Chik Satin Shampoo

Consumer Behavior Project

Table of Contents

Acknowledgement..................................................................................................................................3

Introduction...........................................................................................................................................3

Market Size in India......................................................................................................................3

Existing Competitors: Few players -HUL dominates ....................................................................4

Growth Trajectory: A blip in growth rates ....................................................................................4

The reasons for the slowdown.......................................................................................................5

Scaled Down Versions.....................................................................................................................5

Functional Benefits.........................................................................................................................6

Future Prospects: Herbal opportunity............................................................................................7

Moving across category barriers....................................................................................................7

Factors affecting the consumer behaviour in Shampoo Industry..........................................................8

Comparison between Brands.......................................................................................................10

Fishbein Multi Attribute attitude Model.....................................................................................10

Comparison between the consumer behaviour of males and females................................................17

Consumer Profile..................................................................................................................................19

Target Countries for Cavincare to enter with the Chik Satin Shampoo brand.....................................22

Acknowledgement

This project has been an opportunity for all of us to gain vital knowledge on Consumer Behaviour.

We would like to convey our heartfelt thanks to Prof Bikramjit Rishi to give us the opportunity to

take up this project. His suggestions have been the only source of guidance for us throughout.

Introduction

Market Size in India:

In India, hair care products are the fastest-growing category within personal products.

Between 1994 and 1998, the market size of products such as skincare and toothbrushes

doubled in value. But the size of the shampoo market expanded two-and-a-half times over

the same period. Not surprisingly, shampoos are a high priority area for major players such

as Hindustan Lever. The current size of the shampoo market, according to ORG-MARG, is

Rs.850 crore - equivalent to 30,000 tonnes in volume terms.

Unlike other FMCG categories such as soaps and detergents, which boast of a penetration

level of more than 90 per cent, shampoos remain a low penetration category. Industry

sources estimate that the urban market penetration of shampoos is a modest 36 per cent.

Shampoo usage in the rural markets is even more infrequent, with a penetration level of 12

per cent. Thus, even for the largest player in this industry, there is considerable scope for

volume expansion by converting non-users.

Existing Competitors: Few players -HUL dominates

For a market with high potential, the shampoo market in India is dominated by just a few

players. From scores of brands five years ago, the shampoo market has now been whittled

down to a handful. Hindustan Lever (HLL), with a 65 per cent volume share (68 per cent

share by value), dominates the market with brands such as Sunsilk, Clinic Plus and Clinic All

Clear. Cavin Kare Limited with brands such as Chik and Nyle follows with a 19.8 per cent

volume share.

Procter & Gamble (P&G) is the only other large player in this category with brands such as

Pantene Pro-V and Head & Shoulders. P&G discontinued its shampoo manufacturing

operations in India in 2000. Most of its brands are today directly imported from other Asian

countries such as Thailand, Taiwan and Vietnam.

New entrants are probably discouraged by the formidable task of establishing a distribution

network from scratch. HLL's long established ties with retailers and its extensive distribution

reach probably acts as an entry barrier for new entrants.

CavinKare Limited, which has managed to garner a significant share of the shampoo market

despite this handicap, has focussed on scaled-down versions of its brands and herbal

shampoos -- two segments where the market leader did not have a presence. Cavin Kare's

shampoo business has grown faster than the overall market, at 20 per cent in 1998, 4 per

cent in 1999 and 34 per cent over the past four quarters.

Growth Trajectory: A blip in growth rates

Despite its undisputed potential, the rapid expansion of the shampoo market was

interrupted in 1999. Overall growth rates in the market slowed to 1.7 per cent in 1999, from

16 per cent the previous year. Between January and November 2000, however, the market

appears to have recovered some, and the shampoo category has grown by around 10 per

cent.

The reasons for the slowdown

The main factor is lack of innovation. HUL has identified three major barriers to shampoo

use in India –

The perception that shampoos contain harsh chemicals that could damage hair

High price of shampoos

The view that the shampoo is more of a glamour product rather than a hygiene

product.

