Marketing Strategy to launch a dish washing liquid in Kerala Marketing Strategy to launch a dish washing liquid in Kerala Acknowledgments

Marketing Strategy to launch a dish washing liquid in Kerala

I k o n M a r k e t i n g C o n s u l t a n c y

R a j k o t , G u j a r a t

Chirac Asokan Kuruvangattil

This Report is based on a brief study on the dishwashing

liquid market in Kerala, usage behaviour of consumers.

Observations from the study has been used to device

marketing strategies to launch a dishwashing liquid in

Kerala


Chirac Kuruvangattil Page 1

Acknowledgments

I would like to thank Mr. Azaz Motiwala, and Ikon Marketing Consultancy for providing me with this opportunity to study the feasibility of launching of a dishwashing liquid in Kerala and also for giving me this chance to strategize the same. This was a good opportunity for me to put to apply what I had learnt. I would also like to thank all who took part in the survey especially Mrs. Rejindrakumari Asokan for allowing me to survey the employees of her firm.



Abstract

This research was to study the feasibility of launching a dishwashing liquid and to generate sound marketing strategy to implement the launch in the Kerala market. The main objectives were to scan the market environment, identify the various segments and target segments, to come up with the appropriate marketing mix, advertising mix and financial projections of the launch. This would give us a fair picture of the marketing aspects and effort required for a successful launch. The geography that we have chosen is the state of Kerala and the time period that we have set is a year, the first year after launch. A survey was conducted to study preferences, usage, usage rate and latent needs of the identified target segment. Due to lack of time, completed surveys of only 29 respondents were collected. My study is based this limited response.



Table of Contents Acknowledgments ............................................................................................................................... 1

Abstract ............................................................................................................................................... 2

Statement of Problem ......................................................................................................................... 4

Segmenting and Targeting .................................................................................................................. 6

Positioning ........................................................................................................................................ 10

Marketing mix ................................................................................................................................... 11

Market potential ............................................................................................................................... 18

Annexure ........................................................................................................................................... 19



Statement of Problem

With increasing disposable incomes and the increase in double income households, the Indian FMCG sector has become extremely lucrative. The homecare sector is a significant segment of this sector. The dish washing liquid was first introduced to India in 1999 by Henkel in the form of Pril, which is still the market leader in the segment; it enjoys 40% of the market. The other major players who were subsequently introduced to the market were Vim, Exo and recently Dettol. This highly competitive situation makes the process of launching a new product in this segment herculean. Apart from the competitive situation, since this is a relatively new product, marketers have to make consumers shift from traditional products such as dishwashing bar, powder as well as ash. Studies have shown that the dishwashing liquid market is growing at a pace of 40 percentages annually. The problem that we have in hand, and the purpose of this research is to study the dishwashing liquid segment in Kerala as well the consumer preferences and usage in the region and come up with a sound marketing strategy to launch a product in the category. Objectives of the Study

This research has the following objectives: 1) Identify target segment of liquid dishwashing products to be launched in. 2) To study the target segment, their preferences, usage and latent needs. 3) To generate sound marketing strategy to successfully launch a new brand in this category.

Dishwashing detergent market environment

The dishwashing detergent market in India consists of three major categories, dish washing powder, dish washing bar and the dish washing liquid. These three products also have to compete against traditional methods such as using ash to clean dishes. The Indian consumer are now slowly migrating from ash to powder, powder to bar and bar to liquid. The total market size of these three categories put to together in the year 2012 was estimated to be Rs.232 crores. The dishwashing bar has the biggest piece of the pie with an estimated size of Rs.179 crores, followed by liquid which is of Rs. 52 crores and then by powder at Rs. 1.2 crores. The liquid segment is the fastest growing segment pegged at more than healthy pace of 40%, followed by the bar at 20%. The powder category is however is seeing a fast decline in market size, it’s shrinking by half every year.



