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35 Consumer Behaviour in Relation To Health Care Products Vijayalakshmi 1
35 Consumer Behaviour in Relation To Health Care Products Vijayalakshmi 1
Certificate
Acknowledgement
Executive summary
Why is consumer behaviour in rural and urban areas important for FMCG
companies? As we know consumer behaviour deals with psychological process
of decision making by consumer, by social context which also exerts group
pressure on them.The study of consumer behaviour provides marketers with
important information which help them in taking marketing mix decision.
Rural marketers are growing 5 times faster than urban markets simply because
75% of Indias population lies in rural area.Urban markets have reached a
saturation point and there is a cut throat competition in urban India.Ther is an
increase in rural income ,savings and standard of living.
The marketers can enter urban market but it is not as difficult as entering rural
markets.The marketers has to face various constraints such as low literacy
level, low income, seasonal demand, problems regarding transportation,
communication and distribution channel in rural markets. Where as it is
reverse in urban markets.There is need to understand rural and urban
consumers with regards to buyer, behavior, attitudes, beliefs and aspirations of
people.Next we would move to intelligent consumer behaviour.There are ten
points which shows how an intelligent consumer buy their products.As
marketing, segmenting, targeting and positing is important for all marketers in
FMCG sectors. Without thies it is very difficult bring a product in market.Then
there is analysis done on the FMCG sector with strength, weakness,
opportunities and threats.
The project deals with two companies i.e.Procter & Gamble and Hindustan
unilever limited (HUL) which relates to health care products.Health also
includes personal care products.
The urban consumers are more concerned about their health; but in rel;ation to
rural consumers, they are not so concerned.Therefore, how HUL entered the
rural market is explained in detail.Survey of 50 people is taken to know on
what basis purchases is done,what influence purchase, brand loyalty,etc.
This project helped me understand that consumer behaviour of urban and rural
are important for the marketers.It is not easy for the marketers to study
consumer behaviour but if things are done in right way the returns are many.
Research Methodology
Index
No
Topic
Introduction
Page
no
1-7
8-12
a)
b)
c)
d)
e)
Marketing concept
Segmenting,Targeting,Positioning
Customer value
Customer satisfaction
Customer retention
13-14
FMCG Sector
15-17
18-22
23-26
27-30
31-38
a) Profile
b) Potential & changing pattern
9
39
10
Case study-HUL
40-42
11
43-45
12
Questionaire
46-47
13
Conclusion
48-49
14
Annexure
50-53
Belch and Belch define consumer behaviour as the process and activities
people engage in when searching for, selecting, purchasing,using, evaluating and disposing
of products and services so as to satisfy their needs and desires.
-1-
Marketing
Environmental
Buyer
Decision
Stimuli
Stimuli
Characteristics
Process
BUYER'S
RESPONSE
Problem
recognition
Product
Economic
Price
Technical
Place
Political
Promotion
Cultural
Attitudes
Motivation
Perceptions
Personality
Lifestyle
Information
search
Alternative
evaluation
Purchase
decision
Product choice
Brand choice
Dealer choice
Purchase timing
Purchase amount
Post-purchase
behavior
The black box model shows the interaction of stimuli, consumer characteristics, decision
process and consumer responses. It can be distinguished between interpersonal stimuli
(between people) or intrapersonal stimuli (within people). The black box model is related
to the black box theory of behaviorism, where the focus is not set on the processes inside a
consumer, but the relation between the stimuli and the response of the consumer. The
marketing stimuli are planned and processed by the companies, whereas the environmental
stimulus are given by social factors, based on the economical, political and cultural
circumstances of a society. The buyers black box contains the buyer characteristics and the
decision process, which determines the buyers response.
-2-
The black box model considers the buyers response as a result of a conscious, rational
decision process, in which it is assumed that the buyer has recognized the problem.
However, in reality many decisions are not made in awareness of a determined problem by
the consumer.
The study of consumer behavior enables marketers to understand and predict consumer
behavior in the marketplace; it is concerned not only with what consumers buy but also
with why, when, where, and how they buy it. Consumer research is the methodology used
to study consumer behavior; it takes place at every phase of the consumption process:
before the purchase, during the purchase, and after the purchase.
