changing indian rural consumer behaviour-soaps and detergents
TRANSCRIPT
Changing Indian rural consumer Behavior
Soaps and Detergents
1
CHAPTERNO.
PARTICULARSPAGE
NO.
1 CONCEPT OF CONSUMER BEHAVIOR 5
1.1 Introduction 7
1.2 Need for studying consumer behavior 7
2 RURAL CONSUMER AND CHANGING DEMAND
PATTERN
11
2.1 Different segment 11
2.2 Increasing Awareness 12
2.3 Changing trend in Indian rural consumer 14
3 RESEARCH METHODOLOGY 19
3.1 Research Design 19
3.2 Source of data 21
4 RURAL FMCG MARKET 33
4.1 Impulse to go rural 34
4.2 Impact of Globalization 36
4.3 Rural v/s Urban consumer 38
4.4 Branding Positioning 40
4.5 Branding strategy in rural price 52
5 DETERGENT AND SOAP IN INDIAN RURAL MARKET 57
5.1 HLL v/s NIRMA 57
5.2 SWOT analysis 57
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5.3 Price strategy 58
5.4 Companies in rural India 59
6 CONCLUSION 60
7 BIBILOGRAPHY 60
SYNOPSIS
This study on Indian consumer behavior is aimed to get a better understanding of
the Indian market place thus enabling them to embark on selected strategies to
effectively reach the Indian RURAL consumers.
India is a big country with 28 states, over one billion people and 120 dialects/languages.
From the market perspective, people of India comprise different segments of
consumers, based on class, status, and income.
An important and recent development in India’s consumerism is the emergence of
the rural market for several basic consumer goods. Three-fourths of India’s
population lives in rural areas, and contribute one-third of the national income.
India is a lucrative market even though the per capita income in India is low and
it remains a huge market, even for costly products.
This project report focuses on changing behavior of rural consumers. However I
have restricted report finding and analysis to detergent and soap category. This is done
in-order to draw boundary lines of project and make the report specific. Moreover
the study includes primary analysis of survey done in rural area on detergent and
toilet soaps. The survey focuses on understanding consumer behavior towards toilet
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soaps and detergents.
I hope this report of mine will be useful for further learning.
CHAPTER I
CONCEPTS OF CONSUMER
BEHAVIOUR
4
CHAPTER I INTRODUCTION
Analyzing consumer behavior is perceived as cornerstone of a successful
marketing strategy. Consumer behavior is ‘the mental and emotional processes and
the observable behavior of consumers during searching purchasing and post
consumption of a product and service. Similarly consumer behavior as the action and
decision process of people who purchase goods and services for personal
consumption.
There are four different views related to consumer decision making process and
behavior. It is argued that first of them is ‘economic view’ that consumers are
primarily facing imperfect competition and they are always expected to make
rational decision on the basis of assumptions that they are aware of all product
alternatives, they can rank benefits and limitation of each alternative and are able to
identify one best alternative. Second ‘Passive View’ is absolutely opposite to
economic view and suggests that consumers are irrational and impulsive as they are
submissive to self-centered interests of marketers and got influenced by marketing
tools. Similarly third, ‘ Emotional View’ is related to perceive consumer’s
decision making based on their emotional association or feeling about some
products and services. For instance, a person loosing red color specific pen neither
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go for rational decision by evaluating alternatives ( economic view) nor will the
person get influenced by marketers ( passive view). Rather the person will try to
purchase any pen closely resembled with his favorite possession.
Fourth and arguably most acknowledged view is ‘Cognitive View’ where
consumers are considered as “thinking problem solver’ which are receptive as well
as actively searching for the products and services that can fulfill their need.
Consumer’s behavior under this view is based on information seeking and processing
attributes usually directed by a goal. For instance, buying a tooth paste from shop
can have a certain goal of choosing product that can taste good. Despite of critiques
for each viewpoint, it can be considered a valid argument, that all four types of
decision making behavior exist and provide marketer guidelines to analyze
consumer accordingly. Based on general perception about most acknowledged and
common ‘cognitive view’, asserts broader stages of a consumer’s decision making
process that includes problem identification , information search, evaluation
of alternatives, outlet selection and purchase and post-purchase action.
1.2 Need for studying consumer behavior
Consumer behavior can be said to be the study of how individuals make decisions on
how to spend their available resources (time, money, effort) on various consumption-
related items. This simple definition of consumer behavior tells marketers to resolve
every activity around the ultimate consumer and gauge their behavior by specifically
focusing on:
• Who buys the products or service?
• How do they buy products or services?
• How often do they buy them?
• When do they buy them?
• Why do they buy them? And
• How often do they use them?
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This questions will help in understanding better what factor influence the decision
making process of the consumers. The decision making process identifies the number of
people who are involved in this process and ascribes a role to them – like the users,
decider, influencer, and buyer.
It is believed that consumers or customers make purchase decision on the basis of
receipt of a small number of selectively chosen pieces of information. Thus it will be very
important to understand what and how much information is required by the customer to
help them to evaluate the goods and services offerings.
The involvement of the customer in the decision making process will vary with
the type of purchase involved – like incase of complex product there will be high
involvement and so on. Thus it is very important to understand what customers feels will
help them to able to evaluate goods and services.
The consumer decision making process goes beyond the facets such as what features or
the product design will be acceptable to consumers, what benefits are they seeking from
their products, what price will be suitable etc. Today consumer behavior also includes
the post purchase satisfaction or dissatisfaction behavior. Because the post purchase
behavior will have repercussions on the communication (word of mouth) they have with
the firm’s prospective customers. Usually there are two types of customers – the personal
consumer and organizational consumer.
1.2.1 Personal consumer:
Right from the stimuli till the consumer response, there are many individual and
environment influencing the consumer purchase decisions.
1.2.2Organizational consumer:
The type of buying situation will be different but the categorization in terms of low
involvement and high involvement purchases made by individual is similar.
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The marketers look into the decision-making unit in both the cases i.e. personal purchases
as well as the industrial purchases. Then depending upon the ‘role’ of the person who is
most likely to influence the decision they decide to more of the promotional efforts at
them.
1.3 OBJECTIVES OF THE STUDY
To study the general causes for Changing Indian rural consumer Behavior
To analyze changing mentality of the consumer and their behavior
To find out the most prominent general and various factors that leads to changing behavior of the consumer.
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1.5 LIMITATIONS OF THE STUDY
The information provided by them may be subjected to
personal bias. Some of the respondents were not interested
to express their views.
It is possible that some of the respondents feel uncomfortable and
has backed the study and hence the reliability of the response.
Due to time constraints and busy schedules it was difficult to interact with the consumer completely.
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CHAPTER IIRURAL CONSUMER AND CHANGING DEMAND PATTERN
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2.1 Different Segments of Indian Consumers
2.1.1 The socialites
Socialites belong to the upper class. They prefer to shop in specialty stores, go to clubs on
weekends, and spend a good amount on luxury goods. They are always looking for
something different. They are the darlings of exclusive establishments. They go for high
value, exclusive products. Socialites are also very brand conscious and would go only for
the best known in the market.
