Moti Soap Project 1u5u21
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Rebranding ‘Moti’ Soap
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Ankit Bansal Kaustubh Giri
(215) Dipesh Jain (216)
Puneet Rathi (243) Abhay Sharma (247) Shreya Sood (250) Contents
Toilet Soaps- An Introduction.................................................................................3 REBRANDING MOTI SOAP
Toilet Soaps- An Introduction 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 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: , popular, discount and economy soaps. soaps are estimated to have a market volume of about 80,000 tonnes. This translates into a share of about 14 to 15%. However, by value it is as much as 30%.
Sector Analysis
Market Segmentation
Soaps are also categorized into men's soaps, ladies' soaps and common soaps. There are a few specialty soaps as transparent Glycerine soaps, sandal soaps, specially flavored soaps, medicated soaps and baby soaps. Specialty soaps are high valued but enjoy only a small share of the market in value . The market is growing at 7% a year. This means that the incremental demand generation is 5% over and above the population growth. With increasing awareness of hygienic standards, the market could grow at a rate higher than 8% annually. Interestingly, 60% of the market is now sourced from the rural sector. This means that the variance between the two segments is not very large. Since upper-end market focus is the urban areas, margins come from the urban sector
Market Share of Soap manufacturing companies in India
In 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 ed 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 s 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 ed by OK and later by OK NSD Bar.
The brands have undergone a full foray of launches and relaunches, making each occasion to give a more vigorous thrust to the marketing effort. Quite a few of the brands have been acquired: Hamam from TOMCO and Baby Toilet soap from Johnson & Johnson, for example. To provide a sound base to its toilet soaps operations, HLL has also branched out into other toiletries like shampoos and related products like glycerine, 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 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 retained all soap brands and transferred detergent brands to P&G in 1993. Godrej found it convenient to shed the detergent brands - Ezee, Key, Biz and Trilo - as they represented a losing portfolio. Capacity utilization in the industry varies from as low as 50% to 80%. Godrej Soaps Limited (GSL) has been using its capacity by working for other producers. GSL makes Rexona and Dettol for Reckitt & Colman of India and Johnson's Baby Soap for Hindustan Lever (Johnson & Johnson). And yet only half of its capacity of 71,000 tonnes is being used. Also companies like VVF Ltd. has state of the art technology oriented plants, which they mostly use for producing brands like Dettol, Nivea Creame soap and also internationally well know brands like Fa for other marketers. 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 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 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 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.
SWOT ANALYSIS OF SOAP INDUSTRY Strengths Soap penetration: soap has a very high penetration of 95% in the urban region while the rural region contributes to 85% penetration, which shows a potential for growth in the rural sector.Soaps is a Delicenced Industry, which symbolizes that any individual with finance and marketing skills can enter the industry. Weakness The duty structure: excise duty is at the rate of 16% on all toilet soaps and the sales tax structure varies from state to state with a minimum of 8 % in some states ranging upto 20 % in most of the southern states like Andra Pradesh, Tamil Nadu, and Orissa India solely depends on the Imports for vegetable oil mainly from Malaysia & Indonesia and import duty is as high as 35%. The large-scale organized sector where the Technology and Capital Invested are high. The other popular and carbolic soaps are manufactured by small manufacturing units predominantly existing in the southern sector. Opportunity Indian Exports for Soaps are quite insignificant. The reason being other South Asian countries like Malaysia, Indonesia and China have Palm Oil available in abundance. Hence exporting Soaps becomes an expensive proposition. India can concentrate on exports of specialty soaps like ayurvedic, herbal and special categories like fairness soaps. Internet is fast emerging as a strong distribution channel and the new players are finding it easier to launch assaults through this medium very effectively.
In the world of cut throat competition ‘Quality’ at an affordable price is the new mantra. Companies are trying every measure to improve the quality of the product by maintaining or at times even decreasing the price to make the product affordable and competitive. Presence of a large unorganized market: branded products can wash the unorganized market by providing value for money products at competitive market Threats Industry Growth – the entire soap Industry is growing at a minimal rate of 3 % and the entire FMCG industry is ing through turmoil, where the soap segment ed actually a negative growth leading to saturation.The only players we see are the low (cheap) quality soaps from countries like Indonesia, Malaysia and China, which has a low freight cost structure and also a substantially low cost of manufacturing.
HUL COMPANY ANALYSIS: HUL-The FMCG Giant 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 placed at a distantly of 16 %. Some of the big brands in Soaps are Lifebuoy, the largest selling soap in India, Lux, Liril, Pears, Hamam, Rexona, Breeze, Dove, and Savlon. 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 s 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 Breeze, Caress, 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 ruling the roost. While Pears has dominated as high profile specialty soap. To provide a sound base to its toilet soaps operations, HLL has also branched out into other toiletries like shampoos and related products like glycerine, fatty acids. Denim is HLL’s franchise for Men’s toiletries. The Core Competencies of HLL is its nation wide strong Distribution network. Before we look at its distribution network, the best so far in this country, let us reflect on the rural India scenario. Around 700 million people, or 70% of India's population, live in 6,27,000 villages in rural areas. 90% of the rural population is concentrated in villages with a population of less than 2000. The statistics is daunting. Particularly for HLL, which markets Packaged Mass Consumer Goods (PMCG) of everyday use, the size of the rural market makes it essential to tap. HLL has traditionally focused on the rural market. Several of the company's major business categories, such as Fabric Wash, Personal Wash and Beverages, already get over 50% of their sales from rural areas. Rich Company Poor Consumers: The Plan of Action HLL realises that there is much more that needs to be done. To service rural markets, the key issues that need to be addressed are the 3 important A’s viz. availability, awareness and overcoming prevalent attitudes and habits. Extending Availability Data on rural consumer buying behaviour indicates that the rural retailer influences 35% of purchase occasions. Therefore, sheer product availability can determine brand choice, volumes and market share. Project Streamline was conceptualized to significantly enhance HLL’s control on the rural supply chain through a network of rural sub-stockists, who are based in these very villages. As part of the project, higher quality servicing, in of frequency, credit and full-line availability, is provided to rural trade. Thereby, giving HLL a substantial competitive edge over the next decade. The principle of Project Streamline is to leverage HLL’s scale and organizational synergy to increase reach in rural markets. The pivot of Streamline is the Rural Distributor (RD), who has15-20 rural sub-stockists attached to him. Each of these sub-stockists is located in a rural market. The sub-stockist then performs the role of driving distribution in neighboring villages using unconventional means of transport such as tractor, bullock cart, and other means of transport. From 1998, the project has been rolled out in select states of the country where the terrain or poor stage of market development typically makes any distribution system unviable. The Streamline system has extended direct HLL reach in these markets to about 37% of India's rural population from 25% in 1995. Most important, the number of HLL brands and SKUs
stocked by village retailers has gone up significantly. Having done that, the project now aims to expand our coverage to 50% of rural population by 2003. Influencing Affordability Influencing affordability Project Streamline focused on extending distribution, Project Bharat’s influence was restricted to raising penetration and awareness levels. On the anvil, is a new rural program, which will reach villages with a population below 2000 and influence income as well. This path-breaking venture aims to facilitate the doubling of our share of the rural consumer's wallet in three years. The model is unique in that it influences all the variables that influence growth. The model triples physicals reach, doubles communication reach, creates a platform for influencing attitude changes and raising incomes. Enhancing awareness Mass media reaches only 57% of the rural population. Generating awareness, then, means utilizing targeted, unconventional media including ambient media. HLL has been utilizing events such as fairs and festivals, etc. as occasions for brand communication. Cinema vans shop-fronts, walls and wells are other media vehicles that we have utilized to heighten brand and pack visibility.