Consumer behavior is interdisciplinary; that is, it is based on concepts and theories about
people that have been developed by scientists in such diverse disciplines as psychology,
sociology, social psychology, cultural anthropology, and economics.
Consumer behavior has become an integral part of strategic market planning. The belief
that ethics and social responsibility should also be integral components of every marketing
decision is embodied in a revised marketing conceptthe societal marketing concept
that calls on marketers to fulfill the needs of their target markets in ways that improve
society as a whole.
-3-
Information search
Once the consumer has recognised a problem, they search for information on products and
services that can solve that problem. Belch and Belch (2007) explain that consumers
undertake both an internal (memory) and an external search.
Personal sources
Commercial sources
Public sources
Personal experience
The relevant internal psychological process that is associated with information search is
perception. Perception is defined as 'the process by which an individual receives, selects,
organises, and interprets information to create a meaningful picture of the world'
- Selective retention consumers remember messages that are more meaningful or important
to them
The implications of this process help develop an effective promotional strategy, and select
which sources of information are more effective for the brand.CV
Information evaluation
At this time the consumer compares the brands and products that are in their evoked set.
How can the marketing organization increase the likelihood that their brand is part of the
consumer's evoked (consideration) set? Consumers evaluate alternatives in terms of the
functional and psychological benefits that they offer. The marketing organization needs to
understand what benefits consumers are seeking and therefore which attributes are most
important in terms of making a decision.
Purchase decision
Once the alternatives have been evaluated, the consumer is ready to make a purchase
decision. Sometimes purchase intention does not result in an actual purchase. The
marketing organization must facilitate the consumer to act on their purchase intention. The
provision of credit or payment terms may encourage purchase, or a sales promotion such as
the opportunity to receive a premium or enter a competition may provide an incentive to
buy now. The relevant internal psychological process that is associated with purchase
decision is integration.
-5-
External influences
-7-
a) The three elements of this strategic framework are: market segmentation, targeting, and
positioning.
3. Market segmentation is the process of dividing a market into subsets of consumers with
common needs or characteristics.
4. Market targeting is the selection of one or more of the segments identified for the
company to pursue.
5. Positioning refers to the development of a distinct image for the product or service in the
mind of the consumer, an image that will differentiate the offering from competing ones
and squarely communicate to the target audience that the particular product or service will
fulfill their needs better than competing brands.
a) Successful positioning centers around two key principles:
i) The first principle says that the marketer should communicate the benefits that the
product will provide rather than the products features.
ii) The second principle states that because there are many similar products in almost any
marketplace, an effective positioning strategy must develop and communicate a unique
selling Propositiona distinct benefit or point of differencefor the product or service.
Customer Satisfaction
1. Customer satisfaction is the individuals perception of the performance of the product or
service in relation to his or her expectations.
2. The concept of customer satisfaction is a function of customer expectations.
-10-
Customer Retention
1. The overall objective of providing value to customers continuously and more effectively
than the competition is to have and to retain highly satisfied customers.
2. This strategy of customer retention makes it in the best interest of customers to stay with
the company rather than switch to another firm
3. In almost all business situations, it is more expensive to win new customers than to keep
existing ones.
4. Studies have shown that small reductions in customer defections produce significant
increases in profits because:
a. Loyal customers buy more products.
b. Loyal customers are less price sensitive and pay less attention to competitors
advertising.
c. Servicing existing customers, who are familiar with the firms offerings and processes, is
cheaper.
d. Loyal customers spread positive word-of-mouth and refer other customers.
-11-
-12-
People with chronic illnesses, such as diabetes or high blood pressure, should strive to
become "experts" in their own care and use their physicians as "consultants."
7. They understand the logic of science and why scientific testing is needed to test and
to determine which theories and practices are valid.
8. They are wary of treatments that lack scientific support and a plausible rationale.
Most treatments described as "alternative" fit this description.
9. They are familiar with the economic aspects of health care. They obtain appropriate
insurance coverage, inquire in advance about professional fees, and shop comparatively for
medications and other products.
