Evaluation of child promo items for Harpic consumer

promotions

by

Mehra Arjun Arun

10P029

Management Development Institute

Gurgaon 122 001
June, 2011

Evaluation of Child promo Items for Harpic Consumer

Promotions

by

Mehra Arjun Arun

Under the guidance of

Shri Gunjan Khetan
Brand Manager, Harpic
Reckitt Benckiser India Ltd

Management Development Institute

Gurgaon 122 001
June, 2011

Executive Summary
In this project we have a dual objective. In the first part of the project we look to identify a
promotional item for Harpic Consumer promos. This item should be a strategic fit with the
parent brand and should achieve sales lift targets.
We progress by evaluating the item with respect to several parameters.
In the final lap of this part, we negotiate with vendors to decide the item that should be
given free with Harpic.
In the 2nd part of the project, we look to roll out a 123 communication campaign for Harpic
across 6 metros. Due to decisions beyong my control, this part has been delayed.

Table of Contents
Introduction: .............................................................................................................................. 5
Part 1: Evaluating child promo items for Harpic promos .......................................................... 5
Problem formulation: ............................................................................................................. 5
Objective: ............................................................................................................................... 6
Project brief: ........................................................................................................................... 6
Phase 1: Scanning the environment ...................................................................................... 8
market visits: ..................................................................................................................... 8
Observations from the market visit: .................................................................................. 9
Competitor Mapping: ....................................................................................................... 12
Exploring the previous offerings of Harpic: ...................................................................... 13
Phase 2: Consumer Insights ................................................................................................. 14
Methodology: ................................................................................................................... 14
Primary Research: ............................................................................................................. 14
Learnings from Phase 2: ................................................................................................... 21
Phase 3: Evaluation .............................................................................................................. 22
Pre-evaluation .................................................................................................................. 22
Top 20 options .................................................................................................................. 28
Top 14 offerings: ............................................................................................................... 29
Top 7 offerings: ................................................................................................................. 31
From 7--> 3 offerings
Consumer Survey: ........................................................................................................... 31
Findings from Survey: .................................................................................................... 34
Recommended Offerings: ................................................................................................. 38
Pril utensil bar on 500ml SKU ........................................................................................... 38
Scotch Brite floor cloth on 750ml SKU ............................................................................. 38
Negotiations: .................................................................................................................... 38
Pril Utensil bar ................................................................................................................. 39
Scotch Brite Floor Cloth: ................................................................................................ 41\
Final Recommendations

Evaluating child promo items for Harpic promos

Introduction:
As discussed in the blueprint submitted earlier, I have approached this project in 3
phases.
In the following pages, I will discuss the study of the three phases in depth.

Problem formulation:
Harpic, the leading brand for toilet cleaning (also known as lav care) in India had
witnessed phenomenonal growth in recent years beginning early 2000s. Launched
in India in 1984, Harpic created the product category 25 years ago. Being the pioneer
in the Toilet cleaner market commanding a share of 75%, the brand growth has
paralleled the growth of the toilet cleaner product category in India.
The heady growth seen by this product category 2002 onwards had attracted the
attention of the competition which had started to become very active and gave
much more focus to their products and marketing efforts. Fresh competition from
international players in recent times has also made its entry in the promising Indian
home cleaning care market.
(Source: www.rb.com)

Competition, especially from private labels is keeping Harpic on its toes.

In the past two years, Harpic has provided only two promo offers: 40% extra free and
Dettol Skincare soap free. Although, both of these have been reasonably successful,
the company is on the lookout for fresh ideas that could provide a higher sales lift.

Objective:
The Objective of my project is precisely this.
The key deliverables of the project are:
1. Evaluate various promo items (Not soap or volume free) for Harpic
2. Recommend promo items basis sales uplift and strategic fit
3. Negotiate with vendors for final costings on the top 3 items

Project brief:
At the outset, I was given a briefing by my guide. I was informed that I need to identify and
evaluate an item free for the following promos:
SKU
No. of units on which promo will be run
Cost of item free
Channels
Geography

Harpic Power 500ml

50Lakh-60Lakh units
Rs. 8 per unit
All(Modern Trade and Traditional Trade)
All India

Table 1: Project brief

SKU
No. of units on which promo will be run
Cost of item free
Channels
Geography

Harpic Power 750 ml

3 Lakh-4 Lakh
Rs. 14
All
All India

Before we proceed, there are a few relevant terms that need to be clarified at this stage.
What are consumer sales promotions?
Sales promotion is one of the four aspects of promotional mix. (The other three parts of the
promotional mix are advertising, personal selling, and publicity/public relations.) Media and
non-media marketing communication are employed for a pre-determined, limited time to
increase consumer demand, stimulate market demand or improve product availability.

