A STUDY ON THE MARKET SIZE OF THE PERFUMED HAIR OILS IN THE RURAL MARKETS
Submitted byKishore Kumar Risong Assam Institute of management PGDBM 2nd year batch Roll no:-26/D/2009
INDIAN FMCG INDUSTRY IN CONTEXT OF RURAL MARKETING 1)STRUCTURAL ANALYSIS OF FMCG INDUSTRY 1. Individual items items are of small value (small SKU's) although all FMCG F MCG products put together account for a significant part of the consumer's budget. 2. The consumer spends little time on the purchase decision. He seldom ever looks at the technical specifications. 3. Limited inventory of these products (many of which are perishable) are kept by consumer and prefers to purchase them frequently, as and when required. 4. Brand switching is often induced by heavy advertisement, recommendation of the retailer or word of mouth.
3) Competitions Factors that enable small, unorganized players players with local presence to flourish include the following Basic
technology for most products is fairly simple and easily available. The small-scale sector in India enjoys exemption/ lower rates of excise duty, sales tax etc. This makes them hem mor more price rice compe ompettitiv itive e vis vis-a-a-vis vis the the organized sector. A highly highly scatt scattere ered d marke markett and poor poor trans transport port infr infras astr truct uctur ure e limit limitss the the abili ability ty of MNCs MNCs and and national players to reach out to remote rural areas and small towns. Low brand brand aware awarenes nesss enable enabless local local player playerss to market their spurious look-alike look-alike brands.
2)Huge Distribution Network a)India is home to six million retail outlets, including 2 million in 3,160 towns and four million in 627,000 villages. b) Since retailers are reluctant to allocate slow moving items important factors for the FMCG s to success are the ability to build,
PROBLEMS PREVAILING IN THE PARICULAR SECTOR Less developed developed infrastr infrastructur ucture. e. In rural markets, brands are non-existent. They identify FMCG by three things -primarily by color, color, visuals of animals and birds and by numbers. Low educatio education n level. To do proper proper mark marketi eting ng of their their product productss FMCG FMCG comp compani anies es needs needs to educate the consumers. So if you have to create brandcommunication, marketing efforts must be supported by education. Longer credit period requirement. Rural retailers are far less specialized than their urban counterparts and carry a wider range of products. Since frequent delivery is not possible in their part of the world, they tend to carry only a single brand in each product category & usually, the brands that are first on the rural shelves become synonymous synonymous with product category category and are difficult to dislodge
MARICO business profile Marico is a leading Indian Group in Consumer Products and Services in the Global Beauty and Wellness space. Marico markets well-known brands such such as Parachut chute, e, Saffo ffola, la, Sweek eekar, ar, Hair Hair & Car Care, Niha Niharr, Shan hanti amla, Mediker, Revive,Manjal, Kaya, Sundari, Aromatic, Camelia, Fiancee and HairCode. a)Distribution channel b)Sales hierarchy Need of the project:Marico has been the undisputed market leader in the hair oil, anti-lice segment. The brand equity of this FMCG Company is one of the best in the market. But, over sometime, the company has been facing lots of threat from other hair-oil companies like almond Bajaj drop drops. s.Da Dabu burr,sha ,shali lime mer& r&va vasm smol ol in the the ligh lightt hair hair oil oil segm segmen ent. t.In In this this cont contex ext, t, the the proj projec ectt was was unde undert rtak aken en for for, comp compet etiti ition on mapp mapping ing&t &to o determine the existing market size of
RESEARCH METHODOLOGY a) RESEARCH APPROACH:1. Primary data collected by the survey method. 2. Secondary data collected by surfing the Internet, Organization Organization records, etc. b)RESEARCH INSTRUMENTS:1. Detailed Questionnaire Method 2. Informal face to face interview method c)SAMPLING PLAN:Sampling Unit :-Retailers.stockists,consumers Sample size :-190 outlets,100 consumers Sampling Procedure :-Questionnaire, personal interaction interaction & Secondary data. d ata. Research Area: Markets studied Golaghat Dergoan Amguri Nazira Bokakhat Dimow Titabar
Research Research objectives:Competition mapping of the hair-oils category with special reference to a)hair&care,BAD,Clinic AD,Clinic all clear b)Parachute jasmine,Bajaj jasmine,Vasmol jasmine. c)Parachute,shalimer,paragon&fortune coconut oils To understand customers response to the small packs-20ml,50 ml,75 ml,100ml. To know the availability of coconut oils in the rural markets Companies under study:Bajaj Almond Drops
Vasmol jasmine Paragon Shalimer Fortune coconut oil.