Project Shakti: HLL soon realized that although it was enjoying a greater penetration in the rural market when compared with its competitor such as Nirma and ITC, its direct reach was restricted to only 16% . The FMCG giant was desperate to increase this share. HUL saw its dream fulfillment in the vast Indian rural market. The company was already engaged in rural development with the launch of the Integrated Rural Development Programme in 1976 in the Etah district of Uttar Pradesh. This program was in tandem with HUL's dairy operations and covered 500 villages in Etah. Subsequently, the company introduced similar programs in adjacent villages. These activities mainly aimed at training farmers, animal husbandry, generating alternative income, health & hygiene and infrastructure development. The main issue in rural development was to create income-generating prospects for the poor villagers. Such initiatives, linked with the company's core business, became successful and sustainable and proved to be mutually beneficial to both the company ant its rural customers. However, much remained to be done. Project Shakti was conceived. Following the pioneering work carried out by Grameen Bank of Bangladesh , Self Help Groups (SHGs) of rural women were formed by several institutions, NGOs and government bodies in villages across India. This group of usually 15 contributed a small amount of money to a common pool and then offered a micro-credit to a member of the group to invest in a commonly approved economic activity. Partnering with these SHGs, HLL started its Project Shakti in Nalgonda district of Andhra Pradesh in 50 villages in the year 2000. The social side of the Project Shakti was that it was aimed to create income-generating capabilities for underprivileged rural women, by providing a sustainable micro enterprise opportunity, and to improve rural living standards through health and hygiene awareness. Most SHG women viewed Project Shakti as a powerful business proposition and are keen
participants in it. There after it was extended in other states with the total strength of over 40,000 Shakti Entrepreneurs. HLL offered a wide range of products to the SHGs, which were relevant to rural customers. HUL invested significantly in resources who work with the women on the field and provide them with on-the-job training and . HUL provided the necessary training to these groups on the basics of enterprise management, which the women need to manage their enterprises. For the SHG women, this translated into a much-needed, sustainable income contributing towards better living and prosperity. Armed with micro-credit, women from SHGs become direct-to-home distributors in rural markets In general, a member from a SHG was selected as a Shakti entrepreneur, commonly referred as 'Shakti Amma' received stocks from the HLL rural distributor. After trained by the company, the Shakti entrepreneur then sold those goods directly to consumers and retailers in the village. Each Shakti entrepreneur usually serviced 6-10 villages in the population strata of 1,000-2,000 people with 4-5 major brands of HLL - Lifebuoy, Wheel, Pepsodent, Annapurna salt and Clinic Plus. Apart from these, other brands included Lux, Ponds, Nihar and 3 Roses tea. The Shakti entrepreneurs were given HLL products on a `cash and carry basis.' However, the local self-help groups or banks provided them micro credit wherever required. According to Dalip Sehgal, Executive Director, New Ventures & Marketing Services, HLL Project Shakti was adding up to 15% of HLL sales in rural Andhra Pradesh. He further asserted that given the largeness of the country and backwardness of its women, Project Shakti-like endeavor would place everybody in a win-win situation. Overcoming attitudes and habits Creating distributive reach is not sufficient to tap the rural markets. Market development can be a difficult task because in rural India, both consumption and penetration of Soaps is quite low. For instance, even for other personal care products only three out of 10 people in rural areas use toothpaste or talcum powder, or shampoo and skin care products, and only six use washing powders. In Soap category, which has the most high penetration amongst the other PMCG, the consumption is barely once per five bathing occasions. Project Bharat, the first and largest rural home-to-home operation to have ever been mounted by any company, sought to address many of these issues. The operation was conducted in high-potential districts of the country. The exercise was started by the Personal Products Division in 1998, and covered 13 million households by the end of 1999. In the course of the operation, company vans visited villages across the country and distributed sample packs comprising a low-unit-price pack of soaps. The distribution was ed by explanation of product usage and a video show, which was interspersed with product communication. Thus we generated awareness of its product categories and the availability of affordable packs. Consumers were also made aware of the superior benefits of using our products vis-à-vis their current habits (example: stress on hygiene), and the affordability of the pack sizes on offer. The project, thus, successfully addressed issues of awareness, attitudes and habits. Hopefully, as consumers in rural areas get exposed to such value-added, value-for-money alternatives, they will continue to buy into the categories. The project saw a 100% increase in
penetration, -ship and top-of-mind awareness in the districts targeted. However, sampling once is not adequate to convert non-s. So Personal Products rolled out a follow-up program, the Integrated Rural Promotion Van (IRPV), to once more target villages with a population of over 2,000.
HUL – SWOT Analysis Strengths •
Strong Brand equity
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Cutting edge distribution network in place, which ensures that the products reach across the length and breadth of this vast country.
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Maintaining favorable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things.
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Nationwide manufacturing facilities :The diverse product range of this giant is manufactured in close to 100 factories, located across the length and breadth of India. The operations involve 2,000 suppliers and associates. About 28 factories are situated in backward areas. In fact, all major investments of HLL, in recent years, have been either in A-Category backward areas or No-Industry Districts. These include factories in Khamgaon and Yavatmal (Maharashtra), Chhindwara (Madhya Pradesh), Orai and Sumerpur (Uttar Pradesh), Dabgram (West Bengal), Silvassa (Dadra & Nagar Haveli) and Pondicherry.
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Taking over sick enterprises, in response to requests from government authorities, and converting them into viable operations. The company's units at Mangalore, Rajpura and Gajraula all bear testimony to this achievement. In the process, HLL has saved precious jobs and developed local economies.
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State-of-the-art research facility : HLL has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Lever Research Centre (HLRC), with facilities in Mumbai and Bangalore, has over 100 highly qualified scientists and technologists, many with post-doctoral experience acquired in the US and Europe. Set up in 1958, HLRC’s aim is to develop new products and processes, improving benefits and quality of existing products, optimal use of resources, energy conservation and pollution control. The company has many achievements in these areas, with 169 patents till date.
