A

SYNOPSIS

ON

A COMPARETIVE STUDY OF SALES

PROMOTION OF SOAP INDUSTRY

Report submitted in partial fulfillment of the requirement for the degree of

MASTER OF BUSINESS ADMINISTRATION

(G.B.TECHNICAL UNIVERSITY, LUCKNOW)

UNDER THE GUIDENCE OF: SUBMITTED BY:

MR. ISHAN KAUSHIK SHAMIM AHMAD

FACULTY OF DMS Roll No. 0909970081

MBA- 4TH SEM (2009-11)

HARLAL INSTITUTE OF MANAGEMENT & TECHNOLOGY

8, Institutional Area, Knowledge Park-1, Grater Noida-201306 (U.P)

INDEX1. PREFACE

2. INTRODUCTION

3. REVIEW OF LITERATURE

4. OBJECTIVE OF THE STUDY

5. RESEARCH METHODOLOGY

6. LIMITATION OF THE STUDY

7. FINDING AND ANALYSIS

8. SUGGESTION & RECOMMENDATION

9. CONCLUSION

10.QUESTIONNAIRE

PREFACE

My research works are integral part of MBA (IV Sem) and submitted to HIMT,

(Affiliated to GBTU, Lucknow). During the process a student gets an opportunity to

study the market scenario and set the practical aspects of theory which makes the

concept clear. This is an outcome of the research work and study of market that

undertaken on the subject related to “An analysis of Soap Industry". This makes

Indian as one of the ideal market for soaps and other cleaning products. The

penetration of bathing soaps is 98% of all households. The research study shows that

the per capita consumption of bathing soap is 513 gm. So there is a very big market

for soap in India. The total turnover of soap or market in India is 54 lakhs ton per

annum and is increasing at the rate of 5% per annum.

My research work is absolutely significant result for soap industry and they are

welcomed to find out company’s soaps are in more demand these days by comparing

various factors. It is to find out the basic and all the other factors, success and their

facing present problems regularly. The research work is based on analysis of various

promotional tools used by the different companies manufacturing soaps.

FMCG refers to consumer non-durable goods requirement for daily or frequent use.

Typically, a consumer buys these goods at least once a month. The sector covers a

wide gamut of products such as detergents, soaps, toothpastes shampoos, creams,

powders, food products, confectioneries, beverages, cigarettes.

Individual items are of small value. But all FMCG products put together

account for a significant part of the consumer’s budget.

The consumer keeps limited inventory of these products and prefers to

purchase them frequently, as and when required. Many of these products are

perishable.

The consumer spends little time on the purchase decision. Rarely does he/she

look for technical specification. Brand loyalties or recommendations of reliable

retailer/dealer drive purchase decisions.

Trail of a new products i.e. brand switching is often induced by heavy advertisement,

recommendation of the retailer or neighbors/friends.

These products cater to necessities, comforts as well as luxuries. They meet the

demands of the entire cross section of population. Price and income elasticity of

demand varies across products and consumers.

INTRODUCTIONINTRODUCTION

Indian is one of ideal market for soaps and other cleaning products. The penetration of

bathing soaps is 98% of all households. The research study shows that the per capita

consumption of bathing soap is 513 gm. So there is a very big market for soap in India. The

total turnover of soap or market in India is 54 lakhs ton per annum and is increasing at the

rate of 5% per annum. FMCG refers to consumer non-durable goods requirement for daily or

frequent use. Typically, a consumer buys these goods at least once a month. The sector

covers a wide gamut of products such as detergents, soaps, toothpastes shampoos, creams,

powders, food products, confectioneries, beverages, cigarettes. The consumer keeps limited

inventory of these products and prefers to purchase them frequently, as and when required.

Many of these products are perishable. These products cater to necessities, comforts as well

as luxuries. They meet the demands of the entire cross section of population. Price and

income elasticity of demand varies across products and consumers.

