industry watchers say that the TFM content on some brands has moved
up from the *0-'0 per cent earier to over 60 per cent of ate.
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Therefore+ per unit reaisations on soaps have decined+ the mar!eters of soaps have
actuay sacrificed a part of their margins on hi!ing the TFM content.
Tough times ahead
ith competitive pressures on the rise and a arger number of brands osting for
consumer attention in a suggish mar!et+ the soap mar!et is i!ey to remain a difficut
one for most payers. Smaer payers such as Godre Consumer and en!e S:IC
have been in a position to report robust saes growth in the category over the past year
despite the bruising competition.
owever+ this is party due to a reativey sma base of comparison. #ness the
mar!et e,pands+ the frenetic promotiona activity may soon te on the growth rate of
the payers. 7nd when it comes to sustaining a high decibe promotiona campaign+
#/@s si"e certainy gives it the wherewitha to do it.
9ura reviva -- 7 wid card
It appears that a genuine boost to the mar!et si"e for toiet soaps wi sti have to
come from a reviva in rura demand. >vidence from the past does appear to suggest
that a sharp rise in rura incomes woud have a cascading effect on FMCG demand.
The pic!-up in voume growth in the soap mar!et in %333+ after a year of suggish
growth in %335+ demonstrated that a recovery in agricutura output does have an
indirect impact on saes voumes of FMCG products.
This year+ reports of a good monsoon in the northern and western parts of the country
have spar!ed off specuation about a reviva in FMCG growth rates. The fact these
two regions account for ** per cent of the demand for FMCG products strengthens
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this argument. owever+ it appears to be a bit eary in the day to ca it a reviva. For
one+ whie the northern and western regions have received satisfactory rains+ southern
India has been the victim of a very erratic monsoon. Second+ given that the good
monsoon in the current year succeeds two or three consecutive years of drought in
some regions+ there coud be a substantia time ag before higher rura incomes
transate into better FMCG demand.
Third+ the !ey crisis in agricuture over the past year has been that farm product prices
have dropped sharpy in response to a buid up of surpus foodgrain stoc!s. Therefore+
even if a good monsoon transates into a higher agricutura output+ there is the
uestion of whether this wi actuay e,pand or shrin! farm incomes.
These factors suggest that it may be premature to ta!e investment e,posures in
companies focussed on toiet soaps in the hope of a reviva. It may be better to wait
for concrete signs of a pic!-up in rura demand+ which is certainy some way off.
T#E FO'R COMPONENT" OF T#E MARKETING MI<
In toiet soap mar!et #/ has '&4 mar!et share. This is the product segment where
#/ has seen growth over ast year but the growth is not as high as there is e,pansion
in the mar!et for toiet soaps. The cash cows for #/ incude /ife boy+ /u,+ /iri+
9e,ona and <ree"e. The company@s premium soap incude ;ove+ :ears. The company
has come up with a new product offering i.e. Fair B /ovey soap. The strategy for
(00'-06 woud be to increase the mar!et share from e,isting '&4 to 604. The
strategic changes ta!ing ) :@s into consideration woud beD
Pr,0uct+ #/ woud continue with the e,isting portfoio of the products and woud
concentrate on coming with new fragrances on different soaps than aunching new
)6
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soaps. It woud position ;ove and /u, Internationa soap very urban rich women who
are e,tra conscious for their compe,ion. :ears+ /u, Internationa woud be
positioned for the urban and rura rich. For the consuming urban cass+ /iri+ 9e,ona+
:ears and /ifebouy Internationa woud be positioned. It woud aso come up with
)0gm pac!aging for different products. It wi aso be thin!ing of e,tending popuar
brands of cosmetics in the toiet soap segment by that decision woud be based on the
popuarity and acceptance of that particuar brand 1<rand >,tension2.
Pric+ #/ woud be trying to customi"e the pac!aging of various products on the
basis of price points. e.g. it wi come up with the pricing of 9s *+ 9s %0 and 9s %* for
different products. It woud try to e,periment it with the products positioned for
consuming cass.
