approach paper uttam industries

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UTTAM INDUSTRIE

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Approach paper
ON
Strategy for Uttam Industries

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EXECUTIVE SUMMARY :
The soap industry in India is at the high growth rate and many new
entrants are planning to launch their product in this category. The overall
soap industry is worth 60,000 crores. YVR Organic soap targets at entire
family with their various herbal soaps. The market has been segmented
according to geographical locations. It further differentiates these segments
into Socio Economic Cluster (SEC) which takes into account the criteria of
education and profession which ultimately measures the financial ability of
consumers. The cluster is divided into five parts starting from A to E. The
products target the urban and suburban, upper and upper middle class
segment of the population, who fall under A and B section of SEC. Tactical
marketing tools, 4P‘s, are extensively used by the uttam to market products.
The products are produced in India. Since the demand for soap market is to a
great extent oligopolistic, variations in price lead to price war which can
eventually break down the company‘s market share. Thus UTTAM cannot
provide a better price than its competitors. But the price is affordable by most
of the people. UTTAM will outsource its distribution channel to third party
distributors which allow them to distribute product in massive bulks
amounting to around Twelve Hundred pieces. The soap industry has a few
major producers of which Hindustan Unilever holds market share of 70%.
Other competingbrandslike Godrej, P&G and Johnson & Johnson have started
to have a strong consumer base, but UTTAM Organic's product features
distribution and promotional activities will create high brand loyalty for
which it will be a strong market share holder soon after developing its IMC
plan. UTTAM Organic, with the aid of its promotional activities and unique

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feature of being herbal, will be able to penetrate the market. But other
producers in the industry are posing a threat towards UTTAM Organic‘s
market share as they have moved towards the rural masses of the population.
UTTAM Organic is adopting niche marketing as we aim to target a particular
segment and gain their loyalty.

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Background of the study -
-As a part of RuralProductsMarketingpaper, we a group of
six studentshave assigned Utham industries, technology partner of NIRD
functioningover a period of ten years. Study is mainly conducted to suggest
waysto increase sales volumeof this micro industry. Products, mainly soaps,
detergents etc. It will also cover understandingof consumer behaviour
through primary survey. Distribution pattern is mainly of network of trainees
who are benefited from here.
Soaps and other detergent productshave great customer demand dueto its
importancein day to day life. Crucialfactor is how to stay competitive in the
world of competition. Responsiveto changes in the environmentisthe tool
which calls for innovation, flexibility etc. This will help usto understand what
the gaps in their marketing strategy are. While devisingthe appropriate
strategy, these gaps would be taken into consideration to make it sound
enough.
This study willenable us to understand thewhole environmentwithin which
the unitoperates; especially consumers’perception to the product, and how
differentfactors determinebuyingbehaviour. Key concern is what all aspects
of marketingcan be improved further. Thiswill facilitate us to devise an
appropriatemarketingstrategy for the product.
Accordingto Indian Detergent Marketoutlook, the overall market for
detergent is growingwith a CAGR of 13.06% from thelast five years.
Detergent industry ismostly captured by organized playerslike HUL,
P&G,Nirmaetc. Whereas, unorganized regionalplayershave significant hold

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on rural areas. On the basis of pricing, organized marketis divided into
categories like popilar (economy),mid-range, premium.
Objectives of the study -
 To identify existing marketing strategy of Utham industry.
 To identify the marketingstrategies prevailingin the market
 To understand theconsumer behaviour towardsalternative products.
 To develop an effective marketing strategy to increase share in market.
Mission :
 To produce organic soaps that are well-formulated, checked and tested. The
organic soaps must be really effective relative to what is being said on its
label.
 The main objective of ROO enterprise is to produce soaps that are not only
used for cleansing the skin but also for absorbing all the impurities embedded
in it.
 Give the customers a perception of smoothness, calmness and relaxation,
which is what they will feel after they apply the product.
 To establish the image of a health and wellness and environment-friendly
company.

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Specific deliverables of the project -
-The study is divided two parts. First part is all about what is
prevailingin Utham industry unit. Details like production, distribution,
customers, returns which speaksabout marketing strategy followed by them.
Next stage is concerned aboutconsumers’ behaviour, taste and preferences
about detergents product.. This willenable usto understand the whole
environmentin which the market operates, how the productis marketed and
what strategies are adopted, how the consumer needsaresatisfied and how
they go about creating valuefor their product.
The second partof the study dealswith developingan effective marketing
strategy for the productslikesoap and phenoil. This strategy will not only
enable us to addressprevailingloopholes but also to move forward by
penetratinginto new markethorizons.