MAJOR PLAYERS IN THE SOAP MARKET:

Hindustan Unilever Limited

Godrej

Nirma

Procter & Gamble

Johnson & Johnson

Wipro

Colgate Palmolive

Reckitt-Benckiser

The soap market can be divided into three categories:

CATEGORY PRICE WEIGHTPremium > Rs. 15 75 gm.Popular Rs. 8-15 75 gm.

Economy/Functional < Rs. 8 75gm.

1. 1. Economy/Functional soapsEconomy/Functional soaps:: It comprise of 35% of the market. The red carbolic

cakes are low price germ killers. The names of few of the functional brands are Nirma

bath and Lifebuoy. The prices of this brand soaps are less than Rs. 8 for 75 gms.

2. Popular soapsPopular soaps: : The biggest share in the soap market, popular soap has a market

share of 55%. The price of this category of soaps ranges from Rs 8-15 for a 75 gm

cake e.g. Liril, Cinthol, Rexona. Each soap wants to posses a special benefit like

fragrance, freshness etc.

3. 3. Premium soapsPremium soaps: : It comprises of 10% of the total market. Premium brands are priced

above Rs.15 for 75 gm cake. People are willing to pay more for this category of soap

and several other brands have special relationship and people. Some of the premium

soaps include : Pears, Dove, Johnson Baby soap.

CATEGORY WISE MARKET SHARE OF SOAPSCATEGORY WISE MARKET SHARE OF SOAPS

The above graph shows that the Economy soaps constitute 35% of market share, Popular soaps constitute major portion of market share i.e. 55% and Premium soaps constitute only 10% of market share.

LITERATURE REVIEW

The importance of consumer sales promotion in the marketing mix of the fast moving

consumer goods (FMCG) category throughout the world has increased. Companies spend

considerable time in planning such activities. However, in order to enhance the effectiveness

of these activities, manufacturers should understand consumer and retailer interpretations of

their promotional activities. A study of these perceptions will reveal their preferences, their

knowledge, and motivations. In this project, an attempt has been made to examine the nature

of sales promotion activities in toilet soap category in India, study retailer perceptions with

respect to these activities.

According to Kotler sales promotion are as: Sales Promotion consists of a diverse

collection of incentive tools, mostly short-term designed to stimulate quicker and/or greater

purchase of particular products/services by consumers or the trade.”

Roger Strang has given a more simplistic definition i.e. “Sales promotions are short-term

incentives to encourage purchase or sales of a product or service.”

Hence, any forms of incentives offered for short period either to trade or consumers are

considered as sales promotion activities.

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. Inflationary trend had made both the consumer as well as trade

deal prone. Hence, sales promotion activities in toilet soap industry posed a very interesting

study and consumer and retailer perceptions thereof.

Objectives of Sales Promotion:

1) To increase sales volume by inducing customers to buy more.

2) To attract new customers to try the product

3) To encourage sales in off season.

4) Educating the consumers about new products, new uses of the existing products.

5) Building the brand loyalty for the product among the customers.

6) To create good public image of the product & the firm.

TECHNIQUES OF SALES PROMOTION:

1) FREE SAMPLES : one of the most popular sales promotion techniques include free

samples of products to selected people in order to popularize their products.

Distribution of sample is popular in case of Books, Drugs, Personal Care items like-

Soaps, Creams etc.

2) PRICE-OFF OFFER :such kinds of offers are generally given during off seasons eg.

on woolen clothes.

3) GIFT SCHEMES: gifts are offered along with purchase of products/services. Most

of times gifts are based on quantum of purchase or value of purchase.

4) CONTESTS : contests are organized for consumers, salesman, dealers to encourage:

(i) the customers to buy more.

(ii) the salesman to effect as much sales as possible.

(iii) the dealers to order higher quantities.

For e.g. for a customer, writing a good slogan for a product may enable him to get a

free trip to spend holidays at the destination of his/her choice.