Pr,-,ti,n+ For promotion+ apart from continuing the e,isting strategy of
concentrating on T.E. channes+ #/ woud try to focus on the promotiona campaign
in rura sector. It woud aso concentrate on promoting through radio and sponsoring
the programs e.g. Lrishi ;arshan@ and L7ap !a Swasthaya@ programs that have greater
number of audience. The advertising for them woud have a pastora and cutura
oo!s. It woud cha! out the rura promotion scheme for those areas where the cabe
T.E. has not reached. #nder this scheme It woud try to incude LGram :anchayat@+
LSwasthaya :arishad@ and other oca bodies by offering !nowedge for using good
and anti-germ products.
Plac+ 7s the mar!eting channes of the company are aready estabished #/ woud
try to increase the penetration in the rura sector to the e,treme remote areas which
are not touched ti now. It woud try to reduce the deivery time of the products by
choosing and increasing the strategic ocations of warehouses. It woud aso trac! the
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distribution path of the whoesaers in sma cities through mar!eting team and woud
estabish a patform or team at a "ona eve for a the whoesaers and woud try to
ta!e their feedbac! on the mar!et deveopments.
These !inds of congregations coud aso increase the brand oyaty in the whoesaers
and they woud be motivated to push #/ products.
Th Ral Challn2+ %ridging the gap bet#een Philip &otler and
Countryside $ndia
Mar!eting in deveoping countries i!e India have often been borrowed from the
western word. Concepts i!e <rand identity+ Customer reationship management+ )
:=s of the mar!eting mi,+ Consumer behavior process Segmentation+ targeting and
positioning etc. have often been ifted straight from the mar!eting inteigentsia
abroad and adopted in Indian conditions+ often with minima success. Ras,n lis n,t
in th 9ault ,9 such c,nc1ts= /ut thir int2rati,n with th In0ian th,s an0
cultur. The rura India offers a tremendous mar!et potentia. ?eary two-thirds of a
midde income househods in the country are in rura India and represents haf of
India=s buying potentia. ;espite+ the strong potentia the rura mar!ets are by and
arge ess e,poited.
'() %ridging the *ap by !+tending ,P-s .f the arketing i+ to the / P-s And 0
!-s
#/ has modified ) :=s of the mar!eting mi, by incuding an additiona : i.e.
:ac!aging. Further to ensure the sustainabiity of the mar!eting mi, two >=s i.e.
>ducation and >mpowerment have to be at the core as they hep in generating
widespread participation from the rura cient by enhancing their standard of iving.
)3
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PACKAGING+
The reason for putting pac!aging out of the product as a specia focus area is that due
to ow iteracy eves the importance of symbos and pac!aging become more
important in having a high brand reca.Thus+ after the ) p of mar!eting+ it is *th :
which is pac!aging going to pay a !ey roe in rura mar!ets. 7so since the rura
customers are usuay daiy wage earners and they don=t have monthy incomes i!e
the ones in the urban areas have. So the pac!aging is in smaer units and esser-priced
pac!s that they can afford given their !ind of income streams.
T#E CORE * 6E@"
The two biggest probems that the rura India faces are Iiteracy and #nempoyment.
To integrate them in one=s Mar!eting mi, ensures that the product or service offered
ensures wider participation and better chances of success. ence+ it gives the rise to
the concept of two >=sD >ducation and >mpowerment at the core of our improvedMar!eting Mi,. This concept presents an opportunity to improve the ife of rura
Indians and thus+ ensure that they activey patroni"e the company=s products.
%.2 >ducationD Since vast maority of rura India ac!s even basic education eves and
modern outoo!+ it is important that the company introducing a new product shoud
oo! at buiding category and not ust seing products. It is important to consistentydrive home the point that the customer=s ife is going to be enhanced because of
product=s consumption.
(.2 >mpowermentD <ecause of huge disguised unempoyment eves in agricuture and
ac! of empoyment opportunities in other sectors+ any concept which uses any scope
*0
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for income generation woud be favored more than the traditiona mar!eting mi,
concepts.
