IntroductionToilet soaps account for the largest single share of about 10% in the Rs 480 billion FMCGmarket. The toilet market is getting saturated at a high penetration level of 98% and is growing ata very modest rate. The Indian Soap Industry includes about 700 companies with combinedannual revenue of about $17 billion. Soap manufacturers originally targeted their products to thelowest income level in urban as well as rural areas, positioning their brands as a way to removedirt and clean the body. For some brands, that positioning persists even today with a focus onremoval of body odor and keeping the user healthy. However, soap positioning is movingtowards skin care as a value-added benefit.People belonging to different income levels use different brands, which fall under differentsegments (see table below), but all income levels use soaps, making it the second largestcategory in India (detergents are number one). Rural consumers in India constitute 70% of thepopulation. Rural demand is growing, with more and more soap brands being launched in thediscount segment targeting the lower socio-economic strata of consumers.Soap Price (per 75 gram cake)Segment in rupees in US$Carbolic* 5.00 10 centsDiscount 7.00 15 centsPopular 11.00 23 centsPremium 17.00 36 centsSuper Premium 35.00 75 cents* The carbolic segment consists of soap that has crysellic acid (e.g. carbolic acid) as an active ingredientto remove body odor. These soaps have a strong medicated/germ killing connotation.Soap industry in IndiaIndian Soap Industry has tremendous opportunities in the manufacturing companies of soaps forGraduates and post graduates in the areas of Marketing, Finance, Administration, Advertisingand even opportunities for the models to act in ads for the soaps.
Consumer preferences are varied and are more regionally specific. India is divided into fourregions:North regionConsumers in the North prefer pink colored soaps, which have floral profiles. Here the fragrancepreference is for more sophisticated profiles reflecting their lifestyles. Freshness soaps with limeand citrus notes are also popular preferences as the climate in the North is very hot andcitrus/lime scented soaps are seen to be refreshing.East regionThe East is not a big soap market; hence no particular preference skews.West regionConsumers in the West exhibit preferences for strong, impactful fragrances and somewhatharsher profiles compared to the North. Preferences are more for the pink soaps with floralfragrances, primarily rose, which are positioned on the beauty platform.South regionIn the South, the skew is towards specific soap segments like the Herbal/Ayurvedic profiles andalso the Sandal profiles. Consumers here do not exhibit high brand loyalty and are ready toexperiment and try out new brands. Hence, most fast moving consumer goods companies tend tolaunch their new brands in these markets, which they call test launch markets.The market is littered over with several leading national and global brands and a large number ofsmall brands which have limited markets. The popular and premium brands include Lifebuoy,Lux, Cinthol, Liril, Rexona, Shikaki, Nirma, Dettol etc.Dettol in IndiaDettol is the trade name for a line of hygiene products manufactured by Reckitt Benckiser. Thebrand started its journey in 1933 as antiseptic liquid, but over the years, it has been extended to a
number of product categories like toilet soaps, liquid Handwash, liquid Bodywash, shaving Creamand plaster strips. As a brand, it is ranked the 48th most-trusted one in India by The Brand TrustReport 2011. Dettol voted as India’s Most Trusted Brand (ORG Marg - Brand Equity Survey).Soap is primarily targeted towards women, as they are the chief decision-makers in terms of soappurchase. Medicated positioning like germ killing and anti-bacterial are marketed to families.About 75% of soap can be bought through different types of outlets like Kirana store, Medicalstore, Department store, pan-beedi store etc.HistoryThe origins of personal cleanliness date back to prehistoric times. Since water is essential forlife, the earliest people lived near water and knew something about its cleansing properties.Records show that ancient Egyptians bathed regularly. Soap got its name, according to an ancientRoman legend, from Mount Sapo, where animals were sacrificed.The following table consists of time duration of use and manufacturing of soap all overworld.Red dot (.) indicate area of usage of soapNumbers (1, 2, 3…) below red dot indicates usage of soap accordingly. This is describing infollowing table.
No Time Duration Country1 2800 BC production of soap-like materials in ancient Babylon, Iraq2 1550 BC The Ebers papyrus indicates the ancient Egyptians bathed regularly andcombined animal and vegetable oils with alkaline salts to create a soap3 175 AD In Athens, Rome4 150 AD People started use soap in Germany5 7rdcentury AD From the beginning of the seventh century, soap was produced inNablus (West Bank, Palestine), Kufa (Iraq) and Basra (Iraq)6 800 AD Soap making becomes recognized as an art in Italy and Spain7 1200 AD The English began making soap during the 12th century8 1725 AD In united state of America9 1897 AD The first company created was North West Soap Company, the soapmanufacturing plant in India situated in the city of Meerut, UttarPradesh.10 1930 AD The Tata Oil Mills Company and its first branded soaps appeared on themarket in the early 1930s at Kerala, indiaOverview if industry in marketWiproAccording to market researcher Nielsens data, Reckitt was the third-largest soap maker in thecountry with a 9.1% share in the market in value terms in June this 2011, ahead of Azim Premji-promoted Wipro, which had 8.1% share with brands such as Santoor and Chandrika.
