Managing Customer Value - Group Assignment
EXECUTIVE SUMMARY
Hemas is one of the top diversified conglomerates in Sri Lanka. Out of Hemas’ various business
stances in Sri Lanka, FMCG industry plays a significant part in generation of profits which help
them to be market leaders.
Baby Cheramy is the flagship brands in Hemas’ FMCG sector. It is being in the market for baby
products for more than 40 years. Due to immense competition emerging from existing local and
international products for babies Hemas is now facing threats.
Author’s carried out a primary survey to recognize what is the current positioning about the
brand in the customer’s mind and what are their expectations. After identifying the current stance
in the customer’s mind author’s developed repositioning strategies which could be adopted by
Hemas to retain the market leadership and to improve the market share.
The following report has been prepared based on the analysis carried out in the following areas:
Introduction to the company (SWOT, Porter’s 5 force Analysis and strategic group
mapping)
Gap Analysis
Repositioning strategies and justifications
Relevant appendices to give support to the analysis
Based on the research findings possible recommendations are also been given at the end of the report.
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ACKNOWLEDGEMENTThe authors are heart fully thankful to their “Managing Customer Value” lecturer Mr. Rajitha
Silva, whose encouragement, guidance, and support from the initial to the final level enabled to
the authors’ to develop an understanding about the subject. Also the authors are thankful to Dr.
Mahesha Samarathunga, for directing them in the correct path regarding citation and references.
The authors also wish to thank the librarian.
Lastly, the authors offer their regards to all those who supported them during the completion of
this group assignment.
The authors are responsible for any errors that remain in this assignment.
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TABLE OF CONTENTSEXECUTIVE SUMMARY.........................................................................................................................1
ACKNOWLEDGEMENT...........................................................................................................................2
TABLE OF CONTENTS............................................................................................................................3
1. COMPANY BACKGROUND............................................................................................................5
1.1 Introduction to Hemas.................................................................................................................5
1.2 Marketing Philosophy..................................................................................................................5
1.3 Product Portfolio..........................................................................................................................6
2. SITUATION ANALYSIS.......................................................................................................................7
2.1 SWOT Analysis.................................................................................................................................7
2.1.1 – Strengths..................................................................................................................................7
2.1.2 – Weaknesses..............................................................................................................................7
2.1.3 – Opportunities...........................................................................................................................7
2.1.4 – Threats.....................................................................................................................................7
2.2 Porter’s Five Forces Analysis...........................................................................................................8
2.3 Strategic Group Mapping..................................................................................................................9
3. GAP ANALYSIS..................................................................................................................................10
4. REPOSITIONING STRATEGIES........................................................................................................14
5. RECOMMENDATIONS.......................................................................................................................16
REFERENCES..........................................................................................................................................17
APPENDICES...........................................................................................................................................18
1) SWOT Analysis.............................................................................................................................18
2) Porter’s 5 Forces Analysis.............................................................................................................23
3) Strategic Group Mapping...............................................................................................................24
4) Sample Questionnaire....................................................................................................................27
5) Survey Analysis.............................................................................................................................31
WORK LOAD MATRIX..........................................................................................................................39
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LIST OF FIGURESFigure 1 - Piyawera CSR scheme of Hemas..................................................................................................5Figure 2 - Product Portfolio.........................................................................................................................6Figure 3 - Porter's 5 Forces..........................................................................................................................8Figure 4 - Positioning Map...........................................................................................................................9Figure 5 - Repositioning Strategies............................................................................................................14Figure 7 - Market Share for soaps..............................................................................................................19Figure 6 - Market share of toiletries..........................................................................................................19Figure 8- Taxation on Profits......................................................................................................................22Figure 9 - Preference Level........................................................................................................................32Figure 10 - Attribute Preferences..............................................................................................................33Figure 11 - Brand Switching.......................................................................................................................34Figure 12 - Brand Perception.....................................................................................................................34Figure 13 - Purchase Decision....................................................................................................................35Figure 14 - Customer Awareness...............................................................................................................35
LIST OF TABLES
Table 1 - Gap Analysis..............................................................................................................................13Table 2 - Product Range.............................................................................................................................18Table 3 - Ratios..........................................................................................................................................20Table 4 - Product Varieties........................................................................................................................26Table 5 - Preference Rates.........................................................................................................................31Table 6 - Attribute Preferences..................................................................................................................33Table 7 - Brand switching rate...................................................................................................................33Table 8 - Perception...................................................................................................................................34
LIST OF ABBRIVIATIONS
CDDA – Cosmetics Drugs and Devices Authority J & J – Johnsons & Johnsons
5S – Japanese Quality Management System FMCG – Fast Moving Consumer Goods
ECCD – Early Childhood Care & Development B/C – Baby Cheramy
SL- Sri Lanka
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1. COMPANY BACKGROUND
1.1 Introduction to HemasHemas is one of the top diversified conglomerates in SL with 20 active subsidiaries which
operates in 5 different sectors – FMCG, healthcare, transportation, power and leisure, started its
operations in 1948 (Hemas Annual Report, 2009).
This is a listed company guided by its core values passion for customers, obsession for
performance, driven by innovation and concern for people (Hemas Annual Report, 2009).