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Product and process innovation : HLL has also developed the capability to design and manufacture machines in-house or have them assembled by third parties as per given specifications. This enables the company to set up plants at half the cost of others. Such technological developments have also led to significant improvement in productivity. The capacity of a toilet soap line has gone up from 6,000 tonnes per annum in the early nineties to 10,000 tonnes per annum now, while that of a detergent bar line has gone up from 7,000 tonnes per annum to 25,000 tonnes per annum now, thus substantially increasing capital productivity.
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Constant Marketing Initiatives – Some unique ones : What better place to educate people about the importance of frequent soap use than where 70 million people come to clean themselves? Hindustan Lever ed the pilgrims visiting Allahabad for Kumbh Mela, the religious festival held every 12 years. Executives wanted to show that dirt is always present, though often invisible. Marketers waved an ultraviolet-
light wand over attendees' hands to show where germs and dirt resided. While the pilgrims came to bathe at the confluence of India's sacred rivers to cleanse their souls, they also learned to keep their hands free of pathogens. The village street theaters represented a more emotional play. Lever and Ogilvy Outreach, the unconventional marketing arm of Ogilvy & Mather, recruited local magicians, dancers, and actors who knew each market and village that the company wanted to target. In total, 50 teams of 13 performers were recruited to serve as connections between the brands and the residents. Scripts were changed for different dialects, education levels, and religions. In all, Ogilvy coordinated two-hour performances at 2,005 haats over six months. The results seem compelling. Awareness of Breeze, a low-cost soap with more of a beauty pitch, increased from 22% to 30% over the six months that the performances were running. Opportunities •
Converting the s of the Popular segment of soap to the segment.
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Presence of a large unorganized sector, who find it difficult to import oil from south east Asian countries hence buy oil from local manufacturers and cannot produce on the economies of scale.
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HLL is countries one of the largest five exporters, but exports in the soap segment are bare minimal.
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Increase in Discretionary Spends :Discretionary spends of consumers is already on the rise; and it would continue to increase in the future. This would be particularly of interest to HLL in the personal products business.
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Business to Business connectivity B2B connectivity (between a company and its supply chain partners) would help reduce costs, improve inventory management, facilitate flow of information and enhance efficiency in the distribution system. The challenge for companies in B2B would be to ensure that all supply chain partners operate on a common platform and packages. HLL would therefore, need to consider lending to their supply chain players to bring about uniformity of operating platforms. B2C too will grow, but will not be a major strategic focus for companies selling low-value items.
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Untapped rural market : The rural markets are expected to witness a different kind of a shift. As companies aggressively compete to get a higher share of the rural pie, competitive advantage will lie with those who have a higher reach. An effective way to achieve reach in rural markets would be to farm out, to divest the reaching mechanisms to third-parties like stockists/star-resellers, etc.
Threats Major threat, especially to the soaps of HLL is that of Down-threading, the prolonged drought in the North and West of the country (until 2000) and the sharp fall in the farm disposable incomes has persuaded the households to downtrade, that is , switch from
high to low-priced brands resulting in a de-growth in the segment. This can lead to the cannibalization of its own brands in the segments. Competition activity, in particular the pricing and advertising strategies of main competitors. Backward Integration resorted by other players (Nirma producing Caustic Soda), giving others a cost advantage. Success of new launches in the niche segment by the competition Volume growth in personal products and ability to protect market share Raw material (Palm Oil) prices as cost increases cannot be ed on fully, in a competitive scenario.
HISTORY OF MOTI SOAP IN INDIA Moti was India's brand of soaps during the seventies.Now there is no trace of this brand. During the earlier 80s Moti Luxury Bath Soap was the best of its kind and mainly considered best to be suited for the upper-class of people. The true reason remained to be its cost aspect. A small bar of Moti Soap costed almost around INR 25/- which was quite an elevated cost during those years. Even mini sized bars weighing around 50g were sold to facilitate the purchase of travellers. Moti was promoted as a soap . Only now we find Hamam
and such other soaps also marketing similar mini-soaps, whereas in those days only Moti sold mini-soaps too to promote the sales. Moti was a special soap which had certain differentiation. The first differentiation point was the Shape. Unlike other soaps which came in cake form, Moti was round soap. Moti is the vernacular term for Pearl . So the soap was also in the shape of pearl. Another uniqueness was the size of the soap. Moti was a big soap. Often one gets bored of the soap and it never quite finish fast. Moti came in popular fragrances like Gulab(Rose),Scented white cream and Sandal. White Cream Moti: The White Cream Moti Soap almost resembled our Lux soap but it was a round shaped soap like the Mysore Sandal. But of course, Mysore Sandal was also marketed in an oval shape. The white cream Moti was a cream-rich soap. It had moisturizing agents which kept the skin smooth and glossy. So, you weren’t required to use moisturizers after bathing. This was best suited for normal & dry skins. Prolonged usage of the cream Moti Soap had been proven to take away the cracks from the skin and make gruffy skin smoother. Since the white Moti Soap retained the moisture of the skin and gave it a long-lasting shine, the aged looks due to dryness of the skin were prevented. This was made of 100% vegetable oils and contained absolutely no artificial, chemical or animal ingredients. Sandal Moti: This was a round-shaped half-cream (semi-sandal) coloured soap having a very mild fragrance of sandal. Like the cream soap, the sandal soap also contained pure vegetable oils, natural moisturizing agents and some of the essential natural components. People who used Moti Sandal soap really enjoyed their bathing experience with its mild sandal aroma. The sandal incense on the skin lasted longer, giving a freshness throughout the day. Gulab Moti: It was a round shaped rose d soap that brought refreshment, rejuvenation and replenishment to your body that lasted all day long. It was also a soap which provided rich lathering experience to the consumer during the bath. Moti originally was a brand of Tata Oil Mills Company ( TOMCO). Tomco also promoted this brand heavily. Most of the campaign had a signature brand imagery the soap surrounded by pearls. Those ads were in most of the magazines during the peak stage of this brand. Pearls formed an important role in the entire brand communication and pearl was an anchor which created an association with the brand in the consumer's mind.Among the different fragrances marketed, Moti White Cream soap was the one shown in Ads which was placed in between ravishing glossy white pearls. Some thoughts about Moti: GOOD:
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Due to the natural ingredients in Moti Soaps, it did not cause any allergy even on the most sensitive skins. Had natural moisturizing agents which kept the skin smooth & glossy The fragrances were very pleasant and found to last longer on the skin
BAD: • •
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There were no anti-bacterial ingredients and so was not recommended for use of children. Dissolved faster when compared with other slow-liquefying soaps – Fragrance used to longer, but the Soap did not… High Cost
In 1993, TOMCO merged with HLL Moti then moved to HLL following the merger. That marked the end of this brand. Why HLL decided to sideline Moti soap is not known. The brand was never promoted and slowly the brand faded into oblivion. Some probable reasons for the brand’s death •
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The reason for this brand's death may be because it did not fit into the brand portfolio of HLL. While Hamam ( another Tomco brand ) thrived, Moti was never in the picture.Then with the Power Brand strategy, brands like Moti never had a chance to survive. The brand had prospects if HLL had done some serious product development. In the branding perspective Moti had certain assets. The name and the imagery were wonderful assets for a marketer. Moti had both these assets. The problem was probably with the product. There were things missing in the soap (as has been mentioned earlier in the bad thoughts about moti) which ultimately led to the death of this brand. Another factor might be at the segmentation side. Now also the market for a soap is abysmally low in India. Now also there is no successful brand of soaps in India ( Essenza de wills is trying hard ). Also after some time Moti Soap had lost its charm, the reason being the excessive competition in the market and the more & more many other brands were offering same variety of soaps (with similar fragrances too) at very competitive prices.