2.1.2 The conservatives
The Conservatives belong to the middle class. The conservative segment is the reflection
of the true Indian culture. They are traditional in their outlook, cautious in their approach
towards purchases; spend more time with family than in partying and focus more on
savings than spending. Slow in decision making, they seek a lot of information before
making any purchase. They look for durability and functionality but at the same time is
also image conscious.
They prefer high value consumer products, but often have to settle for the more
affordable one. These habits in turn affect their purchasing habits where they are trying to
go for the middle and upper middle level priced products
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2.2 Rural consumer
About three quarters of the Indian population are in the rural areas and with the growing
middle class, especially in the Indian cities; the spill over effect of the growing urban
middle class is also felt in the rural areas.
The Indian rural market has been growing at 3-4% per annum, adding more than 1
million new consumers every year and now accounts for close to 50% of the volume
consumption of fast-moving consumer goods (FMCG) in India. The market size of the
fast moving consumer goods sector is projected to more than double to US$ 23.25 billion
by 2010 from the present US$ 11.16 billion. As a result, it is becoming an important
market place for fast moving consumer goods as well as consumer durables.
Over the years, as a result of the increasing literacy in the country, exposure to the west,
satellite television, foreign magazines and newspapers, there is a significant increase of
consumer awareness among rural consumers.
Today more and more rural consumers are selective on the quality of the
products/services.
This awareness has made the Indian rural consumers seek more and more reliable sources
for purchases such as organized retail chains that have a corporate background and where
the accountability is more pronounced. The consumer also seeks to purchase from a place
where his/her feedback is more valued. Indian rural consumers are now more aware and
discerning, and are knowledgeable about technology, products and the market and are
beginning to demand benefits beyond just availability of a range of products that came
from ‘trusted’ manufacturers.
The Indian rural consumers are price sensitive and prefer to buy value for money
products.
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2.3 Changing Trends in Indian rural consumer behavior
2.3.1 Bulk purchasing
Urbanization is taking place in rural India at a dramatic pace and is influencing the life
style and buying behavior of the consumers. The rural consumers are depending more
on fast and ready-to-serve food, they take less pain in traditional method of cooking and
cleaning.
Bulk purchases seems to be the trend these days with purchasing becoming more of a
once-a-week affair, rather than frequent visits to the neighborhood market/store/vendor.
The popular growing shopping trend is purchasing from malls to supermarkets.
2.3.2 Lifestyle
The current Indian rural consumer buying behaviour to a large extent has urbanize
influence. There is an increase in positive attitude towards trends. The Indian rural
consumer has become much more open-minded and experimental in his/her perspective.
There is now an exponential growth of trend reaching the Indian consumer by way of the
media and other mediums.
Indian rural consumers have also developed lifestyles which have emerged from
changing attitudes and mind sets; exposure to western influences and a need for self-
gratification. Beauty parlors, eateries, designer wear, watch, hi-tech products are a few
instances which reflect these changes.
2.3.3 Buyers market in the making
The sellers’ market is slowly moving towards becoming the buyers’ market.
Since, India’s economic liberalization policies were initiated in 1991, many new product
offerings have entered the Indian market and product variety has also increased manifold.
Import licensing restrictions are being eliminated and tariffs significantly reduced and
this has led to large range of consumer goods made available in India.
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2.4 Consumer Spending Behavior
The Indian consumer spending has increased from US$ 133.60 in 1992-93 to US$
350.74 in 2002-03, a compound annual growth of 10.13 per cent at current prices.
The way Indian consumers are spending their money on various items has changed in
recent years. The share being spent on the basis (food and beverages) has fallen from
54.07 per cent in 1992-93 to 44.8 per cent in 2002-03. Other items have increased in
importance, for example, medical and healthcare spending has increased from 3.5 per
cent to 8.5 per cent of total expenditure over the same period, a compound growth rate of
19.71 per cent. Similarly spending on transport and communication has grown at 13.2 per
cent.
While the Compound Annual Growth Rate (CAGR) in total consumer spending has been
around 12 per cent a year over the past decade, there have been sharp ups and downs.
Consumer expenditure has been in tandem with the annual GDP growth.
For rural India, per capita 30 days' consumer expenditure of US$ 12.34 was split up
into US$ 6.78, on an average, for food, and US$ 5.56 for non-food. Food expenditure
included US$ 2.25 for cereals and cereal substitutes, and US$ 2.37 for milk, milk
products, vegetables, edible oil and US$ 2.16 on others. on-food expenditure
included US$ 1.11 for fuel and light, and another US$1.00 for clothing, footwear and
US$3.45 on other non-food expenditure.
For the urban sector, average Monthly Per Capita Consumer Expenditure (MPCE) of
US$ 23.53 was split up into US$ 10.00 for food and US$ 13.53 for non-food. Of food
expenditure, US$ 2.37 went towards cereals and cereal substitutes while US$ 3.67 was
spent on milk, milk products, vegetables and edible oil and US$3.96 on other food items.
US$ 2.11 was spent per person per month on fuel and light, and US$ 1.65 on clothing and
footwear and US$9.77 on other non-food items.
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Urban expenditure levels per capita exceeded rural levels for all the product groups,
except on cereals and cereal substitutes. The average monthly per capita
expenditures on cereals and cereal substitutes for rural and urban areas are very
close to each other.
The gap between rural and urban averages of MPCE was of the order of US$ 11.16.
The item-groups viz. milk and milk products, beverages etc, fuel and light,
education, miscellaneous consumer goods & services, conveyance and rent
contributed to the gap significantly.
Non-food expenditure per person in the urban sector was more than double of that for the
rural sector, where it was about US$ 5.55.
In India, the higher income group (>US$2,465) spends more amount of their income on
luxury goods and trendy products than fact moving consumer products.
The middle income group (US$1,162 – US$1,190) spends more on consumer
expendables than the rich.
Combined the middle and the lower income group provide 60 per cent of the value of the
Indian market.
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CHAPTER - III
RESEARCH METHODOLOGY
3.1 Research Design
“A research design is the arrangement of conditions for collection and analysis data in
a manner to combine relevance to the researcher purpose with economy in procedure”
It constitutes the blueprint for the collection, measurement and analysis of
data. As such design includes an outline of what the researcher will do form
writing the hypothesis and its operational implications to the final analysis of data.
As such the design includes an outline of what the researcher will do from
writing the hypothesis and its operational implications to the final analysis of data. More
explicit, the decisions happen to be in respect of:
What is the study about?
Why is the study being made?
Where will the study be carried
out? What type of data is required?
Where can the data found?
What periods of time will the study
include? What will be the sample design?
How will the data be analyzed?
In what style will the report be prepared?
What techniques of data collection will be used?
The Research Design undertaken for the study is Descriptive one. A study,
which wants to portray the characteristics of a group or individuals or situation, is
known as Descriptive study. It is mostly qualitative in nature. The main objective of
Descriptive
study is to acquire knowledge.
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3.2 Source of Data
Data are the raw materials in which marketing research works. The task of data collection begins after research problem has been identified and research design is chalked out. Data collected are classified into primary and secondary data.
Primary data
In this study, the primary data is collected to understand the main reasons behind changing consumer behavior of soap and detergent. This is collected using a questionnaire specifically designed for the consumer of all levels.
Secondary data
Secondary data were collected from the newspapers, journals, websites, and from library books.
