A

MINI PROJECT REPORT

On
SUPER SOAP)

Submitted to:

Dr. A.P.J Abdul Kalam Technical University, Lucknow

Submitted in Partial Fulfillment for the Award of the
DEGREE OF MASTER OF BUSINESS ADMINISTRATION
(2022-2024)
Under the Guidance of: Submitted By:
DR. SAPNA MALIK MOHD RAFEY
PROFESSOR (MBA DEPT) MBA-I SEM

VIDYA SCHOOL OF BUSINESS

AFFILIATED TO DR. A.P.J. ABDUL KALAM TECHNICAL UNIVERSITY, LUCKNOW
VIDYA KNOWLEDGE PARK, BAGHPAT ROAD MEERUT-250002
 Student Declaration
This is to certify that I have completed the Mini Project titled “SUPER SOAP)” under the
guidance of Dr. SAPNA MALIK Professor (MBA DEPT) in partial fulfilment of the
requirement for the award of Degree of Master in Business Administration at Vidya School
of Business, Meerut. This is an original piece of work and I have not submitted it earlier
elsewhere.

Date: Signature:

Place: Name: MOHD RAFEY

Roll No-

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 CERTIFICATE FROM THE INSTITUTE GUIDE

This is to certify that the Mini Project titled “SUPER SOAP)” submitted in the partial
fulfillment of the requirement for the award of the Degree of Master of Business
Administration at Vidya School of Business, Meerut, under my guidance & direction.

To the best of my knowledge and belief the data & information presented by him in the
project has not been submitted earlier.

DR. SAPNA MALIK

PROFESSOR (MBA DEPT)

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 Acknowledgement

The success of this Mini Project report is the outcome of guidance and valuable suggestions
provided by all the concerned without whom the report could not fide on the right back. I
would like to express my sincere gratitude to Dr. SAPNA MALIK Professor (MBA DEPT)
of Vidya School of Business, Meerut, for giving me an opportunity to do this project work.
I also express my sense of deep gratitude towards Dr. SAPNA MALIK, for his huge
contribution in the form of guidance, which was with me throughout the journey of making
the project.

Finally, I will be failing in my duty, if I do not thank my Parents, friends and well-wishers for
their enthusiastic support and who have directly or indirectly helped in some way or the other
in making this project.

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 Abstract

As an integral part of the course curriculum, all MBA students are required to undergo Mini
Project. The main objective of this Project is to supplement the student‟s theoretical
knowledge with a practical exposure to the working environment.

This programmed enhances the student‟s capability to cope up with the uncertainties and
challenges.

The subject of my research was SUPER SOAP).

I feel highly gratified in this report.

It has been my constant endeavour to present this report in the most systematic and analytical
manner.

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 Executive Summary

In this study, we look at the options of experiential learning and embedding to the skills and
how the organization get the accreditation from its training course and develop the employee
exactly and smartly using applying different models like 360-degree feedback, training by
telephone, group training, mind mapping, perceptual awareness etc. Training is essential to
order to understand how to implement the core principle of coaching and learning. Most of
the people attracted up to the profession or precisely the ones, who are likely to make good
trainers. People with integrity, like helping others and enjoy making something different with
others. Experiential learning and embedding skills are an action oriented behavioural
situation. The purpose of the action situation is to have participants, who generate their own
data about each of the key concepts to be studied. To get the best from experiential learning
and embedding skills method, the trainer must be a good observer of behaviour. When the
groups start to examine his experiences and reflect upon them, he is in a position to assist
with this process. His responsibility is to focus on learning, and making it clearer for the
participants, which is extremely important.

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 TABLE OF CONTENTS

 INTRODUCTION..........................................................................................................1
 MY PRODUCT………………………………………………………………………………………………………………2-3
 IMPORTANCE AND INNOVATION………….........................................................4
 REASONS FOR SELECTING THE PRODUCT…………………………………….5
 HISTORY OF BATH-SOAP.....................................................................................6-8
 PACKAGING………....................................................................................................9
 COMPETITIVE SOAP BRANDS.................................................10-14
 PERMISSIONS ANS LICENSES REQUIRED............................15-20
 COST EFFECTIVE TECHNIQUES FOR PRODUCT......................20
 COST EFFECTIVE TECHNIQUES FOR PROMOTION PLAN......21
 MARKET POTENTIAL…………………………………………21-31
 INDUSTRY PROFILE…………..................................................32-37
 INDUSTRY SWOT ANALYSIS………….......................................38
 BCG MATRIX………………………...........................................38-40
 FIVE FORCES ANALYSIS OF SOAP INDUSTRY...........................................40-44
 MARKET SEGMENTATION..............................................................................44-47
 FINDINGS&SUGGESTIONS..............................................................................48-50
 CONCLUSION...........................................................................................................51
 BIBLIOGRAPHY......................................................................................................52
 INTRODUCTION

Soap tablets is formulated to wash and clean hands. Soap Tablets is the going to be best-
selling and most widely used products among people who love travelling. Tablets may have
different features depending on content. There are variations, such as for children, opaque
with glycerine, with antibacterial, transparent and etc. Soap tablets contains anionic
surfactant, cocamide deasurfactant, cocobetaine as amphoteric surfactant, opaque agent as
making opaque, dye, fragrance, glycerine for prevention hand outside conditions and etc. In
addition, antibacterial agent for making antibacterial Soap tablets. Soap tablets for children
can be made by using soft and unharmful ingredients. For making natural Soap tablets as
opaque or clear we will going to use natural and herbal oil, potassium hydroxide, water,
glycerine, dye and fragrance. These ingredients are used to make saponification for Soap
tablets as natural. For production of herbal soap tablets, we will use herbal extracts and herbal
fragrance in addition to these ingredients. In present age, all people want to appear smart and
elegant in his personality. The history of soap industry in India is very old say since 1889.
The use of soap or soap like cleaning agent has always been associated with man‟s inherent
instinct to keep his body and other belonging clean. Soap help remove slag from skin to make
skin a brilliant glow. The principal raw material of soap is oil and fats. According to these
raw materials the quality of soap and category of soap is changed. The necessary raw
materials are needed to be of high purity and the finished product should have the balanced
pH as its froth may enter the eye. Soaps are made by combining liquid fats (like vegetable
oils or animal fat) with an alkali like sodium hydroxide (also called lye). The process is called
Saponification; the definition of “saponify” is literally ―to turn fat or oil into soap by
reaction with an alkali. During the curing process, the sodium hydroxide and water evaporate
out of the product, leaving behind just awesome soap. Super fatting, which refers to the
process of adding liquid fats to soap after saponification, is popular for its rich, moisturizing
effect. Clear soaps will add glycerine and sorbitol (a sugar alcohol with emollient properties),
and products labelled ―antibacterial usually rely on triclosan, a substance that kills bacteria
and helps prevent fungus growth. A simple production method with high return soaps are
invariably used in every household. The antibacterial soap with a moisturizer added has huge
market potential. The market is spread from remote village to the metro cities alike.
The industry gives a good profit and high employment oriented.

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 MY PRODUCT

Soaplet

Soaplet is the home of real beauty. Beauty is not defined by shape, size, or color its feeling
like the best version of yourself. Authentic. Unique. Real. Our brand has been working to
make beauty a source of confidence, not anxiety. Soaplet celebrates a new definition of
strength: one with care at its center. Real strength is shown through the care you give to the
people that matter and that includes you.

SELLING PRICE

Soaplet is a product which speaks to the middle class and target a large volume of customers.
Soaplet is highly economical and is positioned as an affordable Luxury soap for all. Soaplet
focuses on being a cost leader and has adopted a competitive pricing mechanism in its
marketing mix so as to compete with other players and survive in the market. This is further
achieved by being a mass producer which has resulted in achieving economies of scale.

Our selling price are:

 Maximum Retail Price (MRP) Per Soap Tablet Box (20 Tablets):15rs
Mega pack (20 tablet boxes) MRP:300rs
Super mega pack (40 tablet boxes) MRP:600rs
 Manufacturer:10rs/tablet box (20 tablets)
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 Mega pack (20 tablet boxes):200
Super mega pack (40 tablet boxes):400
 Wholesaler:12.5rs/tablet box (20 tablets)
Mega pack (20 tablet boxes):250rs
Super mega pack (40 tablet boxes):500
 Retailer:15rs/tablet box (20 tablets)
Mega pack (20 tablet boxes) MRP:300rs
Super mega pack (40 tablet boxes) MRP:600rs
 Consumer:15/tablet box (20 tablets)
Mega pack (20 tablet boxes) MRP:300rs
Super mega pack (40 tablet boxes) MRP:600rs

PROFIT MARGIN

 Manufacturer:50%
 Wholesaler:25 %
 Retailer:20%

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 IMPORTANCE AND INNOVATION

IMPORTANCE

 There is no product like this in market.

