10

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Reynolds flair linc cello
uno orbic
racer gel writomete ocean gel techno tip
Shop 1 1 0 2 3 7
Shop 2 3 0 5 0 9
Shop 3 0 1 3 2 4
 25

20

15

10
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5

0
clinic all head and
pantene sunsilk
clear shoulders
Shop 1 4 20 7 14
Shop 2 12 5 4 9
Shop 3 7 11 12 21
 10

0
dabur red
colgate pepsodent babool
toothpaste
Shop 1 2 1 9 4
Shop 2 5 2 7 5
Shop 3 3 4 2 6
 10

0
liril lux Cinthol vivel
Shop 1 2 8 6 2
Shop 2 5 4 4 1
Shop 3 3 9 2 5
Perfect_competition_in_the_short_run
Economics_Perfect_competition
Short-run equilibrium of the firm under monopolistic competition
Long-run equilibrium of the firm under monopolistic competition
HLL takes price war to shampoo market
TNN 16 March 2004, 04:14am IST
MUMBAI: Consumers of fast-moving consumer goods (FMCG) are in for a treat. The price war in the detergents
market may move to the shampoo segment

with the leader, Hindustan Lever Ltd (HLL), offering a free bottle of shampoo with each bottle bought.
HLL, which controls 50% of the Rs 1,000 crore shampoo market, said the move was intended to expand the market by
driving consumption and frequency of usage. Market reacted sharply to the offer, with HLL shares ending lower by
2.3% at Rs 153.90 as against the Sensex fall of 3.2%.
HLL's two brands — Sunsilk and Clinic Plus — are available in three different quantities. A 100 ml Clinic Plus costs
Rs 37.50, 200 ml Rs 70 and 300 ml Rs 117. Sunsilk is priced at Rs 55 (Rs 125 ml), Rs 100 (Rs 250 ml) and Rs 150 (Rs
400 ml). Industry analysts said the move was to stem the fall in its marketshare in the shampoo segment. The
company's share fell in 2003 to 54% from 59% in 2002. The gainers were CavinCare under the Chic brand, Dabur and
Procter & Gamble. Ashok Chhabra, executive director of Procter and Gamble, declined to comment on the rival offer.
"At P&G we are focussed on offering quality products to the consumers than looking at competition." P&G's Pantene is
priced at Rs 61 (100 ml), Rs 117 (200 ml), Rejoice at Rs 39 (100 ml) and Rs 75 (200 ml) and Head & Shoulders at Rs
64 (100 ml) and Rs 122 (200 ml) An industry analyst said, "The move by HLL is to take on competition from the
regional brands like CavinCare." It is targeting volume growth by cutting prices, he said.
Last year, HLL had launched sachets at 50 paise and Re 1 compared to its rival's (Procter & Gamble) sachets at Rs 2
and Rs 3 for its three brands. P&G had priced its sachets Rejoice at Rs 2, and Pantene and Head & Shoulders at Rs 3
each. Such an offer (buy one, get one free) was the company's first in 10 years. "There is a huge increase in market
consumption in the bottled package segment, and hence, we are offering value to our customers," a source said.
Shampoos: Putting money where the lather is:-Aarati Krishnan

AT A time when most FMCG (fast moving consumer goods) categories are inching along, personal products are being seen as the harbinger of
prosperity. And hair care products is the fastest-growing category within personal products. Between 1994 and 1998, the market size of
products such as skincare and toothbrushes doubled in value. But the size of the shampoo market expanded two-and-a-half times over the
same period. Not surprisingly, shampoos is a high priority area for major players such as Hindustan Lever. The current size of the shampoo
market, according to ORG-MARG, is Rs 850 crore -- equivalent to 30,000 tonnes in volume terms.

Unlike other FMCG categories such as soaps and detergents, which boast of a penetration level of
more than 90 per cent, shampoos remain a low penetration category. Industry sources estimate that the urban market penetration of
shampoos is a modest 36 per cent. Shampoo usage in the rural markets is even more infrequent, with a penetration level of 12 per cent.
Thus, even for the largest player in this industry, there is considerable scope for volume expansion by converting non-users.

