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Market Demand and Potential - Lux Soap

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Mansukh Patel Strategic Business Marketing Mr. M Natrajan

Paper: Market Demand / Potential – LUX Soap
PRODUCT PROFILE • • • • • LUX is a global brand developed by Unilever. The range of products includes beauty soaps, shower gels, bath additives, hair shampoos and conditioners. LUX started as “Sunlight Flakes” laundry soap in 1899. In 1924, it became the first mass market toilet soap in the world. It is noted as a brand that pioneered female celebrity endorsements. As of 2005, Lux revenue is at 1.0 billion euros, with market shares spread out to more than 100 countries across the globe. Today, Lux is the market leader in several countries including Brazil, India, Thailand and South Africa. For years, LUX has been one of the India top soaps that offer a way to gain smooth and fair looking skin without worrying too much on how old the user is. LUX soap came from one of the biggest corporation in the India today, Unilever. LUX is a personal care brand owned by Unilever. LUX is primarily made from synthetic surfactants, as well as some vegetable oil based soap ingredients, such as sodium palm kernelate. LUX is formulated to be pH neutral, with a pH that is usually between 6.5 and 7.5.

As paper title specify, market research is done for the LUX soap to estimate the current demand and market potential. Market research is the process through which one can indentifies the basic problems area relating the product demand, its potential and as conclusion strategies to enhance demand and potential within specified geographical area. OBJECTIVE 1. To assess the present demand of LUX soap within specified Geographical area 2. To assess the future potential of LUX soap market 3. To propose the steps to enhance market demand of LUX soap to enrich market potential COMPANY PROFILE Hindustan Unilever ltd., (HUL) is the leader for the toilet soap industry in India with a Approximate 55% share in the market. Other major players from LUX is facing competition are Godrej soaps, Wipro, Procter & Gamble, Colgate Palmolive, Johnson & Johnson etc. HUL is a 52% owned subsidiary of Anglo Dutch giant Unilever. It has presence in Indian industry since 1888. HUL is a largest FMCG company of India. HUL products are wide spread and touching to every 2 customer out of 3 customers in India. HUL has range of products having 20 categories including Home, personal care, food and beverage. HUL has more than 100 manufacturing facilities across India covering all geographical area with diverse product range. CURRENT MARKET DEMAND OF LUX SOAP There is market demand of 7 lacs MT of toilet soap, out of which 500 MT comes from the premium segment, 3 lacs tons from carbolic segment and the rest are from the batting or popular segment. There are 40 brands in the total toilet soap market. In the popular segment Liril, Cinthol, Palmolive, Lux international have been well established in the market. In the popular segment lux, rexona, hamam, santore have a strong presence while among the carbolic soap lifebuoy, Ok, nirma have proved their worth. The important point is that the price of the soap between the various brands generally varies between 50 paise and rupee.

Toilet Soap Market share of different company in India COMPANIES MARKET SHARES HUL TATA OIL MILLS DOVE GODREJ SOAPS NIRMA OTHERS 60 13 07 05 08 07

As data specifies above, that is the fact Hindustan Unilever Limited is leading company in toilet soap sale. LUX is one of the most popular brands of HUL in toilet soap. LUX soap falls under popular segment which is added advantage to sustain and grow the market. TOTAL MARKET POTENTIAL OF LUX • Lux is market leader in toilet shop but still it has market potential to grab close competitor brand like Santoor and Godrej. • There is potential of capturing customers following brand like Santoor and Godrej 1. • Dettol soap has special characteristics for germicide effects and customers following Dettol is hard to crack because they follow they brand because of particular advantage of that soap. • There is potential of rise in 2-3 % market of nearest competing brand.

%age Market of Soap : 2013-14
16 14 12 10 8 6 4 2 0 Lifebuoy Lux Santoor Dettol Godrej 1 8.8 7.8 6 14.4 14.4 %age Market of Soap

TOTAL CURRENT SALES OF HUL Description Sales Revenue of HUL Sales Revenue of Lux % Growth in Sales revenue of HUL (Rs. Crore & %age) % Growth in Sales from Personal care Products (Rs. Crore & %age)

2011-12 22,116 6,486

2012-13 26,417 7,309 4,301 19.4 823 12.7

2013-14 28,019 7,980 1,602 6.1 671 9.2

Statistics of last three years show that there is growth in sales of HUL as well as Personal Care products sales. Year 2013-14 has shown lower growth than previous year. Market potential is very much visible due to growing population in India as well as improved life style. The Indian soap market is ruled by three major giants; Hindustan Unilever Limited, Godrej and Nirma. These three companies alone account for 88% of the total market share in India. H.U.L. with its brands like Lux and Lifebuoy has dominated the Indian lather industry since the last few decades. Nirma another top soap brand in India is one of the major competitors of HUL and holds a 15% market share in the Indian soap market. The primary aim of the top soap brands in India today is to expand the number of rural consumers since the rural consumers consists of 70% of the total population of the country . The overall soap penetration in Indian households is 98%. The top soap brands in India are ranked according to usage and popularity since people belonging to different strata's of societies use different brands of soap. Rural consumers in India constitute 70% of the population. The top soap companies are specially producing soaps under the discount segment meant exclusively for the rural areas targeting the absolute lower income consumers. We can consider the followings keeping view of above facts for market demand and market potential. • • • • • • • As lux falls in popular segment and there is extensive scope of market potential in rural area as rural India has 72% customer. Rural India has about 639,000 villages where 743 miilion people accounting for 72% of Indian population. About 7% of the villages having population below 500 people which is counted about 2.5 crore population. A major challenge faced to develop the customer within this geographical area is logistics and distribution. Those villages don’t have shops and mostly dependant to nearby small town and cities for their shopping. Another factor to be considered is purchasing power of those customers, since their average income below Rs. 50,000 per annum. Age group in the smaller town use to be either above 40 years or below 10 years due to migration of population from rural area to urban area.

SUGGESTIONS AND CONCLUSION • To make develop lux soap of smaller size with low price that is affordable to majority of population having low income. • To advertise brand through visual display banners and posters. • To create distribution network that reaches to smaller towns those are in reach of smaller villages. • To target the age group below 10, for which parents spend money. To create special advertisement targeting rural area of small village. • To conduct the survey in rural area of target market to getting in the mind of customer. Incorporate the finding of survey in marketing plan to increase market share covering remote rural area. • Herbal product in LUX soap can be one innovative idea to attract small village population, because of their life style that can attract costumer in small village. • LUX soap promotion campaign can be initiated in small villages and nearby town and cities.

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