reverse auctions in supply chain
TRANSCRIPT
Analysis of the Strategies for Competitive Advantage in New Product Development in an FMCG firm (RSPL or Ghari)
Guide: Dr. Uday S. Racherla
Submitted By: Ummed Singhoya
Roll No. 11125063
11MBA,
Table of Contents
Executive Summary
Introduction Objective of the project? Why did you choose your project? Or Importance of the project (NPD)? What you did in your project? Finding of your project? How company would be benefited bcoz of this project?
Company overview Company Profile Products categories
o My focused Producto Why did I pick this product?
Business strategy
Company strategy Current Competitive strategy
Why they need new strategy? Issue with current strategy
Fear of Competitoro Cost Leadership o Product differentiationo Focus
Proposed Competitive strategy
New Product development Strategy Focused Product: Xpert dishwash bar and Ghari detergent powder
What is product? Contents of product? Competitors product in same domain? How competitor’s product is different than us? Competitor’s product contents? Pricing of Product
o RSPLo Competitorso Where is the differentiation?
Comparison of two different product in RSPL Xpert dishwash bar and Ghari detergent powder
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Where they are not good for Xpert dishwash bar? Where they are good for ghari det. Powder? How they created different product and how could create competitive advantage in
sustainable manner for future growth?o Ex. Of competitive advantage creation
Conclusion
References
Annexure Data Collection:
Questionnaire Prepared Answers of questions Visits facts
Executive Summary
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With the Indian economy growing at an average rate of 5-7%, middle class is swelling and
with that the purchasing power and hence the need for better quality of life and products to
support them. Therefore, FMCG sector is one of the fastest growing and highly competitive
sectors in India. Indeed, the rest of the world is looking for investment opportunities in India,
especially due to prolonged recession in the industrial west.
It is not surprising that competition in the FMCG sector is increasing day by day and there is
an urgent need by firms to establish competitive advantage in order to sustain revenues and
profits and grow market share. Due to competition, successful firms are trying to bring new
innovations to the market place, so that they can satisfy the unmet/under met needs of the
consumer. To match the needs of the consumers, companies need to map the market
continually in terms of changes in consumer needs as per changing life styles, family
structure, work-life balance etc. Thus, they need to design their strategies to be flexible and
accommodating; otherwise they won’t be able to stay in the market. The companies need to
make efforts to make new products by satisfying the unmet/under met needs of consumers.
The RSPL is one of the key companies in the FMCG sector, with presence in Dairy, Laundry
and Household Care categories, where competition is very high from the other multinationals
such as Unilever, P&G and Colgate Palmolive, which have great competitive presence in
many other geographic locations. After having done literature study of the RSPL firm, I
understood that it is flourishing day by day. I understood that the company is making
significant efforts to grow the market share and profits. It would be a valuable study to
analyze the existing strategies of RSPL in different categories (Dairy, Laundry and
Household Care) in terms of the industry structure and competitive forces, in order to
establish the source of RSPL’s competitive advantage and strategic opportunities for new
product development for the future.
I would like to study the strategies of RSPL and understand the rationale behind new
product development, so that potential new opportunities can be identified for
competitive advantage in the future. Once my study is complete, I would share my
academic learning on the strategies for sustainable competitive advantage with RSPL in
near future.
Introduction
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New product development is the most crucial stage for a company and it carries significant
risk in the context of product failures that might occur right after their launch in the market.
The product failure rate can be as low as 30% and as high as 90% in this regard. (Antil,
J.1988). The global market is characterized by varying taste patterns of consumers that are
influenced by their diverse cultures and preferences. Therefore in the face of rapidly changing
consumer tastes, technology and competition, companies should continuously provide the
global market with new products that satisfy all segments of the market. This is a tedious task
however, and requires systematic Research & Development by companies in order to create
successful products that have a considerable market demand and appear attractive to the
consumers worldwide. In the case of RSPL, the company has always tried to innovate new
products through their R&D efforts keeping in view the taste patterns of various segments of
the global market. The study sites the example of RSPL’s dish bar range that was exclusively
innovated for Indian people.
Product innovation is a complex task and it requires careful scrutiny by the company based
on the above mentioned factors.
Today the global market is signified by a fiercely competitive environment in which the
important target for companies is to capture increasing returns to scale while minimizing /
lowering costs of production with great speed and flexibility (Kotabe, 1990). RSPL as an
international chain tries to achieve these targets through its consistent R&D innovations in
order to create products that are marketable and have a significant turnover within various
segments and sub-segments of the international market.