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Methodology -
-The methodology adopted for the first part of the study is to meet
the entrepreneur to gain adequate knowledgeaboutthe presentsituation of
Utham. Factors like How far it is functioning, Operationaldetails, Product
portfolio, Customer awareness, Distribution pattern etc. Two productsYVR
soaps & phenylis identified on the basis of high sales volumefor proposing
strategy.
- In the second part requiresdevelopinga marketing
researchtool and conductinga market survey. It will involvedeveloping
customised interviewschedules for household consumersas well as
institutional buyers. Schedules are finalised after conductingpilot survey.
These schedulesare provided in Annexure –I, II& III respectively.

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Sampling design-
 Sample frame – All soap and phenylconsumersof Rajendranagar will
be selected
 Sample size – Consumers(18), institutionalbuyers(2)
 Sampling procedure –For household consumersStratified random
samplingis the technique used, wereconsumersaredivided into
differentsubpopulationslikehousewives, mades,daily workers,
studentsetc. Like this ninestratas will be created and two samplesfrom
each strata will be drawn based on simplerandom sampling.
 Sources ofPrimary Data: Inferencesderived from survey
 Sources of Secondary Data: Journalsof NIRD werearticles of technology
partnersare given.

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Annexure-I
Interview Schedule for Institutional buyers-
1. What all are the typeof phenyland soap you require for sale?
2. Which brand you prefer for generally?
3. Who suggest you to bring this brand? Relative FriendsRetailers Others
(please specify)_______________________________
4. Since how long time you are selling this brand?
5. Which typeis havinghighest sales volume?
6. You purchasethis brand because……..
7. from where, you purchasethis brand? Closest retailer ,Wholesaler, Door to
door service, Others
8. Generally how muchamountof phenyland soap you need every
week/month?
9. How muchmoney you investin phenyland soap every week/month?
10. Areyou satisfied with presentpackaging? A. Very satisfied B. Needs
improvement(like………….)
11. Haveyou faced any fluctuation in customer demand recentyears, with the
productfeatureslike price, quality, adulteration, service, others?
12. How you meet your requirementsin case of scarcity?
13. Would you liketo continuewith same brand of phenyland soap if yes
then why and if no then why?
14. Accordingto you which factor influencesbuyersdecision the most?

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Annexure-II
InterviewSchedule for HouseholdSurvey Disclaimer – This is to
acknowledge that the following survey is purely for educational
purpose. The identity of the respondent will be kept confidential.
1. Family members and details –
S.no Name Age Sex Education Occupation
1
2
3
4
5
6
7
2. HouseholdIncome -
Range ( √ )
Less than 60,000
61,000 < 1,20,000
1,21,000 < 1,80,000
1,81,000 < 3,00,000
3,01,000 < 4,80,000
4,81,000 < 6,00,000
Morethan 600000

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3. Product-
S.no Product Name Brand
1. Soap
2. Phenyl
a) Since when have you been using the particular brand - __________ months /
years
b) What is your monthly requirement/ consumption for phenyland soap
______.
e) In what quantity do you buy soap and phenyl - ______
4. Price -
a) How much pricedo you pay for the brand you consume – Rs. ______
b) Do you get discountsor offers regularly – ________ (Yes / No) If yes, explain
___________________________________________________________________________
___________________________________________________________________________
____________________
5. Place -
a) Wheredo you purchasesoap and phenylfrom?
_______________________________________________________
b) How far is the market? - _________ Km(s)

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6. Promotion -
a) What attracted you the most to go for this product?
___________________________________________________________________________
___________________________________________________________________________
____________________
7. What do you look for while buyingthe product?
7.1 Packaging
7.2 Features
7.3 Cost
7.4 Brand
8. Do you find any additionalutility by usingthat particular brand?
8.1 I useit because it is used widely
8.2 It helps to maintain my family’shealth
8.3 I useit because I have been using it from a longtime
8.4 I do not find any differencebetween differentbrands
9. If your household income increases would you go for an expensivebrand or
other brand?
___________________________________________________________________________
___________________________________________________________________________
____________________
10. If there is a new brand in the marketwhich is similar to the brand that you
consumeand is available at a cheaper price, would you go for? Why?
___________________________________________________________________________
___________________________________________________________________________
____________________
11. Who decides the buyingof this productin your family?

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MARKET STRATEGY
CURRENT SCENARIO :
 Presently, Indian organic farming market is estimated at ₹ 2,500 crore. With
a steady annual growth of 40% on rising population, higher disposable
incomes and rising health consciousness, India's organic farming industry is
set to grow to ₹ 10,000 crore, according to Associated Chambers of Commerce
and Industry of India (ASSOCHAM)
 It has been a part of human nature to prefer healthier products with lesser
preservatives and synthetic materials added.
 Organic farming can create millions of jobs in the agricultural sector as it can
spur over 30 per cent of employment per hectare as against non-organic
farming and this ratio can further increase if on-farm processing, value
addition, packaging and direct marketingare considered, saysan independent
research of ASSOCHAM.
 The global organic market currently stands at around 65 billion dollars and
is growing at a robust annual rate of over 5 billion dollars.

