Ghari detergent ppt

A PROJECT ON

GHARI DETERGENT

By Rajalaxmi Prakash

PGDM 2012-14

IIBM Patna

INTRODUCTION OF GHARI DETERGENT Ghari Detergent powder is manufactured by Rohit Surfactants

Private Limited (RSPL), a Kanpur based 3000 crore diversified conglomerate in India. The detergent brand was founded by Muralidhar and Bimal Kumar Gyanchandani in 1987.

It came to limelight in late 2012 when it beat HUL's Wheel detergent and grabbed the top spot in terms of market share. After 25 years of its inception, it took the top spot in the detergent market. In November 2012, Ghari was the market leader with a 17.4% share compared with Wheel's 16.9% and Tide’s 13.5%.

The product was low priced and targeted at the rural customers, middle class and lower-middle class customers. A 1 kg pack of Ghari detergent is priced at Rs 35 and a 2.5 kg pack is priced Rs 85 only.

Two years ago, RSPL flagged off the 'Ghari Detergent Express', a train whose exteriors are painted with Ghari branding that ran between Lucknow and Guwahati for two months.

Ghari has spread its distribution network to more states now and

directly reaches rural markets, which is its biggest audience.  It has

21 manufacturing units, 15 of which were added since 2006.

The tagline “Pehle istemaal karein fir vishwaas karein”  (Use it and

then believe it) which encourages trial and prompts repeat purchase.

Promotions are done through roadside shows, magic shows

and exhibitions in smaller towns and cities.

Ghari is for common man and usually it targets household

wives. To live in that spirit Ghari brand has avoided using

any celebrity to endorse it unlike wheel (endorsed

by Salman Khan), Rin (Kajol), and Ariel Oxybin (Kiran Bedi).

SWOT ANALYSIS

Strength:-

1. Market leader in the tier-3 & tier-4 segment of detergent market in

India.

2. Strong reach to the rural consumer.

3. The tagline ‘Pehle istemaal kare fir wishwaas kare’ has struck a chord

amongst the price-sensitive mass market.

4. High push by retailers and high word-of-mouth amongst consumers.

5. Good branding through TVCs and print ads.

6. Indigenous brand name which is very associative with the

rural masses as well as those at the bottom-most segment.

7. Home market UP with population 167 million constitutes over

12% of the country’s FMCG sales.

8.Affordable pricing.

CONTD..

Weakness:-

1. Limited export market as compared to international brands.

2. Unable to completely penetrate in premium segment because of image.

3. Quality not very superior.

Opportunity:-1. Entered western & southern India recently where a huge market

opportunity lies.

2. Further penetrate the rural market by collaborating with various NGOs.

Threats:-1.Low profit margins in detergent sector.

2.Threat from existing and new players in the market.

3.Huge conglomerates (HUL and P&G) with a large capital base and strong presence in the detergent market to compete with.

MARKETING MIX(4P’S)

Product:-i. Ghari detergent is a mediocre brand.

ii. Significant features are resistance against moth and shrinkage, no toxic chemicals present and it leaves a pleasant fragrance in clothes.

iii. It is formulated in accordance with the well-defined parameters of the industry. To ensure flawlessness and accurate results, it is thoroughly inspected before dispatching to the customers' premises.

iv. Variants are:-• Detergent cake - 340 Gms, 190 Gms, 95 Gms

• Detergent powder - 3 Kg, 1 Kg, 500 Gms, 210 Gms, 90 Gms, 15 Gms

CONTD.

Price:-i. Pricing is inspired by Nirma’s low-cost model. Ghari followed Nirma’s

strategy of keeping low price and targeting customers at the bottom of the market.

ii. 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.

iii. Ghari 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.

iv. It took the bold step of pricing at a 10% premium over HUL’s Wheel and Nirma - Rs 35 a kg as against Rs 30. It’s a brilliant gap that Ghari has found as it is priced above mass brands like Wheel and Nirma but much below mass premium brands such as Tide and Surf.

