Segmentation in Soaps

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Consumer Trends|
Inside the Soap Category in India|
Soap is a product that many people might take for granted or consider rather ordinary, but for some, lathering up can be a treasured part of a morning or nightly routine. 

Scented or unscented, in bars, gels, and liquids, soap is a part of our daily lives. In the United States, soap is a $1.390 million (US$)* industry with over 50 mass market brands. But in some markets the sales potential for soap is only beginning to be realized. At the end 2000, soap was a $1.032 million (US$)* business in India. IFF's marketing experts offer the following overview of this growing category.

*Source: Information Resources Inc. 2001 data for Year-End 2000| |
Overview of the Indian Soap Category
India is a vast country with a population of 1,030 million people. Household penetration of soaps is 98%. People belonging to different income levels use different brands, which fall under different segments (see table below), but all income levels use soaps, making it the second largest category in India (detergents are number one). Rural consumers in India constitute 70% of the population. Rural demand is growing, with more and more soap brands being launched in the discount segment targeting the lower socio-economic strata of consumers.  | Soap Price (per 75 gram cake)| | Segment| in rupees| in US$|

| Carbolic*| 5.00| 10 cents|
| Discount| 7.00| 15 cents|
| Popular| 11.00| 23 cents|
| Premium| 17.00| 36 cents|
| Super Premium| 35.00| 75 cents|
| |
| * The carbolic segment consists of soap that has crysellic acid (e.g. carbolic acid) as an active ingredient to remove body odor. These soaps have a strong medicated/germ killing connotation.|

History of Soap in India
During the British rule in India, Lever Brothers England introduced modern soaps by importing and marketing them in India. However, North West Soap Company created the first soap manufacturing plant in India, which was situated in the city of Meerut, in the state of Uttar Pradesh. In 1897, they started marketing cold process soaps.* During World War I, the soap industry floundered, but after the war, the industry flourished all over the country.

Mr. Jamshedji Tata set up India's first indigenous soap manufacturing unit when he purchased OK Coconut Oil Mills at Cochin Kerala around 1918. OK Mills crushed and marketed coconut oil for cooking and manufactured crude cold process laundry soaps that were sold locally. It was renamed The Tata Oil Mills Company and its first branded soaps appeared on the market in the early 1930s. Soap became a necessity for the moneyed class by around 1937.

*Cold process soaps are manufactured by mixing all ingredients (soap base, perfume, fillers, actives, etc.) in a large pot and heating them up to 70 degrees while they are stirred manually. Once the mixture is ready, the soap is plodded based on its size with the logo by a machine. In a machine made soap, the mixing process is called milling and this is done by a rotary operated machine and not manually.| |

Brand Positioning Then and Now
Soap manufacturers originally targeted their products to the lowest income strata in urban as well as rural areas, positioning their brands as a way to remove dirt and clean the body. For some brands, that positioning persists even today with a focus on removal of body odor and keeping the user healthy. However, soap positionings are moving towards skin care as a value-added benefit.| |

Consumer Use Today
Toilet soaps are always used in the bar form—there is no other form in the Indian market—and they are used in the bath. Showers are a distant dream for 70% of India’s population, who live in the villages where there is not even a regular supply of drinking water. In the urban areas, people bathe by using a bucket of water, mug, and a bar of soap. In villages, they usually bathe by the river bank or village ponds....
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