FINDINGS&ANALYSIS Availability Availability of marico product is 92%. Outlets
Numbers
Keep marico product
174
Donot keep marico products
16
Total outlets
190
Availability of Marico products in the markets Outlets keep Marico products Outlets do not keep marico products 8%
92%
Reasons for not keeping Marico productsReasons for not keeping marico products
No of outlets
No sales person(PSR or sales person from stockist)visit
7
Inad Inadeq equa uate te cred credit it facili acility ty
4
Delivery issue
5
Total outlets
16
From the table, it is seen that irregular visit made by the sales person is the prime reason for not keeping marico products followed by the improper delivery&credit delivery&cr edit facility facility..
c)Retailer purchasing purchasing from outside the territory MARKET
NO OF OUTLETS PURCHASE FROM-
TOTAL
aaa STOCKIST
WHOLESELLER
GOLA GHAT
25
29
NAZ IRA
15
20
OUTSIDE THE TERRITORY
Reasons for purchasing outside the terrtory Underutting of rate Less offering in scheme
54
2
37
No credit facility No sales persons visit No cash discount
A MG U R I
5
3
7
15
TITA BAR
15
11
3
29
BOKA KHAT
8
6
DIMOW
7
4
2
13
DERGAON
6
2
4
12
16
17 4
13% 6%
14 50% 19%
PURCHASED MARICO PRODUCT FROM OUTSIDE THE TERRITORY
From the above table table it is observed that in the Amguri market most most retai retailer lerss purchas purchases es from from outside outside the territ territory ory,fo ,follo llowed wed by Titabar&Dergoan.
12%
Undercutting of rate is the major reason for the retailers for purchasing purchasing out the territ
2)Factor that influence a retailer to motivate a customer to buy a product When I asked that is profit margin is important for them to motivate that customer to buy that brand, then 81% said that profit margin is an important factor&the factor&the rest of 19% said no no..
Factor that motivate a the retailer
No 19%
Yes 81%
3)Brand awareness of coconut oils among users 3)b)When I asked the 62% retailers what what coco coconu nuttoil oil bran brand d the the most most customer customerss specifying specifying for when when they come come to your your shop shop,t ,the hen n 67% 67% said said that customers come to my specifying the name of parachute,17% said shalimer.
3.a)When I asked retailers about brand awareness awareness of coconut coconut oils among the consumers then 62% said that yes, customers coming to my shop specifying the name of the particular coconut oil.
awareness of Brand awareness YES
coconut oils
NO
Brand
paragon 4%
38%
62%
awareness
others 12%
shalimer 17% Parachute 67%
3) Availibility of Parachute in different outlets as compared to its competitors BRANDS
PARACHUTE
SHALIMER
PARAGON
FORTUNE
CLINIC COCONUT OIL
PLUS TOTAL OUTLET VISITED
MARKET
A
C
B
C
GOLAGHAT
4
20
30
54
2
5
2
NAZIRA
2
12
23
37
1
AMGURI
2
3
20
25
TITA BAR
3
5
1
9
BOKAKHAT
2
4
8
DIMOW
1
5
DERGAON
2
6
B
Total
A
C
B
A
A
C
B
C
B
3
2
55
1
3
3 2
40
2
2
2
2 1
15
3 1
3
1
1
30
13
2
3
2
7
13
1
2
4
12
2
1
1
15 1
2
2
A=A class outlets= 4500< MONTHLY SA LES B=C
A
category outlets= 2000< MONTHLY SALES< 4500
C= C category outlets=MONTHLY SALES< 2000
From the above availability availability table it can be said that the availability of parachute in the different outlets is much better than its competitors brands.