5) FREE DEMONSTRATION : free & live presentation of the products helps to

understand the product better & its working more clearly, since after a demonstration,

normally a customer feels convinced and opts for the purchase.

Other sales promotion tools include: Discount Cupons, Displays, Fairs & Exhibitions.

RESEARCH METHODOLOGY

RESEARCH – MEANING

Research is an art of scientific investigation. According to Redmen and Mary defines

research as a “syst ematic effort to gain knowledge”.

Research methodology is way to systematically solve the research problem. It is a plan of

action for a research project and explains in detail how data are collected and analyzed. This

research study is a descriptive research study.

RESEARCH DESIGN

A research design is a plan that specifies the objectives of the study, method to be adopted in

the data collection, tools in data analysis and hypothesis to be framed.

“A research design is an arrangement of condition for collection and analysis of data in a

manner that aims to combine relevance to research purpose with economy in procedure”.

NATURE OF DATA

Primary data

The primary data are collected from the employees of HIDESIGN through a direct structured

questionnaire.

Secondary data

Company profiles, websites, magazines, articles were used widely as a support to primary

data.

SAMPLING SIZE AND TECHNIQUE

Size of the sample

It refers to the number of items to be selected from the universe to constitute as a sample. In

this study 50 employees of HIDESIGN in Puducherry was selected as size of sample.

Sample design

The sampling technique used in this study is simple random sampling method. This method

is also called as the method of chance selection. Each and every item of population has equal

chance to be included in the sample.

Population design

The population of this study is the total employee in the company. It is finite population.

There are four production centers for the organization for this study I have taken only

employees in one production centre.

STATISTICAL TOOLS USED

To analyze and interpret collected data the following statistical tools were used.

1) Percentage method

2) Weighted average method

3) Chi-square analysis

4) Correlation

5) Regression

Percentage method

The percentage is used for making comparison between two or more series of data. It is used

to classify the opinion of the respondent for different factors. It is calculated as

No. of respondents favorable*100

Percentage of respondent = Total no of respondents Weighted average method

The weighted average method can be calculated by the following formula. This tool is used

to find the rank given by the respondents to the welfare measures. It can be calculated as

Here XW represents the weighted average

X represents the value of variable

W represents the weight given to the variable.

Chi-square analysis

Chi-square analysis in statistics is to test the goodness of fit to verify the distribution of

observed data with assumed theoretical distribution. Therefore it is a measure to study the

divergence of actual and expected frequencies.

The formula for computing chi-square is as follows.

The calculated value of chi-square is compared with the table of chi-square for the

given degrees of freedom at the specified level of significance. If the calculated value is

greater than the tabulated value then the difference between the observed frequency and the

expected frequency are significant. The degrees of freedom is (n-2) where ‘n’ is number of

observed frequencies and in case of contingency table the degrees of freedom is (C-1) (R-

1) where C is number of columns and R is number of rows.

It is used to find the relation between communication in work place and work

satisfaction. It is used to find the relation between welfare satisfaction and work satisfaction

it is used to find the relation between experience of respondents and work satisfaction

XW = ∑ WX / ∑ X

Chi-square = ∑ {(O-E)2 / E}

OBJECTIVES OF THE STUDY

To do a comparison between the soaps companies and find out :

(i) which company’s soaps are more used by people.

(ii) the numerous factors which influence the consumers purchase

behavior towards HUL, Godrej, Nirma, Wipro, Johnson & Johnson soaps.

(iii) consumers liking-disliking ,their awareness regarding the soaps & sales

promotion schemes given on them by the above mentioned companies.

To compare soaps industry on the basis their current sales promotion schemes.

To assess which company’s soaps are popular (i.e. used more) among the different

categories of soaps: Economy, Popular and Preumium.

To get an insight into retailers views regarding the sales of soap industry and sales

promotion schemes on them.

