Detergents

Marketing in Practice Detergent Powders

Industry Structure

Market

Per capita consumption: 3.2 Kg Industry growth rate: 6-8% per

annum

World’s third largest detergent market

Total detergent market: Rs 6000 crore

Detergent powder: Rs 3300 crore

23 lakh tonnes/ annum

Other forms:

Detergent bars (43%)

Liquid detergents

Compacts

3300 crore

55%

6000 crore

Marketing in Practice Detergent Powders

Industry Structure

National Sales Distribution• Urban – 60%

• Rural – 40%

38%

28%

18%

16%

Marketing in Practice Detergent Powders

Industry Structure

Detergent Demand in India (th MT)

0200400600800

100012001400160018002000

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

2004

-05

Strong and consistent growth

Marketing in Practice Detergent Powders

Industry Structure

Very high penetration Growth

• Upgradation from bars to powder

• Increasing per capita consumption

• Increasing use of premium powders

Marketing in Practice Detergent Powders

Industry Structure

Detergent powders segmentation• Premium

Surf Excel, Ariel, Henko (Surf Excel + Ariel ~ 90%)

Rs 75 per Kg

• Economy Henko White, Rin, Tide, Sunlight

Rs 35-50 per Kg

• Popular Nirma, Wheel, Ghadi, Check

Rs 18-22

• Compacts

•T

Marketing in Practice Detergent Powders

Industry Structure

Market share• HLL is the largest player. Operates in all segments

• Nirma leader in the popular segment

• P&G present in the economy and premium segments

42%

21%

7%

4%

12%

14%

HLL

Nirma

R&B

Henkel SPIC

P&G

Others

Marketing in Practice Detergent Powders

Industry Trends

Detergent market has good penetration – but slow growth Saturation hits urban areas Bar form of detergents are losing out. Premium quality synthetic

detergents are experiencing growth due to drop in unit price. Compact detergents meant for washing machines are getting

slow entry. Price competition among major manufacturers getting more

intense. South India offer good potential and growth. P&G has chosen an expansٹ绿ｷ럿 strategy by lowering prices. HLL trying to build brand loyalty for Surf by innovative ad

campaign.

Marketing in Practice Detergent Powders

Consumer Behaviour

Across all segments: The main attributes that consumers look for in a detergent are:

• Value for money (how effective the detergent is in cleaning clothes vs affordability)

• Ease of use (must dissolve fast) – this was specific to households which do not have washing machines

Apart from the cleansing action, detergents should also be easy on the skin and must have a fragrance: Ariel Spring Clean (roses), Ariel Fresh Clean (mogra)

Main factor influencing consumers’ expectations:• Improved affordability

• Ad campaigns

Marketing in Practice Detergent Powders

Consumer Behaviour

Within a segment: Very little perceived difference in a particular category and a price

point Consumers are more or less indifferent among leading brands as long

as prices are comparable This commoditization nature of detergent business that is forcing

players to fall in line with lower prices superior quality detergents at an affordable price

Between two segments: With price cuts, upgradation With slowdown, downgradation

Marketing in Practice Detergent Powders

Major Players

Premium• Surf Excel• Ariel• Henko Stain Champion

Economy/Mid Priced• Tide• Rin Shakti• Henko Mr. White

Popular• Nirma• Wheel

Marketing in Practice Detergent Powders

Positioning Map - Detergents

Price

Cleaning Power

Whiteness

Concentrates

Economy

Popular

Marketing in Practice Detergent Powders

Surf Excel

‘Surf’ launched in 1959: first in Indian detergent market Surf Excel launched in 1992 Complete migration of Surf to Surf Excel Blue in 2004 Premium segment: Market leader Positioned as very effective with any kind of stains: ‘Surf Excel Hai Na’

• Less effort in cleaning and lower water consumption

Focus on building brand loyalty through emotional connect: ‘Daag Acche Hain’ campaign

• Positioned against generic hate stains attitude• Assurance: Go ahead and get dirty• Latest campaign: Colour

Variants: • Surf Excelmatic: Specially for washing machines• Surf Excel Blue: Stain removal with fabric care (midpriced segment)• Surf Excel Liquid: Liquid concentrate

Marketing in Practice Detergent Powders

Ariel

Launched by P&G in India in 1991 First to bring compact detergent technology Premium: Positioned as a stain remover that is easy to use

P&G: Slashing prices of Ariel to expand its consumer base, more affordable.