Moreover, if any company fails to respond to new product introductions by competitors with
appropriate speed, it will loose out on the desired market share due to late market penetration
and eventually its profits will be dispelled (Kotler, 1988).
In this regard, RSPL tries to scrutinize its competitor’s products in order to evaluate the
viability of its innovations during new product development process and this is done by
RSPL’s R&D segment. It expends about 20% more on its R&D for new product development
as compared to its competitors such as Unilever, Nirma and Jyoti Laboratories, occupying
number one position in the market.
The front-line staff in an organization, like sales assistants, receptionists, etc., plays a major
role here, as these are the ones that come in contact with the customers the most.
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Organisations today are giving increasing importance to the front-line staff as the
management realizes that excellence in service can be achieved only by means of having
efficient and dedicated employees as their front-line staff. The employees occupying the
position, as front-line staff should not just be friendly to their customers but they should be
masters in what they are doing to please customers. (Schlesinger and Heskett, 1991)
OBJECTIVE 1
Why is new product development so important for a company like RSPL?
RSPL is a now well established company in FMCG business and in order to maintain its
superior standing in the global market, it has to lay considerable emphasis on the strategies it
employs for development of new products.
Two important concepts can be derived from this concise definition: firstly, a style is not
fashion unless it is commonly accepted (prevailing); secondly, fashion is transient (at any
given time). These characteristics of the fashion phenomenon had profound implications for
the supply chain, the product life cycle and the complexity of the markets served by L’Oreal
and its competitions.
The speed at which fashion markets change is very high, with very short product life cycles.
Many fashion items have product cycles as short as half a year, or even a few weeks.
Consumer’s preferences depend on the season, on the social and cultural environment and on
the effects of previous marketing communication for fashion items or substitute products
(Mintel, 2005). Responding in a timely way to these changing demands is thus vital for
success. Moreover, Crawford (1988) has also established that without new products, firms
will certainly be at a stand still. The research also highlights that initial or early entry of new
products can result in new market development, long term market dominance, and
foreclosure of competitors’ responses.
The characteristics of the fashion industry require companies to make strategic choices about
factors such as quality, speed, technology, price and flexibility: these factors define the
positioning of a company (Abell, 1993). Drawing upon the information provided in the case
study, it can be suggested that L’Oreal operates in the top end of the fashion market with
clear market positioning, which can be depicted as follows:
Company Overview:
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Company Profile:
Rohit Surfactants Private Limited (RSPL)
Rohit Surfactants Private Limited, a flagship company of RSPL Group, owner of Trademark
“GHARI”, was incorporated on 22nd June 1988 with the name Shri MahadoeSoap Industries
Private Limited and the name was changed to its present name with effectfrom 17th June
2005.The group has under gone another major restructuring in the year 2008. The
saidrestructuring has enabled the group to consolidate the detergent and leather
business,alongwith all related brands into one single entity and separating the real estate
businessinto another entity.
Historical Background:
Late Dayal Das with his sons Shri Murli Dhar Ji and Shri Bimal Kumar Ji initiated the
groupas a small family business. It is said that knowledge and expertise comes
fromexperience. It was their efforts and dedication that laid the foundation on which the
empireof RSPL group has been build up within a span of three decades.
Group comprises of companies mentioned under:-
1) Rohit Surfactants Private Limited -Company does the manufacturing and marketing of
detergents, toilet soaps, leather & footwear, wind energy and other FMCG products.
2) Nimmi Build Tech Private Limited (formerly known as Poonam Developers
&Infrastructure India Private Limited) - This company is involved in the business of
construction and real estate.
3) Red Chief: It is one of the leading footwear brand in India since 1997, manufacturing high
quality genuine leather footwear at unbeatable price. The company has recorded an
impressive growth through its enthusiastic and highly motivated marketing team; Company
has estimated sales figures of Rs. 900 million in benchmarking standards. In the domestic
market it is one of the most admired footwear brands and holds the valued market share for
leather footwear.
4) Wind Energy: In the year 2008, with a view to expand the Wind Power Project, the group
has also set established another Wind Power generation project at Gujarat. The capacity of
the project is 9.60 MW with 12WECs’ of 800 KW each.
