herbal cosmetic brands - exploratory reseach

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3/13/2014 Vijayalakshmi | Balamurali | Karan | Florisha | Prahaladh | Nidheesh BIOHEMISPHERE ALOE VERA GEL & SUNSCREEN Exploratory Research Mphatic Minds

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Page 1: Herbal Cosmetic Brands - Exploratory Reseach

3/13/2014

Vijayalakshmi | Balamurali | Karan | Florisha | Prahaladh | Nidheesh

BIOHEMISPHERE ALOE VERA GEL & SUNSCREEN

Exploratory Research

Mphatic Minds

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2 Exploring the Market Place: Aloe Vera Gel & Sunscreen

Table of Contents

EXPLORATORY RESEARCH - SECONDARY DATA ANALYSIS 1. Introduction to Aloe Vera…………………………………………………………………….5

Aloe Vera Gel ………………………………….6 Aloe Vera Sunscreen 7 Different Categories of Healthcare Applications 12 Conclusion 12 EXPLORATORY RESEARCH – QUALITATIVE METHODS 13 INDEPTH INTERVIEW 14 Introduction 14 Research Methodology 14

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Introduction

Aloe Vera

According to World Health Organization (WHO), around 80% of the world population depend upon

traditional medicine. They have been used as a diagnostic and for healing throught history to

present and have proven to be effective without resulting in painful side effects. Ayurveda is one

such system that has its roots deeply ingrown into the Indian culture, Ayurvedic cosmeceutical

date back to the Indus Valley Civilization. Ayurveda consists of numerous plant and animal based

ingredients which comprise the medications, along with identifying the type of body of the patient

according to the five primary elements of the universe. Aloe Vera, referred to as “Kumari” is a key

ingredient in Ayurveda which has varied uses from treating skin to liver ailments. The strength of

the plant is rediscovered by the cosmetic industry which has begun to extensively use it and

promote products commercially.

How it helps

Aloe can substitute synthetic ingredient used in cosmetic industry very competitively and is

finding increasing use in the ever growing consumer product segment. Aloe contains a mixture of

glucosides collectively called 'aloin', which is the active constituent of the drug. Aloin and its gel

are used as skin tonic as they have a cooling effect and as a moisturizing agent. This helps in

preparation of aloin based creams, lotions, shampoos and allied products.

Cultivating Aloe Vera

Farmers in India regularly face problem like lack of rain, low ground water level, soil degradation

etc. Cultivation of aloe Vera would be beneficial as it requires minimum usage of water and the

returns from it would be more than 50,000 yearly per acre. Most of the distributers we contacted

and as per data available online, Aloe Vera products have a high market demand. Many processing

units have already established in the country & according to estimation, more than 300 industries

are processing Aloe Vera leaf. However, there is still a high percentage that is left untapped as the

raw material doesn’t seem to be enough to meet the demand. Therefore, there is an unlimited

market potential in India for the “Sanjeevani “of modern times – Aloe Vera.

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Aloe Vera Gel

Aloe Vera Gel is the most popular product that is derived out of the Aloe Vera plant. The

preparation of the gel is quite simple, as slicing the leaf would result in the gel oozing out, to be

consumed directly or can go in for further processing. The remarkable gel serves various purposes

from being applied on the skin as a moisturizer and a coolant to being consumed internally for

well-being of the digestive system, liver and kidney.

Competition

As discussed earlier, the cosmetic industry has realized the great potential of aloe vera.

1. Premium Segment: Forever Living, Amway, Body Shop

2. Affordable Segment: Patanjali, Fab India, Lotus fairness gel, Prakriti, Banjaras, Aloe Vera,

Aroma Treasures

These brands have launched products based on the Aloe Vera Gel positioned for different

purposes such as

Soothing skin, after being exposed to sun

Moisturizing

Clearing Acne/ Dark Spots

Evening the skin tone

Fairness and many more

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5 Exploring the Market Place: Aloe Vera Gel & Sunscreen

Aloe Vera Sunscreen

Sunburns cause a lot of pain and irritation, while reducing the elasticity of skin causing early

ageing. Aloe Vera is a great natural skin coolant and is known to treat sunburns while moisturizing

skin.

