INTRODUCTION

WE regularly talk about things like butter potato chips

toothpastes razors household care products packaged food

and beverages etc But do we know under which category

these things come They are called FMCGs FMCG is an

acronym for Fast Moving Consumer Goods which refer to

things that we buy from local supermarkets on daily basis

the things that have high turnover and are relatively

cheaper

FMCG Products and Categories

- Personal Care Oral Care Hair Care Skin Care Personal

Wash (soaps)

- Cosmetics and ries deodorants perfumes feminine

hygiene paper products

- Household care fabric wash including laundry soaps and

synthetic detergents household cleaners such as

dishutensil cleaners floor cleaners cleaners air

fresheners insecticides and mosquito repellents metal

polish and furniture polish

FMCG in 2006

The performance of the industry was inconsistent in terms of

sales and growth for over 4 years The investors in the sector

were not gainers at par with other booming sectors After

two years of sinking performance of FMCG sector the year

2005 has witnessed the FMCGs demand growing Strong

growth was seen across various segments in FY06 With the

rise in disposable income and the economy in good health

the urban consumers continued with their shopping spree

- Food and health beverages branded flour branded

sugarcane bakery products such as bread biscuits etc

milk and dairy products beverages such as tea coffee

juices bottled water etc snack food chocolates etc

- Frequently replaced electronic products such as audio

equipments digital cameras Laptops CTVs other

electronic items such as Refrigerator washing machines

etc coming under the category of White Goods in FMCG

Sector Outlook

FMCG is the fourth largest sector in the Indian Economy with

a total market size of Rs 60000 crores FMCG sector

generates 5 of total factory employment in the country and

is creating employment for three million people especially in

small towns and rural India

Soap is a surfactant used in conjunction with water for

washing and cleaning that historically comes in solid bars

but also in the form of a thick liquid especially from soap

dispensers in public washrooms

Historically soap has been composed of sodium (soda ash)

or potassium (potash) salts of fatty acids derived by reacting

fat with lye in a process known as saponification The fats

are hydrolyzed by the base yielding glycerol and crude

soap

Many cleaning agents today are technically not soaps but

detergents which are less expensive and easier to

manufacture

How soap works

a diagram of the function of soap

Soaps are useful for cleaning because soap molecules attach

readily to both nonpolar molecules (such as grease or oil)

and polar molecules (such as water) Although grease will

normally adhere to skin or clothing the soap molecules can

attach to it as a handle and make it easier to rinse away

Applied to a soiled surface soapy water effectively holds

particles in suspension so the whole of it can be rinsed off

with clean water

(fatty end) CH3-(CH2)n - COONa

(water soluble end)

The hydrocarbon (fatty) portion dissolves dirt and oils

while the ionic end makes it soluble in water Therefore it

allows water to remove normally-insoluble matter by

emulsification

Soapmaking

The most popular soap making processes today is the cold

process method where fats such as olive oil react with lye

Soap makers sometimes use the melt and pour process

where a premade soap base is melted and poured in

individual molds but this is not really to be considered soap-

making Some soapers also practice other processes such

as the historical hot process and make special soaps such

as clear soap (glycerin soap)

soap differs from industrial soap in that usually an excess

of fat is used to consume the alkali (superfatting) and in

that the glycerin is not removed Superfatted soap soap

which contains excess fat is more skin-friendly than

industrial soap though if not properly formulated it can

leave users with a greasy feel to their skin Often

emollients such as jojoba oil or shea butter are added at

trace (the point at which the saponification process is

sufficiently advanced that the soap has begun to thicken)

after most of the oils have saponified so that they remain

unreacted in the finished soap

Lye

Reacting fat with sodium hydroxide will produce a hard soap

Reacting fat with potassium hydroxide will produce a soap

that is either soft or liquid Historically the alkali used was

potassium hydroxide made from the deliberate burning of

vegetation such as bracken or from wood ashes

Fat

Handicraft made Marseille soap

Soap is derived from either oils or fats Sodium tallowate a

common ingredient in many soaps is in fact derived from

rendered beef fat Soap can also be made of vegetable oils

such as palm oil and the product is typically softer If soap is

made from pure olive oil it may be called Castile soap or

Marseille soap Castile is also sometimes applied to soaps

with a mix of oils but a high percentage of olive oil

(fatty end) CH3-(CH2)n - COONa

(water soluble end)

The hydrocarbon (fatty) portion dissolves dirt and oils

while the ionic end makes it soluble in water Therefore it

allows water to remove normally-insoluble matter by

emulsification

Soapmaking

The most popular soap making processes today is the cold

process method where fats such as olive oil react with lye

Soap makers sometimes use the melt and pour process

where a premade soap base is melted and poured in

individual molds but this is not really to be considered soap-

making Some soapers also practice other processes such

as the historical hot process and make special soaps such

as clear soap (glycerin soap)

soap differs from industrial soap in that usually an excess

of fat is used to consume the alkali (superfatting) and in

that the glycerin is not removed Superfatted soap soap

which contains excess fat is more skin-friendly than

industrial soap though if not properly formulated it can

leave users with a greasy feel to their skin Often

emollients such as jojoba oil or shea butter are added at

trace (the point at which the saponification process is

sufficiently advanced that the soap has begun to thicken)

after most of the oils have saponified so that they remain

unreacted in the finished soap

Lye

Reacting fat with sodium hydroxide will produce a hard soap

Reacting fat with potassium hydroxide will produce a soap

that is either soft or liquid Historically the alkali used was

potassium hydroxide made from the deliberate burning of

vegetation such as bracken or from wood ashes

Fat

Handicraft made Marseille soap

Soap is derived from either oils or fats Sodium tallowate a

common ingredient in many soaps is in fact derived from

rendered beef fat Soap can also be made of vegetable oils

such as palm oil and the product is typically softer If soap is

made from pure olive oil it may be called Castile soap or

Marseille soap Castile is also sometimes applied to soaps

with a mix of oils but a high percentage of olive oil

as the historical hot process and make special soaps such

as clear soap (glycerin soap)

soap differs from industrial soap in that usually an excess

of fat is used to consume the alkali (superfatting) and in

that the glycerin is not removed Superfatted soap soap

which contains excess fat is more skin-friendly than

industrial soap though if not properly formulated it can

leave users with a greasy feel to their skin Often

emollients such as jojoba oil or shea butter are added at

trace (the point at which the saponification process is

sufficiently advanced that the soap has begun to thicken)

after most of the oils have saponified so that they remain

unreacted in the finished soap

Lye

Reacting fat with sodium hydroxide will produce a hard soap

Reacting fat with potassium hydroxide will produce a soap

that is either soft or liquid Historically the alkali used was

potassium hydroxide made from the deliberate burning of

vegetation such as bracken or from wood ashes

Fat

Handicraft made Marseille soap

Soap is derived from either oils or fats Sodium tallowate a

common ingredient in many soaps is in fact derived from

rendered beef fat Soap can also be made of vegetable oils

such as palm oil and the product is typically softer If soap is

made from pure olive oil it may be called Castile soap or

Marseille soap Castile is also sometimes applied to soaps

with a mix of oils but a high percentage of olive oil

potassium hydroxide made from the deliberate burning of

vegetation such as bracken or from wood ashes

Fat

Handicraft made Marseille soap

Soap is derived from either oils or fats Sodium tallowate a

common ingredient in many soaps is in fact derived from

rendered beef fat Soap can also be made of vegetable oils

such as palm oil and the product is typically softer If soap is

made from pure olive oil it may be called Castile soap or

Marseille soap Castile is also sometimes applied to soaps

with a mix of oils but a high percentage of olive oil

An array of quality oils and butters are used in the process

such as olive coconut palm cocoa butter hemp oil and

shea butter to list a few Each oil chosen by the soap maker

has unique characteristics that provide different qualities to

soaps including mildness lathering and hardness For

example olive oil provides mildness in soap coconut oil

provides lots of lather while coconut and palm oils provides

hardness

Process

In both cold-process and hot-process soapmaking heat is

required for saponification

Cold-process soapmaking takes place at a temperature

sufficiently above room temperature to ensure the

liquification of the fat being used and requires that the lye

and fat be kept warm after mixing to ensure that the soap is

completely saponified

Unlike cold-processed soap hot-processed soap can be used

right away because lye and fat saponify more quickly at the

higher temperatures used in hot-process soapmaking

Hot-process was used when the purity of lye was unreliable

and can use natural lye solutions such as potash The main

benefit of hot processing is that the exact concentration of

the lye solution does not need to be known to perform the

process with adequate success

Cold-process requires exact measurement of lye to fat using

saponification charts to ensure that the finished product is

mild and skin friendly Saponification charts can also be used

in hot-process soapmaking but are not as necessary as in

cold-process

Hot process

In the hot-process method lye and fat are boiled together at

80 ndash 100 degC until saponification occurs which the soapmaker

can determine by taste (the bright distinctive taste of lye

disappears once all the lye is saponified) or by eye (the

experienced eye can tell when gel stage and full

saponification have occurred)

After saponification has occurred the soap is sometimes

precipitated from the solution by adding salt and the excess

liquid drained off

The hot soft soap is then spooned into a mold

Cold process

A cold-process soapmaker first looks up the saponification

value of the fats being used on a saponification chart which

is then used to calculate the appropriate amount of lye

Excess unreacted lye in the soap will result in a very high pH

and can burn or irritate skin Not enough lye and the soap is

greasy and oily Most soap makers formulate their recipes

with 3-15 excess oil so that all of the lye is reacted and

that excess fat is left for skin conditioning benefits

The lye is dissolved in water and the resulting solution mixed

with fat Once it has cooled to about 80-90 degrees

Fahrenheit this lye-fat mixture is stirred until trace that is

the two thin clear substances become cloudy and thicken

(Modern-day amateur soapmakers often use a stick blender

to speed this process) After much stirring the mixture turns

to the consistency of a thin pudding

Essential oils fragrance oils botanicals herbs oatmeal or

other additives are added at light trace just as the mixture

starts to thicken

The batch is then poured into molds kept warm with towels

or blankets and left to continue saponification for 18 to 48

hours Milk soaps are the exception They do not require

insulation Insulation may cause the milk to burn During this

time it is normal for the soap to go through a gel phase

where the opaque soap will turn somewhat transparent for

several hours before turning opaque again The soap will

continue to give off heat for many hours after trace

After the insulation period the soap is firm enough to be

removed from the mold and cut into bars At this time it is

safe to use the soap since saponification is complete

However cold-process soaps are typically cured and

hardened on a drying rack for 2-6 weeks (depending on

initial water content) before use If using caustic soda it is

recommended that the soap is left to cure or at least 4

weeks

Purification and finishing

The common process of purifying soap involves removal of

sodium chloride sodium hydroxide and glycerol These

components are removed by boiling the crude soap curds in

water and re-precipitating the soap with salt

Most of the water is then removed from the soap This was

traditionally done on a chill roll which produced the soap

flakes commonly used in the 1940s and 1950s This process

was superseded by spray dryers and then by vacuum dryers

The dry soap (approximately 6-12 moisture) is then

compacted into small pellets These pellets are now ready

for soap finishing the process of converting raw soap pellets

into a salable product usually bars

Soap pellets are combined with fragrances and other

materials and blended to homogeneity in an amalgamator

(mixer) The mass is then discharged from the mixer into a

refiner which by means of an auger forces the soap through

a fine wire screen From the refiner the soap passes over a

roller mill (French milling or hard milling) in a manner similar

to calendering paper or plastic or to making chocolate liquor

The soap is then passed through one or more additional

refiners to further plasticize the soap mass Immediately

before extrusion it passes through a vacuum chamber to

remove any entrapped air It is then extruded into a long log

or blank cut to convenient lengths passed through a metal

detector and then stamped into shape in refrigerated tools

The pressed bars are packaged in many ways

Sand or pumice may be added to produce a scouring soap

This process is most common in creating soaps used for

human hygiene The scouring agents serve to remove dead

skin cells from the surface being cleaned This process is

called exfoliation Many newer materials are used for

exfoliating soaps which are effective but do not have the

sharp edges and poor size distribution of pumice

History

Early History

Soapnut Tree (Reeta Sapindus tree)

