case analysis on
TRANSCRIPT
CASE ANALYSIS ON “SUPER SHAMPOO PRODUCTS AND THE INDIAN MASS
MARKET”
Submitted in partial fulfillment of the requirement for the award of the diploma of
POST GRADUATE DIPLOMA IN MANAGEMENT(PGDM)
By:
NIPUN SACHDEVA
International Management Institute
Bhubaneswar
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DECLARATION
This is to certify that the work presented in the project entitled “ Super Shampoo
Products And The Indian Mass Market” in the partial fulfillment of the requirement for
the award of diploma of PGDM , International Management Institute, Bhubaneswar
is an authentic work carried out under my supervision and guidance.
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ACKNOWLEDGEMENT
I am extremely thankful to my instructor Dr. D.D SWAIN who has given me the
opportunity to deal with this case. He listened to all my queries with a great deal of
patience and helped me to understand our topic better.
It was an inspiring project and I owe a genuine thanks to Dr. D.D SWAIN for assigning
me this project.
Date : Dr. D.D SWAIN
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Table Of Contents
1. BACKGROUND OF THE CASE.………………………………………………. 5
2. INDUSTRY ANALYSIS………...……………………………………………… 6
3. SWOT ANALYSIS…………………………………………………………………9
4. ISSUES AND DECISION POINTS………………………………………….......10
5. FINDINGS AND RECOMMENDATIONS……….…………………………… 13
6. CONCLUSIONS………………………………………………………………… 14
7. BIBLIOGRAPHY AND WEBLIOGRAPHY………………………………………15
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Chapter 1 Background Of The Case
The case hovers around how Mr. Suresh Venkataraman, a successful marketer of
industrial products, hit upon an idea of getting into the business of consumer products in
general and the shampoo industry in particular. The fact that fascinated him the most
was the use of single packaging. Also he wondered how with the invention of sachets,
shampoo as a category was transformed from an unaffordable product to an affordable
one. Therefore, in spite of being from Coimbatore, a city known for its textile industries,
he decided to get into the shampoo industry. He also had a firm belief that the rural
market offered a huge potential for consumer products.
Venkataraman decided to name the product Super Shampoo. He selected the name
Super as it was easy to pronounce and had an English overtone that was considered a
part of the aspirations of rural consumers. Moreover, the word “super” was amplified by
the media to celebrate film stars by projecting them as “superstars”. The word “super”
triggered a superior image amongst whatever it was competing against in a specific
context.
Besides other players in the shampoo market, venkataraman was keen on
understanding the customers needs of the rural market which is a difficult task as it is
highly heterogeneous, making it impossible to look at it as a single consumer market.
The case deals with the several attitudinal aspects of consumers towards the shampoo
industry. The understanding of the attitudinal aspects of the target population is utmost
important when an existing product in the industry is launched as it requires to position
and differentiate your product from the other successful players in the market and to
understand this venkatraman conducted a survey for deciding the marketing strategy of
his brand .
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Chapter 2 Industry Analysis
2.1 Industry Overview
Indians have evolved from the ‘champi’ times, wherein hair oil was considered to be the
only product meant for hair care. Today, there are a plethora of options available from
shampoos and conditioners to hair dyes and post wash products. In this article we focus
on the shampoo segment, which is considered to be one of the fastest growing segment
in the hair care industry.
The India shampoo industry is estimated at Rs 14 bn and is growing at an average rate
of 20% per annum. According to AC Nielsen, shampoo is one of the fastest growing
categories within FMCG sector and is expected to grow at 25% per annum in the
coming years.
From a penetration level of 13% in 2000, now almost a third of the country's rural
population uses shampoo with penetration levels zooming to 32% in 2005. While the
north and west zones have tripled in penetration, the south and east zones have
doubled during the period between the years 2000 to 2005
After a sober growth in 2004 due to the downturn of the FMCG sector, shampoo sector
saw strong growth in the next two years due to the introduction of sachets and a surge
in rural demand. The overall shampoo market, which sees annual volume sales of
approximately 63,000 tonnes, saw rural offtake grow by 40% last year, while urban
demand grew half that at 21%.
2.2 Market Players
The key players in the Indian shampoo industry with their respective market shares is
as follows:
HLL is the undisputed leader from the early 1990s with brands like Sunsilk,
Clinic All Clear and Clinic Plus.
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P & G entered India in Nov 1995, with the world’s largest selling brand –
Pantene. It also launched Head &Shoulders, which is the leading AD shampoo.
Amongst other players are Dabur, CavinKare and Ayur.
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The market share in terms of turnover of the major players is given below in the
form of a pie chart :
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Chapter 3 SWOT Analysis
Strengths Weaknesses
Sizeable share of the Indian market
Naming of the product as “Super” to
which people could relate
Marketing Experience of Mr.
Venkataraman
Financial power to compete against
the established brands.
Lack of proper distribution channel.
Oppurtunities Threats
Significant growth in the rural
market.
75% of the BoP (Bottom of
Pyramid) consumers live in the rural
market.
