Consumer Behavior I

Super shampoo case and the indian mass market

Group 1

Arjun P K (231033)

Rohit P L (231122)

Srijit Nair (231158)

Vivek Chavan (231173)

Snehashish (231174)

John S Manavalan (231178)

ContentsExecutive Summary.....................................................................................................................................2

Problem Statement.....................................................................................................................................3

Data Analysis...............................................................................................................................................3

Recommendations.....................................................................................................................................12

Key Decision Criteria..................................................................................................................................13

Action and Implementation Plan...............................................................................................................15

Conclusion.................................................................................................................................................16

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Executive Summary

The case gives a situation where Mr. Suresh Venkataraman desires to launch his own shampoo

brand in the rural markets of Karnataka. The fact that fascinated him the most was the use of

single packaging. Also he wondered how with the invention of sachets, shampoo as a category

was transformed from an unaffordable product to an affordable one. Therefore, in spite of

being from Coimbatore, a city known for its textile industries, he decided to get into the

shampoo industry. Mr. Venkataraman also had a firm belief that the rural market offered a

huge potential for consumer products and before he goes ahead with the launch, he carries out

a survey to figure out how the rural markets respond to consumer products and how this can

be used for a successful launch. He figures out that he can have two options- to come out with

both sachets and bottles of the shampoo or to only come up with the sachets and then if it’s

accepted, he can come out later with bottles. Mr. Venkataraman decided to commission a

survey to obtain some insights related to the consumer behaviour towards shampoo category

as well as towards the brands.

Mr. Venkataraman often wondered why several brands of shampoos did not have a brand

name that was simple to understand. He decided to name the product Super Shampoo. He

selected the name Super as it was easy to pronounce and had an English overtone that was

considered a part of the aspirations of rural consumers. Moreover, the word “super” was

amplified by the media to celebrate film stars by projecting them as “superstars”. The word

“super” triggered a superior image amongst whatever it was competing against in a specific

context.

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Problem Statement

Super shampoo being a new brand, had to face challenges like:

o Addressing the established competitors like HUL,P&G,cavin care.

o Competing against the advertising methods of the established brands.

o Understanding the diversity of cultures in the rural market.

o Understanding the consumer psyche in the changing environment.

o Low per capita income.

Data Analysis

Rural market in India

In India roughly 150 million households earned between Rs. 75,000 to Rs. 150,000, and it has

been found out that 25% of these 150 million were from urban and rest 75% from rural India.

Rural consumer market consisted of between 720 & 790 million consumers with around 160

million households. The FMCG market in India was estimated between US$15 billion to US$18

billion and likely to grow to US$33 billion by 2015. The rural market grew 25% in 2008 and was

projected to be around US$ 425 million in 2010; double the size of 2007. It was also estimated

that around The rural market grew 25% in 2008 and was projected to be around US$ 425

million in 2010; double the size of 2007.

The FMCG market in India was estimated between US$15 billion to US$18 billion and likely to

grow to US$33 billion by 2015. It was found that the rural market grew 25% in 2008 and was

projected to be around US$ 425 million in 2010; double the size of 2007. US$ 8.55 million of

FMCG was contributed by rural India. The US$ 8.55 million of FMCG was contributed by rural

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India. Urban markets were contributing only 29% of all of FMCG. There are around 350 million

low income consumers in the country.

The Rural Consumer

The rural consumer base was a highly heterogeneous one in nature. The education level is low

compared with the developed cities and they are highly risk averse in nature. The consumers

are found to be highly value conscious. They do not mind shelling out extra money if the

[product is worth it.

Shampoo market in India

Total Hair Care market worth was estimated to be of Rs. 70 million in value. Out of which

Shampoo category was around Rs. 30 million. The awareness of shampoo was around 80% in

rural and 90% in the urban areas. The Per annum consumption was 13 ml per capita, much

lower than Asian average. The top players with there market shares are as follows

HUL – 46%,

P&G -24%,

Cavin Kare- 18%,

Dabur -7%

The primary stock keeping units were bottles and sachets. Pricing of the sachets were ranging

from 50p to Rs. 3. 90% of sachet market was from rural, out of which 70% of which came from

South India. North India contributed 50% of bottle volume which shows that in south Indian

rural markets sachets is the best way of launching the shampoo.

