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Impact Of Advertisement On Purchasing Of Toilet Soaps Marketing Essay
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Jan 9th, 2020

Impact Of Advertisement On Purchasing Of Toilet Soaps Marketing Essay

70 % of India Population Lives in 627000 Villages in rural Areas.90% of the Rural Population is concentrated in villages with a Population of less than 2000, with agriculture being the main Business. This shows the Potential India and has to bring the much -needed Volume Driven Growth. The Saturation limit in the Urban Market has reached and now marketers are moving Rural. They are following go “GO RURAL” Strategy.

There is a increase in Income of Rural People , growth in rural demand is expected to increase double fold every Quarter because consumers are moving up towards premium products. However, in the recent past there has not been much change in the volume of premium soaps in proportion to economy soaps, because increase in prices has led some consumers to look for cheaper substitutes. The Maximum Advertisement is Personal Care Category comes from Toiletry Soaps .It will be also good to understand some ground realities about rural marketing before marketers venture into rural markets with their brands. Like in urban areas, People who watch TV in rural areas, also influence the choice of many personal care products.

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INTRODUCTION

Background of study

The toilet soaps market is estimated at 530,000 TPA including small imports. Hindustan UniLever is, of course, the market leader.

The market is littered over with several, leading national and global brands and a large number of small brands, which have limited markets. The popular Brands in the rural areas include Lifebuoy, Lux, Cinthol, Liril, and Nirma, Santoor.

Toilet soaps, despite their divergent brands, are not well differentiated by the consumers. It is, therefore, not clear if it is the brand loyalty or experimentation lured by high volume media campaign, which sustain them. A consequence is that the market is fragmented. It is obvious that this must lead to a highly competitive market. Toilet soap, once only an urban phenomenon, has now penetrated practically all areas including remote rural areas. The incremental demand flows from population increase and rise in usage norm impacted as it is by a greater concern for hygiene. Increased sales revenues would also expand from up gradation of quality or per unit value.

As the market is constituted now, it can be divided into four price segments: premium, popular, discount and economy soaps. Premium soaps are estimated to have a market volume of about 80,000 tonnes. This translates into a share of about 14 to 15%. However, by value it is as much as 30%.

Market Segmentation

Soaps are also categorized into men’s soaps, ladies’ soaps and common soaps. There are a few specialty soaps as transparent Glycerin soaps, sandal soaps, specially flavored soaps, medicated soaps and baby soaps. Specialty soaps are high valued but enjoy only a small share of the market in value terms.

The market is growing at 7% a year. This means that the incremental demand generation is 5% over and above the population growth. With increasing awareness of hygienic standards, the market could grow at a rate higher than 8% annually. Interestingly, 60% of the market is now sourced from the rural sector. This means that the variance between the two segments is not very large. Since upper-end market focus is the urban areas, margins come from the urban sector.

Factors affecting buying behavior

Price is the most important factor which effects the buying behavior of consumer, by which a consumer goes for the various segment of soap like premium, popular, sub-popular and carbolic which are basically decided by the cost factor and fat content in the soap.

The buying frequency is either monthly that is done by the families or in case of bachelors it is more than once in a month. The occasions when premium soaps are purchased are usually when there are festivals and ceremonies. Moti Soaps are usually presented during festivals and occasions for presents and gifts.

The promotional techniques help to boost sales. Various tactics like the price off’s, buy one get two free, free gifts and other schemes help boost sales in short run and also help in clearing stocks.

One of the important points a soap marketer should note is that the soaps are usually purchased by women in urban areas as most of the day to day consumption of personal care products are made by women. A point to note is that women use more personal care product than men do and hence premium soaps are mostly targeted at them. Men normally make purchase decisions in rural areas. Hence the marketer has to adopt different strategy for such a market.

Benefits sought by various customers from various brands are

Beauty – Lux

Freshness – Liril, Cinthol

Natural – Medimix, Margo

Baby – Johnson & Johnson, Doy

Cream – Dove, Doy Care (moisturizing)

Medicated – Dettol, Savlon,

Glycerin – Pears, Emami

Penetration

One of the factors, which affect the demand of soaps, is the penetration, which the products have in market. In case of soaps this has not been a major issue as the penetration in the rural area is as high as 97% and that for urban area is around 99%. Thus the approximately the penetration is around 99% for overall India.