FMCG companies are working at getting consumers to switch over from alternatives, such as

natural products and soaps, to shampoos.

CavinKare attributes the slowdown in growth rates to the contraction of agricultural

incomes. Roughly a fourth of the shampoo market is in rural India. But the rural market is

the key driver for sachets, which make up 70 per cent of the total shampoo sales. HUL has

higher stakes in the rural market with an 80 per cent share.

Scaled down versions

Therefore, the strategies of the major players have revolved around attacking these barriers

to usage. The players obviously believe that the key obstacle to recruiting new users lies in

the high price of shampoos as a product. Unlike other FMCG categories, where marketers

are experimenting with low unit packs, as a concept, the low unit shampoo packs have been

around for over a decade. Therefore, marketers have been working at scaling down prices

further.

CavinKare made the first such attempt. It introduced a smaller 50 paise sachet of Chik, when

most other sachets retailed at Rs.2. The effort appears to have been an unqualified success,

with the Chik brand expanding by 40 per cent after the launch. A new 50 ml bottle of Chik

priced at Rs.6 (when most other brands were available in 100 ml bottles and above) has also

helped expanded the brand.

HUL acknowledges that the Chik innovations have expanded the overall market, trimming

HLL's volume shares by 2-3 percentage points.

HUL has responded with its own 50 paise version of Lux shampoo. The company claims their

launch of 30 ml bubble pack for Clinic Plus (Rs.8), is an innovative and cost-effective

alternative for sachet users. While sachets are difficult to store and re-use, the bubble pack

allows the user to extract just the right quantity for a single wash.

The scaled down versions could help pep up volume growth rates for major players. But

they have also had the effect of lowering the per ml cost of the major brands retailed

through sachets. Till the time the players upgrade users to the larger pack sizes, the sachet

revolution could restrict margin expansion for the players.

Functional benefits

Players have also tried other routes to expand the shampoo market. Fighting the perception

that shampoos are essentially glamour products, marketers have tried to add a utility value

to shampoos by offering functional benefits. Anti-dandruff shampoos represent this

attempt. Clinic Plus, one of the first anti-dandruff brands, is the largest shampoo brand

today, with a market share of 31 per cent.

Clinic All Clear, an anti-dandruff extension targeted at the youth has also managed to garner

a 13 per cent share. Due to its low pricing (Rs.71 for a 160 ml bottle against Rs.68 for a 100

ml bottle of Head & Shoulders anti-dandruff shampoo), the brand also has a significant rural

market share of 44 per cent.

HUL has also experimented with different versions of Sunsilk for dry, normal and oily hair.

Procter & Gamble's Head & Shoulders Menthol and Pantene Lively Clean also offer

functional benefits to users. Since these add-ons enable brands to command a price

premium over the plain shampoos, this strategy could aid both volume and margin

expansion.

Future Prospects: Herbal opportunity

One of the key barriers to shampoo usage lies in the reluctance to use a synthetic product

on hair. Worldwide, therefore, herbal shampoos or botanicals are a fast growing category.

Ayur from RDM Traders Private Limited and Nyle Herbal, a herbal shampoo launched by

CavinKare, have been some of the early entrants in the Indian herbal shampoos market.

These products claim to use traditional Indian herbs such as shikakai, soap nuts and amla as

ingredients and have been a success. Nyle Herbal is among the top five shampoo brands in

the country and herbal shampoos today account for 10 per cent of the market size.

That industry leader, HUL, does not as yet have a presence in this segment is noteworthy.

However, brands such as Sunsilk have been emphasising natural ingredients such as

`fruitamins'.

High price could be a key barrier when it comes to herbal shampoos. The key challenge in

manufacturing herbals lies in efficacy. Users typically require larger quantities or higher

concentrations of herbal shampoos to replicate the results of synthetic shampoos. Bringing

down prices can therefore be quite difficult in this case. This is probably why 90 per cent of

the herbal shampoos still sell only in the urban markets.