Brands in the market

The major companies that have brands across the three categories in the Kerala market are Henkel, Jyothy Laboratories, Hindustan Unilever, Godrej and Reckitt Benckiser. Sabena leads the shrinking powder category with a huge 65% market share in south India, while Vim leads the pack in the dishwashing bar market. Vim by Hindustan Unilever enjoys strong brand equity and that is the major reason for it being a leader in this category. It is closely followed by Exo from Jyothy laboratories. It enjoys a market share of 18.4%. Exo is a strong south Indian player which is now slowly fledging towards other parts of India. Exo in Kerala does marginally better than it does in other states as consumers in Kerala trust the name Jyothy Labs as it originates from Kerala.

1.2

179.159

51.63

Market Size

Powder

Bar

Liquid

-50%

20%

40%

-60% -40% -20% 0% 20% 40% 60%

Powder

Bar

Liquid

Growth Rate

Growth Rate



In the dishwashing liquid category it is the pioneer, Pril from Henkel (which has now been acquired by Jyothy Labs) that still enjoys the top position with almost 70% of the market majorly due to its first mover advantage. It is the brand that introduced Indians to dishwashing liquid. Pril faces competition from HUL in the form of Vim Drop and Reckitt & Benckiser in the form of Dettol, both of which have strong brand equity due to the long presence of the brands in the Indian market.

Segmenting and Targeting

Level of Education and Disposable Income become key factors in people migrating from powder to bar and from bar to liquid. Powder and bar being used by budget conscious households with low disposable incomes and Liquid being used by households with better disposable income. Level of education becomes a factor as educated people are more aware of such products and easily adopt a new product, in this case migrate from bar to liquid. Because of the above stated reason I have used Socio-Economic Classification for segmenting the market.



The total population of Kerala as per the 2011 census is 3,33,87,677. The district wise distribution of the population is given below.

The distribution of Kerala’s population across various SEC are given in the below table. *The old SEC system has been used as data for the new system was not available.

33,07,284

26,29,703

21,21,943

11,95,537

19,79,384

11,07,453

32,79,860

31,10,327

28,10,892

30,89,543

8,16,558

41,10,956

25,25,637

13,02,600

Total Population 3,33,87,677

Thiruvananthapuram

Kollam

Alappuzha

Pathanamthitta

Kottayam

Idukki

Ernakulam

Thrissur

Palakkad

Kozhikode

Wayanad

Malappuram

Kannur

Kasargod



2.50% 4%

6.70% 6.80%

20.80%

31.80%

21.20%

6.30%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

A1 A2 B1 B2 C D E1 E2

Urban SEC segemntation of Kerala

7.80%

18.30%

66.50%

7.40%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

R1 R2 R3 R4

Rural SEC of Kerala



Using the above data, given below is the population in crores of Kerala across SEC segments.

SEC segments Population A1 0.39 A2 0.63 B1 1.05 B2 1.07 C 3.26 D 4.99 E1 3.33 E2 0.99 R1 1.38 R2 3.24 R3 11.76 R4 1.31

Of the given segments we would be targeting women, between the age of 15 and 69, across segments which constitute people with education above SSC and with good disposable Income. We would be focussing on the segments, A1, A2, B1, B2, C, 50% of D, R1 and R2, females between 15 and 69 years of age from these segments. That will be our Target Segments.

17.69

15.69

Rural vs Urban Population (Crs)

Rural

Urban



For more details see the table in the next page. The figures are in crores.

SEC Segments Segments Population

Female Population

Females between 15 and 69

A1 0.39 0.20 0.13 A2 0.63 0.33 0.20 B1 1.05 0.55 0.34 B2 1.07 0.55 0.35 C 3.26 1.69 1.06 D (50%) 4.99 1.30 0.81 R1 1.38 0.72 0.45 R2 3.24 1.68 1.06 Total 4.40

From the above table, our target market consists of 4.40 crores females between the age of 15 and 69.