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CHAPTER IV
RURAL FMCG MARKET
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4.1 INTRODUCTION
The Indian rural Fast Moving Consumer Goods (FMCG) industry began to shape
during the last fifty odd years. The FMCG sector is a cornerstone of the Indian
economy. This sector touches every aspect of human life. Indian FMCG market has
been divided for a long time between the organized sector and the unorganized sector.
Unlike the US market for FMCG which is dominated by a handful of global players,
India’s Rs. 460 billion FMCG market remains highly fragmented with roughly half
the market going to unbranded , unpackaged home made products.
This presents a tremendous opportunity for makers of branded products who can convert
consumers to buy branded products. Globally, the FMCG sector has been successful in
selling products to the lower and middle income groups, and the same is true in India.
Over 70% of sales is made to middle class households today and over 50% is in rural
India. The sector is excited about a burgeoning rural population whose incomes are rising
and which is willing to spend on goods designed to improve lifestyle. Also with a near
saturation and cut throat competition in urban India , many producers of FMCGs are
driven to chalk out bold new strategies for targeting the rural consumer in a big way.
MART, the specialist rural marketing and rural development consultancy, has found that
53 per cent of FMCG sales and 59 per cent of consumer durable sales lie in the rural
areas. Of two million BSNL mobile connections, 50 per cent went to small towns and
villages; of 20 million Rediffmail subscriptions, 60 per cent came from small towns; so
did half the transactions on Rediff's shopping site. According to a study by Chennai-
based Francis Kanoi Marketing Planning Services Pvt Ltd, the rural market for FMCG is
worth Rs.65,000 crore, for durables Rs 5000 crore, for tractors and agri-inputs Rs.45,000
crore and two- and four-wheelers, Rs.8000 crore. In total, a whopping Rs.123,000 crore.
This could be doubled if corporate understood the rural buying behaviour and got their
distribution and pricing right.
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4.2 Impulse to go Rural
There are many reasons that has urged the FMCG companies to enter the uncharted
territory of rural India. Some of the attractions are discussed below;
4.2.1Large Population
The rural Indian population is large and its growth rate is also high. Over 70% India’s
one billion plus population lives in around 627,000 villages in rural areas. This simply
shows the great potentiality rural India has to bring the much needed volumes and help
the FMCG companies to bank upon the volume driven growth.
Percentage distribution of households and income
4.2.2 Rising rural prosperity
India is now seeing a dramatic shift towards prosperity in rural households. To drive
home the potential of rural India just consider some of these impressive facts about the
rural sector. As per the National Council for Applied Economic Research (NCAER)
study, there are as many ‘middle income and above’ households in the rural areas as there
are in the urban areas. There are almost twice as many ‘lower middle income’ households
in rural areas as in the urban areas.
Distribution of people income-wise
According to NCAER projections, by 2006 – 07, the lowest income class (i.e.Rs.2500
and below) will shrink by more than 60%. The higher income classes are likely to double
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by 2006 – 07. This apparently is the result of development work, which happened under
the five years plans and other special programmes such as land reforms, rural
electrification rural communication, and rural credit facilities, etc. The absolute size of
the rural market is thus expected to double that of urban India. But despite the high rural
share in these categories, the rural penetration rates are low, thus offering tremendous
potential for growth.
According to Mr. D. Shiva Kumar, Business Head (Hair), Personal Products Division,
Hindustan Lever Limited, the money available to spend on FMCG (Fast Moving
Consumer Goods) products by urban India is Rs. 49,500 crores as against is Rs. 63,500
crores in rural India.
4.2.3 Growth in Market
The purchasing power in rural India is on steady rise and it has resulted in the growth of
the rural market. The market has been growing at 3-4% per annum adding more than one
million new consumers every year and now accounts for close to 50% of volume
consumption of FMCG. The growth rates of lot of FMCG are higher in rural markets than
urban markets. In product categories like toilet soaps, talcum powder, cooking oil,
vanaspati ghee, tea, cigarettes and hair oil, the share of rural market is more than 505.
The estimated annual business from rural markets was Rs 1,23,000 crore, comprising Rs
65,000 crore of FMCG, Rs 5,000 crore of durables, Rs 45,000 crore of agricultural inputs
including tractors and Rs 8,000 crore of two-wheelers and four wheelers.
Twenty nine per cent of the rural people own cars, 27 per cent own colour televisions, 24
per cent own refrigerators and 10 per cent own washing machines, which points to the
untapped potential in the rural areas. Companies therefore have to look at the rural
market very seriously for future expansion.
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Rural FMCG market Projections (the below table indicates past data in-order to
show upcoming rural market)
4.2.4 Effectiveness of Communication
An important tool to reach out to the rural audience is through effective
communication. A rural consumer is brand loyal and understands symbols better. This
also makes it easy to sell look -alike. The rural audience has matured enough
to understand the communication developed for the urban markets, especially with
reference to FMCG products. Television has been a major effective communication
system for rural mass and, as a result, companies should identify themselves with their
advertisements.
Advertisements touching the emotions of the rural folks, it is argued, could drive a
quantum jump in sales.
4.2.5 IT Penetration in Rural India
Today there are over 15 million villagers in India who are aware of the Internet
and over 300,000 villagers have used it! Ten years back, history was created with
Public Call Office phone booths (essentially manually operated payphone facilities),
opening in every corner of the country. This experiment was an instant success and
contributed to hundreds of thousands of jobs. Over the next two years, WorldTel is
expected to provide 1000 centers in Tamil Nadu with 2 to 20 terminals in each centre.
If successful, this experiment can be replicated easily to all 27 states leading to over half
a million Internet users through this experiment alone! The existing 600,000 public call
offices in India will soon be transformed into public 'tele-info-centres' offering a
variety of multimedia information services. The rural consumers spend time and
money to access higher level22
information. Studies have indicated that if the content has direct relevance and will result
in commercial gains, people in rural areas are willing to pay for information services.
Consumerism has altered rural buying behavior in recent years. Spending patterns of
those who spend are now adapting to face the technology bug. Today's rural children and
youth will grow up in an environment where they have 'information access' to education
opportunities, exam results, career counseling, job opportunities, government schemes
and services, health and legal advice and services, worldwide news and information, land
records, mandi prices, weather forecasts, bank loans, livelihood options. If television
could change the language of brand communication in rural India, affordable Web
connectivity through various types of communication hubs will surely impact the
currency of information exchange. As the electronic ethos and IT culture moves into rural
India, the possibilities of change are becoming visible.
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4.3 Understanding rural consumer
The rural-urban divide does exist. In many cases, the rural consumer, unlike the urban
one, can't appreciate ads that are clever, gimmicky, suggestive or hi-tech
• The rural consumer is very conscious about getting value for money.
• He understands symbols and colors better, and looks for endorsement by local leaders
or icons.
• He doesn't like to pay extra for frills he cannot use.
• He has his daily routine, and there is no sense of urgency in his lifestyle.
• He has a very high involvement in any product purchased, especially when he decides
to buy high-end products, which cost a few hundreds or thousands of rupees.
Divisions based on caste, community and other hierarchical factors continue to exist in
rural areas. Perceptions, traditions and values vary from State to State and, in some cases,
from region to region within a State.