 It‟s easy to carry and use.
 It does not leave any wastes so it is eco-friendly product as it dissolves fully when
someone use a soap tablet by rubbing it on hands with water.
 It is not very costly and it is important at the time of travelling as it very easy to carry
and store.
 It is very useful for travelling purposes.

INNOVATION

 The idea of making soap tablets is relevant as it is a new innovative idea and there is
no product like this available in the market.
 The innovation in the idea is that we produce the soap in the form of small tablets that
dissolves fully when people use it with water by rubbing the tablet on their hands.
 It very useful to customers in the travelling and at the places when they are out of
their home, they can easily carry a soap tablet box that contains 20 tablets in their
pockets so whenever they want to wash their hand they do not need to think for a soap
or handwash or paper soaps.
 This provides a solution to the customers for the problem of carrying a soap or
handwash or paper soaps while travelling or while they are outside where they need to
wash their hands.
 The soap tablets will be user friendly as it‟s not harmful for customers and they will
be eco-friendly also as they not leave any waste.
 Customers are willing to buy it and customers will buy it for sure for their travelling
purposes because when we use paper soaps during travelling after washing our hand
with paper soaps it leaves the paper that we have to throw somewhere it‟s a waste of
paper soap but when customer use a soap tablet after rubbing it on their hand with
water it gets fully dissolved and it does not leave any waste like paper soaps.

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 REASONS FOR SELECTING THE PRODUCT

There is a vast market available for Soap all around the world. It being soft in nature will act
on skin giving a soothing effect. This soap tablet is nothing but a soap of good and refined
quality and balanced pH, so this soap tablet have as good market as other soap have. Because
of its charming name this soap tablet can be used by all male, female irrespective of caste,
creed, and sex. As the fashion grows up its market potential will also grow accordingly.
Considering the population trend in the state there is still an ample scope for growth of this
industry. There are so many kinds of soap flooded in the market but because of its peculiar
name and nature, quality, and properties it will also grab good market in present scenario.

Soaps are cleaning products that have become an essential part of our lives. Cleaning
products play an essential role by safely and effectively removing dirt, germs and other
contaminants and hence produce a healthy lifestyle.

I have selected this product because:

 It is a necessity good.
 It is used everywhere
 A good quality soap tablet is necessary to stay clean
 It holds a good market share

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 HISTORY OF SOAP
Soap has been with us in one form or another for thousands of years. The story goes that in
Rome in around 1,000 B.C. at a place called Sapor Hill, the women were washing their
clothes in a small tributary of the river Tiber, below a religious site where animal sacrifice
took place. They noticed that the clothes became clean upon contact with the soapy clay
which was dripping down the hill and into the water. It was noticed later that this cleansing
agent was formed by the animal fat soaking through the wood ashes and into the clay soil.
Strangely, in the first century A.D., the Romans are credited with the making of a soap-like
substance using urine. The ammonium carbonate in the urine was reacted with oils and fat in
wool to form this 'soap'. During the Eighth Century the Spanish and Italians began making
what was more like modern soap from Beech Tree ash and Goat fat, whilst the French are
credited with replacing the animal fat with Olive oil. In England during the 17th century
under King James I, soap makers were given 'special privileges' and the soap industry started
developing more rapidly, although soaps were generally still madden using caustic alkalis
such as potash, leached from wood ashes and from carbonates from the ashes of plants or
seaweed. The soaps made in this way were harsh and often rather unpleasant Soap as we
know it today did not come about until the 18th century, when Nicholas Le Blanc, a
Frenchman, discovered a reliable and inexpensive way of making sodium hydroxide (caustic
soda), or lye as it is known to the soap maker, which forms the basin with which soaps are
made to this day.4 Further developments in soap making were pioneered in Britain during the
late 18th century with the invention of 'Transparent' soap by Andrew Pears, the son of a
Cornish farmer. This refined soap was known then as it is now as Pears Transparent Soap.
Over the years and to the present day, opaque soaps have remained the favourite, mainly
because transparent soaps tend to be more expensive and also don't last as long. Factors likely
to encourage soap marketing and consumption in developing countries in the future include:

 More discriminating educated and aware consumers.

 Growth of the media, especially TV
 Improvements in transportation and communication networks.
 Innovative R&D for raw materials and finished products.
 Growth of supermarkets and retail outlets.
 High speed packaging machines and attractive packaging
 materials.
 State of the art technology to enhance productivity and

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 reduce cost.
 Increasingly talented advertising and market research
 agencies.
 Liberalisation of markets and growth in free trade.

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8
 PACKAGING
Packaging-The final stage of the soap manufacturing process is the packaging. In this stage,
the finished product is packed for final supply to consumer. During the packaging stage,
soaps tablets are either packed in single packs or multipacks.

Soaplet Packaging Benefits

Packaging is one of most important steps in soaps manufacturing and hence should be given
prime consideration by soap manufacturers. Some of the important benefits of soaplet
packaging include -

• Enhances the marketability of product

• Improves the appearance and attractiveness of product

• Increases the shelf appeal of product

• Increases the shelf life of product

• Reduces the waste during production

• Makes the product easy and convenient to use

• The product can be packed in different packs to meet the varying demands in the
market.

PRIMARY PACKAGING: The soap is attached with a biodegradable and environmentally

friendly card with our logo and our website info and then wrapped in eco-friendly paper.

SECONDARY PACKAGING: This consists of a cardboard box that can contain 12 bars of
soap in each box.

TRANSPORTATION PACKAGING: It would then be put in an even larger cardboard box

for transportation.

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 COMPETITIVE SOAP BRANDS

LUX

LUX is a global brand developed by Unilever. The range of products includes beauty soaps,
shower gels, bath additives, hair shampoos and conditioners. Lux started as "Sunlight Flakes"
laundry soap in 1899. As of 2009, Lux revenue was estimated at €1 billion, with market
shares spread out to more than 100 countries around the globe.Today, Lux is the market
leader in countries like Brazil, India, Thailand and south Africa. Developed by Unilever, Lux
(soap) is now headquartered in Singapore. Lux is a multinational beauty product brand sold
mostly in South Asia. The products of Lux are having a high rate of sales. Lux Soap was
introduced to America in 1925 by the Lever Brothers. It was a white soap packaged in pastel
colors designed to be comparable to the finer French soaps, but more affordable. Once Lux
Soap began its national campaign in 1926, it was also advertised for men and children The
Thompson agency then began a campaign in 1928 to get endorsements from Hollywood
actresses, by sending 425 actresses cases of Lux Soap. It received 414 endorsements in
return, leading them to claim that 9 out of 10 stars in Hollywood use Lux Soap.

In 1933, advertisements claimed that Lux Soap was used by 686 out of 694 more well known
actresses. Lux Soap's Hollywood campaign along with its many other advertising efforts,
would assist Lux Soap in becoming a worldwide leader in soap sales. As the focus of
advertising shifted from the use of Hollywood starlets to a focus on everyday women, Lux
Soap declined in sales and was removed from the shelves in the 1990s. Lever Brothers shifted
their focus to another soap, Dove.

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Dove
Dove is an American personal care brand owned by Unilever originating in the United States.
The products are sold in more than 150 countries and are offered for both women, men, and
babies. Dove's logo is a silhouette profile of the brand's namesake bird. Vincent Lamberti was
granted the original patents related to the manufacturing of Dove in the 1950s, while he
worked for the Lever brothers. Dove Beauty Bar has ¼ moisturizing cream that gently
cleanses and moisturizes the skin, giving you smooth skin with a spa-like glow. It has
mild cleansers that help your skin to retain its natural moisture rather than stripping it
away. This Dove bar even helps to replenish nutrients that are lost during the cleansing
process. Soap, in case you didn't know, is specifically defined as fatty acids that are
neutralized by an alkali such as lye. But Dove is not soap – it's what is known as a Syndet
bar (which stands for synthetic detergent.) And it's true that these synthetic detergents are less
drying and less damaging to skin proteins. With its unscented and hypoallergenic formula, it
gently cleanses for softer skin than ordinary bar soap. ... #1 DERMATOLOGIST
RECOMMENDED: Formulated with mild cleansers and ¼ moisturizing cream, Dove
moisturizing Beauty Bar helps give you instantly soft skin and lasting nourishment. It's called
a Beauty Bar for a reason as it helps skin feel more firm and elastic compared to ordinary
soap. ... However, Dove does not strip skin and is proven to be more gentle and mild than or-
dinary soap. In fact, the bars' unique formula replenishes nutrients in the skin while cleansing,
leaving it soft and smooth.

