Work In Progress Soap Industry Marketing Essay

In the summer of 1888, visitors to the Kolkata harbor noticed crates full of Sunlight soap bars, embossed with the words Made in England by Lever Brothers. With it began an era of marketing branded Fast Moving Consumer Goods (FMCG).

Soon after followed Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim. In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about 360,675 individual shareholders and financial institutions.

LUX

We all like to look gorgeous and enjoy that confidence which makes us feel like anything’s possible. And that’s just what the Lux range offers you on a daily basis – at a price you can afford.

Everything about the brand – from the look and feel of the products and packaging to the subtle fragrances – is a delight to the senses. In fact, Lux has been making waves since 1924, when it launched the world’s first mass-market beauty soap at a fraction of the cost of some expensive brands. 

Lux provides prestige-inspired beauty products made accessible to all which indulge the senses to make your skin and hair smell, look and feel more alluring and attractive, and inspire you to revel in the pleasure of expressing your beauty.

While Lux started as a soap, the range now includes shower gels, bath creams and a range of hair care products such as shampoos, conditioners and treatments. Feminine, decadent, but always accessible, Lux provides women with a collection of sophisticated skin and hair care products developed to meet their needs and delight their senses.

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Since its launch in 1924, Lux has had a glittering connection to some of the most beautiful and best-known stars in history. Through the years, actresses including Elizabeth Taylor, Marilyn Monroe, Brigitte Bardot and more recently Sarah Jessica Parker, Catherine Zeta Jones and Jennifer Lopez have endorsed the brand.

In Asia, where Lux is one of the continent’s leading beauty brand names, a selection of stunning Bollywood actresses have endorsed Lux products, with Aishwarya Rai one of the best-known brand ambassadors.

Major Competitors Identified Against Hindustan Unilever Limited

Procter & gamble

Camay soap

Cholayil

Medimix soap

Market Capitalization

Today in the Indian economy the popular segments are 4/5ths of the entire soaps market. The penetration level of toilet soaps is 88.6%. Indian per capita consumption of soap is at 460 Grams per annum, while in Brazil it is at 1,100 grams per annum. In India, available stores of soaps are five million retail stores, out of which, 3.75 million retail stores are in the rural areas. 70% of India’s population resides in the rural areas and around 50% of the soaps are sold in the rural markets.

SWOT Analysis of HUL

STRENGTH

Strong parentage and R&D,healthy cash offers to support innovation.

Strong position in most of the categories of its presence.

Project SHAKTI has created a brand awareness in rural area.

New sales organization called ONE HLL were introduced in the market.

WEAKNESS

Market myopia led to stagnation of business.

Low raw material cost-high priced products.

Inability to transform its strategies at the right time.

Increase in AD spending, which affect the margins.

OPPORTUNITY

Expansion of horizon outside Asia

Export is less compared to production.

It increases consumer aspirations.

Large Domestic market over a billion population.

Untapped rural market.

It diversified its brand in food products.

THREAT

Losing market share in most of the categories, matured and growing due to new entrants.

Stiff competition from local as well as MNC players.

Rural income is yet dependant on agriculture and in true monsoon.

ITC Ltd.-one of the biggest threats.

SWOT Analysis of LUX

STRENGTH

Strong market research(door to door sampling, once in a year – Rural & Urban Area)

Many Variants (Almond oil, Orchid extracts, Milk cream, Fruit extracts, Saffron sandalwood oil & Honey)

Strong Sales & Distribution n/w backed by HUL)

Strong Brand Image & promotion but relatively lower prices

Positioning focuses on the attractive beauty segment

WEAKNESS

Mainly positioned as beauty soap targeted towards women, lack unisex appeal

Some variation like sunscreen, international variant did not do well in the market

Not much popular in rural areas

Usage rate/wear rate is high and is generally mushy and soggy

Stock out problems – replenishment time is high in semi-urban/rural areas

OPPORTUNITY

Soap industry is growing by 10% in India

Beauty segments compounded annual growth rate (CAGR) is very high

Liquid body wash is currently in growth stage – Lux should come out with more variants in this segment

Large market share – strong hold over the market

More promotions like price-offs and samples

Retentive strategy required as the soap segment is in the mature stage of its product life cycle.