#/ runs the program of Sef-ep Groups 1SG2+ which operate i!e direct-to-home
distributors. The mode consists of groups of 1%*-(02
viagers beow the poverty ine 19s.6*0 per month2 ta!ing micro-credit from ban!s+
and using that to buy #/ products+ which they wi then directy se to consumers.
RETAILER+
;ata on rura consumer buying behavior indicates that the rura retaier infuences
&*4 of purchase occasions. Therefore+ sheer product avaiabiity can determine brand
choice+ voumes and mar!et share. So+ roe of retaier is aso very important in rura
mar!ets+ because he woud be one who provides information regarding uantity of
pac!+ promotiona schemes+ infuences of advertisement+ consumer feedbac! etc to
company. So the retaier pays a very big roe here. The rura customer goes to the
same shop aways to buy his things. 7nd there is a very strong bonding in terms of
trust between the two. The buying behavior is aso such that the customer doesn@t as!
for the things by brand but i!e %% 1paanch rupey #aala sabun dena12 ?ow it is on
the retaier to push whatever brand he wants to push as they can infuence the buyer
very easiy and very strongy on the preferences. ence+ there is the need to get hissupport through proper trade promotion activities to get more retai shef and
convincing on his side to ma!e the customer buy the brand.
*%
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DI"TRI$'TION "TRATEGIE" OF #'L
The need for innovative and effective distribution networ! for rura areas is evident
from the fact that #/ has come up with new distribution channes to cater to rura
mar!ets.
For eg+ Pr,ct "tra-lin was conceptuai"ed to significanty enhance the contro
on the rura suppy chain+ through a networ! of rura sub-stoc!ist+ who are based in
these very viages. 7s part of the proect+ higher uaity servicing+ in terms of
freuency+ credit and fu-ine avaiabiity+ was be provided to rura trade. The pivot of
Streamine is the 9ura ;istributor 19;2+ who has %*-(0 rura sub-stoc!ists attached
to him. >ach of these sub-stoc!ists is ocated in a rura mar!et. The sub-stoc!ists then
performs the roe of driving distribution in neighboring viages using unconventiona
means of transport such as tractor+ buoc! cart+ et a. The Streamine system hase,tended direct #/ reach in these mar!ets to about &64 of India@s rura popuation
from (*4 in %33* and the number of #/ brands and S#s stoc!ed by viage
retaiers has gone up significanty.
#'L MODEL+
#/ have adopted the ) :=s in addition to % more :+ % 9 19>T7I/>92 7?; ( >=s.
So the new M79>TI?G MIQ mode adopted by #/ oo! i!eD
*(
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*&
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CON"'MER "ALE" PROMOTION
The importance of consumer saes promotion in the mar!eting mi, of the fast moving
consumer goods 1FMCG2 category throughout the word has increased. Companies
spend considerabe time in panning such activities. owever+ in order to enhance the
effectiveness of these activities+ manufacturers shoud understand consumer and
retaier interpretations of their promotiona activities. 7 study of these perceptions wi
revea their preferences+ their !nowedge+ and motivations.
In India fast moving consumer goods 1FMCG2 category has witnessed an outburst of
saes promotion activities in the post-iberai"ation era. This proect study though
e,poratory has considered perceptions for price as we as non-price promotions in
toiet soap category.
The reasons for the study wereD
i2 The widespread use of saes promotions in toiet soap category
ii2 istoricay+ whenever there was a downward trend in growth+ saes promotion
activities too! the front seat of promotiona mi,.
iii2 Companies panned these activities with inward oo!ing view hence it was fet that
it woud be usefu to understand the perceptions of consumers and retaiers regarding
saes promotion activities to improve the effectiveness of these activities.