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Pears
Pears transparent soap is a brand of soap first produced and sold in 1807 by Andrew Pears, at
a factory just off Oxford Street in London, England. It was the world's first market
translucent soap. Under the stewardship of Thomas J. Barratt, A. & F. Pears initiated a
number of innovations in sales and marketing. A. & F. Pears was acquired by Lever Brothers,
now Unilever, in 1917, and products under the Pears brand are currently manufactured in
India. Pears soap was made using a process entirely different from that for other soaps. A
mixture of tallow and other fats was saponified by an alkali. Clearly, this is currently caustic
soda (sodium hydroxide), since the ingredients list shows sodium salts of fatty acids, but a
chemist reports that in the 1960s, caustic potash (potassium hydroxide) was used. It has not
been possible to determine what was used in the early days of the product, as the writings of
Francis Pears mention only alkali in industrial methylated spirits. After saponification was
completed, the resulting glycerol was left in the batch. Batches were made not in huge pans,
but in small kettle-like vessels. As soon as the translucent amber liquid had cooled enough to
solidify, it was extruded into opaque oval bars that were cut into bath- or toilet-weight tablets,
ready for beginning their long spell in the drying rooms (ovens). The hot liquid soap fresh
from the vessel had a totally fatty matter (TFM) of 45% compared with the TFMs of 70–80%
usual in soaps made by the conventional method. The TFM increased considerably as the
alcohol content fell during drying. The concave shape of the soap is formed by shrinkage
while the soap is drying, and is not due to deliberate moulding.

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Lifebuoy
Lifebuoy is a brand of soap marketed by Unilever. Lifebuoy was originally, and for much of
its history, a carbolic soap containing phenol (carbolic acid, a compound extracted from coal
tar).The soaps manufactured today under the Lifebuoy brand do not contain phenol.
Currently, there are many variants of Lifebuoy. Lifebuoy Care soap bar is specially
formulated to give both germ protection and care. It contains the goodness of milk cream and
gives your skin a soft and smooth feel. Lifebuoy Care soap's advanced Silver Shield Formula
gives 100% stronger protection*. Our skin is the first line of defense from the outside world.
Lifebuoy soap's characteristic medicated, carbolic smell has been replaced with a more
enjoyable and contemporary 'health' fragrance. The reason Lifebuoy is paired with creosote in
Ms. Richmond's memory is that her father built the farm's bathhouse from creosote-soaked
railroad ties. Product Description. Lifebuoy's unique formulations and antibacterial
ingredients in all its products make it superior to all other ordinary soaps, giving 100% better
germ protection. Good health, protection from most skin germs and control of body odor
make up the core objectives of the brand. Lifebuoy Care soap bar is specially formulated to
give both germ protection and care. It contains the goodness of milk cream and gives your
skin a soft and smooth feel. Lifebuoy Care soap‟s advanced Silver Shield Formula gives
100% stronger protection*.Our skin is the first line of defense from the outside world. Hence,
it is extremely important to take care of your skin. Personal hygiene helps your skin stay
healthy and protected. Good personal hygiene makes the skin healthy, which can then help
protect against infection causing germs#.

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Medimix
Medimix is an Indian brand of ayurvedic/herbal soap manufactured and marketed by Cholayil
Private Limited, a Chennai-based company. The brand was founded by Dr. V. P. Sidhan from
Valapad, Kerala.The year 1969 proved pivotal to the family legacy as Dr. Sidhan combined a
timeless tradition with his sharp business acumen to develop a green bar of soap that could
both nourish and protect our skin. Medimix Ayurvedic Soap is a unique combination of 18
herbs like glycerine, sandal, turmeric that cleanses the skin of dirt and grimes and also
protects the skin simultaneously. It helps soothe the skin of any rashes and pimple freakouts
and suitable for all skin types. It helps improve skin texture and adds a beautifying glow to
the skin. Medimix Ayurvedic Bath Soap is the world‟s largest selling ayurvedic bath soap
that is suited for all skin types. It is completely herbal with a 60% coconut oil base and
contains no animal fat. It is known for its curative, preventive and beautifying qualities for
skin, scalp and hair. The rich lather of Medimix Ayurvedic Bath Soap is enriched by the
extracts of 18 Herbs scientifically incorporated to give protection from various skin
problems. The natural oil base of Medimix Ayurvedic Soap contains pure coconut oil.
Traditionally handcrafted as per the strict Ayurvedic formulation, Medimix is packed with
natural ingredients, making it perfectly safe even for a baby's tender skin. Contains no animal
fat.

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 PERMISSION AND LICENSES REQUIRED
 Factory Licence: - First in order to start manufacturing unit you must register under
Factories Act. Get ESI (Employee State Insurance) and EPF (Employee Provident
Fund) Registration under ESI and EPF Act respectively.
 Licence from Pollution Control Board: - No objection certificate from Pollution
Control Board is required to operate a manufacturing unit.
 Manufacturing Licence: - Manufacturing license is required for manufacturing of
Soap as laid down in part XIV of Drugs and Cosmetics Rule.
 Registration under VAT and Excise: - After obtaining approvals from various
authorities, registration under Sales Tax Act and Excise Act is required.
 Trademark Registration: - It is important to register our name or logo so that no one
can copy our brand. Trademark is a symbol or design that distinguishes the product of
different parties.
 Patent: - Patent is required to register formulae for manufacturing of soap. Once
formulae of making soap get registered under Patent Act then it cannot be used by any
person.

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 CHANNEL OF DISTRUBUTION

MANUFACTURER

WHOLESALER

RETAILER

CONSUMER

Reason for selection of this channel: This channel of distribution is selected because there
are a large number of customers for soap and it needs to be available in their near locality and
the product needs to be in distributed in all shops- big or small. And this can only be done
with a long chain.

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 TRANSPORTATION

Transportation means physical movement of goods from place of production to the place
where they are required.

The firm uses truck to transport the final good to the wholesaler or warehouse. The trucks can
easily hold a lot of goods and is a very efficient means of transportation. An Insulated truck
will be used as the means of transportation. Insulation is required because the soaps need a
cool place, otherwise it‟ll melt or get damaged.

To ensure that the cost of transportation is controlled and can easily be monitored, the
transportation will be handled by the firm itself.

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 WAREHOUSING

Whatever is produced is not sold off immediately. Storage or warehousing refers to holding
and preserving goods till they are delivered to the buyers. This is known as warehousing. The
need for warehousing arises because there is a time gap between the production and
consumption of goods. By bridging this gap, warehousing creates time utility. Also, the
goods must be stored properly so that they can be protected from any damage which may
cause heat, moisture, theft etc.

Soaplet will have warehouses in all the states of the country to store the soaps. Also, for
international market, Soaplet will have warehouses abroad also.

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 WAYS OF PROMOTING MY PRODUCT

The following 5 ways will promote Soaplet:

 Sales Promotion: It is the benefit given to the customer with the same price for
shooting up the sales of any given commodity.
 Soaplet will have an introducing offer of 20% extra in soap bars.
 Advertising: Soaplet will be advertised through various mass media like television
advertisements, radio, magazines, newspaper, etc.
 Event Promotion: Soaplet will exhibit its product range in various events related to
the soap industry. Also, Soaplet will sponsor such events once a year.
 Direct selling: Soaplet will be sold door to door by designated sales personnel. This
will support our objective to make Soaplet a household brand.
 Social Media Marketing: Soaplet will also be promoted in one of the most cost-
effective marketing, i.e., social media marketing.
 Through social media marketing we will reach many people with very less cost.
 Various social media platforms include Facebook, Twitter, linked in, Google and
YouTube.

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SCHEMES

The wholesaler: To sell more units or to encourage the wholesaler to buy more units, the
manufacturer will bear the cost of transporting the products to the wholesaler on their own
thus reducing the pressure on the wholesaler.

The retailer: To encourage the retailer to buy more units of the product, discounts will be
given. Thus, the retailer will then be paying less than the actual price.