10. They report frauds, quackery, and other wrongdoing to appropriate agencies and
law enforcement officials. Consumer vigilance is an essential ingredient of a healthy
society.
-14-
FMCG SECTOR
Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged
goods. Items in this category include all consumables (other than groceries/pulses) people
buy at regular intervals. The most common in the list are toilet soaps, detergents,
shampoos, toothpaste, shaving products, shoe polish, packaged foodstuff, household
accessories and extends to certain electronic goods. These items are meant for daily of
frequent consumption and have a high return.
A major portion of the monthly budget of each household is reserved for FMCG products.
The volume of money circulated in the economy against FMCG products is very high, as
the number of products the consumer use is very high. Competition in the FMCG sector is
very high resulting in high pressure on margins.
-15-
Weaknesses:
1. Lower scope of investing in technology and achieving economies of scale, especially in
small sectors
2. Low exports levels
3. "Me-too" products, which illegally mimic the labels of the established brands. These
products narrow the scope of FMCG products in rural and semi-urban marke
Opportunities:
1. Untapped rural market
2. Rising income levels, i.e. increase in purchasing power of consumers
3. Large domestic market- a population of over one billion.
4. Export potential
5. High consumer goods spending
Threats:
1. Removal of import restrictions resulting in replacing of domestic brands
2. Slowdown in rural demand
Tax and regulatory structure
-16-
-17-
-18-
To have a common interest for the company as well as for the human resource
of the company
To be dependent on each other i.e the company and the human resource
The company has one manufacturing unit in Goa. There are 2 business divisions of
Procter and Gamble Hygiene - the healthcare division and the feminine care division.
P&G Health care division: This division of the company indulges in the production of
various over-the-counter commodities under the brand name Vicks. It is a pain
reliever and a remedy for cough and cold. Some of the products under the Vicks
portfolio are:
o Vicks Inhaler
o Vicks Action 500+
o Vicks Vaporub
o Vicks Formula 44
o Vicks Cough Drops
-19-
P&G Feminine care division: This division is known for its immensely popular brand
Whisper. This product altered the concept of feminine hygiene in India. It has
improved the lives of innumerable Indian women. Whisper sanitary napkins come in
different variants such as:
Whisper Choice
Effective July 1, 2007, the company's operations are categorized into three "Global
Business Units" with each Global Business Unit divided into "Business Segments"
according to the company's March 2009 earnings release.
Beauty Care
o
Beauty segment
Grooming segment
Household Care
o
Procter and Gamble Hygiene has a ubiquitous presence in lakhs of Indian households
today due to the immense popularity of its product lines.
-20-
Driven by its commercial success, core values, and business objectives, Procter and
Gamble Hygiene is sure to do even better in India in the near future.
Procter & Gamble is the 2nd largest MCG company in India after Hindustan Liver
Limited.
Throughout the years, Procter & Gamble has had a domination strategy similar to
that of the Roman Empire, albeit with a much friendlier platform.
The company is no stranger to market dominance, and it has made sure to keep it that
way through strategic acquisitions and sell-offs. The acquisition of Gillette in late
2005 for a cool $57 billion was the biggest buy in company history. P&G also bought
a majority of Wella in 2003 and sold off its Sure brand in September 2006 to Najafi
Companies' Innovative Brands to focus on more gender-specific deodorant products.
Oh, and there's also the continuing success of Olay, Pantene and Crest, just to name a
few of its 22 billion-dollar brands.
Due to its steady divide-and-conquer strategy, the company has managed to double its
size since 2000 and develop a platform of more than 300 brands sold in some 180
countries. (P&G is looking to expand further into the pharmaceutical sector and gain
as solid a footing there as it already has in personal care and home products.)
Acquisitions and restructuring have been quite profitable, as total revenue in 2006
increased by an astounding 26% from the previous year to $25.8 billion (thanks partly
to the Gillette purchase). P&G also padded the pockets of its research and
development departments, allocating more than $2 million to the cause in 2006.
