PROJECT REPORT ON STUDY OF BEAUTY SOAP: LUX

SUBMITTED TO: Mallieswari Maam

SUBMITTED BY: Sneha Bhambhani (123244) Balwinder Singh (123124)

MBA(UoM) 2012-2014

INTRODUCTION

The origins of personal cleanliness date back to prehistoric times. Since water is essential for life, the earliest people lived near water and knew something about its cleansing properties - at least that it rinsed mud off their hands. A soap-like material found in clay cylinders during the excavation of ancient Babylon is evidence that soap making was known as early as 2800 B.C. Inscriptions on the cylinders say that fats were boiled with ashes, which is a method of making soap, but do not refer to the purpose of the "soap." Such materials were later used as hair styling aids. Soap got its name, according to an ancient Roman legend, from Mount Soap, where animals were sacrificed. Rain washed a mixture of melted animal fat, or tallow, and wood ashes down into the clay soil along the Tiber River. Women found that this clay mixture made their wash cleaner with much less effort. As the market is constituted now, it can be divided into four price segments: premium, popular, discount and economy soaps. Premium soaps are estimated to have a market volume of about 80,000 tones. This translates into a share of about 14 to 15%. Soaps form the largest pie of the FMCG Market with bathing & toilet soaps accounting for around 30% of the soap market, by value. Currently, the soap industry is divided into three segments namely Premium, Popular and Economy/ Sub popular. To fight competition, major players Hindustan Unilever Ltd (HUL), Godrej Consumer Products Ltd (GCPL) and Wipro Consumer Care & Lighting are now drawing up fresh game plans. And the accent is clearly on innovation to gain mind share as well as market share in this overcrowded category.

OBJECTIVE OF THE PROJECT

To find what strategies the company uses to market its world famous beauty soap; the positive and negative aspects of those strategies. To discuss the process of using market segmentation, target marketing, the product, pricing, promotional and distribution strategies and a competitive analysis.

COMPANY PROFILE

Hindustan Unilever Limited (HUL), a 52%-owned subsidiary of Anglo-Dutch giant Unilever, has been working its way into India since 1888. Formerly known as Hindustan Lever Limited. The Group's principal activities are to manufacture and market consumer products. Hindustan Unilever Limited (HUL), a subsidiary of Unilever, is a fast moving consumer goods (FMCG) company based in India. The company focuses on efficient delivery to consumers with an improved supply chain, brand building initiatives and innovation, which has helped the company to sustain its leadership position in the overall FMCG category in India.

Mission
Unilever's mission is to add Vitality to life. They meet everyday needs for nutrition; hygiene and personal care with brands that help people feel good, look good and get more out of life. Their deep roots in local cultures and markets around the world give them strong relationship with consumers and are the foundation for their future growth. A key requirement is building in the quality expectations of their consumers into their products. To win consumers confidence and loyalty, they need to consistently deliver branded products of excellent quality. The Quality Policy describes the principles that everyone in Unilever follows, wherever they are in the world, to ensure that they are recognized and trusted for their integrity, the quality of their brands and products, and the high standards they set.

LUX

Lux soap was first launched in 1916 as laundry soap targeted specifically at 'delicates'. Lever Brothers encouraged women to home launder their clothes without fear of satins and silks being turned yellow by harsh lyes that were often used in soaps at the time. The flake-type soap allowed the manufacturer some leeway from lye because it did not need to be shaped into traditional cake-shaped loaves as other soaps were. The result was a gentler soap that dissolved more readily and was advertised as suitable for home laundry use. Lux toilet soap was introduced in 1925 as bathroom soap. The name 'Lux' was chosen as a play on the word "luxury." Lux has been marketed in several forms, including bar and flake and liquid (hand wash, shower gel and cream bath soap). Lux in step with the changing trends and evolving beauty needs of the consumers, offers an exciting range of soaps and Body Washes with unique elements to make bathing time more pleasurable. One can choose from a range of skincare benefits like firming, fairness and moisturizing. Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands. Since its launch in India in the year 1929, Lux has offered a range of soaps in different colors and world class fragrances. Lux is a beauty soap of film stars. Lux recognized the need for a compelling message about beauty that would resonate with women of today. From the 1930s right through to the 1970s, Lux soap colors and packaging were altered several times to reflect fashion trends. In 1958 five colors made up the range: pink, white, blue, green and yellow. People enjoyed matching their soap with their bathroom colors. In the early 1990s, Lux responded to the growing trend away from traditional soap bars by launching its own range of shower gels, liquid soaps and moisturizing bars. Lux beauty facial wash, Lux beauty bath and Lux beauty shower were launched in 1992. In 2004, the entire Lux range was re-launched in the UK to include five shower gels, three bath products and two new soap bars. 2005 saw the launch of three exciting new variants with dreamy names such as Wine & Roses bath cream, Glowing Touch and Sparkling Morning shower gels. Lux has recently launched its two fruit extract variants New Lux Strawberry & Cream and Lux Peach & Cream contain a blend of succulent fruits & luscious Chantilly cream. The most recent addition in the brand is Lux Crystal Shine.