The consumer: To encourage consumers to buy more units of the product, schemes like buy-
1-get-1-free, sales and discounts will be given. This way, more consumers will buy the
product and in more quantity.

SOCIAL MESSAGE

The packaging is made with high-quality recyclable plastic which is makes the outer covering
eco-friendly.

The ingredients used in this Soaplet are 100% herbal products and there are absolutely no
side effects from using this.

It is suitable for any person above 5 years of age.

The price of the Soaplet is less expensive compared to the others.

COST EFFECTIVE TECHNIQUE FOR PRODUCT

Soaplet are manufactured keeping in mind the quality of the soap tablet while the costs are
reduced.

Hence. the firm produces the raw materials on its own, ensuring quality of the raw materials
while significantly reducing the costs by completely mollifying the costs of the agents who
generally provide such raw materials.

The costs of manufacturing process are also significantly reduced since we shall utilize very
little machinery and a greater number of people which will also provide employment to the
rural residents, while reducing our costs significantly.

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 COST EFFECTIVE TECHNIQUE FOR PROMOTION PLAN

Sales promotion: Interesting offers will be provided on all soaps. The free samples given
along with larger quantities will be samples of soaps scents that are sold less when compared
to the other soaps‟ scents in the product range. Hence, trying to make these unpopular
flavours popular.

Advertising: Cost can be reduced for television advertising and newspaper advertising, but
the other media have constant cost which when reduced also reduces effectiveness. The
television advertisements will be short using standard cameras and original locations which
reduces our cost on the equipment and studio setup. Instead of running an advertisement on
the newspaper it is more cost effective to introduce pamphlets into the newspaper.

Event promotion: Event promotion are second most cost-effective means of promoting after
social media marketing. It helps in generating genuine leads along with branding amongst
your extract target audience. Hence, no money is wasted on promoting the brand out of the
target audience.

Social media marketing: it is the most cost-effective means of promotion with very
effectiveness. Using social media promotion, we can filter the people who will view my
advertisements or follows us ova these platforms. This again ensures that we don't leave the
target market unnecessarily, it also helps in deciding during what time interval my
advertisement must run on the platforms.

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 MARKET POTENTIAL

The global Soap tablets market size was estimated at USD 18.50 billion in 2018. Rising
awareness regarding personal hygiene among adults is expected to remain a key driving
factor for the market. These Soap tablets formulations are expected to gain popularity as they
have low pH levels which make them gentler and suitable for people with sensitive skin. This
factor is anticipated to contribute to the widespread adoption of the product in near future.
Household category led the soap tablets market, accounting for more than 60% of the market
in 2018. The demand is generally higher in urban areas in comparison to rural areas. Key
factor attributed to this growth include rising consumer awareness regarding hygiene and
healthy lifestyle in emerging economies. Government initiatives for improving hygiene in
emerging economies such as China and India will further propel the growth. For instance,
campaigns like Swachh Bharat Mission and Total Sanitation Campaign among others will
boost the spending on sanitary hygiene products like hand washes in India. Commercial
segment is anticipated to expand at a CAGR of 4.5% from 2019 to 2025, attributed to the
rising expansion of commercial properties and hospitality industries at global level. In 2018,
the U.S. hotel industry expanded by around 5%. Such significant rise can be, attributed to the
high product demand from commercial segment.

BASIS & PRESUMPTION

The project profile is drawn on the basis of following presumptions.

 Target has been fixed at production of 18,250,000 tablets or 912,500 tablet boxes on
the basis of single shift working and on average of 25 working days/month,
 The skilled & unskilled labor will be engaged @ Rs. 12,000/-, Rs. 10000/- and
respectively for each type of labor.
 Interest rate for fixed and working capital being 10% Per Annum. Margin money will
be the 15% of the total cost of project.
 Payback period being 4 years with a moratorium period of ½ years. Costs in respect
of machinery and equipment, raw materials are those generally obtained at the time of
preparation of project profile and may vary depending upon various factors.

IMPLEMENTATION SCHEDULE

 Scheme preparation and approval - 1 months

 Selection of site - 1 month

22
  Sanction of loan - 2 months
 Udyog Aadhar - 1 day
 Machinery procurement, erection - 1 months
 & Commissioning
 Power connection - 1 month
 Trial run & Statutory Compliances - 1months
 Commencement of production - 6 months onwards

TECHNICAL ASPECTS

Production Details & Process of Manufacturing soap tablets is not very complicated. For the
production, there is need usable and tried a formulation, raw materials and mixing tank. For
raw materials to be used, quantities to be used and ingredients usage rankings, you should
look into this formulation. Therefore, formulation and production methods of clear and
opaque Soap tablets are important. If you have not a good formulation, you cannot make
healthy and efficient production of any detergent derivatives.

Laboratory based Manufacturing Process

 Measure some water in 20 litre tanks.

 Add Nitrosol in water & stirr until it dissolves in a tank.
 Ina separate container, take some water and add caustic soda & allow it to dissolve in
water keep stirring the solution till the caustic soda completely dissolves in water
 Then add this caustic soda solution to main soap solution. Keep on stirring the
solution while adding.
 The total mixture will coagulate. The solution will become thick.
 Now dissolve the soda ash in a water in a separate container and stir well. Ensure soda
ash should completely dissolve in water otherwise it may create lumps in the soap
solution.
 Then add this solution to the main soap solution slowly and keep it stirring. It will
neutralize the solution.
 Again, in a separate container, take some water to dissolve SLS powder and Stir
properly.
 Add SLS solution to soap solution. Stir continuously.
 Again, in a separate container, dissolve STPP in water and stir well.

23
  Then add sulphonic (not sulphuric acid.) and continue to stir.
 Also add foaming booster to the solution. Stir properly till consistent solution will
form
 Allow the mixture to stand for 20 – 30 minutes.

Order of Dissolution

 Group 1
Nitrosol/ Antisol
Caustic Soda
Soda Ash
 Group 2
SLS/Texapon
STPP Sulphonic
Foaming Booster
 Group 3
Colour & Perfume

Quantity of the Raw Material to Produce 20 Soap Tablets (1 tablet box)

 Nitrosol / Antisol = 130Gram

 Caustic Soda = 100 Gm
 Soda Ash = 350 Gm
 SLS = 100gm
 STPP = 150 gm
 Sulphonic = half a litre
 Foaming booster = Half a litre
 Colour 50 gm
 Perfume = 40ml
 Water = As per Requirement

Raw Material Required

 Nitrosol (Takes time to sissoved in water) / Antisol (Powder form)(easily dissolve in

water)
 Caustic soda

24
  Soda Ash
 Sodium Laurel sulphate (SLS)/ Texapon
 Sodium tripoly phosphate
 Sulphonic (Liq)
 Foaming Booster
 Colour & Perfume

Quality Control and standards

1. IS 4199 (B) (2001): Toilet Soap, tablets (BI-LINGUAL) [CHD 25: Soaps and other
Surface-Active Agents

2. Drug Licence

As per the Drugs and Cosmetics Act and Rule, the Central Government and the State
Government makes rule regarding issuance of licence to a person for manufacturing
cosmetics. Basically, it is the State Drug Authorities of respective States, who are authorized
to issue manufacturing licenses.

3. Trade Mark

4. GST Numbers

Place of Manufacturing

While determining the place for manufacturing the Soaplet it has to be seen that the
manufacturing house should work in a manner it benefits the public at the same time it should
not affect the environment adversely. Also there has been rule laid down relating to the
factory premises which have been mentioned in the Schedule M-II of the Drugs and
Cosmetics Act and Rule. The manufacturer has to comply with those requirements and
conditions.