The earliest known use of a natural soap-like substance was

the powder of the Reeta(Sapindus) nut which was used by

Indians since antiquity Hindus in India were obliged to bathe

at least once a day every morning in accordance with

Ayurveda Evidence of manufactured soap use are

Babylonian clay cylinders dating from 2800 BC containing a

soap-like substance A formula for soap consisting of water

alkali and cassia oil was written on a Babylonian clay tablet

around 2200 BC

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

Unlike cold-processed soap hot-processed soap can be used

right away because lye and fat saponify more quickly at the

higher temperatures used in hot-process soapmaking

Hot-process was used when the purity of lye was unreliable

and can use natural lye solutions such as potash The main

benefit of hot processing is that the exact concentration of

the lye solution does not need to be known to perform the

process with adequate success

Cold-process requires exact measurement of lye to fat using

saponification charts to ensure that the finished product is

mild and skin friendly Saponification charts can also be used

in hot-process soapmaking but are not as necessary as in

cold-process

Hot process

In the hot-process method lye and fat are boiled together at

80 ndash 100 degC until saponification occurs which the soapmaker

can determine by taste (the bright distinctive taste of lye

disappears once all the lye is saponified) or by eye (the

experienced eye can tell when gel stage and full

saponification have occurred)

After saponification has occurred the soap is sometimes

precipitated from the solution by adding salt and the excess

liquid drained off

The hot soft soap is then spooned into a mold

Cold process

A cold-process soapmaker first looks up the saponification

value of the fats being used on a saponification chart which

is then used to calculate the appropriate amount of lye

Excess unreacted lye in the soap will result in a very high pH

and can burn or irritate skin Not enough lye and the soap is

greasy and oily Most soap makers formulate their recipes

with 3-15 excess oil so that all of the lye is reacted and

that excess fat is left for skin conditioning benefits

The lye is dissolved in water and the resulting solution mixed

with fat Once it has cooled to about 80-90 degrees

Fahrenheit this lye-fat mixture is stirred until trace that is

the two thin clear substances become cloudy and thicken

(Modern-day amateur soapmakers often use a stick blender

to speed this process) After much stirring the mixture turns

to the consistency of a thin pudding

Essential oils fragrance oils botanicals herbs oatmeal or

other additives are added at light trace just as the mixture

starts to thicken

The batch is then poured into molds kept warm with towels

or blankets and left to continue saponification for 18 to 48

hours Milk soaps are the exception They do not require

insulation Insulation may cause the milk to burn During this

time it is normal for the soap to go through a gel phase

where the opaque soap will turn somewhat transparent for

several hours before turning opaque again The soap will

continue to give off heat for many hours after trace

After the insulation period the soap is firm enough to be

removed from the mold and cut into bars At this time it is

safe to use the soap since saponification is complete

However cold-process soaps are typically cured and

hardened on a drying rack for 2-6 weeks (depending on

initial water content) before use If using caustic soda it is

recommended that the soap is left to cure or at least 4

weeks

Purification and finishing

The common process of purifying soap involves removal of

sodium chloride sodium hydroxide and glycerol These

components are removed by boiling the crude soap curds in

water and re-precipitating the soap with salt

Most of the water is then removed from the soap This was

traditionally done on a chill roll which produced the soap

flakes commonly used in the 1940s and 1950s This process

was superseded by spray dryers and then by vacuum dryers

The dry soap (approximately 6-12 moisture) is then

compacted into small pellets These pellets are now ready

for soap finishing the process of converting raw soap pellets

into a salable product usually bars

Soap pellets are combined with fragrances and other

materials and blended to homogeneity in an amalgamator

(mixer) The mass is then discharged from the mixer into a

refiner which by means of an auger forces the soap through

a fine wire screen From the refiner the soap passes over a

roller mill (French milling or hard milling) in a manner similar

to calendering paper or plastic or to making chocolate liquor

The soap is then passed through one or more additional

refiners to further plasticize the soap mass Immediately

before extrusion it passes through a vacuum chamber to

remove any entrapped air It is then extruded into a long log

or blank cut to convenient lengths passed through a metal

detector and then stamped into shape in refrigerated tools

The pressed bars are packaged in many ways

Sand or pumice may be added to produce a scouring soap

This process is most common in creating soaps used for

human hygiene The scouring agents serve to remove dead

skin cells from the surface being cleaned This process is

called exfoliation Many newer materials are used for

exfoliating soaps which are effective but do not have the

sharp edges and poor size distribution of pumice

History

Early History

Soapnut Tree (Reeta Sapindus tree)

The earliest known use of a natural soap-like substance was

the powder of the Reeta(Sapindus) nut which was used by

Indians since antiquity Hindus in India were obliged to bathe

at least once a day every morning in accordance with

Ayurveda Evidence of manufactured soap use are

Babylonian clay cylinders dating from 2800 BC containing a

soap-like substance A formula for soap consisting of water

alkali and cassia oil was written on a Babylonian clay tablet

around 2200 BC

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

experienced eye can tell when gel stage and full

saponification have occurred)

After saponification has occurred the soap is sometimes

precipitated from the solution by adding salt and the excess

liquid drained off

The hot soft soap is then spooned into a mold

Cold process

A cold-process soapmaker first looks up the saponification

value of the fats being used on a saponification chart which

is then used to calculate the appropriate amount of lye

Excess unreacted lye in the soap will result in a very high pH

and can burn or irritate skin Not enough lye and the soap is

greasy and oily Most soap makers formulate their recipes

with 3-15 excess oil so that all of the lye is reacted and

that excess fat is left for skin conditioning benefits

The lye is dissolved in water and the resulting solution mixed

with fat Once it has cooled to about 80-90 degrees

Fahrenheit this lye-fat mixture is stirred until trace that is

the two thin clear substances become cloudy and thicken

(Modern-day amateur soapmakers often use a stick blender

to speed this process) After much stirring the mixture turns

to the consistency of a thin pudding

Essential oils fragrance oils botanicals herbs oatmeal or

other additives are added at light trace just as the mixture

starts to thicken

The batch is then poured into molds kept warm with towels

or blankets and left to continue saponification for 18 to 48

hours Milk soaps are the exception They do not require

insulation Insulation may cause the milk to burn During this

time it is normal for the soap to go through a gel phase

where the opaque soap will turn somewhat transparent for

several hours before turning opaque again The soap will

continue to give off heat for many hours after trace

After the insulation period the soap is firm enough to be

removed from the mold and cut into bars At this time it is

safe to use the soap since saponification is complete

However cold-process soaps are typically cured and

hardened on a drying rack for 2-6 weeks (depending on

initial water content) before use If using caustic soda it is

recommended that the soap is left to cure or at least 4

weeks

Purification and finishing

The common process of purifying soap involves removal of

sodium chloride sodium hydroxide and glycerol These

components are removed by boiling the crude soap curds in

water and re-precipitating the soap with salt

Most of the water is then removed from the soap This was

traditionally done on a chill roll which produced the soap

flakes commonly used in the 1940s and 1950s This process

was superseded by spray dryers and then by vacuum dryers

The dry soap (approximately 6-12 moisture) is then

compacted into small pellets These pellets are now ready

for soap finishing the process of converting raw soap pellets

into a salable product usually bars

Soap pellets are combined with fragrances and other

materials and blended to homogeneity in an amalgamator

(mixer) The mass is then discharged from the mixer into a

refiner which by means of an auger forces the soap through

a fine wire screen From the refiner the soap passes over a

roller mill (French milling or hard milling) in a manner similar

to calendering paper or plastic or to making chocolate liquor

The soap is then passed through one or more additional

refiners to further plasticize the soap mass Immediately

before extrusion it passes through a vacuum chamber to

remove any entrapped air It is then extruded into a long log

or blank cut to convenient lengths passed through a metal

detector and then stamped into shape in refrigerated tools

The pressed bars are packaged in many ways

Sand or pumice may be added to produce a scouring soap

This process is most common in creating soaps used for

human hygiene The scouring agents serve to remove dead

skin cells from the surface being cleaned This process is

called exfoliation Many newer materials are used for

exfoliating soaps which are effective but do not have the

sharp edges and poor size distribution of pumice

History

Early History

Soapnut Tree (Reeta Sapindus tree)

The earliest known use of a natural soap-like substance was

the powder of the Reeta(Sapindus) nut which was used by

Indians since antiquity Hindus in India were obliged to bathe

at least once a day every morning in accordance with

Ayurveda Evidence of manufactured soap use are

Babylonian clay cylinders dating from 2800 BC containing a

soap-like substance A formula for soap consisting of water

alkali and cassia oil was written on a Babylonian clay tablet

around 2200 BC

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

the two thin clear substances become cloudy and thicken

(Modern-day amateur soapmakers often use a stick blender

to speed this process) After much stirring the mixture turns

to the consistency of a thin pudding

Essential oils fragrance oils botanicals herbs oatmeal or

other additives are added at light trace just as the mixture

starts to thicken

The batch is then poured into molds kept warm with towels

or blankets and left to continue saponification for 18 to 48

hours Milk soaps are the exception They do not require

insulation Insulation may cause the milk to burn During this

time it is normal for the soap to go through a gel phase

where the opaque soap will turn somewhat transparent for

several hours before turning opaque again The soap will

continue to give off heat for many hours after trace

After the insulation period the soap is firm enough to be

removed from the mold and cut into bars At this time it is

safe to use the soap since saponification is complete

However cold-process soaps are typically cured and

hardened on a drying rack for 2-6 weeks (depending on

initial water content) before use If using caustic soda it is

recommended that the soap is left to cure or at least 4

weeks

Purification and finishing

The common process of purifying soap involves removal of

sodium chloride sodium hydroxide and glycerol These

components are removed by boiling the crude soap curds in

water and re-precipitating the soap with salt

Most of the water is then removed from the soap This was

traditionally done on a chill roll which produced the soap

flakes commonly used in the 1940s and 1950s This process

was superseded by spray dryers and then by vacuum dryers

The dry soap (approximately 6-12 moisture) is then

compacted into small pellets These pellets are now ready

for soap finishing the process of converting raw soap pellets

into a salable product usually bars

Soap pellets are combined with fragrances and other

materials and blended to homogeneity in an amalgamator

(mixer) The mass is then discharged from the mixer into a

refiner which by means of an auger forces the soap through

a fine wire screen From the refiner the soap passes over a

roller mill (French milling or hard milling) in a manner similar

to calendering paper or plastic or to making chocolate liquor

The soap is then passed through one or more additional

refiners to further plasticize the soap mass Immediately

before extrusion it passes through a vacuum chamber to

remove any entrapped air It is then extruded into a long log

or blank cut to convenient lengths passed through a metal

detector and then stamped into shape in refrigerated tools

The pressed bars are packaged in many ways

Sand or pumice may be added to produce a scouring soap

This process is most common in creating soaps used for

human hygiene The scouring agents serve to remove dead

skin cells from the surface being cleaned This process is

called exfoliation Many newer materials are used for

exfoliating soaps which are effective but do not have the

sharp edges and poor size distribution of pumice

History

Early History

Soapnut Tree (Reeta Sapindus tree)