So it was also a tough choice for HLL. The company may have felt that Moti did not have a future as a soap. And it may cannibalize some existing brands if the prices are rationalized. Moti may had to be repositioned if it had to survive . But HLL was not prepared to invest in a brand which had a minuscule 2% of the market. So the decision was to slowly kill the brand.
REBRANDING MOTI SOAP Modified Marketing Mix Product • • • • • Place
The traditional Circular shape is the differentiating factor hence it should be retained The size available is too large. Hence, smaller sizes should be made available in the markets depending about the requirement of the consumer. Different colours and fragrances should be introduced in different markets depending upon the taste of the locals and feasibility of the product Experimenting with new fragrances and introduce newer variants in the market Packaging to be made attractive in keeping the current trends and the earlier design should be discarded.
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The soap should be relaunched at the Pan India level rather than launching it at the state level. Different parts of the country prefer different variants and fragrances. This thing should be kept in mind while promoting the soap in those regions .Eg., North Indian markets prefer Lime and Citrus fragrances whereas southern markets prefer Medicinal and herbal variants Rural markets contain 70% of India’s population and hence targeting the rural market will prove very beneficial. HUL can utilise its Project Shakti in rural areas to make the consumer aware about the Moti Soap and also to sell the soaps there. This will give HUL the edge over others. But the product will have to be customised for the rural markets in totally separate ways. Moti Soap should be made available with many retailers and distributors so that there is no shortage of the product when a consumer wants to buy the soap. HUL’s distribution network is a huge advantage to make this possible.
Distribution Strategies: Movement of goods and services from the source through the distribution channel, right up to the final consumer, or and the movement of payment in the opposite direction, right up to the original producer or supplier Channels of distribution: A distribution channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent)intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary got the items at one pricing point and moves it to the next higher pricing point until it reaches the final buyer also called channel of distribution or marketing channel.
The Importance of Distribution: Most producers use intermediaries to bring their products to market they try to develop a Distribution channel to do this. A distribution channel is a set of Interdependent organizations that help make a product available for use or consumption by the consumer or business . Channel intermediaries are firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business . A company’s channel decisions directly affect every other marketing decision. Place decisions, for example, affect pricing. Marketers that distribute products through mass merchandisers such as Wal-Mart will have different pricing objectives and strategies than will those that sell to specialty stores. Distribution decisions can sometimes give a product a distinct position in the market. The choice of retailers and other intermediaries is strongly tied to the product itself. Manufacturers select mass merchandisers to sell mid-price-range products while they distribute top-of-the-line products through high-end department and specialty stores. The firm’s sales force and communications decisions depend on how much persuasion, training, motivation, and its channel partners need. Whether a company develops or acquires
certain new products may depend on how well those products fit the capabilities of its schannel . Some companies pay too little attention to their distribution channels. Others, such as FedEx, Dell Computer, and Charles Schwab have used imaginative distribution systems to gain a competitive advantage. Functions of Distribution Channels: Distribution channels perform a number of functions that make possible the flow of goods from the producer to the customer. These functions must be handled by someone in the channel. Though the type of organization that performs the different functions can vary from channel to channel, the functions themselves cannot be eliminated. Channels provide time, place, and ownership utility. They make products available when, where, and in the sizes and quantities that customers want. Distribution channels provide a number of logistics or physical distribution functions that increase the efficiency of the flow of goods from producer to customer. Distribution channels create efficiencies by reducing the number of transactions necessary for goods to flow from many different manufacturers to large numbers of customers. This occurs in two ways. The first is called breaking bulk. Wholesalers and retailers purchase large quantities of goods from manufacturers but sell only one or a few at atime to many different customers. Second, channel intermediaries reduce the number oftransactions by creating assortments providing a variety of products in one location—sothat customers can conveniently buy many different items from one seller at one time. The transportation and storage of goods is another type of physical distribution function. Retailers and other channel move the goods from the production site to other locations where they are held until they are wanted by customers. Channel intermediaries also perform a number of facilitating functions, functions that make the purchase process easier for customers and manufacturers. Intermediaries often provide customer services such as offering credit to buyers and accepting customer returns. Customer services are oftentimesmore important in B2B markets in which customers purchase large quantities of higher priced products.
Promotion • • • •
A Robust branding exercise should be undertaken and Moti soap should be re launched on a large scale. All the modes of communication should be effectively used and an ‘Integrated Marketing Communication’ plan should be prepared and implemented. A Buzz should be created in the market so that it generates curiosity and this helps to increase the recall value. Promotional Schemes should be introduced while launching the product.
Promotional Plan • Define a specific objective. • Determine a workable distribution plan to a targeted audience.
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Create a central theme. Develop a message to the theme. Select a promotional product that bears a natural relationship to your profession or Communications theme. Don't pick an item based solely on uniqueness, price or perceived value. Don't fall prey to the latest trends or fads. The most effective promotional productsare used in a cohesive, well-planned campaign.Sales promotions are nonpersonal promotional efforts that are designed to have animmediate impact on sales. Media and non-media marketing communications areemployed for a pre-determined limited time to increase consumer demand, stimulatemarket demand or improve product availability
Price • •
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Historically, Moti has been a very expensive soap costing around 25 Rs during eighties which was pretty high by any standards Prices have to be reduced to gain a sizable market share and this will have to be done by reducing the sizes so that they cost less Price to be kept somewhere between lux and pears. Certain fragrances will cost more. These have to be targeted towards the segment in the urban markets. Also price will have to be be contingent upon the place and competitors. Prices should not be the basis of competition and hence constant product improvement should be the way ahead.