 Location and surroundings– The production house or factory should not be

established near residential areas. Also, it should have measures to avoid risk of
contamination from the external environment including open sewage, drain, and
public lavatory.
 Building and premises– ventilation openings and similar lines shall be designed Apart
from it the factory should have proper sanitation facilities, hygiene should be

25
 maintained in the manufacturing building, for that it has to be ensured that the
workers are provided and are using hand gloves and masks.
 They shall also conform to the conditions laid down in the factories Act, 1948.
 They should design, construct and maintain to prevent the entry of insects, pests, birds
and rodents.
 Waste disposal– Proper arrangement should be made for disposal of solid waste as
well as tablets waste.
 All bio-medical waste shall be destroyed as per the provisions of the Bio-Medical
Waste Rule, 1996.
 Apart from its provision should be made for proper and safe storage of waste material
waiting for disposal.
 Health, clothing and sanitation of workers- prior to employment all personnel shall
undergo medical examination including eye examination.
 It should be ensured that any of the working staff is not suffering from any
communicable diseases.
 Also, all the employ should be required to report about their illness or abnormal
health condition to their immediate supervisor.
 Drugs Controller General is appointed by the Central Government as a head of the
Central Drug.
 Standard Control Organization who is authorized to regulate the cosmetics and drugs
in India.
 Precuations to be taken
 Do not make the preparation near flame or fire
 Avoid direct contact of soap chemicals with the skin or eyes
 Keep all soap chemicals out of reach of children
 Do not taste any soap chemicals

26
 MANUFACTURING PROCESS

The Soaplet can be made or manufactured into 2 steps namely preparation of soap base and to
obtain finished products soap base. For making the soap base the specifications is carried
which is done by either remitting and perfuming and secondly by milling process. Fat should
be used of high standard quality. Weigh fat oil & lye (sodium- hydroxide) accurately, if the
lye is weighed more, the soap will be hard and harmful to skin and if the lye is low, the fat
will not be saponified properly. Melt oil fat into a kettle and filter it to remove any impurity.
Now add caustic soda lye into it slowly and stir continuously when the oil is saponified fully
add perfume and colours and pour into moulds.

Soap is produced industrially in four basic steps. but in principle it could be done in the three
steps outlined here.

 Step 1 - Saponification A mixture of tallow (animal fat) and coconut oil is mixed with
sodium hydroxide and heated. The soap produced is the salt of a long chain
carboxylic acid.
 Step 2 - Glycerine removal Glycerine is more valuable than soap, so most of it is
removed. Some is left in the soap to help make it soft and smooth. Soap is not very
soluble in salt water, whereas glycerine is, so salt is added to the wet soap causing it
to separate out into soap and glycerine in salt water.
 Step 3 - Soap purification Any remaining sodium hydroxide is neutralised with a
weak acid such as citric acid and two thirds of the remaining water removed.

27
  Step 4 - Finishing Additives such as preservatives, colour and perfume are added and
mixed in with the soap and it is shaped into bars for sale.

Manufacturing Machine Specification:

Soaplet Plant:
Machine Type Soap making
equipment
Automation Grade Semi-automatic
Driven Type Electric

Other Details: Sigma mixer is placed on the platform to enable material flow by gravity. Soap
Noodle is either lifted by bucket elevator or through electric hoist or manually as preferred.
Entire mixed mass from sigma mixer is fed to Noodler / Refiner Refined soap mass is fed to
the Triple roll mill where it is flaked out. Flaked material is lifted by conveyor to the Duplex
Vacuum Plodder. Bar cutter cuts the bar to set repeat lengths. Soap cutter is used to cut the
soap to billets matching to the final size. Billets are fed to automatic stamping machine or
manual stamping machine. Stamped cakes are either carton packed or soap wrapped.
Production Capacity: UPTO 2000KGS.

28
Other Details: Sigma mixer is placed on the platform to enable material flow by gravity. Soap
Noodle is either lifted by bucket elevator or through electric hoist or manually as preferred.
Entire mixed mass from sigma mixer is fed to Noodler / Refiner Refined soap mass is fed to
the Triple roll mill where it is flaked out. Flaked material is lifted by conveyor to the Duplex
Vacuum Plodder. Bar cutter cuts the bar to set repeat lengths. Soap cutter is used to cut the
soap to billets matching to the final size. Billets are fed to automatic stamping machine or
manual stamping machine. Stamped cakes are either carton packed or soap wrapped.

PRODUCTION CAPACITY

Per day production capacity may vary from 40000 to 50000 tablets or 2000 to 2500 tablet
boxes.

Quantity produced per Annum: 18,250,000 tablets or 912,500 tablet boxes

Value: 4,562,500

MOTIVE POWER REQUIREMENT: 5 HP single phase connection can be used

FINANCIAL ASPECTS

Fixed Capital

29
a. Land & Building: 600 Sq. ft @ Rs. 10000 Rented

b. Machinery & Equipment:

Sr. No Description Quantity Rate Amount

1 Drums (200 ltr) 4 10000 40000

2 Agitator with constant mixing (100Ltr) 1200000 200000

3 Automatic filling machine (8 bottles per min)185000 85000

4. Sealing & Packaging Machine 100000 100000

Total 425000

FINANCIAL ANALYSIS

a. Cost of Production (Per Year)

i) Total Recurring Cost = 4562500

ii)Depreciation on Machinery & Equipment@10% = 265000

iii)Interest on Total Capital Investment @ 10% = 540000

Total = 5367500/-

b. Turnover (Per Annum)

i)Quantity produced per Annum: 18,250,000 tablets or 912,500 tablet boxes

Turnover per Annum:9125000

c. Net Profit Per Annum

Net Profit = Turnover per Year - Cost of Production

= 9125000 - 5367500

= 3757500

d. Net Profit Ratio = (Net Profit per year / Turnover per Year) X 100

= (3757500 / 9125000) X 100

= 41.1%

30
e. Rate of Return = (Net Profit per year / Total Investment) X 100
= (3757500 / 5400000) X 100

= 69.5%

Break-even Point (B.E.P.)

Fixed Cost per Annum

a. Interest on investment @ 10% 540000

b. 40% of wages & Salaries 98800

c. 40% of other expenses (except rent) 98000

d. Rent 1000000

Total 1736800

Break- Even Point (B.E.P.) = [Fixed Cost/ (Fixed cost + Profit)] X 100
= 1736800/ (1736800+3757500) X 100
= 1736800 / 5794300 X 100
= 29.97 %

ORGANISATIONAL AND MANAGEMENT PLAN

Ownership of the Business
The business is owned by Soaplet pvt. Ltd.
Key Management Staff
 General Manager
 Production Manager
 Marketing Manager
 Accountant

31
 ORGANISATION CHART

Managing Director

Production Manager (Existing)

Factory Factory Sales Proposed

Assistant Assistant Officers Account
(existing) (Proposed) (Proposed) Officer

Details of Salary Schedule

SN Designation No of staff Salary Monthly Salary Annual Salary

1. Managing Director 1 65,000 65,000 780,000

2. Production Manager 1 300,000 30,000 360,000

Marketing Director 1 30,000 30,000 360,000

3. Sales/Marketing 2 12,0000 24,000 288,000

4. Factory Workers 4 12,000 48,000 576,000

5. Cleaner/Office Assistant 1 10,000 10,000 120,000

6. Drivers 2 20,000 40,000 480,000

TOTAL SALARY 12 247,000 964,000

32
 INDUSTRY PROFILE
The Fast-Moving Consumer Goods (FMCG) sector is the fourth largest sector in the
economy with a total market size in excess of Rs 60,000 crore. This industry essentially
comprises Consumer Non-Durable (CND) products and caters to the everyday need of the
population.

Product Characteristics

Products belonging to the FMCG segment generally have the following characteristics:

 They are used at least once a month

 They are used directly by the end-consumer
 They are non-durable
 They are sold in packaged form
 They are branded

Industry Segments

The main segments of the FMCG sector are:

 Personal Care: oral care; hair care; skin care; personal wash (soaps); cosmetics and
toiletries; deodorants; perfumes; paper products (tissues, diapers, sanitary); shoe
care.
 Major companies active in this segment include Hindustan Lever; Godrej Soaps,
Colgate-Palmolive, Marico, Dabur and Procter & Gamble.
 Household Care: fabric wash (laundry soaps and synthetic detergents); household
cleaners (dish/utensil cleaners, floor cleaners, toilet cleaners, air fresheners,
insecticides and mosquito repellants, metal polish and furniture polish).
 Major companies active in this segment include Hindustan Lever, Nirma and Reckitt
& Colman.
 Branded and Packaged Food and Beverages: health beverages; soft drinks;
staples/cereals; bakery products (biscuits, bread, cakes); snack food; chocolates; ice
cream; tea; coffee; processed fruits, vegetables and meat; dairy products; bottled
water; branded flour; branded rice; branded sugar; juices etc.
 Major companies active in this segment include Hindustan Lever, Nestle, Cadbury
and Dabur.
33
  Spirits and Tobacc Major companies active in this segment include ITC, Godfrey
Philips, UB and Shaw Wallace. An exact product-wise sales break up for each of the
items is difficult.