Hindustan UniLever is the largest contributor to the toilet soaps market of India. It enjoys almost a two-thirds share, with the second ranked Nirma Soaps placed at a distantly low share of 16.8%. Lux and Lifebuoy have held the sway of the market for almost fifty years. While the former brand remained the preserve of the high-end rich consumers, Lifebuoy ruled the roost with health-conscious users as a hygienic soap. The products underwent up-gradations with the introduction of versions like International Lux and Lifebuoy Personal. In between came brands like Nirma Rose, Nirma Beauty Soap, Breeze, Caress, and LeSancy. In 1993 came Dove. Earlier, Liril made waves with its lemon touch and bathing acrobatics.

At the medium and lower rungs, brands like Hamam, Moti, Jai, Rexona (third largest brand) were well supported by OK and later by OK NSD Bar.

The brands have undergone a full foray of launches and relaunches, making each occasion to give a more vigorous thrust to the marketing effort. Quite a few of the brands have been acquired: Hamam from TOMCO and Baby Toilet soap from Johnson & Johnson, for example.

While Pears has dominated as high profile specialty soap, HUL undertook, in 1992, a project to manufacture the product for the world market at Khamgaon in Maharashtra. Commercial production commenced in 1993.

To provide a sound base to its toilet soaps operations, HUL has also branched out into other toiletries like shampoos and related products like glycerin, fatty acids.

Godrej Soaps had a disappointing experience in forging an alliance with Procter & Gamble (P&G). Infact P&G is withdrawing itself from the premium soap segment like Camay.

P & G has now a fully-owned subsidiary in India and now it is concentrating more on personal care products. Godrej retained all soap brands and transferred detergent brands to P&G in 1993. Godrej found it convenient to shed the detergent brands – Ezee, Key, Biz and Trilo – as they represented a losing portfolio.

Godrej is promoting a number of brands, Cinthol, Ganga, Shikakai, Fairglow, No.1 and Crowning Glory, while it has others to bother about such as Vigil and Fresca. Cinthol ranks third and accounts for 60% of all Godrej Soap’s brands. It is an old brand launched about five decades ago in early 1950s. New Cinthol Lime and Cologne gave it a new look in 1985. Two variants were introduced in 1989 placing an added emphasis on their brand of soaps. Its deodorant and complexion soap is styled as Cinthol Spice. Cinthol is perceived largely as a male soap, as Lux is a lady’s soap. The company expects a very high growth for Cinthol in 1997-98. Ganga did well and a new version Doodh Ganga has been introduced. Ganga had notched up a 5% market share but declined to 2% later with sales at Rs 350 mn. Godrej wants to revive it. Godrej Soaps was giving a tough competition to Hindustan Lever. Crowning Glory was pitched for hair care.

Even Nirma has achieved a significant penetration and has notched up an impressive 60,000 tonnes sale in just three years. Nirma Ltd has been putting up a backward integration plant to produce soda ash and linear alkyl benzene (LAB).

Capacity utilization in the industry varies from as low as 50% to 80%. Godrej Soaps Limited (GSL) has been using its capacity by working for other producers. GSL makes Rexona and Dettol for Reckitt & Colman of India and Johnson’s Baby Soap for Hindustan UniLever (Johnson & Johnson). And yet only half of its capacity of 71,000 tonnes is being used. Also companies like VVF Ltd. has state of the art technology oriented plants, which they mostly use for producing brands like Dettol, Nivea Creame soap and also internationally well know brands like Fa for other marketers.

It seems Indians have sacrificed hygiene at the altar of thrift. If numbers are anything to go by, Indians do seem to be washing themselves, as well as their clothes, rather less. Data collated by industry certainly points to this rather unpleasant conclusion. The consumption of soaps and detergents has shrunk substantially with volumes declining by 11.5 per cent and consumption of detergents declining by 4.1 per cent in the year.

The evidence of this decline in consumption is somewhat perplexing in a country with a growing population as the consumption of soap and detergents should logically be directly proportional to population growth. “Soaps and detergents are at the back of the house and are not status products like TVs or refrigerators. It’s possible that consumers may be economizing on their use or buying cheaper brands during a downturn,” explains an official at a leading FMCG firm.