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Size of the Industry:
- The Indian Soap Industry includes about 700 companies with
combined annual revenue of about $17 billion. Major companies in this
industry include divisions of P&G, Unilever, and Dial. The Indian Soap
Industry is highly concentrated with the top 50 companies holding almost
90% of the market. The market size of global soap and detergent market size
was estimated to be around 31M tonne in 2004, which is estimated to grow to
33M tonnein the coming years. Toilet soapsaccount for more than 10% of the
total market of soap and detergents. In Asia, the countries like China and India
are showing rapid growth in the toilet soap section. Market share of body
wash was estimated to be around 2% in 2004 and is showing signs of healthy
growth in these markets. India's soap market is ₹ 41.75 billion. Indian Soap
Industry volume is ₹ 4,800-crore. For the purpose of gaining a competitive
edge, Indian companies are now relaunching their brands with value-
additions to woo consumers across India. For instance, Hindustan Unilever
Ltd (HUL) has recently launched a host of toilet soap brands which include
Lifebuoy, Lux, Breeze and Liril-with value additions. The aim is to meet the
evolving needs of customers.

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Market Trends:
 Worldwide compound annual growth rate (CAGR) in 2005-2008 was
observed as 2%.
 The forecast for 2010-2015, the soap production would increase especially
in the US (First Research, 2008).
 The growth will also happen in Asia with a total of 50% of the global
demand. South East Asia has a huge potential to grow further.
 In South Asian countries, 4.2% CAGR wasrecorded between 2004 and 2009.
Market Capitalization :
Today in the Indian economy the popular segments are 4/5ths of the entire
soaps market. The penetration level of toilet soaps is 88.6%. Indian per capita
consumption of soap is at 460 Gms per annum, while in Brazil it is at 1,100
grams per annum. In India, available stores of soaps are five million retail
stores, out of which, 3.75 million retail stores are in the rural areas. 70% of
India's population resides in the rural areas and around 50% of the soaps are
sold in the rural markets.

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Market Segmentation:
According to
 Age
 Gender
 Income levels
 Frequency of purchase
 Skin type
 Geographical location
Target Segment:
Urban and suburban upper and upper middle class who are health conscious
as well as skin conscious. Diverse products are provided for all skin types.
Soap products are specialized into cleansing, moisturizing, scenting,
antibacterial and whitening.
 Competitors:
 Major Competitors:
 HUL
 P&G
 Godrej India
 Johnson & Johnson
 Local competition

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MARKETING MIX AND STRATEGY (4P) MANTRA:
"If it's good for the consumer, it's most likely good for business."
 The real buzzword is organic.
 Consumers--especially the Generation Y crowd--are happy to do away with
added hormones, antibiotics and genetic modifications‛ (Wilson, 2006).
The Production Process:
Each batch of soaps of size 8 will take 4 days to be finished with
approximately 3 contact hours involved. Employing two unskilled labours,
working 6 hours every day will produce 2*2*30*8 =960 soaps per month
placement:
-The main target market would be customerswho valueattributes like natural
constituents, healthy lifestyle etc.
Trying to access every geographical market simultaneously would lead to
unbearable logistics costs. Hence, business development will be done in
stages, targeting regions offering better connectivity with accessible markets
first, and then moving out into other territories in later stages.
It can be observed that there isn’t a huge bias in terms of gender based
preferences in usage pattern. However the major user group is in the age
group of 20-30 years, with substantial chunk aged 40 years or less. However,
Organic soaps have qualities which are not necessarily changed based on age,
and hence the market is consumer of varying ages, but as the major self-
sufficient user, 20-40 age group should be the prime target segment.

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Pricing:
Product Cost Analysis

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Competitors Pricing :
-For competitive pricing, competing products are placed in
descending order of direct competition:
Dove -₹ 35 (75gm)
Pears -₹ 30-35 (80 gm)
Mysore Sandal -₹ 30 (75gm)
Beauty soaps: LUX, Breeze -₹ 25
Lifebuoy, Dettol - ₹ 10-15
Accordingto survey conducted for MysoreSandal soap - Consumers willing to
buy Mysore Sandal at ₹ 30-35 : 55.3%
People buying Sandalwood soaps for fragrance and Natural oils : 46.3%
It is safe to set a price in the range of ₹ 30-37 range to compete directly with
moisturizing soaps.
Marketing communication mix:
 Advertising: Through print media(newspaper/Magazine), Broadcast
media(Television/Movie Halls), Display media(Billboards)
 Events: Company sponsored activities and events to create brand related
interactions with consumers.
 Direct marketing: Use of internet to directly contact customers through
mails.
 Interactive Marketing: online activities and programs designed to create
awareness among customers

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