Neev Herbal Soaps

XLRI SCHOOL OF BUSINESS AND HUMAN RESOURCEPRESENTED BY: ANSHAT SINGHAL B09070||GAURAV SHARMA B09080||

MEGHA BHATIA B09090 || PAVANI AYSOLA B09100 || SAYAN MAJUMDER B09110 || VIKRAM SINGH RATHORE B09120

A venture for social Development

CASE ANALYSIS

Neev Trust – An Initiative

• NEEV TRUST started by Mr. Anurag Jain and Mrs. Shikha Jain in 2006– To empower poor in slums and villages – Focus on education, entrepreneurship, community

development• NEEV SOAPS started in 2007

– To provide employment and financial independence– Financial sustainability for social activity– Registered under KVIC – Operates in hut in village in Jamshedpur– 3 women full time employees

Toilet Soap Market• Oldest Fast Moving Consumer Goods (FMCG)

industries in India. • Highest penetrated category (98% urban and 70%

rural) • Scores of brands – Attention of India's 1,100 million

users.• 10% to the total 97,800 crores• Currently this industry is estimated to be 9800 crores

annually in terms of sales and 5, 50,000 tonnes in terms of volume (As reported by AC Nielsen India Retail Store Audit 2008).

• Herbal soap market – Rs. 660 crores ( in 2007)

PEST Analysis• Political Factors

– Sops to industry by different states to setup plants– Emphasis on promotion of Small scale industry to benefit

small scale player– Focus on Rural industries and promotion for major trade

fairs and events

• Economic Factors– Excise duty reduction from 10 to 8 % in 2009 on soaps– Increased spending power of population– Lower Palm oil prices on imports, leading to lower cost– Higher import duty on caustic soda to offset lower prices

and dumping by foreign players

PEST Analysis• Social

– Main target at Hygiene and personal care– Indian customer becoming more beauty conscience– Increase in awareness and benefits of herbal soaps– Increased social importance for Handicraft and

Craftsmen

• Technological– Soap classified as Grade 1, 2, 3 on basis of Total Fatty

Matter by BIS, – Currently using small scale technology with no

mechanization

Porter’s 5 Forces

Porter’s 5 ForcesSuppliers- Soda ash concentrated industry- Supply of oils – a constraint

ModerateSubstitutes- Other Ayurvedic products- Household remedies

HighBuyers- Quality conscious- Bargaining leverage- Substitutes available

High

Porter’s 5 ForcesBarriers to Entry- Delicensed Industry- Low capital requirements

Low

Threat of Rivals- Number of established players- Both herbal and beauty soaps- High penetration

High

ProductHandmade

herbal soaps

Comes in six different varieties

Do not contain any chemical or artificial

colors

Maintains moisture

content and is non-harmful

Lasts long and is good value

for money

PriceFollows cost

based pricing

Fixed margin- 20% for

individual and 40% for bulk

Price for 75 gms bar - Rs. 20 to

Rs. 40

Price for 100 gms bar – Rs. 30

to Rs. 60

Outside Jamshedpur,

pricing is uniform at Rs. 60

Price

Soap 75 gms bar 100 gms bar

Lemongrass 20 30

Neem Tulsi 25 35

Olive Rose 35 50

Almond Rose 40 60

Patchouli 40 60

Rose Petals 25 NA

Place

Made to order as of now

Also trade fairs in Ranchi,

Jamshedpur and metros

Premium retail outlets,

handicraft boards, major

hotels targeted

Placement through regular

departmental stores

unsuccessful

Promotion

Very limited money spent on

promotions

Mainly melas, word of mouth

and website

Of late, resorting to more

professional visual

merchandising in melas

Developed a new website this year

SWOT Analysis

Strengths•Innovative production•Natural ingredients•Medicinal qualities•Control over production and distribution

Weaknesses•No standardized procedures•No economies of scale•Limited production capacity•No organizational structure in place•No STP in place

Opportunities•Limited competition•Can leverage the social angle•Can expand distribution network through premium retailers, Khadi Village Udyog, Jharcraft, hotels,etc

•Capital from loan, venture capitalists etc.

ThreatsLack of brand awarenessCompetition from bigger brands like MedimixLimited distribution network

Recommendations

SegmentationGeographic Segmentation

• Metros • Tier 1• Tier 2• Tier 3

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Behavioral Segmentation

Basis for Purchase• Skin Conscious• Price

√

Demographic Segmentation

Income• Upper Class• Upper Middle Class• Middle Class• Lower Class

Age• Below 15 years• 15 – 45 years• Above 45 years

Gender• Male• Female

√√

√

√

Targeting

Upper and Upper Middle Class

Metros and Tier 1

Cities

Females Skin Conscious

Target Segment Attractiveness• Nearly 26 percent of Indian population is urban.• Concentrated demand in the top cities that we are

trying to get a grip on. The top 10 odd cities contain about 20% of India’s urban population as per estimates.

• Bangalore, Delhi, Mumbai, Kolkata, Kanpur,Chandigarh.

• The top hundred cities barely account for 60% of India’s urban population.

Target Segment Attractiveness

PositioningSalient attributes

– Handmade– Fresh Cut– Fresh skin– Anti fungal – Anti microbial – Moisturizer– Different shapes

Values – Natural – Exotic– Environment Friendly– Social Venture

PositioningSymbolsTagline – Nature’s envySymbol – Butterfly sucking nector

CompetitionMedimix, Margo, Chandrika

– Herbal – Established players– Priced higher– Strong regional hold

Other beauty soaps – – Non herbal – Market leaders– Lower price

Nature’s Envy

Product• 5 varieties

- Lemon grass- Almond Rose- Olive Rose- Patchouli- Neem Tulsi

• Features and Benefits:- Keeping the benefits same - Thrust on the social cause

Packaging

Freshly Sliced Handmade soaps crafted from the purest Indian Herbs

Neem Tulsi

Lemon Grass

Almond Rose

Olive Rose

Neev Herbal SoapNature’s Envy"Neev Herbal Handmade Soaps are made

from vegetable oils (coconut, olive and palm oils) and purest essential oils without using any chemicals or artificial colours. Mild and nourishing to the skin they do not rob the skin off its natural oil.”

Packaging

Price

The revised price can be

followed

Appeals to our target segment

Profit on margin not

volumes

Significant margin for distributors

Can reduce price later

Promotion• Ladies’ Clubs• Spas and beauty products• Hotels• Trade fairs• Promotional activities in woman colleges • Videos in you tube• Tie-up with ayurvedic and health clinics• High-end boutiques• Ads in ayurvedic/high-end magazines• Free samples (25 gms) with these magazines

Promotion

Women’s clubs

Promotion

Heritage Hotels

Promotion

Trade exhibits

Promotion

Health Clinics

Promotion

Women’s and health magazines

Promotion

Boutiques

Promotion

Spas

Promotion

During college fests

Place• Premium retail stores• medicine shop• handicraft stores• Gift shops• Clubs• Spas and beauty parlours• Premium hotels• Temporary stalls during college fests specially in

women colleges• Either-or kind of shops where alternative products are

available

Place

Premium Retail Stores

Place

Selected medicine stores

Place

Handicraft Stores

Place

Premium Hotels

Place

Shops selling alternative products

Place

Trade Fairs

Other Recommendations• Scale up operations• Thrust on Social Venture• Testimonials• Extend to new product lines like face wash,

moisturizer• Corporate Movie

Thank You