Positioning

Since this is an intensely competitive market, with players like Pril, Vim Drop and Dettol along with Exo and Godrej in the fray, positioning becomes important as our product will be looking to differentiate itself from all the major players. The current players position themselves on two major aspects which are,

Superior cleaning ability Presence of antibacterial agents

I conducted a survey on a sample of our target segment to identify their preferences and latent needs if any. The notable results of the survey were as follows;

Among consumers who do not currently use a liquid mentioned that they thought that liquids were not economical

A small section from those who do not currently use liquids also mentioned that they were not aware of how to use dishwashing liquid

Among consumers who currently uses liquid detergents, majority mentioned that it was more efficient at cleaning dishes and they also said that it is easier to use than a bar or powder

Some respondents also mentioned that it would be better if their liquids had a stronger fragrance



Only few of the respondents who used liquids felt that it was economical to use a liquid. From the above information we can come to the conclusion that when it comes to dishwashing liquid the stated need of the consumer is that the product should clean dishes well, the real need of the consumer is that the product should be economical and unstated need is that it should have a strong fragrance.

I would suggest the product to be positioned as liquid which cleans well, easily and with an added benefit of good fragrance. The product should be in a bottle with a special nozzle which makes sure only the optimum amount comes out and hence it would be more economical. This enables us to not only target existing users of dishwashing liquids, but also those who are thinking of migrating from bar to liquid but does not want to as they feel it is not economical to do so.

Marketing mix

Product

Dishwashing liquid positioned as one which cleans dishes better, with a strong fragrance and a bottle which regulates outflow of liquid which ensures economical use. Since in Kerala lime is extensively used to clean dishes and coconut husk to scrub, we can have our product with the qualities of lime and extremely small fragments of coconut husk in our product which ensures that it cleans better and easily.

Price

The following are the prices of the major products in the category, available in the market;

Brand Name Unit (ml) Price Vim Drop 750 142 Vim Drop 500 92 Vim Drop 250 52 Dettol 200 50 Pril Active 120 20 Pril Active 225 42 Pril Active 425 76



Hence the average price per ml for these brands is as follows;

Brand Name Price per ltr Vim Drop 194 Dettol 250 Pril Active 177

As per previous studies, the cost to manufacture liquid detergent is estimated as follows; Direct cost for manufacturing 2 ltrs

Particulars Qty. Cost Sodium Lauryl Ethyl Sulfate (SLES)

150 g

29.28

Sodium Chloride 50 g 0.85 Coco Deethanolomyte (CDEA) 60 ml 19.33 Water Soluble – Dye Green 10 ml 4.58 Benzalkonium Chloride .01 ml 0.013 Kalamansi Scent 10 ml 11.39 Total 65.46 Total (1 ltr) 32.73

Indirect cost for manufacturing 100 ltrs

Particulars Cost Labor Cost (P382/day min. wage x 2)

1000.84

Transportation Cost 98.25 Water and Electricity 65.5 Contingency Cost (10% of direct cost)

327.5

Total 1492.09 Total (1 ltr) 14.92



Total cost for manufacturing 1 ltr of liquid dishwashing detergent is Rs.47.65 and the profit margins of various members of the value chain in percentage figures are as follows.

Value chain member commission/profit Percentage of the price Retailer 20% Distributor 8% Cash and Carry agent 2% Manufacturer 20%

With all the above information, we would have the option of a very aggressive pricing of Rs.155 per litre which is lesser than the market leader pril and would help in sending the message that we are economical. This will also help us convert some of the consumers currently using bars. Or we can price our product at Rs. 175 which is still Rs.2 less than the lowest priced competitor Pril, we don’t have to compromise on the message of quality.

Place

Kerala market is unique as it is difficult for a marketer to differentiate between rural and urban markets. The consumption patterns and purchasing behaviour are almost similar across urban and rural areas. Also points of purchase do not vary, other than a few supermarkets in cities which are majorly relied for monthly purchases, most people rely on neighbourhood stores for purchases. Hence our products should be present across both these points of purchase, with bigger units, 1 ltr bottles along with smaller ones at super markets to serve the monthly shoppers and smaller units, 500 ml and 200 ml at neighbourhood shops.

Promotion

We are positioning our product as one which cuts crease, which is economical and also has a strong fragrance. Hence our tagline should be something which reflects these aspects. A few samples are given below;

Cuts out the stains, keeps in the fragrance Clean and fragrant within your budget

The brand name needs to reflect the above mentioned attributes. Below are a few suggestions;

Jasmine Fresh (Jasmine denotes fragrance and Fresh denotes cleanliness) Miss Sparkle (If used along with a brand personality, it can convey messages of fragrance

and cleanliness. Housewives will be able to connect better with a character similar to them and this will generate recall and share of mind.)



