LUX :BEAUTY BAR OF FILMSTARSLUX :BEAUTY BAR OF FILMSTARS

A STUDYA STUDY

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TABLE OF CONTENTS

Executive Summary

1. Objectives of the Study

2. Scope of the Study

3. Limitations of the Study

4. Methodology

5. Abstract

6. Company Background

7. Four P’s

SWOT Analysis

Perceptual Mapping

8. Data Analysis

9. Conclusions

10.Recommendations

References

Appendix

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EXECUTIVE SUMMARY

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1. OBJECTIVES OF STUDY

The main objectives of the study are:

i) To assess the consumer sales promotion schemes offered on Lux.

ii) To get an insight into retailers’ views regarding the schemes being offered on Lux.

iii) To study consumer perceptions regarding various schemes on Lux andresponses toward them.

2. SCOPE OF THE STUDY

The geographical scope of the study was restricted to the Ghaziabad & Delhi due

to time and resource constraints. The study being exploratory in nature, the

sample size was restricted to 80 consumers (mostly student group) and 20

retailers. Focus being mainly on in-depth probing, the generalizations drawn are

only indicative and not conclusive.

3. LIMITATIONS OF THE PROJECT

(1) Response biasness could be one of the limitations.

(2) The sample chosen may not be the true representative of the whole

population.

(3) As the research was exploratory in nature, it was not possible to study the

accurate phenomenon of the fact.

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4. METHODOLOGY

In order to address the above questions an exploratory study was conducted.

The idea was to probe and get deeper insight into sales promotion scenario of

Lux and to tap perceptions of retailers and consumers. In order to address

above mentioned objectives

(i) Study of secondary sources was carried out,

(ii) Responses of retailers were taken using structured questionnaire and

(iii) Structured questionnaire was designed to seek consumer responses.

Convenience sampling was used for both retailers as well as consumer studies.

Twenty retailers ranging from small kirana store to big provision stores were

approached. All the retailers were located in Ghaziabad and Delhi area. The

respondents for consumer study were mostly students and consumers found as

per convenience in the market. The total respondents were 80 in number.

Data analysis is done using software packages like SPSS & MS-EXCEL.

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5. ABSTRACT

The origins of personal cleanliness date back to prehistoric times. Since water is

essential for life, the earliest people lived near water and knew something about

its cleansing properties - at least that it rinsed mud off their hands.

A soap-like material found in clay cylinders during the excavation of ancient

Babylon is evidence that soap making was known as early as 2800 B.C.

Inscriptions on the cylinders say that fats were boiled with ashes, which is a

method of making soap, but do not refer to the purpose of the "soap." Such

materials were later used as hair styling aids.

Soap got its name, according to an ancient Roman legend, from Mount Sapo,

where animals were sacrificed. Rain washed a mixture of melted animal fat, or

tallow, and wood ashes down into the clay soil along the Tiber River. Women

found that this clay mixture made their wash cleaner with much less effort.

Some of the early instances of commercial manufacturing of soap are:

In Britain references began to appear in the literature from about 1000AD, and in

1192 the monk Richard of Devizes referred to the number of soap makers in

Bristol and the unpleasant smells which their activities produced

A century later soap making was reported in Coventry. Other early centers of

production included York and Hull. In London a 15th century "sopehouse" was

reported in Bishopsgate, with other sites at Cheapside, where there existed

Soper's Lane (later renamed Queen Street), and by the Thames at Blackfriars

Andrew pears. In 1789, he commenced production of a transparent soap at a

factory in Wells Street, off Oxford Street and became hugely successful.

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6. COMPANY BACKGROUND

INTRODUCTION

Understanding perceptions of channel members and consumers regarding sales

promotion activities enhances the effectiveness of these activities. Widespread

usage of sales promotion activities in Fast Moving Consumer Goods (FMCG)

sector makes it imperative that manufacturers take into account channel member

and consumer perceptions before planning such programmes. In this paper, an

attempt has been made to examine the nature of sales promotion activities in

toilet soap category in India, study retailer perceptions with respect to these

activities and also get an insight into consumer perceptions of these activities.

Our findings indicate that with respect to the nature of the schemes, premiums

(free gifts) were found to be the most frequently used in both premium and

popular toilet soap category, followed by price offs. Retailers perceived price offs

to have relatively greater impact compared to any other forms of sales promotion.

In line with the retailers’ perceptions, the findings of consumer perceptions

indicated that price off was the most preferred type of sales promotion. Retailers

stated that role of word of mouth and television advertising was very important in

providing information inputs to the consumers regarding sales promotion

activities. This perception of retailers was supported by the consumer unaided

recall of sales promotion schemes which were widely advertised. As the retailer

interacts and observes consumers more frequently and closely than the

manufacturer, it would be useful for the companies to incorporate perceptions

while planning sales promotion strategies.

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All the above researches have focused on price promotions and their response.

Our study though exploratory has considered perceptions for price as well as

non-price promotions in toilet soap category. The reasons for the study were:

i) The widespread use of sales promotions in toilet soap category

ii) Historically, whenever there was a downward trend in growth, sales

promotion activities took the front seat of promotional mix

iii.) Companies planned these activities with inward looking view hence it was

felt that it would be useful to understand the perceptions of consumers

and retailers regarding sales promotion activities to improve the

effectiveness of these activities.

HINDUSTAN LEVER LIMITED

In the summer of 1888, visitors to the Kolkata harbor noticed crates full of

Sunlight soap bars, embossed with the words "Made in England by Lever

Brothers". With it began an era of marketing branded Fast Moving Consumer

Goods(FMCG).

Soon after, followed Lifebuoy in 1895 and other famous brands like Pears, Lux

and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to

the market in 1937.In 1931, Unilever set up its first Indian subsidiary, Hindustan

Vanaspati Manufacturing Company, followed by Lever Brothers India Limited

(1933) and United Traders Limited (1935). These three companies merged to

form HLL in November 1956; HLL offered 10% of its equity to the Indian public,

being the first among the foreign subsidiaries to do so. Unilever now holds

51.55% equity in the company. The rest of the shareholding is distributed among

about 380,000 individual shareholders and financial institutions.

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The erstwhile Brooke Bond's presence in India dates back to 1900. By 1903, the

company had launched Red Label tea in the country. In 1912, Brooke Bond &

Co. India Limited was formed. Brooke Bond joined the Unilever fold in 1984

through an international acquisition. The erstwhile Lipton's links with India were

forged in 1898. Unilever acquired Lipton in 1972 and in 1977 Lipton Tea (India)

Limited was incorporated.

Pond's (India) Limited had been present in India since 1947. It joined the Unilever

fold through an international acquisition of Chesebrough Pond's USA in 1986.

Since the very early years, HLL has vigorously responded to the stimulus of

economic growth. The growth process has been accompanied by judicious

diversification, always in line with Indian opinions and aspirations.

The liberalization of the Indian economy, started in 1991, clearly marked an

inflexion in HLL's and the Group's growth curve. Removal of the regulatory

framework allowed the company to explore every single product and opportunity

segment, without any constraints on production capacity.

Simultaneously, deregulation permitted alliances, acquisitions and mergers. In

one of the most visible and talked about events of India's corporate history, the

erstwhile Tata Oil Mills Company (TOMCO) merged with HLL, effective from April

1, 1993. In 1995, HLL and yet another Tata company, Lakme Limited, formed a

50:50 joint venture, Lakme Lever Limited, to market Lakme's market-leading

cosmetics and other appropriate products of both the companies. Subsequently

in 1998, Lakme Limited sold its brands to HLL and divested its 50% stake in the

joint venture to the company.

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HLL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation

in 1994 - Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex

Sanitary Pads. HLL has also set up a subsidiary in Nepal, Nepal Lever Limited

(NLL), and its factory represents the largest manufacturing investment in the

Himalayan kingdom. The NLL factory manufactures HLL's products like Soaps,

Detergents and Personal Products both for the domestic market and exports to

India.

The 1990s also witnessed a string of crucial mergers, acquisitions and alliances

on the Foods and Beverages front. In 1992, the erstwhile Brooke Bond acquired

Kothari General Foods, with significant interests in Instant Coffee. In 1993, it

acquired the Kissan business from the UB Group and the Dollops Ice-cream

business from Cadbury India.

As a measure of backward integration, Tea Estates and Doom Dooma, two

plantation companies of Unilever, were merged with Brooke Bond. Then in July

1993, Brooke Bond India and Lipton India merged to form Brooke Bond Lipton

India Limited (BBLIL), enabling greater focus and ensuring synergy in the

traditional Beverages business. 1994 witnessed BBLIL launching the Wall's

range of Frozen Desserts. By the end of the year, the company entered into a

strategic alliance with the Kwality Ice-cream Group families and in 1995 the Milk

food 100% Ice-cream marketing and distribution rights too were acquired.

Finally, BBLIL merged with HLL, with effect from January 1, 1996. The internal

restructuring culminated in the merger of Pond's (India) Limited (PIL) with HLL in

1998. The two companies had significant overlaps in Personal Products,

Specialty Chemicals and Exports businesses, besides a common distribution

system since 1993 for Personal Products. The two also had a common

management pool and a technology base. The amalgamation was done to

ensure for the Group, benefits from scale economies both in domestic and export

markets and enable it to fund investments required for aggressively building new

categories.