Examples include contests, coupons, freebies, loss leaders, point of purchase displays,
premiums, prizes, product samples, and rebates
Sales promotions can be directed at either the customer, sales staff, or distribution channel
members (such as retailers). Sales promotions targeted at the consumer are called
consumer sales promotions. Sales promotions targeted at retailers and wholesale are called
trade sales promotions. Some sale promotions, particularly ones with unusual methods, are
considered gimmicks by many.
(ref Wikipedia: http://en.wikipedia.org/wiki/Sales_promotion)
What are the different types of Consumer sales promotions offered at RB?
At Reckitt, there have been three types of promotional offerings:
Volume free: Giving extra quantity free in the pack. Most recently observed at Reckitt was
40% extra free on 500ml Harpic Power SKU.
Price-off/Discount: A discount off a pack.
Item free: Giving a free gift to the customer with every purchase. This item can be an inhouse item or an item of another company.
These offerings are made across 1 or more marketing channels.
What are the different marketing channels?
Primarily, there are two marketing channels at RB. These are known as Modern Trade and
Traditional Trade.
As the name suggests, Modern Trade includes modern retail outlets and standalones. Stores
such as Big Bazaar, Spencers, Easy Day, and several standalones such as SRS Bazaar, Sangam
Bazaar are included in this channel
The other channel, known as traditional trade caters to kirana stores.
What is a promo item?
A promo item is essentially an item free that may be an in-house product or an external
product that is used in consumer sales promotion.
Examples include pasta free with ketchup or exam starter kit free with Chocos.
By child promo item, do we mean a promo item for children?
No. To understand this, let us consider an example:
Suppose Lizol is given free with Harpic. In this case, Harpic is known as the parent item and
Lizol is referred to as the child item. A child promo item has nothing to do with children.
Now, that we have gained some understanding on important terms, let us get straight to
each phase of part 1 of the project.

Phase 1: Scanning the environment

My first step in the project was to scan the environment. The objective of scanning the
environment was:
To explore the various offerings in the market across products, across all channels
To do a competitor mapping
To analyse the preferred option: volume free, item free or discount
To explore the previous offering of Harpic
Start of phase 1: 4th April 2011
End of Phase 1: 13th April 2011
Towards this objective I made the following

market visits:
Market Visit 1:
Location: Madangiri Central Market, South Delhi
Day: Friday, 8th April, 2011
Time: 11.00 am to 4.00 pm
Guide: Mr. Surinder Mishra, DBSR, Affiniti Enterprises
Total stores visited: 25
Number of retail stores: 19
Number of wholesale stores: 6
Market Visit 2:
Areas visited: Sector 56, Sector 15
Malls/standalones:
Sangam Bazaar, SRS Bazaar, Easy Day
Day: Wednesday, 13th April, 2011
Time: 10.00am to 5.00 pm

Observations from the market visit:

A total of 38 item free offerings were explored in these market visits. The observations are
in the table below:
Table 2: Scanning the environment
Parent Item
Child Item
Fit
Gillette Mach 3 Razor
Gillette foam
Complementary
Surf Excel Blue(3kg)
Bucket
Complementary
Boro Plus
Emami glycerine bar
Complementary
Surf Excel Blue
Comfort
Complementary
Vatika Hair oil
Gulabari cream
Complementary
Lakme Sun Expert
Dove Soap
Complementary
Parachute Hair oil
Head Massager
Complementary
Boro plus
Emami glycerine bar
Complementary
Dabur Gulabari
Neha Herbal Mehndi
Complementary
Dettol Pump
Dettol refill pouch
Complementary
Vaseline Aloe Vera
Dove Soap
Complementary
Pond's magic talc
Pond's Daily face wash
Complementary
Sunsilk Shampoo
Lux Bodywash
Complementary
Mr. Muscle
All in one cleaner
Complementary
Kissan Orange Squash
Water bottle
complementary
Golden Time tea
Steel Glass
complementary
Haryali Tea
Bone china glass
complementary
Bajaj Almond Hair Oil
Garnier Shampoo
Complementary
Parachute Hair Oil
Pantene Shampoo
Complementary
Medimix soap
Soap Dish
Complementary
Sensodyne Toothpaste
Vivel Soap
Complementary
Sach Soap
Parachute hair oil free
Complementary
Alive coffee
Hippo Snacks
Complementary
Pasta
Maggi Ketchup
Complementary
Saffola Gold Oil
Arise Basmati rice
Complementary
Sundrop Oil
Act 2 popkorn
Complementary
Maggi Sauce
Maggi Bhuna Masala
complementary
Knorr Soup
Soupy noodles
complementary
Junior Horlicks
Nursery rhymes CD
Same TG
Junior Horlicks
School starter kit
Same TG
Boost
Badminton racket
Same TG
Dabur Red toothpaste
School Kit
Same TG
Horlicks cream biscuit
Narnia tattoo
Same TG
Horlicks
Exam Starter kit
Same TG
Mortein All insect killer
Dettol pump
Same TG
Vivel Soap
Notebook
Same Company

Harpic 500ml
Dettol Soap
same TG
Castrol
Soaps
No fit
Table 1: Item free offerings explored during market visit
27 of the 38 products above, made a complementary offering(child item is either of
the same category or aiding in the usage of the parent item).
That is 70% of the offerings explored.
Competitor Mapping:

Brand
Clean Home

Offer
B1G1

Description
SKU
Buy 1 get 1 free
500ml blue
Cleanmate(700ml) + care mate
Cleanmate Combo pack
handwash(250ml) = Rs. 89;save Rs.38 700ml blue
Cleanmate Combo pack
2x500ml; save Rs. 38; 110---72
500ml blue
Cleanmate Discount
Save Rs. 23 on 700 ml blue
700 ml blue
Domex
Volume free
50% extra free on 500 ml pack
500ml blue
Expelz
B1G1
blue 500ml pack. MRP=Rs 55
500ml blue
Expelz Citrus Discount
Save Rs. 16 on 500ml pack. MRP=Rs. 55 500ml citrus
Expelz ITC
Combo pack
2 pack, Save Rs. 15 on combo
ITC
Kiwi clean
Discount
700ml blue; 67---48
700ml blue
Mr. Muscle Blue Volume free
40% extra free on 500 ml pack
500ml blue
Sani Fresh
Combo Pack
2x500ml for Rs. 75. Save Rs. 29
500ml blue
Sani fresh
Discount
Save Rs. 10 52---42
500ml blue
Toilet cleaner Combo pack price off 2x500ml for Rs. 58
500ml blue

MRP Company
Rs. 65 Spencers

Channel
All

72/55 Future Retail

Rs. 55
Rs. 72
54 HUL
55 Reliance Wellness Ltd
55 Reliance Wellness Ltd
30 Reliance Wellness Ltd
Rs. 67 Sara Lee
55 SC Johnson
52 Dabur
52 Dabur
36*2=72 Bharti Walmart

All
All
All
All
All
All
All
All
All
All
All
All

Table 3: Competitor mapping

Observations:
Most of the offerings are combo packs of either another or same SKU of the same product

Cleanmate (private label of Future Retail) and Sani Fresh are probably the most dynamic
brand as far as offerings are concerned. They are giving more than one offer on the same
SKU in the same channel
I believe this gives more options to the consumer which is preferred
Cleanmate is the only brand that is offering another product in a combo pack. It is offering
Cleanmate 500ml and liquid Handwash in a combo pack with a price off.
All competitor offerings are traditional.
Exploring the previous offerings of Harpic:
Harpic Power
500ml
Channel
Offering
All
40% extra free
All
Dettol Soap 70g SC free
All
Dettol Soap 70g SC free
All
40% extra free
All
Dettol soap 70g free
All
Lizol 200ml citrus free
All
EOB degreaser free
All
20% extra free
MT
buy 2 get 200ml free
MT
Buy 2 get Rs.10 off
Db
Scrub free
MT
Buy 2 get Rs.10 off
Db
20% extra free
MT
Lizol free on 2pc
All
Dettol soap free