The parameters of the top brands are as follows:

Parameters Clinic Plus Head & Shoulders Chik

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Target Consumer

Low income consumer

High income consumer with high awareness

Low income consumer

(urban & rural) (urban & rural)

SKU 25 ml – 300 ml bottles

100 ml – 400 ml bottles 25 ml – 300 ml bottles

7.5 ml sachets 7.5 ml sachets 7.5 ml sachets

Pricing Rs. 2 sachet Rs. 3 sachet 50p – Re. 1 sachet

Benefit Cosmetic value Anti dandruff Cosmetic value

Value Family value & Health

Leading anti dandruff shampoo

Flagship brand for confident Indian woman

Category Beliefs among non-users

In the Indian mass business sector, it was found that among non-clients of cleanser, most don't

participate in washing their hair all the time, with the larger part of respondents washing their

hair just once (48%) or twice (43%) every week. In those examples, most persons showed that

they didn't utilize Shampoo to wash their hair, but instead option items, for example, Shikakai

or cleanser; just 24% of the respondents utilized cleanser.

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Statements Mean Value

1. Washing with shampoo makes hair look beautiful 4.1

2. Always buy shampoo in Sachet 4.1

3. Use shampoo only when need to wash oil from hairs 4.0

4. Shampoo makes hair strong and healthy 4.0

5.Shampoo cleans hairs better than soap 3.9

6. Feels confident when use shampoo 3.9

7. Shampoo is very expensive 2.5

8. Shampoo is a luxury that is used on special occasions 2.6

Agree

There is adequate confirmation to infer that non-clients of cleanser trust that utilizing

cleanser will make their hair solid and solid

It is likewise trusted that cleanser ought to just be utilized every so often to wash oil

from the hair as it cleans the hair superior to anything cleanser

Appearance is likewise a key element for the Indian shopper as it is trusted that there is

a help in certainty at whatever point the hair has been washed with cleanser rather than

utilizing any of the option items

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In spite of these convictions, the Indian mass-business sector shows a general

unwillingness to buy a lot of this item at any one time and have just acquired cleanser

sachets.

Disagree

The buy examples are not straightforwardly identified with the to some degree

unfavorable financial states of the Indian mass-market, as the cost for cleanser does not

impact its buy or recurrence of utilization.

It is not trusted that cleanser is extravagant nor that cleanser is an extravagance thing,

just to be utilized on extraordinary events.

Neither Agree nor disagree:

Chemicals in cleanser are bad for the hair and will harm it

Cleanser can be utilized for the periodic wash however not for the day by day wash

Attempt cleanser in light of the proposal of a companion of relative

Cognitive beliefs on the three brands of shampoos

Clinic Plus

• A cosmetic brand targeted to low income users thus ideal for the consumers in rural

India who were predominantly of the lesser income levels

• Positioned as a "Family Value and Health Foundation" which helps to solve the largest

hair problem in India i.e. hair fall while providing lustre, shine and strength

Advertising elements that match with the cognitive beliefs:

• Prevention of split ends and protection from dirt

• Prevention of hair fall

Reasons for a score of 3.9 on question about probability of next time purchase:

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• The Clinic Plus advertisements have an aspirational appeal particularly to Indians in the

rural areas who strive to achieve their social needs of self-actualization, achievement

and affiliation

• It shows the mother as the chief decision maker when purchasing for the family; other

women can relate to this as most rural Indian women would be in similar positions

based on the culture and societal norms

• Focus on Family’s hair care rather than showcasing individual hair care benefits

Head & Shoulders

• Head & Shoulders is an anti-dandruff brand of shampoo approved by dermatologists

and endorsed by celebrities

• The brand is a part of the fastest growing segment (anti-dandruff) of the market and is

priced in the premium tier

Advertising elements that match with the cognitive beliefs:

• The corresponding advertisements provide assurance through science; uses high

percentage to support the claim of reduced hair fall and believability due to 9/10

dermatologists recommending the brand

• Value for money : The claim of one versus three washes which appeals to the

conservative and cautious nature of Indian rural consumers and helps to reduce

dissonance related to purchasing this premium product

• The product includes intensive Solutions, such as VitaZinc designed to treat itching,

flaking, dryness, irritation and redness, it also helps protect hair from falling out

Reasons for a low score of 2.7 on question about probability of next time purchase:

• Do not motivate rural Indians to purchase because of following reasons:

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• the price of the brand

• Difficulty in rationalizing the purchase because the product they have been

using for years (Shikakai) provides the same benefit

• Besides solving their dandruff problem and being more appealing to the opposite

sex, the ads do not pull on any of the aspiration based appeals which are

extremely important especially in the rural Indian culture

Chik

• Chik is a cosmetic shampoo, which is the 2nd most recognizable and used brand of

shampoo which is priced so as to target to semi-urban and rural consumers

• It would be present in the popular or economy tier

• Chik promises the confident Indian woman soft, nourished beautiful hair

Advertising elements that match with the cognitive beliefs:

• Chik keeps hair soft, nourished and beautiful all the time

• Do not have to worry about tangling of hair

Reasons for a neutral score of 3 on question about ‘probability of next time purchase’:

• Fail to tap into the core beliefs of the decision maker i.e. strong family bonds, earning

societal respect, need for affiliation, goal achievement through hard work

• The ad is weak, does not have a strong aspiration base, and failed to address the key

problem of hair fall

• The risk averse nature of rural Indians who may not see the need for simply looking

beautiful as enough motivation to purchase

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Affective aspects reflected by advertisements of the three brands of shampoos

Clinic Plus

In the Clinic Plus advertisements we can see the influencer is the mother. The mothers are nurturing and

providing what is best for their children; therefore they would select the best shampoo for nurturing

their children’s hair as well. Clinic Plus promises to help them to do that. It instils confidence in the

mothers who may give themselves credit for giving their daughters the freedom to experiment with her

hair, without having to worry about their daughters’ hair fall

Head and Shoulders

The endorsements may lead consumers to externalize the benefits experienced from using H&S through

sharing experiences with friends giving all the distinctive praises to the shampoo. The H&S influencers

such as Kareena Kapoor and Saif Ali Khan makes consumer believe that after using the shampoo they

would look like them (stylish and centre of attraction)

Chik

Chik has used beautiful young urban women who are independent and ready to conquer the world. This

depicts the minds of the modern Indian women and that is how the target market can relate with it. Chic

leads consumers to discover a new and beautiful side to them and along with it, the confirmation that

no goal is too far or unachievable.

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Differences between the cognitive and affective beliefs reflected by the respondents based on their exposure to the advertisements of the three brands

• In the case of cognitive belief, customers have different perception based on the recognition from the advertisement. It might be negative or positive.

• In the case of affective belief, using celebrities for trust or story plot in the advertisements, the brands try to attract customers to have positive affective belief.

Recommendations

To succeed in rural market the company will need to adapt the 4P’s of marketing to the 4A’s in

their strategy – Awareness, Acceptability, Availability and Affordability. Due to the limited reach

of mass media the marketer would have to focus more on traditional media like melas, haats or

mandis, which were places where the entire population of a village congregated on a periodic

basis to purchase a multitude of essential goods while also seeking a say’s entertainment for

the family.

Access and availability are equally important. There should be deep distribution and easy

availability. Availability is the biggest challenge. Affordability is the key driver in rural India

because of which the sachets needs to be carefully priced. With low disposable income product

needs to be affordable to the customer.

As seen above there are several challenges for the product can face in the rural market hence

they can use try devising some strategy to overcome the challenges. Some of the strategies that

the company can adopt are:

Product Strategy: The packaging of the product should be in colourful and decent sachets in

order to attract the rural consumers. The rural consumers are more concerned with the utility

of the products. The brand awareness and loyalty in rural areas is quite high. Therefore, first a

brand value must be created among the rural customers.