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In January 2000, in a historic step, the government decided to award 74 per cent

equity in Modern Foods to HLL, thereby beginning the divestment of government

equity in public sector undertakings (PSU) to private sector partners. HLL's entry

into Bread is a strategic extension of the company's wheat business. In 2002,

HLL acquired the government's remaining stake in Modern Foods.

In 2003, HLL acquired the Cooked Shrimp and Pasteurised Crabmeat business

of the Amalgam Group of Companies, a leader in value added Marine Products

exports.

MARKET SHARE OF VARIOUS COMPANIES (TOILET SOAPS)

HLL

GODREJ

WIPRO

NIRMA

OTHERS

Price segments of toilet soaps

Segment Price/weight

Premium > Rs. 15 / 75 gms

Popular Rs. 8-15/75 gms

Economy < Rs. 8 /75 gms

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LUX: THE STAR PERFORMER

The great Indian brand wagon started nearly four decades ago. Great brands

sometimes outlast their ambassadors as proven by Lux which is celebrating its

75th anniversary in India.

The first ambassador, Leela Chitnis featured in a Lux advertisement which

flagged off the Lux wagon. She gave way to a galaxy of stars which includes

Madhubala, Nargis, Meena Kumari, Mala Sinha, Sharmila Tagore, Waheeda

Rehman, Saira Banu, Hema Malini, Zeenat Amaan, Juhi Chawla, Madhuri Dixit,

Sridevi, Aishwarya Rai and Kareena Kapoor. The last frontier for most actors

aspiring to stardom is becoming a Lux ambassador. The brand has outlasted

many soaps. From the beginning, Lux became a household name across the

country. Actor Hema Malini says, “One of the turning points in my career was

when I was signed up by Lux. It was then that I knew I had made my mark in

Indian cinema as a leading lady. To be a Lux star is a much sought after honour

amongst leading ladies and it truly means a lot to me.”

After 50 Indian female actors lathering up with Lux, it is now the turn of a male

actor, Shah Rukh Khan, to say, “Aaj mein aapko batanewala hoon meri

khubsuratein ka raaz — Lux. Ab batayein aapka favourite Lux Star kaun hai? (I

want to tell you about my beauty secret — Lux. Who is your favourite Lux Star?)”

In 1926, Ginger Rogers became the first Hollywood great to appear in a Lux

commercial. The first Lux bar made in India was sold for the princely sum of two

annas in 1934.

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LUX: VARIANTS

In the country since 1929 and endorsed by popular film stars, Lux is the biggest

brand in the soap category. Lux Toilet Soap, in the popular segment, offers its

consumers a range of soaps enriched with the goodness of a variety of

nourishing ingredients –Almond Oil, Orchid Extracts, Milk Cream, Fruit Extracts,

Saffron, Sandalwood Oil and Honey. The Lux premium range offers specialized

skincare to its consumers in the form of Lux International. It also includes Lux

Body Wash for superior bathing benefits keeping in step with the changing needs

of the Lux consumer

In addition to these variants lux has come up with a few more variants to

celebrate its 75 years in business.

The Lux Celebration Range is a set of three exclusive variants- Aromatic Glow

and Chocolate Seduction and Lux White Spa body wash containing exotic

ingredients, never seen in the Indian market before.

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LUX : COMPETITOR ANALYSIS

NIRMA

Nirma Since the early nineties, Nirma has been challenging the hegemony of

Hindustan Lever, which holds over 54 per cent share of the toilet soaps market.

Nirma has so far managed to snatch 9 per cent share of market.

Almost as an answer to the general perception of low quality, Nirma had invested

in the latest soap manufacturing plant in the world the first of its kind in India.

While leading manufacturers like HLL and Godrej continue to rely on batch

manufacturing, Nirma had sourced the latest Italian technology from Binacchi

and CMB and set up a finish line that produces 500 toilet soaps per minute,

wrapped and carton sealed for dispatch.

Nirma Bath Soap:

Toilet soap market in India was dominated by a very few MNC’s which could

monopolistically price their product. In 1992, sensing a strong need to expand the

market through Penetrative Pricing, Nirma entered this market with the launch of

‘Nirma Bath Soap’, which is a carbolic (Red) soap. Although the carbolic soap

segment is on decline, Nirma Bath has generated larger volumes each year.

Packed in a red color wrapper and available in 75 gram and 150 gram pack

sizes, this soap has a Total Fatty Matter (TFM) of 60 %.

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Nirma Beauty Soap:

With its market promise to offer “Better Products, Better Value, Better Living,”

Nirma introduced ‘Nirma Beauty Soap’ in the year 1992. Available in three

different variants and pack sizes, this soap has a TFM content of 70%. Due to its

admirable perfume and a higher TFM content, this brand, within a short span of

five years, had achieved the status of the third largest selling toilet soap brand

and still continues its outstanding performance

Nirma Lime Fresh Soap:

This product had created a sensational marketing history in the Indian Toilet

soaps market, when it was launched in 1997. Seventeen million packs of Nirma

Lime Fresh soap were sold in the very first month of its soft launch. Packed in a

poly coated 75 gm carton, which is printed on the world’s best Cerruti 8-colour

printing machine, this soap is available in green colour. With a lime aroma that

tingles in one’s sensory buds for a long time, this soap contains 80% TFM. The

product launch of Nirma Lime Fresh had been extremely successful, being

ranked as the Seventh Most Successful Brand Launch for the year 1998, as

ranked by the Business Standard Marketing Derby, 1998. (as featured in The

Strategist Quarterly, July-September 1998).

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Nima Rose:

The remarkable and phenomenal market response received by Nima Rose soap

within just two months of its launch once again proved the merits of Nirma’s

commitment towards its consumers. Nima Rose soap has got an exceptionally

soft rose fragrance – which remains around body for a long time even after bath.

The high TFM content of this product allows a consumer to have pleasant bath.

This brand had carved a niche in its segment by achieving leadership position

just within two months of its launch. It is available in 100g and 150g pack sizes.

Nima Sandal.

Over the period, Indian toilet soap market has fragmented & has seen

emergence of prominent floral fragrance segments as Sandal, Rose, Jasmine,

etc. Nima Sandal is a one of such product in floral segment. This toilet soap has

80% TFM content, with rich & exotic fragrance. It promises benefits of Sandal oil

& Turmeric powder. It is a premium product from Nima stable and is available in

100g and 150g packs.

The company has expanding into other segments of the fragmented five lakh

tonne soap market. It launched Nirma Beauty soap in the premium segment.

Nirma Beauty Soap carried a MRP price tag of Rs 7 and was sold at Rs 6, while

Levers Lux sold for Rs 8. Imitating Levers time-tested strategy, Nirma used

actress Sonali Bendre in its advertising. Today, Nirma Beauty soap sells

whopping 45,000 tonnes, making it the3rd largest soap brand after Lux and

Lifebuoy.

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When Lever made an assault on Nirma Beauty Soap with its Breeze, the Patels

quickly hit back at Levers freshness plank. Nirma Lime Fresh was positioned

against Levers Liril Lime Fresh, but while Liril sold for Rs 12.50, Nirma Lime

Fresh sold for Rs 8.

Breaking away from tradition, Nirma introduced a new soap brand, Nima Lime, in

the key markets of Gujarat and Maharashtra. The launch was significant because

it was the first time since the company's inception that Nirma had chosen to

move away from its umbrella branding strategy by adopting a new brand name.

With a wrapper price of Rs 6.50 and a total fatty matter (TFM) content of 70 per

cent, Nima Lime Fresh was aimed at the popular segment of the toilet soaps

market.

This is Nirma's fourth brand launch in the toilet soaps market. It marked its foray

in the early nineties by launching Nirma beauty soap to take on Lever's best

selling brand; Lux. Nirma followed it up with Nirma Premium, Nirma Lime Fresh.

GODREJ

Godrej Consumer Products Ltd.(GCPL) is a major player in the Indian FMCG

market with leadership in personal, hair, household and fabric care segments.

The company employs 950 people and has three state-of-the-art manufacturing

facilities at Malanpur (M.P.) Guwahati (Assam) and Silvassa (U.T.).

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Godrej is among the largest marketer of toilet soaps in the country with leading

brands such as CINTHOL, FAIRGLOW, GODREJ NO 1. Their FAIRGLOW

brand, India's first Fairness soap, has created marketing history as one of the

most successful innovation.

Market share in Toilet soaps grows to 8.0% in FY 2004-05 from 6.8% in FY

2003-04. All three Power brands have begun to perform strongly.

However, GCPL is a relatively small player compared to HLL, in toilet soaps, with

a market share of around 8 per cent. Once the archrival of HLL, it now occupies

the number three rank, after HLL (54% market share) and Nirma (9% market

share).

Godrej No.1

Godrej No.1 Beauty Soap stands for True Natural Beauty. Godrej No.1 is

available in five variants enriched with natural ingredients, specially formulated to

cater to special skin types. Sandal, Rose, Jasmine, Natural and Ayurvedic

packed with the goodness of natural ingredients.