2
15 15
4)Promotions of various perfumed hair oil companies in the rural market
a)Point of sale advertisement of bajaj almond drops
b)Wall painting promotion of Marico at the point of sale.
5)Availability
of perfumed hair oils(BAD,H&C,Clinic all clear) in the outlets of different markets
BRANDS
HAIR AND CARE A
MARKETS AL AT
BAJAJ ALMOND DROPS C
B
¡
¥
¢
£
NAZIRA TITABAR DER A N
£
BOKAK
§
AT
¢
AM URI DIMOW
§
¤
©
¥
§
¤
§
8
¥
§
8
¥
¤
9
5
¦
§
7
¦
¤
¦
¥
¤
¦
¤
¦
§
8
§
¤
§
¤
7
¨
5 OAL
AT
¨
NAZIRA
5
TITABAR ©
¦
¤
C
B ¥
§
¦
¤
6
¤
¤
5 §
9
¤
§
¦
7
¦
¤
5 8
¦
¤
¤
§
¡
A
¥
¦
¤
¥
¤
§
¤
C
B ¥
£
¥
¤
A
¥
¦
¤
CLINIC ALL CLEAR
¨
DER AON
A=(A category outlets)= 5 MONT LY SALES
<
5
BOKAK
AT
¨
A
B
C
A
B
C
A
B
C
AM URI
AIR AND
category outlets) = MONT LY SALES< 5
<
C=(C category outlets)= M ONT LY SALES<
BAJAJ ALMOND DROPS
DIMOW CARE
B= (B
CLINIC ALL CLEAR
Availability of &C is found highest in olaghat in the outlets including including A category B category,C category followed by
7)Comparative study study of Baja j Almond Drops,Clinic all clear and H&C in terms of price ,consumer offer,trade offer,trade offers B R AN D S
sku
Consumer offer
20 ml 50 ml 75 ml 100 ml
Bajaj Almond Drops If contains, th en Y If dont contain, th en N N
MRP (in Rs)
Y ,Godrej soap Y ,Chinthol soap N
24
150 ml
Trade offer
H&C
N
20 ml
N
50 ml
N
If dont contain, th en N
ii)Cash discount of Bajaj almond drop drops, s, Cli Clinic nic all all clearis clearis higher higher than H&C.
20
38 42
Y,20% extra
100
Y,20% extra
N
35
N
55
35
60
iii)Ret iii)Retail ail margin margin of Baja Bajajj alm almond drop drops, s, Cli Clinic nic all all clearis clearis higher higher than H&C. Stretegy Stret egy adop adopted ted by both the companies :-
N
N
150 ml
Retail Margin Cash
If dont contain, then N
10 N
FINDINGS i)SK i)SKU U vari ariety ety of Bajaj almond drops drops is higher higher than than H&C and Clinic all clear. clear.
,then ,then Y
N N
MRP (in Rs)
Ifcontains
s,then s,then Y
75 ml
200 ml
Clinic all clear
Ifcontain
75
200 ml
100 ml
MRP (in Rs)
N N
N
10 %
9%
10%
1 5 -2 %
1 5%
2%
Both the companies are tryi tryin ng to crea creatte demand among consumer consumer through through consumer consumer offer.
7)Brand awareness a)When I asked retailers about brand awareness of perfumed hair oils among the consumers then 56% said that yes,customers coming to my shop specifying the name of the particular perfumed hair oil brand.the brand awareness among the consumers is low from the retailers prospective.
b)From the 44% retailers to where most
brand aware customers specially come,63% said that customers coming to their shop asking bajaj almond drops drops .So we can say say bajaj almond is the most preffer preffered ed brand.
