DETERGENT WARS IN INDIA

CASE STUDY

INTRODUCTION
HISTORICAL PERSPECTIVE-INDIAN DETERGENT MARKET  Its a 23 lakh ton market (laundry soap bars and bars & synthetic detergents )  Cakes and detergent powders(6.4 lakh ton and 9.6lakh ton respectively)  Segments of washing powders
    Economy(price of less than Rs 25/kg) Mid priced(Rs25 to Rs 90 per kg) Premium (Rs90 to Rs120 per kg) Compact (price mare than Rs120 per kg)

Low per capita consumption Major players (HLL, P&G, NIRMA, HENKEL SPIC, OTHERS)

INTRODUCTION
HISTORICAL PERPECTIVE(1950s TO 1970s)EVOLUTION OF INDIAN DETERGENT MARKET

 HLL and Swastik were the first to manufacture detergents in India.  Surf-the national market leader Captured market in west, north, south HLL has 70% of the market share .  New players entered  1996 -TOMCO-Magic, Tej.  1977-TOMCO- OK .  1977-Godrej-key .  1978-Detergents India ltd.'s- sixer

INTRODUCTION
Cont.
          In mid 1970s hike in prices due to oil crises. Sales not effected even though Surf prices doubled. Entry of Nirma, HLL in trouble. Laundry segment. Other branded products TOMCOs 501-1968 Detergent cake by TOMCO- bonus HLLs RIN bar-1969 Swastiks DET detergent cake Detergent India ltd.'s- Regal and Chek

HINDUSTAN LEVER LTD

 Originated at England in 1885 by Lever Brothers as William Hesketh Lever and exported Sunlight to India  It merged with Margarine Unie a Netherlands based company  Three Indian subsidiaries merged to form Hindustan liver Ltd.  In 2003 its total business was around Rs. 2000 cr. Market share of 40 %  Its key brands Surf, Rin, Wheel.  Small brands Sunlight, 501,Rin Ala a Fabric bleach  Present market share in 2011-36% in detergents
     Different Portfolios all segment & all prices point Compact- Surf Excel Premium- Surf Medium- Rin Shakti, Rin supreme Popular segment- Wheel

NIRMA
       Founded by Karsan Bhai Patel in 1969. Its started with small scale but HLLs most aggressive competitor. It has its own small scale packing & print press. It was sold in Poly bags Earlier it started selling by Door to door. It was Positioned as a cheaper alternative to surf. Became a symbol of good quality with the phrase Nirma washes clothes as white as milk.

HLL VS NIRMA
Packing material and the ingredients. Despite being inferior, Nirma was selling one-third of Surf by 1977 and by 1985, the sales grew by 49%. HLLs market share fell as consumers did not find any significant difference in quality and hence took advantage of the price difference Decided to take HLL heads-on and introduced Nirma bar to counter Rin. Gave a Nirma bar free with every two packs of Nirma powder.

HLL vs. NIRMA

Then charged Rs 1.50 for a bar of Nirma ,one-third of price of Rin. Project Sting Operation. Cut down the advertising costs by creating a character Lalitaji portrayed by TV artist Kavitha Chowdary- Sasti cheez aur achchi cheez mein farak hota hai, bhai saab. The punch line Surf ki kharidhari mein samajh dhari hai became famous By 1991,sales grew from 30,000 to 42,000 tones. HLL then launched Sunlight to match with Nirmas price. Discovered the backdrop of Nirma.

HLL vs. NIRMA

Decided to develop a Non-Soap Detergent powder and introduced it in 1988-Wheel. Selected Gujarat for establishing the plant due to access of raw materials. Sales of Wheel grew to 100,000 tonnes. Wheel ranked 10th and Nirma ranked 7th with a share of 38% economy segment in 2003.

PROCTER & GAMBLE

Established in 1837, Cincinnati, Ohio, USA. Acquired Richardson Vicks Inc. in 1985. and entered India. Introduced Whisper in 1989 and Ariel in 1991 P&Gs Indian operations were managed through two companies PGHH, PGHP.  By early 2000 it has grown into a large global organization.  Marketed 300 brands having a 5 billion consumer base in over 140 countries.  These brands are Ariel, crest, Pantene, always, whisper, pringles, pampers, oil of Olay, Vicks.    

P&G VS. HLL

Launched Ariel Microsystem in 1991 and priced it at Rs 32, advanced proprietary enzyme based technology and advertising. Claimed that 500gm Ariel would last for a month, longer than others. Unilever had the technology but HLL dismissed the idea. But changed the idea after the launch of Ariel. To reduce the development time carried out different phases at the same time and developed Surf Ultra in 1992.( Team centered development ) HLL held 7% share by the end of 1992.

P&G VS. HLL

P&G upgraded Ariel to Ariel Micro shine at the end of 1996 while HLL replaced Surf Ultra with Intl Surf Excel in 1996. Surf Excel came up with Surf Excel hai na HLL tied up with Bombay Dyeing and P&G tied up with Reliance.( Brand development strategy). Surf Excel exceeded Ariel in terms of sales due to a strong distribution muscle. HLL launched Surf with Excel power which ranged between Intl Surf Excel and Ordinary Surf.

P&G VS. HLL

P&G launched Ariel power compact in 1998 and as a counter HLL relaunched Surf Excel with a better formulation with a different punch line. P&G then adopted a different advertising strategy. P&G launched Tide in May 2000 in premium segment which also consisted Ariel and these two were not present in the same market anywhere in the world. HLL then launched the first liquid detergent of the country for daily washing needs in May 2000.

P&G VS. HLL

The market experienced a downward shift towards low priced detergents like Ghari and Fena. Relaunched Surf Excel with a new advertising campaign. HLL introduced a low foam detergent in May 2003 to conserve water. Followed brand development strategy in launching Surf Excel Automatic in May 2003 with a diffferent packing. HLL dissolved Surf into a new identity in 2004. P&G quit its operations in India. Adopted Selective distribution strategy.

HENKEL
It is a subsidiary of Henkel KgaA, Germany Entered India in 1989. Produced toilet soaps, talcum powders and personal grooming products. Famous brands are Margo, Neem, Tuhina, etc. Launched HSCP in July 1994 for upper segment and Mr. White in 1998 for middle segment. Relaunched Mr. White in February 2004 in a Gusset pack.

 Linear Alkyl Benzene Sulfonic acid (LABSA 90%), is an anionic surfactant, which is widely used in formulation of complete range of synthetic detergent powders, liquids & cakes. It has high active content (90%) and gets quickly miscible with water. Further, it has low salt content. All these aspects combined together, make our Linear Alkyl Benzene Sulphonic Acid perfect to be used in variety of formulations. LAB accounts for 45 per cent of costs of synthetic detergents.

LAB price was at Rs 89,200 a tonne in May. CGSI feels that the detergent manufacturers are cutting down the costs may be due to the degradation in the quality or they may be operating at very high margins earlier because LABs price is rising . So, customer should be careful in this regard.

THANK YOU

By: UMAR MAQSOOD