Fairglow

The Godrej FairGlow fairness soap contains a powerful fairness ingredient '

Natural Oxy-G ', which makes you fairer by reducing the dark melanin without

changing the skin's natural balance. In addition, it also removes blemishes to

give you a clear, glowing complexion.

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Godrej FairGlow Soap was India's first and is the largest selling fairness soap. It

helps you become fairer in a convenient way, simply through a daily bath. It is a

quality Grade 1 fairness product having 76% TFM (Total Fatty Matter). It has a

pleasant fragrance and is white in colour.

Cinthol lime fresh

With the extracts of real lime, Cinthol Lime Fresh provides deep cleansing along

with active freshness and vitality. This makes for an invigorating bath that kick

starts and gets you ready for the day.

The soap has an excellent long-lasting lime fragrance that keeps you feeling

fresh throughout the day.

With TFM 76% this Grade1 soap is available in 50g, 75g and 125g.

WIPRO

Wipro Consumer Care is yet another principal player enjoying a five per cent

market share. After lying dormant for a decade, Wipro Consumer Care promises

moving into top gear. Wipro has three important brands of soap in its portfolio:

Santoor, Milk and Roses, Chandrika.

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Santoor soap The magic of Sandal & Turmeric comes together in Santoor - a soap that

nourishes your skin with Sandal and Turmeric to

make you look much younger.

Santoor offered a combination of sandal and turmeric. Wipro later introduced a

new variant of Santoor - a sandal and besan variant. The new variant offered the

combined benefits of sandal and besan. Santoor's market share is around three

per cent. But its low market share, the company argues, has to be seen in the

context of its regional presence. This, an outcome of limited resources,

happened around mid-1990s, as the first round of revival began. Around this

time, the company took a conscious decision to follow a state-oriented strategy

Santoor Chandan

A premium soap manufactured with extracts of Sandalwood oil, Santoor

Chandan has a strong lingering fragrance and is a favourite of discerning

customers.

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Milk & Roses soap

The nourishment of milk and the softness of roses - Milk&Roses gives you

glowing skin that puts even jewellery to shame!

Available in milky white and glowing pink.

Chandrika

The world’s first Ayurvedic soap brings you the goodness of nature to give you

healthy and glowing skin. Chandrika, the 65-year-old brand, now marketed by

Wipro Consumer Care and Lighting, sports contemporary packaging, a new

shape and has many new additions to the host of Ayurvedic ingredients it is

made of.

OTHERS

Colgate-Palmolive (India) Ltd. - the marketer of personal care products, offers

‘ultra modern’ line of Transparent Palmolive Natural skincare soaps. Palmolive

has been the pioneer in introducing soaps for different skin types (example

Palmolive Extra Care for Dry Skin, for Oily Skin and for Normal Skin). Its latest

range is a combination of moisturizing glycerin, essential oils and a mixture of

premium natural herbs and flowers. It is available in two variants – ‘Relaxing’ and

‘Soothing’. Long-lasting and refreshing, the floral fragrance is aimed at making

the user feel cared-for and looked-after. The price is Rs.17 for a 100-gm cake.

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Reckitt Benckiser - a niche player in the Indian soap market owns the well

known brand ‘Dettol’. It had launched a new product - Dettol Extra Soap. The

Dettol Extra Soap is an extension of the company's existing range of soaps under

Dettol brand. It has a formulation that provides Dettol protection and also

contains moisturizes that prevent skin dryness. The soap has a pleasant new

fragrance and a convenient saddle shape, making it easy to hold. A 75 g bar is

priced at Rs.15.

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7. FOUR P’s OF LUX

Market

The personal wash market is valued at Rs. 45 billion (Source: ORG-MARG). It is

a highly penetrated market though per capita consumption lags even South

Asian countries like Indonesia. The market has seen stagnant sales over the last

four years and the low entry barriers have led to intense competition between

national and local brands.

Achievements

Lux is the largest personal wash brand in the country with a value share of 17%.

Three in every five Indian consumers enjoy the luxurious bathing pleasure of Lux

during the course of a year. This strong association with consumers has led to

Lux becoming one of the most trusted brands in the country.

Lux has retained its leadership status by strongly differentiating itself – no soap

brand can claim to be more aspirational for the Indian consumer than Lux - ‘the

beauty soap of film stars’.

The last three years have seen Lux continue to grow far ahead of the market. It

has gained close to 4% share in this period. A key initiative that has fuelled this

growth has been the launch of Mini Lux – strategically priced at Rs. 5 to bring it

within the reach of 300 million rural consumers. The introduction of new perfume

and ingredient variants, addressing new benefit segments, has been the other

growth driver.

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History

Lux soap was launched in India in 1929. The first bar of Lux was made in India

and sold for a princely sum of two annas in 1934. From the very first

advertisement in 1929 featuring Leela Chitnis, the gorgeous faces of the silver

screen have come out in the open with their beauty secret – Lux.

Popularly known as ‘the beauty soap of film stars’, Lux has been a favorite with

generations of users for the experience of sensuous, luxurious bathing.

Since its launch in India, Lux has offered a range of soaps in different colours

and fragrances. They have each, however, offered the same benefit of beautiful

skin. Desirable product sensorials, especially its world class fragrances and

nourishing ingredients, have made the Lux bath a pleasurable experience.

But Lux being the market leader has evolved along with the changing needs of its

consumers. The late 1980s saw the emergence of a premium segment in the

soap category – a new consumer set whose beauty and bathing needs began to

evolve. In 1989, to tap into this segment, Lux launched a range of premium

soaps to suit their different skin types.

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The FOUR P’s

(A)Product

A product is anything that can be offered to a market to satisfy a need or

want.Products that are marketed include physical goods, services, experiences,

events, persons, places, properties, organizations, information and ideas.

Product Classification

Marketers have traditionally classified products on the basis of characteristics:

durability, tangibility, and use.

LUX is a Tangible, Non Durable Good on the basis of this classification.

Consumer Goods Classification

The vast array of goods consumers can buy can be classified on the basis of

shopping habits:

Convenience Goods: The consumer purchases such goods frequently,

immediately and with a minimum of effort.

Shopping Goods: Are goods that the consumer, in the process of selection and

purchase characteristically compares on the bases of suitability, quality, price

and style.

Specialty Goods: Have unique characteristics or brand identification for which a

sufficient number of buyers are willing to make a special purchasing effort.

Unsought Goods: Are those the consumer does not know about or does not

normally think Of buying

LUX and other soaps fall into the category of Convenience Good

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Product Life Cycle

LUX Beauty Bar is in the maturity stage of its life cycle whereas the LUX

Bodywash is in the growth stage.

LUX Body LUX Beauty

Wash Bar

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Product Line

Soaps:

Lux Lux Lux Lux Lux Lux Lux Lux Lux

Almond Orchid Fruit Saffron Sandalwood Rose International Chocolate

Aromatic

Extracts Extracts Oil and Honey

Glow

Bodywashes:

International International

International

Lux Bodywash Lux Bodywash Lux

Bodywash

White Spa Rich Moisture Fresh

Moisture

Shampoos:

Lux Super Lux

Rich Jasmine

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LUX Beauty Soap- Form, Features, Style

With icons of beauty endorsing the brand, the offerings made by Lux have

always been superior and have always led the market, setting benchmarks for

competition.

Lux has beauty offerings in two of the four market segments – popular and

premium, spanning the needs of varied consumers.

Lux Toilet Soap in the popular segment has in the past four years offered its

consumers a range of soaps enriched with the goodness of a variety of

nourishing ingredients – rose extracts, almond oil, milk cream, fruit extracts and

honey which are known to harbour the secrets of incredibly perfect skin.

At the upper end of the market is the premium range which continues to offer

specialised skincare to its consumers in the form of International Lux – a range of

moisturising, deep cleansing and sunscreen soaps. Keeping in tune with the

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changing times it has also launched Lux Body Wash which offers superior

bathing benefits.

To establish the presence of nourishing ingredients in the new Lux, a unique

concept, ‘ingredients you can see in the soap’, was born. A novel metallic

substrate packaging beautifully showcased the ingredients and its globally

accepted ingredient-linked perfumes heightened the sensorial experience.

Each of the soaps in the range has milk cream, with the active ingredients of

rose extracts, sandal saffron, almond oil and fruit extracts. These create an

experience in pampering indulgence and luxury designed to bring out the star in

every woman. This is the first time in the Indian chapter of the brand that the

beauty bar variant was being differentiated on the basis of its ingredients rather

than its perfume and colours.

Though Lux International, a premium variant of the toilet soap, launched in 1989,

is differentiated on the basis of its ingredients, the popular version, Lux Beauty

Bar was always projected as a “pure and mild” solution to soft and smooth skin.

International Lux Body Wash – the last name in luxury

It is the next revolution in the realm of personal care. The art of styling skin and

giving it that enviable glow.

The new International Lux Body Wash comes in two rich variants. Rich Moisture

embodies an exotic combination of green apple and orchid extracts. And Fresh

Moisture exudes the tingling freshness of orange peel extracts. To ensure a

complete skin styling experience, with each elegant bottle comes a free loofah.