The following report is prepared based on the flagship brand – Baby Cheramy – of Hemas.
According to Hemas corporate website (2011), “In its life span of over 40 years B/C has grown
into a complete range of toiletries and accessories for babies. Renowned for simple purity of
product, using ingredients carefully tested for mildness and suitability for use on babies”.
1.2 Marketing PhilosophyHemas has adopted societal marketing concept. They have invested in “Piyawera” scheme which
has the motive to improve ECCD developments in early childhood of children in SL. This has
started 32 pre schools all round the nation which educates more than 3000 students.
Figure 1 - Piyawera CSR scheme of Hemas Source: Hemas corporate website, 2011
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1.3 Product Portfolio
FMCG Transportatio Leisure Health Power
Personal Care Home Care Foods Paper Products
Traded Brands
Figure 2 - Product Portfolio Source: Austceyl corporate website (2011) & Authors’ work
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2. SITUATION ANALYSIS
2.1 SWOT Analysis
2.1.1 – Strengths
Hemas is a Sri Lankan company with 20 active subsidiaries and shares being traded in stock
exchange (Hemas corporate website, 2011). B/C product range has been in the market since 1962
(austceyl corporate website, 2011) with a wide range of products. As said by super brands
corporate website (2011) it has the market share of 47% currently in toiletries segment. Hemas
has adopted lean manufacturing systems recently and won various prices for brand excellence
especially for B/C (you tube corporate website, 2011 & hemas annual report, 2009). Financial
policy is in a good position. (Refer appendix 1.1)
2.1.2 – Weaknesses
B/C has to face various competitive activities from its close rivals like Pears and J & J which
make Hemas to retaliate based on their strategies. Customers mostly prefer foreign brands
thinking that they have more quality than B/C. Maybe due to the above reasons Hemas facing
difficult times in certain segment like baby soaps. B/C racks in super markets are filled with
some other brands which could have an impact on the purchase behaviour.
(Refer appendix 1.2)
2.1.3 – OpportunitiesTormenting war came to an end in SL which has created a gateway to enter into North and
Eastern markets. According LBO corporate website (2011), customer spending patterns has
increased to a certain extent. On average 340000 children are born in SL gives a available market
for B/C (super brands corporate website, 2011). Many universities offer industry oriented
degrees which the company can adopt. (Refer appendix 1.3)
2.1.4 – ThreatsUnregistered CDDA imports are dominating the market (LBO corporate website, 2011). Tax rate
has gone up from 14.6% - 16.1% (Hemas annual report, 2011). More recognition is there
towards Unilever and P & G. Environment can get polluted by the polythene based packages.
(Refer appendix 1.4)
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2.2Porter’s Five Forces Analysis
Figure 3 - Porter's 5 Forces
Source: Done by Authors
(Refer appendix 2)
Threat of Substitutes-Herbal products:Aloe vera soap-Home made remedies: Egg york, neem oil-Aromatherapy products.
-Organic products.
Threat of new entrants and entry barriers
-Government policies.-Health and safety rules.-Legislation process.
-Trade barriers.-Initial investment.-Registered trademarks with high brand loyalty.-Benefit over the economies of scale
Buyer Bargaining Power
-Low bargaining power over suppliers.
-Cost of changing brand-Buyer fragmented and dispersed.-Higher switching cost.
Supplier Bargaining Power-Moderate power-Labour inputs-Raw material supplies-Utilities
Existing Rivalry- More than 11 competitors. -High switching cost-Monopolistic competition-Constant changes in prices and differentiation in product.-High asset specificity-High exit barriers
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2.3 Strategic Group Mapping
Figure 4 - Positioning MapSource: Done by Authors
(Refer appendix 3)
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3. GAP ANALYSIS
Attributes Available Expected Market
(Local/Foreign)
Product
Variety
B/C offers a large
range of baby care
products and customers
are extremely happy
about it.
There are some more
varieties that the present
and potential customers
expect from the brand
such as baby bath,
bottom balm, toothpaste,
lotion etc
J & J, Pears have almost
launched similar
products like B/C.
Foreign brand does not
offer all the variety as
they offer in their
mother countries.
Other local firms still
have to improve their
product range to make it
comparable with B/C.
Package In 2009 October B/C
re-launched its product
packaging to enhance
customer acceptance
(Hemas annual report,
2010).
Customers relatively
satisfied with new
packaging but Hemas
could use various shapes
relating to kids and also
could thing of attractive
colors.
J & J uses see through
bottles.
Other brands do not
make any difference in
packing.
Features Very few
differentiations are
available regarding the
products.
Customers expect
various fragrances in
B/C.
J & J offer various
fragrances which are
favored by babies.
Size Shampoo size is only
available 40ml – 400ml
Can improve the size of
the bottles to 600ml – 1
liter where they do not
J & J offers 1 litre
bottles at a different
package.
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need to go to purchase
them eventually
Price
Market
Price
Price available in the
market is the lowest
price.
According to the survey
young parents seek to
look at other attributes
like quality and sense of
satisfaction rather than
only price.
Local brands like
kekulu, kohomba, panda
etc. offers at the similar
price as B/C.
J/J, Avent, Curash &
Mother care offers at a
relatively high price.