One possible reason could be increased production in the small-scale sector. For instance, besides detergents sold as powders and bars, which is produced by organized players, a large quantum of detergents is sold in the form of laundry soaps, which are used for washing clothes. Production of laundry soaps are reserved for the small-scale sector and data is not readily available. There is also a large cottage industry producing cheap soap, used for personal wash, for which reliable numbers are not available.

Another possible reason for the apparent decline in consumption could be the free samples of soap which have been handed out as part of incentive schemes, say industry sources. “The quantum of such samples may not be picked up in the data,” said the official.

There is another whacky hypothesis. Many households earlier used soaps for twin purposes: for body wash as well as shampoo substitutes.

However, successful sachet marketing in shampoo seems to have now penetrated this market, which has directly impacted the sales of soaps.

A detailed analysis of the data shows that sale of premium soaps, the likes of HUL’s Lux or Godrej’s Cinthol, declined by 13.1 per cent. But even the carbolic or discount soaps – the likes of HUL’s Lifebuoy or Nirma – saw volumes decline by 9.9 per cent. Even though the market has shown de-growth in toilet soaps segment, analyst say that it will grow at a meager rate of 3 to 4 per cent especially in the premium category, which was previously looking attractive. This can be attributed to factors like excessive dependent of Indian rural sector on monsoon, which can be uncertain. Also due to high excise duty prices have remained high enough to keep the huge middle class chunk away from this market. Thirdly 80% of the raw materials used in premium soap are imports, which attract high import duty. All this factors lead to increase in cost, which deters the players to provide value for money product to the middle class consumer.

The price of the premium segment products is twice that of economy segment products. The economy and popular segments are 4/5ths of the entire soaps market. The penetration level of toilet soaps is 88.6%. However, the per capita consumption of soap in India is at 460 gms per annum, while in Brazil it is at 1,100 gms per annum.

In India, soaps are available in five million retail stores, out of which, 3.75 million retail stores are in the rural areas. Therefore, availability of these products is not an issue. 70% of India’s population resides in the rural areas; hence around 50% of the soaps are sold in the rural markets.

Growth

With increase in disposable incomes, growth in rural demand is expected to increase because consumers are moving up towards premium products. However, in the recent past there has not been much change in the volume of premium soaps in proportion to economy soaps, because increase in prices has led some consumers to look for cheaper substitutes.

The major players in personal wash (Soap) market are HUL, Nirma and Godrej

REVIEW OF LITERATURE

Publised by WPP COMPANY ( OGLIVY INDIA ) Developing markets such as India are an important source of growth for Unilever. The company is adopting unique marketing approaches to increase consumption of its products in these regions, positioning itself as an ethical brand that benefits wider society.

Unilever’s Lifebuoy ‘Swasthya Chetna’ (‘Health Awakening’) campaign is one example. This educates people on the importance of health and hygiene in preventing diarrhea and encourages them to adopt a simple hand-washing regime using soap. Swasthya Chetna is India’s largest ever rural health and hygiene education program. HUL have done aggressive advertising strategies to promote its “Swasthya Chetna” Programme

Lifebuoy health officers visited 43,000 Indian villages and schools over five years where they used product demonstrations, interactive visuals, competitions and drama workshops to spread the health and hygiene message.

The program has reached 110 million rural Indians since it began in 2002. Awareness of germs has increased by 30% and soap use has increased among 79% of parents and among 93% of children in the areas targeted. Soap consumption has increased by 15%.

The campaign received recognition for its innovation and effectiveness, winning Silver in the Rural Marketing Advertisers Association of India awards in 2006, and the grand prize at the Asian CSR awards 2007. It was also recognized by the Indian government who created a special edition postal cover dedicated to the campaign. .[1]

Publised in Business.in.com by Sawmya roy on August 18,2009 – Godrej No. 1. is a hit though, from the stables of Godrej Consumer Products Ltd. It claimed the number three spot in the toilet soap category for the quarter ended June 2009, eating into market leader Hindustan Unilever’s (HUL) market share.

It is now the third highest selling soap behind Lifebuoy and Lux. Lifebuoy and Lux, both HUL products and market leaders, saw market share decline by almost 2 percent to 16 and 15.4 Santoor also stakes claim to the number three spot. The ACNielsen Repot shows Godrej No. 1 in the number three slot, but only in terms of volume. Since it is a discount brand, it falls to number five in terms of value. Santoor and Dettol take the third and fourth spots on the Neilson Report Table.