-21-
The packaging sector has definitely reaped benefits, too. Since CEO A.G. Lafley put
a premium on design and innovation when he took over in 2000, the number of
designers at P&G has tripled. Many subsequent new packages exhibit top-notch
structure and graphics. The paired bottle design for Herbal Essences hair care
products, for example, reflects the contemporary character of the restaged brand. The
asymmetrical shape of the container combines with a new hologram logo to create a
fun and flirty motion on shelves, both in the store and at home.
Since the brand was a recent acquisition and Wall Street was watching closely, P&G
put the project on a fast track. Total time to market: six months. After four and a half
months of market research and brand development, it launched the new packaging
within six weeks. To save time, personnel from an outside design firm worked at the
P&G offices. The co-location was a first for both companies.
Innovation impacts many aspects of P&G's business. With an eye on improving
operational efficiencies, the packaging department was restructured last year. In its
typical Franchise role, the department will continue to serve a particular global
business unit (skin care, for example) in all aspects of packaging development and
implementation. Anew Capabilities role, however, capitalizes on a packaging
professionals' expertise in specific technologies. For example, someone with expertise
in pumps would be the go-to person for an Olay product or for a Crest product.
In early 2007, the company announced plans to fold some existing businesses into
global business units. The trifecta of global business units will then be renamed
Beauty Care, Global Health and Well Being, and Household Care.
-22-
Brooke Bond entered Indian market in 1900 and in 1903 it launched Red Label
tea in the country. In 1912, Brooke Bond & Co. India Limited was formed. Unilever
acquired Brooke Bond through an international acquisition. Similarly, Lipton's link
with India date back to 1898. Unilever acquired Lipton in 1972 and in 1977 Lipton
Tea (India) Limited was incorporated. Pond's (India) had been in Indian market since
1947. It joined the Unilever ranks through an international acquisition of Chesebrough
Pond's USA in 1986.
The liberalization of Indian economy in 1991 and subsequent removal of the
regulatory framework allowed HLL to explore every single product and opportunity
segment, without any constraints on production capacity
Reasons to purchase
In February 2007, the company has been renamed to "Hindustan Unilever Limited"
to strike the optimum balance between maintaining the heritage of the Company and
the future benefits and synergies of global alignment with the corporate name of
"Unilever".
In 2007, Hindustan Unilever was rated as the most respected company in India for the
past 25 years by Business World, one of Indias leading business magazines The
rating was based on a compilation of the magazines annual survey of Indias Most
Reputed Companies over the past 25 years. HUL is the market leader in Indian
consumer products with presence in over 20 consumer categories such as Soaps, Tea,
Detergents and Shampoos amongst others with over 700 million Indian consumers
using its products. It has over 35 brands. Sixteen of HULs brands featured in the AC
Nielsen-Brand Equity list of 100 Most Trusted Brands Annual Survey (2008)
-24-
According to Brand Equity, HUL has the largest number of brands in the Most
Trusted Brands List. Its a company that has consistently had the largest number of
brands in the Top 50 and in the Top 10 (with 4 brands).
Hindustan Unilever distribution covers over 1 million retails outlets across India
directly and its products are available in over 6.3 million outlets in India, i.e. nearly
80% of the retail outlets in India. It has 39 factories in the country. Two out of three
Indians use the companys products and HUL products have the largest consumer
reach being available in over 80 per cent of consumer homes across India.
The Anglo-Dutch company Unilever owns a majority stake (52%) in Hindustan
Unilever Limited. HUL was one of the eight Indian companies to be featured on the
Forbes list of Worlds Most Reputed companies in 2007
Mercury pollution
In 2001 a thermometer factory in Kodaikanal run by Hindustan Unilever was accused
of dumping glass contaminated with mercury in municipal dumps, or selling it on to
scrap merchants unable to deal with it appropriately.
Ayurvedic: Ayush
Coffee: Bru
Hindustan Unilever has acquired several Indian FMCG companies so far. This
includes:
Brooke Bond
Lipton India
Modern Foods
It acquired Kissan brand from UB group; Dollops ice cream brand from Cadbury
India; Lakme cosmetics brands from Tata.