The earliest known use of a natural soap-like substance was

the powder of the Reeta(Sapindus) nut which was used by

Indians since antiquity Hindus in India were obliged to bathe

at least once a day every morning in accordance with

Ayurveda Evidence of manufactured soap use are

Babylonian clay cylinders dating from 2800 BC containing a

soap-like substance A formula for soap consisting of water

alkali and cassia oil was written on a Babylonian clay tablet

around 2200 BC

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

hardened on a drying rack for 2-6 weeks (depending on

initial water content) before use If using caustic soda it is

recommended that the soap is left to cure or at least 4

weeks

Purification and finishing

The common process of purifying soap involves removal of

sodium chloride sodium hydroxide and glycerol These

components are removed by boiling the crude soap curds in

water and re-precipitating the soap with salt

Most of the water is then removed from the soap This was

traditionally done on a chill roll which produced the soap

flakes commonly used in the 1940s and 1950s This process

was superseded by spray dryers and then by vacuum dryers

The dry soap (approximately 6-12 moisture) is then

compacted into small pellets These pellets are now ready

for soap finishing the process of converting raw soap pellets

into a salable product usually bars

Soap pellets are combined with fragrances and other

materials and blended to homogeneity in an amalgamator

(mixer) The mass is then discharged from the mixer into a

refiner which by means of an auger forces the soap through

a fine wire screen From the refiner the soap passes over a

roller mill (French milling or hard milling) in a manner similar

to calendering paper or plastic or to making chocolate liquor

The soap is then passed through one or more additional

refiners to further plasticize the soap mass Immediately

before extrusion it passes through a vacuum chamber to

remove any entrapped air It is then extruded into a long log

or blank cut to convenient lengths passed through a metal

detector and then stamped into shape in refrigerated tools

The pressed bars are packaged in many ways

Sand or pumice may be added to produce a scouring soap

This process is most common in creating soaps used for

human hygiene The scouring agents serve to remove dead

skin cells from the surface being cleaned This process is

called exfoliation Many newer materials are used for

exfoliating soaps which are effective but do not have the

sharp edges and poor size distribution of pumice

History

Early History

Soapnut Tree (Reeta Sapindus tree)

The earliest known use of a natural soap-like substance was

the powder of the Reeta(Sapindus) nut which was used by

Indians since antiquity Hindus in India were obliged to bathe

at least once a day every morning in accordance with

Ayurveda Evidence of manufactured soap use are

Babylonian clay cylinders dating from 2800 BC containing a

soap-like substance A formula for soap consisting of water

alkali and cassia oil was written on a Babylonian clay tablet

around 2200 BC

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

Purification and finishing

The common process of purifying soap involves removal of

sodium chloride sodium hydroxide and glycerol These

components are removed by boiling the crude soap curds in

water and re-precipitating the soap with salt

Most of the water is then removed from the soap This was

traditionally done on a chill roll which produced the soap

flakes commonly used in the 1940s and 1950s This process

was superseded by spray dryers and then by vacuum dryers

The dry soap (approximately 6-12 moisture) is then

compacted into small pellets These pellets are now ready

for soap finishing the process of converting raw soap pellets

into a salable product usually bars

Soap pellets are combined with fragrances and other

materials and blended to homogeneity in an amalgamator

(mixer) The mass is then discharged from the mixer into a

refiner which by means of an auger forces the soap through

a fine wire screen From the refiner the soap passes over a

roller mill (French milling or hard milling) in a manner similar

to calendering paper or plastic or to making chocolate liquor

The soap is then passed through one or more additional

refiners to further plasticize the soap mass Immediately

before extrusion it passes through a vacuum chamber to

remove any entrapped air It is then extruded into a long log

or blank cut to convenient lengths passed through a metal

detector and then stamped into shape in refrigerated tools

The pressed bars are packaged in many ways

Sand or pumice may be added to produce a scouring soap

This process is most common in creating soaps used for

human hygiene The scouring agents serve to remove dead

skin cells from the surface being cleaned This process is

called exfoliation Many newer materials are used for

exfoliating soaps which are effective but do not have the

sharp edges and poor size distribution of pumice

History

Early History

Soapnut Tree (Reeta Sapindus tree)

The earliest known use of a natural soap-like substance was

the powder of the Reeta(Sapindus) nut which was used by

Indians since antiquity Hindus in India were obliged to bathe

at least once a day every morning in accordance with

Ayurveda Evidence of manufactured soap use are

Babylonian clay cylinders dating from 2800 BC containing a

soap-like substance A formula for soap consisting of water

alkali and cassia oil was written on a Babylonian clay tablet

around 2200 BC

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

roller mill (French milling or hard milling) in a manner similar

to calendering paper or plastic or to making chocolate liquor

The soap is then passed through one or more additional

refiners to further plasticize the soap mass Immediately

before extrusion it passes through a vacuum chamber to

remove any entrapped air It is then extruded into a long log

or blank cut to convenient lengths passed through a metal

detector and then stamped into shape in refrigerated tools

The pressed bars are packaged in many ways

Sand or pumice may be added to produce a scouring soap

This process is most common in creating soaps used for

human hygiene The scouring agents serve to remove dead

skin cells from the surface being cleaned This process is

called exfoliation Many newer materials are used for

exfoliating soaps which are effective but do not have the

sharp edges and poor size distribution of pumice

History

Early History

Soapnut Tree (Reeta Sapindus tree)

The earliest known use of a natural soap-like substance was

the powder of the Reeta(Sapindus) nut which was used by

Indians since antiquity Hindus in India were obliged to bathe

at least once a day every morning in accordance with

Ayurveda Evidence of manufactured soap use are

Babylonian clay cylinders dating from 2800 BC containing a

soap-like substance A formula for soap consisting of water

alkali and cassia oil was written on a Babylonian clay tablet

around 2200 BC

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

Soapnut Tree (Reeta Sapindus tree)

The earliest known use of a natural soap-like substance was

the powder of the Reeta(Sapindus) nut which was used by

Indians since antiquity Hindus in India were obliged to bathe

at least once a day every morning in accordance with

Ayurveda Evidence of manufactured soap use are

Babylonian clay cylinders dating from 2800 BC containing a

soap-like substance A formula for soap consisting of water

alkali and cassia oil was written on a Babylonian clay tablet

around 2200 BC

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

The Ebers papyrus (Egypt 1550 BC) indicates that ancient

Egyptians bathed regularly and combined animal and

vegetable oils with alkaline salts to create a soap-like

substance Egyptian documents mention that a soap-like

substance was used in the preparation of wool for weaving

Roman History

It is commonly reported that a soap factory with bars of

scented soap was found in the ruins of Pompeii (79 AD)

However this has proved to be a misinterpretation of the

survival of some soapy mineral substance [citation needed]

probably soapstone at the Fullonica where it was used for

dressing recently cleansed textiles Unfortunately this error

has been repeated widely and can be found in otherwise

reputable texts on soap history The ancient Romans were

generally ignorant of soaps detergent properties and made

use of the strigil to scrape dirt and sweat from the body The

word soap (Latin sapo) appears first in a European

language in Pliny the Elders Historia Naturalis which

discusses the manufacture of soap from tallow and ashes

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

but the only use he mentions for it is as a pomade for hair

he mentions rather disapprovingly that among the Gauls and

Germans men are likelier to use it than women

A story encountered in some places claims that soap takes

its name from a supposed Mount Sapo where ancient

Romans sacrificed animals Rain would send a mix of animal

tallow and wood ash down the mountain and into the clay

soil on the banks of the Tiber Eventually women noticed

that it was easier to clean clothes with this soap The

location of Mount Sapo is unknown as is the source of the

ancient Roman legend to which this tale is typically

credited In fact the Latin word sapo simply means soap it

was borrowed from a Celtic or Germanic language and is

cognate with Latin sebum tallow which appears in Pliny

the Elders account Roman animal sacrifices usually burned

only the bones and inedible entrails of the sacrificed

animals edible meat and fat from the sacrifices were taken

by the humans rather than the gods Animal sacrifices in the

ancient world would not have included enough fat to make

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

much soap The legend about Mount Sapo is probably

apocryphal

Arab History

The Arabs made soap from vegetable oil such as olive oil and

some aromatic oils such as thyme oil Lye (Al-Soda Al-Kawia)