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Ankit Bansal Kaustubh Giri
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Puneet Rathi (243) Abhay Sharma (247) Shreya Sood (250) Contents
Toilet Soaps- An Introduction.................................................................................3 REBRANDING MOTI SOAP
Toilet Soaps- An Introduction 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 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: , popular, discount and economy soaps. soaps are estimated to have a market volume of about 80,000 tonnes. This translates into a share of about 14 to 15%. However, by value it is as much as 30%.
Sector Analysis
Market Segmentation
Soaps are also categorized into men's soaps, ladies' soaps and common soaps. There are a few specialty soaps as transparent Glycerine soaps, sandal soaps, specially flavored soaps, medicated soaps and baby soaps. Specialty soaps are high valued but enjoy only a small share of the market in value . The market is growing at 7% a year. This means that the incremental demand generation is 5% over and above the population growth. With increasing awareness of hygienic standards, the market could grow at a rate higher than 8% annually. Interestingly, 60% of the market is now sourced from the rural sector. This means that the variance between the two segments is not very large. Since upper-end market focus is the urban areas, margins come from the urban sector
Market Share of Soap manufacturing companies in India
In 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 ed 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 s 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 ed by OK and later by OK NSD Bar.
The brands have undergone a full foray of launches and relaunches, making each occasion to give a more vigorous thrust to the marketing effort. Quite a few of the brands have been acquired: Hamam from TOMCO and Baby Toilet soap from Johnson & Johnson, for example. To provide a sound base to its toilet soaps operations, HLL has also branched out into other toiletries like shampoos and related products like glycerine, 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 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 retained all soap brands and transferred detergent brands to P&G in 1993. Godrej found it convenient to shed the detergent brands - Ezee, Key, Biz and Trilo - as they represented a losing portfolio. Capacity utilization in the industry varies from as low as 50% to 80%. Godrej Soaps Limited (GSL) has been using its capacity by working for other producers. GSL makes Rexona and Dettol for Reckitt & Colman of India and Johnson's Baby Soap for Hindustan Lever (Johnson & Johnson). And yet only half of its capacity of 71,000 tonnes is being used. Also companies like VVF Ltd. has state of the art technology oriented plants, which they mostly use for producing brands like Dettol, Nivea Creame soap and also internationally well know brands like Fa for other marketers. 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 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 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 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.
SWOT ANALYSIS OF SOAP INDUSTRY Strengths Soap penetration: soap has a very high penetration of 95% in the urban region while the rural region contributes to 85% penetration, which shows a potential for growth in the rural sector.Soaps is a Delicenced Industry, which symbolizes that any individual with finance and marketing skills can enter the industry. Weakness The duty structure: excise duty is at the rate of 16% on all toilet soaps and the sales tax structure varies from state to state with a minimum of 8 % in some states ranging upto 20 % in most of the southern states like Andra Pradesh, Tamil Nadu, and Orissa India solely depends on the Imports for vegetable oil mainly from Malaysia & Indonesia and import duty is as high as 35%. The large-scale organized sector where the Technology and Capital Invested are high. The other popular and carbolic soaps are manufactured by small manufacturing units predominantly existing in the southern sector. Opportunity Indian Exports for Soaps are quite insignificant. The reason being other South Asian countries like Malaysia, Indonesia and China have Palm Oil available in abundance. Hence exporting Soaps becomes an expensive proposition. India can concentrate on exports of specialty soaps like ayurvedic, herbal and special categories like fairness soaps. Internet is fast emerging as a strong distribution channel and the new players are finding it easier to launch assaults through this medium very effectively.
In the world of cut throat competition ‘Quality’ at an affordable price is the new mantra. Companies are trying every measure to improve the quality of the product by maintaining or at times even decreasing the price to make the product affordable and competitive. Presence of a large unorganized market: branded products can wash the unorganized market by providing value for money products at competitive market Threats Industry Growth – the entire soap Industry is growing at a minimal rate of 3 % and the entire FMCG industry is ing through turmoil, where the soap segment ed actually a negative growth leading to saturation.The only players we see are the low (cheap) quality soaps from countries like Indonesia, Malaysia and China, which has a low freight cost structure and also a substantially low cost of manufacturing.
HUL COMPANY ANALYSIS: HUL-The FMCG Giant 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 placed at a distantly of 16 %. Some of the big brands in Soaps are Lifebuoy, the largest selling soap in India, Lux, Liril, Pears, Hamam, Rexona, Breeze, Dove, and Savlon. 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 s 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 Breeze, Caress, 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 ruling the roost. While Pears has dominated as high profile specialty soap. To provide a sound base to its toilet soaps operations, HLL has also branched out into other toiletries like shampoos and related products like glycerine, fatty acids. Denim is HLL’s franchise for Men’s toiletries. The Core Competencies of HLL is its nation wide strong Distribution network. Before we look at its distribution network, the best so far in this country, let us reflect on the rural India scenario. Around 700 million people, or 70% of India's population, live in 6,27,000 villages in rural areas. 90% of the rural population is concentrated in villages with a population of less than 2000. The statistics is daunting. Particularly for HLL, which markets Packaged Mass Consumer Goods (PMCG) of everyday use, the size of the rural market makes it essential to tap. HLL has traditionally focused on the rural market. Several of the company's major business categories, such as Fabric Wash, Personal Wash and Beverages, already get over 50% of their sales from rural areas. Rich Company Poor Consumers: The Plan of Action HLL realises that there is much more that needs to be done. To service rural markets, the key issues that need to be addressed are the 3 important A’s viz. availability, awareness and overcoming prevalent attitudes and habits. Extending Availability Data on rural consumer buying behaviour indicates that the rural retailer influences 35% of purchase occasions. Therefore, sheer product availability can determine brand choice, volumes and market share. Project Streamline was conceptualized to significantly enhance HLL’s control on the rural supply chain through a network of rural sub-stockists, who are based in these very villages. As part of the project, higher quality servicing, in of frequency, credit and full-line availability, is provided to rural trade. Thereby, giving HLL a substantial competitive edge over the next decade. The principle of Project Streamline is to leverage HLL’s scale and organizational synergy to increase reach in rural markets. The pivot of Streamline is the Rural Distributor (RD), who has15-20 rural sub-stockists attached to him. Each of these sub-stockists is located in a rural market. The sub-stockist then performs the role of driving distribution in neighboring villages using unconventional means of transport such as tractor, bullock cart, and other means of transport. From 1998, the project has been rolled out in select states of the country where the terrain or poor stage of market development typically makes any distribution system unviable. The Streamline system has extended direct HLL reach in these markets to about 37% of India's rural population from 25% in 1995. Most important, the number of HLL brands and SKUs
stocked by village retailers has gone up significantly. Having done that, the project now aims to expand our coverage to 50% of rural population by 2003. Influencing Affordability Influencing affordability Project Streamline focused on extending distribution, Project Bharat’s influence was restricted to raising penetration and awareness levels. On the anvil, is a new rural program, which will reach villages with a population below 2000 and influence income as well. This path-breaking venture aims to facilitate the doubling of our share of the rural consumer's wallet in three years. The model is unique in that it influences all the variables that influence growth. The model triples physicals reach, doubles communication reach, creates a platform for influencing attitude changes and raising incomes. Enhancing awareness Mass media reaches only 57% of the rural population. Generating awareness, then, means utilizing targeted, unconventional media including ambient media. HLL has been utilizing events such as fairs and festivals, etc. as occasions for brand communication. Cinema vans shop-fronts, walls and wells are other media vehicles that we have utilized to heighten brand and pack visibility.