While Aloe Vera is not necessarily an active ingredient for Sun Screen, it has been used widely by

various brands for its natural cooling and healing properties.

Competition

Affordable Segment: The key players in the aloe vera sunscreen affordable segment are Lotus,

Biotique, Jovees, Aroma Magic and so on.

Premium Segment: Forever Living

Apart from readily available competition products as mentioned above, many niche products are

also available online in the premium segment; whereas they might not be available on shop

shelves. Some high priced competitors for sunscreen and gel are Rustic Art Organic Sunscreen,

Sante Bio Aloe, Logona Aloe Day Cream.

Apart from sunscreens and gel, Aloe Vera is used in other cosmetic products such as

soaps, moisturizers, oils and packs.

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Competition Positioning Mapping for Aloe Vera Gel

Inference:

The popular players in the market fall in the above mentioned four categories: Soothing,

Moisturizing, Clearing Acne and Fairness when it comes to their products positioning. Some brands

like Patanjali and Prakriti Herbals speak about dual benefits. However, according to popular

marketing management concept, it is better if we stick to a single unique selling proposition (USP)

as it would be easier for customers to register.

Forever Living

Aloe Veda

Brihan

Fab India

Moisturizing

Soothing Fairness

Clears acne

Patanjali

Aroma treasures

Khadi

Lotus

Vana Vidhi

Banjaras

Prakriti Herbals

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7 Exploring the Market Place: Aloe Vera Gel & Sunscreen

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8 Exploring the Market Place: Aloe Vera Gel & Sunscreen

In-Depth Interview

DELPHI INTERVIEW:

Dr. D Ragavendran MD Ayurveda

Research Associate

Kotakkal Arya Vaidhya Chikitsalayam & Research Institute

Arya Vaidya Chikitsalayam, an Ayurveda Hospital at Coimbatore was established in

1950 is recognized by the Department of AYUSH, Ministry of Health and Family

Welfare, Govt. of India and the World Health Organization. It offers services in

the fields of Education, Research, Pharmacy and Clinical Practice in Ayurveda and

takes care of the nationwide distribution of Ayurveda medicines through C&F

agents and over 1000 agencies.

Dr. Ragavendran is a doctor of medicine in Ayurveda, working as a physician consultant and

research associate at Arya Vaidhya Pharmacy (AVP).

We requested Dr. Ragavendran to give us an insight on the benefits of Aloe Vera as a cosmetic.

Dr. Ragavendran started our conversation by explaining that Ayurveda, “the science of life” is a

historical medical approach to help human beings live a healthy life. He introduced us to the three

kinds of body systems or ‘Doshas’ that human beings are generalized to have, based on the five

elements: air, water, ether, earth and fire:

1. Pitha – composes predominantly of heat

2. Vatha – composes of air and ether

3. Kaptha – composes of earth

He explained that Aloe Vera or “Kumari” is a key ingredient in

Ayurveda that has varied purposes from cooling the system,

purifying blood, anti-inflammation, diuretic to treating many

“Pitha” related issues.

He mentioned that Aloe is good for skin as a whole as it helps

reduce dark spots, pimples, sunburn and lightens tan. People

are also realizing the benefits and resorting to herbal practices

for long term health. He does not suggest any specific

products because as per Ayurveda, medication cannot be

prepared using a single ingredient generic to a large audience.

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9 Exploring the Market Place: Aloe Vera Gel & Sunscreen

Exploring Consumer’s Mindsets

1. Intercepts

We intercepted 40 people randomly – Men and Women on the busy Race Course road in

Coimbatore to understand what they felt/thought about of Aloe Vera gel and products. To sum

their responses:

Inference:

Most of the respondents have heard of Aloe Vera but have not used it. Quite a few of them said that

they own the actual plant and consume it. Some women and two men mentioned that they have

used Aloe Vera in other forms, such as in moisturiser and aloe juice.