Since this is a new brand, it is very important for generating awareness among the target segment, hence it’s very important to make sure we minimise spillage of our communication. We need a mix of ATL advertisements, mainly newspapers and television advertisement during female oriented T.V. shows such as T.V. serials etc. Since Kerala has a high readership with Malayala Manorama and Mathrubhumi, the two major dailies figuring in the nation’s top ten in IRS surveys almost every year, advertising in newspapers will ensure lesser spillage. We must also implement BTL advertisement at the point of purchase which will help in making the customer recall the brand from ATL activities. See below calculation of profit for two price points Rs. 155 and Rs. 175.

We have assumed three market responses based on the degree of promotion required.

Degree of promotion/Market Response

Optimistic Most Likely Pessimistic

High Promotion (17% of revenue)

30% Market Share 15% Market Share 8% Market Share

Average Promotion (12% of Revenue)


Low Promotion (Low Promotion)




Profit Calculations for a price of Rs.175 and after having manufactured 1000000 litres of dishwashing liquid;

High Promotion (17% of Revenue)

Optimistic

Most Likely

Pessimistic

Manufactoring cost

4,76,50,000.00

4,76,50,000.00

4,76,50,000.00

Wholesaler

34,97,590.92

17,48,795.46

9,32,690.91

Distributor

1,39,90,363.66

69,95,181.83

37,30,763.64

Retailer

3,49,75,909.16

1,74,87,954.58

93,26,909.11

Promotion

2,97,29,522.79

1,48,64,761.39

79,27,872.74

Revenue

17,48,79,545.81

8,74,39,772.90

4,66,34,545.55

Profits

4,50,36,159.28

-13,06,920.36

-2,29,33,690.86


Optimistic

Most Likely

Pessimistic

Manufactoring cost

4,76,50,000.00

4,76,50,000.00

4,76,50,000.00

Wholesaler

23,31,727.28

8,26,097.66

4,66,345.46

Distributor

93,26,909.11

33,04,390.66

18,65,381.82

Retailer

2,33,17,272.77

82,60,976.64

46,63,454.55

Promotion

1,39,90,363.66

49,56,585.98

27,98,072.73

Revenue

11,65,86,363.87

4,13,04,883.20

2,33,17,272.77

Profits

1,99,70,091.05

-2,36,93,167.74

-3,41,25,981.79



Low Promotion (9% of Revenue)

Optimistic

Most Likely

Pessimistic

Manufactoring cost

4,76,50,000.00

4,76,50,000.00

4,76,50,000.00

Wholesaler

11,65,863.64

4,66,345.46

2,33,172.73

Distributor

46,63,454.55

18,65,381.82

9,32,690.91

Retailer

1,16,58,636.39

46,63,454.55

23,31,727.28

Promotion

52,46,386.37

20,98,554.55

10,49,277.27

Revenue

5,82,93,181.94

2,33,17,272.77

1,16,58,636.39

Profits

-1,20,91,159.02

-3,34,26,463.61

-4,05,38,231.80

Profit Calculations for a price of Rs.155 and after having manufactured 1000000 litres of dishwashing liquid;

High Promotion (17% of Revenue)

Optimistic

Most Likely

Pessimistic

Manufactoring cost

4,76,50,000.00

4,76,50,000.00

4,76,50,000.00

Wholesaler

30,97,866.24

15,48,933.12

8,26,097.66

Distributor

1,23,91,464.96

61,95,732.48

33,04,390.66

Retailer

3,09,78,662.40

1,54,89,331.20

82,60,976.64

Promotion

2,63,31,863.04

1,31,65,931.52

70,21,830.14

Revenue

15,48,93,312.00

7,74,46,656.00

4,13,04,883.20

Profits

3,44,43,455.36

-66,03,272.32

-2,57,58,411.90




Optimistic

Most Likely

Pessimistic

Manufactoring cost

4,76,50,000.00

4,76,50,000.00

4,76,50,000.00

Wholesaler

20,65,244.16

8,26,097.66

4,13,048.83

Distributor

82,60,976.64

33,04,390.66

16,52,195.33

Retailer

2,06,52,441.60

82,60,976.64

41,30,488.32

Promotion

1,23,91,464.96

49,56,585.98

24,78,292.99

Revenue

10,32,62,208.00

4,13,04,883.20

2,06,52,441.60

Profits

1,22,42,080.64

-2,36,93,167.74

-3,56,71,583.87

Low Promotion (9% of Revenue)