LATE"T ADERTI"ING TREND"
/ast three-four years have seen a tremendous increase in the number of regiona
channes as we as the amount of advertising on it. The entire advertising scenario is
dominated by FMCG categories and more recenty+ in the ast one or two years+ by
ceuar phonesK ceuar phone service categories. FMCG categories+ which dominate
the mar!et scenario+ incude toiet soaps+ tooth pastes+ shampoos+ ready to eat food
and fairness creams. <ut out of a these categories+ the most heaviy advertised
category across the entire channe whether regiona or nationa is the toiet soaps
category.
*)
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DATA ANAL)"I"
3 ,lu- Gr,wth ,9 ",a1sB ,n T 0urin2 Januar % Ma 6;&;.
• ;uring Hanuary -May (0%0+ advertising of SoapsU category on TE has seen arise of %3 per cent compared to same period in year (003.
N,t+ ",a1sB Cat2,r ,nl inclu0s $athin2T,ilts ",a1s an0 n,t th
Laun0rWashin2 ",a1s.
**
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"har ,9 ariants ,9 ",a1sB ,n T 0urin2 Jan % Ma 6;&;.
• ;uring Hanuary - May (0%0+ @:rotection-7yurvedicKMedicated@ segment hadthe argest share 1i.e. )3 per cent2 of overa advertising share of SoapsU onTE+ foowed by @?ourishing-<eauty@ and @ydration-Moisturising@ Soaps with(' per cent and %& per cent share respectivey.
N,t+ ",a1sB Cat2,r ,nl inclu0s $athin2T,ilts ",a1s an0 n,t th
Laun0rWashin2 ",a1s.
*'
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T,1 A04rtisrs ,9 ",a1sB ,n T 0urin2 Jan % Ma 6;&;.
• @industan #niever /td@+ @ITC /td@ and @9ec!itt <enc!iser 1India2 /td@ werethe Top three advertisers+ contributing 6' per cent share of overa SoapsUcategory ad pie on TE during Hanuary - May (0%0.
N,t+ ",a1sB Cat2,r ,nl inclu0s $athin2T,ilts ",a1s an0 n,t th
Laun0rWashin2 ",a1s.
*6
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Nw /ran0s ,9 ",a1sBa04rtis0 ,n T 0urin2 Jan%Ma6;&;
• @Eive Satin Soft@+ @/u, Strawberry B Cream@ and @Eive ;i is Toiet Soap@were top three new SoapU brands advertised on TE during Hanuary - May(0%0.
N,t+ ",a1sB Cat2,r ,nl inclu0s $athin2T,ilts ",a1s an0 n,t th
Laun0rWashin2 ",a1s.
*5
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T,1 "tats in ",a1sB a04rtisin2 ,n T 0urin2 Jan % Ma 6;&;
• ;uring Hanuary -May (0%0+ SoapsU category advertising on 9egiona and ?ationa channes in the ratio of '%D&3.
• @Maharashtra@+ @7ndhra :radesh@ and @arnata!a@ were the top three statesaccounting for more than *0 per cent advertising share of SoapsU category on9egiona channes during Hanuary - May (0%0.
N,t+ ",a1sB Cat2,r ,nl inclu0s $athin2T,ilts ",a1s an0 n,t th
Laun0rWashin2 ",a1s.
*3
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A4ra2 a04rtisin2 9r?unc ,9 ",a1sB ,n T 0urin2
Jan%Ma6;&;
• Compared to Hanuary - May (003+ average advertising freuency of SoapsUsaw a rise of %) per cent on TE during Hanuary - May (0%0.
N,t+ ",a1sB Cat2,r ,nl inclu0s $athin2T,ilts ",a1s an0 n,t th
Laun0rWashin2 ",a1s.
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Cl/rit En0,rs-nts 9,r ",a1sB ,n T 0urin2 Jan%Ma 6;&;.
• @:riyan!a Chopra@ with () per cent share eads in Ceebrity endorsement ofSoapsU on TE cosey foowed by @areena apoor@ with (& per cent shareduring Hanuary - May (0%0
• The third spot of the Ceebrity >ndorsement chart for SoapsU was occupied by@Puvra Singh@ during Hanuary - May (0%0.