.
Special
Schemes
B/C offers triple value
pack and BOGOF
schemes for cologne
consumption.
Gift packs available at
lower price consists of
most of the product
range of B/C.
People from sub urban
areas seek more value
for money from B/C
products.
Kohamba offers gift
packs at a high price
comparing to B/C.
J/J offers different sizes
of gift packs with a price
lower than B/C.
Promotion
Tag Line “Pure Love”
Tools B/C uses national level
TV advertisement,
radio announcements
etc to reach the
potential customers.
Hemas is one of the
conglomerate which
Comparing to J & J B/C
is lacking behind in the
development of emotion
which enhances the
bond between mother
and child. Imaginative
and creative ads can be
used to bridge the gap.
J & J uses repetitive
advertisements which
promotes bond between
mother and child.
Pears use animative
creatures to capture
small toddler’s attention.
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tries to promote ECCD
development in Sri
Lanka. It has launched
“Piyawara” scheme to
improve early
childhood
development. (Hemas
corporate website,
2011). These CSR
activities improve its
awareness.
Stores are provided
with racks to shelf their
branded products to
promote them.
B/C can use repetitive
advertising on channels
as like J & J.
B/C and Pears TV
advertisement are
similar in nature so it
might confuse the
audience. B/C can
change it current ads
with taking the above
mentioned points into
consideration.
Mother care, Avent and
Curash are mainly
purchased through word
of mouth publicity by
the users in the foreign
countries and in SL.
Place
Channel
B/C is distributed
island wide through
second level of
distribution channels to
all the super markets
like Keels, Cargills etc
and boutique shops.
Current users of the
brand are satisfied with
the placing of B/C.
J & J and Pears products
are displayed in separate
racks provided. They are
available in most of the
regions in SL.
Reach B/C’s target segment
spreads from low
income to upper middle
income. So it is
distributed island wide.
Due to this they retain
their market leadership.
Hemas can establish
new strategies to make
sure that the brand is
available at all possible
locations in the areas
aftermath of war.
Other brands like Avent,
Mother care & Curash
are sold in baby care
shops which are very
few.
Local customers mostly
get these brands
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imported or got them
from friends in other
countries.
Store Displays
B/C racks are displayed
in prominent places to
attract and make the
customers easily reach
what they wanted.
Online
shopping
E- Commerce websites
like Kapruka, Alibaba,
Keels online etc sell
B/C brands.
Most of these brands
were purchased online
through e- commerce
websites.
Table 1 - Gap Analysis
Source: Table was prepared based on survey findings and direct observations in supermarkets
4. REPOSITIONING STRATEGIESRepositioning is where a firm tries to change the perception that their customers’ hold in their
mind regarding a particular product (Lovelock &Wright, 2002). Repositioning has gained vital
importance in today’s context due to ever changing customer preferences (Jobber, 2010).
Jobber (2010) explained that there are four strategies that a firm can adopt into to reposition.
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Source: Adapted from Jobber and Fahy, 2008.
Hemas can adopt “image repositioning strategy” to improvise the mental perception of people
about the brand. Image repositioning is where keeping the product and target market the same
but to change the image of the product (Jobber & Fahy, 2008).
In terms of the requirements to be in the baby care market B/C has required functionalities. But it
is lacking behind in creating a strong brand image to combat competition stemming from the
industry.
According to the primary survey conducted by the authors it is evident that customers’
perception on quality regarding B/C is considered to be low. This is because of the strong image
of quality regarding other brands created through promotional campaign, word of mouth etc.
Through image repositioning strategy Hemas could focus on how to implant the view that B/C is
a good quality product.
Hemas could focus on getting medical approvals that ensures that the brand is out of any harm to
the skin conditions of toddlers. Hemas could get advice from SL College of dermatologists who
can give advice regarding quality enhancements they can have in each product variety of B/C.
Hemas signed an MOU with UNICEF in 2001 relating to its ECCD development programs
initiated to enhance ECCD developments in SL (Hemas corporate website, 2011). So Hemas can
give more emphasis in this additional recognition from an international treaty to convince that
they are producing reliable baby care brand with giving more concern for the society in which
they operate.
Figure 5 - Repositioning Strategies
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It is already said in SWOT analysis that there are chemical and bio technological degrees offered
through local universities in SL. So Hemas could make use of these graduates to enhance the
current ingredients to make it more effective on tender skin conditions.
Hemas could be benefited from carrying out promotional campaigns which would give more
focus to the relationship of mother and child rather than of limiting to animated creatures. The
TV ads would give more impression to the customers rather than in any printed medium.
Repetitive ads could be able to lift up the need to purchase a product variety of B/C.
Hemas could use celebrity endorsements that would be inspirations to mothers having kids.
Appearance of doctors would create more awareness towards the brands. Ads should not be of
high end standard but could be able be understood by low income level as well.
Another strategy that could be used by Hemas is “product repositioning”, where target market
would be the same but product will be enhanced.
It is a general issue that author’s came across that most of the customers are expecting more
variety from B/C. For example they were expecting baby bath, bottom balm and requested some
variations in term of cologne fragrances.