Optimistic

Most Likely

Pessimistic

Manufactoring cost

4,76,50,000.00

4,76,50,000.00

4,76,50,000.00

Wholesaler

10,32,622.08

4,13,048.83

2,06,524.42

Distributor

41,30,488.32

16,52,195.33

8,26,097.66

Retailer

1,03,26,220.80

41,30,488.32

20,65,244.16

Promotion

46,46,799.36

18,58,719.74

9,29,359.87

Revenue

5,16,31,104.00

2,06,52,441.60

1,03,26,220.80

Profits

-1,61,55,026.56

-3,50,52,010.62

-4,13,51,005.31

From the above calculations we are able to see that promotions have to kept at a high level of 17% of Revenue.



Market potential

Total Market potential

The market potential has been calculated for the SEC segments A1, A2, B1, B2, C, 50% of D, R1, R2, our target segments. It has been calculated for the time period of one year. The total market potential has been calculated by calculating the number of households in the SEC segments we are targeting. The average size of a household in Kerala is 5. The usage rate has been calculated from the results of the survey.

SEC segments

Segments Population

Households Usage (ltrs per annum)

Value (Price Rs.175)

Value (Price Rs.155)

A1 3,92,215.00 78,443 613536 10,73,68,856.25 9,50,98,129.82 A2 6,27,544.00 1,25,509 981658 17,17,90,170.00 15,21,57,007.71 B1 10,51,136.20 2,10,227 1644277 28,77,48,534.75 25,48,62,987.92 B2 10,66,824.80 2,13,365 1668819 29,20,43,289.00 25,86,66,913.11 C 32,63,228.80 6,52,646 5104622 89,33,08,884.00 79,12,16,440.11 D (50%) 24,94,487.40 4,98,897 3902091 68,28,65,925.75 60,48,24,105.66 R1 13,79,929.20 2,75,986 2158604 37,77,55,618.50 33,45,83,547.81 R2 32,37,526.20 6,47,505 5064416 88,62,72,797.25 78,49,84,477.56 Total 3,69,91,54,075.50 3,27,63,93,609.73

To calculate market potential, we have fixed the marketing mix as explained before with a high level of promotion (17% of Revenue). We have calculated the market potential for three market responses (Optimistic, Most likely, Pessimistic) and are as given below;

Market Response/Price Point Price Rs.175 (Rs.) Price Rs.155 (Rs.)

Optimistic 1,10,97,46,222.65 98,29,18,082.92 Most Likely 55,48,73,111.33 49,14,59,041.46 Pessimistic 29,59,32,326.04 26,21,11,488.78



Annexure

Survey

Q1) Do you use dishwashing detergent/bar/liquid? Yes No Q2) If you have answered the above question as yes, then which of the following form of dishwashing product do you use? Bar Liquid Powder Q3) If you are not using liquid, then please state the reason why you are not using it? Not Economical Lack of awareness about such a product Lack of awareness about how to use such a product Loyal to the form of soap we are using Other reasons, please state them. Q4) If you are using liquid, then please state what is it that you like about using a liquid dishwashing soap? Economical Hygienic Better at cleaning dishes Easier to use Others, please state them Q5) most commonly used size of the SKU?



1 Ltr 750 ml 500 ml 250 ml Sachet Q6) Usage rate? How many days does it take for you to use 750 ml? 15 days 30 days 45 days 60 days 75 days or more Q7) how big is your household/family? 2 3 4 5 6 or more Q8) what features would you like to see in your dishwashing soap? Open ended question?

Documents

Marketing Strategy to launch a dish washing liquid in Kerala Marketing Strategy to launch a dish washing liquid in Kerala Acknowledgments