N,t+ ",a1sB Cat2,r ,nl inclu0s $athin2T,ilts ",a1s an0 n,t th
Laun0rWashin2 ",a1s.
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• ;uring (0%0+ TE advertising of :ersona Care sector saw a rise of (( per cent
compared to (003.
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"har ,9 Prs,nal Car Cat2,ris ,n T 0urin2 6;&;
• ;uring (0%0+ @:ersona ygiene@ category had ma,imum share i.e. )) per centof overa :ersona Care sector advertising on TE foowed by @air Care@ and@:ersona eathcare@ with (' per cent and %' per cent share respectivey.
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T,1 "u/ Cat2,ris ,9 Prs,nal Car $ran0s a04rtis0 ,n T
• @Toiet Soaps@ + @Shampoos@+ @Tooth :astes@ were the top & sub categoriescontributing &3 per cent share of overa :ersona Care sector advertising onTE during (0%0.
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T,1 A04rtisrs ,9 Prs,nal Car /ran0s ,n T 0urin2 6;&;
• @industan #niever /td@+ @:rocter and Gambe@+ @9ec!itt <enc!iser 1India2 /td@were the top & advertisers+ they contributed &' per cent of overa :ersonaCare sector advertising on TE during (0%0.
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Nw $ran0s ,9 Prs,nal Car sct,r launch0 ,n T 0urin26;&;
• @/u, Strawberry and Cream@+ @7,e ;ar! Temptation@ and @Sunsi! air FaSoution@ were the top & new :ersona Care brands advertised on TE during(0%0.
• ;uring (0%0+ ) of the Top %0 new :ersona Care brands advertised on TEwere @ITC /td@ and & beonged to industan #niever /td which had occupiedthe Top & paces.
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T,1 Cl/ritis n0,rsin2 Prs,nal Car $ran0s ,n T
• @:riyan!a Chopra@ was the top ceebrity endorsing :ersona Care brands on TEfoowed by @areena apoor@ and @Sushmita Sen@ during (0%0.
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T,1 &; $ran0s in th In0ian -ar:t
"T'D) ON CON"'MER PERCEPTION"+
&. Currnt usa2 ,9 t,ilt s,a1 $ran0s+
Tabe beow gives current usage of toiet soaps across different income categories
1research was conducted with &0 peope2D
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6. REA"ON" FOR "WITC#ING $RAND" +
This coud be seen from Tabe beowD
7s obvious from the above tabe+ saes promotion was not the main reason for
switching brand in this category. ?eed for variety was the predominant reason. It was
found through deeper probing that even though consumers woud have switched
brands due to saes promotion+ there was reuctance about admitting the same and
variety was given as a reason for switching. It was further found that consumers had
positive disposition towards promoted brand. 7s a resut when toiet soap brand waschanged for variety+ the brand which was promoted had higher probabiity of purchase
than non-promoted brands.
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7. RECALL OF $RAND" $EING PROMOTED+
It coud be seen from Tabe beowD
7s seen from above+ /u, 1God Star offer J most promoted and advertised brand2 had
the ma,imum reca. This brand used TE advertisement heaviy to announce saes
promotion offers.
Si, out of &0 did not reca any saes promotion scheme on any brand. It coud be
inferred that
i2 hard core oyas to a particuar brand 1eg. amam2 woud never 1pay attention to
any announcements of any other toiet soap brand.
ii2 #ness saes promotion offers were propery communicated to the target audience+
reuired impact might not be created and
iii2 #ness promotiona offers were of significant vaue to a consumer+ it was i!ey to
get unnoticed andKor ignored.
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8. WILLINGNE"" TO $') ON "ALE" PROMOTION OFFER
Si,ty-three per cent of the sampe did not show wiingness to buy a brand due to
promotion whie (64 showed wiingness and %04 were not sure. This indicates that
when (64 showed wiingness+ and %04 consumers who were not sure+ these groups
might be ured through innovative and ucrative saes promotion offer.
. A$ILIT) TO IND'CE TRIAL
Forty per cent of the respondents had said that saes promotion had the abiity to
induce tria which reinforces the above inference.