Place:-i. Before going national which would have spread its resources very thin,

RSPL focused on Uttar Pradesh to begin with, which has a population of 167 million and accounts for over 12 per cent of the country’s FMCG sales.

ii. It focused on developing an intense distribution network to reach the customers effectively, which is evident from the fact that out of 3000 dealers in India, 900 dealers are in UP and 25 of them are in Kanpur alone. It has almost 50% of its 21 manufacturing units in UP.

iii. Ghari has spread its distribution network to more states now and directly reaches rural markets, which is its biggest audience. In the past 3-4 years, Ghari added 10 states to its distribution reach. The brand is now present in 19 states. A regional brand had suddenly gone national, reaching out to millions of new customers. To complete this push effect, the company added over 1,000 dealers and now has a total network of 3,500. The next target is to cover the remaining 15-odd regions (states and union territories) in the next two years .

iv. Ghari now has some 21 units, 15 of which were added since 2006. With the company now looking to enter more markets, especially in southern India, at least four more plants are expected to be set up as early as possible.

In 2006, Citigroup Venture Capital India (CVCI) had approached RSPL (then Kanpur Trading Chemicals) to pick up a roughly 14% stake. The deal didn’t go through due to valuation differences and RSPL decided to restructure its business instead. After the restructuring, the company has now almost doubled its distribution network and production units, all funded through internal accruals.

Around April 2011 onwards, RSPL started using mobile phones to book sales and track distributor's positions and sales for which it adopted a mobile application ‘msales’. Msales helped the sales force to take care of the sales activity on the go and the data captured is pushed to its enterprise resource planning (ERP) system. Msales is GPS enabled so it is possible to track the sales. Earlier, it was not possible to track sales on the go.

Promotion:-RSPL has attempted to prove that you can be innovative without splurging and

without hiring anyone from the IIMs, either. Ghari spends under 2% of sales on A&P - as against 12-14% spent by its MNC peers – which helps it sustain its low margin, high-volume strategy.

All advertisements are centered on the tagline ‘Pehle istemaal karein fir vishwaas karein’ (Use it and then believe it) which encourages trial and prompts repeat purchases. Ghari is for common man and usually it targets household wives. To live in that spirit Ghari has avoided using any celebrity to endorse it unlike Wheel (endorsed by Salman Khan), Rin (Kajol), and Ariel Oxybin (Kiran Bedi). They believe that Ghari doesn’t need any celebrity so let consumers use it and then trust the brand.

Ghari 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. The first campaign was the Ghari Detergent Express (a summer special) in 2008 that ran between Lucknow and Guwahati for 2 months. Its exteriors were painted with Ghari branding. Taking the cue from there, it then advertised in Pushpak Express that runs between Lucknow and Mumbai. . Advertisements were also displayed inside the bogies of Swarna Jayanti Express (from Trivandrum to Hazrat Nizamuddin in Delhi) that cuts across 3-4 states in south India in 2009. The brand can also be seen on railway crossings in West Bengal and Uttar Pradesh.

RSPL promotes Ghari at roadside shows, magic shows and exhibitions in smaller towns and cities. Customers are unlikely to see other brands at these places - an innovative idea to break the clutter. The magic shows have given Ghari good visibility in cities like Jaipur, Indore, Kota, Alwar and Kanpur.

About 30 company-owned vehicles are used for out-of-home advertising.

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, which is actually quite attractive.

Of late, the company has taken some tentative steps towards the popular media. Recently, it sponsored a show Rakt Sambandh on NDTV Imagine.

PORTER’S FIVE FORCE MODEL Rivalry among existing competitors

The major competitors are Wheel and Nirma in the popular segment and Surf and Tide in the overall market.

Currently, Ghari is the market leader with a market share of 17.3%, Wheel is at number 2 with a share of 16.9% and Tide is 3rd with a market share of 13.5%. Nirma has market share of less than 6% now.

HUL gives tough competition in the detergent market as it has one product for each segment viz. Surf (premium segment), Rin (mid-scale) and Wheel (popular).

  Ghari competes mainly on its affordable pricing, target

market segment, distribution reach (especially to rural areas), size of its home market UP (which contributes over 12% to the country’s FMCG sales) and novel, innovative and effective promotional tactics.

Threat of new entrantsAs Ghari is not a very high quality product, entry of

detergents with better quality but affordable pricing can be a serious threat. Entry is easy as there are low barriers of entry in the FMCG sector and economies of scale exist here.

Threat of substitute productsIn today’s fast life, even women do not have the time and

patience for manual washing of clothes. This is the age of highly innovative washing machines. Ghari is a bucket-wash detergent which can be threatened by sophisticated detergents meant for effective as well as gentle washing of clothes in washing machines.

Detergents with properties to protect the hands from roughness, dryness and allergic reactions in the process of washing can also be a threat.

