Soap IndustryPRESENTED BY: ABIGAIL CLIFFORD, TESS BERGHOFF, MAHAK GOEL, UDEME AKPAETE

Why the Soap Industry?

Interesting

Product positioning comparable to diamond industry

Relatively inelastic demand

Homogenous nature demands unique advertising

Differentiation based on brand image

Traditionally steeped in negative advertising

Industry BackgroundABIGAIL CLIFFORD

Industry Background Soap is a multi - billion dollar industry

Majority of soap is sold in supermarkets and mass merchants

Total number of units sold each year is 3.1 million (10 billion pounds)

Hotels discards 2.6 billion bars of soap every year

Humanitarian efforts for washing hands

History Production began during the colonial times where main ingredients where in abundance

Remained a locally produced good until Revolutionary War

Early 19th century and the rise of the Textile Industry stimulated the rise of soap making firms

By the early 1840s Cincinnati became the soap industry leader containing 17 companies including Proctor & Gamble

No Advertising, No Branding, Small Firms

Post Civil War Emergence of brands and product differentiation

Advertising became the biggest innovation

Invention of radio created a new avenue of advertisement

P&G pioneered radio advertising through creating daytime serial dramas

By 1962 soap firms were spending 250 million annually on advertising 90% on TV P&G spending 190 million

Todays Market Aging population has paved the way for new companies and increased

product differentiation

Rising germ free attitude

Increased preference towards liquid soap over bar soap

Innovation in firms to create soaps with dual purposes

Brand Market Share

Dove22%

Dial14%

Soft Soap9%Lever 2000

8%

Irish Spring7%

Caress6%

Olay6%

Other29%

The industry 650 establishments in the US alone

The change in the millennium market creates slightly easier entry through change in preferences and innovation

Still highly competitive

No government regulations

Success comes from businesses of scale

Advertising DifferencesWOMEN

Advertise to achieve emotional response

Highly combative through comparative advertising

Easy to repeat innovative additions to product

MEN

Focus on overall image

Offer many more aspects to brand

More persuasive than combative

Scent of product large factor

Organization Profitability of individual companies depends on efficient operations and effective sales and marketing

Pricing set by the firms

The top 50 companies control 90% of revenue

Most firms manufacture in similar manners

US is the biggest consumer of soaps

P&G In August they began to streamline their brands down to their 80 most profitable

Their company market share is divided into personal care 35%, food 28%, homecare 18%, and refreshment 19%

The overall goal is to reduce carbon footprint through innovation and sustainability

In 2014 they recorded 81 billion in sales

Unilever Unilever is a Britain founded

multinational company 400 brands focused on health

and well being In 2014 they recorded a profit

of 48.44 billion euros Revenue of personal care

products 17,739 billion euro Skin care and hair care market

worldwide 12.9% Grocery store market world

wide 50.1%

36%

27%

19%

18%

Personal Care FoodsRefreshment Home Care

Industry Market Share

Unilever42%

Procter & Gamble

20%

Henkel Group 11%

Colgate Palmolive Co.8%

Johnson & Johnson7%

Private Label7%

Others 5%

Unilever Procter & Gamble Henkel Group Colgate Palmolive Co.Johnson & Johnson Private Label Others

HHI= 2200.14(Highly Concen-trated)

Female Personal Care BrandsTESS BERGHOFF

Dove Subsidiary of Unilever

Founded in 1957 Dove Beauty Bar

Headquartered in the United Kingdom

Target Market: Women 20-40

Estimated $5.8 Billion brand value

Dove Advertising◦ Original focus on product attributes

◦ Ads featured traditional models◦ 2004 Campaign for Real Beauty

◦ Celebration of diversity◦ Widen definition of beauty

Dove AdvertisingDove ‘Beauty Sketches’ 114 Million Views in one monthLead to 4 Billion blogger media impressions

Dove AdvertisingSocial Media Presence

◦ 23 Million Facebook followers◦ 164,000 Twitter followers◦ Interactive Community ◦ #choosebeautiful campaign

Dove AdvertisingCorporate Social ResponsibilityAdvertising Goodwill

◦ Image Acceptance◦ Breast Cancer Campaign

Launched ‘Movement for Self Esteem’ in 2010◦ Partnered with the Global Advisory Board, Boys & Girls Club, Girls Inc, and Girl Scout