was used for the first time and the formula hasnt changed

from the current soap sold in the market From the

beginning of the 7th century soap was produced in Nablus

(West BankPalestine) Kufa (Iraq) and Basra (Iraq) Soaps as

we know them today are descendants of historical Arabian

Soaps Arabian Soap was perfumed and colored some of the

soaps were liquid and others were hard They also had

special soap for shaving It was commercially sold for 3

Dirhams (03 Dinars) a piece in 981 AD Al-Razi rsquos manuscript

contains recipes for soap A recently discovered manuscript

from the 13th century details more recipes for soap making

eg take some sesame oil a sprinkle of potash alkali and

some lime mix them all together and boil When cooked

they are poured into molds and left to set leaving hard soap

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

Historically soap was made by mixing animal fats with lye

Because of the caustic lye this was a dangerous procedure

(perhaps more dangerous than any present-day home

activities) which could result in serious chemical burns or

even blindness Before commercially-produced lye (sodium

hydroxide) was commonplace potash potassium hydroxide

was produced at home for soap making from the ashes of a

hardwood fire

Castile soap was produced in Europe as early as the 16th

century

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

Modern History

1922 magazine advertisement for Palmolive Soap

In modern times the use of soap has become universal in

industrialized nations due to a better understanding of the

role of hygiene in reducing the population size of pathogenic

microorganisms Manufactured bar soaps first became

available in the late nineteenth century and advertising

campaigns in Europe and the United States helped to

increase popular awareness of the relationship between

cleanliness and health By the 1950s soap had gained public

acceptance as an instrument of personal hygiene

Rarely conditions allow for corpses to naturally turn in to a

soap-like substance such as the Soap Lady on exhibit in the

Mutter Museum

OBJECTIVE OF STUDY

The objective of the study is to understand the soap

industry in India Also there are following points that we

wanted to cover among the Soap Industry

1 Different players in the industry

2 Different types of soap

3 Price comparison

4 Companies involved and their various branding styles

5 branding strategy of different players

METHODOLOGY

Methodology is the major or the first step of any project If

the plan for methodology is not streamlined then the

project cannot flow without interruption

For our study we would majorly use secondary research as

our tool of research We would be using the journal past

researches articles new paper magazines internet as

our source of data collection We would strongly we would

be using different sites to collect data and then we would

analyze the collected data and then conclude the project

with recommendations

FINDING amp ANALYSIS

ABOUT THE INDUSTRY

Soap Industry in India

soap industry is one of the oldest Fast Moving Consumer

Goods (FMCG) industry in India It is among the highest

penetrated category within FMCG sector reaching an

estimated 95 urban and 87 of the rural households In

value terms the industry is worth Rs45000 million and in

volume terms it is worth 53 million (in 2001 as reported by

Operations Research Group (ORG) Survey) The main

characteristic of the industry was severe competition and

high level of brand proliferation The industry witnessed 7

decline in value in year 2001 (Vanscom Database)8

There were 45 leading national brands None of the national

brands had more than 5 market share and many more

regional and unorganised sectorlocal brands 9Hindustan

Lever was the market leader with about 30 (number) of

soap brands with a total market share of 67 in 1998-99 in

organised sector as seen from Table-1 below which gives

the lead players and their respective market share

The leading brands in the market are Dove Pears Lux

Dettol Liril Rexona Lifebouy Nirma

Palmolive and Hamam A survey reported in Vanscom which

was conducted in Ahmedabad

showed that 103 s soap brands were available in this city

alone

The industry had witnessed many innovative sales promotion

activities in the recent past

Numerous factors were responsible for such a phenomenon

One of the reasons being that the market being sluggish

companies were trying to increase market share in stagnant

to declining (volume terms) market in order to retain

consumers to encourage switching to induce trials and

liquidate excessive inventories Another reason possible was

that with the presence of so many brands the competition

had increased severally leading to fight for market share and

shelf space Inflationary trend had made both the consumer

as well as trade deal prone Hence sales promotion activities

in soap industry posed a very interesting study and

consumer and retailer perceptions thereof

On the basis of information collected on various brands and

their prices (see Exhibit-1) following three segments

emerge

Table-2 Price Segments of Soaps

The brands in popular segments were found to be frequently

promoted as there was intensive price competition in this

segment The brands could also be classified based on

medicinal benefits cosmetic benefits perfumes

naturalherbal properties For the purpose of this study

only price segments were considered

PRICE RANGE

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

OBJECTIVE OF STUDY

The objective of the study is to understand the soap

industry in India Also there are following points that we

wanted to cover among the Soap Industry

1 Different players in the industry

2 Different types of soap

3 Price comparison

4 Companies involved and their various branding styles

5 branding strategy of different players

METHODOLOGY

Methodology is the major or the first step of any project If

the plan for methodology is not streamlined then the

project cannot flow without interruption

For our study we would majorly use secondary research as

our tool of research We would be using the journal past

researches articles new paper magazines internet as

our source of data collection We would strongly we would

be using different sites to collect data and then we would

analyze the collected data and then conclude the project

with recommendations

FINDING amp ANALYSIS

ABOUT THE INDUSTRY

Soap Industry in India

soap industry is one of the oldest Fast Moving Consumer

Goods (FMCG) industry in India It is among the highest

penetrated category within FMCG sector reaching an

estimated 95 urban and 87 of the rural households In

value terms the industry is worth Rs45000 million and in

volume terms it is worth 53 million (in 2001 as reported by

Operations Research Group (ORG) Survey) The main

characteristic of the industry was severe competition and

high level of brand proliferation The industry witnessed 7

decline in value in year 2001 (Vanscom Database)8

There were 45 leading national brands None of the national

brands had more than 5 market share and many more

regional and unorganised sectorlocal brands 9Hindustan

Lever was the market leader with about 30 (number) of

soap brands with a total market share of 67 in 1998-99 in

organised sector as seen from Table-1 below which gives

the lead players and their respective market share

The leading brands in the market are Dove Pears Lux

Dettol Liril Rexona Lifebouy Nirma

Palmolive and Hamam A survey reported in Vanscom which

was conducted in Ahmedabad

showed that 103 s soap brands were available in this city

alone

The industry had witnessed many innovative sales promotion

activities in the recent past

Numerous factors were responsible for such a phenomenon

One of the reasons being that the market being sluggish

companies were trying to increase market share in stagnant

to declining (volume terms) market in order to retain

consumers to encourage switching to induce trials and

liquidate excessive inventories Another reason possible was

that with the presence of so many brands the competition

had increased severally leading to fight for market share and

shelf space Inflationary trend had made both the consumer

as well as trade deal prone Hence sales promotion activities

in soap industry posed a very interesting study and

consumer and retailer perceptions thereof

On the basis of information collected on various brands and

their prices (see Exhibit-1) following three segments

emerge

Table-2 Price Segments of Soaps

The brands in popular segments were found to be frequently

promoted as there was intensive price competition in this

segment The brands could also be classified based on

medicinal benefits cosmetic benefits perfumes

naturalherbal properties For the purpose of this study

only price segments were considered

PRICE RANGE

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

METHODOLOGY

Methodology is the major or the first step of any project If

the plan for methodology is not streamlined then the

project cannot flow without interruption

For our study we would majorly use secondary research as

our tool of research We would be using the journal past

researches articles new paper magazines internet as

our source of data collection We would strongly we would

be using different sites to collect data and then we would

analyze the collected data and then conclude the project

with recommendations

FINDING amp ANALYSIS

ABOUT THE INDUSTRY

Soap Industry in India

soap industry is one of the oldest Fast Moving Consumer

Goods (FMCG) industry in India It is among the highest

penetrated category within FMCG sector reaching an

estimated 95 urban and 87 of the rural households In

value terms the industry is worth Rs45000 million and in

volume terms it is worth 53 million (in 2001 as reported by

Operations Research Group (ORG) Survey) The main

characteristic of the industry was severe competition and

high level of brand proliferation The industry witnessed 7

decline in value in year 2001 (Vanscom Database)8

There were 45 leading national brands None of the national

brands had more than 5 market share and many more

regional and unorganised sectorlocal brands 9Hindustan

Lever was the market leader with about 30 (number) of

soap brands with a total market share of 67 in 1998-99 in

organised sector as seen from Table-1 below which gives

the lead players and their respective market share

The leading brands in the market are Dove Pears Lux

Dettol Liril Rexona Lifebouy Nirma

Palmolive and Hamam A survey reported in Vanscom which

was conducted in Ahmedabad

showed that 103 s soap brands were available in this city

alone

The industry had witnessed many innovative sales promotion

activities in the recent past

Numerous factors were responsible for such a phenomenon

One of the reasons being that the market being sluggish

companies were trying to increase market share in stagnant

to declining (volume terms) market in order to retain

consumers to encourage switching to induce trials and

liquidate excessive inventories Another reason possible was

that with the presence of so many brands the competition

had increased severally leading to fight for market share and

shelf space Inflationary trend had made both the consumer

as well as trade deal prone Hence sales promotion activities

in soap industry posed a very interesting study and

consumer and retailer perceptions thereof

On the basis of information collected on various brands and

their prices (see Exhibit-1) following three segments

emerge

Table-2 Price Segments of Soaps

The brands in popular segments were found to be frequently

promoted as there was intensive price competition in this

segment The brands could also be classified based on

medicinal benefits cosmetic benefits perfumes

naturalherbal properties For the purpose of this study

only price segments were considered

PRICE RANGE

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

FINDING amp ANALYSIS

ABOUT THE INDUSTRY

Soap Industry in India

soap industry is one of the oldest Fast Moving Consumer

Goods (FMCG) industry in India It is among the highest

penetrated category within FMCG sector reaching an

estimated 95 urban and 87 of the rural households In

value terms the industry is worth Rs45000 million and in

volume terms it is worth 53 million (in 2001 as reported by

Operations Research Group (ORG) Survey) The main

characteristic of the industry was severe competition and

high level of brand proliferation The industry witnessed 7

decline in value in year 2001 (Vanscom Database)8

There were 45 leading national brands None of the national

brands had more than 5 market share and many more

regional and unorganised sectorlocal brands 9Hindustan

Lever was the market leader with about 30 (number) of

soap brands with a total market share of 67 in 1998-99 in

organised sector as seen from Table-1 below which gives

the lead players and their respective market share

The leading brands in the market are Dove Pears Lux

Dettol Liril Rexona Lifebouy Nirma

Palmolive and Hamam A survey reported in Vanscom which

was conducted in Ahmedabad

showed that 103 s soap brands were available in this city

alone

The industry had witnessed many innovative sales promotion

activities in the recent past

Numerous factors were responsible for such a phenomenon

One of the reasons being that the market being sluggish

companies were trying to increase market share in stagnant

to declining (volume terms) market in order to retain

consumers to encourage switching to induce trials and

liquidate excessive inventories Another reason possible was

that with the presence of so many brands the competition

had increased severally leading to fight for market share and

shelf space Inflationary trend had made both the consumer

as well as trade deal prone Hence sales promotion activities

in soap industry posed a very interesting study and

consumer and retailer perceptions thereof

On the basis of information collected on various brands and

their prices (see Exhibit-1) following three segments

emerge

Table-2 Price Segments of Soaps

The brands in popular segments were found to be frequently

promoted as there was intensive price competition in this

segment The brands could also be classified based on

medicinal benefits cosmetic benefits perfumes

naturalherbal properties For the purpose of this study

only price segments were considered

PRICE RANGE

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

The leading brands in the market are Dove Pears Lux

Dettol Liril Rexona Lifebouy Nirma

Palmolive and Hamam A survey reported in Vanscom which

was conducted in Ahmedabad

showed that 103 s soap brands were available in this city

alone

The industry had witnessed many innovative sales promotion

activities in the recent past

Numerous factors were responsible for such a phenomenon

One of the reasons being that the market being sluggish

companies were trying to increase market share in stagnant

to declining (volume terms) market in order to retain

consumers to encourage switching to induce trials and

liquidate excessive inventories Another reason possible was

that with the presence of so many brands the competition

had increased severally leading to fight for market share and

shelf space Inflationary trend had made both the consumer

as well as trade deal prone Hence sales promotion activities

in soap industry posed a very interesting study and

consumer and retailer perceptions thereof

On the basis of information collected on various brands and

their prices (see Exhibit-1) following three segments

emerge

Table-2 Price Segments of Soaps

The brands in popular segments were found to be frequently

promoted as there was intensive price competition in this

segment The brands could also be classified based on

medicinal benefits cosmetic benefits perfumes

naturalherbal properties For the purpose of this study

only price segments were considered

PRICE RANGE

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

to declining (volume terms) market in order to retain

consumers to encourage switching to induce trials and

liquidate excessive inventories Another reason possible was

that with the presence of so many brands the competition

had increased severally leading to fight for market share and

shelf space Inflationary trend had made both the consumer

as well as trade deal prone Hence sales promotion activities

in soap industry posed a very interesting study and

consumer and retailer perceptions thereof

On the basis of information collected on various brands and

their prices (see Exhibit-1) following three segments

emerge

Table-2 Price Segments of Soaps

The brands in popular segments were found to be frequently

promoted as there was intensive price competition in this

segment The brands could also be classified based on

medicinal benefits cosmetic benefits perfumes

naturalherbal properties For the purpose of this study

only price segments were considered

PRICE RANGE

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

Table-2 Price Segments of Soaps

The brands in popular segments were found to be frequently

promoted as there was intensive price competition in this

segment The brands could also be classified based on

medicinal benefits cosmetic benefits perfumes

naturalherbal properties For the purpose of this study

only price segments were considered

PRICE RANGE

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

PRICE RANGE

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

It could be inferred from the above table that upper income

segment showed greater preference for premium brand of

soaps like Dove Pears Nivea with the exception being Lux

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

The soaps were available in different sizes - 75 gms 100

gms 125 gms and 150 gms The popular sizes were 75

gms and 100 gms

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

DIFFERENT SOAP PRODUCTS IN INDIAN MARKET

INTERNATIONAL PLAYERS

Hindustan Lever Soaps (Lux Liril Lifebuoy Breeze Rexona

Pears Pears Glycerine Dove Le-Sance Ayush)