Project Shakti: HLL soon realized that although it was enjoying a greater penetration in the rural market when compared with its competitor such as Nirma and ITC, its direct reach was restricted to only 16% . The FMCG giant was desperate to increase this share. HUL saw its dream fulfillment in the vast Indian rural market. The company was already engaged in rural development with the launch of the Integrated Rural Development Programme in 1976 in the Etah district of Uttar Pradesh. This program was in tandem with HUL's dairy operations and covered 500 villages in Etah. Subsequently, the company introduced similar programs in adjacent villages. These activities mainly aimed at training farmers, animal husbandry, generating alternative income, health & hygiene and infrastructure development. The main issue in rural development was to create income-generating prospects for the poor villagers. Such initiatives, linked with the company's core business, became successful and sustainable and proved to be mutually beneficial to both the company ant its rural customers. However, much remained to be done. Project Shakti was conceived. Following the pioneering work carried out by Grameen Bank of Bangladesh , Self Help Groups (SHGs) of rural women were formed by several institutions, NGOs and government bodies in villages across India. This group of usually 15 contributed a small amount of money to a common pool and then offered a micro-credit to a member of the group to invest in a commonly approved economic activity. Partnering with these SHGs, HLL started its Project Shakti in Nalgonda district of Andhra Pradesh in 50 villages in the year 2000. The social side of the Project Shakti was that it was aimed to create income-generating capabilities for underprivileged rural women, by providing a sustainable micro enterprise opportunity, and to improve rural living standards through health and hygiene awareness. Most SHG women viewed Project Shakti as a powerful business proposition and are keen
participants in it. There after it was extended in other states with the total strength of over 40,000 Shakti Entrepreneurs. HLL offered a wide range of products to the SHGs, which were relevant to rural customers. HUL invested significantly in resources who work with the women on the field and provide them with on-the-job training and . HUL provided the necessary training to these groups on the basics of enterprise management, which the women need to manage their enterprises. For the SHG women, this translated into a much-needed, sustainable income contributing towards better living and prosperity. Armed with micro-credit, women from SHGs become direct-to-home distributors in rural markets In general, a member from a SHG was selected as a Shakti entrepreneur, commonly referred as 'Shakti Amma' received stocks from the HLL rural distributor. After trained by the company, the Shakti entrepreneur then sold those goods directly to consumers and retailers in the village. Each Shakti entrepreneur usually serviced 6-10 villages in the population strata of 1,000-2,000 people with 4-5 major brands of HLL - Lifebuoy, Wheel, Pepsodent, Annapurna salt and Clinic Plus. Apart from these, other brands included Lux, Ponds, Nihar and 3 Roses tea. The Shakti entrepreneurs were given HLL products on a `cash and carry basis.' However, the local self-help groups or banks provided them micro credit wherever required. According to Dalip Sehgal, Executive Director, New Ventures & Marketing Services, HLL Project Shakti was adding up to 15% of HLL sales in rural Andhra Pradesh. He further asserted that given the largeness of the country and backwardness of its women, Project Shakti-like endeavor would place everybody in a win-win situation. Overcoming attitudes and habits Creating distributive reach is not sufficient to tap the rural markets. Market development can be a difficult task because in rural India, both consumption and penetration of Soaps is quite low. For instance, even for other personal care products only three out of 10 people in rural areas use toothpaste or talcum powder, or shampoo and skin care products, and only six use washing powders. In Soap category, which has the most high penetration amongst the other PMCG, the consumption is barely once per five bathing occasions. Project Bharat, the first and largest rural home-to-home operation to have ever been mounted by any company, sought to address many of these issues. The operation was conducted in high-potential districts of the country. The exercise was started by the Personal Products Division in 1998, and covered 13 million households by the end of 1999. In the course of the operation, company vans visited villages across the country and distributed sample packs comprising a low-unit-price pack of soaps. The distribution was ed by explanation of product usage and a video show, which was interspersed with product communication. Thus we generated awareness of its product categories and the availability of affordable packs. Consumers were also made aware of the superior benefits of using our products vis-à-vis their current habits (example: stress on hygiene), and the affordability of the pack sizes on offer. The project, thus, successfully addressed issues of awareness, attitudes and habits. Hopefully, as consumers in rural areas get exposed to such value-added, value-for-money alternatives, they will continue to buy into the categories. The project saw a 100% increase in
penetration, -ship and top-of-mind awareness in the districts targeted. However, sampling once is not adequate to convert non-s. So Personal Products rolled out a follow-up program, the Integrated Rural Promotion Van (IRPV), to once more target villages with a population of over 2,000.
HUL – SWOT Analysis Strengths •
Strong Brand equity
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Cutting edge distribution network in place, which ensures that the products reach across the length and breadth of this vast country.
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Maintaining favorable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things.
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Nationwide manufacturing facilities :The diverse product range of this giant is manufactured in close to 100 factories, located across the length and breadth of India. The operations involve 2,000 suppliers and associates. About 28 factories are situated in backward areas. In fact, all major investments of HLL, in recent years, have been either in A-Category backward areas or No-Industry Districts. These include factories in Khamgaon and Yavatmal (Maharashtra), Chhindwara (Madhya Pradesh), Orai and Sumerpur (Uttar Pradesh), Dabgram (West Bengal), Silvassa (Dadra & Nagar Haveli) and Pondicherry.
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Taking over sick enterprises, in response to requests from government authorities, and converting them into viable operations. The company's units at Mangalore, Rajpura and Gajraula all bear testimony to this achievement. In the process, HLL has saved precious jobs and developed local economies.
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State-of-the-art research facility : HLL has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Lever Research Centre (HLRC), with facilities in Mumbai and Bangalore, has over 100 highly qualified scientists and technologists, many with post-doctoral experience acquired in the US and Europe. Set up in 1958, HLRC’s aim is to develop new products and processes, improving benefits and quality of existing products, optimal use of resources, energy conservation and pollution control. The company has many achievements in these areas, with 169 patents till date.