Widespread illiteracy.
Huge competition in BoP market.
Availabilityof home made Ayurvedic
substitutes.
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Chapter 4 Issues And Challenges In The Case
4.1 Key Issues
The key issues in the case is as follows:-
Why shampoo industry is chosen to enter inspite of so many existing players?
Why The target market chosen is the rural market and particularly the southern
rural market?
How will the brand be placed as in the minds of the target consumers?
What medium should be used for the promotion of the product?
4.2 Major Challenges
Underdeveloped People : Vast majorities of the rural people are tradition bound,
and believe in old customs, traditions, and habits.
Lack of Proper Physical Communication Facilities : Physical communication of the
villages is highly expensive. Even today most villages in the eastern parts of the
country are inaccessible during the monsoon.
Many Languages and Dialects : The number of languages and dialects vary
widely from state to state, region to region and probably from district to district.
The messages have to be delivered in the local languages and dialects.
Low Per Capita Income : Even though about 33-35% of gross domestic product is
generated in the rural areas it is shared by 74% of the population. Hence the per
capita incomes are low compared to the urban areas.
Low Levels of Literacy: The literacy rate is low in rural areas as compared to
urban areas.This again leads to problem of communication for promotion
purposes.
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Prevalence of spurious brands and seasonal demand : For any branded product
there are amultitude of 'local variants', which are cheaper, and, therefore, more
desirable to villagers.
Different way of thinking : The difference is also in the way of thinking. The kind of
choices of brands that an urban customer enjoys is different from the choices
available to the rural customer. The rural customer has a fairly simple thinking as
compared to the urban counterpart.
4.2 Decision Points- Strategies Adopted To Conquer The Rural Market:
Marketing Strategy:
They associate with people of similar wavelength in thinking, who will definitely
take care of quality first and foremost and besides, they have a strong system of
quality monitoring.
As part of their strategy, they lay down all the ground rules for the manufacturers
in maintaining their standards.Outsourcing is one of the three cardinal rules of
CavinKare's corporate strategy.
Direct media promotions have helped build knowledge of product categories and
change long-entrenched living habits.
Hindustan Unilever believes that its core competencies are research and
development, brandbuilding, and distribution management.
Communication Strategy
CavinKare discovered that soap usage was the biggest barrier and people did
not see the need for using Shampoo.Company tried to convey the message to
the consumer that soap usage was bad for the hair and when a product exists
specifically for hair it should be used.
To build a local and regional presence, Procter and Gamble advertised in local
print and television, before taking the brands nationally.
Hindustan Unilever advertised more often and hired well qualified professionals
to compete with the competitors.
Distribution Strategy
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Instead of using the conventional distribution route, CavinKare have created a
`sachet' sales force that sells only sachet packs to small retailers including
cigarette and paan shops.
Separate hawkers' channel is being created that has moved from neighborhood
toneighbourhood.
Hindustan Unilever is using the small shops and mobile vans to expand product
reach and gain accessibility.Because the unconventional route is not expected to
become a major revenue generator inthe coming years.
Apart from unconventional method, the company hired professionals for sales
and, distribution and expanded its network beyond South India.
Promotional Strategy
Single-serve packaging will also serving in the institutional sales and this method
has been adopted by all the three companies considered for the study.
CavinKare is hoping the low price point and convenience of sachets will help
rope in hotelsand restaurants as bulk customers.
Chapter- 5 Recommendations And Findings
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After thoroughly undergoing the case study and with the knowledge I have acquired, I
hereby put forth my views and suggestions on the basis of the study.
There are some particular trends which are significant in the shampoo industry in the
Indian context.
Focus on quality, value and customer satisfaction:
Today in order to survive, an organization has to understand the significance quality,
value and customer satisfaction in its true essence and not only in rural India but also in
the urban sector.
Focus on global thinking and local planning:
In today’s globalised environment an organisation should think global and act local.
Thinking globally, increases the target audience drastically and hence provides more
opportunities, as the same time planning locally ensures that the product is accepted by
the target audience.
Conclusion
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From coconut oil to conditioners and henna to hair colorants, Indian hair care market is
undergoing a sea change in the way consumer nurture their hairs. A strong
undercurrent is being observed in the Indian hair care market with consumers showing
readiness in experimenting with new products and manufacturers showering consumers
with new products and services.
In the last 2 – 3 yrs the market share of CavinKarehas come down though it is growing.
It is mainly due to the anti-dandruff shampoos in the market which from 0% has taken
over 25% of the market. CavinKaredoesn’t have an anti dandruff shampoo yet.
Ordinary shampoos constitute only 75% of the market of which Chik holds 20% market
share. But Chik is the largest brand in rural UP, AP, etc. and the number one in many
other states as well
So the fact remains that the rural market in India has great potential, which is just
waiting to betapped. Ultimately, the ball lies in the court of marketers .
It's all about how they approaches the market, takes up the challenge of selling products
and concepts through innovative media design and more importantly interactivity.
Webliography
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