23 Mar 2015
70% of India's population lives in 627000 villages in rural areas. 90% of the rural population Is concentrated in villages with a population of less than 2000, with agriculture being the main business. This simply shows the great potentiality rural India has to bring the much - needed volume- driven growth. This brings a boon in disguise for the FMCG Company who has already reached the plateau of their business urban India.
With increase in disposable incomes, growth in rural demand is expected to increase because consumers are moving up towards premium products. However, in the recent past there has not been much change in the volume of premium soaps in proportion to economy soaps, because increase in prices has led some consumers to look for cheaper substitutes. It will be also good to understand some ground realities about rural marketing before marketers venture into rural markets with their brands. Like in urban areas, People who watch TV in rural areas, also influence the choice of many personal care products that enter the household.Â
The toilet soaps market is estimated at 530,000 TPA including small imports. Hindustan UniLever 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 Brands in the rural areas include Lifebuoy, Lux, Cinthol, Liril, and Nirma, Santoor.
Toilet soaps, despite their divergent brands, are not well differentiated by the consumers. It is, therefore, not clear if it is the brand loyalty or experimentation lured by high volume media campaign, which sustain them. A consequence is that the market is fragmented. It is obvious that this must lead to a highly competitive market. Toilet soap, once only an urban phenomenon, has now penetrated practically all areas including remote rural areas. The incremental demand flows from population increase and rise in usage norm impacted as it is by a greater concern for hygiene. Increased sales revenues would also expand from up gradation of quality or per unit value.
As the market is constituted now, it can be divided into four price segments: premium, popular, discount and economy soaps. Premium soaps are estimated to have a market volume of about 80,000 tonnes. This translates into a share of about 14 to 15%. However, by value it is as much as 30%.
Soaps are also categorized into men's soaps, ladies' soaps and common soaps. There are a few specialty soaps as transparent Glycerin 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 terms.
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.
Price is the most important factor which effects the buying behavior of consumer, by which a consumer goes for the various segment of soap like premium, popular, sub-popular and carbolic which are basically decided by the cost factor and fat content in the soap.
The buying frequency is either monthly that is done by the families or in case of bachelors it is more than once in a month. The occasions when premium soaps are purchased are usually when there are festivals and ceremonies. Moti Soaps are usually presented during festivals and occasions for presents and gifts.
The promotional techniques help to boost sales. Various tactics like the price off's, buy one get two free, free gifts and other schemes help boost sales in short run and also help in clearing stocks.
One of the important points a soap marketer should note is that the soaps are usually purchased by women in urban areas as most of the day to day consumption of personal care products are made by women. A point to note is that women use more personal care product than men do and hence premium soaps are mostly targeted at them. Men normally make purchase decisions in rural areas. Hence the marketer has to adopt different strategy for such a market.
Beauty - Lux
Freshness - Liril, Cinthol
Natural - Medimix, Margo
Baby - Johnson & Johnson, Doy
Cream - Dove, Doy Care (moisturizing)
Medicated - Dettol, Savlon,
Glycerin - Pears, Emami
One of the factors, which affect the demand of soaps, is the penetration, which the products have in market. In case of soaps this has not been a major issue as the penetration in the rural area is as high as 97% and that for urban area is around 99%. Thus the approximately the penetration is around 99% for overall India.
Hindustan UniLever is the largest contributor to the toilet soaps market of India. It enjoys almost a two-thirds share, with the second ranked Nirma Soaps placed at a distantly low share of 16.8%. Lux and Lifebuoy have held the sway of the market for almost fifty years. While the former brand remained the preserve of the high-end rich consumers, Lifebuoy ruled the roost with health-conscious users as a hygienic soap. The products underwent up-gradations with the introduction of versions like International Lux and Lifebuoy Personal. In between came brands like Nirma Rose, Nirma Beauty Soap, Breeze, Caress, and LeSancy. In 1993 came Dove. Earlier, Liril made waves with its lemon touch and bathing acrobatics.