Intercepts

i use Himalaya. it's comfortable, but there are

no visible change

I use Baba Ramdev's for wellbeing

Usage of Aloe Vera as Gel or Sunscreen

Heard of it, but not used

Used the gel

Never heard of it

Used other AV products

Use directly from plant

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Exploring Retail Outlets: Mystery Shopping and beyond

Our team went as mystery shoppers to popular stores, supermarkets and pharmacies to see the

stocking and awareness of Aloe Vera gel and sunscreen. Below given are the store -specific

implications as well as the collective insight.

1. Kannan Departmental Store

KDS is a popular supermarket chain present in Coimbatore, Erode, Tiruppur etc. It caters

predominantly to the middle class SEC and stocks all the common grocery items to health

and beauty products. They try to sell products slightly lower than the MRP.

Observation:

We observed that KDS store is highly involved in selling herbal products.

Apart from the usual brands such as

Biotique, Aroma Magic, Banjaras,

Jovees, KDS have their own Aloe Vera

Gel brand in various flavours which

they have placed in a) The Medical

Department b) The Cosmetics

department c) General Stores Section

Sales Representatives’ Push:

The sales reps take pride in their Aloe

products and suggest to customers in

their benefits.

They explained that it’s fast moving.

2. Nilgiris

Nilgiris is a popular, established grocery retail outlet in South India that has been around

since 1905. Nilgiris is visited by the upper-middle class families and is known for quality.

Observation:

Nilgiris stocks all the cosmetic products on one aisle. It holds the popular brands such as

Biotique, Lotus, Himalaya, Jovees , Banjaras products.

Sales Representatives’ Push:

Biotique and Himalaya have company sales reps who push their respective products.

The store’s attendants, when spoken to suggested brands like Lotus and Jovees, and

considered them as fast-moving.

3. Pazhamudhir Stores

Pazhamudhir Stores is a popular store in Coimbatore that sells groceries and common

consumer products.

Observation:

Pazhamudhir is rather congested and stocks all the cosmetics on a single narrow

aisle. But the products are segregated neatly.

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Sales Representatives’ Push:

Brand Himalaya has it’s own sales representative who constantly bugs customers to

try out the products

The store’s sales reps did not have much idea about “Aloe Vera” but when asked

about sunscreen, they suggested Lotus and Himalaya sunscreens.

Only Banjaras Aloe Vera gel was available

Projective Technique

Word association

Plant Vivel Soap

Best!!!

Date : 10/3/14

Location : Brookefields

Nature

Green

Moisturizer

Face wash

Ootyy

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Word association test was conducted for 25 people - both Male and Female, aged 20-50.

People were asked to say the first word that comes to their mind when they think of

aloevera. The words said by those people are shown in the picture above. The words

which were often repeated by people were Green, Face wash, Moisturizer. Five of those

people were not aware of aloevera.

Insights

People associate aloevera with nature which is evident from many of the words which they

associated, such as green, plant, nature, Ooty. Valuable insights such as these, throw light

upon customers emphasizing the need for usage of Aloe Vera products as skin care

applications. They are unaware of Aloe Vera product applications other than on skin.

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Unique business model: Serving domestic market (Own brand) Foreign markets (Sub contracting in

clients’ brand names)

Distributor – 1 Distributor – 2 Distributor – 3 Markets serviced South East Asian

Nations Canada & Sri Lanka Domestic & Foreign

Profit margin ~ 10% – 20 % ~ 35% ~ 10%-20% Raw material source

Agriculturists – Tamilnadu

Agriculturists – Direct sourcing Contract farming entities

Challenges in business

Shortage of Raw materials

Sitting on stockpile of 10 tons of Pure Organic gel

Production facility’s capacity shortage

Location of business

Coimbatore, Tamilnadu

Kovilpatti, Tamilnadu Chennai, Tamilnadu

Product range Aloe Vera gel Creams/Gel/Soap/Shampoo/Oil Skin care kits Notes Business not vibrant Looking forward to venture

into retail sector Sub contracting, catering to clients’ specifications

Unique business model

Concentrates exclusively on gel products

Supplying exclusively to select geographies

Manufacturing & Distribution (Parallel activities)

Fast moving product

Aloe Vera Gel Pure organic gel Facial Kit (Own brand name)

Pricing Market oriented Pure organic gel – Rs.160/Kg Rs.626/- (Facial kit)

Focus Group Discussion

Gender: Male/Female

Age: 13-25years

Number of FGDs: 5

INTRODUCTION

Mphatic Minds held totally five Focus Group Discussions. Three of which were for girls, aged 18-25,

one for school girls, aged 13-16 and one for boys, aged 18-21, who are studying in Amrita University.