METHODOLOGY

For accessibility and availability of information we have chosen to work on the strategies of Hindustan Unilever Ltd. As the company operates in the market with a huge number of products in different industries, we have decided to focus on one of their worldwide successful brands, LUX. Most of the information used in this project is from primary Sources. The information is collected through a questionnaire which is filled by the employer of Kwality Big Bazaar. In addition, the secondary information is also collected from websites.

FACTS AND OBSERVATIONS

Competitor Analysis:

Internal competitors Lifebuoy: Born: 1895 History: Owned by Unilever Plc., the parent company of Hindustan Unilever Ltd. Status: Has 18% market share in the bathing soaps category, worth Rs 6,000 crore Lifebuoy landed on Indian shores in 1895, when the country was in the grip of a plague epidemic. With its positioning as a powerful germicidal and disinfectant, and with a strong carbolic smell, it was what the nation was looking for. But the health advantage waned over time as competitors came out with soaps that promised both health and beauty. It was around 2002 that the product moved from being a hard soap to a mild soap that delivered a significantly superior bathing experience. The new soap had a refreshing fragrance and its overall positioning changed, painting its promise of health in softer, more versatile and responsible huesfor the entire family. The packaging was also changed: The rugged looking packs were soon replaced with a softer pinkish cover. This was followed by a series of ads highlighting the soaps germ-fighting benefits. Lifebuoy had become a family soap with hygiene as its core promise. Right from the early days, the brand has preferred effective communication to celebrities. An exception is its recent, limited exposure campaign with cricketer Yuvraj Singh.

External Competitors Santoor: Santoor is the flagship brand in the Wipro Consumer Care & Lighting stable and the 2nd largest brand of soap in India in the popular segment of the category. The brand enjoys two decades of trust since its launch in 1986 and has grown to be counted amongst the top brands in the Country in an intensively competitive market. Millions of women across the country have discovered the secret of younger looking skin with Santoor. It is a truly unique soap that combines the goodness of natural ingredients - Sandal, Turmeric and natural Skin Softeners. Sandal provides a cooling

and soothing effect that softens skin, while turmeric controls formation of skin darkening pigments like melanin, to give skin a radiant glow. Natural Skin Softeners make skin soft and supple. The end result, skin that is so healthy and beautiful, it lies about your actual age! Amongst the first brands in the Country to launch an offering with the twin ingredient benefits of Sandal and Turmeric, Santoor has over the years moved from a purely natural ingredient based appeal, to one of the most preferred beauty soaps of the day. Today, Santoor is one of the fastest growing soap brands in India. Santoor is available in three variants Santoor (Sandal & Turmeric), Santoor White (Sandal & Almond milk) and Santoor Chandan which is premium soap manufactured with extracts of Sandalwood oil a favorite of discerning consumers.

Cinthol: Cinthol the popular and much-loved brand of Godrej Consumer Products Limited (GCPL) have been a favorite of people for many years. All different soaps in its range are having feel-fresh fragrance and high TFM index. Cinthols range covers an economic Limefresh, the medium deosoaps (spice, lime, cologne and the new sport) and a slightly expensive Cinthol-Original. For decades, Cinthol-Original is one of the best soaps made in India. It had a simple red-cover which attracts none! But was still able to sustain itself in the market . Godrej has now launched the improved Cinthol range. Cinthol now offers a derange of soaps, talc and deo-sprays in three exciting fragrances - Classic, Cologne and Sport in a trendy new packaging. It also offers Cinthol fresh soap and Cinthol Regular soap with new exciting packaging. The eye-catching and vibrant packaging symbolizes a sense of adventure, zest and action. The new Cinthol range brings 24Hour Confidence through Active Deo Formula, which controls body odour, Powerful Dry Shield that absorbs sweat, Ultra Scent Technology for long lasting fragrance and Freshness that revitalizes you 24x7. The new range will be available across the country at modern retail and other outlets and will be supported by high-impact advertising on television, print, out-door, on-line and radio.

Vivel and Superia: The Vivel Di Wills range is available in two variants. Its unique carton pack has been developed by ITC's design team to provide a novel consumer experience. Vivel Di Wills Sheer Radiance is enriched with Olive Oil, to provide skin lusters to make it radiant. Vivel Di Wills Sheer Crme is enriched with Shea Butter, to moisturize skin to make it soft and supple. The Vivel range of soaps is available in four variants:- Vivel Young Glow is enriched with Vitamin E and Fruit Infusions which help in providing youthful glow to the skin.