Olay Subsidiary of Proctor & Gamble

Founded in South Africa in 1953 “anti-aging” fluid

Acquired by P&G in mid 1980s

Target: Women 30-50

Estimated $4 Billion brand value

Olay Advertising◦ Focus on Elegance and Exclusivity◦ Adherence to Traditional Beauty Standards◦ Models and Celebrities

Olay Advertising◦ 2012 Launch of Olay Essentials◦ Attempt to target a younger customer

base◦ Launch of mobile app and

advertisements

Olay Advertising◦ 2014 ‘Your Best Beautiful’ Campaign◦ Campaign Ambassador Katie Holmes◦ “I want to have skin like a royal”

Olay AdvertisingOnline Social Media Presence

◦ 6.3 Million Facebook followers◦ 100,000 Twitter followers◦ ‘Olay for you’ website & mobile app

Male Personal Care BrandsMAHAK GOEL

Axe Overview Subsidiary of Unilever

First launched in 1983 in France

Target Market: Men 18 – 30

Estimated Brand Value: $421 Million

Products: Deodorants, shampoo, shower gel, aftershave, cologne, skin care, hair styling products

Axe Advertising The Axe Effect Campaign

Popularity increased in 2000s in America

Main focus is how the everyday man is irresistible when he wears Axe

Heavy use of models

Sex Appeal

Axe Advertising

Axe Social MediaShower Pooling Campaign

Facebook Likes: 4M

Twitter Followers: 135 K

Axe SWOTStrengthsFragrance

Brand positioningVariety of productInternational reach

Availability

WeaknessesNarrow Target

ExpensiveSexual Appeal

Products overlookedDesign

OpportunitiesLarge product line for men

International expansionBrand image in sports

Social media expansion

ThreatsCompetitors

Focused solely on sexDegrades women

Old Spice AdvertisingFounded by the Shulton Company

Introduced Early American Old Spice for Women in 1937

Closely followed by Old Spice for men in 1938

Bought by Proctor and Gamble in June 1990

Target Market: Men 18 onward

Estimated Brand Value: $903 Million

Products: shaving cream, aftershave, deodorant, body wash, and body spray

Old Spice AdvertisingThe Man Your Man Can Smell Like Campaign

Marketing to Women for Men’s Products

Heavy focus on masculinity

Celebrity Endorsement: Former NFL Player Isaiah Mustafa

Humor Advertising

Old Spice Social MediaResponse Campaign in 2010: Answering Twitter and Facebook Queries

Over 180 short commercials

Targeted social media celebrities, such as Ellen DeGeneres

Personalized ads

Raw Data AnalysisUDEME AKPAETE

Sales in the Industry

Average Amount per Ad

Dove Axe Old Spice$0

$50,000

$100,000

$150,000

$200,000

$250,000

$84,300.00

$54,670.21

$229,557.14

Brands

Average Advertising Time

14

14.5

15

15.5

16

16.5

17

15 15

16.49

Brands

Seco

nds

AxeOld Spice Dove

Old Spice Primetime Advertising

NFC CHMPSHP GM

NBA BSKB PLYFF GM

GOTHAM-FOX

BROOKLYN NINE-NINE-FOX

WORLD SRS GAME 5

0 0.5 1 1.5 2 2.5

Old Spice Advertising

Number of Advertisements

Prog

ram

s Ad

verti

sed

On

• Majority of prime time advertisements took place on sports related programming

Axe Primetime Advertising

NCAA BB PLYF GM

NBA BSKB PLYFF GM

NBA COUNTDOWN-ABC

SATURDAY NIGHT CLG FTBL

1

1

1

5

Number of Advertisements

Prog

ram

s Ad

verti

sed

On

• All of the advertisements took place during sports-related programs

• Reinforce males as target audience

Dove Primetime Advertising

• Advertised on 100+ shows during primetime

• Indicative of wide audience reach

• Larger target audience

Olay Primetime Advertising

Category 1 Category 2 Category 30

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Series 1 Series 2

No soap advertisements by Olay during prime time

Olay

• “Age is the enemy”• Age renewal, vanishing creams • Brand image has trickle down effect to their soap brand

Target Audience-Middle Age women hoping to retain youth

RecommendationsOlay

Look for growth potential in soap segment

AxeShow more initiatives towards CSR

Engage the female audience to buy for significant others

Old SpiceIntroduce “traditional” line, catered to men 40+

Capitalize on gaps in market for older men

Recommendations IndustryReact to sluggish sales for bar soap, shift emphasis

Complementary Advertising (Health & Beauty)

Cater towards a larger ethnic audience

Questions? Thank you!