SKU offering
70g SC soap
70g SC soap
70g original soap
200ml citrus
worth Rs. 75
200ml Harpic power

200ml lizol
75gm

Period
Nov, Dec 2010
Aug-10
Mar-10
Aug-09
Jun-09
Jun-09
Jun-09
Mar-09
Jan-09
Dec-08
Oct-08
Aug-08
Jun-08
Mar-08
Jan-08

Harpic Power 750

ml
Channel
Offering
SKU offering
Period
MT
Lizol 200ml free
Lizol 200ml
Feb-11
MT+gold accounts Harpic Pwr fragrance free
Power fragrance 200ml May-09
MT+gold accounts Dettol SC soap free
75gm SC soap
Feb-09
MT
Vanish 120g free
Sep-08
MT
Rs.7 off
Aug-08
Table 4: Previous offering of Harpic
Observations:
On Harpic 500ml Power SKU:
In the past 2 years, only 2 offerings have been provided with Harpic: Dettol soap free and
40% extra free

Two years prior to that (in 2008 and 2009), Harpic offered 11 different offers at quick
succession
Only 1 offer where the item free wasnt in-house(scrubber)
On Harpic 750 ml SKU:
Only one offering in the last two years
All offering have been made in the MT channel alone. This is done to align with the
consumption pattern of 750 ml SKU.
As far as consumer promotion offerings are concerned, there has been more emphasis on
the 500ml SKU than the 750 ml SKU. This is done keeping in mind the fact that 500ml is the
most preferred SKU amongst consumers(RB sales data)

Phase 2: Consumer Insights

In the next phase of my project, I look to understand the voice of the consumer. In my
understanding, as we are giving the offering to the consumer, it is necessary to understand
his preferences
For this purpose, I conducted a consumer survey. The process followed to achieve the end
objective is outlined below:

Methodology:

Secondary Research to
support it

Primary Research:
Methodology:

Apart from my organization guide as well as other seniors of the company, I also deliberated
with the Market Research Head of RB(South Asia) to finalize my hypotheses and the ensuing
questionnaire.
I personally administered the survey. As I was conducting the survey in modern retail outlets
as well as outside kirana stores, and since I wanted to reduce my time with each
respondent(which would allow me more respondents), I decided to use placards or posters
to aid my questions.
The photographs below depict the methodology followed

Framing the hypotheses:

The W5H Decision making model:

We knew where and when to run the promo. We were well aware of why and How we are
going to run the promo. However, What the item free will be and for whom was yet to be
decided.

Secondary Research indicated:

56% of the offerings on the shelves are item-free offerings
Sweepstakes are the next most frequented offering(10%)
Toiletries is the 2nd most frequently promoted product(14%)

Hypotheses:
Consumers prefer item free over volume free and discount
Promotional items that are complementary(aid in usage or same category)are preferred
over items for the consumers personal usage
The consumer is influenced by family members while purchasing toilet cleaners
Pilot Experiment:
Location: Reliance Mart, Gurgaon
Date:
Time:
No. of respondents: 17

Consumer Survey:
After reviewing the questionnaire , I set forth to conduct the final survey. I had a target of
100 respondents.
Locations for Modern Trade: Reliance Mart and Easy Day. Gurgoan
Location for Traditional trade: Sector-14 Gurgaon
Findings from survey:
Location

Number of responses

Reliance Mart Gurgaon

48

Easy Day Gurgaon

10

Sec-14 Gurgaon

42

Total

100

MT
TT

Table 6: TG mapping of survey

In the above table, the yellow highlighted areas is the TG of Harpic and the green
highlighted area is that part of the TG that was covered in the survey. As it is
observed, the survey covered the entire range of the TG of Harpic(SEC A, B, and C)