Hindustan Unilever, with brands such as Lifebuoy and Lux continues to be a clear leader in thesegment with 45% share, followed by Godrej Consumers, according to Nielsen data.P&GNirma Consumer Care Ltd (NCCL), a wholly-owned subsidiary of Nirma Ltd, has announced itsexclusive marketing and manufacturing arrangement by which Nirma will bring Camay, aleading global beauty soap brand to the Indian consumer.As part of the strategy, NCCL has obtained the license for manufacturing and marketing Camay,from Procter & Gamble Home Products Ltd for an undisclosed licensee fee with effect fromOctober 8, 2002, according to Nirma Consumer Care Ltd. chairman and managing director HirenPatel.HULWith over seven brands — LUX, LIFEBUOY, HAMAM, REXONA, BREEZE, DOVE andPEARS — has 54.3% share of the overall soap market.However, underlying volume sales growth of 11% helped boost its revenue 7.1% on year toRs4,794 crore.Godrej Consumer ProductsGCPL, India‘s second largest soap maker after Hindustan Unilever Ltd, has nearly 9.2% marketshare. With 11% market share in value terms.NirmaNirma had a 1.5% share in the toilet soap segment. The Investment of Rs 200 Crores, 3000000soap pieces sold per day. Annual sales of Rs 500 crore 20% market share. Second largest soapmanufacturer in India Four lines of 500 soaps per minute.Gross Sales Rs in crore (2011)Godrej 3643Nirma 3241HUL 22800Dettol 30604P&G 26300
Wipro 83680Porter’s five force analysis1) Threat of new competition:-a. High R&D cost – The competitor need high R&D cost to compete with Dettol soap.Since Dettol is dominant player in toilet soap.b. Less access to distribution – The distribution for new entrant will be difficult. SinceDettol has major distribution.c. Difficult to differentiate the product – The Dettol has many variant while competitor hasto bring many variants to compete with Dettol toilet soaps.2) Threat of substitute products or servicesa. The only one substitute which can be threat is liquid soap.b. Less buyer tendency to substitute – The most of buyer is unaware of substitute. Thereforethere is less inclination towards substitute.3) Bargaining power of customers (buyers)a. High buyer profits – The customer has higher profit to buy a Dettol soap compare toother brands. Since they provide quality with their price.b. High switching cost – The other brands are costlier compare to Dettol toilet soap. Thebuyer has to pay higher price to change the brand.c. Less number of substitutes – The substitute is also less for customer to switch theirchoice.4) Bargaining power of suppliersa. Low bargaining power – The supplier has less option to vary their products price. Hencethey have low bargaining power.b. Low impact of inputs on differentiation – The supplier has long term relations withDettol. So they have low impact of inputs on differentiation.
5) Intensity of competitive rivalrya. The closest competitor in this category is Lifebuoy Soaps from Hindustan Unilever Ltd.Other competitor is Lux.b. Lifebuoy has higher market share compared to Dettol soaps. The Dettol consider as apremium brand while Lifebuoy is a cost effective brand.Referencehttp://www.indianmirror.com/indian-industries/soap.htmlCOMPETITORSLifebuoyLuxSUPPLIERSLow bargainingpowerLow impact of inputson differentiationBUYERSHigh buyer profitsHigh switching costsLess number ofsubstitutesNEW ENTRANTSHigh R&D costLess access todistributionDifficult to penetratethe productSUBSTITUTESOnly one: Liquid SoapLess buyer tendency tosubstitute
http://www.niir.org/profiles/profiles/soap-detergents-cleaning-powder-washing-toilet-soaps-liquid-detergents-acid-slurry/z,,1e,0,a/index.htmlhttp://www.timetoast.com/timelines/11122https://www.iffxpress.com/xpress/na/xhome.nsf/0/83688E1B4D5787D480256CC900631457http://www.scribd.com/doc/45326340/Dettol-Project-ReportWillcox, Michael (2000). "Soap". In Hilda Butler. Pouchers Perfumes, Cosmetics and Soaps (10thed.). Dordrecht: Kluwer Academic Publishers. p. 453http://www.cleaninginstitute.org/clean_living/soaps__detergent_history_3.aspx