The case of a well-known brand of shampoo. When it entered the Rajasthan market some
decades ago, with a theatre commercial that showed a beautiful model featuring bouncing
hair, the product bombed. Post-research showed that it was considered indecent for a girl
to show off her hair, and the audience refused to connect with the brand.
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Similarly, MRF bullock cart tyres, there was glaring differences between Western UP and
Eastern UP. While bullock carts in Western UP were smaller vehicles with single
buffalos, in Eastern UP, they were bigger vehicles pulled by two bullocks. In Western
UP, villagers spoke Hindustani whereas in Eastern UP, they spoke Bhojpuri. When we
developed the communication package, we had to keep the above factors in mind.
The first step in the development of any communication package is the in-depth study of
the mindset of consumers of each region for each product category. Remember, it is
suicidal to blindly extend the experience of one product category to another.
While the importance of conceptualizing in the local languages (to capture the local spirit
in the communication aimed at specified rural audiences) is known, what is very often
overlooked is that a rural consumer is not in a hurry and you can take your time to
communicate a message. The quickies beamed on television media, which very often go
over his head, are not for him. In fact, commercials or short tele-films of two minutes or
more do much better.
• Rural folks do not understand clever, gimmicky, quick (fast-paced), suggestive and
hi-tech films.
• Use of unrelated symbols, characters and icons confuse and distance them.
• They want a clear connection between the problem and the solution offered by a
brand.
• It is important to be clued to the region-specific requirements and cater to the typical
tastes of the regional consumers, both in terms of product offerings and
communication packages."
• Creating brands for rural India is a science that will require many ardent students who
are willing to participate in this great big task of doing the different thing altogether
in Branding
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4.4 Brand Positioning in Rural Markets
Branding correlates with Image Building in an organization vis-à-vis its products
produced/services rendered. In the vicinity of today's Marketing scenario along with
advancement in technology, Brand Management is the order of the day. In the process of
branding, the aspect of brand activation at ATL (above the level) and BTL (below the
level) makes a vital contribution for the marketing journey.
To attain a safe platform in Brand activation, the Marketing Managers pay attention and
focus in a diligent manner on the value based credentials of the users in the Marketing
arena. A full-fledged dedicated team with multi focused thoughts only can do the needful
for the successful brand management.
Good branding strikes a chord with viewers help them relate with the product and reflect
their aspirations.
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The research approaches to get at brand objective.
Word Associations:
While using the logo, hoardings and exhibits, suitable jargons have to be deployed in the
word association. People can be asked what strikes in their mind when they hear the
brand's name.
Personifying the Brand:
Visual control mechanism plays a vital role in identifying the brands in terms of
personification. People can be identified the brands when seeing the visual pictures
described.
Laddering up to find the brand essence:
Brand essence relates to the deeper, more abstract goals consumer and trying to satisfy
with the brand. The attribute, a functional benefit and an emotional benefit brand essence
constitute a technique known as laddering up.
Brands are increasingly getting more entwined with our lives. The debate today is not as
much about 'why branding' as above defining a meaningful role for a brand in the
consumer's life.
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4.4.1 Flow chart on branding process
4.4.2Why branding in rural areas
1. Separate your brand from your competitors in a unique way
2. Relevant and motivating to your customers
3. Prospects and channels-it gives you value and make you special.
4. Enhance your perceived value, there by supporting premium pricing, sheltering you
from low price competition.
5. Contributing to share holder value.
6. Provide resilience in times of negative press.
7. Enable you to launch new products more quickly and cost effectively
4.4.3 Successful Branding:
As branding can make or break a product, marketer should handle it with the same
concern as the artisans show in their work. All the activities that are taken under the
umbrella of a brand add to or subtract from the value. The customer's evaluation of a
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brand is a result of all the consumer experiences he has had with the brand. Consumer
experience includes product, services, personal contacts, advertising, promotions, word of
mouth, etc.
This mix of memories, which are built up over a long time, makes the brand potentially
the most powerful liver of the intangible perceived values. After all the first thought that
comes to the mind of the customer prior to the purchase of the product is 'who has made
it', if that brand has good reputation, it raises the level of confidence on the part of the
customer to buy the product.
4.4.4 India's USP
India is shining then! India is Unique in many ways. A population that is large,
heterogeneous, largely English speaking and a cultural heritage that runs back to
thousands of years. India is young. India is vibrant. The major segmentation of mass
population is located in rural area. So, the market potential is large in number. So we can
expect the market strength in rural area. Now, the educational Institutions are also
concentrating on rural marketing and doing market research in rural places. Rural
markets are rapidly growing in India but have often been ignored by marketers. Most of
them are remote-fully ignorant due to the reason of diversification of products produced
thereby slitting into disposable income.
4.4.5 Branding strategy in rural place.
Rural Product Development:
The rural market is a fast growing one and has a huge population with a great level of
disposable income. To encash this, products have to be specifically developed to meet the
needs of rural markets. Sometimes, existing products might have to be modified to suit
these markets too accordingly.
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Rural product development has the strong edifice on a great deal of research like
feasibility studies, rural aspiration, rural profiling and so on. This paves way for a great
deal of infrastructure and expertise in this area.
Rural Branding
Rural branding bears quite different stand from urban branding. The first step towards
rural branding is to research and gain insight into the working of rural markets. Based on
this communication campaigns have to be developed with a lot of rural sensitivity.
Rural branding is attained by way of opting to a greater percentage of local media and a
smaller percentage of the mass media. Rural gatherings like temple festivals, melas, and
cinema halls and so on can be used as venues to promote brands. Direct Marketing and
events like road shows; film shows, melas, street theatre can also be used to promote
brands.
A well-planned rural branding campaign cannot just create brand awareness but help your
target relevant to your brand and promote sales. A long-term campaign will keep your
brand at the top-of-the-mind and build brand loyalty. So the brands are in safe hands.
Rural Market Research
Rural markets behave most differently from urban markets. While many marketers have
tried to market their products in rural areas, just a handful of the same only has
succeeded. A strong insight into rural consumer behavior and sensitivity to their values
and beliefs is essential; to upgrade the rural market rural market research encompasses
not just gathering data but analyzing them and linking the findings to promoting your
products.
Rural Communication Campaigns:
Communication for rural markets calls for a different kind of outlook. There must be a
strong accent on helping the target relate to the message.
30
The entire communication and media strategy has to devise a system based on research
findings. These have to be developed in the regional vernacular languages and set in the
local culture for easier acceptance and reach. Unlike communication campaigns in urban
areas that rely greatly on the mass media, the strategy will be of crying in the wilderness
in rural areas. Besides mass and outdoor media, rural extravaganza like temple festivals,
melas and other events where the villagers come together can be used for promotions.
Rural Events:
In the rural context, one of the best ways to capture the attention of the audience is
through Event-management. Since rural areas have limited venues for entertainment,
conducting an event in rural areas can bring a good response.
A well-planned event can get the product the mileage that we want. Some of the
interesting events that can be conducted are Road Shows, Melas, Street-Theatre, Film
Shows and so on. These make a visually strong impact and build long term brand recall.
Rural public are the target audience and hence the portfolio of event management has to
be handled professionally with diligent care and broad perspective.
Rural DM Campaigns:
Direct Marketing (DM) is one of the most powerful way to meet the target on their turf
and build product awareness as well as promotion. The success of any DM campaign
depends on the field workers and their sensitivity and emotional connectivity to rural
markets.