It has also launched Pureit, a home water purifier which supplies drinking water
without boiling/need of electricity.
Hindustan Unilever Network is the direct selling channel of the company. It has about
350,000 consultants, all independent entrepreneurs, trained and guided by HLN's
expert managers and trainers.
-26-
Economic models - These models are largely quantitative and are based on the
assumptions of rationality and near perfect knowledge. The consumer is seen
to maximize their utility. See consumer theory. Game theory can also be used
in some circumstances.
-27-
-28-
AWARENESS - before anything else can happen the potential customers must
become aware that the product or service exists. Thus, the first task must be to
gain the attention of the target audience. All the different models are,
predictably, agreed on this first step. If the audience never hears the message,
they will not act on it, no matter how powerful it is.
INTEREST - but it is not sufficient to grab their attention. The message must
interest them and persuade them that the product or service is relevant to their
needs. The content of the message(s) must therefore be meaningful and clearly
relevant to that target audience's needs, and this is where marketing research
can come into its own.
ATTITUDES - but the message must go even further; to persuade the reader
to adopt a sufficiently positive attitude towards the product or service that he
or she will purchase it, albeit as a trial. There is no adequate way of describing
how this may be achieved. It is simply down to the magic of the copywriter's
art, or based on the strength of the product or service itself.
PURCHASE - all the above stages might happen in a few minutes while the
reader is considering the advertisement; in the comfort of his or her favourite
armchair. The final buying decision, on the other hand, may take place some
time later; perhaps weeks later, when the prospective buyer actually tries to
find a shop which stocks the product.
-29-
REPEAT PURCHASE - but in most cases this first purchase is best viewed
as just a trial purchase. Only if the experience is a success for the customer
will it be turned into repeat purchases. These repeats, not the single purchase
which is the focus of most models, are where the vendors focus should be, for
these are where the profits are generated. The earlier stages are merely a very
necessary prerequisite for this!
This is a very simple model, and as such does apply quite generally. Its lessons are
that you cannot obtain repeat purchasing without going through the stages of building
awareness and then obtaining trial use; which has to be successful. It is a pattern
which applies to all repeat purchase products and services; industrial goods just as
much as baked beans. This simple theory is rarely taken any further - to look at the
series of transactions which such repeat purchasing implies. The consumer's growing
experience over a number of such transactions is often the determining factor in the
later - and future - purchases. All the succeeding transactions are, thus, interdependent
- and the overall decision-making process may accordingly be much more complex
than most models allow for.
-30-
-31-
lead the way will be benefited as shown by the success of HUL and ITC initiatives
3)Location pattern:
The total rural population is across 6,38,667 villages.Rural consumer is
scattered over large area in the following pattern:
4)Reference group:
5)Occupation :
Typically 60% of people are engaged in agriculture related activities like
farmjng,poultry,cattle,etc.
6)Media:
Rural people are fond of music and folk shows.In Maharashtra the
traditional show is Tamasha and Nautanki in U.P.
7)Culture:
It refers to values,ideas,attitudes and meaningful symbols.While culture
and norms have a great hold on rural consumers perception tradition and values vary
from state to state.
Strategies
Dynamics of rural markets differ from other market types, and similarly rural
marketing strategies are also significantly different from the marketing strategies
aimed at an urban or industrial consumer. This, along with several other related issues,
have been subject matter of intense discussions and debate in countries like India and
China and focus of even international symposia organized in these countries.
-33-
Challenges: There are significant challenges to the entire process the most important
being the capacity building of the rural entrepreneurs. For decades, the entrepreneurs
associated with very conventional/traditional knowledge of business, humiliation with
government, so they are likely to look at these initiatives with skepticism. Only
consistent performance can convince the skeptics. Therefore, the industries must play
a catalytic role to cope with this challenge and should also train the entrepreneurs to
develop their managerial and IT skills. On the other hand, the products of the existing
and popular brand also stand as threat to the rural products. These global giants
(brand) may try to suppress the rural products in the markets with its communication
hype. Therefore, developing alternative and additional market linkages for these
products is an absolute necessity. Moreover, the low volumes of rural products, high
operating cots, high attrition, and absence of local know how and relationships may
also create problem in the process. Henceforth, it is essential to make a way out to
cope with these odds.