Nivea Ponds Johnson baby soap Dettol Camay OK Clearsil

DOMESTIC PLAYERS

Mysore sadal soap Mysore baby soap Margo Godrej

(Cinthol FairGlow) Santhoor Keshnikar Chandan

Chandrika Nirma Himani Jasmine Kastoori Neema Gold

smith Rose Gramodhyog soaps

Pears Soap Box of 3

by Pears

44 oz ea box of soap

$695

Mysore Sandalwood Soap

by Mysore

125 g bar

$300

Nag Champa Beauty Soap

by Satya Sai Baba

5 oz bar

$367

Medimix Soap Large

by Medimix

125 g bar

$295

Pears Body Wash

by Pears

85 oz shower gel

$750

Sandalwood Soap

by Chandrika

75 g bar

$195

Pears Original Transparent Soap

by Pears

44 oz bar

$250

Chandrika Soap

by Sorya Lab

262 oz bar

$150

Dettol Liquid Soap

by Dettol

250 ml liquid soap

$550

Nag Champa Bar

by Satya Sai Baba

4 oz bar

$435

Mysore Sandal Soap

by Mysore

75 g bar

Sandal Soap

by Moti

525 oz bar

$350

Sandalwood Ayurvedi Soap

by Herbal Vedic

262 oz bar

$295

Lux Black Honey Soap

by Hindustan Lever

100 g bar

$250

Mysore Gold Sandalwood Soap

by Mysore

150 g bar

$450

Sandal Soap 1

by Godrej Soaps

75 g bar

$195

Medimex Soap

by Medimex

75 g bar

$195

Aloe Vera Soap

by Dabur

125 g soap bar

$195

Moti Rose Soap

by Moti

150 g bar

$250

Limda (Neem Soap)