Two variants, Ariel Spring clean and Fresh clean (scented) “A to Z daag ke liye jo de taaza khushboo”.

• A man cooks dinner for his wife, who is away. He stains his shirt in the process, but uses Ariel to remove the stain

• Key emphasis: Ease of use, fragrance, stain removal

Target segment: Women, age group 25-35 years Variant: Ariel Front-o-Mat (front loaded washing machines)

Marketing in Practice Detergent Powders

Henko Stain Champion

Launched in ’94 in the South: Direct competition to Surf Top end premium: Market share ~9% Focused on stain removal (highest order need for Indian consumer):

Pre-treater powerpearls (proprietary technology) High-on-quality, relatively low-on-price proposition Earlier campaigns: Positioning Henko as a better option (usage of

Surf was more a habit than conviction)• Celebrities; Freebies; Regional association to strike emotional chord

“Iske power pearls kapro mein geheraee tak jaye aur daag ko jar se nikal”• Focus on product performance superior as compared to rivals

• Technological aspect: No social/emotional angle as such

Marketing in Practice Detergent Powders

Tide

Launched in 2000: Mid priced ; Price cuts: moved to popular

“Fastest growing and one of the most deeply penetrated detergents in households across India” – ORG-AC Nielsen

Target: "superior whiteness" and "whiteness maintenance" laundry needs of a homemaker in India

“Chaunk gaye? White ho to Tide ho…”• Showcase its cleaning power; superior whitening• Focus on value proposition: High performance at low cost• No emotional aspect: Beg stage of PLC• Social consciousness of white clothes

Marketing in Practice Detergent Powders

Rin Shakti

Re-launched in 2004 as Rin Advanced to counter Tide Mid-priced brand May lead to cannibalization of other HLL customers due to

forced price cuts of Surf Excel Blue “Double safedi”

• Focus on whitening: Direct competition with Tide

• Pure clean technology: Absence of residue

• Social acceptability due to white clothes

• Focus different from Surf Excel Blue: However, does not completely eliminate cannibalization given similar prices

Marketing in Practice Detergent Powders

Henkel Mr White

Mid priced: Market share ~14%; No 2 in segment Only eco-friendly detergent in its segment: not emphasized Promises superior product performance;unique dazzling whiteness

• Mr White - personifying the brand clearly

Relaunched this year: enhanced formulation, a fresh new fragrance, in an all-new pack

“Thoda sa green thoda sa blue. Thoda sa jadoo. Mr. White. Sabse white”.• Social consciousness: Ensure that clothes are the whitest

• Uses expert: Research on voices of authority

• Promises the “Power of 2 - Lime + Blue”

• Focus on premium values: Good quality at a reasonable price

Marketing in Practice Detergent Powders

Wheel

Launched in 1987 by HLL to counter Nirma Single largest detergent brand by value Popular segment: Mass market Superior formulation to Nirma

• Promise: Clean tough stains easily; not harmful to hands• Lemon fragrance

‘Mehnat kum, phir bhi dhulai No. 1’.• Positioned as the smart housewife’s choice for the mass market

Introduced a fresh fragrance along with Wheel Green: “Naya khushboodaar Wheel. Mehengi wali dhulai, budget mein samayi”.

Premium variant: Active Wheel• Quality Clean and Care at affordable price• Brightness of coloured clothes, fresh fragrance

Marketing in Practice Detergent Powders

Nirma

Caused a marketing miracle when introduced • Targets bottom of the pyramid

• Priced 1/3rd of competitors; caused immediate trial

• Unique environment-friendly, phosphate-free formulation— consumers become loyal

• 0% of the market share in 1976 to 61.6% of market share in 1987

• HLL launches Project STING

Unique marketing mix: Lowest pricing, distribution through small retailers and heavy advertising

Communication of Value: Simple messages and catchy jingles

Has a variant in the premium segment • Priced almost 40% lesser - 25g, 500g, 1000g

Marketing in Practice Detergent Powders

Future Trends

Detergent industry set to grow at 10% per annum With penetration already high, growth to come largely

from:• Upgradation from bars to powder

• Increasing per capita consumption

• Increasing use of premium powders

Effort by firms to avoid the commoditization of the product

Greater stress on branding and emotional connect