Survey findings
Hypothesis 1: Consumers prefer item free over volume free and discount
Null Hypothesis: Consumers equally prefer item free, volume free and discount schemes
Which of these offers do you think
are most frequently offered by
toilet cleaners?
item free
volume free
discount
don't know

item free

discount

don't know

10% 9%

9
68
13
10
100

9.00
68.00
13.00
10.00

13%
68%

Volume free

Which of these schemes do you

prefer with toilet cleaners?
Volume free
Item free
discount
indifferent/don't matter

volume free

67
9
13
11
100

67.00
9.00
13.00
11.00

Conclusion: The null hypothesis cannot be rejected

Item free

13%

discount

indifferent/don't matter

11%

9%
67%

Hypothesis 2: Consumers prefer complementary items over items for their personal usage
Conclusion: Hypothesis 2 is accepted
Soap

Which item free would you desire

with a shampoo?
Soap
Hair Oil
Detergent
bindi pack

21
54
24
1
100

bindi pack

21%

24%

21.00
54.00
24.00
1.00

54%

biscuits

cosmetic item/skin cream

soap

1%

22
62
15
1
100

15%

22.00
62.00
15.00
1.00

floor cleaner
6%

21
63
6
10
100

21.00
63.00
6.00
10.00

22%

62%

toilet brush

Which item would you desire free

with a toilet cleaner?
toilet brush
floor cleaner
cosmetic items/beauty creams
Detergent

Detergent
1%

tea cup

Which item free would you desire

with tea?
tea cup
biscuits
cosmetic item/skin cream
soap

Hair Oil

cosmetic items/beauty creams

10%

63%

21%

Detergent

Hypothesis 3: Consumers are influenced by family members while purchasing toilet cleaners
88.00

Are you influenced by family

members
while
purchasing
household items?
Yes

12

12.00

No

88

88.00

12.00

100
Yes

No
88.00

Do you consult anybody while

deciding the brand of toilet
cleaners?
Yes

12

12.00

No

88

88.00

12.00

100
Yes

With whom do you go shopping

for cleaners most often?
Children
Spouse
parent
friends
alone

No

Children

3
18
7
6
66

3.00
18.00
7.00
6.00
66.00

Spouse

parent

friends

alone

3%
18%
7%
66%
6%

Learnings from Phase 2:

Consumers prefer volume free over item free and discount
Consumers prefer complementary items as item free as compared to items for
personal use
Consumers are not influenced by their family members while purchasing toilet
cleaners
Toilet cleaner is a low involvement product
Consumer concern is on the functional aspect

Phase 3: Evaluation
The main tasks in this phase of the project are described below:

Pre-evaluation:

Parameters to decide item free: The intangibles and tangibles

Evaluating last 3 years promos of RB:

I went through the offerings of Reckitt Benckiser over the last 3 years. Specifically I
studied RB promos
Analysis of:
All RB consumer promo offers of last 3 years
2+1 offerings of RB
promo offerings of Harpic in last 3 years
The financial appraisals used to judge the effectiveness of any promo are essentially
of three types: combined ROI, PSI and PER

Combined ROI:
D NR/D (TI +MKTG)
PSI (Promo Sales Index) - Promo NR / Base NR
PER (Promo Efficiency Ratio) - Promo GM/ Base GM
ROI= Return on investment
PSI=Promo Sales Index
PER= Promo Efficiency Ratio
D= absolute change in value
NR=Net revenue
GM= gross margin
Base values are the values before the promo is rolled out
The most successful promo for Lizol had been a scotch brite mop free. Scrubber free
with Harpic 500ml also occupied a top 3 position for its promos in the last 3 years.
This revalidated he hypothesis that complementary items are preferred by
consumers.