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CONCL'"ION+
7fter conducting the survey+ observed can be made that #/ sti rues the FMCG
mar!et. There premium cass i!e /#Q and /IF><#8P acts as the C7S C8 for
them and others i!e ;8E> is growing fast in the mar!et.
#/ is in a Rstic!y ground and finds itsef between devi and deep sea+ on one end is
oca and internationa competitors whie on other is humongous popuation in
viages . F7ST Moving Consumer Goods 1FMCG2 sector wi witness more than *0
per cent growth in rura and semi-urban India by (0%(+ according to an anaysis
carried out by the 7ssociated Chambers of Commerce and Industry of India.
#/ has earned its esson the hard way that I?;I7 is fu of vagaries in spite of the
fact that #/ has so many products in the mar!et + to cater to the whims of customer
is amost impossibe. There is very pecuiar mar!et dynamics prevaent in the rura
parts so muti nationa i!e #/ find it difficut to foow the trends here in
comparison of oca manufacturers. The rura mar!et may be auring but it is not
without probems such as ow per capita disposabe incomes and arge number of
daiy wage earners. Some of the other probems associated with rura mar!ets areacute dependence on the vagaries of the monsoon+ seasona consumption in!ed to
harvests+ festivas and specia occasions+ poor roads and power probems.
The other difficuty that FMCG companies are i!ey to face is that of ogistics. India@s
'(6+000 viages are spread over &.( miion s !m. ;eivering products to the 6*0
miion Indians iving in rura areas wi be a tough tas!.
Moreover our findings indicate that with respect to the nature of the schemes+ premiums 1free gifts2 were found to be the most freuenty used in both premium and
popuar toiet soap category+ foowed by price offs. 9etaier=s perceived price offs to
have reativey greater impact compared to any other forms of saes promotion. In ine
with the retaiers= perceptions+ the findings of consumer perceptions indicated that
price offs was the most preferred type of saes promotion. 9etaiers stated that roe of
word of mouth and teevision advertising was very important in providing information
inputs to the consumers regarding saes promotion activities. This perception of
retaiers was supported by the consumer unaided reca of saes promotion schemes
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which were widey advertised. 7s the retaier interacts and observes consumers more
freuenty and cosey than the manufacturer+ it woud be usefu for the companies to
incorporate perceptions . e beieve that younger age-groups are more e,perimenta
in nature+ amenabe to trying new brands+ and soughtKoo!ed for or as!ed whether
there were any2 saes promotion schemes running on any toiet soap at the time of
purchase. 7so the person going to the shop for the purchase of soap is the fina
decision ma!er of the brand. ence it is essentia that companies need to design
attractive+ stri!ing+ visibe :8:s for scheme announcements.
7so foowing inference can be made that #?I/IE>9 is using new innovative media
campaigns which are not ony auring customers but aso increasing brand awareness. The
theme for media campaign is amost common for #niiver but it changes the appication for e.g. R;I9T IS G88; is transformed into R;77G 7C>P 7I? in I?;I7.
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C#APTER * 7
RECOMMENDATION"
$I$LIOGRAP#)
'E"TIONNAIRE
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RECOMMENDATION"
The two point remedies for #/ through which it can recover its ost grounds areD
%. 9etaiing is the new mantra in mar!eting these days+ #/ shoud come up with its
e,cusive stores in metros and sub-urban areas. In this way it can not ony decrease
number of intermediaries but aso direct contact with the customers can be
estabished.
(. #/ shoud identify that there are two segments in Indian mar!et that have vast
potentia which are youth and rura mar!et. So+ #/ shoud introduce product
specificay to this segment+ there is specific soap in the mar!et which everages on
the youth and rura aspect of India.
The organi"ationa pressure+ tight financia contro and overa du ness ma!e the
mar!eters to su! and suee"e. <ut+ mar!eters have to be more focused ust appy
themseves. Then they can reoice that the spring wi not be too far. 7part from the
usua ):s+ its a in the recessionary &:=s+ perception+ panning and pundering of the
mar!et to find growth out of de-growth. 8ne who finds the opportunity reaps the
benefit. Some time+ sow down may be a bessing in disguise for some companies.