Present position
Rural markets, as part of any economy, have untapped potential. There are several
difficulties confronting the effort to fully explore rural markets. The concept of rural
markets in India, as also in several other countries, like China, is still in evolving
shape, and the sector poses a variety of challenges, including understanding the
dynamics of the rural markets and strategies to supply and satisfy the rural consumers.
Conclusion: These issues gain added complexity under globalization, where markets
are characterized by extreme competition and volatility. While rural products has been
perceived traditionally as catering to the local market, or at best, to a wider national
market through limited formal channels, the reality of globalization since the 1990s
introduced a new dimension to the market for such products. The issue of rural
The core of a scientific approach is to understand the market opportunities for rural
products along with the country's development priorities and to chalk out a strategy
where rural industries have an important role to play. While rural products are forced
to increasingly become part of global supply chains, these products need to adapt
themselves, not only according to the changing tastes of the national market, but also
according to changes in tastes in the international market. Therefore, a process is
essential to explore the market linkages and capacity building for SHGs through a
bottom up approach and continuous dialogue with stakeholders of rural enterprise.
This process should ensure the participation of rural people as consumers and
producers in the globalization mechanism, with better livelihoods and global access to
markets. The real challenge of building a sustainable market linkage starts here.
-35-
1)Potential:
With urban market showing the sign of saturation ,companies are
getting increasing excited about the potential of rural India. In 1994-95
around 60%of rural population was in the low income group of
Rs.25,000p.a.By 2006-07 only 20%of them is left in this category.
Because of rise in income L.G.entered rural market with brand
Sampoorna in the television category which contributed 15% of its
turnover in the year 1991-2000.It is estimated by HUL that out of 5 lakh
villages in India only 1 lakh have been tapped through the number of
middle and higher income level farmer in rural India is 21.7 lakhs.
2) Increase exports:
The export policy of 2000 paved for open markets status for
agriculture.The WTO policy for agro exports has increased exports of
Indian agriculture products,there by increasing the income of rural
population.
6) Rural communication:
The mass madia has increased demand for goods and services in the
rural areas.
Companies like Colgate,HUL sell their products in the Khumbh Mela
festival.
-37-
7) Total sales:
The percentage of total sales from rural markets are steadily increasing:
HUL
COLGATE
GODREJ
ASIAN PAINTS
L.G
50%
50%
30%
60%
50%
Literacy level
Disposable income
-38-
increases
3) Reference Group :
Urban consumers are concerned about what type of product to
buy their quality, price, size etc.
4) Occupation :
The occupation of urban consumers are teachers, doctors, bank
manager,peons,etc.So they buy products according to their needs.
Eg:- Washing machine, T.V, etc.
5) Media:
Media of communication in urban areas is through advertisements,
hoardings,posters,etc.
-39-
Business has to now stand on their own feet to give a competitive edge to the
company.
It is unwise to blame the weak demand from rural markets any more for poor
sales.The responsibility of growing the market lies wiyh manufactures.
-40-
Rural consumers are adaptive.They donot buy brands based on sheer habit;
like urban folks they too try new products and enjoy advertising much the
same.
Widen the health promise-Health and hygiene for the whole family in the
place of hard working victorious male.Now the target audience is family.
Maintain association with the core brand-Lever retained the brick shape of
the soap,the red colour,the jingle as well as the plus symbol.The product
form(carbolic to milled and the perfume cresylic to a health fragrance) were
new.The weight of the soap was reduced from 150-125 grams and the price
was increased by 8.50 paise to be Rs.9 per cake.
Marketing communication
Lifebuoys new communication tack centered around health and hygiene.While
the first set of ads targeted the core consumers and told him about the switch
,the next sets of ads were pitched at the mother and talk about how lifebuoy
prevents kids from picking up germs.The new formulation, new health perfume
and superior skin feel, along with popular red colour,have registered conclusive
and clear preference among existing and new users.