There were some very successful promo offerings such as Lizol+Harpic

(complementary).
There were also some child items which did not work with any parent irrespective of
the channel or the geography.
Consumer promos where item free was complementary

Harpic Power 500ml

Channel Offering
All

SKU offering

Period

ROI

PSI

PER

40% extra free

Dettol Soap 70g
SC free
70g SC soap
Dettol Soap 70g
SC free
70g SC soap

Dec -10

1.58 1.28

1.31

Aug-10

4.23 1.68

1.42

Mar-10

3.96 1.64

1.65

Aug-09

2.08 1.26

1.30

Jun-09

6.01 1.74

1.80

All

40% extra free

Dettol soap 70g
free
70g original soap
Lizol 200ml
citrus free
200ml citrus

Jun-09

3.43 2.23

2.32

All

EOB degreaser
free

All

20% extra free

All
All
All
All

worth Rs. 75

Jun-09

1.93 2.78

2.89

Mar-09

1.91 1.20

1.24

Jan-09

2.16 1.38

1.42

Dec-08
Oct-08

16.41 1.33
4.05 1.69

1.40
1.72

MT

buy 2 get 200ml 200ml Harpic

free
power
Buy 2 get Rs.10
off
Scrub free
Buy 2 get Rs.10
off

Aug-08

15.28 1.79

1.79

Db

20% extra free

Jun-08

4.36 1.33

1.36

MT

Lizol free on 2pc 200ml lizol

Mar-08

2.32 1.52

1.55

All

Dettol soap free 75gm

Jan-08

2.92 1.52

1.55

MT
MT
Db

Same 2 offerings over

the past 2 years
Moderately successful

10 different
offerings in 2 years
Only offering not of RB
In the top 10 offerings

Discussion with cross promotion agencies

Outcomes of discussions
Agencies had experience of this scale and reach
Useful in narrowing down options
Exposed to a wider range of offerings
Network of other company representatives
Identifying the pros and cons of doing cross promotions through an agent

Pros and Cons of using a cross promo agency:

Recommendations for using cross promo agency:

Top 20 options
Based on these discussions and the budgeted cost, I arrived at a list of 20 options to
consider:

Based on the intangibles discussed earlier, 6 options were rejected and we narrowed down
to 14 options

Top 14 offerings:

Assessing the top 14 offerings:

At this stage, we had a list of 14 petential offerings. Our next objective was to
shortlist the top 7 offerings.
Basis of Assessment:
Perceived value of item free
Frequency of purchase of item free
Expected Reach
Competitors product
The following table shows the assessment conducted. The red highlighted options
are those that were rejected.

Top 7 offerings:

We have narrowed down to 7 options as an item free with Harpic.

To choose the top 3 offerings, I decided to go back to the consumers and capture
their opinion on their favoured options.
From 7 offerings 3 offerings
Consumer Survey:
Methodology:
The offerings were physically displayed to the respondents. The survey was conducted
home to home as well as in Modern Trade outlets.
The break-up of the responses is shown below:

TG Mapping:

Illiterate

School
upto 4
years

School 59
years

Graduate
Some Graduate
/Post
SSC/HS college /Postgra
Graduate
C
but not
duate
professio
graduate general
nal

E2
E2
E2
D

E2
E1
D
D

E1
D
D
C

D
C
C
B2(4)

D
C
C
B1(1)

D
B2
B2
A2(1)

D
B2
B2
A2

B2

B1(2)

A2

A2

A1

B2

B2

B1(2)

A2

A1

A1

B1
Self Employeed professional D
Clerical/Salesman
D
Supervisory Level
D
Officers/Executives-Junior
C

B1
D
D
D
C

A2
D
D
C
C

A2
B2
C(5)
C(4)
B2(3)

A1
B1
B2(4)
B2(5)
B1(10)

A1(4)
A2
B1
B1
A2(24)

A1
A1
B1
A2
A2(15)

Officers/ExecutivesMid/Senior

B1

B1

B1(4)

A2(5)

A1(10)

A1(15)

Unskilled
Skilled Workers
Petty traders
Shop Owners
Businessmen with No
employees
Businessmen with 1-9
employees
Businessmen with 10+
employees

B1

The blocks in green indicate the SEC classification of the respondents covered in the survey.
The yellow blocks show the TG of Harpic.
The numbers in brackets are the number of respondents in each SEC.

Respondents were asked to rank their top 3 offerings

The influence of MRP of the item free was checked

Findings from Survey:

75% respondents considered Pril Utensil Bar in their top 3 offerings

65% respondents considered Scotch Brite in their top 3 offerings
DLS was a top 3 offering for 65% of the respondents
This is shown in the pie-chart below:

Respondents were asked to Rank their top 3 offerings.