Moving across category barriers

Meanwhile, the value-added shampoo segment is getting quite crowded, with a range of

pharmaceutical and cosmetics companies launching specialised products. While Dabur has

leveraged Vatika's brand equity to launch Vatika Herbal shampoo, Godrej Soaps has

leveraged its dominance of the hair colour market to launch Godrej Colour gloss shampoo,

for users with coloured hair. This apart, several pharmaceutical companies (including

Johnson & Johnson) have launched medicated anti-dandruff shampoos (which will probably

carry higher credibility with buyers), while cosmetic companies such as Biotique and Lotus

Herbals also have herbal shampoos on the shelves.

Factors affecting the consumer behaviour in Shampoo Industry

We conducted a survey consisting of 60 respondents, 30 males and 30 females to find the

factors affecting the consumer behaviour in Shampoo segment. The following graph shows

the importance of factors that consumers consider before buying a shampoo.

7ml sham

poo sach

et for le

ss than

Rs.2

hair cle

ansin

g

anti-dan

druff

hair co

nditioning

non-chem

ical co

ntent

attrac

tive pack

aging

hairfal

l pro

tection

celeb

rity e

ndorsemen

t

different v

arieti

es for d

ifferent h

air ty

pes

good bran

d name

good fr

agran

ce 0

50

100

150

200

250

300

350

400

Sum of all respondents

Sum of all respondents

As we can see in the graph, importance of different attributes for a shampoo varies a lot.

The attributes of shampoo in descending order of their importance are:

1. Hair Cleansing

2. Hair Fall Protection

3. Hair Conditioning

4. Non-chemical Content

5. Anti-Dandruff

6. Good Fragrance

7. Good Brand Name

8. Different Varieties for different hair types

9. Attractive Packaging

10. 7ml shampoo sachet for less than Rs. 2

11. Celebrity Endorsement

Our respondents are students from a B-School, all youngsters having age between 22 and

28. The survey brings forth the following main points regarding consumer behaviour:

a. Youngsters from upper / upper middle class do not get affected by celebrity

endorsements for a shampoo. For example Dove does not endorse any celebrity for

its promotions.

b. Youngsters today are opting for natural products rather than products with big brand

names. For example many people are buying Himalaya products instead of products

from big guns.

c. Youngsters today care a lot about their looks. This is the reason they are not very

much concerned about the price while buying a shampoo.

d. Different shampoo varieties launched by different brands does not affect the

consumer behaviour much and therefore does not result in increased sales.

Comparison between Brands

On the 11 factors which we have taken above, respondents rated 4 prominent shampoo

brands of Indian market. These brands are Vivel, Chik Satin Shampoo, Pantene and Head &

Shoulders.

Fishbein Multi Attribute attitude Model

The attitude data obtained from the survey was used to construct the Fishbein Multi

Attribute attitude model. Average of the 60 responses was taken. The following table shows

the results:

Attribute Evaluation Vivel Chik Satin PanteneHead &

Shoulders

7ml shampoo sachet for less

than Rs.2 69.1717.78 21.98 13.85 15.55

Hair Cleansing121.97 27.73 25.18 34.03 35.02

Anti-Dandruff 96.50 20.75 18.00 25.25 32.50

Hair Conditioning104.77 26.97 21.50 29.43 26.87

Non-Chemical Content

72.07 19.13 18.62 17.68 16.63Attractive Packaging

74.13 18.00 13.78 21.43 20.92Hairfall

Protection102.32 25.18 19.88 29.98 27.27

Celebrity Endorsement

59.48 14.55 10.75 17.10 17.08Different

Varieties for Different Hair

Types88.08 21.73 17.20 25.85 23.30

Good Brand Name

98.82 22.78 16.53 29.27 30.23Good Fragrance

106.67 26.32 24.02 28.90 27.43Total Score 240.93 207.45 272.78 272.8

Comparison between the 4 brands for each factor could also be analyzed through the

following pie charts:

7ml shampoo sachet for less than Rs.2

VivelChikPanteneH&S

Consumers perceive Chik Satin Shampoo to be the cheapest among the 4 brands

Hair Ceansing

VivelChikPanteneH&S

Head & Shoulders ranks first among the 4 brands for hair cleansing

Anti-Dandruff

VivelChikPanteneH&S

Head & Shoulders is Anti-Dandruff specialist shampoo which is reflected through the pie

chart

Hair Conditioning

VivelChikPanteneH&S

Pantene is suited best for hair cleansing according to the consumers

Non-Chemical Content

VivelChikPanteneH&S

Vivel is considered having non-chemical contents

Attractive Packaging

VivelChikPanteneH&S

Consumers find Pantene most attractive with respect to Packaging

Hairfall Protection

VivelChikPanteneH&S

Consumers trust Pantene the most when it comes to Hairfall Protection

Celebrity Endorsement

VivelChikPanteneH&S

Celebrity endorses Head & Shoulders the most according to the consumers

Different Varieties for Different Hair Types

VivelChikPanteneH&S

Pantene provides with the maximum varieties as per consumers

Good Brand Name

VivelChikPanteneH&S

Head & Shoulders scores highest in Brand Name

Good Fragrance

VivelChikPanteneH&S

Pantene provides the best fragrance according to the consumers

Ranking of the four brands based on all the factors together

3

42

1

Ranking

VivelChikPanteneH&S

According to the survey conducted, consumers rate Head & Shoulders as the best shampoo

brand preceding Pantene. The difference between the 2 brands is negligible though. After

these 2 brands, Vivel shampoo captures the 3rd rank leaving Chik Satin shampoo at the last

place.

Comparison between the consumer behaviour of males and females with respect to

purchase of hair shampoos

Now we will analyze the differences in the importance of different attributes of a shampoo

between male and female consumers.

The ranking given to different attributes by male consumers could be seen in the following

graph:

7ml sham

poo sach

et for le

ss than

Rs.2

hair cle

ansin

g

anti-dan

druff

hair co

nditioning

non-chem

ical co

ntent

attrac

tive pack

aging

hairfal

l pro

tection

celeb

rity e

ndorsemen

t

different v

arieti

es for d

ifferent h

air ty

pes

good bran

d name

good fr

agran

ce 0

20

40

60

80

100

120

140

160

180

200

9

14 3

5

10

2

11

87 6

Male Respondents

The ranking given to different attributes by female consumers could be seen in the following

graph:

7ml sham

poo sach

et for le

ss than

Rs.2

hair cle

ansin

g

anti-dan

druff

hair co

nditioning

non-chem

ical co

ntent

attrac

tive pack

aging

hairfal

l pro

tection

celeb

rity e

ndorsemen

t

different v

arieti

es for d

ifferent h

air ty

pes

good bran

d name

good fr

agran

ce 0

20

40

60

80

100

120

140

160

180

9

1

73 2

8

3

10

5 64

Female Respondents

The following points could be extracted from analysis of the above 2 graphs:

a. Both male and female respondents give hair cleansing top priority as expected as it is

the basic function of any cleaning agent.

b. While males give preference to hair fall protection quality of a shampoo, for females,

quality of non-chemical content stands second only to hair cleansing. This brings

forth the fact that males have fear of hair loss while they are young. His could also be

seen in the advertisements of different brands which are promoting their hair fall

protection shampoos nowadays. As females prefer non-chemical shampoos, a lot of

advertisements are promoting shampoos with fruit extracts, natural extracts etc.

c. While females do care about the fragrance of shampoo, males do not give much

heed to this quality. This depicts the typical stereotype of our society where males

are not supposed to care about things like fragrance, beauty etc.

d. Males give high preference to anti-dandruff quality while for females it seems that

dandruff is not a problem.

e. Attributes like attractive packaging, price, celebrity endorsements and brand name

doesn’t seem to be affecting either males or females. One reason of this indifference

could be the consumer profile of the respondents. They all are well educated, know

their brands and are from well to do families.

