Report

TABLE OF CONTENTS

1. Executive Summary

2. Introduction

3. Products of Colgate Palmolive Pakistan

4. Competitors of Colgate Palmolive

5. Raw Material used in Detergents

6. Consumer Price Index

7. Market Analysis

8. Research Analysis

9. Conclusion

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EXECUTIVE SUMMARY

Colgate-Palmolive Pakistan is the leading manufacturer in fabric care segment in detergent

industry they are only producer of sulphuric acid and linear and branched alkyl benzene which is

the one of the major ingredient in detergent. They face major competition from Uniliver and

Procter and gamble Pakistan but the Colgate Palmolive products specially bonus is leading the

market which is satisfying need of low cost and quality as compared with soaps and loose

detergent.

This research project aims in identifying that during recession time the consumer purchase

pattern is changed and the consumers shifted from Colgate Palmolive high cost product which

are brite and express to low cost product i.e. bonus. Questionnaire is distributed to consumers to

support the objective of research and we have collected various data about the fabric care

segment of the industry and Colgate Palmolive Pakistan.

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INTRODUCTION:

The objective of the research is to find out he impact of recession on fabric care division and

selected the Colgate Palmolive Pakistan products which are Brite ,express and Bonus and try to

find out that because of recession the bonus powder sales is increase as compared to brite and

express power because bonus is the low cost product.

As it is written in recent column in the news paper (Business Recorder 2009) is that laundry

detergent is a fiercely contested sector. Colgate-Palmolive leads through its brand bonus in

volume at the mass end. Unilever’s Surf leads in value at the top and has gained share from

P&G’s Ariel.

In Pakistan detergents were introduced in sixties. Pakistan being mainly a laundry soap market

detergent was considered a product for the top end of the market and high duties were charged

on both raw material and finished products. This made detergents expensive and as a result the

consumption remained low. The real increase in the use of detergents came in last ten years, the

two main reasons for this growth are.

a) Import duties on the raw material were rationalized and reduced the manufacturers passed

on the benefits to the consumers and the detergent became more affordable in the market.

b) Local production of raw material by Colgate Palmolive which makes Colgate leader in

the market because of the low cost detergent powder.

TYPES OF DETERGENTS:

a) Heavy duty detergents with high active ingredients

b) Low Foam detergents these are medium range Active detergent

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PROMBLEMS FACED BY INDUSTRY:

LOCAL MANUFACTURERS:

The biggest problem faced by the industry is by local manufacturers i.e. soaps, loose powder

DISPOSIBLE INCOME

In Pakistan the purchasing power of people is low as compared to developed countries that are

why low cost products sales is increasing.

PARALLEL IMPORTS:

Parallel imports are one of the major problems for the industry

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PRODUCTS OF COLGATE PALMOLIVE PAKISTAN:

1. BRITE TOTAL

Launched in the year 1981.This premium quality detergent is now even better than before with

the inclusion of globally recommended ingredients of stain lifter and oil Easter. The combined

actions of these ingredients lift the toughest of stains of oil and grease in just one wash

2. EXPRESS POWER:

Express is the only brand in the popular price segment of laundry detergent it has loyal consumer

base from 1993 express has effectively contributed towards leadership of Colgate Palmolive in

overall detergent market. The quality and price fit perfectly into the consumer needs and

affordability criteria

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3. BONUS:

Bonus is the largest selling detergent in Pakistan it is an affordable value detergent which offers

superior cleaning performance and stain and dirt removal as compared to traditional laundry aids

it is replacing laundry soaps and loose detergent and because of recession bonus sales is

increasing and helps Colgate Palmolive in shaping up the penetration in downscale rural markets

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COMPETITORS OF COLGATE PALMOLIVE PAKISTAN:

The competitors of Colgate Palmolive are

1. Uniliver Pakistan

2. Procter and gamble Pakistan

LOCAL PRODUCTION:

Main producers of detergent in the country are

Colgate Palmolive (Pakistan) ltd

Uniliver Pakistan

Procter and Gamble are importing detergent and marketing in Pakistan. This is possible due to

decrease in import duties. Production plant of P&G is in Egypt.