Few players, HLL dominates

For a market with high potential, the shampoo market in India is dominated by just a few players. From scores of brands five years ago, the
shampoo market has now been whittled down to a handful. Hindustan Lever (HLL), with a 65 per cent volume share (68 per cent share by
value), dominates the market with brands such as Sunsilk, Clinic Plus and Clinic All Clear. Cavin Kare Limited, an unlisted company from
Chennai, with brands such as Chik and Nyle follows with a 19.8 per cent volume share. Procter & Gamble (P&G) is the only other large player
in this category with brands such as Pantene Pro-V and Head & Shoulders. P&G discontinued its shampoo manufacturing operations in India in
2000. Most of its brands are today directly imported from other Asian countries such as Thailand, Taiwan and Vietnam. New entrants are
probably discouraged by the formidable task of establishing a distribution network from scratch. HLL's long established ties with retailers and
its extensive distribution reach probably acts as an entry barrier for new entrants. Cavin Kare Limited, which has managed to garner a
significant share of the shampoo market despite this handicap, has focussed on scaled-down versions of its brands and herbal shampoos --
two segments where the market leader did not have a presence. Cavin Kare's shampoo business has grown faster than the overall market, at
20 per cent in 1998, 4 per cent in 1999 and 34 per cent over the past four quarters.

A blip in growth rates

Despite its undisputed potential, the rapid expansion of the shampoo market was interrupted in 1999. Overall growth rates in the market
slowed to 1.7 per cent in 1999, from 16 per cent the previous year. Between January and November 2000, however, the market appears to
have recovered some, and the shampoo category has grown by around 10 per cent. The reasons for the slowdown? ``Lack of innovation'',
says Mr D. Shivakumar, General Manager Marketing, Personal Products, Hindustan Lever. The company has identified three major barriers to
shampoo use in India -- the perception that shampoos contain harsh chemicals that could damage hair, high price and the view that the
shampoo is more of a glamour product rather than a hygiene product.

``We like to see it this way. Though we have a 69 per cent share of the shampoo market, we have just 10 per cent of the hair wash occasions
in the country. We will work at getting consumers to switch over from alternatives, such as natural products and soaps, to shampoos'', says
Mr Shivakumar. His counterpart in Cavin Kare attributes the slowdown in growth rates to the contraction of agricultural incomes. ``The rural
markets have slowed down due to the two consecutive disastrous monsoons'', says Mr Nandakumar, President, Marketing and Sales, Cavin
Care. This does seem a plausible explanation. Roughly a fourth of the shampoo market is in rural India. But the rural market is the key driver
for sachets, which make up 70 per cent of the total shampoo sales. HLL has higher stakes in the rural market with an 80 per cent share.

Scaled down versions

Therefore, the strategies of the major players have revolved around attacking these barriers to usage. The players obviously believe that the
key obstacle to recruiting new users lies in the high price of shampoos as a product. Unlike other FMCG categories, where marketers are
experimenting with low unit packs, as a concept, the low unit shampoo packs have been around for over a decade. Therefore, marketers have
been working at scaling down prices further. Cavin Kare made the first such attempt last year. It introduced a smaller 50 paise sachet of Chik,
when most other sachets retailed at Rs 2. The effort appears to have been an unqualified success, with the Chik brand expanding by 40 per
cent after the launch. A new 50 ml bottle of Chik priced at Rs 6 (when most other brands were available in 100 ml bottles and above) has also
helped expanded the brand. HLL acknowledges that the Chik innovations have expanded the overall market, trimming HLL's volume shares by
2-3 percentage points. ``Cavin Kare has expanded the market itself. Though our volume shares are down, our brands have not lost volume.
They continue to sustain their earlier growth rates,'' says Mr Shivakumar. HLL has responded with its own 50 paise version of Lux shampoo.
The company claims the recently launched 30 ml bubble pack for Clinic Plus (Rs 8), is an innovative and cost-effective alternative for sachet
users. While sachets are difficult to store and re-use, the bubble pack allows the user to extract just the right quantity for a single wash. The
scaled down versions could help pep up volume growth rates for major players. But they have also had the effect of lowering the per ml cost
of the major brands retailed through sachets. Till the time the players upgrade users to the larger pack sizes, the sachet revolution could
restrict margin expansion for the players.

Functional benefits

Players have also tried other routes to expand the shampoo market. Fighting the perception that shampoos are essentially glamour products,
marketers have tried to add a utility value to shampoos by offering functional benefits. Anti-dandruff shampoos represent this attempt. Clinic
Plus, one of the first anti-dandruff brands, is the largest shampoo brand today, with a market share of 31 per cent.

Clinic All Clear, an anti-dandruff extension targeted at the youth has also managed to garner a 13 per cent share. Due to its low pricing (Rs 71
for a 160 ml bottle against Rs 68 for a 100 ml bottle of Head & Shoulders anti-dandruff shampoo), the brand also has a significant rural
market share of 44 per cent. HLL has also experimented with different versions of Sunsilk for dry, normal and oily hair. Procter & Gamble's
Head & Shoulders Menthol and Pantene Lively Clean also offer functional benefits to users. Since these add-ons enable brands to command a
price premium over the plain shampoos, this strategy could aid both volume and margin expansion.