It is priced at Rs. 90 for 250 ml and Rs. 49 for 150 ml respectively International

Lux Body Wash comes in an exquisitely designed bottle and is available at select

outlets in select cities.

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Trade Character

Labelling

The LUX Trade Character or Logo is present prominently on the package. A

novel metallic substrate packaging showcases the ingredients, and a female

model is shown on the pack. Also diplayed graphically are the key ingredients.

The ingredients, place of manufacture have been listed. Also listed is the

consumer complaint cell address in case of unsatisfactory product.

Packaging

A novel metallic substrate packaging beautifully showcases the ingredients, in

case of the soaps. A female model is shown on the pack. The colors are different

for different variants such as saffron for the saffron variant, pink for the rose

extracts etc.The Bars come in package sizes of 100g, 120g, 150 g

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The LUX Body Wash comes in an exquisitely designed bottle with

the trade character prominently displayed.

Lux has launched a 45g variant called Mini Lux priced at Rs. 5

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Developing New Variants

The new Lux Beauty Bar is significantly better on all aspects including aesthetics,

sensorials, skin care, value for money, perfume and ingredients.

The company claims that a new initiative behind Lux beauty bar was always in

the offing, market conditions notwithstanding. HLL’s structured innovation

programme was the driving force. This programme, which charts the route for

every HLL brand’s progress, works eight to 12 quarters ahead of the company’s

brands.

For instance, at the time when Lux International with a superior moisturizer was

launched in 1999, the company claims to have been working simultaneously on

Lux Sunscreen which was launched in 2000.

Lux is always a step ahead of trends rather than following the trend. It would

rather orient and direct the change rather than follow it. This flag-bearing

programme according to the company, helped in timing the relaunch.

Also by using brand-oriented research, the company identified two sets of

consumers. One was the loyal base of existing Lux Beauty Bar consumers. The

other was the target segment which would be the source of growth for Lux.

This segment comprised of those customers who were buying soaps in the sub-

popular segment, but could shift upwards if a better product was offered in the

popular segment. A company executive says, “The entire relaunch exercise was

aimed at delivering a superior mix, which would tap into this source of growth.”

32

The consumer needs and triggers which were identified included: fragrance,

quality of lather, long-lasting, value for money product, familiarity and belief were

factors that translated into a sense of reliability and quality. This helped in the

delivery of the new product.

Several options were considered for the Lux relaunch. These included mood-

enhancing perfume positioning. Skin-care based ingredients like glycerin, sandal

and saffron were considered.

The company says that after scanning 60 or 70 options across both national and

international markets almond oil, honey and milk cream were the chosen ones.

With its latest stance, the company is banking on the sub-popular segment soap

buyers to buy into the new Lux. While the target segments remain the SEC B, C

and D, the soap’s performance in its top markets north and west which contribute

to over two-thirds of its sales, will be crucial to its future growth.

Though retailers in Mumbai spell Lux on their list of best sellers, they say that the

honey variant is yet to catch on, as the consumer has never associated with

Lux’s black colour packaging.

33

(B)Promotion

The promotion mix is classified as follows:

Advertising:

1) Transit

2) Electronic Media

3) Print Media

4) Direct

Sales Promotion

Personal Selling

1) Direct Selling

2) Indirect Selling

Public Relations

Direct Marketing

34

Advertising

Advertising is any paid form of non-personal presentation and promotion of

ideas, goods and services by an identified sponsor. Ads can be a cost

effective way to disseminate messages, whether to build a brand preference

or to educate people.

LUX ADVERTISEMENTS THROUGH THE AGES

35

LEELA CHITNIS IN THE FIRST LUX PRINT ADVERSTISEMENT FEATURING

AN INDIAN ACTRESS

MADHUBALA IN A LUX PRINT ADVERTISEMENT

WAHEEDA REHMAN IN A LUX PRINT ADVERTISEMENT

36

VYAJANTIMALA IN A LUX PRINT ADVERTISEMENT

SAIRA BANO IN A LUX PRINT ADVERTISEMENT

37

KARISHMA KAPOOR IN A LUX PRINT ADVERTISEMENT: INSET LUX PRINT

ADVERTISEMENT FEATURING BABITA

38

AISHWARYA RAI IN A PRINT ADVERTISEMENT FEATURING LUX

INTERNATIONAL

KAREENA KAPOOR SHOWCASING THE LATEST CHOCOLATE VARIANT

BY LUX

39

Advertisement Analysis

USP or the common thread through all the advertisements is the Presence of

Movie Stars through the ages.

The product has been positioned on the basis of REFERANCE GROUP by

using a celebrity popular at that point in time.

Some amount of attribute positioning by mentioning the various ingredients

has also been done

Lux campaigns have wooed millions of people over the decades. Popularly

known as the beauty soap of film stars, Lux has been an intimate partner of the

brightest stars on the silver screen for decades. An ode to their beauty, an

announcer of their stardom, advertising campaigns on Lux have featured film

stars across the nation, promising their beauty and complexion to ordinary

women.

With top movie stars – from Madhubala to Madhuri, from Babita to Karisma and

Kareena having endorsed the goodness of Lux over generations, it was natural

that the brand has built equity as the best beauty soap in India.

From the beginning Lux, by using a leading film star of the time, has fulfilled the

consumers’ aspirations of using beauty soaps via the rationale ‘if it’s good

enough for a film star, it’s good for me. This later moved into a transformation

role of having a bath with Lux, which transports the user into a fantasy world of

icons, film stars and fairy lands.

40

Change in communication strategy

However, the communication was slowly seen to be losing relevance, as

consumers were beginning to question if the film star actually used the brand.

In addition to this, several competitive beauty soap brands had begun advertising

using similar methods of communication. In this context, the global brand team

for Lux developed a new communication strategy. This strategy – bring out the

star in you – for the first time moved the brand away from the long-running film

star route. The film star still features in the new communication but not as her

gorgeous self but rather as an alter ego/projection of the protagonist (a regular

girl), for a few seconds of the entire ad.

Thus, for the first time the film star was used as a communication device and not

as the main feature of the ad. The move away from the film star and her fantasy

world to a regular Lux user, with the focus on the protagonist’s star quality, is a

change from the norms set by Lux advertising in the past. With the new

communication strategy, the film star is used purely as a communication device

to portray star quality in every Lux user.

This idea – bring out the star in you – puts the consumer at the heart of the

brands’ promise. This promise goes beyond the functional deliverables of soap,

beyond bathing and the bathroom to the world outside. It’s a world where with

Lux on her side, an ordinary woman can impact her world with her own star

quality.

This is a successful attempt to bring the brand closer to its users and to give it a

more youthful and contemporary image.

41

Breaking away from tradition, HLL resorts to a male and metro sexual Shah

Rukh to revive Lux, which turned 75 this year.

CELEBRATING 75 years of the Lux brand, Hindustan Lever has decided to

break away from tradition. It has changed the feminine face of its second largest

selling soap brand to show reigning superstar Shah Rukh Khan sitting in a tub of

petals along with actresses of yesteryear who have already featured as Lux

models. Increasing competition and lack of innovation in the soaps category has

led the FMCG biggie to try out something `new,' which, hopefully, will change the

fortunes of the languishing brand. After intense brainstorming by the company's

brand team and JWT, the ad agency for Lux, Shah Rukh Khan was seen as the

right connect.

Shah Rukh is a big draw and women just love him. The target audience for Lux is

women. Shah Rukh is a great favourite with women of all ages. So the strategy

for Lux has not really changed. It is just the execution that is very different;

instead of a female star in the tub, they have Shah Rukh.

The new campaign featuring King Khan shows him immersed in a bath tub with

petals and talking about `his beauty secrets' (`Meri Sundarta Ka Raaz'). The

beauty soap of female stars has moved from traditionally using reigning film stars

and now has been endorsed by nearly 50 Indian film stars.

42

And it's not about Shah Rukh the star but the kind of person that he is, is what

the Lux brand hopes to integrate into its new campaign. "Instead of showing

Shah Rukh as a macho man riding a horse like the Marlboro man, the idea was

to portray the metro sexual male who had a soft touch. Shah Rukh has been

portrayed as a different kind of male who is different from the rest of the stars.

fraternity who feel the ad could have had a story line and been made

aesthetically more appealing.

Apart from the events and promotions, the new campaign with Shah Rukh is

intended to help in reviving the heritage brand, which has always relied on film

stars for its ads. And it has used male stars in the past in international markets.

So while it is a big departure, it is with a reason. And the ad is not claiming that

SRK is using the brand. He is not shown using the soap. He is merely in a bath

tub surrounded by the Lux stars. So it is a device to inject a bit of novelty and

`buzz value' into an old brand.

To quote the marketing of HLL, one word that comes to mind is mammoth.

Despite constantly declining net profitability, HLL has retained its stronghold as

country‘s biggest advertiser in 2004. The FMCG giant topped the list of India‘s

leading advertisers with a combined TV and press ad spend of Rs.517 crore last

year. In fact HLL upped its spend by 30.5% in ‘04 to Rs.396 crore in ‘03.