At the medium and lower rungs, brands like Hamam, Moti, Jai, Rexona (third largest brand) were well supported by OK and later by OK NSD Bar.
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.
While Pears has dominated as high profile specialty soap, HUL undertook, in 1992, a project to manufacture the product for the world market at Khamgaon in Maharashtra. Commercial production commenced in 1993.
To provide a sound base to its toilet soaps operations, HUL has also branched out into other toiletries like shampoos and related products like glycerin, fatty acids.
Godrej Soaps had a disappointing experience in forging an alliance with Procter & Gamble (P&G). Infact P&G is withdrawing itself from the premium soap segment like Camay.
P & G has now a fully-owned subsidiary in India and now it is concentrating more on personal care products. Godrej 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.
Godrej is promoting a number of brands, Cinthol, Ganga, Shikakai, Fairglow, No.1 and Crowning Glory, while it has others to bother about such as Vigil and Fresca. Cinthol ranks third and accounts for 60% of all Godrej Soap's brands. It is an old brand launched about five decades ago in early 1950s. New Cinthol Lime and Cologne gave it a new look in 1985. Two variants were introduced in 1989 placing an added emphasis on their brand of soaps. Its deodorant and complexion soap is styled as Cinthol Spice. Cinthol is perceived largely as a male soap, as Lux is a lady's soap. The company expects a very high growth for Cinthol in 1997-98. Ganga did well and a new version Doodh Ganga has been introduced. Ganga had notched up a 5% market share but declined to 2% later with sales at Rs 350 mn. Godrej wants to revive it. Godrej Soaps was giving a tough competition to Hindustan Lever. Crowning Glory was pitched for hair care.
Even Nirma has achieved a significant penetration and has notched up an impressive 60,000 tonnes sale in just three years. Nirma Ltd has been putting up a backward integration plant to produce soda ash and linear alkyl benzene (LAB).
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 UniLever (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 is sold in the form of laundry soaps, which are used for washing clothes. Production of laundry soaps are reserved for the small-scale sector and data is not readily available. There is also a large cottage industry producing cheap soap, used for personal wash, for which reliable numbers are not available.
Another possible reason for the apparent decline in consumption could be the free samples of soap which have been handed out as part of incentive schemes, say industry sources. "The quantum of such samples may not be picked up in the data," said the official.
There is another whacky hypothesis. Many households earlier used soaps for twin purposes: for body wash as well as shampoo substitutes.
However, successful sachet marketing in shampoo seems to have now penetrated this market, which has directly impacted the sales of soaps.
A detailed analysis of the data shows that sale of premium soaps, the likes of HUL's Lux or Godrej's Cinthol, declined by 13.1 per cent. But even the carbolic or discount soaps - the likes of HUL's Lifebuoy or Nirma - saw volumes decline by 9.9 per cent. Even though the market has shown de-growth in toilet soaps segment, analyst say that it will grow at a meager rate of 3 to 4 per cent especially in the premium category, which was previously looking attractive. This can be attributed to factors like excessive dependent of Indian rural sector on monsoon, which can be uncertain. Also due to high excise duty prices have remained high enough to keep the huge middle class chunk away from this market. Thirdly 80% of the raw materials used in premium soap are imports, which attract high import duty. All this factors lead to increase in cost, which deters the players to provide value for money product to the middle class consumer.
The price of the premium segment products is twice that of economy segment products. The economy and popular segments are 4/5ths of the entire soaps market. The penetration level of toilet soaps is 88.6%. However, the per capita consumption of soap in India is at 460 gms per annum, while in Brazil it is at 1,100 gms per annum.
In India, soaps are available in five million retail stores, out of which, 3.75 million retail stores are in the rural areas. Therefore, availability of these products is not an issue. 70% of India's population resides in the rural areas; hence around 50% of the soaps are sold in the rural markets.