28% respondents considered Pril as their No. 1 offering

An equal number considered Scotch Brite as their No.1 offering

36% considered Pril as their 2nd most favoured offering

DLS and Scotch Brite were a distant second with only 20% respondents considering
wither of these offerings as their 2nd best option

It emerged that maximum respondents(23%) considered the lucky draw option(Trip

+Scrubber) as their 3rd best offering
Pril did not emerge even as a runner up here, with Scotch Brite and DLS being
preferred by an equal number of respondents(19%)
From the findings, I calculated a weighted average rank of the offerings. This is
shown in the table below:

As observed Pril had the lowest average rank or in other words was the most
preferred offering.
The other question that emerges is why did respondents choose thes options?
This was assessed as well in the survey. The findings are shown below:

Are consumers influenced by MRP?

NO
61% of respondents were not aware of the MRP of the item free and did not make a
choice based on the MRP of the item free

Recommended Offerings:
Pril utensil bar on 500ml SKU
Daily Use Product
A new offering for Harpic
Most preferred offering according to consumer survey
It has a lower MRP. Negotiable at the lower budgeted cost
Since the 500ml SKU is driving sales revenue, the more exciting offering should be
offered on the 500ml SKU
Scotch Brite floor cloth on 750ml SKU
Higher MRP, so negotiable at the budgeted cost
2nd most preferred offering by consumers

Negotiations:
Procedure for negotiating with the company:

Pril Utensil bar

Product of Henkel India

SKU: 380 gms utensil bar
MRP: Rs. 21
Budgeted cost: Rs.8
For this purpose I directly negotiated with R. Venkitachilam, the Head of Corporate
Sales at Henkel India
Although this promo offer was to run on 60 lakh units, I began by considering 30
Lakh units only. This would allow me a buffer of 30 Lakh units later incase
negotiations did not pan out as per our expectations.
The details of the promo offer were communicated to Venkat:
Promo to run All India in All channels
Promo to run tentatively in October-November
Long term association desired
The benefits of reach and recall by associating with Harpic were reiterated
Budgeted Cost: Rs. 7
First Quote:

At this stage, It was discovered that Pril 380gms was considered as an item free with Robin
Blue(an RB product) the previous year at a base price of Rs.12.75

This was used to put pressure on Venkat to bring down his quote further. The long term
benefits of reach and recall was also reiterated.
2nd Quote:

At this juncture, I had the option of applying more pressure by using the buffer quantity of
30 lakhs.

Further negotiations
I had four options as shown below:

After taking advice from my guide and other seniors, I chose option A.

Venkat was compelled to further reduce his price:

Revised Quote
He revised his quote as follows:

As this too wasnt close to our requirements, we decided to negotiate on a special

SKU of Pril specifically for this promo.
What emerged was:
Pril 225 gms utensil bar at a price of Rs. 8.25 landed
Pril 250 gms at a price of Rs. 9.20 landed
My objective was fulfilled and I forwarded all the quotes to the costing
department.The finer details of the negotiations would be worked out by them.
Scotch Brite Floor Cloth:
I contacted Keshav Kumar, the Marketing Manager at 3M as well as Abhijit Ghone,
the Product Category Manager of Scotch Brite. A brief-up on the discussions and
what emerged:
Discussed broad findings of my research
Communicated benefit in reach and recall for 3M
No positive response. Their claim was that there was no fit between Harpic and a floor cloth

Plan B:
As Scotch Brite was the only recognized brand of floor cloth, we didnt have the
option of considering another brand of floor cloth. Instead, we decided to make our
own floor cloth. It would be similar in make to Scotch Brite floor cloth but would carry
the Harpic Logo instead.

The following vendors were contacted for this purpose

Sara Brushware Pvt. Ltd

Quote:
Rs. 16
Including abrasive
No logo
50cm x 55cm
Revised quote:
After rounds of negotiaiotns, I was able to bring Sara Brushwares quote down from Rs.16 to
Rs.12.
I also got a range of 16 options with quotes we could consider for the final offering.

Floor cloth1: Cotton cloth Size 50cm x 55cm

Floor cloth 2: Cotton cloth Size 40cm x 45cm
Abrasive: fiber
HL1: tag
HL2: woven small(3in x 1 in)
HL3: woven big(5in x 2in)

Quotes of other vendors:

Scotch Brite floor cloth was running a consumer promo on the Lizol 500ml SKU.