Brand
brand awareness
awareness
clinic all clear 6%
YES 44% NO 56%
hair&care 31% bajaj amond drops 63%
Monthly sales of Hair&care,bajaj almond Drops&clinic all clear (IN (I N A CA CATE TEGO GORY RY OU OUTL TLET ETS) S)
BRAND H&C
GOLAGHAT
BOKAKHAT
800
200
BAD CLINIC ALL CLEAR
1600
500
300
100
TOTAL
2700
800
DIMOW
TITABAR
400
400
(IN B cat catego egory ry out outlet lets) s)
BRAND
GOLAGHAT
BOKAKHAT
DIMOW
Monthl Mon thly y sal sales(i es(in n Rs)
MARK MA RKET ETS S DERGOAN
AMGURI
NAZIRA
Above Above 4500
200
120
400
450
1400
500
1000
900
120
90
200
180
1720
710
1600
1530
MARKE MAR KETS TS TITABAR
DERGOAN
AMGURI
100
100
80
90
100
150
BAD
480
300
200
400
250
400
420
CLINIC ALL CLEAR
100
80
50
40
70
50
90
TOTAL
780
480
350
520
410
550
660
(IN C CATEGOY CATEGOY OUTLETS) MARKETS BOKAKHAT
DIMOW
TITABAR
DERGOAN
AMGURI
NAZIRA
H&C
100
80
60
40
40
80
100
BAD
340
220
120
220
150
300
260
60
40
35
35
40
50
CLINIC ALL CLEAR
Between
2000&4500 B Below
2000
NAZIRA
200
GOLAGHAT
A
C
H&C
BRAND
Categor Cat egory y
Some abbreviations H&C=Hair care BAD=bajaj almonds drops Sku=stock keeping unit
To find the marketshare marketshare of H&C,Bajaj H&C,Bajaj Almond Almond Drops ,Clinic ,Clinic all clear in the different different rural markets markets I have selected selected some of the specific specific rural markets markets with very high high sale,high sale,high sale,moderate sale,moderate sale&low sale&low sale,since sale,since it is notpossible notpossible to present to present the market shares of all the markets that have visited.
GOLAGHAT MARKET
Sale
Market
Very high sale
Golaghat
High sale
Nazira
Moder Moderat ate e sale sale
Titaba Titabarr
Low sale
Dergoan
CALCULATION CALCULATION OF MARKET S HARE
Total monthly sale is calculated in terms of the brand sold in the respective outlet . Total outlet covered in the Golaghat market =55 Among the outlets surveyed I have found that 54 outlets keep both BAD,H&C and33 outlets kept Clinic all clear.
BRAND
AVERAGE SALE IN THE A CLASS RETAIL OUTLETS
AVERAGE SALE OF B CATEGORY OUTLETS
AVERAGE SALE OF C CATEGORY OUTLETS
SALE IN TERMS OF AVAILABILITY
(Availability in the different category outlets)*(average sale)
H&C
800
200
10 0
4*800+20 *800+20*200+ *200+30 30*100=10200 *100=10200
BAD
1600
480
340
4*1600+20 *1600+20*480+ *480+30 30*340=26200 *340=26200
CLINIC ALL CLEAR
300
100
60 3*300+20 *300+20*100+ *100+10 10*60=3500 *60=3500 TOTAL SALE=39900
MARKET SAHRE OF BAD=(Sale of BAD/total sale)*100=(26200/39900)*100=66% MARKET SHARE OF CLINIC ALL CLEAR=(3500/39900)*100=9%
Red colour digits represent the A A category outlets Green colour digits represent the B category outlets
NAZIRA MARKET MARKET SHARE OF H&C=(Sale o f H&C/Total H&C/Total sale)*100 sale)*10 0 =(4400/18620)*100 =24% MARKET SAHRE OF BAD=(12820/18620)*100 =69% MARKET SHARE OF CLINIC ALL CLEAR=(1400/18620)*100 =7%
DERGOAN DERGOAN MARKET(Total MARKET(Total outlet covered in the the Dergoan market =40) MARKET SHARE OF H&C=(Sale o f H&C/Total H&C/Total sale)*10 0 =(710/3610)*100 =20% MARKET SAHRE OF BAD=(2600/3610)*100 =72% MARKET SHARE OF CLINIC ALL CLEAR=(300/3610)*100 = 8%
MARKET SHARE OF H&C=(Sale o f H&C/Total H&C/Total sale)*10 0 =(1320/12570)*100 =11% MARKET SAHRE OF BAD=(Sale of BAD/total sale)*100 =(10600/12570)*100 =84% MARKET SHARE OF CLINIC ALL CLEAR=(6 50/12570)*100 =4%
From the above calculation it is found that Bajaj almond Drops is the market
Cross tabulation Cr
Crosstab
t
Coun t
Count Mont
l
elow 0 to 6 quantit ur ased 6 to 12 or f 13to 18
Mont
sales
Rs 2000
4500 < sales
Total
51
18
1
53
24
8
4
36
19 to 24
1
7
2
10
25to30
1
3
1
5
3
6
9
43
14
164
otal
107
From the above cross tabulation it is seen that retailers retailers having their monthly sales below 2000 mostly purchase 13 to 18 pcs.The retailers having income level more than 4500 usually purchase31 to 36 pcs. The retailers retailers having monthly sales in between2000&4500 most purchase 19 to 24 pcs of Bajaj Almond Drops.Thus Drops.Thus it can be concluded that a retaler having high monthly sales going to purchase more pcs.
