detergent wars in india (surf excel, ariel, nirma, wheel, tide, ghari)
TRANSCRIPT
Detergent Market in India
Indian Detergent Market LandscapeCurrent Market Size (Organized Detergent Market) 2015: Rs.15,000 CroreTotal Volume 2013 (Production): 1.9 Million TonnesCAGR (2012-2015): 11% approx.Washing Machine Penetration in India: 8.8%Indian Population Division:
Urban: 33%Rural : 67%
Households Owning Washing Machine:Urban : 27.5% of all urban householdsRural : 0.6% of all rural households
Source: Market Research Report on Detergent Industry in India by Niir Project Consultancy Services (NPCS)
Indian Detergent Market Landscape
Detergent
Powder Bars Liquid
Indian Detergent Market Landscape1959
• HUL launched Surf Excel.
1969• Nirma was launched.
1987• RSPL launched Ghari.
1988• HUL launched Wheel.
1991• P&G launched Ariel.
2000• P&G launched Tide.
Timeline:
Indian Detergent Market Landscape
34
22.818
12
13.2
Market Share Division
HULGhariP&GNirmaOthers
The Detergent market is dominated by following major players:
1. Hindustan Unilever Limited (HUL)2. Rohit Surfactants Pvt. Ltd. (RSPL)3. Procter & Gamble (P&G)4. Nirma5. Jyothy Laboratories & Others
Premium Mid Scale Economy (Mass)0%
10%
20%
30%
40%
50%
15%
40%
45%
Detergent Market Segmentation
S u r f, A r i e l R i n , T i d e G h a r i , N i r m a , W h e e l , Fe n a Brands:
Porter’s
Five Forces Model
Competitive Rivalry
Threat of New
Entrants
Bargaining Power of Suppliers
Threat of Substitutes
Bargaining Power of
Buyers
We will measure the forces on the following scale:
Very Low Low Medium High Very High
1.) Competitive RivalryPremium Price Segment
• High• High because easy brand
switching.• For Tier I and Tier II cities
only and competitive rivalry is high there.
• Surf Excel, Ariel, Henko• Surf Excel & Ariel face
tough competition from each other, where Ariel offers fragrance, Surf Excel offers a bit lower price compared to Ariel.
Mid Price Segment
• Very High• Very high because more
number of players, no loyalty, and customers switching to different price segments.
• Tide Plus, Rin, Super Nirma Blue, Mr. White, etc.
• Tide, faces lot of competition from Surf as well as Ghari, Ghari being low priced and good quality.
Low Price Segment
• Very High• Very high as Customers in
this segment, easily switch brands based on small price differences also. Moreover markets are toppled easily by distribution strategies and promotions.
• Nirma, Wheel, Ghari all face fierce competition in this segment based on price, product differentiation, distribution strategies
2.) Bargaining Power of SuppliersPremium Price Segment
• Low• Main ingredient required
to be procured from suppliers is soda ash which is not an ingredient hard to make.
• Suppliers are ready to provide good quality soda ash.
• But still quality matters and hence bargaining power of suppliers is low but not very low.
• E.g. Surf, Ariel, etc.
Mid Price Segment
• Very Low• Multiple suppliers exist,
who provide desired quality of soda ash to these companies and hence they don’t have any competitive edge.
• Moreover, suppliers do not want to lose huge contracts with behemoths like P&G and hence they have low bargaining power
• E.g. Tide
Low Price Segment
• Very Low• Many suppliers of soda ash• High quality of soda ash is
not required and it can be procured from any supplier.
• Companies like Nirma produce their own soda ash (Backward Integration)
• Hence suppliers have very low bargaining power.
• E.g. Nirma, Wheel, Ghari, etc.
3.) Threat of New EntrantsPremium Price Segment
• Medium• Entry is difficult as there
are difficulties to get premium loyal customers.
• But still with differentiated products it is still conquerable. Hence the medium price segment.
• E.g. Henko from Henkel entered the premium price segment but then failed miserably.
Mid Price Segment
• High• Entry is easy as there are
low barriers to entry• As it is FMCG industry it is
easy to achieve high economies of scale.