Sales Promotion

Sales promotion, a key ingredient in marketing campaigns, consists of a

collection of incentive tools, mostly short term, designed to stimulate quicker or

greater purchase of particular products or services by consumers or the trade.

Whereas advertising offers a reason to buy, sales promotion offers an incentive

to buy.

43

Sales promotion includes tools for

CONSUMER PROMOTION

Samples

Coupons

Cash Refund Offers

Prices Off

Premiums

Prizes

Patronage Rewards

Free Trials

Warranties

Tie in Promotions

Cross Promotions

Point Of Purchase Displays

Demonstrations

TRADE PROMOTION

Prices Off

Advertising and display Allowances

Free Goods

BUSINESS AND SALES-FORCE PROMOTION

Trade Shows and Conventions

Contests for Sales Reps

Specialty Advertising

44

Objectives of sales promotion:

Sales Promotions vary in their specific objectives. Sellers use incentive type

promotions to attract new trials, reward loyal customers, and to increase the

repurchase rates of occasional users. Sales promotions often attract brand

switchers, who are primarily looking for low price, good value, or premiums.

Sales promotions are generally unlikely to turn them into loyal users, although

they may be induced to make subsequent purchases. Sales promotions used

in markets of high brand similarity can produce a high sales response in the

short run but permanent gain in the market share.

In markets of high brand dissimilarity, sales promotions maybe able to alter

market shares permanently. In addition to brand switching, consumers may

engage in stockpiling- purchasing earlier than usual or purchasing extra

quantities. But sales may hit a post promotion dip.

A number of sales promotion benefits flow to the manufacturers and

consumers. Sales promotions enable manufacturers to adjust to short term

variations in supply and demand. They enable manufacturers to test how high

a list price they can charge, because they can always discount it. They induce

consumers to try new products instead of never straying from current ones.

They lead to more varied retail formats, such as everyday-low-price store and

the promotional pricing store. For retailers, promotions may increase sales of

complementary categories as well as induce some store switching by

consumers. They promote greater consumer awareness of prices. They

permit the manufacturers to sell more than they would normally sell at list

prices. They help the manufacturer to adapt programs to different consumer

segments. Consumers themselves enjoy some satisfaction from being smart

shoppers when they take advantage of price specials.

45

Service marketers also employ sales promotions to achieve marketing

objectives. Some service firms use promotions to attract new customers and

establish loyalty.

Sales Promotion Schemes Used By LUX

Lux presented 30 gm gold each to the first three winners of the Lux Gold

Star offer from Delhi. According to the promotional offer that Lux unveiled

in October 2000, a consumer finding a 22-carat gold coin in his or her

soap bar got an opportunity to win an additional 30 gm gold. The first 10

callers every week got a 30 gm gold each.

The offercould be availed only on 100 gm and 150 gm packs of Lux soap.

Lux Star Bano, Aish Karo contest which started on April 16 and went on till

July 15 of 2005. All one needed to do was buy a special promotional pack

of Lux soap. The pack comes with a special scratch card. The 50 lucky

winners and their spouses were flown down to Mumbai to live a day like

Aishwarya Rai would. They could also be given gift vouchers worth Rs

46

50,000 from Shoppers' Stop along with an exclusively designed Neeta

Lulla sari and a beauty makeover by Michelle Tung, Aishwarya's preferred

designer and stylist. The pièce de résistance was a dinner date with

Aishwarya Rai herself.

The Lux Star Bano, Aish Karo contest aims to drive

the brand proposition — Mujh mein star jagaye —

further. The Lux `Be a Star' promotion is an unique

offering through which LUX brings what stardom

feels like to customers.

Lux is celebrating 75 year’s of stardom in India and

to kick start the celebration, Lux has launched the Har Star Lucky Star

activity.

Har Star Lucky Star offer is bound to go down in history as the only activity

where every consumer is a winner! All wrappers of Lux have a star printed

inside them. If the consumer finds written inside the star, any number from

“1” to “5”, she will get an equivalent discount (in rupees) on her purchase

from her shopkeeper. If the consumer finds “75 years” written inside the

star, she will get a year’s supply of Lux free, courtesy the beauty stars.

Play the supercharged version of the hit puzzle game, Bejeweled.

Create rows of 3 or more identical stones and you could win a trip for

two to a five-star Resort in Goa. You can also win Lux Skincare

Products.

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Email:

Name:

Please enter your name and

email to play the game.

Online Contests

Public Relations:

Not only must the company relate constructively to customers, suppliers and

dealers, it must also relate to a large number of interested publics.A public is any

group that has an actual or potential interest in or impact on a company’s ability

48

to achieve its objectives. PR involves a variety of programs designed to promote

or protect a company’s image or its individual products.

They perform the following functions:

Press relations: Presenting news and information about the organization

in the most positive light.

Product Publicity: Sponsoring efforts to publicize specific products.

Corporate Communications: Promoting understanding of the

organization through internal and external communications.

Lobbying: Dealing with legislators and government officials to promote or

defeat legislation and regulation.

Counselling: Advising management about public issues and company

positions and image during good and bad times

LUX PR Activities

Watch out Mumbai, Bangalore & Delhi! Guess who is in town to launch the new Lux

Orchid! None other than Kiwi cricket vice captain Chris Cairns who will bowl a maiden

over - well 3 maidens to be precise. Lux Orchid will host the ‘Lux Orchid Nights’ in

Mumbai, Bangalore & New Delhi, where Chris Cairns will look out for and crown the ‘Lux

Orchid Face of the evening’. This is just one of the many activities planned for the launch

of Lux Orchid with exotic orchid petals in Jojoba Oil.

Lux celebrated 75 yrs of existence in a grand way by unveiling Shahrukh

Khan as their latest brand ambassador. Kareena Kapoor, Juhi Chawla,

Sridevi and Hema Malini graced the event and made it special. All the

stars have endorsed Lux in the past. The event was held at the grand

Intercontinental in Mumbai on Friday afternoon.

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(C)Price

"Price" is pretty self-explanatory but it‘s very important to success. Price

something too high and a company may never sell a single item of it. Price it too

low and one can lose money on every sale once all of costs of doing business

50

are considered. So you want to price it attractively so that you can sell it to your

clients and they‘ll feel good about the purchase. HLL seems to have mastered

this idea. Prices of HLL are considered the most competitive in Indian market.

With an operating profit of 470 Mn$ and a turnover of 2,190 Mn$, HLL has no

need to look back on the fact that it is a leader. The main fact for this huge

success story is the strategic pricing decision the company has adopted from

time to time.

HLL always gives value for money to his consumers. It is known for its

competitive pricing. HLL has the advantage of quoting a reasonable price due to

its economy of scale. HLL also can quote a very competitive price due to its

superior technology and optimum utilization of inventory. HLL has the product

range that meets the needs of all classes of consumers. It has the products that

are categorized as premium and mass products, which have been described

above. HLL matches its prices with the competitor who is operating

in the same category. HLL also gives price offs on its products to reward

consumers who are using it for a long time and also to attract new consumers.

The LUX Beauty Bars are priced as follows:

100gms: Rs. 13

150gms: Rs. 19

LUX International is priced at

125gm: Rs. 21

International Lux Body Wash comes in an exquisitely designed bottle and is

available at select outlets in select cities. It is priced at

Rs. 70 for 250 ml

Rs. 40 for 150 ml

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Lux has also introduced the “Mini Lux” that has helped in better penetration of the

rural market. Priced at

45g: Rs. 5

(D)Place

Cutting-edge distribution network

HLL’s distribution network is recognized as one of its key strengths -- that which

helps reach out its products across the length and breadth of this vast country.

The need for a strong distribution network is imperative, since HLL’s corporate

purpose is “to meet the everyday needs of people everywhere.”

At Hindustan Lever Limited, distribution network is one of the key strengths that

help them reach their products across the length and breadth of this vast country.

It has 2000+ suppliers and associates, 45 C&F.A.s, 7,000 stockists and direct

coverage in over 1 million retail outlets across India.

To meet the ever-changing needs of the consumer, HLL has set up a distribution

network that ensures availability of all their products, in all outlets, at all times.

This includes, maintaining favorable trade relations, providing innovative

incentives to retailers and organizing demand generation activities among a host

of other things. HLL boasts of placing a product across the country in less than

72 hrs.

The first phase of the HLL distribution network had wholesalers placing bulk

orders directly with the company. Large retailers also placed direct orders, which

comprised almost 30 per cent of the total orders collected.

Today, the goods are transferred from the factory to the company warehouses

(C&F.A godowns) and are sent to the distributor from there on a daily basis.

52

From the distributor, the stock reaches the market through daily sales. Typically,

these include the salesman registering the order of a retail outlet and delivering

the goods the next day.

Recently HLL has changed its traditional way distribution and came out with a

new strategy of distribution. It‘s because of the change in buying pattern of the

consumer due to more disposable income. There are different channels of

distribution like Modern Trade, which covers all chains of super markets like

Food World, who get the stocks directly from the company. Wholesalers and

second leg of big retail outlets called Super Value stores come under the

surveillance of the distributor along with the mass retail outlets. There is also this

new concept in the HLL distribution channel called Kiosk. Kiosk is a small shop

that sells only sachets and low priced items (below Rs.10/-). Kiosk also does not

come under the surveillance of the distributor.