This was used as a barometer to judge the price effectiveness of the other vendors
These quotes were within our stipulated budget and were communicated to the costing
department for further discussions.

Compiled recommendations:

What?
o The Item free Should be a complementary offering
o Recommended item free:
o Harpic 500ml: Pril Utensil Bar 380gm
o Harpic 750 ml: Harpic Floor cloth
o 2+1 offering with DLS can also be explored
o Who?
o Low involvement product
o Minimal family influence not for family member
o Not for personal usage

Who?
o Low involvement product
o Minimal family influence not for family member
o Not for personal usage

How?
o Evaluation
Intangibles: Complementary item,(x)family member, (x) personal use,
Strategic fit
Tangibles: ROIPSIPER
Perceived value, competitors product and other misc
o Execution
Cross promo agencies when
units<10L
Bargaining power>RB
Short term association desired

Why?
o
o
o
o

Private Label threat looming large

Big Bazaar sells more cleanmate in its stores than Harpic
Dynamic consumer promo offerings
In comparison Harpic has made only two offerings in last 2 years

Annexure:

1 Do you purchase toilet cleaners?

Yes
No
Which of these offers do you
think
are
most
frequently
2 offered by toilet cleaners?
item free
volume free
discount
don't know

10

11

12

13

14

15

16

17

17

11

1
1

Which of these schemes do you

3 prefer with toilet cleaners?
Volume free
Item free
discount
indifferent/don't matter

Which item would you desire

8 free with a toilet cleaner?
scrubber
floor cleaner
cosmetic items/beauty creams
Detergent

1
1

What is the last promotional

item scheme for toilet cleaners
4 that you can recall?
x
x
Which of these promotional
offers have you not seen in the
5 market?
x
x
Which item free would you
6 desire with a shampoo?
Soap
Hair Oil
1
Detergent
bindi pack

Which item free would you

7 desire with tea?
tea cup
biscuits
cosmetic item/skin cream
soap

1
1

1
1

1
11
5

2
10
4
1

17

3
14

3
14

0
2
3
2
0
10
0

1
1

1
1

11
1

Are you influenced by family

members in your
purchase
9 decision?
Yes
No

Do you consult anybody while

deciding the brand of toilet
10 cleaners?
Yes
No

1
1

1
1

If yes, who do you consult most

11 often?
Mother
spouse
children
friends
other

With whom do you go shopping

12 for cleaners most often?
Children
Spouse
parent
friends
alone
Can you recall the last item free
you received for yourself?wgat
13 was the product
Yes
No
Product

1
1

1
1

1
1

Vim

1
Pan

ten

1
1
1
Dav Gille Sun
dro
at
tte
p +
Rice razor mu
star
(1+1 (free d
free blad

e
1

)
1

e)
1

1
1

1
Kiss

1
1
dett Niv

0
4
13

an
squ
ash
+

oil

bott

fre

le

free
1

ol
ea
with
crea
harp
ic

m
1

Questionnaire:
Do you purchase toilet cleaners?
Yes
No
Which of these offers do you think are most frequently offered by toilet cleaners?
Item free
Volume free
Discount
Which of these promotional schemes do you prefer with toilet cleaners?
Extra volume free
Buy one get one free(same or different item)
Discount scheme: eg. Rs.10 off
4. What is the last promotional item scheme for toilet cleaners that you can recall?
5. Which item free would you desire with a shampoo?
Soap
Hair oil
Detergent
Breakfast cereal
6. Which item free would you desire with tea?
Tea Cup
biscuits
Hair oil
Soap
7. Which set of products would you prefer free with a toilet cleaner?
Scrubber
Floor cleaner
Cosmetic item/creams
Detergent
8. Are you influenced by family members in your purchase decision?
Yes
No
9. Do you consult anybody while deciding the brand of toilet cleaners?
Yes
No
10. If yes, who do you consult most often?
Mother
Spouse
Children
Friends
11. Who do you go shopping for cleaners with most often?

Children
Spouse
Parent
Friends
Name:
Age:
Education:
Occupation: