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  1. 1. CENTRE FOR MANAGEMENT PGDBM 2013-15 BATCH: Visheshdalal VidhiParmar PGDBM 2012-14 BATCH: AnishiKhetan (Marketing Specialization)
  3. 3. EXECUTIVE SUMMARY Market :- The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1 billion. FMCG in India has a strong and competitive MNC presence across the entire value chain. predicted that the FMCG market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. Middle class and the rural segments of the Indian population are the most promising market for FMCG. The Indian Economy is surging ahead by leaps and bounds, keeping pace with rapid urbanization, increased literacy levels, and rising per capita income. The big firms are growing bigger and small-time companies are catching up as well. The Indian hair care market generated total revenues of $1.4 billion in 2009. Drivers & Challenges Drivers Increasing disposable income. Growth in fashion conscious consumers. Rise in awareness. Increase in male Grooming. Challenges Usage of harmful chemicals. Need to position their products. Work on the advertisements. Same products for urban and rural markets.
  4. 4. Current Trends:Usage of herbal products Tie-up with salons 3D colour service Brands seek to be natural Major players:Player 1 Godrej Player 2 L ‘Oreal Player 3 Garnier Player 4 Indica Player 5 Streax Player 6 Revlon Solutions:Change its looks or appearance. Tie up with Salons. Increasing the price of the product would have a superiority value. Provide essential features.
  5. 5. INTRODUCTION Established in 1897, the Godrej group has grown in India from the days of the charkha to nights at the call centres. Their founder, Ardeshir Godrej, lawyer-turned-locksmith, was a persistent inventor and a strong visionary who could see the spark in the future. His inventions, manufactured by his brother Pirojsha Godrej, were the foundation of today’s Godrej Empire. One of India’s most trusted brand, Godrej enjoys the patronage and trust of around 500 million Indians every single day. Their customers mean the world to them. With 7 major companies with interests in real estate, FMCG, industrial engineering, appliances, furniture, security andagri care – to name a few – their turnover crosses 3.3 billion dollars. One ma think of Godrej as such an integral part of India – like the bhangara or the kurta – but you may be surprised to know that 26% of their business is done overseas. Their presence in more than 60 countries ensures that their customers are at home with Godrej no matter where they go. With brands you can believe in, service excellence you can count on and the promise of brighter living for every customer, Godrej knows what makes India tick today. ABOUT GODREJ CONSUMER PRODUCTS LTD Godrej Consumer Products Ltd is one of the leading Fast Moving Consumer Goods (FMCG) companies in India. The company is the market leader in personal, hair, household and fabric care segments. They are having their manufacturing facilities at Malanpur in Madhya Pradesh, Baddi in Himachal Pradesh, Guwahati in Assam and Namchi in Sikkim. The company operates in two segments namely soaps and personal care. The soap segment includes the Godrej brand and other brand toilet soaps and personal care segment includes hair colour, shaving cream and gel, talcum powder, deodorant, fairness cream, liquid detergent and other toiletries. They also undertake contract manufacturing of toilet soap for third parties.