#pon compusions+ some companies may be forced to enter some new categories and
either !nowingy or un!nowingy they may end up having hit the ac!pot with some
niche brand winners
Customers become a rare commodity in a sow down. Increase promotions and
incentives to ure them. The Indian mar!et has become so intense that every payer+
incuding the oca brand payer has become inteigent enough to come out with
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some scheme or the other. 7s a great brand buider and with principes of strategic
mar!eting+ companies may have a tendency to give a stoic smie on the esser
mortas. It=s a trap and do not ever dare to miss the race. Its time to be an Indian in
India.
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%ibliography
Philip kotler, V.A., “Marketing management, !ir"t edition (#$$%),
&imalaya P'li"hing &o'"e, M'mai
M*onald, +.., “*iret Marketing-an Integrated Approah, !ir"t
edition (#$$), Ir/in0M1ra/ &ill
2oert", M.L., Berger, P.*., “*iret Marketing Management,
"i3th
edition (#$$), Prentie &all International In., 4SA
Shankar, 2a5i, “Ser5ie" marketing, Seond edition (#$$#),
So'th A"ia P'liation", *elhi
Sheth, .6., Mittal, B., 6e/man, B.I., “7on"'mer Beha5ior, !ir"t
edition (8999), he *ryden Pre"", 4SA
+++.eonomitime".om
+++.h'l.om
+++.;mg.om
+++.google.om
+++.ade3india.om
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Ann>ur
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'E"TIONNAIRE
Na-+
&. A2 (in )ars!+
1a2 (0-(* 1b2 &0-&*
1c2 (*-&0 1d2 7bove &*
6. Occu1ati,n+
1a2 Student
1b2 ousewife
1c2 or!ingK:rofessiona
1d2 8thers+ SpecifyVVVVVVVVVVVVVVVVVVVVV
7. Annual #,ush,l0 Inc,-+
1a2 /ess than 9s. % /a!hs
1b2 %-( /a!hs
1c2 (-& /a!hs
1d2 Greater than & /a!hs
&. Which #'L@s s,a1 0, ,u us
/u,/iri/ifebuoy9e,ona8thers 1dove+ pearsW..2
6. O4rall h,w satis9i0 ar ,u with th 1r,0uct
Eery unsatisfied#nsatisfiedSomewhat satisfied
Satisfied>,tremey satisfied
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7. #,w li:l ar ,u t, us1urchas (1r,0uct! a2ain
;efinitey:robaby yes
:robaby not;efinitey not
8. #,w w,ul0 ,u rat #'L@s s,a1 with rs1ct t, ,thrs
>,ceentEery goodGood7verage:oor
. W,ul0 ,u c,ntinu /uin2 ,r start /uin2 lu> a9tr sr:@s a11aranc in
lu>@s a04rtis-nt
;efinitey:robaby yes:robaby not;efinitey not
H. W,ul0 ,u li: t, rc,--n0 th 1r,0uct t, ,thrs
;efinitey
:robaby yes:robaby not;efinitey not
. W,ul0 ,u su22st an i-1r,4-nt 9r,- th 9,ll,win2
Ouaity improvement:rice reductionMore diversified7ny other suggestionWWWWWWWWWWWWWW.
. On which 1ara-tr 0, ,u /u s,a1
Company nameSoap name:rice
?eed
. Ar ,u satis9i0 with th ?ualit ,9 #'L 1r,0ucts.
Satisfied#nsatisfied
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&;. #a4 ,u 2t attract0 9r,- th /ran0 a-/assa0,r.
)s
N,
&&. #,w ,9tn 0, ,u switch t, an,thr 1r,0uctEery freuentyFreuenty9arey
?ever
&6. Wh, /us th s,a1 in ,ur 9a-il
MotherKwifeFatherKhusband
Poursef ardy matters