FINDINGS & ANALYSIS

Most of the people prefer to use HUL soaps because HUL offers the best quality

soaps , it manufacturers huge variety of soaps as compared to Godrej, Nirma, Wipro,

J&J., and HUL soaps vary according to prices, quality, fragrances etc. from which

people can easily select soaps according to their income & choice.

HUL is the only company which belongs to all the 3 categories of soaps:

Economy.Popular,Preumium whereas Godrej soaps belongs to popular category

and Wipro & J&J soaps belong to Premium category

Nirma Soaps like Nirma, Nima are used more by lower income group because they

can afford to buy them. Middle income group prefer to use Lux, Cinthol and Upper

income group prefer to use Dove, Pears.

Earlier J&J was the only company which targeting small babies as their market but

now Wipro Baby Soft Soap is also there in the market but still majority of people use

J&J Baby soap.

Talking about the awareness level, people are more aware about HUL, Godrej ,J&J

soaps as compared to Nirma & Wipro Soaps.

Godrej, Nirma, Wipro soaps are not able to attract people due to limited variety, bad

quality.

Wipro Baby soft soap is not available at most of the shops that’s the reason only few

people know about it.

Brand Loyalty is seen more in case of soaps like Lux, Dove and less in case of soaps

like Santoor, Nirma.

Popular soaps among females are lux,dove,pears and among males are

cinthol,hamam,pears.

HUL is the only company which gives the schemes like price-off, Bonus Pack, Free

Gifts etc. the most on its soaps (specially on Lux) as compared to other companies

manufacturing soaps and such schemes are given least on Nirma & J&J soaps.

.

LIMITATIONS OF THE STUDY

Sample size was small so the findings cannot be generalized.

Analysis of data obtained from the questionnaires was done on the assumption that

the respondents gave correct information.

Time-Period for the conduct of survey was short.

Some of the questions in the questionnaire were left unanswered due to either lack of

time or due to lack of knowledge.

SUGGESTIONS & RECOMMENDATIONS

Prices of soaps like Dove, Pears (HUL soaps) and J&J Baby soap should be reduced

as everyone cannot afford to buy them.

Companies Like Nirma, Godrej, Wipro should launch more variety of soaps & should

try to improve the quality of there soaps as people are not satisfied with the quality of

these soaps.

J&J apart from targeting the small babies should target age group people also.

Sales Promotion Tools like price off, contests etc. should be more in case of J&J

soaps, Nirma soaps.

Although large no. of people buy HUL soaps but still some are not satisfied with the

quality of soaps like Dove, Breeze so company should give due consideration to it to

maintain its position in the soap market.

People are less aware about Wipro Baby Soft soap. More awareness should be created

about it through advertising in T.V, radio, newspapers. Also, the retailers should

promote the soap to the consumers when they come to purchase the soaps.

HUL should also launch a special soap for small babies as it does not manufacturers

any soap specially targeting them.

Some new soaps should be introduced in the market targeting males as soaps like

Park Avenue, Denim are not within the reach of everyone.

CONCLUSION

It is concluded that the soap industry is one of the oldest Fast Moving Consumer Goods

(FMCG) industry in India. It is among the highest penetrated category within FMCG sector

reaching an estimated 95% urban and 87% of the rural households. The main characteristic

of the soap industry: severe competition and high level of brand proliferation. Heat and dust

are integral part of Indian climate. So, there is a big market for soaps in India. HUL is the

market leader in the soap industry with 59%.share. According to the comparison conducted

on various parameters, HUL soaps occupies the first position, Godrej occupies the second

postion and Wipro occupies the third position, fourth position is occupied by J&J and Nirma

soaps are least preferred among the all five. HUL soaps are most demanded because of its

good quality, awareness, huge variety, company name etc. and no other company whether it

is Godrej, Nirma, J&J, Wipro could compete with it because people are less aware of the

soaps of these companies, their bad quality, limited variety. Common Sales Promotion tools

offered on soaps are Price-off and Bonus Pack and HUL is the only company which offers

them the most

Thus, it can be said that HUL rules the soap market as it has made a good position in every

aspect whether it is quality, price, variety so, in order to compete with it, Godrej, Nirma,

Wipro, J&J should take care of the above factors.