by Nirmal

75 g soap bar

$195

Tulsi Neem Mitti Soap

by Ayur

75 g soap bar

$195

Dettol Soap Large

by Dettol

125 g bar

$250

Gulab Soap

by Moti

525 oz bar

$250

Lavender Ayurvedic Soap

by Herbal Vedic

262 oz bar

$295

Cinthol Soap

by Godrej Soaps

75 g bar

$195

Hamam Soap

by Hamam

100 g bar

$195

Liril Soap

by Liril

75 g bar

$195

COMPANIES INVOLVED AND THEIR VARIOUS

BRANDING STYLES

More washes More suds So declares a hawker or a

sometime sales rep from Hindustan Lever Ltd the local

subsidiary of Dutch giant Unilever the worlds largest

consumer-products manufacturer The rep makes his case

with a microphone and a truck well stocked with detergents

soaps and toothpastes His rival standing a few feet away

and armed with a megaphone pitches Lever knockoffs

Costs less Cleaner wash The spirited volley of pitches in

Kannada the local language attracts a jostling crowd

Welcome to the new frontier of global capitalism the spot

where state-of-the-art marketing meets the dirt road The

typical family in this town earns 4800 rupees (about $103) a

year from raising crops and from working occasional jobs in

the city Most wash their clothes and their bodies in nearby

ponds or at community water taps If soap is used at all its

usually whichever brand is cheapest -- and people tend to

use that soap for everything their bodies their hair and

their garments In this country the notion of brand and

brand loyalty is fleeting to say the least

But Hindustan Lever in ways at once ingenious dogged and

culturally sensitive is changing all of that Over the past two

decades the company has built a remarkable distribution

system that moves its soaps and detergents to every corner

of India Now it has started to leverage that valuable

infrastructure to expand its reach to a huge and overlooked

group of consumers the rural poor Everybody wants

brands argues Keki Dadiseth 55 who is in charge of home-

and personal-care products worldwide and who is also a

director of Hindustan Lever And there are a lot more poor

people in the world than rich people To be a global business

and to have a global market share you have to participate in

all segments

M (Venky) Venkatesh 42 is one of Hindustan Levers field

generals in this campaign He is regional sales manager for a

chunk of India (total population more than one billion) that

is home to more than 200 million people -- as many as reside

in Russia and the Ukraine combined -- comprising some

150000 villages His mission to sell Lever products to rich

and poor alike

Venkatesh takes that mission seriously A 20-year Lever

veteran he still spends two days a week visiting stores and

markets across his region When he spots Lever products

hidden behind another brand in a storefront he walks in and

rearranges the display He smells soaps to make sure that

the scent is fresh Thanks to the spreadsheet on his IBM

Thinkpad he can recite the demographics for every village

on his itinerary -- from the number of bank deposits above a

certain amount to literacy rates In two years his team has

driven Lever products into 47 of the state of Karnataka up

from 30 Rural consumers want value not just volume

Venkatesh says

Venkatesh strikes up a conversation with Mahaboobjan an

open-shirted man selling incense from a weathered wooden

cart at the haat Mahaboobjan has been peddling his wares

in the region for 20 years His long-standing relationships

with customers position him as a reliable expert and adviser

to local villagers Venkatesh asks him what he thinks of the

pitch being delivered by the Lever hawkers on the truck

Mahaboobjan grabs the microphone In classic salesmans

patter he begins talking about Lux the soap that film stars

use and about the power of Wheel detergent He keeps up a

barrage of conversation to drown out an amplified tape

recording used by the rival selling knockoffs The market is

transformed as villagers flock to the Lever truck In less than

an hour Mahaboobjan sells soap to 15 customers nearly

half of that mornings sales Venkatesh offers him a hawkers

position on the spot

The moral of the story Even the poorest of the poor when

given a choice can be choosy about brands In a nation

where more than one-third of rural consumers watch TV

(everything from Ally McBeal to religious soap operas) and

even more visit commercial centers people arent naturally

inclined to settle for throwaway versions of the real deal -- if

the companies that make the real deal bother to explain the

difference If you only have two rupees (about four cents) to

spare you want value for your money -- and quality products

for your children Casting a glance at the Wheel knockoffs in

the market a silk sari-clad woman named Maryamma

sneers Only village people buy duplicates I want the real

thing

How far should a giant company go to understand poor

customers in faraway markets How does such a company

manage to sell its product profitably to hundreds of millions

of people dispersed and isolated with hardly any disposable

income to spend How does it develop brand loyalty in

markets where for generations people have chosen to buy

the product that was cheapest or the items that a store

actually had in stock -- if they bought anything at all

These are not questions that occupy the minds of high-level

strategists and marketers at most powerful global

companies They are too busy trying to sell high-priced

high-profit products to middle-class customers in the richest

countries Hindustan Lever the largest consumer-goods

company in India has embraced a different strategy It sells

everything from soups to soaps by going wherever its

customers are whether its the weekly cattle market or the

well where village women wash their clothes Why bother

Because it is the smart (and the right) thing to do Poor

people the companys executives believe can become just

as discerning about brands as rich consumers And if brands

exist as a store of value -- a promise about a products

distinctive qualities and features -- then offering poor

consumers a real choice of brands means offering them a

slightly better quality of life Marketing well-made products

to the poor isnt just a business opportunity it is a sign of

commercial respect for people whose needs are usually

overlooked

To be sure plenty of companies peddle low-quality products

at cheap prices to maximize their profits But thats not the

Unilever model Poor countries it believes may hold the key

to the companys long-term prosperity Unilever (annual

revenues $43 billion) anticipates that by 2010 half of its

sales will come from the developing world up 32 from its

current sales Hindustan Lever is the model and the engine

for that shift Indias rural people who comprise 12 of the

worlds population present a huge untapped market What

the company is developing now are the strategies and

tactics to reach that market even as its competitors waver

in their commitment

It is a crucial growth opportunity for Hindustan Lever

perhaps the most effective way for it to retain its number-

one position in consumer goods The company reported

continuous sales growth in India for three decades Then

late last year sales were nearly flat and actually declined in

some categories Given the large scale of the company

says MS Banga 46 chairman of Hindustan Lever our

biggest challenge is to keep growth rates where they are

Thats why every Lever management trainee begins his or

her career by spending six to eight weeks in a rural village

eating sleeping and talking with the locals Marketing

executives make frequent two-day visits to low-income

areas Why all of this trouble Its important to ensure that

our sales guys are connecting with our consumers says

Banga whose tenure with the company began in a village

Once you spend time with consumers you realize that they

want the same things you want They want a good quality of

life

Indeed Lever recognizes that meeting the demand of poor

consumers isnt just about lowering prices Its about

creativity developing products and processes that do more

with less Hindustan Lever creates markets where most

companies see only problems Somehow this company of

36000 employees -- a notorious bureaucracy -- nurtures a

willingness to constantly redefine markets marketing and

brands Its growth in rural India is a case study in strategic

reinvention

Change Who Does the Selling

On November 28 2006 in a meeting hall in Nalgonda in the

southern state of Andhra Pradesh Hindustan Lever

assembled a group of about 150 women The women had

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

their garments In this country the notion of brand and

brand loyalty is fleeting to say the least

But Hindustan Lever in ways at once ingenious dogged and

culturally sensitive is changing all of that Over the past two

decades the company has built a remarkable distribution

system that moves its soaps and detergents to every corner

of India Now it has started to leverage that valuable

infrastructure to expand its reach to a huge and overlooked

group of consumers the rural poor Everybody wants

brands argues Keki Dadiseth 55 who is in charge of home-

and personal-care products worldwide and who is also a

director of Hindustan Lever And there are a lot more poor

people in the world than rich people To be a global business

and to have a global market share you have to participate in

all segments

M (Venky) Venkatesh 42 is one of Hindustan Levers field

generals in this campaign He is regional sales manager for a

chunk of India (total population more than one billion) that

is home to more than 200 million people -- as many as reside

in Russia and the Ukraine combined -- comprising some

150000 villages His mission to sell Lever products to rich

and poor alike

Venkatesh takes that mission seriously A 20-year Lever

veteran he still spends two days a week visiting stores and

markets across his region When he spots Lever products

hidden behind another brand in a storefront he walks in and

rearranges the display He smells soaps to make sure that

the scent is fresh Thanks to the spreadsheet on his IBM

Thinkpad he can recite the demographics for every village

on his itinerary -- from the number of bank deposits above a

certain amount to literacy rates In two years his team has

driven Lever products into 47 of the state of Karnataka up

from 30 Rural consumers want value not just volume

Venkatesh says

Venkatesh strikes up a conversation with Mahaboobjan an

open-shirted man selling incense from a weathered wooden

cart at the haat Mahaboobjan has been peddling his wares

in the region for 20 years His long-standing relationships

with customers position him as a reliable expert and adviser

to local villagers Venkatesh asks him what he thinks of the

pitch being delivered by the Lever hawkers on the truck

Mahaboobjan grabs the microphone In classic salesmans

patter he begins talking about Lux the soap that film stars

use and about the power of Wheel detergent He keeps up a

barrage of conversation to drown out an amplified tape

recording used by the rival selling knockoffs The market is

transformed as villagers flock to the Lever truck In less than

an hour Mahaboobjan sells soap to 15 customers nearly

half of that mornings sales Venkatesh offers him a hawkers

position on the spot

The moral of the story Even the poorest of the poor when

given a choice can be choosy about brands In a nation

where more than one-third of rural consumers watch TV

(everything from Ally McBeal to religious soap operas) and

even more visit commercial centers people arent naturally

inclined to settle for throwaway versions of the real deal -- if

the companies that make the real deal bother to explain the

difference If you only have two rupees (about four cents) to

spare you want value for your money -- and quality products

for your children Casting a glance at the Wheel knockoffs in

the market a silk sari-clad woman named Maryamma

sneers Only village people buy duplicates I want the real

thing

How far should a giant company go to understand poor

customers in faraway markets How does such a company

manage to sell its product profitably to hundreds of millions

of people dispersed and isolated with hardly any disposable

income to spend How does it develop brand loyalty in

markets where for generations people have chosen to buy

the product that was cheapest or the items that a store

actually had in stock -- if they bought anything at all

These are not questions that occupy the minds of high-level

strategists and marketers at most powerful global

companies They are too busy trying to sell high-priced

high-profit products to middle-class customers in the richest

countries Hindustan Lever the largest consumer-goods

company in India has embraced a different strategy It sells

everything from soups to soaps by going wherever its

customers are whether its the weekly cattle market or the

well where village women wash their clothes Why bother

Because it is the smart (and the right) thing to do Poor

people the companys executives believe can become just

as discerning about brands as rich consumers And if brands

exist as a store of value -- a promise about a products

distinctive qualities and features -- then offering poor

consumers a real choice of brands means offering them a

slightly better quality of life Marketing well-made products

to the poor isnt just a business opportunity it is a sign of

commercial respect for people whose needs are usually

overlooked

To be sure plenty of companies peddle low-quality products

at cheap prices to maximize their profits But thats not the

Unilever model Poor countries it believes may hold the key

to the companys long-term prosperity Unilever (annual

revenues $43 billion) anticipates that by 2010 half of its

sales will come from the developing world up 32 from its

current sales Hindustan Lever is the model and the engine

for that shift Indias rural people who comprise 12 of the

worlds population present a huge untapped market What

the company is developing now are the strategies and

tactics to reach that market even as its competitors waver

in their commitment

It is a crucial growth opportunity for Hindustan Lever

perhaps the most effective way for it to retain its number-

one position in consumer goods The company reported

continuous sales growth in India for three decades Then

late last year sales were nearly flat and actually declined in

some categories Given the large scale of the company

says MS Banga 46 chairman of Hindustan Lever our

biggest challenge is to keep growth rates where they are

Thats why every Lever management trainee begins his or

her career by spending six to eight weeks in a rural village

eating sleeping and talking with the locals Marketing

executives make frequent two-day visits to low-income

areas Why all of this trouble Its important to ensure that

our sales guys are connecting with our consumers says

Banga whose tenure with the company began in a village

Once you spend time with consumers you realize that they

want the same things you want They want a good quality of

life

Indeed Lever recognizes that meeting the demand of poor

consumers isnt just about lowering prices Its about

creativity developing products and processes that do more

with less Hindustan Lever creates markets where most

companies see only problems Somehow this company of

36000 employees -- a notorious bureaucracy -- nurtures a

willingness to constantly redefine markets marketing and

brands Its growth in rural India is a case study in strategic

reinvention

Change Who Does the Selling

On November 28 2006 in a meeting hall in Nalgonda in the

southern state of Andhra Pradesh Hindustan Lever

assembled a group of about 150 women The women had

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

in Russia and the Ukraine combined -- comprising some

150000 villages His mission to sell Lever products to rich

and poor alike

Venkatesh takes that mission seriously A 20-year Lever

veteran he still spends two days a week visiting stores and

markets across his region When he spots Lever products

hidden behind another brand in a storefront he walks in and

rearranges the display He smells soaps to make sure that

the scent is fresh Thanks to the spreadsheet on his IBM

Thinkpad he can recite the demographics for every village

on his itinerary -- from the number of bank deposits above a

certain amount to literacy rates In two years his team has

driven Lever products into 47 of the state of Karnataka up

from 30 Rural consumers want value not just volume

Venkatesh says

Venkatesh strikes up a conversation with Mahaboobjan an

open-shirted man selling incense from a weathered wooden

cart at the haat Mahaboobjan has been peddling his wares

in the region for 20 years His long-standing relationships

with customers position him as a reliable expert and adviser

to local villagers Venkatesh asks him what he thinks of the

pitch being delivered by the Lever hawkers on the truck

Mahaboobjan grabs the microphone In classic salesmans

patter he begins talking about Lux the soap that film stars

use and about the power of Wheel detergent He keeps up a

barrage of conversation to drown out an amplified tape

recording used by the rival selling knockoffs The market is

transformed as villagers flock to the Lever truck In less than

an hour Mahaboobjan sells soap to 15 customers nearly

half of that mornings sales Venkatesh offers him a hawkers

position on the spot

The moral of the story Even the poorest of the poor when

given a choice can be choosy about brands In a nation

where more than one-third of rural consumers watch TV

(everything from Ally McBeal to religious soap operas) and

even more visit commercial centers people arent naturally

inclined to settle for throwaway versions of the real deal -- if

the companies that make the real deal bother to explain the

difference If you only have two rupees (about four cents) to

spare you want value for your money -- and quality products

for your children Casting a glance at the Wheel knockoffs in

the market a silk sari-clad woman named Maryamma

sneers Only village people buy duplicates I want the real

thing

How far should a giant company go to understand poor

customers in faraway markets How does such a company

manage to sell its product profitably to hundreds of millions

of people dispersed and isolated with hardly any disposable

income to spend How does it develop brand loyalty in

markets where for generations people have chosen to buy

the product that was cheapest or the items that a store

actually had in stock -- if they bought anything at all

These are not questions that occupy the minds of high-level

strategists and marketers at most powerful global

companies They are too busy trying to sell high-priced

high-profit products to middle-class customers in the richest

countries Hindustan Lever the largest consumer-goods

company in India has embraced a different strategy It sells

everything from soups to soaps by going wherever its

customers are whether its the weekly cattle market or the

well where village women wash their clothes Why bother