The size of the fabric wash market is estimated to be Rs 4500 crore; of household cleaners
to be Rs 1100 crore; of personal wash products to be Rs 4000 crore; of hair care products to
be Rs 2600 crore; of oral care products to be Rs 2600 crore; of health beverages to be Rs
1100 crore; of bread and biscuits to be Rs 8000 crore; of chocolates to be Rs 350 crore and
of ice cream to be Rs 900 crore. In volume terms, the production of toilet soap is estimated
to have grown by four per cent in 1999-2000 from 5,30.000 tonnes from 5,10,000 tonnes in
1998-99. The production of synthetic detergents has grown by eight per cent in 1999-2000
to 2.6 million tonnes. The cosmetics and toiletries segment has registered a 15 per cent
growth in 1999-2000 as against an annual growth of 30 per cent recorded during the period
1992-93 to 1997-98. In the packaged food and beverage segment, ice cream has registered a
negligible growth and the soft drink industry has registered a six per cent growth in 1999-
2000.

Promotion and Branding

Soap manufacturers start their marketing strategy by first identifying whether a marketing
opportunity exists. They proceed to determine whether to target the mass market or a niche
market, and subsequently position their products. Very often, “metoo” looking products,
despite their superior performance, fail to break the barrier of routine buyer behaviour. Where
the market is crowded, companies try to differentiate their products by new forms or new
packaging concepts.

With the increase in both domestic and global competition, companies are having to deal with
and reconcile two conflicting elements in marketing strategy – namely

profitability and market share. Greater market share involves higher marketing costs and
lower profitability. In India, Hindustan Lever's share of the soap and detergent market was
dented severely by the Nirma (an Indian national, privately owned company) strategy of
developing a product especially for the poor, until Lever managed to develop its own product.

34
A teaser ad on Lux soap recently unleashed by FMCG-major Hindustan Lever (HLL) gives
an indication that the company is planning to launch a soap which protects fairness -- in
evident competition to Godrej's FairGlow fairness soap.

The Lux commercial was kicked off almost in tandem with the launch of FairGlow, which is
touted as India's first fairness soap. FairGlow has marked a breakthrough in the stagnant toilet
soaps market and has kindled hopes of fuelling growth with the creation of a new category.

The industry was rife with speculation that market leader HLL would follow in the footsteps
of Godrej Soaps to launch a soap product on the same USP. While details of the proposed
Lux soap are not available, the product is expected to be launched in the next fortnight.

The ad depicts how, by using the soap, one can block the sun rays from tanning the skin
surface. However, the ad does not reveal the name of the product. But it clearly signals that a
new product offering from the Lux stable, albeit on the fairness plank, is in the pipeline. It
has been a couple of weeks since the teaser ad was launched on select channels.

The move is seen by industry observers as a knee-jerk reaction to combat the launch of
FairGlow. The only catch here is that while Godrej Soaps directly claims delivering fairness
through FairGlow, the proposed Lux product talks about protecting fairness by offering
sunscreen benefits. FairGlow is being promoted as a beauty and complexion soap which
contains a bio-extract called natural Oxy-G which is said to make skin fairer naturally.

For Levers, point out industry analyst, it is crucial to defend any market share erosion at a
time when the industry is strutting at growth levels of 2-3 per cent per annum. Given that the
Rs 2,900 crore industry has reached saturation levels in penetration in both urban and rural
markets, it is becoming increasingly challenging for marketers to develop value-added soap
products in the market.

Industry analysts point out that manufacturers will have to design products which offer
unique benefits so as to stoke volumes growth. It is not surprising then that FairGlow is
targeted at both men and women. Research findings show that a section of men too are users
of fairness creams.

There were 45 leading national brands. None of the national brands had more than 5% market
share and many more regional and unorganised sector/local brands. 9Hindustan Lever was
the market leader with about 30 (number) of toilet soap brands with a total market share of

35
67% in 1998-99 in organised sector as seen from Table-1 below, which gives the lead players
and their respective market share.

Table-1: The Lead Players and their Market Share

Percentage of Market Share
Company

HLL 67
Godrej 10
Nirma 8
Colgate Palmolive 1
Others 14
Source: Vanscom Database

Percentage of Market Share

HLL

Godrej

The
Nirma
leadi
ng
Colgate
bran
Palmolive
ds in
Others the
mar
ket are Dove, Pears, Lux, Dettol, Liril, Rexona, Lifebuoy, Nirma, Palmolive and Hamam. A
survey reported in Vanscom, which was conducted in Ahmedabad, showed that 103 toilets
soap brands were available in this city alone. The industry had witnessed many innovative
sales promotion activities in the recent past. Numerous factors were responsible for such a
phenomenon. One of the reasons being that the market being sluggish, companies were
trying to increase market share in stagnant to declining (volume terms) market in order to
retain consumers, to encourage switching, to induce trials and liquidate excessive
inventories. Another reason possible was that with the presence of so many brands the
competition had increased severally leading to fight for market share and shelf space.

36
Inflationary trend had made both the consumer as well as trade deal prone. Due to such a
dense market like India big companies adopt different strategies and coming up with
various sales promotion schemes continuously.

Today big players in Indian bath-soap market are…

 HLL (Hindustan lever limited –a subsidiary of Unilever)

 Godrej
 Nirma
 P&g (Procter and gamble)

Among these players HLL is the biggest player with around 67% of market share. For HLL
most of the soap has become a brand they have their own identity.LUX is the most recalled
soap in the mind of the consumers.

For these main four players, each soap is described in brief as an introduction about which
soap belongs to which company.

There is a strong MNC presence in the Indian FMCG market and out of the top 10 FMCG
companies, four are multinationals while two others have significant MNC shareholdings.
Unlike several other sectors where multinationals have entered after 1991, MNCs have been
active in India for a long time. The top five listed FMCG companies on the basis of their
sales turnover in the last financial year (either year ended December 31, 1999 or March 31,
2000) are:

Company Name ym(finance_year) sales Rs. Profit After

Crores Tax
Rs. Crores

Hindustan Lever Ltd. 199912 10978.31 1073.73

I T C Ltd. 200003 7971.94 792.44

Nirma Ltd. 200003 1717.88 234.1

Nestle India Ltd. 199912 1546.43 98.47

Britannia Industries Ltd. 200003 1169.84 51.02

Colgate-Palmolive (India) Ltd. 200003 1123.53 51.79

37
Godfrey Phillips India Ltd. 200003 1082.63 42.1

Dabur India Ltd. 200003 1046.28 77.67

Smithkline Beecham 199912 743.38 97.61

Consumer Healthcare
Ltd.

Godrej Soaps Ltd. 200003 714.74 61.89

Marico Industries Ltd. 200003 649.05 35.73

Cadbury India Ltd. 199912 511.08 36.7

Procter & Gamble Hygiene & 200006 492.85 75.03

Health Care
Ltd.
Reckitt & Colman Of 199812 435.33 31.47
India Ltd.

I S P L Industries Ltd. 199903 21.57 0.04

Among the major companies, Hindustan Lever has a strong presence in the food, personal
care and household care (detergents) sectors; ITC is the market leader in cigarettes; Nirma
has a strong presence in the detergent market; Nestle and Britannia are active in the food
sector and Colgate has a strong presence in the oral care segment.

Exports

India is one of the world‟s largest producers for a number of FMCG products but its FMCG
exports are languishing at around Rs 1,000 crore only. There is significant potential for
increasing exports but there are certain factors inhibiting this. Small-scale sector
reservations limit ability to invest in technology and quality upgradation to achieve
economies of scale. Moreover, lower volume of higher value-added products reduce scope
for export to developing countries.

38
 INDUSTRY SWOT ANALYSIS
Strengths:
 Well-established distribution network extending to rural areas.
 Strong brands in the FMCG sector.
 Low-cost operations Weaknesses:
 Low export levels.
 Small scale sector reservations limit ability to invest in technology and achieve
economies of scale.
 Several "me-too‟‟ products.

Opportunities:
 Large domestic market.
 Export potential
 Increasing income levels will result in faster revenue growth.

Threats:
 Imports
 Tax and regulatory structure
 Slowdown in rural demand

BCG MATRIX
The BCG matrix method can help understand a frequently made strategy mistake: having a
one-size -fits-all-approach to strategy, such as a generic growth target.