• E.g. Tide was launched in 2000 ,still it was able to get a decent market share
Low Price Segment
• Very High• Entry is very easy as there
are low barriers to entry• Economies of scale• In this segment, even a
small price difference can topple markets of a brand.
• E.g. Ghari launched their business in 1987 when Nirma was at its peak but later the it overtook Nirma.
4.) Bargaining Power of BuyersPremium Price Segment
• Medium• Any product with a good
price difference or differentiated features will be opted by buyers.
• Hence price difference does change buyer behavior but differentiated products also tend to have their own say in market.
• E.g. When Ariel came out with detergents with fragrance flavors, customers switched to that even when Ariel charged higher price then surf excel
Mid Price Segment
• High• Due to higher competition,
bargaining power of buyers is usually high.
• If companies have to resort to offers and lesser margins then that shows high bargaining power of customers.
• E.g. Tide generally attracts customers with “20% extra”, etc. type of offers which shows buyers have good bargaining power.
Low Price Segment
• Very High• More number of players,
customers in this segment are very cost sensitive. More offers have to be provided to attract customers. Buyers also demand quality improvements in products. This shows very high bargaining power of buyers.
• E.g. Nirma, Wheel, Ghari. Ghari offered better quality and buyers switched to it and this Nirma & Wheel had to counter this with various measures.
5.) Threat of SubstitutesPremium Price Segment
• High• In premium segment,
frequency of purchase gets affected as customers able to pay premium prices also tend to spend more on maintenance. Hence they are preferring Dry Cleaning more which affects the premium segment more. Other alternatives, presumably high priced, makes this segment highly vulnerable.
Mid Price Segment
• Medium• Any New technologies, like
liquid soaps, etc. can easily replace the existing players/ brands.
• More people moving to higher segments, and increasing disposable income makes this segment little bit vulnerable to alternatives like Dry Cleaning. But still the market is huge and the whole market cannot move to alternatives, hence threat is medium.
Low Price Segment
• Low• There is no economical
alternative/substitute which is cheap enough to replace already low-priced detergents.
• So the threat from substitute products / alternatives for fabric-washing is low.
Porter’s
Generic Strategi
es
Cost Leadership
Differentiation
Cost FocusDifferentiation
Focus
FocusBr
oad
Targ
etN
arro
w T
arge
t
Lower Cost DifferentiationCompetitive Advantage
Mar
ket
Scop
e
VS.
Surf Excel
Launched in 1959 in India as 1st Detergent Powder.
One of the brands under Unilever.
Ariel
Launched in 1991 in India as Detergent Powder.
One of the brands under P&G.
Surf Excel Product RangeSurf Excel
Matic
Surf Excel Quickwash
Surf Excel Easy Wash
Surf Excel Liquid Wash
Surf Excel Product Range
Surf Excel Matic
Surf Excel Quickwash
Surf Excel Easy Wash
Surf Excel Liquid Wash
Surf excel Quickwash with X-tra clean particles combines the power of stain removing products like blue, bleach and lemon. Multiple stains are removed with just 1 product.
Surf excel Easy Wash is a superfine powder, in which tough stains are taken off in a jiffy. It is made with superior technology which unleashes the power of 10 hands
Works in high water levels of front load washing machines. It has hand rub action power and is value for money. For 2 different types of washing machines, it offers 2 products: A.) Surf Excel Matic Top Load, B.) Surf Excel Matic Front Load.
Surf excel Liquid Detergent works with the Dip Dab Drop formula. It has better dissolution with superior fragrance. It offers ‘Color care’, and is safe for hands.
Ariel Product Range
Ariel Color and
Style
Ariel Matic
Ariel Complete
+
Ariel 24 Hour Fresh
Ariel Product Range
Ariel Matic
Ariel Complete+Ariel 24 Hour Fresh
Ariel Colour and Style
Ariel Complete+ removes tough stains in just 1 Wash. Especially formulated for semi automatic washing machines, Ariel’s cutting edge technology to provide impeccable cleaning
Ariel 24 Hour Fresh provides tough stain removal along with long lasting fragrance. Advanced perfume technology provide impeccable clothes along with refreshing fragrance that lasts upto 24 hours.