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Product and process innovation : HLL has also developed the capability to design and manufacture machines in-house or have them assembled by third parties as per given specifications. This enables the company to set up plants at half the cost of others. Such technological developments have also led to significant improvement in productivity. The capacity of a toilet soap line has gone up from 6,000 tonnes per annum in the early nineties to 10,000 tonnes per annum now, while that of a detergent bar line has gone up from 7,000 tonnes per annum to 25,000 tonnes per annum now, thus substantially increasing capital productivity.
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Constant Marketing Initiatives – Some unique ones : What better place to educate people about the importance of frequent soap use than where 70 million people come to clean themselves? Hindustan Lever ed the pilgrims visiting Allahabad for Kumbh Mela, the religious festival held every 12 years. Executives wanted to show that dirt is always present, though often invisible. Marketers waved an ultraviolet-
light wand over attendees' hands to show where germs and dirt resided. While the pilgrims came to bathe at the confluence of India's sacred rivers to cleanse their souls, they also learned to keep their hands free of pathogens. The village street theaters represented a more emotional play. Lever and Ogilvy Outreach, the unconventional marketing arm of Ogilvy & Mather, recruited local magicians, dancers, and actors who knew each market and village that the company wanted to target. In total, 50 teams of 13 performers were recruited to serve as connections between the brands and the residents. Scripts were changed for different dialects, education levels, and religions. In all, Ogilvy coordinated two-hour performances at 2,005 haats over six months. The results seem compelling. Awareness of Breeze, a low-cost soap with more of a beauty pitch, increased from 22% to 30% over the six months that the performances were running. Opportunities •
Converting the s of the Popular segment of soap to the segment.
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Presence of a large unorganized sector, who find it difficult to import oil from south east Asian countries hence buy oil from local manufacturers and cannot produce on the economies of scale.
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HLL is countries one of the largest five exporters, but exports in the soap segment are bare minimal.
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Increase in Discretionary Spends :Discretionary spends of consumers is already on the rise; and it would continue to increase in the future. This would be particularly of interest to HLL in the personal products business.
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Business to Business connectivity B2B connectivity (between a company and its supply chain partners) would help reduce costs, improve inventory management, facilitate flow of information and enhance efficiency in the distribution system. The challenge for companies in B2B would be to ensure that all supply chain partners operate on a common platform and packages. HLL would therefore, need to consider lending to their supply chain players to bring about uniformity of operating platforms. B2C too will grow, but will not be a major strategic focus for companies selling low-value items.
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Untapped rural market : The rural markets are expected to witness a different kind of a shift. As companies aggressively compete to get a higher share of the rural pie, competitive advantage will lie with those who have a higher reach. An effective way to achieve reach in rural markets would be to farm out, to divest the reaching mechanisms to third-parties like stockists/star-resellers, etc.
Threats Major threat, especially to the soaps of HLL is that of Down-threading, the prolonged drought in the North and West of the country (until 2000) and the sharp fall in the farm disposable incomes has persuaded the households to downtrade, that is , switch from
high to low-priced brands resulting in a de-growth in the segment. This can lead to the cannibalization of its own brands in the segments. Competition activity, in particular the pricing and advertising strategies of main competitors. Backward Integration resorted by other players (Nirma producing Caustic Soda), giving others a cost advantage. Success of new launches in the niche segment by the competition Volume growth in personal products and ability to protect market share Raw material (Palm Oil) prices as cost increases cannot be ed on fully, in a competitive scenario.
HISTORY OF MOTI SOAP IN INDIA Moti was India's brand of soaps during the seventies.Now there is no trace of this brand. During the earlier 80s Moti Luxury Bath Soap was the best of its kind and mainly considered best to be suited for the upper-class of people. The true reason remained to be its cost aspect. A small bar of Moti Soap costed almost around INR 25/- which was quite an elevated cost during those years. Even mini sized bars weighing around 50g were sold to facilitate the purchase of travellers. Moti was promoted as a soap . Only now we find Hamam
and such other soaps also marketing similar mini-soaps, whereas in those days only Moti sold mini-soaps too to promote the sales. Moti was a special soap which had certain differentiation. The first differentiation point was the Shape. Unlike other soaps which came in cake form, Moti was round soap. Moti is the vernacular term for Pearl . So the soap was also in the shape of pearl. Another uniqueness was the size of the soap. Moti was a big soap. Often one gets bored of the soap and it never quite finish fast. Moti came in popular fragrances like Gulab(Rose),Scented white cream and Sandal. White Cream Moti: The White Cream Moti Soap almost resembled our Lux soap but it was a round shaped soap like the Mysore Sandal. But of course, Mysore Sandal was also marketed in an oval shape. The white cream Moti was a cream-rich soap. It had moisturizing agents which kept the skin smooth and glossy. So, you weren’t required to use moisturizers after bathing. This was best suited for normal & dry skins. Prolonged usage of the cream Moti Soap had been proven to take away the cracks from the skin and make gruffy skin smoother. Since the white Moti Soap retained the moisture of the skin and gave it a long-lasting shine, the aged looks due to dryness of the skin were prevented. This was made of 100% vegetable oils and contained absolutely no artificial, chemical or animal ingredients. Sandal Moti: This was a round-shaped half-cream (semi-sandal) coloured soap having a very mild fragrance of sandal. Like the cream soap, the sandal soap also contained pure vegetable oils, natural moisturizing agents and some of the essential natural components. People who used Moti Sandal soap really enjoyed their bathing experience with its mild sandal aroma. The sandal incense on the skin lasted longer, giving a freshness throughout the day. Gulab Moti: It was a round shaped rose d soap that brought refreshment, rejuvenation and replenishment to your body that lasted all day long. It was also a soap which provided rich lathering experience to the consumer during the bath. Moti originally was a brand of Tata Oil Mills Company ( TOMCO). Tomco also promoted this brand heavily. Most of the campaign had a signature brand imagery the soap surrounded by pearls. Those ads were in most of the magazines during the peak stage of this brand. Pearls formed an important role in the entire brand communication and pearl was an anchor which created an association with the brand in the consumer's mind.Among the different fragrances marketed, Moti White Cream soap was the one shown in Ads which was placed in between ravishing glossy white pearls. Some thoughts about Moti: GOOD:
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Due to the natural ingredients in Moti Soaps, it did not cause any allergy even on the most sensitive skins. Had natural moisturizing agents which kept the skin smooth & glossy The fragrances were very pleasant and found to last longer on the skin
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There were no anti-bacterial ingredients and so was not recommended for use of children. Dissolved faster when compared with other slow-liquefying soaps – Fragrance used to longer, but the Soap did not… High Cost
In 1993, TOMCO merged with HLL Moti then moved to HLL following the merger. That marked the end of this brand. Why HLL decided to sideline Moti soap is not known. The brand was never promoted and slowly the brand faded into oblivion. Some probable reasons for the brand’s death •
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The reason for this brand's death may be because it did not fit into the brand portfolio of HLL. While Hamam ( another Tomco brand ) thrived, Moti was never in the picture.Then with the Power Brand strategy, brands like Moti never had a chance to survive. The brand had prospects if HLL had done some serious product development. In the branding perspective Moti had certain assets. The name and the imagery were wonderful assets for a marketer. Moti had both these assets. The problem was probably with the product. There were things missing in the soap (as has been mentioned earlier in the bad thoughts about moti) which ultimately led to the death of this brand. Another factor might be at the segmentation side. Now also the market for a soap is abysmally low in India. Now also there is no successful brand of soaps in India ( Essenza de wills is trying hard ). Also after some time Moti Soap had lost its charm, the reason being the excessive competition in the market and the more & more many other brands were offering same variety of soaps (with similar fragrances too) at very competitive prices.