Vivel Satin Soft is enriched with Vitamin E and Aloe Vera which help the skin feel beautifully soft. Vivel Sandal Sparkle is enriched with Sandalwood Oil and Active Clay which helps in providing clear skin. Vivel Ayurveda Essence is enriched with multiple Ayurvedic Ingredients which help protect skin from germs and harsh environment, keeping it healthy and beautiful. In the popular segment, ITC has launched a range of soaps and shampoos under the brand name Superia. Superia Soaps enriched with natural ingredients give radiant glowing skin. Superia Soaps are available in four variants: 1. Fragrant Flower: with the fragrance of Rose & Lavender Oil 2. Soft Sandal: with the fragrance of Sandal & Almond Oil 3. Natural Glow: with Neem & Coconut Oils 4. Healthy Glow: with Orange Oil

SWOT Analysis:
Strengths: 1. Strong Market Research (door to door sampling is done once a year in Urban and Rural areas). 2. Many variants (Almond Oil, Orchid Extracts, Milk Cream, Fruit Extracts, Saffron, sandalwood Oil, and Honey to name a few). 3. Strong sales and distribution network backed by HLL. 4. Strong brand image. 5. Positioning focuses on the attractive beauty segment. 6. Dynamically continuous innovation of the product and brand rejuvenation new variants (Aromatic Glow and Chocolate Seduction and Lux White Spa body wash) and innovative promotions (22 carat gold coin promotion Chance Hai). 7. Perceived to have high value for money (strong brand promotion but relatively lower price which is a winning combination in the popular segment) 8. Though it is in popular segment, it is having mass appeal/market presence across all segments (15% of the soap market captured by Lux (sales / volume). 9. Unique advantage of having access to resources and assets of HLL.

Weaknesses: 1. Lux is mainly positioned as beauty soap targeted towards women, hence it lacks unisex appeal. 2. Usage rate/ wear rate is high and is generally mushy and soggy. 3. Some variants like the sunscreen, International variant did not do well in the market. 4. Certain advertisements like the recent one with Shah Rukh Khan resulted in controversial interpretations of the message of the advertisement and lead to some loss of focus (of message of the advertisements). 5. Stock out problems - replenishment time is high in semi-urban/rural areas. 6. Earlier positioning as the soap of the stars has somewhat alienated the brand from a portion of the consumers especially in rural areas.

Opportunities: 1. Soap industry growing by 10% in India. 2. Beauty segments Compounded Annual Growth Rate (CAGR) is very high. An indication of this is that Fair and Lovelys segment is increasing at a fast rate - Lux must reinforce its presence in the beauty segment. 3. More promotions like price-off and samples. 4. Retentive strategy required as the soap segment is in the mature stage of its product life cycle. 5. Line extension probably with more variants catering to the beauty segment like natural, herbal soap etc. 6. Liquid body wash is currently in the growth stage Lux should come out with more variants in this segment. 7. Level of servicing is high during sales promotion schemes this could be brought down. 8. It has a large market share and hence has a strong hold over the market.

Threats: 1. New entrants/local competitors/MNCs would increase the competition (Camay, P&G). 2. High internal competition Pears also catering the beauty segment (also from HLL stable). 3. Excessive dependence on beauty segment makes Lux vulnerable to changing customer tastes. 4. Technological change makes the existing products obsolete Lux should focus on technological innovations like Body Wash. 5. Its in the maturity stage in the Product Life Cycle and has a threat of slipping down to decline stage if constant reinvention of the brand is not carried out.

Product Category, Market Segmentation, Target Marketing and Positioning

Product Category:
LUX falls under the category of toiletry product as a beauty soap.

Market Segmentation:
Market segmentation is done so as to satisfy the customers more efficiently. For a brand like Lux, which has a broad customer base, this factor becomes absolutely critical. The segmentations are done basically on the basis of factors like: Lux soap concentrates in the beauty soap category. A brief description of the various factors Lux considers is: Gender: Lux has been, since its introduction seen as soap for women. Lux as a brand symbolizes beauty. The Lux ads has hosted a bevy of film stars such as from Madhubala, Babita, Hema, Karisma to Kareena, Aishwarya, Katrina all endorsing the goodness of Lux over generations. This was done in order to attract women who wanted to look and feel like the stars they idolized. Age: Lux is seen to mainly attract customers that fall within the age group of 16 to 35. In order to cater them, Lux comes up with new and interesting variants. One of the latest entrants, Lux Crystal Shine is mainly targeted at the youth . So is the Black Provocateur which symbolizes boldness. Another example is the chocolate variant lux which was a novel idea. All these are introduced to catch the attention of the youth. Income: One of the essential characteristic of an FMCG product is an affordable price which is very important for its fast sales. Its the meeting point of demand for a product and its price that decide whether the product will sell or not. And the demand for a product is highly dependent on the income of the customer. Lux is not very costly toilet soap. Its price varies from Rs.20 to rs.30.Therefore its target market starts from the middle income group.