Distribution Channels: Most manufacturers and marketers do follow a distribution

arrangement for a village with the population of at least 5000 people. While it is essential to

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formulate specific strategies for distribution in rural areas, the characteristics of product, its

shelf life and other factors have to be kept in mind. The distribution strategy especially framed

for rural India are:

Co-operatives society Public distribution system Multipurpose distribution canters

Distribution up to feeder markets/mandi towns/hats etc.

Pricing Strategy: The per capita income of consumers in rural areas is quite low as compared to

urban areas. Therefore, the price of the product in rural market should be lower than that of

urban market. Also refill packs can be introduced as they reduce the price. Promotion Strategy:

In rural markets, TV, radio, print media and cinema are not that popular. Therefore, new and

innovative modes of promotion strategies should be adopted. One strategy could be promoting

the product at village haats, melas and mandis. Also, leaflets, in local languages, describing the

product could be distributed among the villagers.

Key Decision Criteria

Since Super cleanser is another brand, along these lines it could confront very much a couple

challenges before it positions itself easily in the country market. A percentage of the significant

issues and choice focuses that could manifest are as per the following:

•Addressing the built up brands of shampoos:

There were essentially three noteworthy brands of shampoos in country South India. They were

Clinic Plus, Head & Shoulders and Chik. These brands were truly settled in their own particular

rights and it would be very troublesome for new participant to dislodge these brands from the

business sector.

•Competing against the promoting lightning war of the built up brands:

The aforementioned brands of shampoos are the results of vast business houses like HLL, P&G

and Cavin Kare individually. In this way, they have an immense budgetary reinforcement to

spent on promoting which is perpetually the most mainstream technique for advertising a

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FMCG item. Despite what might be expected, another contestant like Super Shampoo does not

have the obliged monetary ability to spent on promoting.

•Understanding the differences of societies:

There is a gigantic distinction between the urban and country outlook. There exists an

enormous crevice between shopper conduct in country ranges and urban regions. Since, Mr.

Venkataram is from a urban territory and his psyche thinks in a urban style, there can be

trouble in identifying with the country purchaser.

•Understanding the purchaser mind in the evolving environment:

Interest for an item is fluctuated for individuals living in diverse zones with distinctive climatic

conditions, occupations, education level, standpoint towards life and their presentation to

cutting edge products and administrations. The salary distinction between the couple of well off

individuals and poor make contrasts in the interest, traditions and convictions, making division

troublesome.

•Low per capita pay:

Provincial customers have low per capita pay, low obtaining force and a low proficiency rate,

adding to a low expectation for everyday comforts. In any case, this is changing as purchasers

are turning out to be gradually proficient.

•Sales Management:

Provincial advertising includes a more noteworthy measure of individual offering exertion

contrasted with urban promoting. The provincial sales representative must have the capacity to

direct the country buyers in the decision of items, who now and then don't appropriately spur

clients. Channel administration represents an issue as circulation systems in country towns are

protracted, including more go-betweens and therefore higher shopper process. Additionally,

merchants with experience are not accessible.

•Proper media channel:

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Not at all like urban India, country India was what one may call a fundamentally dull media

market as far as the most entered urban media; for instance, TV was the media with the most

noteworthy scope, yet it infiltrated just 38% of rustic India. Radio was in front of print as far as

scope, likely inferable from proficiency boundaries. It came to 18% while print came to 15%.

Film had a simple 5% scope. In this way, it was critical to pick the right media for promoting in

Action and Implementation Plan

Product Strategy:

The packaging of the product should be in colourful and decent sachets in order to attract the

rural consumers. The rural consumers are more concerned with the utility of the products. The

brand awareness and loyalty in rural areas is quite high. Therefore, first a brand value must be

created among the rural customers.