Bargaining power of Suppliers-

Suppliers tend to have a low bargaining power as Ghari is not of a very superior quality, and the basic ingredients are easily available since there are numerous suppliers in the market, switching costs for the raw materials is also not very high.

• Bargaining power of buyersBuyers do possess a strong bargaining power as Ghari is the

major contributor to the turnover of RSPL (it ended fiscal 2011 with net sales of 2,200 crore — Ghari contributed 2,083 crore), mostly buyers have full information about the products and market even in rural areas, products are more or less undifferentiated in terms of features(major distinguishing factor is the price) and the switching costs are low(Ghari is priced at 10% premium over Wheel and Nirma at Rs 35 a kg).

NEW MARKETING STRATEGIES

In reference to Ansoff Matrix, a combination of Market Penetration, Market Development and Product Development Strategies can be implemented for Ghari Detergent. The following sub-strategies would be applicable in employing the above-mentioned strategies.

Quality-It is a well-known fact that Ghari is a detergent of mediocre quality. This fact is one

of its drawbacks. Steps should be taken to improve the product quality with an

accommodating investment in order to maintain the price. Following aspects can be

considered:-

Improving stains effectively with minimum manual effort(since

Ghari is a bucket-wash detergent, this aspect plays an important

part).

Retaining the actual colors of the clothes

Not causing damage to the fabric

Protection from roughening of hands

Variants- The original pack and quality can be maintained for a segment of existing customers who are fully

satisfied with the product. For others, new improved version with improved quality can be

introduced with a differentiating brand name and packaging like Ghari Plus 0r Ghari Advanced.

Variants with different fragrances

Variants with different qualities for different fabrics

Packaging-

Packaging can be changed or at least improvised.

Reusable jars can be introduced

Plastic bags can be fitted with caps for minimizing over-spilling preventing wastage

Improvisation can be done by using better quality packaging material, better quality of colors

and printing on the packs.

Alternative applications-Usage of a product can always be enhanced by promoting alternative

applications of the same product. Detergents are made to dissolve oils hence, their

applications can be increased in the following manners:-

Safe to use for cleaning sinks, counters, toilets, walls, fireplaces and tubs.

Especially good on greasy areas, such as kitchen floors and stove tops

Cleaning oil or grease spills on garage floor and driveway

Attractive incentives- Personal selling methodologies can be employed with increased sales force activities

providing them with additional incentives.

Introducing attractive incentives scheme in accordance with the sales volume (for

distributors, retailers, etc.)

.

Advertising-

Ghari has been showing the same kind of advertisements since ages

which lacks novelty and innovation.

Innovative advertisements (preferably showing rural set-ups and people) should

be created highlighting more on its quality, pricing and market share along with

its USP "Pehle istemaal karein fir vishwaas karein".

Genuine customer testimonials can be shown (home-makers from lower and

middle segment households with whom rural people can feel a connection).

Trains used in the promotion of Ghari (Ghari Detergent Express, Pushpak

Express and Swarna Jayanti Express) can be taken through new routes for more

visibility different states(especially rural areas)

South Indian market-

There lies a huge opportunity for Ghari in the southern market but the brand will have to face

competition from regional brands like Power, Challenge, Arasan and Ponvandu which are

medium and low-priced detergents with a rather strong market presence. The competition can be

minimized taking the following measures:-

The punch line "pehle istemaal karein fir vishwaas karein" should be highlighted in the

respective regional languages.

The original brand name should be retained which is a strong brand identity for the company

but the original brand name should be used on one side of the packaging along with the regional

name for Ghari on the rear side maintaining the same colors, fonts and logo.

Manufacturing plants in southern region should be set up in order to keep the costs low.

Free samples should be distributed in haats, mandis, fairs, puppet shows, magic shows, etc. to

create awareness.

The advertising trains should be taken to the southern region in major cities and rural towns and

villages.

Green marketing-

“Going Green” is the new mantra in the corporate world. Their protective

measures helps to conserve the environment, gives the members of the

company a sense of satisfaction for giving back to the society and creates

goodwill for the company in the market and society at large. So the

company should make attempts to turn eco-friendly by:-

Introducing bio-degradable ingredients in the product.

Making use of recyclable packaging.

Tour visit to manufacturing plants-

A provision should be made for all stakeholders (including

customers) to visit the manufacturing plants and have a tour

visit through the manufacturing process.

Corporate Social Responsibility-

The company should indulge in CSR activities like associating with educational

institutions and foundations.

Participating in social issues prevalent in rural India like early marriage, female

foeticide, family planning, etc.