With increase in disposable incomes, growth in rural demand is expected to increase because consumers are moving up towards premium products. However, in the recent past there has not been much change in the volume of premium soaps in proportion to economy soaps, because increase in prices has led some consumers to look for cheaper substitutes.
The major players in personal wash (Soap) market are HUL, Nirma and Godrej
Developing markets such as India are an important source of growth for Unilever. The company is adopting unique marketing approaches to increase consumption of its products in these regions, positioning itself as an ethical brand that benefits wider society.
Unilever's Lifebuoy 'Swasthya Chetna' ('Health Awakening') campaign is one example. This educates people on the importance of health and hygiene in preventing diarrhea and encourages them to adopt a simple hand-washing regime using soap. Swasthya Chetna is India's largest ever rural health and hygiene education program.
Lifebuoy health officers visited 43,000 Indian villages and schools over five years where they used product demonstrations, interactive visuals, competitions and drama workshops to spread the health and hygiene message.
The program has reached 110 million rural Indians since it began in 2002. Awareness of germs has increased by 30% and soap use has increased among 79% of parents and among 93% of children in the areas targeted. Soap consumption has increased by 15%.
The campaign received recognition for its innovation and effectiveness, winning Silver in the Rural Marketing Advertisers Association of India awards in 2006, and the grand prize at the Asian CSR awards 2007. It was also recognized by the Indian government who created a special edition postal cover dedicated to the campaign.
Godrej No. 1. is a hit though, from the stables of Godrej Consumer Products Ltd. It claimed the number three spot in the toilet soap category for the quarter ended June 2009, eating into market leader Hindustan Unilever's (HUL) market share.
It is now the third highest selling soap behind Lifebuoy and Lux. Lifebuoy and Lux, both HUL products and market leaders, saw market share decline by almost 2 percent to 16 and 15.4 percent respectively in the same period. HUL declined to comment for this article.
An analyst with a domestic brokerage says HUL has also lost share to other fast growing soaps.
Santoor also stakes claim to the number three spot. The ACNielsen figures show Godrej No. 1 in the number three slot, but only in terms of volume. Since it is a discount brand, it falls to number five in terms of value. Santoor and Dettol take the third and fourth spots on that table.
Inching Ahead
No. 1 has gained market share but it is more due to HUL's bad judgement in assessing consumer sentiment. No. 1's growth figures have come from rural areas. During the peak of the slowdown last year, rural buying was largely unaffected even as urban figures dropped. But rural areas are sensitive to price changes. Prices of palm oil, a key ingredient in soap, started rising and HUL imposed steep price hikes. Godrej waited and increased prices slowly and at a much lower rate than HUL.
"HUL took price hikes when people were getting more price conscious," "That is when consumers started to shift." No. 1 increased its market share in rural areas to 6.7 percent from 5 percent a year ago. It has gone from having 38 percent sales in rural areas to 50 percent now.
They drove home the advantage that they had been handed. Once consumers started trying out Godrej No. 1, the brand managers used a combination of clear mass market, rural positioning and a rapid increase in distribution to cement the gains. The company sharply increased its rural distribution network. No. 1 ads now appear only on Doordarshan because it is cheaper and ubiquitous in the areas where they want to be. Spending only on Doordarshan also means that Godrej No. 1's ad to sales ratio is just 1 percent compared to the industry figure of around 8 to 10 percent.
No. 1 was traditionally popular in Punjab and Haryana but not known in other states. It has doubled distribution in Uttar Pradesh in the last two years to compete with large competitors. The Godrej group re-branding campaign also helped.
But No. 1 is not alone in its success. Wipro has also worked with micro finance institutions to promote its soaps in rural areas. "The rural economy has been doing very well because of the high minimum support prices and we concentrated there," says Anil Chugh, vice president for sales and marketing at Wipro Consumer and Care and Lighting. Santoor is now one-and-a-half times as big in rural areas as it is in urban.