Herbal opportunity

One of the key barriers to shampoo usage lies in the reluctance to use a synthetic product on hair. Worldwide, therefore, herbal shampoos or
botanicals, are a fast growing category. Ayur from RDM Traders Private Limited and Nyle Herbal, a herbal shampoo launched by Cavin Kare,
have been some of the early entrants in the Indian herbal shampoos market. These products claim to use traditional Indian herbs such as
shikakai, soap nuts and amla as ingredients and have been a success. Nyle Herbal is among the top five shampoo brands in the country and
herbal shampoos today account for 10 per cent of the market size. That industry leader, Hindustan Lever, does not as yet have a presence in
this segment is noteworthy. ``We do not have immediate plans to enter this category. Today, brands are expensive assets, requiring
continuous investment. Creating a new brand from scratch would be quite undesirable in these circumstances'', feels HLL's Mr Shivakumar.
However, brands such as Sunsilk have been emphasising natural ingredients such as `fruitamins'. However, high price could be a key barrier
when it comes to herbal shampoos. The key challenge in manufacturing herbals lies in efficacy. Users typically require larger quantities or
higher concentrations of herbal shampoos to replicate the results of synthetic shampoos. Bringing down prices can therefore be quite difficult
in this case. This is probably why 90 per cent of the herbal shampoos still sells only in the urban markets.

Moving across category barriers

Meanwhile, the value-added shampoo segment is getting quite crowded, with a range of pharmaceutical and cosmetics companies launching
specialised products. While Dabur has leveraged Vatika's brand equity to launch Vatika Herbal shampoo, Godrej Soaps has leveraged its
dominance of the hair colour market to launch Godrej Colourgloss shampoo, for users with coloured hair. This apart, several pharma
companies (including Johnson & Johnson) have launched medicated anti-dandruff shampoos (which will probably carry higher credibility with
buyers), while cosmetic companies such as Biotique and Lotus Herbals also have herbal shampoos on the shelves.
Ball Point Inks
Ball Point inks are largely used every one from school going children to office goers. Specific dyes, pigments, solvents,
resins and preservatives are the basic raw materials. Market of ball point inks is growing day by day. It is observed that
demand growth rate is 5 % per annum. Few entrepreneurs can enter in this field will be successful
.Plant capacity: 200 Kgs/Day

Plant & machinery: Rs. 7.00 Lacs

Working capital: Rs. 19.00 Lacs

T.C.I: Rs. 42.00 Lacs

Return: 86.25%

Break even: 34.47%

 20 Jun 2006, 0106 hrs IST, Bindu Damodaran Menon, TNN
CHENNAI: Chennai-Based GM Pens International, the manufacturers and marketers of writing instruments under the

Reynolds brand, is bullish on the

growing market for pens in India. With its strong brand equity and a pan-Indian reach, the company hopes to increase
its market share even while emerging a base for the global major.
GM Pens, which has a tie up with the US-based Sanford Corporation, owners of the Reynolds brand, and a part of the
$7bn Newell Rubbermaid group, feels India has the potential to emerge as a manufacturing hub for the global major for
pen tip and other writing instruments.
“Reynolds has a high brand recall. India may become a global sourcing hub as Sanford has shifted a majority of its
manufacturing to India for its global operations,” K Mohamed Meeran, managing director, GM Pens told ET.
Started in 1986, GM Pens has facilities in Chennai and Pondicherry. In 1999, Sanford set up its own tip making facility
near Chennai for supplying to GM Pens and global operations.
“Though we are a franchisee of a global major, outside France, we have become the largest brand in terms of
manufacturing and marketing capability. We are also catering to their markets like Bangladesh, Sri Lanka, Brazil, South
Africa, Thailand and Argentina,” said Mr Meeran.
The company is planning to foray into the stationery segment and increase the number of its retail outlet, Writesite,
from seven to 25.
“The IT boom and automoation have not slowed down the market for pens. There is a boom in the pen segment as
majority of school children use it. This is high growth market for us.
Our product portfolio has grown from a single product in 1986 to 150 shop keeping units (SKUs). This shows that the
organised market for pens is on the upswing,” Mr Vishwadeep Kuila, vice-president, sales and marketing said.
The Rs 176-crore company said it was investing in branding exercise as the market is witnessing a margin-price war.
The prices of low-end ballpoint pens are going down, owing to intense competition. “We are looking to achieve a 30-
35% growth in our flagship brand after it has been endorsed by Sachin Tendulkar,” he said adding that the company has
also set up pen-vending machines in schools.