retail management case study on super shampoo

SUPER SHAMPOO (Market Strategy) Renu

Aishwarya

Ajay

Navdeep

Manoj

AJ/ Ajay K Raina; PGDM 2012-14 Era Business School, New Delhi


Introduction

Suresh Venkataraman is a successful industrial marketer

in South India.

Fascinated by the power of consumer products in

“Rural Market”.

Decides to launch a new cosmetic product with a

brand named “Super Shampoo”

He wants to make this brand successful despite

some big players already ruling the market.

Not formally educated in management studies,

he does have adequate experience.

Financial muscles not very strong.

Decides to test waters through a survey.

This study is based in 2010.


The market consisted of between 720 and 790 million

consumers with around 160 million households, and comprised

12.2 per cent of the world‟s population.

The market grew 25% in 2008 and was projected to be around

US$ 425 million in 2010; double the size of 2007.

FMCG category can be broadly split into household care,

personal care and food and beverages.

The FMCG market in India was estimated at between $15 B to

$18 Billion and likely to grow to US$33 billion by 2015.

57 per cent of these figures was contributed by rural India.

The growth of rural India in the contribution to FMCG sector is

evident from the fact that urban markets that were once 50 per

cent of total FMCG, had reduced to 29 per as of 2010.

Indian Rural Market Scene

Target Market : Rural India


75% rural and 25% urban.

25 years differential.

Lot of traction with big brands rushing in to encash.

Aim is to sell lower priced branded products.

Aspiration based communication adopted by many

brands.

BoP Market


Over last two decades:-

Percentage of BPL families declined from 46% to 27%

Rural Literacy level improved from 36% to 59%

42,000 Haats (periodic markets)

25,000 Melas (exhibitions)

7,000 Mandis (agri markets)

3,80,000 PDS outlets

32,000 Bank branches

DSCL Haryali stores

M & M Shubh Labh stores

TATA/Rallis Kisan Kendras

Escorts rural stores

Warnabazaar, Maharashtra (annual sale Rs 40 crore)

Changing Face of Rural India


Rural India buys…….

Products more often (mostly weekly).

Buys small packs, low unit price more important than

economy.

In rural India, brands rarely fight with each other; they just

have to be present at the right place.

Many brands are building strong rural base without much

advertising support.

Fewer brand choices in rural: number of FMCG brand in rural

is half that of urban.

Buy value for money, not cheap products.

No longer a homogeneous mass.

Consumer Insights


Existing Brands


Food for thought

FOR

Mr Venkataraman


Biggest hair problem – Hair fall.

Anti-dandruff market – fastest growing.

Benefit segments:-

Cosmetics.

Anti-dandruff.

Herbal.

Benefit Based Segmentation: Shampoo


How do the non-users perceive the category of shampoos?

Are they only influenced by functional attributes?

Do they attach symbolic benefits to shampoo?

What attitudes are developed in users with low incomes and where the key usage barrier is affordability?

What would it take a new shampoo entrant to generate likeability and persuade consumers to try the brand?

SURVEY

Key Questions for Mr V.


Sample : Females 18-50 years bracket

Non-user/ low frequency users.

Income below 75K and 75-150K.

Significant TV consumptions.

Sampling Unit : Households since incomes linked.

Sampling Frame : Gender, Age, Income, Consumption, Media.

Strata: Household penetration and category awareness.

Extent : Rural Karnatka (Bidadi, Hoskote and Jigani).

Technique : Probability sampling with random sampling.

External agency.

Note: In the region of interest, Clinic Plus (Cosmetic), H&S (Anti-dandruff) and Chick (Cosmetic) brands are already operating.

Survey: Terms of Reference


Families of 4-5 members.

Husband, the main bread earner through farming, sales, factory work etc.

Usually the wife between 25 and 40 years.

Low income households with aspirations and dreams to do big – Wealth + Societal Respect.

Want to set examples and define lifestyles for their kind.

Women aspired to work.

Regular TV viewing – entertainment + informative.

Ads watched because of currency of issues; celebrities matter but do not make reasons.

Radio also a favourite but print media generally not favoured except fliers and job ads.

Respondents Background…..


FMCG Buying Pattern:-

2000-2500 for grocery + 500 for cosmetics, on an

average.

Grocery shops; usually on weekly basis.

Lady the decision maker.

TV, Word-of-mouth and In-store – in the order of

precedence.

Not averse to trials of new products but smaller

units preferred; mainly TV guided and through

Word-of-mouth.

……Respondents Background

Inputs From Survey and

Deductions


Deductions:-

Influenced by TV (not in isolation for new products), friends and

shopkeepers.

Not hunting for information on beauty products.

Looking good and grooming are important.

Celebrities add trust and faith.

Way Ahead:-

Word-of-mouth is the most important; free trials, spot

promotions, higher visibility and higher incentives to retailers will

work.

Reliance on TV solely will not work.

Benefit and value of money need to be highlighted.

Attitudes, Interest and Opinions


Deductions:-

Vast potential available; 24%

usage.

High penetration but low PCI.

TV main player for category

awareness.

Huge tilt towards smaller

packaging.

Cosmetics and health

important; general aversion to

chemicals.

Price is important.

New products in small sizes.

Way Ahead………

The Potential


Power of “S”

Primary SKU.

Invention of sachets “revolutionized “ the

FMCG market.

It opened B2C untapped market in rural areas.

Unaffordable products became affordable for common people.

Luxury comes in “Sachets”.

Salience - Urban: Rural=10:90 (bottles:‟S‟).

99% of respondents have preference for „S‟; Mr V may have no choice!


Cosmetics: Mr V has to concentrate on this issue

while promoting/marketing since it is the most

important one. Celebrities likely to prove cost

effective.

Health and dandruff : Such benefits need to be

highlighted.

Herbal: The product composition, if made

chemical free, will find more buyers.

Fragrance – flowery.

Cost : It is a price sensitive market there.

Usage Issues


The survey shows the preference for the following past

times/interests among respondents:-

TV watching – need for electronic ads; possibility of

exploring local media/ cable networks to reduce

costs..

Spending time with friends- „word of mouth‟ factor.

Shopping – In store angle + awareness of channel

partner + Incentives + Visibility.

Awareness of key segments, like educated and

socially inclined people will act as a force multiplier.

Use of haats, mandis and melas to improve visibility

and availability.

Targeting Past Times


The following pattern emerges wrt shampoo:-

Importance of looking good- promote „look-good; feel good‟.

Celebrities matter – endorsements.

Advice of friends and relatives- word of mouth.

Lady power (the decision maker) – target audience.

Retailer‟s advice is important – awareness and incentives.

Fear of chemicals – herbal composition.

If liked, will repurchase – once accepted, will have loyal customers‟;

So, value for money, coupled with family well-being needs to

communicated.

Focusing on the Belief System


Recommended Product Levels • Core Benefit-To clean hair

• Basic Product- Shampoo in a

sachet; inexpensive and

convenient.

• Expected Product – Beautiful,

strong and long hair.

• Augmented Product – No

harmful chemicals; herbal/

natural based.

• Potential Product-

Conditioner enriched,

colour/ henna friendly.

WASH

HAIR

Beautiful hair

Less chemicals

Convenient & Cheap

Conditioner

A Staple Convenience Product


Form- Distinct shape of sachet.

Features – Herbal but high on cosmetic value; conditioner later.

Customization – Fragrance, quantity (eg one time use pouches

for family.

Performance Quality – Aim for graduation to superior from

high since target is cost sensitive.

Likely Product Differentiation


• Super Shampoo must position itself as the rural

brand that has local appeal.

• It must give the feel of a star image to users.

• It may use herbal product (shikakai) as its main

ingredients.

Positioning


Product Price

Place Promotion

Packaging

(the 5th one)

Analysis of 4P’s


Why Super Shampoo?

Product

Super shampoo may be

based on “Shikakai”.

Characteristics of producing

more foam.

Flowery Essence (a variety of

it) with focus on shine and

texture.

Price

To target lower income

group.

“More for Less” Strategy.

50% more for ₹1.

Competitive Price comparing

with other brands.


Continued…..

Place

Untapped “rural market”.

160 million households.

Major player of economic growth.

Business of around US$ 425

million.

The key in rural markets lies in

availability and, thus, distribution

is very important.

Use of existing channels like

haats, mandis, rural malls and

retailers would work for Mr V.

Festivals and celebrations.

Promotion

“Super” the name itself.

TV has been indicated as the

main influencer in the survey.

Following “Word-Of- Mouth”

Strategy is also likely to

work, as per survey.

Indirect Advertisement by

others like retailers.


Recommended Strategies Promotion •Regional actor as brand ambassador

•Television (Local cable operators can be cost effective)

•Radio

•Newspaper

•Free Satches

•Word of Mouth

Keeping it Simple • Available

• Affordable

• Acceptable

• Awareness


5th P- Packaging

„S‟ stands favoured.

Help in reducing cost.

Attractive Packaging.

Easy recognition.

Easy to carry & transport.

Waste disposal.


Conclusion

“Value for Money”

proposition

Supported by distribution

penetration

TV and “Word-of Mouth”

publicity.

More for less strategy.

retail management case study on super shampoo

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