Alyaa Herbal Products Ltd., U.S.A.

Marketing Plan for an Herbal Shampoo to be launched in India

Go CleanPresenting to you a totally new formulation which works both on your and scalp from the very first wash, washing away all the dandruff you are worried about so that u don’t have to hesitate, every time u go out…

Current Market Potential

The awareness to use personal care products made from herbs and other natural

ingredients is increasing. Many people prefer herbal product over synthetic chemical

shampoo. The product has been traditionally made by our ancestors and was widely used

before the advent of chemical / synthetics and is not a totally new product for Indian

customers.

Since the herbal shampoo industry is not fully developed in the country and over

periods of time consumers have become aware of advantages of using shampoo made

from herbals, there are great future prospects for Alyaa Herbals

Unlike synthetic chemical shampoo there are absolutely no side effects from using

herbal shampoo and Herbal shampoos generally attracts the customers, especially the fair

sex .Hence there is growing demand for such an herbal product in urban and in semi

urban areas.

Market Research

1. Hair Care Facts

The frequency of shampoo usage is very low. Most consumers use shampoo only

once or twice in a week. In many cases, these products are used on special

occasions such as weddings, parties etc

Some customers use shampoo only to address a specific problem such as dandruff

or when they need to condition their hair

About 50% of consumers use ordinary toilet soaps to wash their hair

About 15 % of consumers use toilet soaps as well as shampoo for cleaning their

hair

Brand loyalties in shampoo are not very strong. Consumers frequently look for a

change, particularly in fragrance

Consumers attribute lathering to the act of cleaning

Major expectations from the product are improvement in texture and

manageability, giving softness and bounce to hair, curing and avoiding damage to

the hair

An Indian needs more shampoo for a proper wash ( average 6 ml ) compared to 4

ml needed in Western countries as most Indian women have long hair

Most consumers do not use shampoo daily

Regular users would need smaller quantity of shampoo per bath. Hair tend to

collect more dust due to dusty environment and oiling habits

Southern market is predominantly a sachet market, accounting for 70 % of sachet

volumes

In Contrast, shampoo bottles are more popular in the Northern markets

About 50 % of the shampoo bottles are sold in the Northern region alone

In the North, local brands such as Ayur have strong equities and these products

being low priced dilute sachet’s USP of low price

2. Market Size

Size of shampoo market - 930 Cr

Anti - Dandruff Shampoo - 20 % of above

Sachet Sales - 70 % of above

3. Shampoo Awareness

Urban areas - 90 %, accounting for 80 % of shampoo sold in the country

Rural areas - 80 %, accounting for 20 % of shampoo sold in the country

4. Usage and Penetration

Per Capita consumption of Shampoo in India - 13 ml

All India Shampoo - 14 %

Urban - 40 %

Rural - 10 %

5. Growth

Average Growth over the last few yrs - > 20 %

Expected Average growth over the next few yrs - 25 %

6. Market size of Herbal Shampoo

Only 13% of total shampoo market

Opportunity and Issue Analysis

Alyaa Herbal Products Ltd. is aware that India has a very large population and Indians

have more hair than natives of any other country. The consumption of synthetic

shampoos is quite high in urban and semi urban areas and the company’s objective is to

transform this demand of synthetic shampoos into the demand for herbal shampoos.

However, there is always a threat from the existing niche players in the market, imitative

future launches and substitutes. The key issues facing Alyaa Herbals are:

i. Should it target only urban and sub urban areas or also include the rural areas?

ii. Should it go for collaborating with some companies for producing bottles,

transportation or do all the things on its own?

iii. What should be the time to time strategies so as to gain a competitive advantage

over others?

ObjectivesAlyaa Herbals decided on the following specific objectives:

Earn an Annual Rate of Return on Investment of 20 percent after taxes over the

next five years.

Achieve sales of about 20 million bottles (100 percent capacity utilization) in the

first year of operation.

Achieve 30 percent consolidated growth in next two years.

Achieve the position of being a reliable and widely used herbal shampoo.