Weddings anywhere in the world mean shopping, and India is no exception. In Indian villages, though, a marriage in the family means shopping not just for the trousseau and home appliances -- it also means buying hair dye, henna and bigger bars of soap. For many households in rural India, what the rest of the world considers everyday products are luxuries to be indulged in once in a while.
Consumer products companies in India are working overtime to change that thinking. At Godrej Consumer Products Ltd (GCPL), though, ensuring its products fly off village store shelves has become the governing ambition. In April 2009, GCPL initiated the ambitious Project Dharti (Dharti is the Hindi word for Earth) to increase the company's focus on rural India. The program's goals are: to generate sales in rural India that overtake within a year the contribution of the country's urban areas; that rural sales growth will outstrip overall sales increases; and that GCPL's distribution network within three years will have expanded to 50,000 villages and 8,000 small towns across India.
At first glance, those aren't unreachable targets for the US$450 million company. About 38% of GCPL's revenues came from rural markets in 2008-09 and the company already had a presence in 15,000 villages and 4,000 small towns when Project Dharti was launched. GCPL is the second largest bath soap manufacturer in India, after Hindustan Unilever. The company claims its Godrej No.1 brand is the best-selling Grade 1 soap (the highest rating of the Bureau of Indian Standards based on the fat content; toilet soaps have a higher fat content than bathing bars) and the market leader across north India.
A combination of internal and external reasons has led to this shift in focus. First, GCPL realized that the urban share of its soap sales was higher than the rural share. "This created a dichotomy and rural India is a value-for-money market," Then there was the economic downturn of 2008-09. While consumer goods were largely insulated from the slowdown, the demand for consumables in urban India didn't grow as fast as it did in rural markets. The Nielsen Company estimates that the fast-moving consumer goods market in India grew 14% in the 12 months ending November 2009. Rural demand accounted for 18% of the growth, while urban demand made up only 12%.
Another reason is the natural growth of the rural market. Rural incomes are on the rise due to increasing food price realizations and government-sponsored employment programs, and that in turn is leading to growing consumption in those markets. A frequently-quoted statistic is that rural India already accounts for 54% of India's fast-moving consumer goods (FMCG) sales, while a white paper by retail consultancy Technopak Advisors and the Confederation of Indian Industry predicts that the rural consumer market will reach US$425 billion in 2010-11, with 720 to 790 million customers. GCPL's annual report of 2008-09 also acknowledges the potential: "Estimates indicate that over 300 million people will move up from the category of rural poor to rural lower middle class between 2005 and 2025. With this change, rural consumption levels are expected to rise to current urban levels by 2017. Such developments in India's markets are expected to create major opportunities for Indian consumer product companies."
The Mumbai-based company, which is part of the US$2.28 billion Godrej group, is ensuring it is well-placed to take advantage of that opportunity when it occurs. Sehgal says GCPL is already halfway to achieving its Project Dharti goals. By February 2010, the distribution network had been expanded to 6,000 small towns and 22,000 villages. Rural sales' contribution to total revenue has increased to 42%, and GCPL has gained a percentage point each in market share of hair color and soaps.
GCPL always have been mainly focusing on
"Customize product and communication; build recognition through demonstration; build word of mouth for the brand; and build access through innovation and a cost-effective distribution channel." He says GCPL seems to doing all that, and more.
Conventional wisdom says rural consumers need customized products designed to suit their needs, their conditions and their wallets. But they also want products similar to those available in urban markets, so many believe that small compromises in product quality are acceptable. Not "Rural consumers want the same product as urban shoppers. If you compromise on quality to make it affordable now, they will shun your brand when their income levels increase. can't afford "Aspiration levels have gone up. They want the same brands they see on TV. The only vector is affordability and demonstrated usage in new categories."