In addition to the ongoing commitment to the traditional grocery trade, HLL is

building a special relationship with the small but fast emerging modern trade.

HLL's scale enables it to provide superior customer service including daily

servicing, improving their range availability whilst reducing inventories. HLL is

using the opportunity of interfacing more directly with consumers in this retail

environment through specially designed communication and promotions. This is

building traffic into the stores while yielding high growth for the business.

An IT-powered system has been implemented to supply stocks to redistribution

stockists on a continuous replenishment basis. The objective is to catalyse HLL’s

growth by ensuring that the right product is available at the right place in right

quantities, in the most cost-effective manner. For this, stockists have been

connected with the company through an Internet-based network, called RSNet,

for online interaction on orders, dispatches, information sharing and monitoring.

RS Net covers about 80% of the company's turnover. Today, the sales system

gets to know every day what HLL stockists have sold to almost a million outlets

53

across the country. RS Net is part of Project Leap, HLL's end-to-end supply

chain, which also includes a back-end system connecting suppliers, all company

sites and stretching right Upto stockists. RS Net has come as a force multiplier

for HLL Way, the company's action-plan to maximize the number of outlets

reached and to achieve leadership in every outlet, by unshackling the field force

to solely focus on secondary sales from the stockists to retailers and market

activation. HLL Way has also led to implementing best practices in customer

management and common norms and processes across the company. Powered

by the IT tools it has further improved customer service, while ensuring superior

availability and impactful visibility at retail points.

For rural India, HLL has established a single distribution channel by consolidating

categories. In a significant move, with long-term benefits, HLL has mounted an

initiative, Project Streamline, to further increase its rural reach with the help of

rural sub-stockists. It has already appointed 6000 such sub-stockists. As a result,

the distribution network directly covers about 50,000 villages, reaching about 250

million consumers.

Distribution will acquire a further edge with Project Shakti, HLL's partnership with

Self Help Groups of rural women. The project, started in 2001, already covers

over 5000 villages in 52 districts of Andhra Pradesh, Karnataka Madhya Pradesh

and Gujarat, and is being progressively extended. The vision is to reach over

100,000 villages, thereby touching about 100 million consumers. The SHGs have

chosen to adopt distribution of HLL's products as a business venture, armed with

training from HLL and support from government agencies concerned and NGOs.

A typical Shakti entrepreneur conducts business of around Rs.15000 per month,

which gives her an income in excess of Rs.1000 per month on a sustainable

basis. As most of these women are from below the poverty line, and live in

extremely small villages (less than 2000 population), this earning is very

significant, and is almost double of their past household income. For HLL, the

project is bringing new villages under direct distribution coverage. Plans are

54

being drawn up to cover more states, and provide products/services in

agriculture, health, insurance and education. This will both catalyse holistic rural

development and also help the SHGs generate even more income. This model

creates a symbiotic partnership between HLL and its consumers, some of whom

will also draw on the company for their livelihood, and helps build a self-

sustaining virtuous cycle of growth.

SWOT ANALYSIS

SWOT analysis is a basic, straightforward model that provides direction and

serves as a basis for the development of marketing plans. It accomplishes this by

assessing an organizations strengths (what an organization can do) and

weaknesses (what an organization cannot do) in addition to opportunities

(potential favorable conditions for an organization) and threats (potential

unfavorable conditions for an organization). SWOT analysis is an important step

in planning and its value is often underestimated despite the simplicity in

creation. The role of SWOT analysis is to take the information from the

environmental analysis and separate it into internal issues (strengths and

weaknesses) and external issues (opportunities and threats). Once this is

completed, SWOT analysis determines if the information indicates something

that will assist the firm in accomplishing its objectives (a strength or opportunity),

or if it indicates an obstacle that must be overcome or minimized to achieve

desired results (weakness or threat) (Marketing Strategy, 1998).

The internal and external situation analysis can produce a large amount of

information, much of which may not be highly relevant. The SWOT analysis can

serve as an interpretative filter to reduce the information to a manageable

quantity of key issues. The SWOT analysis classifies the internal aspects of the

company as strengths or weaknesses and the external situational factors as

opportunities or threats. Strengths can serve as a foundation for building a

55

competitive advantage, and weaknesses may hinder it. By understanding these

four aspects of its situation, a firm can better leverage its strengths, correct its

weaknesses, capitalize on golden opportunities, and deter potentially devastating

threats.

Internal Analysis - The internal analysis is a comprehensive evaluation of the

internal environment's potential strengths and weaknesses. Factors should be

evaluated across the organization in areas such as:

Company culture, image

Organizational structure

Key staff

Access to natural resources

Position on the experience curve

Operational efficiency, capacity

Brand awareness

Market share

Financial resources

Exclusive contracts

Patents and trade secrets

The SWOT analysis summarizes the internal factors of the firm as a list of

strengths and weaknesses.

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External Analysis - An opportunity is the chance to introduce a new product or

service that can generate superior returns. Opportunities can arise when

changes occur in the external environment. Many of these changes can be

perceived as threats to the market position of existing products and may

necessitate a change in product specifications or the development of new

products in order for the firm to remain competitive. Changes in the external

environment may be related to:

Customers

Competitors

Market trends

Suppliers

Partners

Social changes

New technology

Economic / Political environment

The SWOT analysis summarizes the external environmental factors as a list of

opportunities and threats.

SWOT PROFILE OF LUX

STRENGTHS

1.Strong Market Research (door to

door sampling is done once a year in

Urban and Rural areas)

2.Many variants (Almond Oil, Orchid

Extracts, Milk Cream, Fruit Extracts,

Saffron, Sandalwood Oil, and Honey to

name a few)

3.Strong sales and distribution network

WEAKNESSES

1.Lux is mainly positioned as beauty

soap targeted towards women, hence it

lacks unisex appeal

2.Usage rate/ wear rate is high and is

generally mushy and soggy

3.Some variants like the sunscreen,

International variant did not do well in

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backed by HLL

4.Strong brand image

5.Positioning focuses on the attractive

beauty segment

6.Dynamically continuous innovation of

the product and brand rejuvenation –

new variants (Aromatic Glow and Chocolate

Seduction and Lux White Spa body wash) and

innovative promotions (22 carat gold

coin promotion – ‘Chance Hai’)

7.Perceived to have high value for

money (strong brand promotion but

relatively lower price which is a winning

combination in the popular segment)

8.Though it is in popular segment, it is

having mass appeal/market presence

across all segments (15% of the soap

market captured by Lux (sales /

volume)

9.Unique advantage of having access

to resources and assets of HLL

OPPORTUNITIES

1.Soap industry growing by 4% in India

2.Beauty segment’s Compounded

Annual Growth Rate (CAGR) is very

high. An indication of this is that Fair

and Lovely’s segment is increasing at a

fast rate - Lux must reinforce its

presence in the beauty segment

3.More promotions like price-offs and

the market

4.Certain advertisements like the

recent one with Shah Rukh Khan

resulted in controversial interpretations

of the message of the advertisement

and lead to some loss of focus (of

message of the advertisements)

5.Stock out problems - replenishment

time is high in semi-urban/rural areas

THREATS

1.New entrants/local

competitors/MNCs would increase the

competition (Camay, P&G)

2.High internal competition – Pears

also catering the beauty segment (also

from HLL stable)

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samples

4.Retentive strategy required as the

soap segment is in the mature stage of

its product life cycle

5.Line extension – probably with more

variants catering to the beauty segment

like natural, herbal soap etc

6.Liquid body wash is currently in the

growth stage – Lux should come out

with more variants in this segment

7.Level of servicing is high during sales

promotion schemes – this could be

brought down

3.Excessive dependence on beauty

segment makes Lux vulnerable to

changing customer tastes

4.Technological change makes the

existing products obsolete – Lux should

focus on technological innovations like

Body Wash

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PERCEPTUAL MAPPING OF BRAND LUX

Price

Sales Promotion

Perceptual mapping of some important brands

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Lux

Breeze

Dove

Pears

Mysore Sandal

Cinthol

Nirma

Dettol

The above mapping shows that Lux is seen as a brand which promotes its

products in an effective way and has good value for money. None of the other

important brands could match it on promotion as well as value for money

aspects. Although economy brands like Breeze and Nirma scored well on the

value for money aspect, they lagged behind on promotional aspects. Mysore

Sandal soap was seen as a brand which has moderate value for money while it

was left wanting in the promotional aspects. Cinthol and Dettol soaps formed the

middle portion of the map. They were rated as moderate both on promotional as

well as value for money aspects. Although Dove is ranked high on promotional

parameter, it was seen as an expensive proposition. Pears due to its uniqueness

as the only glycerin soap, finds only a certain set of buyers. It ranked low on both

value for money and promotional parameters.