In the area of Direct Marketing, rural team has to be trained, to be sensitive to rural
culture and beliefs. They can handle activities like Door-to-Door sampling, marketing
and product promotion. These activities can also be carried out innovatively at places like
local cinema halls, melas and festivals, in the midst of cross-cultural gatherings and
conglomerations.
31
CHAPTER V
DETERGENT AND SOAP IN INDIAN RURAL MARKET
32
5.1 Detergents and soaps in Indian rural market
The consumer product industry consists of personal care, cosmetics and home products.
The sector is sub divided into dental care, soaps, detergents, surface cleaning products,
skin care and hair care products.
5.1.1 Market share of consumer products penetration in rural India
Segments Market Size Penetration
Rs bn Urban Rural
Toilet Soaps 46.0 95 % 85.0 %
Detergents 38.0 95% 85.0 %
Hair Color 2.4 20 % 10.0%
Skin Care 7 40% 10.0%
Oral Care 21 75% 20.0%
FMCG products like detergents are of low value but the cumulative budget allocated to
FMCG products by consumers is significant. The price and income elasticity of demand
varies across products. FMCG products are backed by heavy advertising and sales
promotion to induce consumers to buy. FMCG products are neither capital intensive nor
technology intensive. That is, technology is easily available and stable. One of the key
features of the FMCG industry is third party manufacturing (TPM). TPM used to offer
fiscal advantages, especially excise- duty, that has now been rationalized. It provides
other benefits like:
Allowing the company (say HLL) to concentrate on marketing and liberate
manufacturing and the associated overheads & inventory.
Reduction in labor costs. Third party manufacturers are usually small because of
which overheads and labor costs are low. These companies do not have the problems
arising out of unionization that big companies face.
33
Greater control over logistics. It is often necessary to get the product manufactured
near the market to control logistics. A company may enter into agreements with many
third party manufacturers instead of setting up plants all over the country.
The market for detergents is dominated by HLL and Procter & Gamble with four other
companies in the organized sector - Godrej Soaps, Shaw Wallace, Colgate Palmolive and
Nirma. In addition there are numerous players in the unorganized sector. In 1995 the
detergent market was estimated at Rs 6500 cr. Exhibit 10-3 presents a snapshot of the
detergents market. The soaps and detergents industry does not face shortages of raw
material as major ingredients like soda ash, vegetable oils; Linear Alkyl Benzene and
Sodium Triphosphate are available. .
34
5.1.3 Segment Wise Operation of Various Detergents
Premium Segment Economy Segment
Product Company Price Per Kg.Product Company Price
Per Kg.
Ariel Green P&G
180
Super Nirma NIRMA
50
Ariel Front O Mat P&G
175
Ariel Gain Super Soaker P&G
49
Ariel Power Compact P&G
155
Rin Shakti HLL
37
Tide Detergent P&G
85
Mr White HENKEL SPIC
35
Surf Excel Matic HLL
160
Surf Excel HLL
135Popular segment
Surf Washing Powder HLL
82
Nirma Washing powder NIRMA
18
Rin Supreme HLL
75
Nima Green NIRMA
18
Henko Compact HENKEL SPIC
135
Wheel Blue HLL
22
Henko Matic HENKEL SPIC
95
OK detergent HLL
18
Henko Stain Champion HENKEL SPIC
81
Wheel Green HLL
18
35
Reg on W se Sa es O Wash ng
Powde
sou h eas
14% 17%
wes23%
no h46%
Ove a Ma ke Sha e
O he s5% HLL
Sma 35%
Sca e30%
N ma30%
M A R K ET
P LAYERS A D T HEI R S HARE
The major players are: HLL, Nirma,
Henkel Spic (included in others), P & G
(included in others), Small-scale players
t
rt End Use rs
country
Detergents are used by every
household throughout the
North India is the largest detergent market in India while south India is the
smallest detergent powder market across the country
36
37
Consumer habits, practices & perceptions
Most Indian urban
housewives do a system wash
ie they first soak the clothes
in a bucket with powder for
some time followed by
scrubbing with bars
Laundry soaps and synthetic
detergent Bars are relatively
more popular in the rural
areas as tap water is not
easily available in many
villages.
In Synthetic Detergents, bars are also more popular than powders due to cheaper
pricing.
Fragrance is one of the key benefits sought after by consumers, as it connotes
freshness and newly washed clothes.
Consumers attribute greatest importance to whiteness while washing.
Many consumers in lower and lower middle class feel that daily washing of
clothes leads to faster and higher wear and tear of clothes
Washing powders are more popular in the western and northern regions whereas
cakes/bars are more popular in the South.
There is widespread use of detergent powder for other purposes such as washing
utensils and cleaning floors.
Liquid detergents are still not widely used. Usage is restricted for special fabrics
and expensive clothes.
Niche products like fabric softeners, stain removers; color fixers are not widely
used.
Homemade remedies such as application of kerosene/lemon for stain removal,
Salt as color fixer etc are popular.
5.2 HLL Vs NIRMA
Point of comparison irma HLL
Product range (wide)
Pricing
Packaging (sachet)
Place in world
Turnover
Profits
SWOT Analysis
5.3.1 Nirma
STRENGTHS
Backward integration on the
manufacturing process
Focused on mass market mainly
rural India - household name
Low price high quality
Distribution network
WEAKNESS
Weak financial position
High interest cost on new projects
Minimal focus on urban market
OPPORTUNITIES
Introduce detergents in the
premium segment
Markets abroad like Bangladesh,
Nepal & parts of Africa
Acquiring global market share
THREATS
Price wars among detergents in the
premium and economy segments
Competition from HLL
Unorganized sector proving products
at the same or lower price
5.3.2 HLL
STRENGTHS
Market leader
Distribution network
Caters to all the 3 segments of
detergent market
Strong brand equity
WEAKNESS
Finding funds for long term growth
without depressing margins further
Declining sales and profits
OPPORTUNITIES
Expanding in out-of-home
segment
THREATS
A reprising strategy in detergents has
eroded HLL’s profitability.
5.4 Pricing Strategy
HLL operates in all the three segments of the market segment wherein the
premium segment includes detergents falling in the price range of Rs. 75 to Rs.
160 per kg, the economy segment includes Rin Shakti at Rs. 37 per kg and the
popular segment includes detergents falling in the price range of Rs. 18 to Rs. 22
per kg
HLL has incurred losses in the last quarter due to their price reduction under its
competitive price war. Earlier it was incurring profits through its detergents
having high prices and maintaining its leadership.
Nirma operates in the popular and economy segment whrein the economy
segment includes super Nirma at Rs. 50 per kg and the popular segment includes
detergents at Rs. 18 per kg
P&G operates in the premium and economy market wherein the premium
segment includes detergents falling in the price range of Rs. 85 to Rs. 180 per kg,
the economy segment includes Ariel Gain Super Soaker at Rs. 49 per kg
5.5 Marketing P’s
4 P’s
4 P’s Nirma HLL
Price
Place
Product
Promotion
5.5.1 Price:
Nirma detergent powder launched in the mid- Seventies at one-third the price of
its competitor HLL’s Surf. It proved to be hugely successful. To counter Nirma,
HLL brought in its own low-priced detergent powder called Wheel, which also
emerged successful. Launching such low priced variants might mean diluting a
premium brand’s quality and more importantly equity. MNCs are therefore wary of
doing this.
