Case Study – Household Products

Summary

• Established in 1940, Capital of Rs 100 crores, a profit Centric Organization

• Engaged in manufacturing and marketing of various consumer products of household use

• Toilet Soap Group: One of the important divisions of the company

• Primary Benefit – Toilet soap with jasmine fragrance and free of animal fat

• Concept testing – Vegetable oil soap, packed in 2-color printed wrapper, jasmine fragrance, priced at Rs. 22.50

Toilet Soap Market

• Presence of large number of brands

• 90% brands sell at around Rs 15/cake

• Rest: between Rs 18-Rs 50/cake (majorly: Rs 20)

• High Price Sector: Growing @ 15%p.a.

• Low Price Sector: Growing @ 4% p.a.

• Company has three brands:

– Two priced at Rs 15: Accounts for 40% of low price sector of toilet soap market (major profit earners)

– One at Rs 30 (higher profit margins and growing fast)

• High competition in low price sector

– Profits have declined (cost cutting cant be done and advertising expenditure has increased)

Decisions Taken at Critical Stages of New Product Introduction

• It was decided by new Marketing Manager Mr. Rahul to improve profitability, the company should introduce 2-3 new brands in high price sector for it has a fragmented market only

• Managing the Development Process: Ideas

– Generating Ideas

• Studying Competitors method was used

– Competition brand contained jasmine perfume and achieved 10% share of high price sector within 2 years

– Evaluation: Comprehensive research was not done in generating ideas (could have used DIG, Interaction with others, employers or using Creativity Techniques)

• Brand Positioning: Sehra as luxury, pure and exotic jasmine fragrance giving soap in foil wrap

• Concept Testing

– 2 products (different jasmine fragrance) were developed

– Product test was conducted with 1st product v/s competitive product and also 2nd product v/s competitive product and then 1st v/s 2nd product

• More thorough testing could have been done where information about communicability and believability, Need Level, Gap Level, Perceived Value, Purchase Intention etc could have been gathered.

• Conjoint analysis could have been done to know which name would have suited more

• Evaluation of Marketing Strategy Development

– Penetration: 30% in Hyd. And 80% in Indore

• Communicated effectively in responsive market like Indore and ineffective in Hyderabad

• Different Promotion Campaign/ Brand Strategy for Hyd is required to increase penetration

– Jasmine Fragrance: More related to women (three panels of consumer women was choosen)

• Name should be changed from Sehra (bridegroom), cojoint analysis could have been done

– When introductory discounts were removed, sales dropped substantially in Indore. This means, the market is price sensitive. I.C. C and D should also have been considered

Market Share increased drastically during introductory discount period for Indore Market

Discount offers didn’t affect Hyd Market share, slight increase from Feb. to April

Penetration in IC A for Indore Market was more. Similar was for IC A for Hyd Segment

IC A segment responded well to the product. However repurchase was problem

• People in regions like Indore are more sensitive to Price

– % of Families buying Sehra was more compared to selling of Jaimala in Indore when discount was offered

– It decreased steadily after discounts went away

• In Hyd., people took a while to understand the product

– % of Families buying Sehra steadily increased in Hyd over the months

– Promotional campaigns failed to effectively demonstrate utility of product

• In Indore, Sehra successfully took over Jaimala in terms of Market Share (value)

– Regions like Indore are potential markets for the company

• Test Market Indore chosen on assumption that it would respond better to purity likely to be incorrect.

– Not many respondents played back claim of ‘made from pure vegetable oils’ in preliminary results of interview of 300 women

Action Plan

• Considering the toilet soap market, the project resulted in less trial and repurchase rates indicating product should not be launched nationally.

• However, it could be launched if there are high trials and high repurchases in next market test after

– Product is redesigned (function, quality, price etc)

– Different promotional campaign for cities like Hyd.

– Renaming the product

– Market Segments ICC and ICD to be considered in next trial project

Aditya Thakre

150101007

Section D