It provides the Best stain removal in 1 Wash. Especially formulated for Fully Automatic Washing Machines. Best used for Front & Top Loading Fully Automatic Washing machines
Ariel Colour & Style is specifically created for coloured clothes to remove tough stains and prevent colour fading. With Colour Lock Technology, it ensures coloured clothes stay shining like new.
“DaagAchheHai”
“Maa KeHaathon
JaisiSafai”
“#ShareTheLoad”
Ad Ad
Ad
Surf Excel ArieLS – SegmentationPremium Segment, Detergent.Mom’s washing children’s dirty clothes byT – TargetingBlue: All mid scale and premium segment buyers, Matic: Washing machine users Bar: Medium and Low Income families Quickwash: Consumers in water-scarce and hard-water regions.“Daag Achhe Hai”P – PositioningPositioned as a quality product at comparatively lower prices, in premium segment.
S – SegmentationPremium Segment, Detergent.Nuclear families with high income-levels.T – TargetingUpper middle class – rich class of the society wanting superior quality. Washing machine users are also targeted by its product Ariel Matic.Customers wanting fragrance and color preservation.#ShareTheLoadP – PositioningPositioned as superior stain remover, offering fragrance and preserving colors, for a premium price.
2kg 1kg 500gm 100gm 60gm 25gm
Rs405 Rs210 Rs115 Rs20 Rs10 Rs5
2kg 1kg 500gm 100gm 60gm 25gm
Rs437 Rs240 Rs130 Rs40 Rs20 Rs10
Porter’s Generic Strategies
Cost Leadership
Differentiation
Cost FocusDifferentiation
Focus
Focus
Broa
d Ta
rget
Nar
row
Ta
rget
Lower Cost DifferentiationCompetitive Advantage
Mar
ket S
cope
VS.
Nirma
Launched in 1969 in India as Very Low-cost Detergent Powder.
Nirma brand launched by a chemist named Karsanbhai Patel
Wheel
Launched in 1988 in India as fragrant low cost Detergent Powder.
One of the brands under HUL.
Nirma Wheel• In 1969, Karsanbhai Patel, a chemist, founded
Nirma in Gujarat and went on to sell it nationally by 1985.
• Patel was offering detergent products for poor consumers, mostly in rural areas.
• In fact, Nirma created a new business system that included a new product formulation, low-cost manufacturing process, wide distribution network, special packaging for daily purchasing, and value pricing.
• Current market share of Nirma is 12% of the total detergent market in India.
• HUL, in typical MNC fashion, initially dismissed Nirma’s strategy. However, as Nirma grew rapidly, HUL could see its local competitor was winning in a market it had disregarded.
• HUL decentralized the production, marketing, and distribution of the product to leverage the abundant labour pool in rural India, quickly creating sales channels through the thousands of small outlets where people at the bottom of the pyramid shop.
• In 1988, HUL launched Wheel to counter Nirma.• Current market share of Wheel is 16.9% of the
total detergent in India.
History
Nirma Product Range
Super NirmaDetergent
NirmaDetergent
Nirma Detergent Cake
Super NirmaDetergent
Cake
Active Wheel Detergent
Lemon & Jasmine
Active Wheel BarLemon & Orange
Active Wheel BarLemon & Jasmine
Active Wheel Detergent
Lemon & Orange
Wheel Product Range
“Sabki Pasand Nirma”
“Super Nirma Se Mile Super
Safedi”
“HaathNaa
Jalein”
“Nimbu Ki Shakti Aur
Hazaro Phoolo Ki Khusboo”
Ad
Ad Ad
Ad
Nirma WheelS – SegmentationLow-End Segment, Rural Households(Basically all belonging to bottom of the pyramid)‘Sabki Pasand Nirma’T – TargetingNirma is spread across a huge market having an excellent distribution channel.Low Income and rural families.
P – PositioningNirma positioned itself as an affordable product between the people who could not afford detergents and for people who were looking for something more reasonable and added value for money.
S – SegmentationLow-end Segment Detergent, people from lower-middle class and poor class.‘Mehangi Wali Dhulai Budget Mein Samai’
T – TargetingLow income and rural peopleCustomers wanting fragrance
P – PositioningPositioned as a house-hold chorePowerful detergent with fragrance.