THREAT

High internal competition (pears – beauty segment)

New entrants(Vivel)

Maturity stage – threat of slipping down to decline stage – if constant reinvention is not carried out

Technological change makes existing products obsolete – focus on innovations like body wash

Excessive dependence on beauty segment makes Lux vulnerable to changing customer tastes.

BCG Matrix for HUL

Porter’s Generic Forces

Differentiation

Beauty Soaps, Scented Soaps, Toilet Soaps, Hand Wash, Body Wash

Cost Leadership

Lux, Lifebuoy, Rexona, Hamam, Liril

Focused Differentiation

Lux for middle & upper class

Lifebuoy, Liril & Rexona for all segments

Dove for women

Focused Cost Leadership

Liril, Lux & Lifebuoy for the rural segment

The table above shows how the various companies have their own core competencies, focus and cost leadership.

MARKETING AND CUSTOMER VALUE:

Earlier people were not fussy about soaps, there were no criteria for soaps they were just a medium of cleanliness. But today a buyer has become very smart for them soap is no longer a medium of cleanliness it has become more than that.

Macro-Environment

Political

Economical

Socio-cultural

Technological

HUL

HUL never fund any government or any political party 

‡

Maoists enforce strike, close Hindustan Unilever’s Nepal factory

Recession unveils new business opportunities for Hindustan Unilever Limited

‡

14.5% growth of FMCG market in India Shampoo sachet

Lakhme salons to lahkme lever pvt ltd

‡

10 million women customers

‡

Fair & lovely for mass market

‡

Herbal products like hamam

Lux Body Wash,

Lifebuoy 10sec hand wash,

Pure-it, surf laundry service in Bangalore

Microenvironment

Customers

Employees

Suppliers

Competitors

Media

Lux

All classes

Training employees to understand customer needs

In 2008, Decrease in supply caused the local brands to take over

Fiama Di Wills, Vivel

Brand Endorsement like SRK, Airwarya Rai, Madhuri Dixit, Sri Devi, etc

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What influences consumer buying behavior?

Cultural factors

The following table depicts how the various cultural factors influence a consumer’s buying behavior.

culture

Subculture

nationality

religion

geography

racial groups

social groups

Lux

32

23

10

15

5

10

5

*the figures are represented in %, survey conducted on 50 people

Personality & Self-concept

Sincerity ( lower class people are bound to Lux, Lifebuoy and Medimix)

Competence(Lux, Dettol, Medimix, lifebuoy)

Sophistication(Lux body wash)

Need recognition in soap category

Basic needs in soap category

Here a consumer searches for a product which will give him/her a feel of cleanliness and freshness after using it.

Security needs in soap category

Here a consumer searches for a product which gives him a feeling of security from germs after using the product. The product should also not have any after use effects.

Social needs in soap category

Here a consumer wants to satisfy his/her own self as well as the socially accepted by the people

Status needs in soap category

Here a customer looks at the ingredients of the product, the after effect and the feel after using the product. The pricing of the product also steers the need.

Self-actualization needs in soap category

Here the customer gets more than what are the basic needs from soap. Here he/she feels or gets more.

Market Segmentation

The following table gives the segment marketing for HUL Company.

Market Segments of toilet soaps of HUL

Segment

Soap Brand

Premium

Pears, Dove, Liril

Popular

Hamam, Rexona, Lux

Economy

Breeze, Lifebuoy

This table gives the segment marketing strategy for Lux brand of soap belonging to the HUL Company.

Price segments of toilet soaps

Segment

Price/weight

Premium

> Rs. 15 / 75 gms

Popular

Rs. 8-15/75 gms

Economy

< Rs. 8 /75 gms

This table gives the segment marketing strategy for Lux brand of soap belonging to the HUL Company.

Price for 100 Gms.

Premium (priced at Rs.15 & more)

Popular (priced at Rs.11 -Rs.14)

Economy (priced upto Rs.10)

Niche Marketing

The following table gives the niche marketing for LUX.

Segments

Soap

Beauty

Lux Almond, Lux Fruit, Lux Beauty, Lux Glow

Fragrance

Lux Aromatic, Lux Rose, Lux Chocolate

Freshness

Lux Saffron, Lux Sandalwood, Lux Orchid

Others

Lux international, Lux Liquid Body Wash, Lux oil and honey

Bases of Market Segmentation

Geographic Segmentation

Region

Divided into 4 zones of east, west, north and south

City

Metro cities, villages, towns

Rural & Semi-urban areas

Yes, such segmentation is done

Demographic Segmentation

Age

In groups of <25, 25-35, 35-45, 45-55 & >56

Family size

In groups of 2, 4, 5-10,>10

Gender

Male/female

Income

Groups of <20,000, 20000-45000,>50,000

Occupation

Workers, salesperson, traders shop owners, officers

Education

–

Psychographic Segmentation

Socio-economic

Types A1, A2..up to E1 and E2

Lifestyle

Culture, married, professional

Personality

–

Behavioral Segmentation

Benefits

Fragrance, freshness, color, shape, hygiene, Moisturization, beauty

User Status

Potential users, regular users

Usage Rate

Medium and heavy

Loyalty Status

Strong and absolute

Readiness Stage

Aware, informed, desirous, intending to buy

Attitude Towards Product

Positive, enthusiastic

Marketing Mix

Product

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

LUX falls into the category of convenience goods which the consumer purchases frequently, immediately and with a minimum of effort.

Lux has a great range of product line like lux almonds, lux aromatic, lux beauty, lux glow, lux saffron, lux sandalwood, lux rose, etc.

A novel metallic substrate packaging beautifully showcases the ingredients, in case of the soaps of Lux. A female model is shown on the pack.

Promotions

The promotion mix is classified as follows:

Advertising:

Transit

Electronic Media

Print Media

Direct

Advertisement Analysis

Some amount of attribute positioning by mentioning the various ingredients has also been done

Lux campaigns have wooed millions of people over the decades. Popularly known as the beauty soap of film stars, Lux has been an intimate partner of the brightest stars on the silver screen for decades. An ode to their beauty, an announcer of their stardom, advertising campaigns on Lux have featured film stars across the nation, promising their beauty and complexion to ordinary women.

Sales Promotion Schemes Used By LUX

Lux presented 30 gm gold each to the first three winners of the Lux Gold Star offer from Delhi. According to the promotional offer that Lux unveiled in October 2000, a consumer finding a 22-carat gold coin in his or her soap bar got an opportunity to win an additional 30 gm gold. The first 10 callers every week got a 30 gm gold each.

Lux Star Bano, Aish Karo contest which started on April 16 and went on till July 15 of 2005. All one needed to do was buy a special promotional pack of Lux soap. The pack comes with a special scratch card. The 50 lucky winners and their spouses were flown down to Mumbai to live a day like Aishwarya Rai would. They could also be given gift vouchers worth Rs 50,000 from Shoppers’ Stop along with an exclusively designed Neeta Lulla sari and a beauty makeover by Michelle Tung, Aishwarya’s preferred designer and stylist. The pièce de résistance was a dinner date with Aishwarya Rai herself.

The Lux Star Bano, Aish Karo contest aims to drive the brand proposition – Mujh mein star jagaye – further. The Lux `Be a Star’ promotion is a unique offering through which LUX brings what stardom feels like to customers.