BIBLIOGRAPHY BIBLIOGRAPHY

BOOK:

Gupta, C.B., Business Studies, Tata McGraw – Hill Publications, 3rd Ed.

NEWSPAPERS

The Times of India

The Hindustan Times

The Economic Times

The Hindu Business Standard Line

WEBSITES:WEBSITES:

* http://www.yahoo.com

* http://www.google.com

* http://www.hul.com

*http://www.godrej.com

*http://www.nirma.com

*http://www.wipro.com

*http://www.johnson&johnson.com

*http://www.cinthol.com

QUESTIONNAIRE-1

(From consumers point of view)

Dear Respondent,

I am a BBA student of BIT and conducting a survey to determine the purchase

behavior of people towards different soaps of HUL, Godrej, Nirma, Johnson & Johnson

& Wipro. The survey is for academic purpose only; it will not be misused for any other

work. Your participation will be highly encouraging in the successful completion of the

research work.

Q1. Which Bath soap(s) do u purchase/use?

1) Lifebuoy 7) Rexona 13) Nirma

2) Breeze 8) Lux 14) Nima

3) Dove 9) Godrej No.1 15) Santoor

4) Hamam 10) Godrej Fairglow 16) Chandrika

5) Liril 11) Cinthol 17) Others (specify)__________

6) Pears 12) Johnson & _______________________

Johnson Baby soap

If you have selected more than 1 option, which soap do you use the most?

_______________________

Q2. Do you know, the soap(s) that you have selected in the above question is a brand of

which company?

1) YES 2) NO

If YES, tick the appropriate option

1) Hindustan Liver Limited (specify the soap name) _____________________________

2) Godrej (specify the soap name) _______________________

3) Nirma ( specify the soap name) ____________________________

4) Johnson & Johnson (specify the soap name) _________________________

5) Wipro (Specify the soap name) ___________________________________

Q3. Which of the following factors influences you to purchase the soap(s) that you have

selected in Q1? ( Mention the names of soap(s) also, if you have selected more than 1

Q1)

FACTORS: SOAP(S) NAME :

1) Price (write Y if your ans is yes)

2) Availability

3) Brand Name

4) Sales Promotion Scheme (gifts,

price off etc. )

5) Fragrance

6) Quality

7) Advertisements

8) Packaging

9) Suitable for skin

10) All of the above

Q4. Are you a brand Loyal?

Write Yes/ No _________ ( Mention the soap name) _____________

If NO, what are the reasons for Brand Switching?

1) Variety of other soaps available 2) Packaging 3) Climatic Conditions 4) Price

5) Sales Promotion Schemes 6) Fragrance 7) Quality

Q5. Is/Are there any soap(s) that you would never like to purchase again or you had bad

experience with?

Write Yes/ No ________________

If Yes , specify the soap(s) name & Reason(s) _______________________________

______________________________________________________________________

Q6. Which of the following soaps you have not tried even once?

1) Lifebuoy 7) Rexona 13) Nirma

2) Breeze 8) Lux 14) Nima

3) Dove 9) Godrej No.1 15) Santoor

4) Hamam 10) Godrej Fairglow 16) Chandrika

5) Liril 11) Cinthol 17) Others (specify)__________

6) Pears 12) Johnson & _______________________

Johnson Baby soap

Reasons :

1) Never Heard 2) Brand Loyal 3) Price 4) Packaging 5) Bad word of mouth 6) Didn’t

attract 7) Limited Variety.

Q7. (i) Does the celebrity advertising the soap(s) also play a role in converting your

attention into purchase?

Write Yes/ No/ Sometimes ________________

(ii) If Yes/ Sometimes, which soap’s advertisement attracts you the most?

_________________________________________________________________

Q8. Mention names of any 5 soaps that you can recall easily?