Because it is the smart (and the right) thing to do Poor

people the companys executives believe can become just

as discerning about brands as rich consumers And if brands

exist as a store of value -- a promise about a products

distinctive qualities and features -- then offering poor

consumers a real choice of brands means offering them a

slightly better quality of life Marketing well-made products

to the poor isnt just a business opportunity it is a sign of

commercial respect for people whose needs are usually

overlooked

To be sure plenty of companies peddle low-quality products

at cheap prices to maximize their profits But thats not the

Unilever model Poor countries it believes may hold the key

to the companys long-term prosperity Unilever (annual

revenues $43 billion) anticipates that by 2010 half of its

sales will come from the developing world up 32 from its

current sales Hindustan Lever is the model and the engine

for that shift Indias rural people who comprise 12 of the

worlds population present a huge untapped market What

the company is developing now are the strategies and

tactics to reach that market even as its competitors waver

in their commitment

It is a crucial growth opportunity for Hindustan Lever

perhaps the most effective way for it to retain its number-

one position in consumer goods The company reported

continuous sales growth in India for three decades Then

late last year sales were nearly flat and actually declined in

some categories Given the large scale of the company

says MS Banga 46 chairman of Hindustan Lever our

biggest challenge is to keep growth rates where they are

Thats why every Lever management trainee begins his or

her career by spending six to eight weeks in a rural village

eating sleeping and talking with the locals Marketing

executives make frequent two-day visits to low-income

areas Why all of this trouble Its important to ensure that

our sales guys are connecting with our consumers says

Banga whose tenure with the company began in a village

Once you spend time with consumers you realize that they

want the same things you want They want a good quality of

life

Indeed Lever recognizes that meeting the demand of poor

consumers isnt just about lowering prices Its about

creativity developing products and processes that do more

with less Hindustan Lever creates markets where most

companies see only problems Somehow this company of

36000 employees -- a notorious bureaucracy -- nurtures a

willingness to constantly redefine markets marketing and

brands Its growth in rural India is a case study in strategic

reinvention

Change Who Does the Selling

On November 28 2006 in a meeting hall in Nalgonda in the

southern state of Andhra Pradesh Hindustan Lever

assembled a group of about 150 women The women had

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

with customers position him as a reliable expert and adviser

to local villagers Venkatesh asks him what he thinks of the

pitch being delivered by the Lever hawkers on the truck

Mahaboobjan grabs the microphone In classic salesmans

patter he begins talking about Lux the soap that film stars

use and about the power of Wheel detergent He keeps up a

barrage of conversation to drown out an amplified tape

recording used by the rival selling knockoffs The market is

transformed as villagers flock to the Lever truck In less than

an hour Mahaboobjan sells soap to 15 customers nearly

half of that mornings sales Venkatesh offers him a hawkers

position on the spot

The moral of the story Even the poorest of the poor when

given a choice can be choosy about brands In a nation

where more than one-third of rural consumers watch TV

(everything from Ally McBeal to religious soap operas) and

even more visit commercial centers people arent naturally

inclined to settle for throwaway versions of the real deal -- if

the companies that make the real deal bother to explain the

difference If you only have two rupees (about four cents) to

spare you want value for your money -- and quality products

for your children Casting a glance at the Wheel knockoffs in

the market a silk sari-clad woman named Maryamma

sneers Only village people buy duplicates I want the real

thing

How far should a giant company go to understand poor

customers in faraway markets How does such a company

manage to sell its product profitably to hundreds of millions

of people dispersed and isolated with hardly any disposable

income to spend How does it develop brand loyalty in

markets where for generations people have chosen to buy

the product that was cheapest or the items that a store

actually had in stock -- if they bought anything at all

These are not questions that occupy the minds of high-level

strategists and marketers at most powerful global

companies They are too busy trying to sell high-priced

high-profit products to middle-class customers in the richest

countries Hindustan Lever the largest consumer-goods

company in India has embraced a different strategy It sells

everything from soups to soaps by going wherever its

customers are whether its the weekly cattle market or the

well where village women wash their clothes Why bother

Because it is the smart (and the right) thing to do Poor

people the companys executives believe can become just

as discerning about brands as rich consumers And if brands

exist as a store of value -- a promise about a products

distinctive qualities and features -- then offering poor

consumers a real choice of brands means offering them a

slightly better quality of life Marketing well-made products

to the poor isnt just a business opportunity it is a sign of

commercial respect for people whose needs are usually

overlooked

To be sure plenty of companies peddle low-quality products

at cheap prices to maximize their profits But thats not the

Unilever model Poor countries it believes may hold the key

to the companys long-term prosperity Unilever (annual

revenues $43 billion) anticipates that by 2010 half of its

sales will come from the developing world up 32 from its

current sales Hindustan Lever is the model and the engine

for that shift Indias rural people who comprise 12 of the

worlds population present a huge untapped market What

the company is developing now are the strategies and

tactics to reach that market even as its competitors waver

in their commitment

It is a crucial growth opportunity for Hindustan Lever

perhaps the most effective way for it to retain its number-

one position in consumer goods The company reported

continuous sales growth in India for three decades Then

late last year sales were nearly flat and actually declined in

some categories Given the large scale of the company

says MS Banga 46 chairman of Hindustan Lever our

biggest challenge is to keep growth rates where they are

Thats why every Lever management trainee begins his or

her career by spending six to eight weeks in a rural village

eating sleeping and talking with the locals Marketing

executives make frequent two-day visits to low-income

areas Why all of this trouble Its important to ensure that

our sales guys are connecting with our consumers says

Banga whose tenure with the company began in a village

Once you spend time with consumers you realize that they

want the same things you want They want a good quality of

life

Indeed Lever recognizes that meeting the demand of poor

consumers isnt just about lowering prices Its about

creativity developing products and processes that do more

with less Hindustan Lever creates markets where most

companies see only problems Somehow this company of

36000 employees -- a notorious bureaucracy -- nurtures a

willingness to constantly redefine markets marketing and

brands Its growth in rural India is a case study in strategic

reinvention

Change Who Does the Selling

On November 28 2006 in a meeting hall in Nalgonda in the

southern state of Andhra Pradesh Hindustan Lever

assembled a group of about 150 women The women had

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

difference If you only have two rupees (about four cents) to

spare you want value for your money -- and quality products

for your children Casting a glance at the Wheel knockoffs in

the market a silk sari-clad woman named Maryamma

sneers Only village people buy duplicates I want the real

thing

How far should a giant company go to understand poor

customers in faraway markets How does such a company

manage to sell its product profitably to hundreds of millions

of people dispersed and isolated with hardly any disposable

income to spend How does it develop brand loyalty in

markets where for generations people have chosen to buy

the product that was cheapest or the items that a store

actually had in stock -- if they bought anything at all

These are not questions that occupy the minds of high-level

strategists and marketers at most powerful global

companies They are too busy trying to sell high-priced

high-profit products to middle-class customers in the richest

countries Hindustan Lever the largest consumer-goods

company in India has embraced a different strategy It sells

everything from soups to soaps by going wherever its

customers are whether its the weekly cattle market or the

well where village women wash their clothes Why bother

Because it is the smart (and the right) thing to do Poor

people the companys executives believe can become just

as discerning about brands as rich consumers And if brands

exist as a store of value -- a promise about a products

distinctive qualities and features -- then offering poor

consumers a real choice of brands means offering them a

slightly better quality of life Marketing well-made products

to the poor isnt just a business opportunity it is a sign of

commercial respect for people whose needs are usually

overlooked

To be sure plenty of companies peddle low-quality products

at cheap prices to maximize their profits But thats not the

Unilever model Poor countries it believes may hold the key

to the companys long-term prosperity Unilever (annual

revenues $43 billion) anticipates that by 2010 half of its

sales will come from the developing world up 32 from its

current sales Hindustan Lever is the model and the engine

for that shift Indias rural people who comprise 12 of the

worlds population present a huge untapped market What

the company is developing now are the strategies and

tactics to reach that market even as its competitors waver

in their commitment

It is a crucial growth opportunity for Hindustan Lever

perhaps the most effective way for it to retain its number-

one position in consumer goods The company reported

continuous sales growth in India for three decades Then

late last year sales were nearly flat and actually declined in

some categories Given the large scale of the company

says MS Banga 46 chairman of Hindustan Lever our

biggest challenge is to keep growth rates where they are

Thats why every Lever management trainee begins his or

her career by spending six to eight weeks in a rural village

eating sleeping and talking with the locals Marketing

executives make frequent two-day visits to low-income

areas Why all of this trouble Its important to ensure that

our sales guys are connecting with our consumers says

Banga whose tenure with the company began in a village

Once you spend time with consumers you realize that they

want the same things you want They want a good quality of

life

Indeed Lever recognizes that meeting the demand of poor

consumers isnt just about lowering prices Its about

creativity developing products and processes that do more

with less Hindustan Lever creates markets where most

companies see only problems Somehow this company of

36000 employees -- a notorious bureaucracy -- nurtures a

willingness to constantly redefine markets marketing and

brands Its growth in rural India is a case study in strategic

reinvention

Change Who Does the Selling

On November 28 2006 in a meeting hall in Nalgonda in the

southern state of Andhra Pradesh Hindustan Lever

assembled a group of about 150 women The women had

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

company in India has embraced a different strategy It sells

everything from soups to soaps by going wherever its

customers are whether its the weekly cattle market or the

well where village women wash their clothes Why bother

Because it is the smart (and the right) thing to do Poor

people the companys executives believe can become just

as discerning about brands as rich consumers And if brands

exist as a store of value -- a promise about a products

distinctive qualities and features -- then offering poor

consumers a real choice of brands means offering them a

slightly better quality of life Marketing well-made products

to the poor isnt just a business opportunity it is a sign of

commercial respect for people whose needs are usually

overlooked

To be sure plenty of companies peddle low-quality products

at cheap prices to maximize their profits But thats not the

Unilever model Poor countries it believes may hold the key

to the companys long-term prosperity Unilever (annual

revenues $43 billion) anticipates that by 2010 half of its

sales will come from the developing world up 32 from its

current sales Hindustan Lever is the model and the engine

for that shift Indias rural people who comprise 12 of the

worlds population present a huge untapped market What

the company is developing now are the strategies and

tactics to reach that market even as its competitors waver

in their commitment

It is a crucial growth opportunity for Hindustan Lever

perhaps the most effective way for it to retain its number-

one position in consumer goods The company reported

continuous sales growth in India for three decades Then

late last year sales were nearly flat and actually declined in

some categories Given the large scale of the company

says MS Banga 46 chairman of Hindustan Lever our

biggest challenge is to keep growth rates where they are

Thats why every Lever management trainee begins his or

her career by spending six to eight weeks in a rural village

eating sleeping and talking with the locals Marketing

executives make frequent two-day visits to low-income

areas Why all of this trouble Its important to ensure that

our sales guys are connecting with our consumers says

Banga whose tenure with the company began in a village

Once you spend time with consumers you realize that they

want the same things you want They want a good quality of

life

Indeed Lever recognizes that meeting the demand of poor

consumers isnt just about lowering prices Its about

creativity developing products and processes that do more

with less Hindustan Lever creates markets where most

companies see only problems Somehow this company of

36000 employees -- a notorious bureaucracy -- nurtures a

willingness to constantly redefine markets marketing and

brands Its growth in rural India is a case study in strategic

reinvention

Change Who Does the Selling

On November 28 2006 in a meeting hall in Nalgonda in the

southern state of Andhra Pradesh Hindustan Lever

assembled a group of about 150 women The women had

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

sales will come from the developing world up 32 from its

current sales Hindustan Lever is the model and the engine

for that shift Indias rural people who comprise 12 of the

worlds population present a huge untapped market What

the company is developing now are the strategies and

tactics to reach that market even as its competitors waver

in their commitment

It is a crucial growth opportunity for Hindustan Lever

perhaps the most effective way for it to retain its number-

one position in consumer goods The company reported

continuous sales growth in India for three decades Then

late last year sales were nearly flat and actually declined in

some categories Given the large scale of the company

says MS Banga 46 chairman of Hindustan Lever our

biggest challenge is to keep growth rates where they are

Thats why every Lever management trainee begins his or

her career by spending six to eight weeks in a rural village

eating sleeping and talking with the locals Marketing

executives make frequent two-day visits to low-income

areas Why all of this trouble Its important to ensure that

our sales guys are connecting with our consumers says

Banga whose tenure with the company began in a village

Once you spend time with consumers you realize that they

want the same things you want They want a good quality of

life

Indeed Lever recognizes that meeting the demand of poor

consumers isnt just about lowering prices Its about

creativity developing products and processes that do more

with less Hindustan Lever creates markets where most

companies see only problems Somehow this company of

36000 employees -- a notorious bureaucracy -- nurtures a

willingness to constantly redefine markets marketing and

brands Its growth in rural India is a case study in strategic

reinvention

Change Who Does the Selling

On November 28 2006 in a meeting hall in Nalgonda in the

southern state of Andhra Pradesh Hindustan Lever

assembled a group of about 150 women The women had

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

areas Why all of this trouble Its important to ensure that

our sales guys are connecting with our consumers says

Banga whose tenure with the company began in a village

Once you spend time with consumers you realize that they

want the same things you want They want a good quality of

life

Indeed Lever recognizes that meeting the demand of poor

consumers isnt just about lowering prices Its about

creativity developing products and processes that do more

with less Hindustan Lever creates markets where most

companies see only problems Somehow this company of

36000 employees -- a notorious bureaucracy -- nurtures a

willingness to constantly redefine markets marketing and

brands Its growth in rural India is a case study in strategic

reinvention

Change Who Does the Selling

On November 28 2006 in a meeting hall in Nalgonda in the

southern state of Andhra Pradesh Hindustan Lever

assembled a group of about 150 women The women had

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

come by bus or by train some at the companys expense

from 50 villages with fewer than 2000 residents Many were

illiterate agrarian workers who were hard-pressed even to

say which products Hindustan Lever makes They wanted to

start a business and the programs name -- Shakti or

strength -- validated their bold decision

The women belonged to self-help groups that ran microcredit

operations Each of them had saved money from their daily

wages or crop sales and were committed to finding ways to

make their collective savings grow So Lever pitched to them

what seemed like an exciting proposition If they used some

of their savings to buy the companys products at cost they

would learn how to sell them to their friends and to other

community groups and how to sell them at a profit Amway

and Avon had already pioneered a similar strategy for the

middle class in urban India But for Hindustan Lever the