The solution lies in customizing the size of the offering, not the product itself. GCPL has done just that, introducing smaller packages of the same products, at price points rural consumers can afford. Smaller bars of soap, herbal henna packets for 10 cents, sachets of powder hair dye and talcum powder for 20 cents act as entry points for rural consumers, who return for larger packs when their budgets permit. Sales of consumer products in rural markets peak immediately after the harvest and during festivals and the wedding season (September through December), when many of India's 600,000 villages are in a have-cash-will-spend mood.
Company executives say the response to the smaller packages has been strong, especially in South India, where the smallest available size of GCPL's Cinthol soap retails at 50 cents. An 11-cent bar has been added to the portfolio.
Communication and promotion strategies also need to be tailored to suit rural customer needs. It starts with the media plan. For value brands like Godrej No.1, GCPL has stopped advertising on private cable and satellite channels, preferring the cheaper and more widely received government-owned television network, Doordarshan, as well as All-India Radio. In addition, it advertises on regional language TV channels and in local publications. "It is more cost-effective to be on Doordarshan since the share of voice is higher," explains Sehgal. In addition, brand recall in urban areas is unlikely to be affected since a campaign for Godrej products is running parallel across all national media. The hair color brands and soap brand Cinthol also retain a more conventional media plan, including ads on cable television.
The commercials that appear on regional TV channels and Doordarshan are quite different from those on cable television, keeping local sentiments in mind. For instance, visuals of people playing with their hair or running their fingers through their hair would be frowned upon in conservative villages, although it's a common image in hair care product advertising across the country.. "The rural consumer is just evolving from the economics of necessity to the economics of gratification. Unlike the urban consumer, he is largely a first-time user of several product categories, be it FMCG or durables," he adds. Regular below-the-line activity such as in-store demonstrations and stalls at village fairs and farmers' meets are also forming part of GCPL's rural marketing strategy.
GCPL is counting on word-of-mouth brand building for its Expert line of hair color products. The company is reaching out to 50,000 barbers and salons in nine states, offering to engage them in a co-branding exercise. Under the program, the salons add the "Expert" tag to their names, with all fixtures -- including mirrors and chairs -- displaying the GCPL brand logo prominently. The salons will also be provided grooming kits including the hair dye, mixing bowl and brush, as well as other GCPL products such as talcum powder and shaving cream. "Most people turn to their hairdressers for advice when they decide to color their hair. So it makes sense for us to influence the influencer,"
The chain of Expert barbershops will enhance GCPL's reach in the hinterland. In the past year, the company has added 7,000 villages and 2,000 small towns to its distribution network. Typically, GCPL's distribution operates on a hub-and-spoke model where a super-stockist in a small town oversees distribution for several adjoining villages, which are looked after by sub-stockists. The company reaches deeper into the interior through regular visits to stock smaller villages with supplies. "[A] good distribution network is the only answer in rural India. "Companies need to keep two issues in mind here: one, ensure distributor margins are high enough to make them service their territories well; and two, offer consumers a choice of products so that the marginal cost of distribution reduces, while avenues of income generation increase."
But there's a trade-off between the cost of distribution and incremental penetration. Given the expense of running and maintaining a vehicle and the need to extend credit to shopkeepers in smaller villages, the cost involved in reaching settlements with less than 2,000 people isn't offset by the consequent increase in sales. Anugrah Madison's Seshadri notes: "About 83% of India's villages are in the 2,000 and below population strata, with hardly any shops. So, most marketers need to address the top 17% [of] villages, which account for 50% of [the] rural population and 50% of rural wealth. Of course, having done this, reaching the last mile (villages with populations below 2,000) is the biggest challenge." Sehgal adds: "Every incremental village is smaller, so doubling reach will not double revenue. That is the commercial dilemma FMCG companies face: the deeper you venture into population strata, the smaller the business opportunities."