J & J seems to be the leader for varieties of products. So Hemas could use this strategy to make
their position better in terms of varieties. Hemas could improve their backward vertical
integration with their suppliers to get best quality products to manufacture requested product
varieties of the customers.
It is essential to look into the capabilities of the firm to get quality ingredients to manufacture
varieties of fragrances. If they going get imported from other regions of the world the cost aspect
should also be given much concern otherwise the current position of the brand in pricing would
be cannibalized.
Hemas could also use organic and natural ingredients to their new varieties or could introduce a
product range. Due to emerging concepts on organic product and Hemas’ societal marketing
concept this would aligned.
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Hemas should again be able to promote it to the customers in a way which could get good reach.
By coming up with products satisfying customer expectations the culture could be enhanced on
being “customer focused”.
Hemas is doing relatively well in sub urban areas and as well as in urban areas. So shift of target
market is not essential. So above mentioned strategies could shift the current position of Hemas
to a different and yet desirable place to improve market position and profits in future.
5. RECOMMENDATIONS
As per the research findings illustrate it is clearly evident that Hemas is in a very crucial point to
reposition its flagship brand to bring up the perception of quality. Hemas could adopt
image/product or both repositioning strategies to get rid of the emerging competition from baby
care products.
Hemas could get adapted to the evolving changes in the current market to be successful in the
market. By using the strengths identified in SWOT, it could invest more in R & D and quality
standards. It could seek the unarticulated needs of their customers and should utilize its unique
resources and capabilities to develop new products.
Hemas could be able to develop marketing intelligence to gather useful information about any
moves of its rivals. By doing all the above it should be able to develop a customer centered
culture which would lead to the success of the repositioning of the business venture.
REFERENCES
Austceyl corporate website, (2011), [online], Available at: http://austceyl.com.au/index_files/Page820.htm [Accessed on 20th May 2011]
Daily mirror corporate website, (2011), [online], Available at: http://print.dailymirror.lk/business/127-local/19546.html [Accessed on 5th June 2011]
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Hemas Holdings, (2009), Hemas Annual Report 2009, Sri Lanka
Hemas corporate website, (2011), [online], Available at: http://www.hemas.com/finrepos/98_Hemas%20Holdings%20AR%202009-10.pdf [Accessed on 19th May 2011]
Hemas corporate website, (2011), [online], Available at: http://www.hemas.com/index.php?action=nav&main=newsnmedia&sec=news&sel=15&ex=1&id=69 [Accessed on 28th May 2011]
Jobber. D, (2010), Principles and practice of marketing, 6th edition, UK, Mc Graw Hill.
Jobber. D & Fahy. J, (2008), Foundation for Marketing, 2nd edition, UK, Mc Graw Hill.
LBO corporate website, (2011), [online], Available at: http://www.lbr.lk/fullstory.php?nid=201006091528589716 [Accessed on 20th May 2011]
Lovelock, C. and Wright, L. (2002), Principles of Service Marketing and Management, USA, Pearson Education.
Quick MBA corporate website, (2011), [online], Availble at: http://www.quickmba.com/strategy/porter.shtml [Accessed on 30th May 2011]
Super brand corporate website, (2011), [online], Available at: http://www.superbrands.com/lkc1/pdf/07_consumerSB.pdf [Accessed on 18th May 2011]
Scribd corporate website, (2011), [online], Available at: http://www.scribd.com/doc/22046549/A-PROJECT-ON-BRAND-REPOSITIONING-STRATEGY-OF-TITAN-WATCHES [Accessed on 29th May 2011]
You Tube Corporate website, (2011), Baby Cheramy – Pure Love, [online], Available at : http://www.youtube.com/watch?v=Xf-NG7-ROqA [Accessed on 29th May 2011]
APPENDICES
1) SWOT Analysis
1.1 STRENGHS
Being a product of Sri Lankan company
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Baby Cheramy is a product from Hemas, which is one of the Sri Lanka’s top 10 diversified
conglomerates (Hemas corporate website, 2011). This has enabled the brand to reach the target
group without any difficulties.
Long term sustainability in the baby care market
Baby Cheramy is being in the market since 1962 (austceyl corporate website, 2011). As it is a
baby care brand this has created bond with mothers and children and the value has been
transferred from generation to generation.
Wide range of products
Baby Talc Napkin rash powder Baby Soap
Prickly Heat Powder Baby Cologne Pampers
Baby Cream Body Oil Cotton Buds
Napkin rash cream Baby Shampoo Gift Packs
Table 2 - Product Range
Source: Author’s Work
The product range satisfies almost every need of a baby.
Position as the market leader
Baby Cheramy is in the market leader position in the market of toiletries with 47% (Colognes
35%, Creams 54%, Talc 38%, and Soap 42%) and accessories for babies (Super brands corporate
website, 2011). It is in a healthy lead against Pears.
Figure 6 - Market share of toiletries
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42%
41%
9%
3% 5%
Market Share - Baby Soaps
Baby CheramyPearsKekuluJ & JOthers
Figure 7 - Market Share for soaps
Source: Authors’ Work based on youtube corporate website (2011) and superbrands corporate website (2011)
Affordable pricing and island wide distribution
Baby Cheramy targets the lower income to upper middle target segments (super brands corporate
website, 2011). The pricing seems to be reasonable. According to super brands corporate website
(2011), “Baby Cheramy now permeates all geographical and socio-economic households in Sri
Lanka”. Product is also been distributed to Australia, New Zealand, Maldives etc.
