Package Sizes in Emerging Markets

Sameer Mathur Assistant Professor (Marketing) www.smathur.com Package Sizes in Emerging Markets

Emerging Markets versus S&P500 S&P500 MSCI

Bottom of the Pyramid Population (millions) 4000 2000 500 < $2,000 $2,000 – $20,000 > $20,000 Source: Harvard Business Review, 2002 Income (US$)

A family in Bangalore

A “Chawl” in Mumbai

Commuters in New Delhi

How do global firms (e.g. P&G) sell packaged goods (e.g. shampoo) to middle-class consumers in emerging markets?

Package Sizes in Emerging Markets 1980g 4140g 6240g 200g 500g 1000g $0.25 $0.60 $1.25 $7.94 $15.19

One Approach: Smaller Package Sizes United States India 420 ml (14 fl oz) $4.65 90 ml (3 fl oz) $1.25

2007 Shampoo Revenue in India Source: A. C. Nielsen, India

2007 Soap Revenue in India Source: A. C. Nielsen, India

Prices of Bathing Soap and Shampoo

Sales of Bathing Soap and Shampoo 80% of bars of bathing soap sold in India, is in 100g or smaller package sizes Only 7% of all shampoo sold in India is in bottle larger than 200ml

Revenue from Bathing Soap and Shampoo 73% revenue comes from sales of bars of soap 100g or smaller in size. The 6ml shampoo sachets surprisingly account for less than 1% of revenue. 50ml and 100ml bottles of shampoo account for 73% of revenue

Another Approach: Ignore the poor
Not sold in a smaller package size
Too expensive for the masses

Competition in Emerging Markets High Quality Low Quality Detergent Soap Shampoo

Bottom of the Pyramid Population (millions) 4000 2000 500 < $2,000 $2,000 – $20,000 > $20,000 Source: Harvard Business Review, 2002 Income (US$)

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PLEASE CLICK BELOW TO SEE RELATED CONTENT: Introduction to Global Marketing Sameer Mathur, Ph.D. Assistant Professor (Marketing), McGill University www.smathur.com

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Package Sizes in Emerging Markets

by Sameer Mathur on Nov 16, 2010

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