direct-sales model was a huge departure from stratified

distribution channels and highly trained sales reps

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

Its not enough to give people access to money says Pratik

Pota 32 a marketing manager on the new-ventures team

(or New Adventures as its dubbed) We have to give them

opportunities and train them in what to do with their savings

Our growth prospects are inextricably linked to these

womens income generation

Shakti represents a huge cultural challenge in India And in

many places Pota faces tough going In the village of

Pochampally he visits the home of Anjamma a promising

participant Anjamma is the local leader of the Telugu Desam

political party and she runs one of the larger womens

microcredits Shes blunt Its hard to sell products to local

villagers she says pointing to the boxes of soap bars and

shampoo sachets stacked in the corner of her living room

Though accustomed to charging interest on her groups

loans shes struggling with how to sell the products at a

margin

But in the next village Ravenpalli Pota finds evidence of

progress In their spare time a group of women weavers

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

have taken to selling soaps and detergents to their

neighbors I thought that we could sell the products for less

than at the store and still make a profit says Maheshwari

the leader Though shes never sold before and has just a

second-grade education her billing book is perfectly

organized Sitting cross-legged on her dirt floor Pota looks

pleased

Were not doing this out of charity Pota says But if you

can contribute to a social cause while being profitable then

why not

Change How You Market

As twilight sets on a weekly cattle-and-trade market in a

village in Bihar buyers collect their wares and gather in front

of a stage A performer lights a small fire on a plate to purify

the stage A mythological tale of romance begins Then the

performers -- magicians singers dancers -- offer a bit of

local news and call out to surrounding villages

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

In the next scene performers are acting again this time in

the role of rural laborers One man is worried that hes not

strong enough to do his work The other tells him Your

body cant breathe if its covered with mud What he means

is if youre not clean youre not strong and you cant

support your family Variations of this message are sung to a

catchy tune The backdrop a banner advertising Lifebuoy

Unilevers 106-year-old mass-market brand of soap in India

Is rural folklore the best way to explain useful hygiene

practices Or does it co-opt a centuries-old tradition in the

interest of crass consumerism Cultivating poor consumers

is often a series of long-term gambles that test the line

between whats creative and whats exploitative After

producing 7000 such live shows across rural India to

promote Lifebuoy and five other brands Hindustan Lever

itself is unsure of the best method for connecting with

consumers But complicated circumstances call for a

willingness to experiment

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

In Bihar and in other villages of the more rural states of

northeastern India the landscape is different from that of

the south Television ownership is less widespread Men

rather than women go to the weekly haats Here swaying

consumers doesnt involve switching from counterfeit brands

to Lever brands Instead it involves switching people from

infrequent to everyday washes using soap without making

them feel profligate or inauthentic The marketing challenge

is to integrate the product into consumers lives

One strategy relied on science Soap executives realized that

people who didnt see dirt on their hands thought that their

hands were clean This attitude partly explained why people

didnt wash their hands after washing clothes in the river or

feeding the cows a key cause of disease transmission

Although the connection was clear in the executives mind

they had to create a similar urgency and emotional

connection to soap for the consumer

And what better place to educate people about the

importance of frequent soap use than where 70 million

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

people come to clean themselves Hindustan Lever joined

the pilgrims visiting Allahabad for Kumbh Mela the religious

festival held every 12 years Executives wanted to show that

dirt is always present though often invisible Marketers

waved an ultraviolet-light wand over attendees hands to

show where germs and dirt resided While the pilgrims came

to bathe at the confluence of Indias sacred rivers to cleanse

their souls they also learned to keep their hands free of

pathogens

The village street theaters represented a more emotional

play Lever and Ogilvy Outreach the unconventional

marketing arm of Ogilvy amp Mather recruited local magicians

dancers and actors who knew each market and village that

the company wanted to target In total 50 teams of 13

performers were recruited to serve as connections between

the brands and the residents Scripts were changed for

different dialects education levels and religions In all

Ogilvy coordinated two-hour performances at 2005 haats

over six months

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

The results seem compelling Awareness of Breeze a low-

cost soap with more of a beauty pitch increased from 22

to 30 over the six months that the performances were

running Awareness of Rin Shakti a moderately priced

detergent bar and powder brand increased from 28 to

36 a company spokesman says And in all five states

sales of Surf Excel a premium washing detergent shot up in

the first half of 2000 compared with 1999 while sales of Rin

shot up in four states

More than that Hindustan Lever may actually be improving

health conditions Its not enough for the company to look

at market-share increase says Anand Kripalu 42 the

companys head of detergents and a creative thinker behind

many of the companys rural-outreach strategies We want

to spread the message of hygiene and really use the

Lifebuoy brand to deliver that benefit to consumers This

isnt just good for us as a brand its good for the country

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

Change How You Develop Products

Most big companies assume that developing products for

poor consumers requires less strategic flexibility less

marketing inspiration and less expensive RampD than

developing products for rich consumers Hindustan Lever has

learned that in fact the opposite is true It takes a genuinely

creative company that is filled with highly imaginative

product developers to reach the poorest of the poor

Consider Indian women and their hair India is home to 16

of the worlds population but also home to 28 of the

worlds hair thanks to the long tresses that Indian women

maintain throughout their life In a culture in which many

poor women still avoid any appearance of self-indulgence

hair grooming is often their one luxury Even women with

faded saris and little jewelry rarely leave home with a hair

out of place

Which means that women look for unexpected opportunities

to care for their hair This insight led to two product-

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

development strategies One reinforced a prevailing

consumer habit that of using soap for hair and body wash

Just over half of consumers especially low-income

consumers use soap to wash both their hair and their body

every day Levers research shows Rather than fight it

marketers decided to create an opportunity Two years ago

Hindustan Lever marketers thought of testing a prototype

hair soap But that development still didnt acknowledge the

fact that consumers use one soap because its more

convenient and because it costs less

And so came the idea for a low-cost soap that cleans the

body and the hair Product developers spent a year in the lab

before finding the right formula Marketers had already built

a strong beauty brand in Breeze a discount soap Now

marketers could build the Breeze brand even further The

new soap is called Breeze 2-in-1 and distribution is targeted

at smaller towns and rural areas Its an example of product

marketers piecing together insights from the field and

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

stretching their imaginations says Mukul Deoras 38 head

of the personal-wash business

Its also an example of how Lever gets consumers to buy

higher-quality products or how it gets them to buy up the

value chain as company executives say Deoras

acknowledges that this brand may cannibalize users of

Levers other discount soaps and shampoos But he says

even if theres cannibalization its okay Consumers are

buying a value-added product which is likely to increase

loyalty

The other strategy targeted women who werent even willing

to try shampoo because they thought that it was too harsh

Marketers decided to tackle the harshness issue head on An

ad campaign showed a straw broom (what happens to hair

with soap) alongside soft tresses (the benefits of shampoo)

Coupled with this campaign the company developed a

sachet of Lux shampoo It capitalized on the Lux-soap brand

and it cost less than any other sachet just 50 paise

compared with two rupees The visual cues and sachet size

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

were so powerful that in the test state of Andhra Pradesh

volume sales of shampoo jumped by 50 in just three

months

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

BRANDING STRATEGY

Segment-wise Frequency of Schemes

Thirteen schemes (47) announced were found to be on

popular segment (Rs8-15 for 75 gms) of soap brands This

was closely followed by 11 schemes (40) in premium

segment (gt Rs15 for 75 gm) Thus it could be inferred that

companies were trying to upgrade consumers of

economypopular brands to popularpremium soap

brands respectively

Nature of Schemes

With respect to the nature of the schemes premium (free

gifts) were found to be the most frequently used schemes in

both premium and popular segment of soap industry No

such scheme was offered by any brand in the economy

segment It could be inferred that as the price of soap in this

segment was less than Rs8 it might not be

possible for the companies to offer this type of premium

promotion Secondly the consumers in this segment were

likely to be price sensitive and such a promotion might not

be of value to them compared to price offs

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

Premium (Free Gift) Offers

Six out of 13 premium offers were a part of the companies

own portfolio eg on buying 2 Dettol soaps a Dettol Talc 18

grams worth Rs25 was given free

Underlying Objectives

Based on Table-3 a set of underlying objectives behind the

various sales promotion schemes were inferred

151 Bonus Packs

bull To reward existing loyal customers

bull To off-load inventory at factory and distribution level (to

attain push)

bull Bonus pack schemes (Buy one get one freemore for the

same price) were used to load the consumers so that they

would not buy competitive brand at least for short period

152 Premium (Free Gifts)

bull To reward and retain existing loyal customers and to

enhance brand image through interactionsassociations

bull To act as a constant reminder of the brand

bull To encourage brand switching amongst deal prone

consumers through innovative gifts

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

bull To induce trial of new products of the company by

leveraging on the existing brand and its equity eg giving

(new) Mysore Sandal Talc free with the purchase of 2 Mysore

Sandal soaps

153 Price-offs

bull Contrary to belief premium soap brands were giving price

offs (3 price off out of 11 scheme announcements in this

category ndash Table-3) The underlying objective could be to

offload inventory by pulling customers from popular soap

segment as the size of the premium segment especially the

higher end of the premium segment might be very small eg

Dove (priced at Rs45 for 100 gm) Rs10 off It could be

inferred that frequent use of sales promotion activities in

premium segment might dilute the brandrsquos exclusivity which

could lead to dissatisfaction and disillusionment among the

regular users

Incentive Price (outlay) Ratio

The incentive price ratio was calculated by taking the

monetary value of the incentive offered to the consumer and

dividing it by the amount of money heshe needs to spend in

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

order to avail the offer The ratio varied from 015 to 100

among various brands The ratios in premium brands varied

from 15 to 71 For example in case of Mysore Sandal and

Palmolive Natural (premium soaps) the incentive ratio

was 15 and 17 respectively With this level of incentive

neither regular premium soap users will feel rewarded or get

attracted nor the popular soap users will be motivated to

switch The highest incentive ratio in case of Fair and Lovely

soap was an introductory offer Such a high incentive again

was not likely to generate desired response in terms of trial

Instead the company could have leveraged on its parent

brand namely Fair amp Lovely Cream which is well entrenched

in the market So with the purchase of Fair amp Lovely tube

free soap would have given better results in our opinion

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

Willingness to buy on sales promotion offer

Sixty-three per cent of the sample did not show willingness

to buy a brand due to promotion while 27 showed

willingness and 10 were not sure This indicates that

when 27 showed willingness and 10 consumers who

were not sure these groups might be lured through

innovative and lucrative sales promotion offer

Ability to induce trial

Forty per cent of the respondents had said that sales

promotion had the ability to induce trial which reinforces the

above inference (34)

Long-term impact

In order to understand ability of the promotions to increase

long-term sales respondents were asked about continuity of

purchase of a brand after the withdrawal of promotion

Eighty per cent of the respondents indicated that they would

not continue But 20 said they would Thus it could be

inferred that promotions in this category (low involvement

products) might encourage trial and brand switching but not

long term loyalty

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

Preference of Schemes

Price off was the most preferred type of scheme Sixty-three

per cent of the respondents ranked price-offs as number one

or two This was from an upper income (biased sample in

which 18 out of 30 were from income group category

gt300000- pa

Perceived Quality

Ninety-three per cent of the respondents had a perception

that the quality of the promoted brands remained the same

during promotion while 7 felt that it was inferior than

before It can be inferred that promotions were not leading

to negative brand quality perceptions It was further

reinforced when 53 of the respondents said that sales

promotion would not weaken their loyalty towards the brand

Perceptions regarding underlying company

motivations

On tapping perceptions regarding underlying company

motivations for sales promotion ldquoto increase salesrdquo was

ranked highest followed by ldquoto attract switchersrdquo and ldquoto sell

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

excess stocksrdquo While providing value to customersrdquo and ldquoto

reinforce company imagerdquo were ranked lowest This

indicates that consumers believed that companies were

undertaking such activities only for their own benefit and not

for the benefit of consumers

Corroborating findings from retailer and consumer

perception studies it is evident that there was a matching of

perceptions regarding nature of scheme (price offs as most

preferred type of scheme mentioned by consumers and

retailersrsquo perceptions about consumer preferences)

Since retailers observe consumers instore beahviour were

frequently and directly their perceptions regarding providing

consumer behaviour are likely to be accurate Such inputs

from the retailers would be useful to companies

The retailers had the perception that those schemes which

were announced through mass media had better response

This was reinforced by the consumer survey which showed

that recall in case of heavily promoted schemes on TV was

found to be very high

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

Retailersrsquo prediction of companiesrsquo motivation for offering

sales promotion were matching with the consumer

perception regarding the same Thus both viewed that

companies were using sales promotion activities mainly to

increase short term sales or encourage switching or selling

excess stock and not really to give value benefit or reinforce

brandcompany image

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

PROMOTIONS IN THE SOAP INDUSTRY TO BUILD

BRAND

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

CONCLUSION amp RECOMMENDATION

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 hisher 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 characterized by switching

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

behavior 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 attractive 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 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 qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

they provide value to the target audience and enhance

brand qualityimage perceptions

Companies need to systematise information flow regarding

sales promotion activities particularly at dealer 1048774 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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

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

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

SWOT ANALYSIS OF SOAP INDUSTRY

Strengths

1 Low operational costs

2 Presence of established distribution networks in both

urban and rural areas

3 Presence of well-known brands in FMCG sector

Weaknesses

1 Lower scope of investing in technology and achieving

economies of scale especially in small sectors

2 Low exports levels

3 Me-too products which illegally mimic the labels of

the established brands These products narrow the scope

of FMCG products in rural and semi-urban market

Opportunities

1 Untapped rural market

2 Rising income levels ie increase in purchasing power

of consumers

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products

3 Large domestic market- a population of over one billion

4 Export potential

5 High consumer goods spending

Threats

1 Removal of import restrictions resulting in replacing of

domestic brands

2 Slowdown in rural demand

Tax and regulatory structure

• How soap works
• Soapmaking
• • Lye
  • Fat
  • Process
  • Purification and finishing
  • • History
    • • Early History
      • Roman History
      • Arab History
      • Modern History
      • Change Who Does the Selling
      • Change How You Market
      • Change How You Develop Products