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5) Namaste India: RSPL Limited is all set to further consolidate its position in the dairy
business with the name of “Namaste India Foods Private Ltd.” Along with the taste the milk
is full of calcium, protein, carbohydrates, vitamins, etc., for healthy growth of a human body.
The Company aims to provide remunerative returns to the farmers and also serve the interest
of consumers by providing quality product which are good value for money.
Product Categories: (FMCG Division only)
Household Products
Ghari Detergent Cake
Ghari Detergent Powder
Xpert Dishwash Bar
Personal Care Products
Venus Bathing Soap
My Focused Product: Xpert Dishwash Bar
Why did I choose this product?
The brand is using its Aquashine formula as the USP and like any other brand, it is talking
about quick and easy cleaning. Xpert is priced around Rs 10 for 200 g bar while Vim around
Rs 12. Exo is priced at par with Xpert. The brand hopes that the price differential together
with celebrity will tilt the consumer choice towards Xpert. This aggressive pricing +
promotional strategy is going to affect the smaller brands rather than Vim in the short-term.
What is lacking in the current strategy of Xpert is the absence of a clear differentiator. While
Aquashine formula is the USP, the brand fails to communicate what it means and how it is
going to benefit. May be in future campaign, these will be explained. Without a powerful
differentiator, Xpert may not be able to break into the market of Vim. Exo tried with its
aggressive promotions and anti-bacterial properties with limited success. It is very difficult to
create a differentiator in a market like dishwash bar and almost all options has been used up
by the players.
Competitive Strategy: Current Competitive Strategy:
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Why they need new strategy?
The different strategies used by RSPL for this phenomenal success are:
1. Achieve higher market penetration in existing markets and simultaneously
exploring new markets
Most of the Ghari detergent sales come from Uttar Pradesh, which is also its birth place,
Madhya Pradesh and Maharashtra. Recently it has started distribution in 8 more states, thus
making its presence in a total of 20 states across the country. Entering new markets doesn’t
mean that the existing markets are saturated as far as Ghari detergent is concerned. Even in
the existing markets, the market share of the competitors was decreasing while the industry as
a whole was growing.
2. Providing Incentives to the Dealers
Ghari detergent provides a profit margin of 9% to its dealers, which is substantially lower
than the standard 12-13% for premium brands, and at the same time, higher than the 6-7%
being offered by the competitors in the same segment. Thus the company has been working
towards creating a strong dealer base while keeping its prices low.
3. Advertising Strategy
Ghari detergent has been very innovative in reaching the customers. With only 35 crores
allotted for marketing and promotional activities it has used trains for initial campaigns to
promote the product. Their hoardings were visible at all the railway crossings in Uttar
Pradesh and West Bengal. RSPL has even promoted Ghari in roadside shows and magic
shows in smaller towns where people are unlikely to see other brands. Recently it has
sponsored a show Rakt Sambandh on NDTV Imagine. Also, instead of going with celebrity
endorsement, the brand has left it on the consumers to try the product and decide if they like
it, just as it claims in its campaign.
4. Segmentation Strategy
For any successful marketing plan segmentation is the first key step. The organization must
carefully craft its strategy to exploit the market potential. RSPL being a small firm could not
afford expensive marketing strategy so it has segmented according to it. Generally market is
segmented on the basis of demographic, geographic and psychographic variables but RSPL
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has mainly concentrated on geographic variable. The geographical split of Ghari detergent is
shown below.
5. Pricing Strategy
Keeping in mind its target market, i.e. the lower end of economy, the company has, as far as
possible, avoided passing on the burden of rising raw material costs on to the customers.
6. Restructuring and Optimization of Resources
Citigroup Venture Capital India (CVCI) approached RSPL in 2006 to buy around 14% stakes
but the deal did not succeed due to valuation differences. This proved to be an eye-opener for
RSPL as it immediately decided to go for introspection, restructured its business and
optimized its resources.
7. Regional Focus
Due to its financial inability to compete with HUL and P&G in other states, RSPL had
launched Ghari detergent in Uttar Pradesh. It focused on developing an intense distribution
network to reach the customers effectively. This is evident from the fact that out of 3000
dealers in India Ghari has 900 dealers in UP and 25 of them are in Kanpur alone. It also has 9
out of its 18 manufacturing units in UP.