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8.DATA ANALYSIS

RETAILER’S ANALYSIS

(1)SALES PROMOTION SCHEMES OFFERED ON LUX

30.0%

15.0%

40.0%

10.0%

5.0% Product bundling

Prizes

Price off

Cross promotion

Cash refundSchemes_

The primary analysis found that “Price off” is the best sales promotion schemes offered

on Lux (40% of the retailers agreed on this). “Product Bundling” was the next best with

30% of the retailers in favour of the same.

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(2)NORMAL DURATION OF SALES PROMOTION SCHEMES

25.0%

15.0%

60.0%

More than 3 months

15 days – 1 month

1 month- 3 monthsDuration

The primary analysis found that “1 month – 3 month” is the normal accepted duration of

sales promotion schemes (60% of the retailers agreed on this). “More than 3 months”

was the next best with 25% of the retailers in favour of the same.

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(3)HOW OFTEN SALES PROMOTION SCHEMES ARE OFFERED ON LUX

75.0%

5.0%

20.0%

Less than 3 months

6 months – 1 year

3 months – 6 monthsFrequency

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The primary analysis found that “Less than 3 months” is the general perceived

frequency for sales promotion schemes offered on Lux (75% of the retailers agreed on

this). “3 months – 6 months” was the next best with 20% of the retailers in favour of the

same.

(4)AFFECT ON SALES OF LUX DUE TO SALES PROMOTION SCHEMES

65

10.0%

75.0%

15.0%

No affect

Increase in sales

Can’t sayAffect_on_Sales

The primary analysis found that sales promotion schemes offered on Lux caused an

“Increase in sales” (75% of the retailers agreed on that). “Can’t say” was the next best

opinion with 15% of the retailers in favour of the same.

(5)COMMUNICATION OF SALES PROMOTION SCHEMES

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25.0%

20.0%40.0%

15.0%

Through salesrepresentatives

Through electronicmedia

Through wholesalers

Through print mediaCommunication

The primary analysis found that “Wholesalers” were the best medium of communication of sales promotion schemes (40% of the retailers agreed on that). “Sales representatives” was the next best with 25% of the retailers in favour of the same

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(6)LEVEL OF SERVICING DURING SALES PROMOTION - COMPARISION WITH COMPETITORS

45.0%

10.0%

35.0%

10.0%Superior and morefrequent

Superior and lessfrequent

Similar and morefrequent

Inferior and morefrequent

Comparision_with_competitors

The primary analysis found that the level of servicing during sales promotion vis-à-vis

competitors was “Superior and more frequent (45% of the retailers agreed on that).

“Similar and more frequent” was the next best with 35% of the retailers in favour of

the same.

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(7)AFFECT OF SALES PROMOTION SCHEMES ON DIFFERENT AGE GROUP

30.0%

15.0%

55.0%

16-25

46 -60

26-45Affect_on_perception_on_age_group

The primary analysis found that “26-45 age group” were the most affected by sales promotion (55% of the retailers agreed on that). “16-25 age group” was the next best with 30% of the retailers in favour of the same

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(8)PROBLEMS FACED DURING & AFTER SALES PROMOTION SCHEMES

10.0%

45.0%

45.0%

Improper information

  Stock out

Handling problemProblems_faced

The primary analysis found that “Stock out” and “Handling problem” were major

problems faced during and after sales promotion schemes (with 45% of the retailers in

favour of the same)

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(9)INCENTIVES PROVIDED DURING SALES PROMOTION SCHEME

10.0%

25.0%

10.0%

55.0%

Others

Prizes

Gifts

Cash discountIncentives_provided

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The primary analysis found that “Cash discount” is the best incentive provided during

sales promotion scheme offered on Lux (55% of the retailers agreed on that). “Prizes”

was the next best with 25% of the retailers in favour of the same.

(10)BEST SALES PROMOTION SCHEME

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10.0%

20.0%

55.0%

15.0%

Scratch card

Product bundling

Price off

Cash refundBest_schemes

The primary analysis found that “Price off” is the best sales promotion schemes offered on Lux (55% of the retailers agreed on that). “Product Bundling” was the next best with 20% of the retailers in favor of the same

CONSUMER’S ANALYSIS

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(1)MOST PREFFERED CRITERION FOR SOAP SELECTION

Word of mouth

Packaging

Color of soap

Benefits

Promotional schemes

Price

Fragrance of soap

Brand value

Advertisement

Most prefferedcriterion

2.5%6.25%

3.75%

13.75%

12.5%

28.75%

10.0%

15.0%

7.5%

The primary analysis found that “Price” is the most preferred criterion for soap (28.75%

of the consumers agreed on that). “Brand Value” was the next best with 15% of the

consumers in favour of the same.

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(2)PERCEPTION ABOUT LUX

15.0%

23.75%

11.25%

50.0%

Soap of filmstars

Soap for all

Nothing specific

Beauty soapPerception about Lux

The primary analysis found that the major perception about Lux is that as a “Beauty Soap” (50% of the consumers agreed on that). “Soap for all” was the next best with 23.75% of the consumers in favour of the same

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(3)RECOLLECTION OF ANY ADVERTISEMENT OF LUX

91.25%

8.75%

Yes.

No

Recall of currentadvertisement

The primary analysis found that advertisement recall of Lux was “Yes” for 91.25% of the consumers and “No” for 9.75% of the consumers

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(4)MOST EFFECTIVE MEDIUM OF SALES PROMOTION

31.25%

58.75%

10.0%

Sales promotion

Advertising

  Personal selling

Most effective mediumfor promotion

The primary analysis found that “Advertising” is the most effective medium for sales

promotion (58.75% of the consumers agreed on that). “Sales Promotion” was the next

best with 31.25% of the consumers in favour of the same.

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(5)PREFERENCE OF PROMTIONAL SCHEME

12.5%

42.5%

15.0%

13.75%

6.25%

3.75%

6.25%

Prizes

Price off

Cross promotion

Cash refund

Scratch card

Free trial

Discount coupons

Preference ofpromotional schemes

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The primary analysis found that “Price Off” is the most preferred promotional scheme

(42.5% of the consumers agreed on that). “Cross Promotion” was the next best with

15% of the consumers in favour of the same.

(6)PERCEPTION ABOUT CHANGE IN QUALITY DURING SALES PROMOTION SCHEME

79

93.75%

6.25%

No change

Superior

Perception aboutchange in quality

The primary analysis found that the perception about change in quality during sales promotion scheme was “Superior” (93.75% of the consumers agreed on that). “No change” was the next best with 6.25% of the consumers in favour of the same

(7)TYPE OF IMPACT

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13.75%

38.75%

21.25%

26.25%

Makes you switch toLux

Continue buying evenafter sales promotionoffer is scrapped

Buy it during salespromotion offer

No change in buyingbehavior

Type of impact

The primary analysis found that the type of impact of sales promotion was “Continue

buying even after sales promotion offer is scrapped (38.75% of the consumers agreed

on that). “No change in buying behaviour” was the next best with 26.25% of the

consumers in favour of the same.

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(8)COMMUNICATION OF SCHEME

3.75%

26.25%

58.75%

11.25%

Through salesrepresentatives

Through print media

Through electronicmedia

Through company’sstall

Communication ofschemes

The primary analysis found that the communication of schemes should be “Through electronic media” (58.75% of the consumers agreed on that). “Through print media” was the next best with 26.25% of the consumers in favour of the same

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(9)PROBLEMS FACED DURING SALES PROMOTION SCHEMES

The primary analysis found that “Stock Out” is the biggest problems faced during sales

promotion schemes (42.5% of the consumers agreed on that). “Any other” was the next

best with 21.25% of the consumers in favour of the same.

(10)COMPARISION WITH COMPETITORS

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48.75%

12.5%

35.0%

3.75%

Superior and morefrequent

Superior and lessfrequent

Similar and morefrequent

Similar and less frequent

Comparison withcompetitors

The primary analysis found that Lux’s promotion schemes were “Superior and more frequent” vis-à-vis its (48.75% of the consumers agreed on that). “Similar and more frequent” was the next best with 35% of the consumers in favour of the same

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(11)AFFECT ON AGE GROUP

6.25%2.5%

32.5%

2.5%

56.25%

Kids

Adults

   Youngsters

  Older people

  AdultsAffect on age group

The primary analysis found that “Adults” were the most affected upon by sales

promotion 56.25% of the consumers agreed on that). “Youngsters” was the next best

with 32.5% of the consumers in favour of the same.

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(12)PRICE OF SOAP

42.5%

15.0%

2.5%

32.5%

7.5% Satisfied

Very satisfied

Satisfied

Neutral

DissatisfiedPrice

The primary analysis found that the customers perceived the price of soap to be

“Satisfactory” (42.5% of the consumers agreed on that). “Neutral” was the next best

with 32.5% of the consumers in favour of the same.

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(13)DISTRIBUTION NETWORK

47.5%

5.0%

26.25%

21.25%

Satisfied

Dissatisfied

Very satisfied

NeutralDistribution Network

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The primary analysis found that the customers perceived the distribution network of soap to be “Satisfactory” (47.5% of the consumers agreed on that). “Very Satisfied” was the next best with 26.25% of the consumers in favour of the same

(14)QUALITY

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47.5%

8.75%

7.5%

12.5%

23.75%

Satisfied

Dissatisfied

Very satisfied

Satisfied

NeutralQuality

The primary analysis found that the customers perceived the quality of soap to be

“Satisfactory” (47.5% of the consumers agreed on that). “Neutral” was the next best

with 23.75% of the consumers in favour of the same.