Nirma Wheel• Cost leadership strategy• Nirma chemicals was able to challenge the
might of Hindustan lever by pursuing this strategy by producing products more cheaply than Surf.
• At that time, it was sold at Rs 3.5 per kg while HUL’s surf was priced at Rs 15.
• The mission of Nirma was to provide better quality products at best prices
• Nirma is a very good example of fulfilling the unmet needs of the customers. Once you fulfill the unmet needs, you also get the first mover advantage.
• Differentiation strategy.• Nirma was already there in the market for many
years so the possibility of breaking the price barrier of Nirma ruled out and so also the place.
• Now the only thing left was the promotion by getting a Brand Ambassador / Celebrity Endorser and that’s what HUL did.
• HUL incorporated artificial fragrance into Wheel, with photographs of Lemon, Jasmine, Sandal etc. to make consumers believe that it contains real ones.
• Research picked up the insight that Nirma was not kind on hands because of its high soda ash content.
• "Maine maangi thi safaai, aur tu ne di haathon ki jalan" commercial, which took the battle straight to Nirma's turf.
Porter’s Generic Strategies
Cost Leadership
Differentiation
Cost FocusDifferentiation
Focus
Focus
Broa
d Ta
rget
Nar
row
Ta
rget
Lower Cost DifferentiationCompetitive Advantage
Mar
ket S
cope
VS.
TIDE
Launched in 2000 in India as Detergent Powder.
One of the brands under P&G.
GHARI
Launched in 1987 in India as Low Cost, Good Quality Detergent Powder.
Brand under RSPL.
“Chaunk Gaye?” “Pehle Istemal Karein, Fir Vishwas Karein”
Ad Ad
Tide GHARIS – SegmentationMedium Level Income Segment, Soaps & Detergent.T – TargetingMiddle class women, washing clothes on their own. Middle class buyers who cannot afford premium products but aspire for equally good productsP – PositioningPositioned as a very good quality detergent offering superior whiteness, good odor, affordable price. An all round detergent possessing all the desired qualities of a detergent.
S – SegmentationLow-end Income Segment (Mass), Soaps & Detergent.T – TargetingLower middle class households in Tier 3 and Tier 4 regions. Also targeted people in rural areas in different geographies.
P – PositioningPositioned as a good quality product (compared to low-end products like Nirma and Wheel) but at a slightly higher price. A product that doesn’t impair ‘Kismat ki rekha’.
Porter’s Generic Strategies
Cost Leadership
Differentiation
Cost FocusDifferentiation
Focus
Focus
Broa
d Ta
rget
Nar
row
Ta
rget
Lower Cost DifferentiationCompetitive Advantage
Mar
ket S
cope
This is not the End, my friends.
Let’s have a quick summary on Porter’s Generic Strategies.
Cost Leadership
Differentiation
Cost FocusDifferentiation
Focus
Focus
Broa
d Ta
rget
Nar
row
Ta
rget
Lower Cost DifferentiationCompetitive Advantage
Mar
ket S
cope
Porter’s Generic Strategies (with respect to competition and price segment)
Cost Leadership
Differentiation
Cost FocusDifferentiation
Focus
Focus
Broa
d Ta
rget
Nar
row
Ta
rget
Lower Cost DifferentiationCompetitive Advantage
Mar
ket S
cope
Porter’s Generic Strategies (in overall Detergent Industry)
Perceptual Map (Above discussed brands)High Price
Low Price
High Quality
Low Quality
References• http://www.icmrindia.org/free%20resources/casestudies/The%20Nirma.htm
• http://mba.mit.asia/waves-2014/Success-Story-of-Nirma.pdf
• https://www.surfexcel.in/laundry-products/
• Market Research Report on DETERGENT INDUSTRY IN INDIA (By NPCS) [PDF]
• Indian Consumer Laundry Study (By Dupont) [PDF]
• Porter’s Five Forces Model and Porter’s Generic Strategies (multiple sites)
• http://consumeraffairs.nic.in/WriteReadData/userfiles/file/DetergentPowders.pdf
The EndThank You