So it was also a tough choice for HLL. The company may have felt that Moti did not have a future as a soap. And it may cannibalize some existing brands if the prices are rationalized. Moti may had to be repositioned if it had to survive . But HLL was not prepared to invest in a brand which had a minuscule 2% of the market. So the decision was to slowly kill the brand.
REBRANDING MOTI SOAP Modified Marketing Mix Product • • • • • Place
The traditional Circular shape is the differentiating factor hence it should be retained The size available is too large. Hence, smaller sizes should be made available in the markets depending about the requirement of the consumer. Different colours and fragrances should be introduced in different markets depending upon the taste of the locals and feasibility of the product Experimenting with new fragrances and introduce newer variants in the market Packaging to be made attractive in keeping the current trends and the earlier design should be discarded.
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The soap should be relaunched at the Pan India level rather than launching it at the state level. Different parts of the country prefer different variants and fragrances. This thing should be kept in mind while promoting the soap in those regions .Eg., North Indian markets prefer Lime and Citrus fragrances whereas southern markets prefer Medicinal and herbal variants Rural markets contain 70% of India’s population and hence targeting the rural market will prove very beneficial. HUL can utilise its Project Shakti in rural areas to make the consumer aware about the Moti Soap and also to sell the soaps there. This will give HUL the edge over others. But the product will have to be customised for the rural markets in totally separate ways. Moti Soap should be made available with many retailers and distributors so that there is no shortage of the product when a consumer wants to buy the soap. HUL’s distribution network is a huge advantage to make this possible.
Distribution Strategies: Movement of goods and services from the source through the distribution channel, right up to the final consumer, or and the movement of payment in the opposite direction, right up to the original producer or supplier Channels of distribution: A distribution channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent)intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary got the items at one pricing point and moves it to the next higher pricing point until it reaches the final buyer also called channel of distribution or marketing channel.
The Importance of Distribution: Most producers use intermediaries to bring their products to market they try to develop a Distribution channel to do this. A distribution channel is a set of Interdependent organizations that help make a product available for use or consumption by the consumer or business . Channel intermediaries are firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business . A company’s channel decisions directly affect every other marketing decision. Place decisions, for example, affect pricing. Marketers that distribute products through mass merchandisers such as Wal-Mart will have different pricing objectives and strategies than will those that sell to specialty stores. Distribution decisions can sometimes give a product a distinct position in the market. The choice of retailers and other intermediaries is strongly tied to the product itself. Manufacturers select mass merchandisers to sell mid-price-range products while they distribute top-of-the-line products through high-end department and specialty stores. The firm’s sales force and communications decisions depend on how much persuasion, training, motivation, and its channel partners need. Whether a company develops or acquires
certain new products may depend on how well those products fit the capabilities of its schannel . Some companies pay too little attention to their distribution channels. Others, such as FedEx, Dell Computer, and Charles Schwab have used imaginative distribution systems to gain a competitive advantage. Functions of Distribution Channels: Distribution channels perform a number of functions that make possible the flow of goods from the producer to the customer. These functions must be handled by someone in the channel. Though the type of organization that performs the different functions can vary from channel to channel, the functions themselves cannot be eliminated. Channels provide time, place, and ownership utility. They make products available when, where, and in the sizes and quantities that customers want. Distribution channels provide a number of logistics or physical distribution functions that increase the efficiency of the flow of goods from producer to customer. Distribution channels create efficiencies by reducing the number of transactions necessary for goods to flow from many different manufacturers to large numbers of customers. This occurs in two ways. The first is called breaking bulk. Wholesalers and retailers purchase large quantities of goods from manufacturers but sell only one or a few at atime to many different customers. Second, channel intermediaries reduce the number oftransactions by creating assortments providing a variety of products in one location—sothat customers can conveniently buy many different items from one seller at one time. The transportation and storage of goods is another type of physical distribution function. Retailers and other channel move the goods from the production site to other locations where they are held until they are wanted by customers. Channel intermediaries also perform a number of facilitating functions, functions that make the purchase process easier for customers and manufacturers. Intermediaries often provide customer services such as offering credit to buyers and accepting customer returns. Customer services are oftentimesmore important in B2B markets in which customers purchase large quantities of higher priced products.
Promotion • • • •
A Robust branding exercise should be undertaken and Moti soap should be re launched on a large scale. All the modes of communication should be effectively used and an ‘Integrated Marketing Communication’ plan should be prepared and implemented. A Buzz should be created in the market so that it generates curiosity and this helps to increase the recall value. Promotional Schemes should be introduced while launching the product.
Promotional Plan • Define a specific objective. • Determine a workable distribution plan to a targeted audience.
• • • • • •
Create a central theme. Develop a message to the theme. Select a promotional product that bears a natural relationship to your profession or Communications theme. Don't pick an item based solely on uniqueness, price or perceived value. Don't fall prey to the latest trends or fads. The most effective promotional productsare used in a cohesive, well-planned campaign.Sales promotions are nonpersonal promotional efforts that are designed to have animmediate impact on sales. Media and non-media marketing communications areemployed for a pre-determined limited time to increase consumer demand, stimulatemarket demand or improve product availability
Price • •
• • • •
Historically, Moti has been a very expensive soap costing around 25 Rs during eighties which was pretty high by any standards Prices have to be reduced to gain a sizable market share and this will have to be done by reducing the sizes so that they cost less Price to be kept somewhere between lux and pears. Certain fragrances will cost more. These have to be targeted towards the segment in the urban markets. Also price will have to be be contingent upon the place and competitors. Prices should not be the basis of competition and hence constant product improvement should be the way ahead.
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