Important observation
sales
elow
34
o 36 31 t
l
quantit 0 to 6 ur ase 7 to 12 f or 13 to 1
Rs 000
21
16
3
1
20
30
8
3
41
19 to 2
21
21
3
45
25 to 3
19
13
4
36
2
5
7
47
16
170
31 to 3 Total
Total
107
From the above cross tabulation
it is seen that retailers having their monthly sales below 000 mostly purchase purchase 0 to pcs& to to pcs, to 8 pcs.The pcs.The retailers retailers having income level more than 00 usually purchase purchase to pcs.thus pcs.thus it can be concluded that a retaler having high monthly sales going to purchase more pcs.
Test for one on e way anova an ova There is no significant difference difference in the the mean ratings given by the consumers in the different different skus of H&C.
ANOVA Sum of
Mean
. . .
. .
e ween roups n roups oa
.
.
.
INTERPRETATION
Since the significant value is less than0.001,we can said that there is a significant difference between the ratings given by the H&C users in the different skus of H&C.
H&C users 50 ML
100ML
200 ML
17% 50% 33%
From the above observation it can be said that 50 ml is the most preff p reffered ered sku of H&C among H&C users.
Comparison of the Price lists of jasmine hair oils
Sku(parachute jasmine)
MRP
R.M.
RATE TO RETAILER
PRIMARY SCHEME
SECONDARY SCHEME
NET RATE IN CARTON
50 ml
14
9%
(14/1.09)=12.84
6
4
12.34
100 ml
29
9%
(29/1.09)=26.60
6
4
25.61
200 ml
49
9%
(49/1.09)=44.95
6
4
42.9
Scheme
Net rate
Bajaj
jasmine
50 ml
18
10%
(18/1.10)=16.28
5%
[16.28-(16.28*5%)]=15.4
100 ml
34
10%
(34/1.10)=30.90
5.20%
[30.9-(30.9*5.2%)]=2 9.2
200 ml
65
10%
(65/1.10)=59.09
5.20%
[59.09-(59.09*5.2%]=5 5.9
R.M.