Demand for top-of-the-drawer FMCG products is no longer restricted to urban India.The rural consumer has emerged as an important cog in the sales growth of premium offerings.Clever pricing,rising aspirations and new marketing mantras are driving this trend
With rural consumers warming up to branded products,the urban-rural divide is fading away faster than one can imagine.There is now very little difference between the aspirations of rural consumers and their urban counterparts. Certain growth statistics have shattered the myth that the rural consumer is content with unbranded or mass-end products alone and gives a strong indication that rural market consumption has picked up and is accelerating faster than urban markets. This has led to their changing their consumption pattern.
Dove shampoo, a premium-end product,reported a growth of over 100% in the rural market during January-October 2010 over the same period last year. In fact, Dove grew faster than its mid-priced cousin, Sunsilk shampoo, which reported a growth of 14% in rural India during the period.
Although analysts explain that the high growth is due to a lower base and that actual sales number would be smaller given the recent introduction of the brand,one cannot overlook the fact that there is a demand for such products and marketers can no longer underestimate the aspirations of the rural consumer.
Gone are the days when the rural consumer was content with using mustard oil and plain soap.Today,he/she is seeking special branded products for daily skin and healthcare needs.Rural consumers across income segments are showing a marked propensity towards spending on premium high-quality products,which are backed by strong brand values, says Sunil Duggal,CEO,Dabur.
For instance, take food products. Not only has the demand for cream biscuits gone up in rural markets, the sale of instant noodles,too,is growing nearly twice as fast in the rural market compared to the urban one.Whats more,one in every six rural buyer of hair dye now uses colours other than blacksomething,which would have been dubbed indulgence a decade ago.Even seemingly urbane brands in categories like deodorants and fabric softeners are said to be growing much faster in rural India than urban,says a study by The Nielsen Company.
Research methodology is the arrangement of condition for collection and analysis of data in a manner that aims to combine the relevance to the research purpose with economy in procedure. Research is conceptual structure within which research is conducted. It is way to systematically study and solve the research problems.
Research purpose can be divided into three categories:
Exploratory research: - It is also termed as formulate research the main purpose of such research is to gain familiarity with a phenomenon or to achieve new insights.
Descriptive research: - This portrays the particular characteristics of a particular individual situation or a group.
Casual research: - Conducted to identify "cause and effect" relationships.
A close end questionnaire was constructed for the survey. A questionnaire comprising a set of questions was presented to respondents for their answers.
PRIMARY DATA:
The first-hand information bearing on any research is the one which has been collected by the researcher. The data here is collected through:
A structured questionnaire
SECONDARY DATA:
The data which has already been collected, complied and presented earlier by any agency may be used for purpose of investigation. The data collected through:
Various publications in form of annual reports, various papers and journals published from time to time.
After collection of data another work necessary for any data collector is to correctly analysis that data. So statistical tools helps us to correctly analysis the data. The statistical tool used here is the software SPSS version 16.0.
Ordinal Scale: - An ordinal scale not only categorizes the variables in such a way as to denote differences among the various categories, it also rank-orders the categories in some meaningful way. With any variable for which the categories are to be ordered according to some preference the ordinal scale would be used. The preference would be ranked and numbered 1, 2 and so on.
Nominal Scale: - A nominal scale is one that allows the researcher to assign subjects to certain categories or groups. For example with respect to the variable of gender, respondents can be grouped into two categories male and female. These two groups can be assigned code numbers 1 and 2. These numbers serve as simple and convenient category labels with no intrinsic value, other than to assign respondents to one of two non-overlapping or mutually exclusive categories.
To find out the impact of advertising on Brand Performance.
To know the consumer Perception of a brand after Advertising.
Null Hypothesis: There is No significant impact of advertisement on Purchasing of toilet soaps in Rural India
Alternative Hypothesis: There would be significant impact of advertisement on Purchasing of Toilet Soaps in Rural India.
The research is exploratory in nature. Explorative studies valuable means of finding out 'what is happening' to seek new insights to ask questions and to access phenomenon in a new light. The study involves finding out impact of advertising on Brand Performance and the consumer Perception of a Brand after Advertising.