These effective strategies implemented by RSPL for Ghari has made it to the second largest
selling detergent in India. In the last fiscal, it has enjoyed a profit after tax of Rs. 190 Cr,
more than many of its MNC peers. Further to overtake Wheel the challenge that RSPL should
now be concentrating is on the spread in South and Western parts of India and build a
distribution network as strong as HUL’s.
Proposed Competitive Strategy:
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Cost differentiation
Product diff
Focus
New Product development Strategy
– What are products?
• Xpert : Fast Action
• Xpert is a dishwash bar brand from Rohit Surfactants Pvt ltd (RSPL) which is now on
an promotional overdrive. The brand is from RSPL which is famous for its Ghari
detergent brand. Ghari literally made the large FMCG MNCs a run for their money.
The Ghari brand is infact larger than the HUL's Surf and is the second largest selling
detergent brand in the country.
• Xpert was launched in 2006 by RSPL as a part of its diversification. The brand is now
competing in the Rs 800 crore utensil cleaner market. The market is dominated by
HUL's Vim with a share of around 60%. The market is characterized by one big
player and several small players. The nearest rival is Exo diswash bar and Pril with a
share of around 8% each. As history has shown, fighting HUL's Vim for market
leadership position is not an easy task but that is the risk that a challenger brand needs
to take.
• Xpert has chosen celebrity endorsement as a route to attract consumers towards the
brand. For this Xpert chose Madhuri Dixit as the celebrity endorser. The brand is
currently running a campaign in TV featuring the celebrity.
• The brand is using its Aquashine formula as the USP and like any other brand , it is
talking about quick and easy cleaning.
• The ad is very basic and rather than using Madhuri Dixit for testimony, the brand
chose to use her as Gangu Thai ( a housemaid character in the movie Ganesha) for the
campaign. If one has missed the Ganesha movie, the ad plot will be half lost.
• Xpert is priced around Rs 10 for 200 g bar while Vim around Rs 12. Exo is priced at
par with Xpert. The brand hopes that the price differential together with celebrity will
tilt the consumer choice towards Xpert. This aggressive pricing + promotional
strategy is going to affect the smaller brands rather than Vim in the short-term.
• What is lacking in the current strategy of Xpert is the absence of a clear differentiator.
While Aquashine formula is the USP, the brand fails to communicate what it means
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and how it is going to benefit . May be in future campaign, these will be explained.
Without a powerful differentiator, Xpert may not be able to break into the market of
Vim. Exo tried with its aggressive promotions and anti-bacterial properties with
limited success. It is very difficult to create a differentiator in a market like dishwash
bar and almost all options has been used up by the players.
• It will be interesting to see how this high profile attack of Xpert will play out in the
future. In the short-term we will see some action in this dull category .
– Contents of products?
– Competitors product in same domain?
• Competitors:
• Vim : The Vim Challenge
• Vim is the market leader in the Rs 400 crore branded dishwash category. This 100
year old brand has evolved with the changing Indian consumer and is a power brand
of HLL stable. The Dishwash market in India is estimated to be in the range of Rs
600-1000 crore ( conflicting reports on the market size) while the branded dishwash
market is roughly 40%.The dishwash market consists of three categories: Powder, Bar
and Liquid. Bar is the largest category followed by Powder and then liquid. Bar
category constitutes 60% of the total market.
• Vim has created the dishwash bar category in 1993. Till that time urban households
used dishwash powders. The bar offered many advantages to the homemaker over the
powder which was messy and uneconomical.Since then Vim Bar ruled the dishwash
market .Currently the brand has a market share of over 60%.
• Vim was initially positioned on the lemon content in the bar. The brand using its
ingredients positioned itself on its Stain Removing benefit. The positioning was
consistent through these years. A terrific marketer HLL is, invested heavily in this
brand and made sure that the brand stayed on the growth stage of its PLC. The brand
changed its form,added new features and expanded the market to stay on the growth
path. To reinforce the stain removing property , the brand repositioned in 2003 by
introducing the Stain Cutter feature .The company was trying to extend the brand
from "Dish wash" to Kitchen Care market.The brand also created much inroads into
the market with its Vim Challenge campaign which directly compared the brand with
competition.
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•
• By looking at the kind of promotions that the various players in this category , I often
wondered what is the logic behind these high spends on promotion. The logic lies in
the potential of this category. The percapita consumption of this category ( value
terms) in India is hardly Rs 4 while in UK it is Rs 150. There is long way to go for
this category...
