Buying Behaviour Summary

Buying Behaviour Summary (carried over from previous submission)

From our previous study we found that the two major challenges that lie ahead with Marketers are a) Penetration- or increase in per capita consumption and b) Building up of credence and moving their products from low involvement to high involvement across majority of the user base. On the basis of these we will study the implications of these on two market players, one of which is an MNC- HLL now known as Hindustan Unilever and another National level player- Cavin Kare.

Why was their heightened competition for Market Share in India

* Teeming millions

* Burgeoning middle class

* Westernized youth

* low penetration levels

* Huge untapped market

Market from 2001 to 2009- The Players and the 4Ps

In January 2001 the Shampoo Market was worth Rs. 85 million according to ORG-MARG. However Market Penetration was just 36% in the urban market and 12% in the rural areas.

HLL now know as Hindustan Unilever was the leader with a market share of 68% followed by Procter & Gamble and Cavin Kare.

In the period of consolidation for the Market the segmentation for the product became more visible. The platforms were

1) Beauty

2) Health

3) Anti-Dandruff

4) Herbal/Natural

The pricing cards were played and Cavin Kare emerged as a major price player by coming up with low consumption units of Chik which increased penetration of Shampoo in the rural market. Later all the companies followed the packaging mode albeit they were differently priced.

The Great Price War in 2003

HUL started it by giving a bottle free on purchase of Sunsilk or Clinic Plus. P & G retaliated by reducing price of Pantene by 16%. HUL reduced the price of Clinic Plus by further 23%. Both the companies projected that the reduction was to give more value to the customer. P & G also introduced a new product Rejoice at a low price level and continued pulling it down further. Indian companies like Dabur and Cavin Kare were the biggest losers as there market share took a beating.

By 2004 the market had grown up to Rs. 100 mn and Sachet were the major growth drivers.

In 2005 HUL remained the leader with a value share of 52% in the Rs. 120 mn market

In 2006 the market grew up to Rs. 142.5 mn as there was huge support from the rural market. Clinic was the clear market leader with a share of 24.5%.

In 2007 the market saw steady and continuous growth along with some major changes. In terms of market an integration across the market segment by introducing Dove Shampoo for the upmarket customers and at the same time launched Rs 0.50 Sunsilk sachet to cover the bottom segment. New users were being added continuously to the bottom of the pyramid as the shampoo became personal with each family member having his own pack. This became a strong driver of growth for the entire market.

In 2008 HUL hiked the the prices of it's brands by 3.5-4 % and the price of Sunsilk was increased by 10%. This was carried out along with a very aggressive campaign especially of Sunsilk which roped in celebrities. HUL was confident the Dove would not cannibalize the other brands in it's protfolio as there was visible super-segmentataion happening in the market.

Analysts felt that rising input costs were responsible for the price hike but othere were of the opiniion that gross margins were good and remarked that companies were in a position to demand higher prices because of increasing customer at both ends of the pyramid. The market share was still very low and this looked like an opportunity across the entire chain.

Per Capita Consumption- India compared to other emerging economies

Marktet Share of the Top companies in the Indian Shampoo Market- 2007 Last Qtr.

By 2008, Market was estimated at Rs. 21.41 billion per annum growing annually at a rate of 14.5%.

Competition in the market has intensified with the entry of ITC, Marico, Godrej, and MNC like Garnier.

2009- Market Trends in the Shampoo Market and its effect on the Players.

Smaller players like Dabur and CavinKare started chipping away share from fast moving consumer goods (FMCG) biggie Hindustan Unilever (HUL) in the hair care market.

During the first quarter (April-June), HUL lost share in both volume and value terms in the fast growing shampoo market. While Dabur increased its share and occupied 7.3% of the market, HUL's share with brands like Sunsilk dipped to 50% (51.5%) and in value terms to 45.4% (46.5%) during the quarter. Procter & Gamble (Head & Shoulders and Pantene) also increased share marginally, while CavinKare (Nyle and Chik brands) maintained its share, according to AC Nielsen data.

Overall, the shampoo market growth was pegged at 14% a year. Analysts said that cheaper variants of rival companies and a stronger marketing push might have led to the biggie losing market share.

Regional players have been chipping at shares of the larger players. The shampoo market is driven mainly by rupee one small packs, with over 90% of the rural market dominated by sachets. In cities, sachets account for about 40% of total sales. Small packs have helped in increasing penetration in rural areas where pricing plays a major role. CavinKare is more of a regional player, and is active in the south, while Dabur leverages Vatika on the 'natural' plank.

Implication, Strategies and Marketing Plans for MNC HUL and Local/National Player Cavin Kare

| HUL | Cavin Kare |

Strategies & Marketing Plans | While everyone was going into stores, HUL went into consumers' homes to find out what she wants. This is part of their 4M of marketing - market development, market share, margins and mood of the consumers. They took the urban market. Over the years, the market has fragmented from the generic kaale ghane baal (dark, thick hair) market to speak about a sharper concept of damage,