In such a scenario:

 Cash cows‟ business units will beat their profit target easily; their management has an
easy job and is often praised anyhow. Even, worse they are often allowed to reinvest
substantial cash amounts in their businesses, which are mature, and not growing
anymore.
 Dogs‟ business units fight an impossible battle and, even worse, investments are made
now and then in hopeless attempts to „turn the business around‟.
 As a result (all)question marks and stars business units get mediocre size investment
funds. In this way they are unable to ever become cash cows. These inadequate
invested sums of money are a waste of money. Either these SBUS should receive
enough investment funds to achieve a real market dominance and become a cash

39
 cow(or star), or otherwise companies are advised to disinvest and try to get whatever
possible cash out of the question marks that were not selected.

Limitations of BCG matrix:

Some limitations of Boston consulting group matrix include:

• High market share is not only success factor.

• Market growth is not the only indicator for attractiveness of a market.
• Sometimes dogs can even more cash as cash cows.
BCG MATRIX...

?
HLL: lifebuoy +,
Santur
HLL Nirma–nirma bath
Rexona, Pears soap
, Lifebuoy, breeze -nirma lime soap
Johnson & Johnson -camay,
Savlon, Dettol, breeze, Godrej- Fairglow
Maisur Sandal soap,
Godrej-shikakai,

HLL-Lux, Hamam, Colgate pamolive

Dove,Liril Godrej-Ganga, Godrej
NIRMA-beauty soap Johnson & No.1 breeze
Johnson baby soap
Godrej-Cinthol, Godrej no.

Cash cow-

40
A business unit has a large market share in a mature, slow growing industry. Cash cows
require little investment and generate cash that can be used to invest in other business units.

Star-

A business unit that has a large market share in a fast-growing Industry. Stars may generate
cash, but because the market is growing rapidly, they require investment to maintain their
lead. If successful, star will become a cash cow when its industry matures.

Question mark (problem child)-

A business unit that has a small market share in a high growth market. These business units
require resources to grow market share, but whether they will succeed and become stars is
unknown.

Dog-

A business unit that has a small market share in a mature industry. A dog may not require
substantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog
has some other strategic purpose, it should be liquidated if there is little prospect for it to gain
market share.

Five Forces analysis of Soap Industry

SUPPLY

Abundant supply in metros Competition is beefing up their distribution network to penetrate

the rural areas.

DEMAND

At an average GDP growth of 5.5% until February 2007, and the present consumer
demand is set to boom by almost 60% over this period.
Most Fmcg companies are awaiting to tap this latent.

BARRIERS TO ENTRY

Huge investment in promoting brands, setting of distribution network and intense

competition.

41
 BARGAINING POWER OF SUPPLIERS

Many established players have a slight edge in bargaining power giving the
competition among suppliers.
Some of the companies have backward integration, which reduces the supplier‟s
clout.

BARGAINING POWER OF CUSTOMERS

Due to increase in branded products, there is less chance that the consumer can
influence, but intense competition within Fmcg companies result in value
for money deals for consumers. (e.g., getting one soap free with one unit of soap)

COMPETITION

In bath soap industry there are low profit margins about 5 – 10% but they are selling in huge
volumes.

To beat the competition companies mainly use various strategies like discounts and freebies.

Unbranded players are size of Rs.1-3 billion and they are growing at the rate of 10%.

Local players have no large distribution network so they are giving fight to the branded
products by giving huge margins to retailers which is an important part of supply chain.

Hindustan Lever‟s SWOT analysis

42
Strengths:

 With identified strengths including a

 strong brand portfolio;
 consumer understanding;
 R&D ability;
 distribution reach(networking) and high-quality manpower
 Strong media personalities
 As the production is on large scale it has the benefit of economies of scale.
 Being very old and reputed company, the company and its brands achieves highest
trust of the consumers.

Weaknesses:

 The company's weaknesses spotted thereby include

 Increased consumer spends on education, consumer durable, entertainment, travel, etc
resulting in lower share of wallet for
 FMCG;
 Complex supply chain configuration and unwieldy number of stocks keeping units
(SKUs) with dispersed manufacturing locations;
 Price positioning in some categories that allows for low price competition and high
social costs in the plantation business.

Opportunities:

 HLL sees its opportunities as

 market and brand growth through increased penetration especially in rural areas;
 brand growth through increased consumption depth and frequency of usage across all
categories;
 upgrading consumers through innovation to new levels of quality and performance;
 emerging modern trade to be effectively used for introduction of more upscale
personal care products;
 growing consumption in out of home categories;
 positioning HLL as a sourcing hub for Unilever companies elsewhere and leveraging
the latest IT technologies.

43
Threats:

 Perceived threats
 span low-priced competition now being present in all categories;
 grey imports
 spurious/counterfeit products in rural areas and small towns; • changes in fiscal
benefits.

Personal wash market: While the growth rate for the overall personal wash market is only 1
per cent compared to average growth rate of 5 per cent, premium and middle-end soaps are
growing at a rate of 10 per cent. The leading players in this market are HLL (Lux, Lifebuoy,
Breeze, Rexona), Nirma (Nima), Godrej Soaps (Cinthol, FairGlow, Shikakai, Nikhar), and
Reckitt & Colman (Dettol).

Growth in production of FMCG

Est
% EST %
Production (market size) Unit 20022003 2003-
growth growth
2004

FMCG (overall) Rs billion 600 2% 609 1.5%

Soap & Toiletries (overall)

Rs billion 90 -5% 90.9 1%

Soap & Toiletries (overall)

Mn tonn 60 4% 60.09 1.50%

Fabric wash market MN tonn 50 4% 50.25 0.50%

Laundry soaps/bars Rs billion 53.3 -6.5% 50.64 -5%

Personal wash market

Rs billion 45 5% 45.45 1%

Toilet soap Rs billion 42 -3.2% 40.11 -4.5%

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 Projected Growth in Production of FMCG Sector
First two
quarters First two
(Apr-Sept quarters
SECTOR UNIT
2003-04) (Apr-Sept 2004-
Actual 05) Projected
FMCG (overall) Rs billion 1.50% 2%

Soap & Toiletries (overall)

Rs billion -4% 1.50%

Soap & Toiletries (overall)

MN tonn 2% 4%

Fabric wash market

Laundry soaps/bars Rs billion -8% 0%

Laundry soaps/bars MN Tonn -5% 1%

Personal wash market Rs billion 7% 1.5%

Toilet Soap Rs billion -5% 1.5%

Market Segmentation

Most multinationals are active in almost all the regions profiled in this report. Their global
reach has been facilitated in part by the increasingly open economic policies that were being
implemented by developing countries such as India and China during the 1990s. Corporate
market expansion strategy by the multinational organizations has involved increased market
segmentation to create a wide range of products especially in the toilet and laundry soap
categories. The main developments during the 1990s has thus been the growth of task
specific products. The market for bath products in particular, has shifted toward body
cleansing, as well as moisturising, as brands become more specialised. Traditional soaps are
fighting back with a move toward nostalgia, and seem to be attracting consumers back to the
products they know best.

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Mergers and acquisitions

Production of soaps for distribution on the international market takes place as near to national
markets as possible. The distance of many of the emerging markets from major industrial
nations, and the sheer bulk of the bar soap and liquid soaps combine to make import
uneconomical in most instances. While domestic manufacturers traditionally tend to
concentrate in their countries of origin, they are increasingly seeking to increase revenues by
venturing into neighbouring countries. This situation is most common in Asia and Latin
America.

The main strategy used by companies wishing to enter other markets is a series of mergers
and acquisitions. In addition, they acquire manufacturing facilities and set up distribution
agreements with local companies.

With the exception of East and Central Europe, most soap and other toiletry markets are
becoming increasingly foreign. In Latin America, Brazil stands out as an exception to this
trend, having a high presence of domestic companies.

In Asia, domestic manufacturers such as Nirma and Godrej are gradually increasing their

domestic market share, particularly at the lower end of their markets.

The acquisition of regional players represents a clear means of establishing or strengthening a

position in a region. Acquisition is also being used as a means of balancing the geography of
a portfolio where a large player is weak in a particular country. This seems to have been a
major factor in Unilever‟s acquisition of Helen Curtis. The alternative to acquisition or
creation of a manufacturing operation in the target country, is to set up a licensing agreement
with a local manufacturer.

How local companies are responding to multinational strategies

Many national soap manufacturers are matching the big player‟s expansion strategies by
expanding into niche markets where brand loyalties are yet to form. They are becoming
successful by quickly identifying and meeting consumer needs,

and by offering more competitively priced products than the multinationals. Another strategy
involves offering products at low retail prices and with small value shares in several sectors
without occupying leading positions in any of them.