• Vim faces intense competition in this category not only from other brands but also
from the traditional methods. In rural areas, Ash is used to clean utensils and the
biggest hurdle in rural penetration of this category is to educate the rural folks to use
Soap instead of ash.
• In the branded segment, Vim faces competition from brands like Exo from Jyothi Lab
, Pril, Sabeena and host of other local brands. Exo is the challenger brand forthe
market leader Vim. Exo brand has effectively differentiated itself by using its anti-
bacterial property and uses the ingredient Trichlozene to reinforce the germ fighting
positioning.
• The emerging category in dishwash market is the liquid dishwash. Pril from Henkel
commands this market with a share of 72%. Although Vim has launched its own
variant, it failed to create an impact and was withdrawn in 2003. 2006 saw a relaunch
of Vim drop with Actor Madhavan endorsing the brand. Pril has countered the
campaign using Shobana as the brand ambassador.Marketers beleive that over a
period of time, consumers will shift to Liquid since it offers more economy and
convenience. But there is a problem with this category: Liquid dishwash is targeted at
urban upper middle class home makers and here the users are home maids rather than
home makers. It will be difficult to teach house maids to use the liquid efficiently .
• The powder segment is dominated by Sabeena brand from ECOF. Sabena is very
strong in the southern market and has a market share of over 65%.
•
• To stay on top of this highly competitive market, Vim has invested not only in
promotion but also in product improvements. In 2005, the brand took on the most
problematic aspect of this category i.e the dishwash bar getting soggy. The reason is
that these bars are kept near the sink and is always in contact with water and with in
days, the bar gets messy. Vim then launched one of the most customer centric
innovation at that time : Poly coated Vim bar. The coating prevented the bar from
becoming soggy and hence the brand became more economical. This innovation is a
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testimony to HLL's ability to understand Indian consumer and translate that to product
improvements.
• Although these innovations can be copied by the competition, Vim has constantly
improved upon the marketing mixes and has stayed relevant and different in the
consumer's mind.Vim is also a classic example that even a boring category like
Dishwash can be made exciting through smart thinking.. cheers !
• Exo : Anti-bacterial DIshwash Bar
• Exo is a dishwash brand from Jyothi Labs. Exo is a challenger brand in the Rs 10,000
crore dishwash product category in India. The brand currently focuses on South India
and is slowly spreading its wings nationally.
• Exo was launched in 2000. The brand was launched as a part of the diversification of
JLL whose bread and butter was from a single brand- Ujala. Exo entered a very tough
market which was dominated by the market leader Vim.
• In competitive strategies, theory talks about various strategies like Frontal Attack,
Bye-pass attack etc. Exo chose to attack Vim directly and aggressively. When a
competing brand chose to attack the market leader, it needs to have a credible
differentiator inorderto compete and succeed. Vim have tremendous brand equity in
the market and it is a tough task to fight such a leader.
• Exo's marketing strategy is a notable example of successful frontal attack. The brand
was able to find a credible and sustainable differentiator against Vim. Exo took the
position of an Anti-bacterial dishwash bar to fight Vim.
• Exo was India's first Anti-bacterial dishwash bar.As usual, the poor Keedanu ( germs)
was at the receiving end. Exo positioned itself as a dishwash bar that killed all the
bacteria in the utensils. The positioning was very smart since Vim was positioned on
the basis of cleanliness.
• Exo was innovative in creating an awareness about the possibility of germs in
utensils. There was also another smart idea from the brand. In theory, we often say
that the differentiator should be relevant, sustainable and not easily copied by
competitors. Exo's positioning of anti-bacterial benefit can be easily copied by the
competitor . In order to counter this, Exo used an ingredient "Cyclozan " to protect its
differentiation. The ingredient brand " Cyclozan " ensured that the differentiation of
Anti-bacterial benefit cannot be easily countered.
• By launching Exo with anti-bacterial property, Exo created both point of parity and
point of difference with Vim. The brand talked about cleanliness thus created parity
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with Vim and then used Cyclozan to establish point of difference thus creating a
powerful position in the mind of the consumers.The results was visible . Exo became
the second largest dishwash bar in South India.
• To fight the aggressive attack by Exo, Vim launched its own anti-bacterial variant
using neem as the ingredient.
• Exo later went into a brand extension mode by launching Exo dishwash liquid and
later Exo Scrub. With the acquisition of Henkel in India by JLL, the fate of Exo
dishwash liquid appears bleak since Henkel's Pril is the market leader in the dishwash
liquid market. Exo will now be restricted to only dishwash bar category.