Recognition through awards received
B/C has received SLIM brand excellence (2007), Brand of the year (2007), Best local brand
(2007), Best product brand (2007) and it is the No 1 brand for Hemas (YouTube corporate
website, 2011).
Financial Stability
The financial highlights through ratios show a steady improvement over the past few years.
47%
31%
19%
3%
Market Share - Toiletries
Baby CheramyPearsJ & JOthers
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Source: Adopted from Hemas Annual Report (2009)
Lean manufacturing production systems
Hemas’ first step towards implementing 5S lean manufacturing system is now complete where
Hemas has also received Gold award in the manufacturing sector and Silver award in overall
category in the Taiki Akimoto award competition in 2010 (Hemas annual report, 2009).
Continuous product developments and product launches
In order to combat the immense competition in the market Hemas continuously launches new
product ranges time to time.
Eg: Aloe Vera cream – 2004, Plastic Cologne bottles – 2005
1.2 WEAKNESSES
Lacking back in certain Segments
Pears launched new soap range with flower fragrances which is new to the market. This activity
would increase the potential market share of Pears which is already the market leader in soaps
for babies.
Customer Perception
Hemas is yet to retaliate the misconception of the quality of the product range. Quality wise J &
J seems to be preferred first.
Lack of Promotion
Table 3 - Ratios
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Hemas does promotion when they do product launches or when they do CSR to kids whereas,
foreign brands (J & J) promotes repetitively. Packaging is not that attractive compared to other
brands.
Other brands placed in B/C racks
B/C has provided certain racks which promotes its brands. In that various other brands were
placed. So this would have an impact on purchase decision at the store where as this is not the
case in J & J racks.
1.3 OPPORTUNITIES
End of civil war in Sri Lanka
"Aided by markets that were previously underserved, and the improvement in the local economy,
most FMCG categories saw double digit growth," Hemas chief executive Husein Esufally told
shareholders in the annual report (Lanka Business Online corporate website, 2011). Hemas can
reach the Northern Province markets easily.
Child Birth Rate
In SL approximately 340000 children are born each year on average (Super brands corporate
website, 2011). If Hemas tap these markets in could generate more revenue.
Qualified work force accessibility
Many universities in SL for example Moratuwa provides chemical engineering degrees and
Colombo University provides biotechnological degrees. Hemas can be able to access these
students to improve their R & D functions for better products.
Increase in consumer spending pattern
According to LBO corporate website (2011), “Hemas group’s said its FMCG division grew revenues at
double digit rates in the latest financial year and it re-launched brands as consumer spending rebounded.
Sri Lanka had high inflation in 2008. It hit a peak of 28 percent in mid-2009 but fell thereafter”.
1.4 THREATS
Competition from imported brands
There are many international companies which cater to the same market of baby cheramy. There
is a threat of reduction in the market share of the brand. "Over the years our fragrance category
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has been adversely impacted by the plethora of unregistered with CDDA imported fragrance
produces available in the grey market," says Esufally (Lanka Business Online corporate website,
2011).
Increase in taxation rate
The taxation rate has increased from 14.6% - 16.1%
during last year which is a threat as it would have an
impact on the revenue generated by the product ranges of
baby cheramy.
Source: Hemas corporate website (2011)
Environmental Pollution
Product range often uses plastic and polythene based packages. This would have an impact on
the environment and would go against their “social responsibility” concept.
More recognition towards Unilevers and P & G
Hemas has to compete with Unilevers which has baby care brands targeted towards segment in
two extremes i.e. J & J for premium price and Pears for average price range. P & G’s pampers,
Farlin are also in the same markets. Overcoming this brand recognition creates immense threats
to the company.
2) Porter’s 5 Forces Analysis1. Existing Rivalry
Baby care market is highly concentrated as there are 3 dominant players i.e Baby Cheramy,
Pears and J & J. There are various foreign and local emerging players which makes the market
Figure 8- Taxation on Profits
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monopolistic competition. The dominant players face difficulties in the market due to changing
prices, differentiation in products etc. Demand sometimes tends to be cyclical where it fluctuates
over birth rate (Quick mba corporate website, 2011). Asset specificity will be high as equipment
used in production is very unique in nature and wouldn’t be able to find a readily available
market price. So exit barrier would be high.
2. Threat of Substitutes
Most of the rivals produce chemical based baby cosmetics where as some of the new players like
Kohomba baby and kekulu came up with herbal products which created a threat for the market
leaders. In order to retaliate this threat now B/C and J & J has also launched herbal range. Home
remedies are also available such as egg yolk, gingili oil, neem oil etc. But this has not created
that intense threat. Organic products are been developed. If those brands enter the market it
would be a substitute. Aromatherapy remedies are also available. So the demand curve remains
inelastic due to lack of alternatives.
3. Buyer Bargaining Power
Buyers are fragmented and widely dispersed around the country. So there is no way that a
particular customer can have bargaining power over suppliers. Products are differentiated. There
are not standardized. When customers switch from one brand to another they have to face
switching costs where the brands offer products at different prices.