  6. 6. The company is among the largest marketer of toilet soaps in the country with leading brands such as Cinthol, Fairglow, and Godrej No 1. Fairglow, India's first fairness soap created marketing history as one of the most successful innovations. The company is also the leader in the hair colour category in India. They are having a vast product range from Godrej Renew Colourssoft Liquid Hair Colours, Godrej Liquid & Powder Hair Dyes to Godrej Kesh Kala Oil, Nupur based Hair Dyes. Their Liquid Detergent brand EZEE is the market leader in that category. Godrej Consumer Products Ltd was incorporated on November 29, 2000 as a public company and was promoted by Godrej & Boyce Manufacturing Company. The liabilities and assets pertaining to the consumer products business of Godrej Soaps Ltd together with the factories situated at Malanpur and Silvassa along with the marketing, selling, distribution and related facilities have been transferred to the company with effect form April 1, 2001. Also, the company set up a new factory at Guwahati in Assam for manufacture of hair colour and toiletries during the year 2001-02. During the year 2002-03, the company launched Godrej No. 1 Ayurvedic soap and Godrej FairGlow Saffron in the southern markets of Karnataka and Andhra Pradesh. Also, they entered the unbranded mehendi powder market by launching 100 per cent natural mehendi branded 'Godrej Nupur'. In May 2003, the company acquired the rademark and copyright relating to the brand Snuggy for a total consideration of Rs 5.9 crore and re-launched as Godrej Snuggy baby diapers in the market. The company commenced commercial production at their manufacturing unit at Baddi in Himachal Pradesh. During the year 2005-06, the company launched many major products which include CintholDeo Soap, Godrej Renew Cream Hair Colour, Godrej Herbal Powder Hair Dye, Cinthol Hand Sanitiser, Godrej Shave Gel and Godrej Snuggy baby diapers. In October 2005, the company acquired 100% ownership in in Keyline Brands Ltd, a UK based FMCG. This acquisition gives the company, ownership of several international strong brands and trademarks including Cuticura, Erasmic and Aaprt in many countries.
  7. 7. During the year 2006-07, the company commenced commercial production at their two new manufacturing units, one at Baddi in Himachal Pradesh for manufacture of toilet soap and the other at Namchi in Sikkim for manufacture of Powder Hair Colours. In September 2006, the company acquired the South African business of Rapidol, UK with their subsidiary Rapidol International. In March 2007, they formed a 50:50 joint venture company known as Godrej SCA Hygiene Ltd along with SCA Hygiene Products AB, Sweden which will manufacture and market paper based absorbent hygiene products, specifically sanitary napkins and baby diapers, in India, Nepal and Bhutan. During the year 2007-08, the company launched Godrej No 1 soap in Papaya and Lotus variant and Godrej Renew Powder Hair Colour. They re-launched their flagship brand Cinthol in a new range of soaps, talc and deo sprays. Cinthol Regular and Fresh soaps were also launched in an attractive new packaging. Their joint venture company, Godrej SCA Hygiene Ltd launched Libero baby diapers, Tena and Libresse and also they re-launched Snuggy brand as 'Snuggy Dry' in the states of Kerala and Tamil Nadu. The company has been awarded the Platinum prize in the Hair Dye category by Readers Digest in the 'Trusted Brand - Asia 2007' awards. There were ranked 6th in the 'Best Employers Study' conducted by Hewitt Associate along with The Economic Times, 9th in the Great Places to Work survey conducted by Great Places to Work Inc., USA in 2008 and 14th on the Best Companies to Work For in India Survey conducted by Business Today and Mercer TNS. Malanpur factory won the Platinum Award in the India Manufacturing Excellence Awards (IMEA) by Frost & Sullivan, in the Chemicals Category and also received a commendation certificate for Strong Commitment to Excel in the CII-EXIM Bank Award for Business Excellence. In October 2007, the company acquired Global Mid East FZE which was 100% subsidiary of Godrej International Ltd. In April 208, the company acquired 100% stake in Kinky Group Properties Ltd, South Africa which is one of the leaders in South African Hair Category. This acquisition gives the company an opportunity to enter into a new line of business and diversify their hair product portfolio. In May 2008, the company commenced commercial production in their new Chemical and Soap Noodle Plant at Malanpur in Madhya Pradesh.
  8. 8. KEY CHALLENGES FOR GODREJ Godrej needs to position their hair colour products. Unlike their other product lines where it is not necessary to segment the market, the hair colour segment has various different audiences and they cannot cater to all. Consumers don’t trust Godrej hair colour products in the same manner they trust their other products like Godrej locks, Godrej Fridge, Godrej cupboards etc. Godrej concentrates more on their other product lines which are already doing very well in the market. They need to focus on their other potential product like hair colour. Also they cater the same hair colour products both to the rural as well as the urban crowd. Another main challenge which Godrej is facing is the fact that they are not able to retain their customers. The case clearly states that consumers enter this segment by using Godrej products but later shift to other products like L’Oreal. Another challenge is that of the perception majority Indians have with regards to the haircolouring. They still think that colouring their hair will lead to hair fall and other such problems. In their advertisements, they concentrate more on how one looks not on how safe the product is. Hair to any consumer is very sensitive and one will first think about how safe is the product rather that how good they look. Another problem in their advertisements is that it targets only the older generation. They are missing out on one of the key main target audience, the millennial. Godrej has still not started to cater to the Salon market. Many of the consumers who colour their hair trust their stylist blindly.