Nirma products are usually priced at a lower rate while HLL uses mid range or
high prices
5.5.2 Place, product & promotion:
The reach of Nirma and HLL is listed in the table. HLL promotes its products
heavily leading to increased customer awareness and it also has a wider product
range, which differentiates it from Nirma.
5.6 Strategy
5.6.1 Hindustan Lever Ltd
Flagship Brand – Surf
Positioning - Premium
Other brands – Rin, Wheel, Sunlight, OK, 555, Ala, Comfort
Surf Excel has been positioned as detergent which has excellent stain removing
capability. However surveys revealed that consumers worried that colored clothes
might wear off faster due to regular use of such high powered detergents. HLL
has therefore changed its advertising theme line from ‘ Surf Excel Hai Na’ to ‘
Daag Hataye, Rang Nahin’.
HLL has adopted a flanking strategy with its brands catering to every customer
segment. Rin and its variants cater to economy segment and premium segments.
Wheel was launched to fight Nirma in the popular end of the market.
Project Shakti
Reinventing the distribution channel
Health and beauty services like Lakme beauty Saloon & Ayush Therapy Centers.
5.6.2 Nirma Ltd
Flagship Brand – Nirma
Positioning - Popular
Other brands – Nirma, Super Nirma
Nirma follows the ‘Value for Money’ strategy for all its products and both its
brands cater to the popular segment of the market. Super Nirma, its brand in the
high end of the economy segment is not a focus area for growth.
Nirma follows the backward integration strategy to become the lowest cost
detergent manufacturer in the world
The company has set up a parallel distribution and sales channel for Nirma. This
consists of 2000 distributors and an independent sales force. A two-tier network
(as against the traditional three tier), the Nirma distribution channel is 'flat'
enabling swift market response
Initiative to expand business in Bangladesh & Pakistan
Nirma will employ effective marketing strategies & continue to reduce cost to
counter increasing price competition
5.6.3 Procter & Gamble
Flagship Brand – Ariel Compact
Positioning - Premium
Other brands – Ariel Super Soaker, Tide
Ariel is positioned in the premium category and is among the most expensive
hand available in the Indian market. The company has launched mid priced
brands like Ariel Super Soaker to cater to the lower income group consumer,
which forms a significant potion of the Indian market.
Tide prices have been slashed by 30% to Rs85 per kg. The company hopes that a
semi premium price positioning will enable it to grow its market share, which has
been stagnating since the last 2-3 years. The price reduction has been possible due
to the company being able to save significantly on distribution costs through
supply chain initiatives and a successful distribution-restructuring project called
the Golden Eye
5.7 Surf Excel & Ariel
5.7.1 Surf excel
1. Surf was launched in 1959.
2. In 1996, Surf redefined this completely when it launched Surf Excel.
3. A pioneer in the Indian detergent powder market.
4. Surf Excel is available in 3 variants:
Surf Excel Blue
Surf Excel Quick Wash
Surf Excel Automatic
Promotions
Various Schemes & Contests-
1. Bucket Scheme
2. 10/10 Contest
Benefits to Distributors & Retailers
1. Distributors-3%
2. Retailers -10%
5.7.2 Ariel
1. Ariel was introduced in India in 1991.
2. Ariel gives you impeccable cleaning in stain removal.
3. Ariel contains unique ingredients that cannot be found in other detergents.
4. Ariel is available in 3 variants:
Ariel Fresh Clean & Spring Clean
Ariel Front-O-Mat
Ariel Ultra-Magic
Promotions
1. Tie-Up With Companies
2. Shiksha Programme
3. Advertisement
5.9 TOILET SOAP
The toilet soaps market is estimated at 530,000 tpa including small imports. Hindustan
Lever is, of course, the market leader.
The market is littered over with several, leading national and global brands and a large
number of small brands, which have limited markets. The popular and premium brands
include Lifebuoy, Lux, Cinthol, Liril, Rexona, and Nirma.
Toilet soaps, despite their divergent brands, are not well differentiated by the consumers.
It is, therefore, not clear if it is the brand loyalty or experimentation lured by high volume
media campaign, which sustain them. A consequence is that the market is fragmented. It
is obvious that this must lead to a highly competitive market. Toilet soap, once only an
urban phenomenon, has now penetrated practically all areas including remote rural areas.
The incremental demand flows from population increase and rise in usage norm impacted
as it is by a greater concern for hygiene. Increased sales revenues would also expand
from up gradation of quality or per unit value.
As the market is constituted now, it can be divided into four price segments: premium,
popular, discount and economy soaps. Premium soaps are estimated to have a market
volume of about 80,000 tones. This translates into a share of about 14 to 15%. However,
by value it is as much as 30%.
5.9.1 Factors affecting buying behaviour
Price is the most important factor which effects the buying behavior of consumer, by
which a consumer goes for the various segment of soap like premium, popular, sub-
popular and carbolic which are basically decided by the cost factor and fat content in the
soap.
The buying frequency is either monthly that is done by the families or in case of
bachelors it is more than once in a month. The occasions when premium soaps are
Demand
1999 00
a 1996 97eY Tonnes
1993 94
1990 91
0 200 400 600
Tonnes
purchased are usually when there are festivals and ceremonies. Moti Soaps are usually
presented during festivals and occasions for presents and gifts.
The promotional techniques help to boost sales. Various tactics like the price off’s, buy
one get two free, free gifts and other schemes help boost sales in short run and also help
in clearing stocks.
One of the important points a soap marketer should note is that the soaps are usually
purchased by women in urban areas as most of the day to day consumption of personal
care products are made by women. A point to note is that women use more personal care
product than men do and hence premium soaps are mostly targeted at them. Men
normally make purchase decisions in rural areas. Hence the marketer has to adopt
different strategy for such a market.
-
r -
-
-
The market shows a seasonal behavior for some brands, i.e. the brands change as per the
customers' need for that particular season. For e.g. in summer - running brand popular
and sub-popular most of the buyer take bath twice in a day specially in northern belt, in
monsoon - running brand antiseptic and medicated soap, in winter running brand
premium (moisturizer and creamy soap).
Ma ke Sha e
s eya O he s 14 8P
4 4
16 8
HLL 64
0 10 20 30 40 50 60 70
%S ha e
5.9.2 Benefits sought by various customers from various brands are
1. Beauty - Lux
2. Freshness – Liril, Cinthol
3. Natural – Medimix, Margo
4. Baby – Johnson & Johnson, Doy
5. Cream – Dove, Doy Care (moisturizing)
6. Medicated – Dettol, Savlon,
7. Glycerin – Pears, Emami
5.9.3 Penetration
One of the factors, which affect the demand of soaps, is the penetration, which the
products have in market. In case of soaps this has not been a major issue as the
penetration in the rural area is as high as 97% and that for urban area is around 99%.
Thus the approximately the penetration is around 99% for overall India.
5.9.4 Market Share (rural areas)
r t r
r
l t r .
.
.
r
In terms of market share, the data indicates that HLL had a market share of 64 per cent in
the soap market, followed by Nirma at 16.8 per cent and Godrej at 4.4 per cent. However,
when contacted by ET, Nirma officials said their market share was in the region of 21 per
cent.