4. Supplier Bargaining Power
Suppliers are powerful to a certain extent as companies in the sector needs to get inputs from
various sources such as labour, raw materials, utilities etc.
5. Threat of new entrants and entry barriers
Government procedures are to be followed when a new competitor enter into the market. Health
and safety rules, legislation process and initial investments can be said as potential barriers for a
new comer. But as it is a monopolistic market there are very little barriers to ban the entry to
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avoid cut throat competition as in oligopolies. All the brands in the segment are registered
trademarks with high brand loyalty. Firms are well established foreign or local companies which
has significant benefit over the economies of scale rather than of a new comer to the industry. It
can be said that this force’s impact is moderate.
3) Strategic Group MappingThe strategic group mapping was done based on the two variables mentioned below:
Product Variety
Product Prices
The bases for the analysis were taken from the table below consisting of the information for each
brand for the above variables.
Brand Variety Quantity PriceBABY CHERAMY SOAP 75G 33/=
SOAP ALOE 75G 33/=
SOAP FLOWERS 75G 33/=
COTTON BUDS 100S 43/=
CREAM 50ML 58/=
CREAM MILK 50ML 58/=
POWDER 100G 67/=
PRICKLY HEAT TALC 100G 70/=
NAPPY RASH CREAM 100ml 85/=
SHAMPOO 125ml 90/=
FEEDING BOTTLE 120ml 100/=
POWDER 200g 105/=
CREAM 100ml 105/=
CREAM ALOE 100ml 105/=
TALC FLOWERS 200g 105/=
CREAM MILK 100g 105/=
HA/BODY OIL ALOE 125ml 110/=
COLOGNE 50ml 110/=
COLOGNE FLOWER 50ml 110/=
FEEDING BOTTLE 240ml 110/=
DIAPERS SMALL 4S 135/=
DIAPERS MEDIUM 4S 135/=
DIAPARS LARGE 4S 135/=
SOAP 5S 75G 145/=
SHAMPOO 250ml 155/=
BABY CHERAMY TALC 400g 175/=
Group 1 – HF10C1BA Page 24
Managing Customer Value - Group Assignment
CREAM 200ml 178/=
CREAM ALOE VERA 200ml 178/=
COLOGNE BABY DOLL 125ml 180/=
COLOGNE TEDDY BEAR 125ml 180/=
BABY CHERAMY COLOGNE
100ml 195/=
COLOGNE FLOWER 100ml 195/=
OIL 250ml 195/=
COLOGNE FLOWER 200ml 290/=
COLONGE 200ml 290/=
GIFT PACK 300/=
CREAM 400ml 325/=
NAPPY WASH POWDER 1kg 335/=
DIAPERS X/LARGE 10S 380/=
DIAPERS LARGE 12S 380/=
DIAPERS MEDIUM 12S 380/=
J & J SOAP 75g 65/=
TIP TO TOE WASH 50ml 65/=
100ml 100/=
BABY CREAM 50g 115/=
COLOGNE 50ml 125/=
COLOGNE POWDER MIST 50ml 125/=
POWDER 100g 135/=
BABY LOTION 100ml 160/=
SHAMPOO 100ml 180/=
HAIR OIL 100ml 200/=
MILK CREAM 100ml 210/=
MILK BATH 100ml 225/=
GIFT BOX 280/=
BABY BATH 200ml 300/=
PEARS PEARS HERBAL SOAP 75g 33/=
SOAP 85g 33/=
SOAP FLORAL 75g 33/=
CREAM 50ml 58/=
PEARS BABY POWDER 100g 68/=
SHAMPOO 120ml 90/=
COLOGNE FLORAL 55ml 105/=
OIL 115ml 110/=
COLOGNE FRESH 50ml 110/=
HERBAL CREAM 100ml 115/=
CREAM 100ml 115/=
COLOGNE MAGIC DROPS 50ml 115/=
SOAP 75G 5S SAVE 20 155/=
HERBAL CREAM 200ml 178/=
Group 1 – HF10C1BA Page 25
Managing Customer Value - Group Assignment
CREAM 200ml 195/=
COLOGNE 100ml 210/=
COLOGNE MAGIC DROPS 100ml 210/=
BABY BONN MOSTURINSING LOTION 100ml 120/=
MILK BATH 100ml 120/=
SHAMPOO 100ml 120/=
BABY OIL 100ml 140/=
FACE CREAM 100ml 160/=
SOAP
NS – PANDA BABY SHAMPOO 120ml 110/=
BABY WASH 120ml 130/=
COLOGNE 100/=
CREAM 100ml 95/=
BABY TALC 100g 68/=
SIDDHALEPA KEKULU SOAP 75g 32/=
COLOGNE 50ml 95/=
TOOTHPASTE 50/=
FARLIN SOAP 75g 220/=
FEEDING BOTTLES
COTTON BUDS 431/=
CURASH BABY SOAP FREE BATH 200ml 767/=
400ml 1145/=
BABY WIPES 1031/=
MORRISON’S BABY SILICON TEAT LARGEMEDIUM
45/=45/=
FEEDING BOTTLE 98/=
CREAM 100g 140/=
COLOGNE 100ml 175/=
AVENT MOISTURIZING LOTION 200ml 1350/=
BOTTOM BALM 125ml 1250/=
FEEDING SPOONS 725/=
KOHOMBA BABY COLOGNE 100ml 175/=
GIFT PACK 380/=
BABY SOAP 80g 33/=
CREAM 100ml 105/=
Table 4 - Product Varieties
4) Sample Questionnaire
BRAND PREFERENCES – BABY CARE PRODUCTS IN SRILANKA
- PRIMARY SURVEY-
Source: Done by Authors
Group 1 – HF10C1BA Page 26
Managing Customer Value - Group Assignment
a) Location / Address:
________________________________________________________
b) No.of kids at home: _______
01. Income level
a. <10,000
b. 10,000-20,000
c. 20,000-50,000
d. 50,000-100,000
e. >100,000
02. Rate the brands which you are familiar with,
a. Baby Cheramy
b. J & J
c. Morrison’s baby
d. Rebeca Lee
e. Curash
f. Kekulu Baby
g. Pears
h. Baby Bonn
i. Panda
j. Kohamba Baby
k. Avent
l. Farlin
m. Other _________________________________
(Give ranking from 1-10)