Toilet-soaps have emerged as the most advertised product in the personal care category in the first half of 2009, leaving behind summer skewed category favorites’ like talcum powders and prickly heat powders/lotions by a considerable margin. The top 10 list saw three of the brands from toilet soaps – Lifebuoy Swasth, Chetna 07, Godrej No.1 Papaya Lotus and Lux Pink Soap.

 

The change in trend is because traditional summer categories like talcum powder has reached stagnation due to consumers’ shift towards other categories like the deodorants. The shift from talcum powders to toilet soaps during summers is also because soaps too are increasingly being positioned as a value-added, cosmetic category which could ensure lasting fragrance, smooth skin and even fairness in some cases.

 

According to industry estimates, the soap segment is one of the biggest FMCG categories in India with bathing and toilet soaps constituting around 30 per cent of the soap market..

 

Hindustan Unilever (HUL) is the biggest advertiser in the personal care category across print and television media. Toilet Soaps had a 1/4th share in the entire personal care advertising in print, while the category led the advertising with 30 per cent share on TV. HUL advertised with 42 brands in which Lux soap, Fair Lovely Multivitamin and Pepsodent Complete Germi Check had the maximum share. .[2]

 

 

Publised in Business.in.com by Sawmya roy on August 18,2009 Godrej No. 1 has gained market share but it is more due to HUL’s bad judgments in assessing consumer sentiment. No. 1’s growth figures have come from rural areas. During the peak of the slowdown last year, rural buying was largely unaffected even as urban figures dropped. But rural areas are sensitive to price changes. Prices of palm oil, a key ingredient in soap, started rising and HUL imposed steep price hikes. Godrej waited and increased prices slowly and at a much lower rate than HUL.

They drove home the advantage that they had been handed. Once consumers started trying out Godrej No. 1, the brand managers used a combination of clear mass market, rural positioning and a rapid increase in distribution to cement the gains. The company sharply increased its rural distribution network. No. 1 ads now appear only on Doordarshan because it is cheaper and ubiquitous in the areas where they want to be. Spending only on Doordarshan also means that Godrej No. 1’s ad to sales ratio is just 1 percent compared to the industry figure of around 8 to 10 percent.

No. 1 was traditionally popular in Punjab and Haryana but not known in other states. It has doubled distribution in Uttar Pradesh in the last two years to compete with large competitors. The Godrej group re-branding campaign also helped. But No. 1 is not alone in its success. Wipro has also worked with micro finance institutions to promote its soaps in rural areas. .[3}

Published: June 03, 2010 in India [email protected] In Indian villages, though, a marriage in the family means shopping not just for the trousers and home appliances — it also means buying hair dye, henna and bigger bars of soap. For many households in rural India, what the rest of the world considers everyday products are luxuries to be indulged in once in a while.

Consumer products companies in India are working overtime to change that thinking. Godrej Consumer Products Ltd (GCPL), though, ensuring its products fly off village store shelves has become the governing ambition. In April 2009, Godrej initiated the ambitious Project Dharti (Dharti is the Hindi word for Earth) to increase the company’s focus on rural India. The program’s goals are: to generate sales in rural India that overtake within a year the contribution of the country’s urban areas; that rural sales growth will outstrip overall sales increases; and that GCPL’s distribution network within three years will have expanded to 50,000 villages and 8,000 small towns across India.

GCPL is the second largest bath soap manufacturer in India, after Hindustan Unilever. The company claims its Godrej No.1 brand is the best-selling Grade 1; toilet soaps ,have a higher fat content than bathing bars) and the market leader across north India.

Rural sales’ contribution to total revenue has increased to 42%, and GCPL has gained a percentage point each in market share of hair color and soaps. Godrej increased its Market Share with the Advertising in Rural Areas with their Discount Schemes. .

GCPL always have been mainly focusing on

“Customize product and communication; build recognition through demonstration; build word of mouth for the brand; and build access through innovation and a cost-effective distribution channel.”

Conventional wisdom says rural consumers need customized products designed to suit their needs, their conditions and their wallets. But they also want products similar to those available in urban markets, so many believe that small compromises in product quality are acceptable. “Rural consumers want the same product as urban shoppers. If you compromise on quality to make it affordable now, they will shun your brand when their income levels increase.