Hindustan Lever is the largest contributor to the toilet soaps market of India. It enjoys
almost a two-thirds share, with the second ranked Nirma Soaps placed at a distantly low
share of 16.8%. Lux and Lifebuoy have held the sway of the market for almost fifty
years. While the former brand remained the preserve of the high-end rich consumers,
Lifebuoy ruled the roost with health-conscious users as a hygienic soap. The products
underwent up-gradations with the introduction of versions like International Lux and
Lifebuoy Personal. In between came brands like Nirma Rose, Nirma Beauty Soap,
Breeze, Caress, and LeSancy. In 1993 came Dove. Earlier, Liril made waves with its
lemon touch and bathing acrobatics.
At the medium and lower rungs, brands like Hamam, Moti, Jai, Rexona (third largest
brand) were well supported by OK and later by OK NSD Bar.
While Pears has dominated as high profile specialty soap, HLL undertook, in 1992, a
project to manufacture the product for the world market at Khamgaon in Maharashtra.
Commercial production commenced in 1993.
To provide a sound base to its toilet soaps operations, HLL has also branched out into
other toiletries like shampoos and related products like glycerin, fatty acids.
Godrej Soaps had a disappointing experience in forging an alliance with Procter &
Gamble (P&G). Infact P&G is withdrawing itself from the premium soap segment like
Camay.
P & G has now a fully-owned subsidiary in India and now it is concentrating more on
personal care products..
Godrej is promoting a number of brands, Cinthol, Ganga, Shikakai, Fairglow, No.1 and
Crowning Glory, while it has others to bother about such as Vigil and Fresca. Cinthol
ranks third and accounts for 60% of all Godrej Soap's brands. It is an old brand launched
about five decades ago in early 1950s. New Cinthol Lime and Cologne gave it a new look
in 1985. Two variants were introduced in 1989 placing an added emphasis on their brand
of soaps. Its deodorant and complexion soap is styled as Cinthol Spice. Cinthol is
perceived largely as a male soap, as Lux is a lady's soap. Ganga did well and a new
version Doodh Ganga has been introduced. Ganga had notched up a 5% market share but
declined to 2% later with sales at Rs 350 mn. Godrej wants to revive it.
Even Nirma has achieved a significant penetration and has notched up an impressive
60,000 tones sale in just three years. Nirma Ltd has been putting up a backward
integration plant to produce soda ash and linear alkyl benzene (LAB).
It seems Indians have sacrificed hygiene at the altar of thrift. If numbers are anything to
go by, Indians do seem to be washing themselves, as well as their clothes, rather less.
Data collated by industry certainly points to this rather unpleasant conclusion. The
consumption of soaps and detergents has shrunk substantially with volumes declining by
11.5 per cent and consumption of detergents declining by 4.1 per cent in the year.
The evidence of this decline in consumption is somewhat perplexing in a country with a
growing population as the consumption of soap and detergents should logically be
directly proportional to population growth. "Soaps and detergents are at the back of the
house and are not status products like TVs or refrigerators. It’s possible that consumers
may be economizing on their use or buying cheaper brands during a downturn," explains
an official at a leading FMCG firm.
One possible reason could be increased production in the small-scale sector. For
instance, besides detergents sold as powders and bars, which is produced by organized
players, a large quantum of detergents are sold in the form of laundry soaps, which are
used for washing clothes. Production of laundry soaps are reserved for the small-scale
sector and data is not readily available. There is also a large cottage industry producing
cheap soap, used for personal wash, for which reliable numbers are not available.
Another possible reason for the apparent decline in consumption could be the free
samples of soap which have been handed out as part of incentive schemes, say industry
sources. “The quantum of such samples may not be picked up in the data,” said the
official.
There is another whacky hypothesis. Many households earlier used soaps for twin
purposes: for body wash as well as shampoo substitutes.
However, successful sachet marketing in shampoo seems to have now penetrated this
market, which has directly impacted the sales of soaps.
A detailed analysis of the data shows that sale of premium soaps, the likes of HLL’s Lux
or Godrej’s Cinthol, declined by 13.1 per cent. But even the carbolic or discount soaps —
the likes of HLL’s Lifebuoy or Nirma — saw volumes decline by 9.9 per cent. Even
though the market has shown de-growth in toilet soaps segment, analyst say that it will
grow at a meager rate of 3 to 4 per cent especially in the premium category, which was
previously looking attractive. This can be attributed to factors like excessive dependent of
Indian rural sector on monsoon, which can be uncertain. Also due to high excise duty
prices have remained high enough to keep the huge middle class chunk away from this
market. Thirdly 80% of the raw materials used in premium soap are imports, which
attract high import duty. All this factors lead to increase in cost, which deters the players
to provide value for money product to the middle class consumer.
Price segments of toilet soaps
Segment Price/weight
Premium > Rs. 15 / 75 gms
Popular Rs. 8-15/75 gms
Economy < Rs. 8 /75 gms
5.10 Companies in rural India
Nirma
Nirma Since the early nineties, Nirma has been challenging the hegemony of Hindustan
Lever, which holds over 54 per cent share of the toilet soaps market. Nirma has so far
managed to snatch 9 per cent share of market.
Almost as an answer to the general perception of low quality, Nirma had invested in the
latest soap manufacturing plant in the world the first of its kind in India. While leading
manufacturers like HLL and Godrej continue to rely on batch manufacturing, Nirma had
sourced the latest Italian technology from Binacchi and CMB and set up a finish line that
produces 500 toilet soaps per minute, wrapped and carton sealed for dispatch.
Ni rma Bea uty So a p:
With its market promise to offer “Better Products, Better Value, Better Living,” Nirma
introduced ‘Nirma Beauty Soap’ in the year 1992. Available in three different variants
and pack sizes, this soap has a TFM content of 70%. Due to its admirable perfume and a
higher TFM content, this brand, within a short span of five years, had achieved the status
of the third largest selling toilet soap brand and still continues its outstanding
performance
Ni rma Li me Fr esh So a p:
This product had created a sensational marketing history in the Indian Toilet soaps
market, when it was launched in 1997. Seventeen million packs of Nirma Lime Fresh
soap were sold in the very first month of its soft launch. Packed in a poly coated 75 gm
carton, which is printed on the world’s best Cerruti 8-colour printing machine, this soap
is available in green colour. With a lime aroma that tingles in one’s sensory buds for a
long time.The product launch of Nirma Lime Fresh had been extremely successful, being
ranked as the Seventh Most Successful Brand Launch for the year 1998.
Nma Ro se:
The remarkable and phenomenal market response received by Nima Rose soap within
just two months of its launch once again proved the merits of Nirma’s commitment
towards its consumers. Nima Rose soap has got an exceptionally soft rose fragrance –
which remains around body for a long time even after bath. The high TFM content of this
product allows a consumer to have pleasant bath. This brand had carved a niche in its
segment by achieving leadership position just within two months of its launch. It is
available in 100g and 150g pack sizes.
Ni ma a ndal .
Over the period, Indian toilet soap market has fragmented & has seen emergence of
prominent floral fragrance segments as Sandal, Rose, Jasmine, etc. Nima Sandal is a one
of such product in floral segment. This toilet soap has 80% TFM content, with rich &
exotic fragrance. It promises benefits of Sandal oil & Turmeric powder. It is a premium
product from Nima stable and is available in 100g and 150g packs.