Lux is celebrating 75 year’s of stardom in India and to kick start the celebration, Lux has launched the Har Star Lucky Star activity. Har Star Lucky Star offer is bound to go down in history as the only activity where every consumer is a winner! All wrappers of Lux have a star printed inside them. If the consumer finds written inside the star, any number from “1” to “5”, she will get an equivalent discount (in rupees) on her purchase from her shopkeeper. If the consumer finds “75 years” written inside the star, she will get a year’s supply of Lux free, courtesy the beauty stars.

Public Relations

Lux PR Activities

Watch out Mumbai, Bangalore & Delhi! Guess who is in town to launch the new Lux Orchid! None other than Kiwi cricket vice captain Chris Cairns who will bowl a maiden over – well 3 maidens to be precise. Lux Orchid will host the ‘Lux Orchid Nights’ in Mumbai, Bangalore & New Delhi, where Chris Cairns will look out for and crown the ‘Lux Orchid Face of the evening’. This is just one of the many activities planned for the launch of Lux Orchid with exotic orchid petals in Jojoba Oil.

Lux celebrated 75 yrs of existence in a grand way by unveiling Shahrukh Khan as their latest brand ambassador. Kareena Kapoor, Juhi Chawla, Sridevi and Hema Malini graced the event and made it special. All the stars have endorsed Lux in the past. The event was held at the grand Intercontinental in Mumbai on Friday afternoon.

Price

The LUX Beauty Bars are priced as follows:

100gms: Rs. 13

150gms: Rs. 19

LUX International is priced at

125gm: Rs. 21

Lux has also introduced the “Mini Lux” that has helped in better penetration of the rural market. Priced at

45g: Rs. 5

Lifebuoy soaps are priced as follows:

115gms: Rs.14

90gms : Rs.12

Medimix soaps are priced as follows:

125gms: Rs.22

45gms : Rs.12

18gms : Rs.5

Place

To meet the ever-changing needs of the consumer, HUL has set up a distribution network that ensures availability of all their products, in all outlets, at all times. This includes, maintaining favorable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things.

The first phase of the HUL distribution network had wholesalers placing bulk orders directly with the company. Large retailers also placed direct orders, which comprised almost 30 per cent of the total orders collected.

For rural India, HUL has established a single distribution channel by consolidating categories. In a significant move, with long-term benefits, HUL has mounted an initiative, Project Streamline, to further increase its rural reach with the help of rural sub-stockiest.

Market Survey of Soaps

Name : …………………………………… Age:…………………………… Gender:……………

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

……………………………………………………

……………………………………………………

(1)Which kind of bath soaps do you like?

Foamy……………………..

Thick lather………………..

Milky………………………

Colored……………………

Glycerin……………………

Medicinal………………….

Neem………………………

Sandal……………………..

(2)Which brand of bathing soap do you use?

…………………………………………………………….

(3)What comes into your mind when you think about Lux?

……………………………………………..

(4)How did you know about Lux?

Advertising

Sales promotion

Public relation & Publicity

Personal selling

Internet

(5)Where do you shop for purchasing soap? (Please tick appropriate option)

(1) Super Markets

(2) Local Retail Store

(3) Wholesale Store

(4) Others, please specify…………………..

(6)What is the size of the soap you usually purchase?

(1) 25gms

(2) 85gms

(3) 115gms

(4) 125gms

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

Superior

Inferior

No change

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

(a) Makes you switch to Lux

(b) Buy it during sales promotion offer

(c) Continue buying even after sales promotion offer is scrapped

(d) No change in buying behavior

(9)Which of the offers available influence you the most to purchase Lux soap?

(1) Discounts offer

(2) Buy one get one

(3) Combo pack

(4) Others, please specify………………………………………..

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

(Very Satisfied) (Satisfied) (Neutral) (Dissatisfied) (Very Dissatisfied)

Price

(b) Distribution Network

(c) Quality

(d) Advertising

(e) Promotional Schemes

(11)Which feature of Lux do you feel needs improvements? (Please tick whatever is applicable)

Hygiene

Freshness

Moisturization

Fragrance

Lather

Color

Shape

Packaging

Availability

(10)Price

(11)Others, please specify……………………………….