The solution lies in customizing the size of the offering, not the product itself. GCPL has done just that, introducing smaller packages of the same products, at price points rural consumers can afford. Smaller bars of soap, herbal henna packets for 10 cents, sachets of powder hair dye and talcum powder for 20 cents act as entry points for rural consumers, who return for larger packs when their budgets permit. Sales of consumer products in rural markets peak immediately after the harvest and during festivals and the wedding season (September through December), when many of India’s 600,000 villages are in a have-cash-will-spend mood.

Company executives say the response to the smaller packages has been strong, especially in South India, where the smallest available size of GCPL’s Cinthol soap retails at 50 cents. An 11-cent bar has been added to the portfolio. There was Aggressive advertising for their smaller pack

Communication and promotion strategies also need to be tailored to suit rural customer needs. It starts with the media plan. For value brands like Godrej No.1, GCPL has stopped advertising on private cable and satellite channels, preferring the cheaper and more widely received government-owned television network, Doordarshan, as well as All-India Radio. In addition, it advertises on regional language TV channels and in local publications. “It is more cost-effective to be on Doordarshan since the share of voice is higher,”. The hair color brands and soap brand Cinthol also retain a more conventional media plan, including ads on cable television.

The commercials that appear on regional TV channels and Doordarshan are quite different from those on cable television, keeping local sentiments in mind. For instance, visuals of people playing with their hair or running their fingers through their hair would be frowned upon in conservative villages, although it’s a common image in hair care product advertising across the country.. “The rural consumer is just evolving from the economics of necessity to the economics of gratification. Unlike the urban consumer, he is largely a first-time user of several product categories, be it FMCG or durables,” he adds. Regular below-the-line activity such as in-store demonstrations and stalls at village fairs and farmers’ meets are also forming part of GCPL’s rural marketing strategy.

Barbers as Brand Ambassadors

GCPL is counting on word-of-mouth brand building for its Expert line of hair color products and Toiletry soaps . The company is reaching out to 50,000 barbers and salons in nine states, offering to engage them in a co-branding exercise. Under the program, the salons add the “Expert” tag to their names, with all fixtures — including mirrors and chairs — displaying the GCPL brand logo prominently. The salons will also be provided grooming kits including the hair dye, mixing bowl and brush, as well as other GCPL products such as talcum powder and shaving cream. “Most people turn to their hairdressers for advice when they decide to color their hair. So it makes sense for us to influence the influencer,” .[4]

Publised in Times of India by Namrata Singh & Rupali Mukherjee Demand for top-of-the- drawer FMCG products is no longer restricted to urban India. The rural consumer has emerged as an important cog in the sales growth of premium offerings. Clever pricing, rising aspirations and new marketing mantras are driving this trend.

With rural consumers warming up to branded products, the urban-rural divide is fading away faster than one can imagine. There is now very little difference between the aspirations of rural consumers and their urban counterparts. Certain growth statistics have shattered the myth that the rural consumer is content with unbranded or mass-end products alone and gives a strong indication that rural market consumption has picked up and is accelerating faster than urban markets. This has led to their changing their consumption pattern.

Dove shampoo, a premium-end product, reported a growth of over 100% in the rural market during January-October 2010 over the same period last year. In fact, Dove grew faster than its mid-priced cousin, Sunsilk shampoo, which reported a growth of 14% in rural India during the period.

Although analysts explain that the high growth is due to a lower base and that actual sales number would be smaller given the recent introduction of the brand, one cannot overlook the fact that there is a demand for such products and marketers can no longer underestimate the aspirations of the rural consumer.

Gone are the days when the rural consumer was content with using mustard oil and plain soap.Today,he/she is seeking special branded products for daily skin and healthcare needs. Rural consumers across income segments are showing a marked propensity towards spending on premium high-quality products, which are backed by strong brand values, For instance, take food products. Not only has the demand for cream biscuits gone up in rural markets, the sale of instant noodles, too,is growing nearly twice as fast in the rural market compared to the urban one. What’s more, one in every six rural buyer of hair dye now uses colours other than black something, which would have been dubbed indulgence a decade ago. Even seemingly urbane brands in categories like deodorants and fabric softeners are said to be growing much faster in rural India than urban. [5]

RESEARCH METHODOLOGY

Research methodology is the arrangement of condition for collection and analysis of data in a manner that aims to combine the relevance to the research purpose with economy in procedure. Research is conceptual structure within which research is conducted. It is way to systematically study and solve the research problems.