When Lever made an assault on Nirma Beauty Soap with its Breeze, the Patels quickly
hit back at Levers freshness plank. Nirma Lime Fresh was positioned against Levers Liril
Lime Fresh, but while Liril sold for Rs 12.50, Nirma Lime Fresh sold for Rs 8.
Breaking away from tradition, Nirma introduced a new soap brand, Nima Lime, in the
key markets of Gujarat and Maharashtra. The launch was significant because it was the
first time since the company's inception that Nirma had chosen to move away from its
umbrella branding strategy by adopting a new brand name. With a wrapper price of Rs
6.50 and a total fatty matter (TFM) content of 70 per cent, Nima Lime Fresh was aimed
at the popular segment of the toilet soaps market.
This is Nirma's fourth brand launch in the toilet soaps market. It marked its foray in the
early nineties by launching Nirma beauty soap to take on Lever's best selling brand; Lux.
Nirma followed it up with Nirma Premium, Nirma Lime Fresh.
G ODREJ
Godrej Consumer Products Ltd.(GCPL) is a major player in the Indian FMCG market
with leadership in personal, hair, household and fabric care segments. The company
employs 950 people and has three state-of-the-art manufacturing facilities at Malanpur
(M.P.) Guwahati (Assam) and Silvassa (U.T.).
Godrej is among the largest marketer of toilet soaps in the country with leading brands
such as CINTHOL, FAIRGLOW, and GODREJ NO 1. Their FAIRGLOW brand, India's
first Fairness soap, has created marketing history as one of the most successful
innovation.
Market share in Toilet soaps grows to 8.0% in FY 2004-05 from 6.8% in FY 2003-04.
All three Power brands have begun to perform strongly. However, GCPL is a relatively
small player compared to HLL, in toilet soaps, with a market share of around 8 per cent.
Once the archrival of HLL, it now occupies the number three rank, after HLL (54%
market share) and Nirma (9% market share).
Go drej o .1
Godrej No.1 Beauty Soap stands for True Natural Beauty. Godrej No.1 is available in
five variants enriched with natural ingredients, specially formulated to cater to special
skin types. Sandal, Rose, Jasmine, Natural and Ayurvedic packed with the goodness of
natural ingredients.
F ai rGl ow
The Godrej FairGlow fairness soap contains a powerful fairness ingredient ' Natural Oxy-
G ', which makes you fairer by reducing the dark melanin without changing the skin's
natural balance. In addition, it also removes blemishes to give you a clear, glowing
complexion. Godrej FairGlow Soap was India's first and is the largest selling fairness
soap
C i n t h o l l i m e f r es h
With the extracts of real lime, Cinthol Lime Fresh provides deep cleansing along with
active freshness and vitality. This makes for an invigorating bath that kick starts and gets
you ready for the day.
The soap has an excellent long-lasting lime fragrance that keeps you feeling fresh
throughout the day.
W IPRO
Wipro Consumer Care is yet another principal player enjoying a five per cent market
share. After lying dormant for a decade, Wipro Consumer Care promises moving into top
gear. Wipro has three important brands of soap in its portfolio: Santoor, Milk and Roses,
Chandrika.
San to or so a p
The magic of Sandal & Turmeric comes together in Santoor - a soap that nourishes
your skin with Sandal and Turmeric to make you look much younger.
Santoor offered a combination of sandal and turmeric. Wipro later introduced a new
variant of Santoor - a sandal and besan variant. The new variant offered the combined
benefits of sandal and besan. Santoor's market share is around three per cent. But its low
market share, the company argues, has to be seen in the context of its regional presence.
This, an outcome of limited resources, happened around mid-1990s, as the first round of
revival began. Around this time, the company took a conscious decision to follow a state-
oriented strategy
Chan dri ka
The world’s first Ayurvedic soap brings you the goodness of nature to give you healthy
and glowing skin. Chandrika, the 65-year-old brand, now marketed by Wipro Consumer
Care and lighting, sports contemporary packaging, a new shape and has many new
additions to the host of Ayurvedic ingredients it is made of.
C o l g a t e - P a l m o l i v e ( I n d i a ) L t d . - the marketer of personal care products, offers ‘ultra
modern’ line of Transparent Palmolive Natural skincare soaps. Palmolive has been the
pioneer in introducing soaps for different skin types (example Palmolive Extra Care for
Dry Skin, for Oily Skin and for Normal Skin). Its latest range is a combination of
moisturizing glycerin, essential oils and a mixture of premium natural herbs and flowers.
It is available in two variants – ‘Relaxing’ and ‘Soothing’. Long-lasting and refreshing,
the floral fragrance is aimed at making the user feel cared-for and looked-after. The price
is Rs.17 for a 100-gm cake.
R e c k i t t Be n c k i s e r - a niche player in the Indian soap market owns the well known brand
‘Dettol’. It had launched a new product - Dettol Extra Soap. The Dettol Extra Soap is an
extension of the company's existing range of soaps under Dettol brand. It has a
formulation that provides Dettol protection and also contains moisturizes that prevent
skin dryness. The soap has a pleasant new fragrance and a convenient saddle shape,
making it easy to hold. A 75 g bar is priced at Rs.15.
CHAPTER VI CONCLUSIONS
CAPTER VICONCLUSIONS
In the end it is certain that SOAP & DETERGENT companies will have to
really gain inroads in the rural markets in order to achieve double digit growth targets in
future. There is huge potential and definitely there is lot of money in rural India but the
smart thing would be to weigh in the roadblocks as carefully as possible. The companies
entering rural market must do so for strategic reasons and not for tactical gains as rural
consumer is still a closed book and it is only through unwavering commitment that the
companies can make a dent in the market. Ultimately the winner would be the one with
the required resources like time and money and also with the much needed innovative
ideas to tap the rural markets.
The Fast Moving Consumer Goods (SOAP & DETERGENT) sector is a
corner stone of the Indian economy. This sector touches every aspect of human life.
The SOAP &DETERGENT producers now realize that there is a lot of opportunity for
them to enter into the rural market. The sector is excited about the rural population
whose incomes are rising and the lifestyles are changing. There are as many middle
income households in the rural areas as there are in the urban. Thus the rural marketing
has been growing steadily over the years and is now bigger than the urban market for
SOAP’s &DETERGENT’S . Globally, the SOAP & DETERGENT sector has been
successful in selling products to the lower and middle income groups and the same is
true in India. Over 70% of sales is made to middle class households today and over 50%
of the middle class is in rural India. Also with a near saturation and cut throat
competition in urban India, many producers of SOAP’S & DETERGENT’S are driven to
chalk out bold new strategies for targeting the rural consumers in a big way.
But the rural penetration rates are low. This presents a tremendous
opportunity for makers of branded products who can convert consumers to buy branded
products. While developing the strategies, the marketers need to treat the rural consumer
differently from their counterparts in urban because they are economically,
socially and psycho- graphically different to each other. This paper covers the
attractions for the SOAP’S & DETERGENT’S marketers to go to rural, the challenges,
the difference between the rural and the urban market and the suitable marketing
strategy with the suitable example of companies and their experience in going rural.
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