Lifebuoy offers ample scope for up gradation.At the upper end of the
market,lifebuoy offers specific health benefits through lifebuoy international
plus and gold.Lifebuoy international plus offers protection against germs which
cause body odour,while lifebuoy international gold helps protect against germs
which cause skin blemishes.The promotions of lifebuoy international is going to
be backed by one of the largest ever direct contact programmes launched across
rural India to drive the consumption of soaps starting in April 2000. HUL
expects to cover more than 10,000 villages in nine to ten states.
-42-
is
the
undisputed
king
of
the
hill
in
the
survey.
This year too, four brands from HUL Pepsodent, Ponds , Lux and Lifebuoy
make it to the Top 10. Pepsodent has climbed from No 8 to No 4, its best ranking in
five years. Ponds , which was at No 3 in 2004, lost ground to slip to No 9 last year;
this year, its back at No 5. Lux, though, finds itself out of the Top 5 list for the first
time, dropping to No 6, while Lifebuoy has slid from No7 to No9.
Priya Nair, GM oral care, HUL, is pleased with Pepsodents gain, and attributes it to
the good stand that the brand has enjoyed with customers since launch. New variants
like Pepsodent Complete and Pepsodent Kids have helped improve brand connect.
BTL activities done at schools and the tie-up with the World Dental Federation have
also helped, she says. HULs other toothpaste brand, Close-up , has retained its No
14 position, and Nair doesnt think there is any cause of worry. Despite what your
survey results show, Close-up has gained market share last year, she says.
Ponds has been aggressive last year with a number of new product launches like
Flawless White and Age Miracle. Venkat Sridhar, GM skincare, HUL, is optimistic
about the future of the brand: Overseas, Ponds is a market leader and is associated
with antiageing, skin lightening, moisturising and oil control. There is a skin care
evolution happening in India and our new products are addressing the changing needs
of consumers. Though not in the Top 10, Fair & Lovely (FAL) has been one of the
gainers from the HUL stable (up from No 16 to No 11).
-43-
Last year FALs growth contribution from increase in consumption has been 40%,
and most growth is happening because of increase in penetration, says Sridhar.
Not alls well with HUL brands, though, going by the survey results. Many HUL
brands have surrendered rank, particularly in categories like soaps and detergents. All
the beauty soap brands in the portfolio have lost rank, with Liril, Hamam and Breeze
being the most severely affected (Breeze, in fact, is the biggest loser this year,
shedding
52
ranks
to
end
up
atno174).
and
Santoor.
Among detergents brands Rin, Surf and Wheel Wheel has fallen ten spots to No
45. Surf has been on a steady slide over the last five years (it was at No 9 in 2004) and
finds itself at No 33, while Rin, which was at No 3 in 2005, is now out of the Top 20
list. The only saving grace for HUL here is the fact that almost all detergent brands
with the exception of Tide, which gained have slipped this year. Other major HUL
brands like
Sunsilk, Lakme and Brooke Bond have also fallen. Lakme once an iconic beauty
brand from HUL runs the risk of being pushed out of Top 100 altogether, falling 14
spots
this
year.
In light of Nokia having overthrown Colgate as the No 1 trusted brand this year, its
interesting to note that HUL didnt manage unseating Colgate and reclaiming pole
position despite having had the firepower of multiple power brands. In fact, the
best ranking that an HUL brand has achieved over the last five years is No 2 Lux
in 2005 and 2006.
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PROJECT SHAKTI
It is one of Hindustan Unilever most ambitious projects to date and when
Project Shakti's mission fulfilled, it will give strength to the fast moving consumer
goods major's rural marketing drive.And in hte bargain, it is intend to bring about a
transformation in the lives of thousand women.
Through a combination of micro-credit and training in enterprise management ,
women from various self-help groups in several states have turned direct -to - home
endorses and distributors of a range of HUL products and are helping the company
plumb hitherto unexplored rural hinterlands.
From the time HUL's new distribution model ,named Project Shakti was
piloted in Nalgonda district in 2001, it has been scaled up and extended to over 5000
villages in 63 districts in A.P, Karnataka, Gujarat, and Madhya Pradesh with around
1400 women enterpreneurs in its fold.