Sample Size- Rural Consumers -150
Rural Retailers -50
Sampling Method- Random Sampling Method ,
Research Instrument - Questionnaire
Research Type -Exploratory Research
The date was collected from filling of Questionnaires from Rural Customers and Retailers in the outskirts of Ghaziabad and Noida and the sampling Method used is Random Sampling Method.
Research is based on the collection of data from both primary and secondary sources.
There may be a possibility of biasness on the part of some respondents, but very much care has been taken to make this report unbiased.
Some respondents might not give the correct information due to their lack of interest and shortage of time.
Time constraint.
All the information is based on primary and secondary data that has its own limitations.
There are various toilet soaps which are sold in the Rural Market but same stay for long time and some do not and the main reason for this that companies drop in their Advertising Efforts and but companies like HUL,Godrej,Nirma Have excelled in the Rural Market because of their continuous Marketing Efforts throughout the years .
The Target market chosen by me was people in the rural areas and I used random sampling method and chose people from the age group of 18-45 yrs and went on with the Research. There were 14 set of questions Designed, 7 each for the consumers and the Retailers.
Interpretation:
When it comes to the Rural Market of India, the most sold Soap is Lifebuoy, Godrej and Lux and the responses from the people is also the same, 28 Respondents are using Hamam, 24 use HUL's Lifebuoy followed by Godrej's ,Godrej No 1 ,and 16 respondents use Lux ,followed by Nima Rose and other Players like Cinthol , Santoor,Margo ,Breeze and in the Others Category there are soaps Local Soaps, Soaps from ITC and other Soaps,
Media Plays a Very Important Role for a Purchasing Decision and Television Media Influences the most and almost 50 % of respondents said Television drives them to buy the soap followed by 24% to Radio ,17 % to Print Media and 9 % said that Banners drives them to buy the product.
When it comes to Advertisement, the Tagline and Jingles Play a very important role and the same is in case of Toilet Soaps and 32 Respondents are happy with Tagline and jingle of Lifebuoy and 28 chose 28 ,While 26 chose Nima Rose followed by Hamam,Godrej No 1,Cinthol,Santoor and Breeze.
The Advertisement of Lifebuoy and Lux have influenced the Respondents the most ,28 have chose Lux and 30 have chose Lifebuoy ,the advertisements of Hamam have influenced 24 respondents Followed by Nima Rose,Godrej No 1 ,Cinthol,Breeze,Santoor and Margo .
There is lot of Advertisements on Toiletry Soaps and do people change from one brand to another after watching an advertisement and 59 % do not change their soap after watching a advertisement, While 41 % Change their Soap after Watching the Advertisements and the Question was also asked from which Brand to which Brand have they Switched and there were a lot of mixed Responses and the Majority in the rural areas have switched to Lifebuoy, Lux or Godrej No 1.
The Brand Mascots and Celebrity Plays a Very Important role for a Brand to build and the same is in case of Toiletry Soaps, 61 % Respondents Feel that after watching a celebrity in an advertisement they are influenced to buy the soap and only 39 % feel that they are not influenced.
83 Respondents are influenced when more advetisement of the same Brand is shown and it influences their Purchasing Decision and 67 do not mind if the same Brand is Advertised or not ,they would stick to the same brand .
The Most frequently asked Soap is Lifebuoy, and this soap have the highest share in the Rural Market and it is followed by Lux (9), Godrej (6), Hamam (6), Margo (2), and Breeze (2).In the others category the soaps are soap from ITC,local soaps, and Dettol.
There are lot of offers offered by Toiletry Soaps company to the Customers and question offered is whether the retailers pass on the offers to the consumers or not .32 Retailers Said that they pass the offer to the Retailers and only 16 Retailers did not pass the offers to the Retailers.