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While new product development will be important in the strategy of niche players, it is
unlikely that it will be as innovative as that achieved by the global players. This is because
investment funds are not readily available in the same way, and new product development
will therefore tend to take the form of brand and line extensions. Nonetheless, many local
manufacturers are identifying and exploiting pockets of innovation in niche markets
especially, where global players do not have dominant positions. In any case, the findings of
this research indicate that many sectors of the global market for soap are not yet saturated. It
is believed that additional sales growth can be generated by targeting specific consumer
groups, for example, consumers in provincial and rural regions, health-conscious consumers,
mothers, children and teenagers.

Threats

Without exception, all the major players and other manufacturers in the industry list the
following issues as threats to the uninhibited growth of the industry:

High government custom duties on essential imported raw materials; High production excise
taxes which in some cases are higher than the import duty on raw materials; High local
energy costs including electricity and fuel; Increasing cost of policing their products against
local artisanal soap producers. This takes the form of increasing research and development, as
well as advertising and promotional expenditure to differentiate their products in the mass or
lower market segment from local ones.

Loopholes in government c of grey imports, i.e.,

unofficially imported products in the local market. In addition, official relaxation of trade
barriers in all regional markets has increased the entry of imported soap into most regional
markets that were fairly stagnant in terms of new product d development and launches.

Competition has intensified significantly over the last five years and has resulted in heavy
corporate investment in a wider range of technologically advanced products and new product
development in general. This coincides with the emergence of a more sophisticated consumer
base, much greater segmentation in markets, and increased demand for value added products.

Basic products like bar soaps remain dominant in Asia, as the bulk of consumers in most
markets earn low incomes and only buy low-cost items. However, this situation showed signs
of change over the last three years with bar soap increasing in value shire from 68.2% to

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72.1%. This was due to consumers at the lower end of the market trading up to more
expensive types of soaps as their average incomes increased. Liquid soaps became
increasingly popular until the 1997 economic crisis caused consumers to economize. The
popularity of liquid soaps and shower gels is due to their hygienic packaging which makes
them popular to use because, unlike bar soaps, it cannot be shared by members of the family
for body cleansing.

The regional market presents tremendous opportunities to the soap manufacturer in terms of
the share size of the formed population. With India‟s population officially exceeding one
billion at the end of the last century and China‟s over 1.5 billion, the majority of them living
under the poverty line, appropriate marketing strategies are needed to turn this region into an
area of advantage for the industry. Unilever is the most dominant player in the region with
Japanese companies,

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 FINDINGS & SUGGESTIONS

Tax reforms

The government has gradually removed the restrictions on imports of consumer goods in the
country and also significantly reduced custom duties. The domestic tax structure of these
products, however, has not been rationalised to provide level playing field for competition.
This is adversely affecting the growth of the FMCG industry and could have far reaching
adverse impact. The following taxation issues need urgent attention of the government:

Extremely high incidence of tax on certain product categories

Some FMCG products such as shampoos, processed food, soft drinks and toiletries
containing alcohol attract high rates of excise duty and sales tax. The total tax incidence in
some cases is more than 60 per cent of the cost or more than 30 per cent of MRP. Such high
tax incidence hampers growth of these product categories besides encouraging manufacture
of spurious products and smuggling.

It is recommended that the total excise incidence of FMCG products should not exceed 16
per cent in the case of non food items and eight per cent in the case of processed foods.
Similarly, the marginal rates of sales tax, which is currently in the range of 10 to 25 per cent,
should not exceed 12 per cent.

Irrational domestic tax structure encouraging imports

Significant reduction in custom duty rates of consumer goods has made imported product
cheaper as compared to indigenously manufactured products, due to irrational domestic tax
structure. For instance, goods manufactured in India suffer from cascading effects of taxes on
inputs as additional cost compared to imports.

The cascading effect of sales tax and local levies on inputs used in domestic manufacture
should be eliminated by providing either MODVAT credit or by introducing notional VAT
covering both central and state taxes on an urgent basis. Moreover, MRP-based excise duty is
levied on a large number of FMCG products. Countervailing duty on the same product when
imported is charged on CIF value. The MRP based assessable value for excise duty does not
allow abatement for post manufacturing costs such as advertising and selling expenses
whereas CIF value considered for the purpose of import duty does not include costs of these
elements incurred subsequently by importers.

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This differential basis creates unfair competition as tax incidence on domestic manufacture
could be considerably higher in case of those products which incur significant marketing and
distribution cost. There is a need to bring parity in tax incidence between domestic
manufacture and imports by including all such elements of post manufacturing costs while
deciding the abatement percentage of MRP based duty.

Inverted Duty structure for selected inputs

Duty on certain raw materials is higher or the same as compared to finished products in
which these materials are used. Such raw materials include oils and chemicals like Soda ash,
caustic soda and LAB. In addition to customs duty, raw materials are also subject to
SAD/sales tax and octroi and therefore total tax incidence and cost of indigenous
manufacture goes up. The import duty on raw materials needs to be rationalised so that it
does not exceed 60 to 70 per cent of the duty on finished goods.

Need for rationalisation of taxes on processed foods

Processed food industry, with its vertical integration with the agricultural sector has
significant potential for employment generation and economic growth. The existing tax
structure and its high overall incidence, however, has been hampering the growth of the
processed industry. The increase in excise duty in last year‟s budget from eight per cent to 16
per cent has adversely affected the growth of processed foods industry. It is recommended
that marginal rate of excise duty on processed foods should not be more than eight per cent
and the sales tax should be levied at four per cent.

Cascading effect of Special Excise Duty

The special excise duty introduced last year is not "cenvatable‟‟ except in the case of selected
products. Most FMCG products covered by tariff chapter 33 such as shampoos, ice creams
and cosmetics are subject to SED. This tariff chapter also contains very wide definition of the
term "manufacture‟‟ which includes labeling, relabeling or conversion of large packs into
small packs. The levy of SED on such products therefore leads to double taxation when
goods are labeled or converted into small packs after manufacture. It is recommended that
SED should be made "cenvatable‟‟; alternatively the term "manufacture‟‟ needs modification,
atleast for the purpose of SED by excluding labeling, relabeling or conversion into small
packs.

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Other suggestions

A joint industry –government initiative for building a "Made in India‟‟ brand for FMCG
products is required. With many multinationals moving into the Indian FMCG market, a
concerted marketing strategy which creates strong brands will be needed for Indian FMCGs
to gain recognition in the market.

Better packaging materials are necessary as a large number of FMCG products are perishable.
The government must facilitate more R&D in packaging materials as this will help in cutting
wastes and costs in the sector. The possibility of a longer shelf life will encourage production
of goods of higher value addition by companies in the sector.

While import of most items has been allowed, the government is not geared to prevent import
of spurious products. In other countries, FMCG goods have to be cleared by regulatory
authorities before they are allowed to enter domestic shores. This is not happening in India
and the government needs to undertake a comprehensive crackdown on these products.

The small-scale reservation policy should be reviewed as it hampers the growth of this sector.
Many reserved products, including several FMCG products can be freely imported. Under the
current policy, not only are Indian producers of many FMCG products restricted from
attaining economies of scale, they also have to compete against import that do not face
constraints on small scale reservations.

Food laws such as the PFA Act should be amended and be made contemporary.

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 CONCLUSION

From the above detailed study of the FMCG industry with the focus on bath soap segment we
can make out that FMCG is the most emerging sector and industry not only in India but all
over the world.

The main leaders of the bath soap segment like HLL, NIRMA. AND GODREJ are focused in
the study which shows that HLL is the leader in FMCG industry and has a large amount of
market share about 67% and even the growth rate. The main reason for the success of some
companies is their strategy and distribution networks.

HLL is dominating due to its diversification, vertical and horizontal integration, breadth and
depth product line and innovative and customer-oriented product introduction. Thus, the
company needs to focus on its distribution channels, networking, marketing strategies, sales
promotion etc to succeed in the market.

From the study we can make out that nirma and godrej still needs a lot market penetration in
the urban market also with focus on the premium class.

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 BIBLIOGRAPHY

Websites:

 www.infoline.com
 www.nirma.co.in
 www.hll.com www.godrej.com
 www.thehindubusinessline.com
 www.google.com

Newspapers:

 Business Standard
 Economic Times

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