Consumer Profile

The survey was conducted across 30 female and 30 male respondents.

50%50%

Gender

Male Female

The monthly household income is an important factor for consideration in this research

study. Majority of respondents (46%) had a monthly household income of Rs. 45,000 or

more. Another 27% of the respondents have a household income between 30,000 and

45,000. Around 20% belong to the category of Rs 15,000 – 30,000 and 7% had monthly

household income less than Rs. 15,000.

7%20%

27%

47%

Monthly Family Income

<=1500015001-3000030001-45000>=45001

While 87% of respondents are students, 13% are employed in the public/ private sector or

are self-employed.

87%

13%

Occupation

StudentPublic Sector/Private Sector/Self Employed

67% of the respondents are graduates while 28% have completed their post graduation. The

respondents educated till XII and holding professional certificates are 2% and 3%

respectively.

2%

67%

28%

3%

Education

XIIGraduationPost GraduationProfessional Cer-tification

Target Countries for Cavincare to enter with the Chik Satin Shampoo brand

Key characteristics of Chic Shampoo as identified by the consumers (Reference: Consumer

Survey)

As observed in the survey, consumers have identified the above four as the key

characteristics (value adds) of chic shampoo.

Further, the same consumers were also asked to rate various drivers (characteristics) that

influence a purchase decision, for a shampoo. Following which, the factor scores (brand

specific and product specific) were multiplied and the resulting scores showed that main

characteristics of chic shampoo, which influence the consumer purchase most are the same

4 characteristics

Cost Effectiveness

Hair Cleansing

Hair Conditioning Fragrance

Celebrit

y Endorse

ment

Attractive

Packag

ing

Brand Nam

e

Product

Variety

Anti Dandru

ff

Non Chemica

l

Hairfal

l Pro

tection

Hair Conditioning

Cost Eff

ective

Fragra

nce

Hair Clea

nsing

0200400600800

1000120014001600

Chic Shampoo

Score

Although, the sample contains Indian people only and their requirements might be different

from consumers in other countries, we can still use the consumer data describing the

product (chic shampoo) perception in studying other countries which might be a potential

market for chic shampoo.

Countries where Chic Shampoo can be launched:-

Dubai

As compared to other parts of UAE, Dubai is highly cosmopolitan in nature with

people from different cultures and communities residing

Around 71% of Dubai is Expats from various parts of Asia, with Indians being the

majority (51%).

The economy is stable, mostly due to the oil reserves

A consuming middle class, who is cost conscious (should not be misunderstood to

low cost buyers) and modern at the same time

Liberal women (as compared to other parts of UAE) do try new fashionable products

Finally, the hot, dry and dusty climate shows that the consumers do require a good

hair cleansing product

Argentina

Is defined as an upper-middle income economy , an emerging market

Urbanization is on a rise and middle class does spend on utility products and also

considers spending on other products

Thus, its highly likely that a normal house will have a tv, refrigerator, AC and a

microwave oven, but economical options of all

Thus, it’s a conservative yet growing economy and hence a perfect launch platform

for Chic

The climate differ as we move from north to south (hot to cold) with north and

central part having hot and dry climate in summers, and south having cool winters.

Due to growth in industrialization, pollution is on an increase and hence we feel a

need for a good cleansing shampoo (more than shine or hair fall) will have good

market

Libya

4th richest country in Africa

Emerging economy

Family life is important in Libya and majority live in apartments

People have started spending on diversified products, but conservatively

A shampoo with high hair cleaning and conditioning capability, which is cost effective

will find good acceptance here