__________________________________________________________

Q9. If you are having a child in your family between 1-10 years, which soap is used for

that child?

1) J& J Baby Soap 2) Wipro Baby Soft Soap

Q10. Which of the following awareness sources provides you more information about the

soap(s) that stimulates you to purchase the same? ( Mention the soap(s) name, if

you have selected more than 1 option in Q1)

SOAP AWARENESS SOURCES: SOAP(S) NAME:

1) Word of Mouth ( Write Y, if is there) _______

2) Retailers _______

3) Advertisements _______

4) Others (Specify) ____________

Q11. (i) Which Sales Promotion Schemes on soap(s) do you prefer the most?

1) Price –Off 2) Contests 3) Free- Gifts 4) Free- Samples

(ii) Can you name any above mentioned schemes on soaps ( not necessary the

current ones) which leads to purchase the same or that you still remember?

_________________________________________________________________

__________________________________________________________________

Q12. Any suggestions for the soap(s) that you use?

SUGGESTIONS SOAP(S) NAME

1) More fragrances should be introduced

(Write Y, if it is there )

2) Decrease in price

3) Should offer Sales promotion Schemes

4) Quality should be improved

5) No suggestions

Personal Information:

1) Name of the Respondent : ____________________________

2) Place : _________________________

3) Age Group: (i) 11-20 years (ii) 21-30 years (iii) 31-40 years (iv) 41- 50 years

(v) above 50 years

4) Gender : (i) Male (ii) Female

5) Martial Status : (i) Married (ii) Unmarried

6) Occupation Status : (i) Student (ii) Service (iii) Business (iii) Housewife (v) Retired

7) Family Income : (i) 1-2 Lakhs p.a

(ii) 2-3 Lakhs p.a

(iii) > 3 Lakhs p.a.

QUESTIONNAIRE-1

(From Retailers point of view)

Dear Respondent,

I am a BBA student of BIT and conducting a survey to determine the sales of which

company manufacturing soaps : HUL, Godrej, Nirma, Wipro and J&J is high, low,

sales promotion offers like price-off, contests etc. given by the above mentioned

companies on their soaps. The survey is for academic purpose only; it will not be

misused for any other work. Your participation will be highly encouraging in the

completion of the project.

Q1(i) What percentages of the following companies’ soaps are sold at your shop?

HUL Soaps Godrej Soaps Nirma Soaps Wipro Soaps J&J Soaps

1) Lifebuoy 1) Godrej No. 1 1) Nirma 1) Santoor 1) Johnson’s

2) Breeze 2) Godrej Fairglow 2) Nima 2) Chandrika Baby Soap

3) Dove 3) Cinthol

4) Hamam

5) Liril

6) Pears

7) Rexona

8) Lux

(ii) Reasons for high/low sales:

1) More/Less Aware 2) Good/Bad Quality 3) Price (High/Cheap) 4) Availability

5) Suitable/Not suitable for skin 6) Variety/ Limited variety of soaps

7) Company Name

Q3. Sale of which soap is highest and lowest at your shop?

1) Highest : _____________________ 2) Lowest : _________________________

Q4. Rank the company from 1-5 ( 1 being the most important and 5 being the least

Important ) whose soaps you like to sell the most/least at your shop?

1) HUL ________ 2) GODREJ __________ 3) Nirma _________

4) Wipro ________ 5) J&J _________

Q5. On which company’s soaps, the offers like price-off, contests, free gifts, free samples,

Packs etc. are given the most?

(i) HUL 2) GODREJ 3) NIRMA 4) WIPRO 5) J&J

On which soap these schemes are given the most and least _______________________

_______________________________________________________________________

Q6. Which soap(s) is/are in more demand these days on which some above mentioned

schemes are given?

_________________________________________________________________

_________________________________________________________________

Personal Information:

1) Name of the respondent : _________________________

2) Name of the shop : _____________________________________

Address of the shop : ___________________________________