03. What is your primary preference when it comes to brand for babies?
a. Quality
b. Price
c. Varieties
d. Availability
Group 1 – HF10C1BA Page 27
Managing Customer Value - Group Assignment
e. Other ______________________________________
04. How frequently would you switch from one brand to another?
a. Very Frequently
b. Sometimes
c. Never
05. What about your post purchase experience of the above preferred brand?
Brand ______________________________________
Very good
Good
Moderate
Bad
Very bad
06. What is the perception on your mind in relation to baby cheramy product range?
a. Value for money
b. Superior quality
c. Reasonable price
d. Availability
e. other ________________________________________________
07. What triggers/ affects your purchase decision on a baby product?
a. Family culture
b. Cost
c. Word of mouth
d. Variety
e. Status
08. How did you get to know about Baby cheramy?
a. Word of mouth (Family & Friend)
Group 1 – HF10C1BA Page 28
Managing Customer Value - Group Assignment
b. TV ads
c. CSR projects
d. Store display
e. Other ______________________________________________
09. Rate your satisfactory level after using Baby cheramy for your kids?
+ + + + +
1 2 3 4 5
10. Do you intend to change your brand in future?
a. Yes
b. No
If yes states the brand ______________________________________
11. Till what age do you use baby products for your kids? ______________________
12. Would you recommend your brand to other person?
a. Yes
b. No
Reason? ______________________________________________________________________
13. Are Baby cheramy brand readily available in the market?
a. Yes
b. No
14. Do you buy branded products?
a. Yes
b. No
15 Kindly choose an option,
a. I am price conscious.
b. I am quality conscious.
c. I am brand conscious
d. Both price & brand
Group 1 – HF10C1BA Page 29
Managing Customer Value - Group Assignment
e. Both price & quality
f. Both Quality& brand
g. Price, quality, & brand
16. Do you think that low price goods would have quality?
a. Yes
b. No
17. What is your most favourite variety in Baby Cheramy?
________________________________________________
18. What is your expectation from the brand mentioned above? Give your suggestions.
___________________________________________________________________________
Thank You.
5) Survey Analysis
According to the preferences of the sample group from whom information was gathered the
preference level of the baby care brands has been divided into three.
First Preference
Second Preference
Group 1 – HF10C1BA Page 30
Managing Customer Value - Group Assignment
Third Preference
Table 5 - Preference Rates
Source: Compiled by Authors
Group 1 – HF10C1BA Page 31
First Preference
Brand No of Respondents
Baby Cheramy 27
J & J 36
Curash 4
Pears 10
Baby Bonn 2
Mother Care 5
Second Preference
Brand No of Respondents
Baby Cheramy 34
J & J 14
Pears 20
Baby Bonn 2
Avent 8
Farlin 6
Third Preference
Brand No of Respondents
Baby Cheramy 16
J & J 12
Morrison's baby 2
Rebecca Lee 4
Curash 2
Pears 30
Baby Bonn 4
Kohomba Baby 6
Avent 4
Farlin 4
Managing Customer Value - Group Assignment
32%
43%
5%
12%
2%6%
First PreferenceBaby Cheramy J & JCurash PearsBaby Bonn Mother Care
40%
17%
24%
2% 10%
7%
Second PreferenceBaby Cheramy J & JPears Baby BonnAvent Farlin
19%
14%
2%5%
2%
36%
5% 7%
5% 5%
Third PreferenceBaby Cheramy J & J Morrison's baby Rebecca LeeCurash Pears Baby Bonn Kohomba BabyAvent Farlin
Figure 9 - Preference Level
Source: Done by Authors
Source: Compiled by authors
Group 1 – HF10C1BA Page 32
Managing Customer Value - Group Assignment
Next concern was on what attribute the parent prefers when it comes to the purchase of baby care products.
Attribute PreferenceAttributes No of Respondents
Quality 48Price 7Variety 13Availability 16
Table 6 - Attribute Preferences
Source: Compiled by authors
Quality Price Variety Availability0
10
20
30
40
50
60
Attributes
No
of R
espo
nden
ts
Figure 10 - Attribute Preferences
Source: Done by authors
The next concern was on the frequency of switching from one brand to another.