In the Market, the majority of the market share is enjoyed by Hindustan Unliver and this is because of their Promotion Activity and 22 Retailers said that HUL Provides the Best -in -Shop Promotional Support and it is followed by Godrej, Nirma, Wipro, Margo and others
56% of the customers change their Brand after the launch of a New Ad Campaign and 44 % do not change their Brand and their customer preference does not change with a change in Campaign.
The Most Effective Media that Governs Purchasing Decision is Television, and the main reason is the consumers is able to see the product and comes to know the various features of the Product and next comes Radio and Print Media and the least effective media Vehicle is Banners.
Offers influence customer to buy the Product and 30 Retailers said that consumers are influenced by the offers and 20 Retailers said that the customers are not influenced by the offers and they stick to a Particular Brand.
There are Various Promotional Schemes offered by companies to the Consumers and 17 Retailers gave their opinion that customers are more influenced by Offers followed by 13 For Gifts with Purchase and 11 for coupons and people are least interested in Money-Back Offers.
It have been out that Advertisement do play a very important role in Purchasing of toilet Soaps in Rural India.
When it comes to Rural Market people are more inclined towards safety because when asked to the respondents, they said they see the Fear Appeal and switch to a brand and the campaign by Hindustan Unilever Limited (Swastya Yojna) have helped them to gain them a market share in Rural Market.
Television Media is the Most Effective Media because majority of the respondents said that they are influenced by TV ad's rather than any other Media.
Offers play a very important role in influencing the customers and many companies have been successful by giving various Offers to the final customer, the offers may be Discounts, Coupons, etc...
The Frequency of the advertisements Influence the purchasing Behavior of the Customers .i.e, when the same Advertisement is Shown Again and again, it would tend the customers to buy the Product.
The Jingles, Tagline also plays a very important in purchasing Behavior because people in rural areas would easily relate it with the brand.
Advertisements Campaigns with Celebrity and mascots influence people in Rural Market to buy the Product.
Companies like Hindustan Unilever, Godrej have good presence in the rural market because of their continuous Advertising and Sales Promotion efforts, so for companies like Nirma, Wipro, Reckitt Benkiser to gain market share they need to increase their Promotion efforts.
There is a perception that people in the rural markets are very price sensitive, but as per the study it was found out that when it came to toiletry soaps people were ready to compromise for price, if the quality of the product was good.
There are many new entrants to the rural market or in the toilet soap industry, For Eg: ITC have come up in toilet soaps and they need to do rigorous advertising in rural areas to gain acceptance in the rural market.
When it comes to Rural Area, People are more interested in Offers and Schemes, so it would be a good move for the company to come out with offers and schemes regularly.
There is always a sense of fear in minds Of Rural people , so companies can take advantage of this and advertise the Product
Eg: HUL did it with their Swastya Chetna Programme for their Soap "Lifebuoy" and gained market share from this move.
If the companies need to taste Success in Rural Markets, they have to come out with Separate Campaigns in rural Areas, an entirely new Campaign in Rural Market.
Example: Godrej came up with Project Dharti for their Godrej No: 1 Soap and they have gained market share out of it.
There is Rise in Demand for Medicated Soaps in the market ,so it would be good for companies to introduce medicated soap as their new Varient.
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.
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 fairly high contribution from rural market makes this category sensitive to the fortunes of the agriculture economy
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.
Heavy launch costs
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
Industry Growth - the entire soap Industry is growing at a minimal rate of 3 % and the entire FMCG industry is passing through turmoil, where the soap segment registered 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.
Then shoot us a message on Whatsapp, WeChat or Gmail. We are available 24/7 to assist you.
Visit Our essay writting help page to get all the details and guidence on availing our assiatance service.
Our writting assistance service is undoubtedly one of the most affordable writting assistance services and we have highly qualified professionls to help you with your work. So what are you waiting for, click below to order now.
Our experts are ready to assist you, call us to get a free quote or order now to get succeed in your academics writing.