Marketing strategy

Product:

i. Brand Name: Go Cleanii. Punch Line: Quality Divine.

iii. Quality: A very effective hair-strengthening and moisturizing shampoo, with refreshing herbal extracts, specially formulated to prevent hair loss and fight Dandruff. Hypoallergenic. No harmful chemicals

iv. Key Ingredients: Fenugreek (for hair-strengthening and nourishing) and Neem(for killing germs) Extracts with Shikakai Granules(anti- Dandruff properties and mint(for Freshness).

v. Safety: Completely Non- harmful. Safe to use on artificially colored or permed hair. Safe for daily use. Suitable for any person above 5 years of age.

vi. Packing and Packaging:

Packed in 7ml sachet, 35 ml, 100 ml and 200 ml plastic bottles.The 50 ml bottles will be the trial packs, which will be discontinued in

the 3rd year of operationPictures of the key ingredients will be displayed on the pack.Safety lock will be on the cap of the bottle to ensure the customer of

non-adulteration.

vii. Labeling: Labeling will include the following:

Brief description of Quality Directions for use Key ingredients Safety Features Price, Quantity, Company’s name, company’s logo etc. Barcode

Target Market: Targeted to the following:

Every person above 5 years of age. High income, upper middle and middle class of urban and sub-urban areas. High income and upper middle class of rural areas.

Pricing:

i. Pricing Strategy: Penetrative and Competitive pricing – low price to attract more customers in comparison to the competitors.

ii. Suggested Retail price:

Quantity (in ml) Price (in Rs.)

7 2.535 17100 68200 120

iii. Price Flexibility: Prices are Flexible to the market conditions and to the cost of manufacturing and also to the prices of competitive products.

Place:i. Channel of distribution: Manufactured product will move through the

following channel of distribution-

Manufacturer Distributor Dealer Wholesaler

Customer Retailer

This channel of distribution has been adopted as the company is new to the country and distributing the product by ourselves may result in excessive cost to the company. So to avoid this problem the company will collaborate with a distributor (to be selected through the process of tender filling) and as the market is very large it has to go through the dealers, to ensure proper distribution.

ii. Inventory Management: Production will be done on batch basis and when one batch will be under process and the raw material for the next batch is being fed, the raw material for the second consecutive batch will be procured. This will result in low storage cost and sufficient raw material for manufacturing.

iii. Warehousing: The manufactured product will be stored in the company’s warehouse near its plant before dispatching it to the distributor.

iv. Distribution Centers: Eight Distribution Centers in:

a. North b. North Eastc. North Westd. South e. South Eastf. South Westg. Easth. West

v. Transportation: Company will collaborate with a transportation Company (to be selected through the process of tender filling) to transport its goods from the plant to the warehouse and to the distributor’s place.

Promotion:

i. Promotion Strategy: Following strategies will be used to promote the product:

Push and Pull Strategies – Push Strategy: we will be using push strategy to concentrate some of our marketing efforts on promoting our product to retailers to convince them to stock the product. A combination of promotional mix strategies will be used in this aimed at the retailer including personal selling, and direct mail, pushing the product onto the retailer. Pull Strategy: we will also be using pull strategy to promote our product amongst the target market to create demand. Consumers will pull the product through the distribution channel forcing the wholesaler and retailer to stock it. This will be done through providing the customers with money off coupons or special offers.

AIDA strategy – The third strategy to promote our product will be the implementation of AIDA model which is

Attention Interest Desire Action

This can be illustrated briefly as grabbing the attention of the customer, then holding his interest, then making the product desirable to him and finally making him to purchase the product.

AIDA is an acronym for Attention, Interest, Desire, and Action. This strategy can be made successful through effective advertisement, distribution of free samples etc.

ii. Advertising: To create awareness about the product in the minds of the customers and to provoke their buying actions. Advertising will be done through the following mediums:

i.T.V. spotsii.Magazines

iii.Billboardsiv.Product packaging and inserts

v.Posters and Flyersvi.In – store displays

vii.Distribution of free samples

iii. Public Relations and Publicity: To be done through-

i.Exclusivesii.Community involvement

iii.Opinion piecesiv.Feature storiesv.Social responsibility Activities

iv. Personal Selling: Personal selling will be done only in Supermarkets and big stores, where a representative of the company will be made available to tell the customers and also help them about the benefits and the uses of the product and also what differentiates our product from others available products.

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