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RAW MATERIAL USED IN DETERGENT POWDER:

Colgate Palmolive is the producers of the raw material which produces sulphur, linear and

branched alkyl benzene which gives them competitive advantage over Uniliver and P&G

Pakistan but recently the Government has reduced the import duties of raw material which gives

Colgate Palmolive a little set back. Colgate-Palmolive is the leading manufacturer of detergent

powder in country with present production capacity of 30000 MTPY. They are the only

manufacturer of sulphuric acid in the country. The production capacity of sulphuric acid based

on SO3 gas and sulphur is 3600MTPY.This capacity is not sufficient to meet the present

requirement and is importing around 3000 tons of sulphuric acid. The country’s total requirement

for sulphuric acid is estimated to be around 20000 MTPY. Colgate Palmolive Pakistan has

started work on new plant with additional production capacity 20000 MTPY which is sufficient

to meet the present requirement. The plant can use both Branched and Linear Alkyl Benzene to

produced sulphuric acid.

RAW MATERIAL IN MANUFACTURING PROCESS:

1. Sulphur

2. Sodium sulphate

3. Linear and branched alkyl benzene

4. Tinopal (optical brighteners)

5. Sodium triphosphate

6. Enzymes

7. Perfumes

8. Perbrates (oxygen bleach)

9. Sodium toluene sulphonate

10. Sodium polyacrylate

11. Soda ash

12. Sodium silicate

13. Sodium hypochlorite

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.CONSUMER PRICE INDEX

The Consumer Price Index of October, 2009 has increased by 0.95% over September, 2009, and

increased by 8.87% over corresponding month of last year the values of price index can be seen in

the table and pie chart.

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MARKET ANALYSIS:

GROWTH:

• Growth of detergent powders in Pakistan in last three years have been 15%.this trend is

expected to continue for another two to three years i.e. 2005 and thereafter the grow this

to be expected around 10% annually for next five years. Recent consumption of detergent

powder per year is 240000 tons but market is still dominated by soap industry 420000

tons but in terms of value the laundry soaps is 10 billion Rs and laundry powder is 17

billion Rs.

YEAR 2005 2006 2007 2008

DETERGENT POWDER

144000 TONS

166000 TONS

194000 TONS

240000 TONS

SOURCE: COLGATE PALMOLIVE AND BUSINESS RECORDER

MARKET SHARE:

Colgate Palmolive Pakistan is leading the industry by 45% and Uniliver Pakistan share 36% and

Procter & Gamble Pakistan Share is 17% and others are 2%.

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36%

45%

17%2%

UnilivercolgateP& G0thers

As we discussed above that Colgate Palmolive Market share is 45% and out of it Bonus share is

19% and Brite share is 12% and express power share is 14%.

12%

14%

19%

Volume sharebriteexpressbonus

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RESEARCH ANALYSIS:

Research survey is conducted to find out how the consumer purchase behavior of fabric care

segment of Colgate Palmolive affected to find out the purchase pattern the sample size we have

selected is 45 and questionnaires is distributed to low income group whose salary is below

20000Rs.

From the survey we have find out the out of 45 the 9 person use brite 10 use express power and

12 use Bonus and in others which include loose detergent soaps and other products in the market.

This shows that bonus users are more than other products.

From the survey we have also found out that the customers used previously brite 6 people and

express 4 soaps users are 14 and others are 18 and most of the bonus people are converted to

bonus in less than two years as shown in the bar chart which shows that in the recession period

most people converted to bonus as compared to brite and express power.

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brite express bonus02468

10

64 4

3

68

2yrs more2yrs less

Out of 12 users of bonus 4 converted from brite 1 from express 4 from soap user and 3 from

other and 8 shifted because of price and 4 because of quality.

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CONCLUSION:

Most of the customers which are converted to bonus are because of price and because of

quality which are previously soap users. This research conclude that the recession affected

the consumption pattern and most of the customers converted to low cost product and most

of the consumers of Colgate Palmolive shifted to bonus from high cost product i.e. brite and

express.

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