Target Market:
Urban and sub urban middle class, and rural poor people are the largest part of Indias population. A research carried out by Unilever reveals that urban rich people are more likely to buy imported and expensive products. Moreover rural poor people tend to buy cheap products even without evaluating its quality. However urban and sub urban upper middle and middle class people tend to buy affordable and quality products. LUX is not a highly expensive but an affordable product. That is why the company targets urban and sub urban upper middle and middle class people who are the second highest population of segment of the country. From the segmentation of customer according to SEC they target category A, B and C, because they are assumed to be financially well-off and can afford to buy LUX.

Product Positioning:
HUL obtained a good position in the buyers mind through better product attributes, price and quality, offering the product in a different way than the competitors do. The company offers improved quality of products in the industry at an affordable price with high branding, which ultimately helps to position the product in the buyers mind as the best quality beauty soap. The market share of the company in the beauty soap industry is somewhere around 43%.Since in the beauty soap industry all products are of same price Unilever cannot provide its consumers with better price but it is in a great position in reference with its packaging, fragrances and product designing. LUXs position in the consumers mind is on two dimensions: price and quality. In comparison to its competitors the pricing of LUX is same but consumers rate it as the product which gives them the highest quality. This positioning created a strong customer loyalty for LUX, for which it the market leader in the industry.

CONCLUSION

The beauty soap industry in India consists of many producers in the industry. The demand for this product is very much vulnerable in terms of pricing. Unilever is providing LUX at a price which is affordable to most of the people in the country. Beauty soap is an uprising product in India as a greater portion of the population, both male and female, are now getting more beauty conscious. As a multinational company HUL with heavy promotional activities, has been able to penetrate the market. With six different fragrances, three different sizes, international standard and high quality design, as a product, LUX has been highly successful over the years. Its distribution process is highly efficient. Its promotional activities, like the beauty contest has been a milestone in attracting a huge number of customers. Overall with its marketing activities LUX has been a successful brand. The only place where rival companies are progressing is in giving customers redemption offers. Research revealed that Indian customers are highly attracted to this sort of offers. These offers are not sustainable in the long run but still it takes away a considerable part of LUXs sale in the short run.

RECOMMENDATIONS

Lux has been following a trend of constant product development and improvement since its inception. This has always proved to be successful for the brand. Therefore a similar strategy can be followed in the future: Lux can go for a high end Ayurvedic variant. Lux has been associated with beauty and feminine grace till now. In the present day consumers are into naturopathy and believe in natural treatments like the Ayurveda. Keeping with this trend, Lux can foray into Ayurvedic variant. HUL already has Hamam soap in this category. But it is a low priced soap whose target audience is quite different from Lux. This new variant can provide the current customers of Lux with a blend of both class and natural goodness. Todays children are tomorrows customers. Children have a major share in the decision making process of consumers. Therefore it will be a viable decision to launch Lux Kids Special soap. By doing this Lux can catch them young and get a loyal customer base from them. This variant can be in vibrant colors as opposed to the soft colors used currently. The fragrances can also be made more fun and vibrant. Lux has high penetration in the urban and semi urban areas. However, it has only 19.8% penetration in the rural areas. The rural market has great untapped potential, which HUL has not concentrated on till now. Consumers are becoming more and more aware and undergoing a surge in disposable income. This huge opportunity can be explored by Lux. HUL already has a strong distribution channel in almost all regions. What is needed here is a change in the communication strategy to reach out to the rural customers. The various channels of communication should be made more appealing to this rural segment of customers.

BIBLIOGRAPHY

1. www.unilever.com http://www.unilever.co.uk/ourbrands/personalcare/lux.asp 2. http://en.wikipedia.org/wiki/Unilever 3. Marketing Management by Kotler 4. http://www.google.com 5. http://www.wikipedia.com

ANNEXURES
Questionnaire
1. Which soap customers prefer to buy? 2. In a day how many lux soaps do you sell? 3. Which age group chooses lux soap the most? a. Teenagers b. Youth c. Children d. Elders 4. How high is your customer satisfaction level? a. Highly satisfied b. Satisfied c. Dissatisfied 5. How do the customers get influenced to buy lux soap? a. Friends b. Advertisements c. Family 6. How often do customers buy lux soap? 7. What kind of customers buy lux soap? a. High income group b. Middle income group c. Lower income group 8. What are the competitors of Lux? 9. What do you think drives the customers to buy fast-track watches? a. Design b. Brand c. Fragrance d. Others