Research purpose can be divided into three categories:

Exploratory research: – It is also termed as formulate research the main purpose of such research is to gain familiarity with a phenomenon or to achieve new insights.

Descriptive research: – This portrays the particular characteristics of a particular individual situation or a group.

Casual research: – Conducted to identify “cause and effect” relationships.

A close end questionnaire was constructed for the survey. A questionnaire comprising a set of questions was presented to respondents for their answers.

Data Collection:

PRIMARY DATA:

The first-hand information bearing on any research is the one which has been collected by the researcher. The data here is collected through:

A structured questionnaire

SECONDARY DATA:

The data which has already been collected, complied and presented earlier by any agency may be used for purpose of investigation. The data collected through:

Various publications in form of annual reports, various papers and journals published from time to time.

Statistical Tool

After collection of data another work necessary for any data collector is to correctly analysis that data. So statistical tools helps us to correctly analysis the data. The statistical tool used here is the software SPSS version 16.0.

Ordinal Scale: – An ordinal scale not only categorizes the variables in such a way as to denote differences among the various categories, it also rank-orders the categories in some meaningful way. With any variable for which the categories are to be ordered according to some preference the ordinal scale would be used. The preference would be ranked and numbered 1, 2 and so on.

Nominal Scale: – A nominal scale is one that allows the researcher to assign subjects to certain categories or groups. For example with respect to the variable of gender, respondents can be grouped into two categories male and female. These two groups can be assigned code numbers 1 and 2. These numbers serve as simple and convenient category labels with no intrinsic value, other than to assign respondents to one of two non-overlapping or mutually exclusive categories.

Objectives of the Study:

To find out the impact of advertising on Brand Performance.

To know the consumer Perception of a brand after Advertising.

Hypothesis

Null Hypothesis: There is No significant impact of advertisement on Purchasing of toilet soaps in Rural India

Alternative Hypothesis: There would be significant impact of advertisement on Purchasing of Toilet Soaps in Rural India.

Research Design:

The research is exploratory in nature. Explorative studies valuable means of finding out ‘what is happening’ to seek new insights to ask questions and to access phenomenon in a new light. The study involves finding out impact of advertising on Brand Performance and the consumer Perception of a Brand after Advertising.

Sampling Technique:

Sample Size- Rural Consumers -150

Rural Retailers -50

Sampling Method- Random Sampling Method ,

Research Instrument – Questionnaire

Research Type -Exploratory Research

The date was collected from filling of Questionnaires from Rural Customers and Retailers in the outskirts of Ghaziabad and Noida and the sampling Method used is Random Sampling Method.

TESTS :

CHI-SQUARE TEST :

A chi-square test (also chi squared test or Ï‡2 test) is any statistical hypothesis testin which the sampling distribution of the test statistic is a chi-square distribution  when the null hypothesis is true, or any in which this is asymptotically true, meaning that the sampling distribution (if the null hypothesis is true) can be made to approximate a chi-square distribution as closely as desired by making the sample size large enough.

Procedure:

Set up the null hypothesis that there is no significant difference between the observed and expected value.

We compute the value of CHI- square by using the formula

CHI-square = ∑ χ2=Σ (( Oi- Ei)2/Ei)

O- Observed value

E- Expected value

Degree of freedoms=(R-1)(C-1)

Level of significance=5

LIMITATIONS OF THE STUDY:

Research is based on the collection of data from both primary and secondary sources.

There may be a possibility of biasness on the part of some respondents, but very much care has been taken to make this report unbiased.

Some respondents might not give the correct information due to their lack of interest and shortage of time.

Time constraint.

All the information is based on primary and secondary data that has its own limitations.

RESULTS AND DISCUSSIONS

Analysis on Toilet Soap Industry in India

There are various toilet soaps which are sold in the Rural Market but same stay for long time and some do not and the main reason for this that companies drop in their Advertising Efforts and but companies like HUL,Godrej,Nirma Have excelled in the Rural Market because of their continuous Marketing Efforts throughout the years .

The Target market chosen by me was people in the rural areas and I used random sampling method and chose people from the age group of 18-45

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