The vision is ambitious : to create by 2010 about 11,000 Shakti enterpreneurs
covering one Lakh villages and touching the lives of 100 million rural consumers.
What is Project Shakti ?
Over the past few years ,faced with stagnating urban sales, the FMCG
behemoth has constantly been looking at ways to increase rural penetration and sales
of a vats range of products . Indeed ,it has made inroads ,given the fact that over 50%
of its sales of Rs.9954 crore from rural India. In 2000 HUL looked at many ways to
many ways to make inroads into the rural markets and even looked at the renowned
Grameen Model and thrift and small savings in Bangladesh.
A senior member of the HUL New Venture Team was even dispatched to
examine the model at close quarters. Have defined the model, HUL launched it on a
trial basis in Naldgonda district of Andhra Pradesh in late 2000; the objectives were
clear ;
Avail micro-credit from government / banks loans for self help groups ; and a
stable "income generating activity" offered by stimulate wealth creatoin in the
village.
Women form self help groups to operate like rural direct-to-home sales
distributors for HUL products.
villages. Now , with this new distribution model,the smaller markets are now being
reffered to as "Shakti markets" .
How it works ?
Typically, a women from a SHG, selected as a Shakti enterpreneur, receives
stocks at her doorstep from the HUL distributor and sells it directly to the customer as
well as the retailers in the village. To get started the Shakti women borrows from her
SHG and the company itself chooses a person from SHG. Each Shakti enterpreneur
services 6-10 villages in the population strata of 1000-2000 people. Some Shakti
enterpreneurs selling products upward of Rs. 15000 a month worth of products can
make a gross profit of Rs.1000 a month.HUL attempts to educate the rural consumers
on the value they can derive from HUL products.
In recruiting a Shakti agent MART,HUL' s implementing agency, found that
the initial phase of 3-6 months was extermely critical for the person's continuation in
the program. When begun the dropout rate was as high as 50% .
After figuring it out MART came out with few success criteria;
In the first 3 months there has to be atleast 3 visits per month by the Shakti
animators.
HUL used other methods as well it hosted Shakti days in villages to create
awarenees about the program.
wanted to foirst stabiles the project before they can look at other companies .It
requires somebody with skill and size to build a platform and the invite other
companies on to this platform.The most powerful aspect about this model is that it
creates a Win-Win patnership between HUL and its consumers, some of whom will
also draw on the organisation for their livelihood , and it builds a self sustaining
virtuous cycle of growth for all.
Women in the rural areas are the catalyst of change and that is why this whole
program keeps women in focus It is like popcorn in machine ; one bursts at first and
then every thing begins popping here too; one woman as an agent change bursts into a
movement. And gives the movement strength.
SURVEY
Name:
Age:
Place:
Gender:
b) 500-1000
c)1000-1500
d) 1500 &above
Q2. On what basis is your purchase decision of personal care &health care
products based?
a)Price
b) quality
c)Availability
d) packaging
a)Often
b) sometimes
c)Rarely
d) never
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b) advertisements
d) price
Q5. Are you brand loyal in buying health care & personal care products?
a)Yes
b)no
b) no
b) no
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Conclusions
The company needs to use appropriate memory devices that embed the
brand in the minds the rural and urban consumers.
Rural audience identified more with colours, symbols and numbers.
The communication has to be loud and colourful. Urban audience
identifies with name, picture and shape.
In urban markets most of the consumers are health conscious but rural
consumers are not. So the companies should aware the consumers
about the products.
-49-
Annexures
Percentage
12%
12%
12%
300-500
500-1000
1000-1500
1500-above
64%
Percentage
10%
10%
30%
Price
Quality
Availability
Packaging
50%
Percentage
10%
20%
10%
Often
Sometimes
Rarely
Never
60%
(Change of brands)
Percentage
28%
Free gifts& discounts
Advertisements
Other influence
60%
6%
Price
6%
-51Percentage
10%
Yes
No
90%
(Brand loyalty)
Percentage
40%
Yes
No
60%
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Percentage
10%
Yes
No
90%
Percentage
40%
Yes
No
60%
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