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(15)ADVERTISING

56.25%

26.25%

17.5%

Satisfied

Neutral

DissatisfiedAdvertising

The primary analysis found that the customers perceived the advertising of soap to be “Satisfactory” (56.25% of the consumers agreed on that). “Neutral” was the next best with 26.25% of the consumers in favour of the same

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(16)PROMOTIONAL SCHEMES

21.25%

7.5%

7.5%

63.75%

Neutral

Dissatisfied

Very satisfied

SatisfiedPromotional Schemes

The primary analysis found that the customers perceived the promotional schemes of soap to be “Satisfactory” (63.75% of the consumers agreed on that). “Neutral” was the next best with 21.25% of the consumers in favour of the same.

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9.CONCLUSION

The findings of the empirical study indicate that unless the brand to be promoted is in the

consideration set of the consumer, sales promotion by itself is unlikely to have any major

impact. Clearly this shows that managers need to invest into brand building exercise so

that his/her brand appears in the consideration set of the target consumers. Only after this

should he spend time, money and energy on sales promotion activities. Sales promotion

should not be used in isolation but need to be integrated with other tools and in line with

the overall positioning of the brand. Also the importance of the role of mass media came

out clearly in both the studies. Companies need to create sufficient awareness about sales

promotion schemes through mass media in order to create awareness The role of retailer

in influencing consumer in brand choice decision in a toilet soap category was found to

be insignificant which also supports the above observations. Toilet soaps are low

involvement products characterised by switching behaviour. Also the person going to the

shop for the purchase of soap is the final decision maker of the brand. Hence it is

essential that companies need to design mattractive, striking, visible POPs for scheme

announcements.

With respect to nature of scheme, the finding suggested that premium (free gift) was

popular with companies. While both retailers and consumers preferred price offs. So it is

necessary that the perceived value of a free gift has to be appealing and high for the target

consumers. Repetitive use of the same premium (soap dish) for a prolonged period may

have negative effect on the loyal customers. When the company is giving its own product

free as premium, it needs to ensure the quality of the product from it as it is likely to

jeopardize the image of both its products.

The findings exhibited that both the retailers and consumers perceived that sales

promotion activities carried out by the companies for increasing sales in short term and

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clearing excess stocks. What it implies is that companies need to use sales promotion

synergistically and communicate so that they provide value to the target audience and

enhance brand quality/image perceptions.

Companies need to systematise information flow regarding sales promotion activities

particularly at dealer - retailer level. Ensuring proper information flow and devising

checks and measures to reduce misappropriations and implementation flows should be

considered critical aspects for the success of sales promotion activities by the companies.

As retailing is fragmented, direct reach by companies is next to impossible. Through

dealers and proper feedback mechanism, companies keep in touch with the market. From

the study it was found that smaller retailers felt neglected and not enthused to implement

the schemes, particularly when additional handling, stocking, accounting was required on

the part of a retailer without compensatory margins. It can be seen that the retailer and

consumer perceptions matched with respect to preferences of schemes, underlying

motivations and role of mass media. This implies that the retailer would be a rich source

of information about the consumer and the likely response to sales promotion activities.

Developing a system to tap such responses from time to time both at retailer and

consumer level would be helpful for planning future sales promotion activities. In order

to build trust and commitment companies should tap preferences, perceptions of retailers

as well as consumers.

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10.RECOMMENDATIONS

(1) They should provide more promotions like price-offs and samples.

(2)Retentive strategy required as the soap segment is in the mature stage of its

product life cycle

(3) Line extension – probably with more variants catering to the beauty segment like

natural, herbal soap etc.

(4) Liquid body wash is currently in the growth stage – Lux should come out with

more variants in this segment

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(5) Level of servicing is low during sales promotion schemes – this could be brought up.

(6) It is having only 19.8 % rural market presentation which could be further enhanced .

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REFERENCES

1. Kotler Phillip, “Marketing Management : Analysis, Planning, Implementation and

Control,” 9th ed., Prentice Hall of India, 1997.

2. Strang Roger, “Sales Promotion fast growth faculty management,” Harvard Business

Review, 1976.

3. www.indiainfoline.com

4. www.hll.com

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APPENDIX

1. Questionnaires Used

RETAILER’S QUESTIONNAIRE

Name :………………………….. Shop’s Name :………………………………….

Address: ………………………… Contact No.:………………………………….

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……………………………………

……………………………………..

(1)What are the sales promotion schemes offered on Lux ?

(a)Price off(b)Discount coupons(c) Product bundling(d)Contests(e)Scratch card(f)Cross promotion(g)Cash refund(h)Prizes(i)Free trial(j)Any other

(2)What is the normal duration of the sale promotion scheme offered by Lux?

(a)Less than 15 days(b)15 days – 1 month(c)1 month- 3 months(d)More than 3 months

(3)How often sales promotion schemes are offered on Lux?

(a)Less than 3 months(b)3 months – 6 months(c)6 months – 1 year(d)More than 1 year

(4) Affect on sales of Lux due to sales promotion schemes offered ?

(a) Increase in sales(b) Decrease in sales(c ) No affect(d) Can’t say

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(5)How is the sales promotion scheme communicated to you?

(a) Through wholesalers(b) Through sales representatives(c) Through print media(d) Through electronic media(e) Through Manufacturer

(6) Level of servicing during sales promotion?

(a) Very Prompt (b) Prompt (b) Moderate (c) Slow (d) Very slow

(7) Comparison of sales promotion scheme offered on Lux with competitors?

(a)Superior and more frequent(b)Superior and less frequent(c)Similar and more frequent(d)Similar and less frequent(e)Inferior and more frequent(f) Inferior and less frequent

(8) Perception of which age group gets most affected due to sales promotion schemes offered?

(a) 8-15 yrs(b) 16-25 yrs(c) 26-45 yrs(d) 46 -60 yrs(e) 60 and above

(9) What are the problems faced during and after the sales promotion schemes?

(a) Handling problem

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(b) Stock out(c) Improper information(d) Leftover

(10) What are the incentives provided to you during sales promotion schemes?

(a) Prizes(b) Sponsored tour(c) Gifts(d) Cash discount(e) Lucky draw` coupons

(11) Which sales promotion schemes you think is the best for you to handle?

(a)Price off(b)Discount coupons(c) Product bundling(d)Contests(e)Scratch card(f)Cross promotion(g)Cash refund(h)Prizes(i)Free trial(j)Any other

CUSTOMER'S QUESTIONNAIRE

Name : .......................................... Age:.................................Sex:...............

Address: ............................................. Contact No:...................................................

............................................................

............................................................

(1)Which brand of bathing soap do you use ?............................................................................................

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(2) Is the same brand of soap used by your other family members? If not , which brand of bathing soap do they use?......................................................................................

(3) How would you rank following criterion for selecting a bathing soap ?

(a) Color of soap(b) Fragrance of soap(c) Brand value(d) Price(e) Benefits(f) Packaging(g) Word of mouth(h) Advertisement(i) Promotional schemes

(4) What comes in to your mind when you think about Lux ?

(a) Soap of filmstars(b) Beauty soap(c) Nothing specific

(5) Can you recall any current advertisement of Lux ?

(a)Yes. (b) No.

(6) Which is the most effective medium for promoting the product?

(a) Advertising(a) Sales promotion(a) Public relation & Publicity(a) Personal selling(a) Internet

(7) Out of total 100 points, allot the points according to your preference on the following promotional schemes?

(a) Price off(b) Discount coupons

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(c) Contests(d) Scratch card(e) Cross promotion(f) Cash refund(g) Prizes(h) Free trial

(8) Do you perceive any change in quality of Lux during the sales promotion scheme?

(a) Superior(b) Inferior(c) No change

(9) What type of impact does the sales promotion scheme on Lux creates on you?

(a)Makes you switch to Lux (b)Buy it during sales promotion offer (c)Continue buying even after sales promotion offer is scrapped (d) No change in buying behavior

(10)How is the sales promotion scheme communicated to you?

(f) Through sales representatives(g) Through print media(h) Through electronic media(i) Through company’s stall

(11)What are the problems faced during and after the sales promotion schemes?

(e) Stock out(f) Improper information(g) Gifts not received(h) Coupons not encashed

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(i) Any other

(12) Comparison of sales promotion scheme offered on Lux with competitors?

(a)Superior and more frequent(b)Superior and less frequent(c)Similar and more frequent(d)Similar and less frequent(e)Inferior and more frequent(f) Inferior and less frequent

(13) In your family which age group gets most affected due to sales promotion schemes offered?

(f) Kids(g) Youngsters (h) Adults(i) Older people

(14) How do you rate Lux on following parameters?

Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied

(a) Price(b) Distribution Network(c) Quality(d) Advertising(e) Promotional Schemes

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APPENDIX -2

104

105