Table 7 - Brand switching rate
Source: Done by Authors
Group 1 – HF10C1BA Page 33
Brand Switching
FrequencyNo of
RespondentsVery Frequently 7Sometimes 53Never 24
Managing Customer Value - Group Assignment
Next element was based on the perception
about B/C on customers.
Source: Compiled by authors
Survey also focused on the triggers
which affects the purchase of a baby care product.
Source: Compiled by authors
People get knowledge about the B/C brand
from various sources. The finding showed the
results below.
Figure 11 - Brand Switching
Figure 12 - Brand Perception
Figure 13 - Purchase Decision
Table 8 - Perception
Group 1 – HF10C1BA Page 34
Customer Perception about B/CPerception No of Respondents
Value for Money 8Superior Quality 16 Reasonable Price 29Availability 25Never Used 6
Triggers of Purchase DecisionStimuli No of RespondentsFamily Culture 21Cost 6Word of Mouth 23Variety 27Status 7
Managing Customer Value - Group Assignment
Customer awarenessVariables No of RespondentsWord of mouth 17TV ads 27CSR project 25Store display 15
Source: Compiled by authors
An MCQ based question was asked to know which aspect of the product makes them take
conscious decisions. The table below is prepared based on the gathered information.
ElementsNo of
RespondentsPrice conscious -Quality conscious 22Brand conscious 2Price & brand -Price & quality 20Quality & brand 14Price, quality & brand 26
Source: Compiled by authors
Another focus was on the perception of customers regarding price and quality. 57% of the
respondents said that they assume that low price doesn’t have quality.
Customer generally does not use only one brand satisfy their baby’s needs but pick different
products from 2-3 brands to get maximum satisfaction.
Customers are greatly satisfied with baby oil, cologne and soap varieties if B/C but they expect
more variations in flavors and quality aspect of it.
Figure 14 - Customer Awareness
Group 1 – HF10C1BA Page 35
Managing Customer Value - Group Assignment
Summary
As per the preference ratings,
Most of the customers preferred J & J (43%) where as B/C occupied the second place
(32%). Mainly in urban areas income level seems to be high and they are eligible to
spend significant amount on their baby’s daily needs. They gave more preference to
quality features of J & J and few foreign brands like Mother Care and Curash. B/C is
being the first preference among sub urban people. As SL is in the middle income
position in global rating of countries it has managed to sustain the market leadership
throughout these years. It is evident after the survey by the gathered information.
Second preference is given mostly to B/C (40%) and Pears got 24% of preference as
second. This shows that B/C is even used in urban households for their popular product
ranges such as baby cologne, baby soap etc.
In the third preference level Pears takes up its position of 36% and in B/C 19% which
shows that Pears is considered to be the second best to B/C in overall view.
Unilever’s product range J & J and Pears are considered as in the proceeding and succeeding
positions.
Regarding product attributes,
More than 50% of the respondents wanted good quality for their baby care products.
They always think of post purchase experience they gathered after consuming a particular
brand and always wanted to avoid rashes, itching or any skin effects.
Next preference is given to variety and availability of the specific product range.
Price is considered as the least preferred as the very last option for most of the
respondents as they are ready to spend more for the sake of their kids.
When considering about the willingness to switch from one brand to another,
29% of the respondents remain loyal to brands they use. There is very low room to
convince them to change their mind set unless some value addition is done to Baby
Cheramy.
Group 1 – HF10C1BA Page 36
Managing Customer Value - Group Assignment
71% of the people think of changing their brands if there is a better brand is available.
B/C has to focus more on R & D to create more value to the existing emphasizing on
quality to tap the people who prefer to change their mind set from other brands to B/C.
The post purchase perception of B/C,
B/C is well known among the sample group for the reasonable pricing (35%) and
availability (30%).
B/C’s perception for value for money and superior quality is lacking behind as very few
has voted for them.
Purchase decision of baby care products is triggered by,
Mainly the variety of goods impressed most of the sample group of the survey (32%).
28% of the respondents preferred positive word of mouth publicity received from their
colleagues and relatives.
The sample group got to know about the brand mostly from television advertisements (32%) and
30% of them came to know through their CSR projects carried out island wide. ECCD programs
conducted by Hemas group have been resulted in more awareness generated to the general
public.
Sample group seems to be more focused towards quality where price, brand comes the next.
Group 1 – HF10C1BA Page 37
Managing Customer Value - Group Assignment
WORK LOAD MATRIX
V.Archchana CB003654
J.F.FaristaCB3753
C.KugadhepCB3721
Executive Summary 100%Company Background 50% 50%Situation Analysis Swot 33.33% 33.33% 33.33%
Porter’s 5 force 50% 50%Positioning map 50% 50%
Gap Analysis 50% 50%Questionnaire 33.33% 33.33% 33.33%Questionnaire Summary 50% 50%Repositioning strategies 40% 30% 30%Recommendations 30% 40% 30%Documentation 30% 30% 40%Signature
...................... ……………… …………….
Group 1 – HF10C1BA Page 38