  9. 9. THE CONSUMER INSIGHTS Here we have taken into consideration the various responses of consumers both negative and positive. We asked consumers what they think about the hair care sector and basis of that qualitative survey we got the following consumer insights. (Age group 18-45, households, working, students.) Negative Positive Head got bulged & skin got rashes & skin I like it because it is ammonia free, colour changed Failure model / some of the chemical mixing It leaves a nice black effect on my hair. is not in proper I found that the packs were not company Godrej Expert Powder Hair Colour is Perfect sealed for my Hair One packet didn’t have both the gloves and Every company making products a bit one had only one glove. harmful to users in India Consumer Relations, when called they don’t It does not burn the scalp. answer Am so disheartened that the company in The natural colour/henna is very good and which I have invested is so unconcerned, I healthy for hair feel that I have invested in wrong company They want to mislead customers to think that Smell of the powder is so natural and the product is non-toxic and non-irritating. impressive I used this product just once in my life and Godrej is a very good old brand and they that too last year a day after my birthday have a very good collection of colours and when I saw a grey hair protruding outta my the best part is the price for the sachet dey head. have rs.10/- only I realized was that my hair became dry by the next day. Neither it softens hair nor it adds shine to it but one may have hair loss as its side-effect. The consumer prefers salon treatments for hair colour especially in India and L’Oreal is known for making the salon endorse their brand name. Certain salons use only L’Oreal products and thus Godrej doesn't get a chance. The Indian consumer does not like the DIY (do it yourself) treatments.Especially when it comes to hair and beauty.
  10. 10. SOLUTIONS India has a lot of people with different skin tones from fair to dark and thus a lot of different shades of colour are required for hair colour. L’Oreal and other brands provide this and thus people end up using these products especially in the urban sector. Godrej should follow the same strategy in order to compete in the urban market.v some of the strategies suggested by us are as follows: Marketing Mix: o Product 1. Start with an entire new range of premium products. 2. Create a sub brand for this sector. 3. Providing essential features like a protective serum or a better after care conditioning product. 4. Different products for rural and urban 5. More variety in hair colours. 6. Show consumers different uses of the product. o Price 1. Different pricing policy for urban and rural markets. 2. Probably increasing the price of the product would have a superiority value on the customers mind while buying the product. Because the mindset of the customer is 'the more expensive the better the quality, especially in this segment. o Place 1. Tie ups with salons 2. One strategy Godrej could try is tie up with salons in different areas to use their products. 3. Tie up with malls across cities. o Promotion 1. A lot of beauty and hair training schools have a tie up with brands like L’Oreal. Hence the hair experts’ end up using those hair colours on their customers. 2. Different events in colleges, especially related to fashion.
  11. 11. 3. Social media platforms like facebook, ttwitter, instagram, etc. 4. School Contests 5. Tie ups with Beauty Contests like Miss India, Miss Asia etc. 6. Training institutes of air hostess. 7. Joint / Tie up with F TV. STPD o Segmentation 1. Middle age group 35-50 2. Younger generation 18-34 o Target Market 1. Youth and mid generation. o Positioning 1. For better repositioning of the Godrej product it is essential to have a better brand ambassador who the women look up to or want to look like. This would attract more customers. 2. They could use brand ambassador like Parineeti Chopra for the youth and Madhuri Dixit for the middle generation. 3. Godrej does well with the rural sector with the specific hair dye power but to penetrate the urban sector major repositioning is required. o Differentiation 1. Price Differentiation: low price for rural market and high price for urban market.