• Exo is a brand which is promoted exhaustively by Jyothy labs. The brand has very
high share of voice and ads keep on driving the USP of germ-killing property. Since
the dishwash bar category is not a high involvement category, the brand had benefited
greatly by this share of voice.
• With the acquisition of Pril brand from Henkel, Jyothi labs now have two formidable
brands in the dishwash category. Vim now faces the most intensive threat to its
leadership position. It will be interesting to watch how the fight will turnout to be.
BAR Clean upVim HULExo Jyothy Laboratories
LimitedSabena ECOFSparkle Pascoe’sOdopic DaburTop cleanNip FENA (P) LIMITEDPril HenkelHenko HenkelXpert RSPL
• Comparison of two different product in RSPL
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– Xpert dishwash bar and Ghari detergent powder
Household Care
The detergents segment is growing at an annual growth rate of 10 to 11 per cent during the
past five years. The local and unorganized players account for a major share of the total
volume of the detergent market. The preference is given to detergents in urban area compared
to bars. Household care segment is featured by intense competition and high level of
penetration. With rapid urbanization, emergence of small pack size and sachets, the demand
for the household care products is booming. In washing powder segment, HUL is the leader
with ~38 per cent of market share. Other major players are Jyoti Laboratories, Nirma, Henkel
and Proctor & Gamble.
Xpert- the dishwasher
Five MAIN COMPETITIVE STRATEGIES ARE:·
Overall low cost leadership strategy·
Best cost provider sstrategy·
Broad differentiation strategy·
Focused lowcost strategy·
Focused differentiation strategy Here competitive strategy varies from sector to sector and company to company. Thus, it is not easy to predict a single or to find a single strategy for the wholesector.When wecome onto FMCG Sector main strategies lay behind market strategies, cost, and quality strategies.
Growth Drivers
HUL
The Company has been launchingnewproductsandbrandextensions,withinvestmentsbeingmadetowardsbrand-buildingandincreasingitsmarketshare.HULisalsostreamliningitsvariousbusinessoperations,inlinewiththeOneUnileverphilosophyadoptedbytheUnilevergroupworldwide.IntroductionofpremiumproductsandadditionofnewconsumersviamarketexpansionwillbeHULsgrowthdrivers
ITC
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ITCsbackwardintegrationtoensurethatitsproductspassefficientlyfromthefarmstoconsumershashelpedittocutdownsupplyandprocurementcosts.
ITCsnon-cigaretteFMCGbusinessleveragesthelargedistributionnetworkthecompanyhasdevelopedbysellingcigarettes over the years
RSPL’s new product development strategy:
consistent R&D efforts
address and maintain its balance between R&D-marketing interface
the company follows a three tier strategy for producing commercially viable products. The three structured strategy includes L’Oreal’s advanced research, applied research and product development, each stage having its own unique functions to perform in order to create successful innovations.
Consumer goods innovation is related to insights intelligence, new product development and marketing communications & sales promotions. Here we would only look on New product development analysis.
Shoppers’ and consumers’ interests as
innovation triggers
General Me My social circle My world
Needs /
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Insights Gathering and
Analysis
NPD communication
Sales promotion
Competitive Strategy
Cost Leadership Differentiation
Manufacturing Strategy
Cost Delivery Flexibility Quality
Firm Performance
Market Share
Sales Growth
Interests /
Concerns
Consumption
/ Shopping
Drivers
How can We help you innovating?
1. Health and Wellness
Bio / Natural product claim
The number of Bio and natural products keeps growing at most of the categories as the perception of artificial ingredients is considered unhealthy and some times evil. NATURAL, BIO and GREEN are most common words included at the brand / sub-brand / taglines of these products.
Household & Personal Care
1. Health and Wellness
Functional benefits through natural ingredients
Natural functional benefits are up! The most common innovation benefits targeted are beauty, energy, health, anti-aging and relax. The natural ingredient most of the times becomes the essence of the product personality and communication.
Household & Personal Care
1. Health and Wellness
Less added stuff is Better!
Lean trend is growing within new consumer goods launches. “No added” claims were the start of this new generation of NPDs. Häagen-Dazs’s Five and Sanex’s Zero% are now solid examples of this trend.