Distribution Channels:

Most manufacturers and marketers do follow a distribution arrangement for a village with

the population of atleast 5000 people. While it is essential to formulate specific strategies

for distribution in rural areas, the characteristics of product, its shelf life and other factors

have to be kept in mind. the distribution strategy especially framed for rural India are-

Co-operatives society

Public distribution system

Multipurpose distribution canters

Distribution up to feeder markets/mandi towns/hats etc.

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Pricing Strategy:

The per capita income of consumers in rural areas is quite low as compared to urban areas.

Therefore, the price of the product in rural market should be lower than that of urban market.

Also refill packs can be introduced as they reduce the price.

Promotion Strategy:

In rural markets, TV, radio, print media and cinema are not that popular. Therefore, new and

innovative modes of promotion strategies should be adopted. One strategy could be promoting

the product at village haats, melas and mandis. Also, leaflets, in local languages, describing the

product could be distributed among the villagers.

Conclusion

It is quite evident from the case that a proper market survey is required for a new FMCG

product in general and a new shampoo product in particular to enter into the rural market.

There were days when huge organizations flocked to rural markets to establish their brands.

Today, rural markets are critical for every marketer be it for a branded soap or an automobile.

As urban markets are getting saturated for consumer goods (FMCG & Durables), marketing

executives are fanning out and discovering the strengths of large rural markets. The Indian hair

care market is undergoing a sea change in the respects of the buying behaviour and consumer

preferences. The consumers are willing to experiment with new products and manufacturers

can therefore take advantage of this situation and gradually venture into the market. There is a

strong wave in favour of anti-dandruff shampoos and shampoos with minerals and proteins

which nurture the health of the hair. There is a stiff competition and the rural market can be

exploited for revenue. The income pattern of the population in rural areas is a bit wayward and

the manufacturer can tap this situation and make profit by use of “Sachets”. According to the

analysed data, the major dilemma for companies today is the gap between the rural and the

urban consumer. The reason why only few companies have managed to venture out is because

of the lack of understanding into the psyche of the rural consumer. Thus looking at the

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challenges and the opportunities which rural markets offer to the marketers, it can be said that

the future is very promising for those who can understand the dynamics of rural markets and

exploit them to their best advantage. A radical change in attitudes of marketers towards the

vibrant and burgeoning rural markets is called for, so they can successfully impress on the 230

million rural consumers spread over approximately six hundred thousand villages in rural India.

it is expected to increase because of the potential recognized in the rural market by the major

players in this segment. The market is also expected to increase due to lower duties and

aggressive marketing by players. Shampoo is also available in a sachet, which is affordable and

makes up to 40% of the total shampoo sale. Since long HUL has been the market leader in the

shampoo industry. With rivals like Procter & Gamble and Dabur giving tough competition,

FMCG major Hindustan Unilever’s market share in shampoo segment is declining and analysts

pointed out that there is a concern over the firm losing out to competition in its other core

segments. According to the Nielsen’s January-February data, HUL’s market share (volumes) in

shampoo segment declined by 1.3 percentage points to 47.3 per cent while P&G gained by 2.4

percentage points with a market share of 17.7 per cent. Dabur on the other hand gained 0.8

percentage points capturing 6.7 per cent market share in the estimated Rs. 3,000 crore Indian

shampoo market. The company’s brands ‘Clinic Plus’, ‘Dove’ and ‘Pantene’ competes against

the likes of P&G’s ‘Head & Shoulder’ and Dabur’s ‘Vatika’, ITC’s ‘Fiama Di Wills’ The Indian

shampoo market is characterised by a twin-benefit platform: cosmetic and anti-dandruff. It is

basically an upper middle class product, as more than 50% of the consumers use ordinary toilet

soap for washing hair. While the awareness level is high, the penetration level is very low even

in the metros which is only 30%. Urban markets account for 80% of the total shampoo market,

the penetration level is rapidly increasing due to decline in excise duty, which was 120% in 1993

to 30% currently. The hair conditioner market is estimated at around Rs 200 crores and is

growing at about 40 to 50 percent a year. In India, the share of hair conditioners is merely one-

fifteenth of the shampoo market. In most mature markets, the share of hair conditioners is

about one-third.

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