RA RATE TO RETAILER
SCHEME
Net rate
SKU(Vasmol jasmine)
MRP
20 ml
7
10%
(7/1.10)=6.36
One piece f ree with one dozen
35 ml
10
10%
9.09
Do
50 ml
12
10%
10.9
Do
100 ml
26
10%
26.63
Do
6.36-0.56=5.80
Comparison of offers BRANDS
Bajaj
Ja smine
sku
If contains, then Y If dont contain, then N
Parachute Jasmine If
cont contai ains ns,,
then then
Y If dont contain, then N
Consumer offer
Trade offer
Vasmol Jasmine If
If dont contain, then N N
35 ml
N
50 ml
N
N
N
100 ml
N
Y,20% extra
N
200 ml
N
Y,20% extra N
35 ml
N
One piece free with every one dozen One piece free with every one dozen One piece free with every one dozen
50 ml
N
N
100 ml
N
N
200 ml
N
N
Retail Margin
10%
9%
10 %
C h di
1 5 2%
1 5%
2%
t
then then
Y
20 ml
20 ml
cont contai ains ns,,
Market share of parachute jasmine Golaghat Brand
Parachute Jasmine Bajaj Jasmine Vasmol Jasmine
Averagemonthly
Average monthly
sale,A
sale
B
Average monthly sale
C
Monthly Sale Availability in the different category outlets*average sale
90 0
300
20 0
4*900+20 *900+20*300+ *300+30 30*200=15600 *200=15600
20 0
150
60
3*200+20 *200+20*150+ *150+20 20*60=4800 *60=4800
50 0
170
80
2*500+20 *500+20*170+ *170+20 20*80=6000 *80=6000 Total Sale=25400
Market share of parachute jasmine=61% Red colour digits represent the A A category outlets
Market share of bajaj jasmine=19%% jasmine=19%%
Market share of Vasmol jasmine=20%
Green colour colour digits represent the B category outlets Blue colour digits represent the C category outlets
Findings from the other market it is sais that parachute is the clear market
Recommendations Value for money:money: Maricos Maricos strategy when when it comes to consumer consumer offer offer should be improved.During improved.During my market study I have found that the competitors offer involving a free FMCG product (soap)along with the hair oil is more alluring alluring to consumers consumers than offering offering 10% or 20% extra. Thus Marico could explore a tie tie up with other FMCG segment &can offer both the product at a discounted discounted rate. rate.This This step will will create create a better pull for the product product in the market. market. Increase Increase the market market coverage coverage In the rural rural market it has been found found that the stockist stockist does not have have complete cover coverage age of the area as assigned to him due to lack of manpower&other financial problems.Marico could give assistance to such stockists by proving a part time sales persons ,so that he can cover every corner of his territo territory ry..This step will boost the sales sales for the Marico Marico along with stokists. stokists. Incentives Incentives for retailers retailers The The awar awarene eness ss amon among g consum onsumer ers, s,as as he is the sole sole poin pointt point point of cont contac actt with with the the end end consumers. consumers.In In the most cases I have have found that the retailers retailers promote promote or takes takes initiatives initiatives to sell a product product which give him better better profit margin margin as the brand awareness awareness among consumer consumer is very low.So low.So they should strengthen the the secondary schemes or trade trade offers offers among the reatailers &also provide provide better better margins than competito competitors. rs. Sales Sales support support The sales sales support provided provided by the Marico Marico is is very very low to boost boost the sale for the product. product. Marico should take extra sale support initiatives to reinforce the sale. The The main main comp compet etit itor or of H&C H&C ,baj ,bajaj aj almo almond nd dro drops is ado adopti pting aggr aggres essi siv ve pro promoti motion onss in the retailers to boost the sale.On the other hand Marico is lagging in such cases.They should also give point point of sale materi materials als to retailers retailers which will will help to create create consumer demand.
Push strategy Parachute is clerarly market leader in the in terms sale availability in the coconut oi segment .So Marico should adopt push strategy place their low selling items in the retail outlets along with their th eir highest selling item Parachute. Increase in sku variety The sku variety perfumed hair oils of Marico is found low as compared compa red to its competitors So they should increase the sku variety of the product p roduct to capture the greater g reater volume of customer. customer. Packaging The packaging of the perfumed hair oils is found as compared to its competitors especially bajaj almond drops. They should modified the packaging of their perfumed hair oils to attract more customers towards towards their brand. brand . Similer packaing adopted by its rival company Rival FMCG brands using the similer packaging as tool to confuse the consumer in the rural markets as usually they pay more attention to the external packaging of the product. So there may be a chance or capturing Marico's market share specially in the coconut oil s egment. Attractive USP Marico should come with unique uniqu e selling proposition strategy with each product of the hair oil category,,lik category,,like e its competitors ..because usp ,in case of hair oils is found very weak as compared to its competitors. By increasing the volume of potential customers From my market survey it is found that the potential users of coconut oils ae specially females&old aged peoples.Marico shold target the childs to expand expand its market volume,because they hardly goes for using hair oils.they should be targeted with well planned promotional strategy. strategy. Promotion of hair oils in the haats,melas In the most of the market market that I visited, visited,has has malas&haats malas&haats in the evey weekend weekend ,so the company company should adopt aggressive promotional campaign to allure the rural customers towards their brand.