Household & Personal Care
2. Health and Wellness
ConvenienceConvenience keeps as a leading innovation driver. Packaging, conservation, transportation /
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storage, regeneration, usage, consumption, dosing and bundled benefits are the major subtrends. In the household and personal care categories, pencil type packaging / dosifiers are growing in popularity.
Household & Personal Care
2. Value / Time Savviness
Value-for-money
Recession and a growing popularity of private label products, are triggering Value-for-Money product launches. Some companies revamp their brands (i.e. Henkel’s Dixan), others truly launch new concepts / brands (i.e. Coca-Cola’s Menos es Más), while the rest communicate price rebates at their packaging.
Household & Personal Care
3. Special Rewards Seek
Collector’s edition
For years, product collecting has been a profitable niche for many companies. Beverage products such as Coca-Cola have a long experience with this type of NPD. With a recession or without it there will always be a number of collectors willing to pay a premium for these kind of products.
Household & Personal Care
3. Special Rewards Seek
Limited edition
Most of the times, limited edition products are variants of a regular product with a different flavor (in the case of Foods & Beverages), which are offered through impulse channels. In essence, the question is that a claim such as “limited edition” should trigger an impulsive behavior from the customers.
Household & Personal Care
4. Self-image Projection / Aspirational Reinforcement
Exotic / Stylish
Exotic and stylish product designs target emotional buying. Wrigley’s Five chewing gum is an excellent example of an exotic + stylish design product, whose launch has been reinforced with a communications image in the line of Apple’s iPhone.
Household & Personal Care
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4. Self-image Projection / Aspirational Reinforcement
Young attitude
Young people and youngsters wannabes are the target segment for these products, such as Pringles
Xtreme. Online cultural elements are generally integrated into the packaging visuals to reinforce this
youth and fresh image (i.e. Perrier’s Conversations packaging).
Household & Personal Care
4. Self-image Projection / Aspirational Reinforcement
Retrostyle / Nostalgia
Brands with a large heritage can always be relaunched with variants recovering its old image but adapted
to new times (i.e. Pepsi’s Pepsi-Cola throwback). Some other times, a product can be recovered and
commercialized again with its same image and communication as n years ago (i.e. Legrain’s Moussel).
Household & Personal Care
5. Social Awareness
Fair Trade / Solidarity
Fair trade, ethics and solidarity are a strong concern amongst Gens X and Y. Some brands promote
charity actions and communicate them through trade-marketing material. Some others place logos of
fair-trade or NGOs certifications. Just a few of NPDs are exclusively oriented to Fair Trade and Solidarity.
Household & Personal Care
5. Social Awareness
Eco-friendship
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Eco-friendship product development trend grows due to the emphasis placed on ecological concerns by
global opinion leaders and the massive media. Ecological food, sustainable packaging and greener
cleaning products are part of this trend.
Household & Personal Care
We help companies to lead their innovation initiatives around the following areas:
New Products and Services Development
We help companies to generate a new product “from scratch” and / or to innovate through any of their products’essential attributes:
• Format / packaging• Usage / storage / disposal• Claim / positioning / communication • Consumption / purchasing moments • Interaction with other products / services• Develop Supply Strategy and capability across the ingredients in the
portfolio for successfully supporting new product launches• Guide and build capability of the Franchisee SCM teams to ensure 100% On
Time In Full deliveries of all new products
• Manage SCM interface with all internal and external customers
ConclusionsThis study has helped to understand various concepts related with reverse auctions and their
mechanism. On one hand auctions offer various benefits to the buyers like cost saving, time
saving, real time market information etc. the buyer has to ensure the supplier buy-in in the
auctioning process. Reverse auctions have a major effect on the buyer-supplier relationship.
This impact is very critical in B2B kind of set-up when a lost relationship can outweigh the
cost and other saving the auction provided. The buyer has to choose a strategy that maximizes
his saving while preserving the relationship with his supplier. These strategies can a include
decisions like line or lot auctions, lot size for the auctions, the level of visibility in the
auctions.
Also the buyer must look at minimizing the total supply chain cost and not award the auction
based on minimum production cost. This task becomes increasingly difficult when buyer
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doesn’t have the cost estimate of the supplier. In that case submitting a proxy function to the
auctioneer helps the supplier.
Finally all the auction process will be of no use if there is collusion among the suppliers or
the number of participating suppliers is very less. All the auctioning models and strategies
revolve around the assumption that there is no collusion and there are sufficient suppliers in
the market.
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References
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