A CASE ANALYSIS ON SUPER SHAMPOO PRODUCTS AND THE INDIAN MASS MARKET

Submitted To: Dr. Dindayal Swain

Submitted By: Shiva Krishna padhi

Date: 19th July 2012

DECLARATION

I hereby declare that the Case Write Up on Xerox Corporation: The Customer Satisfaction Program, submitted to Dr. Dindayal Swain, is a record of an original work done by me based on its case reading.

Shiva Krishna Padhi

Index

1. 2. 3. 4. 5. 6. 7. 8. 9.

Declaration Introduction Why SUPER India and FMCG Why Rural Media Trends in rural India Rural India consumer Behavior Shampoo market in India Shampoo Market in Rural south india

10. Issues and challenges 11. Strategy to be followed 12. Recommendation 13. Conclusion 14. Reference

1. INTRODUCTION:
The case basically covers the following areas: a.Suresh Venkatramanan basically involved in marketing industrial products. b. He belongs to Coimbatore. c. Suddenly in 2010 he became interested in consumer products because He was interested in how shampoo as a category was transformed from unaffordable to affordable category. He was fascinated with single use packaging i.e invention of sachets. Also had firm belief that rural market offer great potential for consumer products. d.To launch a product in shampoo category. e. And lastly had a market survey to focus on challenges, opportunity, and know the basic strategy of existing competitors . f. to find out the key variables which would take a new entrant to persuade consumers like: Affordability Psychographics Lifestyle Media consumption Purchasing power 2. Why SUPER ? Competitors dont have a brand which is simple to understand. Easy to pronounce Had an English overtone that can fascinate rural consumers. Also film stars are projected as SUPERSTARS and films are part of Indian psyche.

3. INDIA and FMCG 4th largest in the Indian economy. $15 to $18 billion market size and will increase to $33 billion in 2015. Strong mnc presence. Well established distribution network.

 Low operational cost. Availability of key raw materials,cheap labour ,and presence in entire value chain. India ,a diverse array of product categories, brand, prices, lifestyles and culture. Available opportunity in the shampoo category ,as it has a low per capita consumption and large segment of low frequency and non users.

4. WHY RURAL? 150 billion households which three times the urban india. Fmcg market penetration is about 2% and the total growth rate is 8%. 70% of Indian population lives here. 12.5% of worlds population lives in rural india i.e around 720 to 790 million 43% of total income of india which is around $220 billion in 2004-05 and is projected around $425 billion in 2010-11 ,a CAGR of 12%. Around 57% of fmcg market income is contributed by this sector i.e $9 billion. Telecom and durables are growing at 31% and 60% resp. Major income of around 60% is generated by agriculture.

5.MEDIA TRENDS IN RURAL INDIA: Television with a reach of 38% in rural areas, radio with 18% and print media with 15%. Other gatherings in villages like melas, haats and mandis which has a huge number. Outdoor media like wall paintings,folk media and fairs. WOM through educated youth of village,local retail store owner and chiefs and landlords or by SHG. 6.RURAL INDIAN CONSUMER BEHAVIOUR Heterogeneous consumer market. High value consciousness through media. Less quality conscious people. Indulge less in pre-purchase analysis.

7. SHAMPOO MARKET IN INDIA Rs 30 billion market in 2010. 14% growth per year. Per annum consumption of 13 ml per capita. Main players are HUL(46%),P&G(24%),Cavin Kare(18%),dabur(7%). SKUs are mainly bottles (25ml to 50 ml) and sachets(7.5 ml). 90% of shampoo sales occurred in sachets in rural india. Southern market accounts for 70% of sachet volumes and northern india 50%.

8. SHAMPOO MARKET IN RURAL SOUTH INDIA: There are top three shampoo brands in south India i.e clinic plus, head & shoulders and chick. below is a summary of each of these players.

Clinic plus

head & shoulders

chick 1. Cosmetic shampo o of cavin care. 2. young women:18 to 25 yrs. 3.mother

1. cosmetic shampoo 1.anti dandruff shampoo of P&G. Brand of HUL. 2.young amle nad female between 2.central character: 18 to 25 years of age. Young school going Girl:8 to 14 yrs old 3.influencer:mother 3.expert or celebrity Who is decision make r in a family 4.consumer segment: premium Low income househ olds

4.low income con sumer.

9.ISSUES/CHALLENGES FACED BY SUPER SHAMPOO IN THE RURAL MARKET: Since Super shampoo is a new brand, therefore it could face quite a few challenges o Addressing the established competitors like HUL,P&G,cavin care. o Competing against the advertising methods of the established brands. o Understanding the diversity of cultures. o Understanding the consumer psyche in the changing environment. o Low per capita income. o Sales Management. o Proper media channel. o Liberalization and globalization.

10.STRATEGY TO BE FOLLLOWED: Cost leadership strategy : This generic strategy calls for being the low cost producer in an industry for a given level of quality. The firm sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain market share. Differentiation strategy: A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. The value added by the uniqueness of the product may allow the firm to charge a premium price for it. Focus Strategy: he focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing entirely on it. A firm using a focus strategy often

enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly.

11. RECOMMENDATIONS: 1. To succeed in a rural market the model of marketing mix has to be changed from 4Ps to 4As i.e. Affordability, awareness , availability acceptability. 2. To adapt Focused strategy: is best suitable for new ventures. It would help them in growing fast in focused way in specific market and then after they can look after expansion and exploring segment. You must need to monitor and keep watch on benefits and advantages of focused strategies because market situation can change any time with change in external environmental factors. Difference between segments can be eroded and it asks organizations to open to much wider competition. With focused strategy you can be much sure of your probable outcome and need of targeted audience. It helps you better in defining product features and offering perceived value to definite market segment. 3. Also venketramanan should keep an eye on the government measures towards rural india which is not mentioned the case like. Waiver of loans. National rural development guarantee scheme. Increasing MSP. Excise duy relaxation on fmcg products in rural India. SBI and other banks are keenly increasing financial inclusion in rural market

12.CONCLUSION:

It is quite clear that rural market is very large in compare to the urban market as well as it is more challenging market. The consumer wants those products which are long lasting, good, easy to use and cheaper. The income level of rural consumers is not as high as the income level of urban consumers thats why they want low price goods. It is one of the reason that the sell of sachet is much larger in the rural area in all segments. It is necessary for all the FMCG major companies to

provide those products which are easy to available and affordable to the consumers. It is right that the profit margin is very low in the FMCG products, but at the same time the market size is much large in the rural area. The companies can reduce their prices by cutting the costs on the packaging because the rural consumers dont need attractive packaging. Application of 4A* is also a major task for the major companies in this area

13.WEBLIOGRAPHY :

a. http://www.slideshare.net/sachin64/rural-products-9163096 b. http://www.scribd.com/doc/59173027/Competitive-Strategies-Followed-byFMCG-Sector-in-India. c. http://www.quickmba.com/strategy/generic.shtml. d. http://expertscolumn.com/content/focused-differentiation-%E2%80%93strategy-which-can-work-you. e. http://www.m.barendezvous.com/fastmoving.php.