FGD was conducted to understand various aspects of the buying and usage behavior of herbal and

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Aloe-Vera products. This was done to know the potential of Aloe Vera based products in Amrita

University.

Details of the participants of focus group discussions are as follows:

Focus Group No of

respondents

Age Native Place

1 5(girls) 18- 20 Vizag, Hyderabad, Bangalore, Chennai, Guntur

2 9(girls) 21- 24 Salem, Palakkad, Kottayam, Kozhikode, Thrissur, Trichy

3 4(girls) 18 Andhra Pradesh

4 11(girls) 13-16 Tamil Nadu

5 8(boys) 18-21 Chennai, Hyderabad, Trichy, Kollam

LIST OF ASPECTS OF THE FGD:

1. Need for daily skincare

2. Need for men’s skincare

3. Price sensitivity to products

4. Preference for herbal products

5. Other concerns of skin care products

6. Awareness of ‘Aloe Vera’s benefits and experience

7. Concerns with the use of Aloe-Vera

8. Opinion development about the product

9. Frequency of change of skincare products

10. Influence of packaging on the buying behavior

INSIGHTS INTO THE ASPECTS

Focus Group 1

Moderated by: Prahaladh, Balamurali

Date : 7/3/14

Location : Amrita University

Focus Group 2

Moderated by: Prahaladh, Balamurali

Date : 7/3/14

Location : Amrita University

Focus Group 3

Moderated by: Karan, Flourisha

Date : 8/3/14

Location : Amrita University

Focus Group 4

Moderated by: Karan, Flourisha

Date : 8/3/14

Location : Amrita University

Focus Group 5

Moderated by: Karan, Flourisha

Date : 8/3/14

Location :Amrita University

Location : Amrita University

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1. Need for daily skincare

Need for ‘daily’ skincare takes birth from the existence of undesirable and unsuitable

conditions, mainly polluted air and bath-water. The need for the same was considered

limited in ideal conditions.

Also many considered it to boost their overall morale.

2. Need for men’s skincare

Opinions about the need for skin care by the males were found to be similar: they need care,

for they have a skin! The need to moisturize was considered mandatory for all skin types

irrespective of skin condition. However, some men thought they don’t need as much care as

women need. They think just washing the face twice a day would be sufficient. Only one of

the men in the focus group is using sunscreen lotion however many are using moisturizers.

3. Price sensitivity to products

Price elasticity for skin care products is from moderate-high. To some people, price was not

a deciding factor once a product was found to be suitable to the skin type and condition,

apart from safety and reliability. A price of Rs 500 was quoted by some duri ng the discussion

and agreed by almost all for ‘face wash and moisturizer’ which was enough for a month if

used daily. Some were not ready to spend more than 250 for a month.

4. Preference for herbal products

Herbal products were considered safe and reliable , hence preferred over chemical based

products. Almost all expressed very strong opinions about it. Most of the school girls who

were in the discussion were already using a lot of herbal products which were suggested by

their parents. 6 out of 8 men agreed that herbal products are good for their skin, whereas

the rest told that they are not seeing any visible changes. They also thought that herbal

products don’t have many variants and there are no specific products for different skin

types.

5. Other concerns of skin care products

The smell and feasibility of usage was given extreme importance. When given samples of

two different aloevera gels, nine out of eleven school girls preferred the same product, for

its smell. They also said that they would pay more for the product that had better smell.

6. Awareness of ‘Aloe Vera’s benefits and experience

Awareness of the benefits of ‘Aloe Vera’ to the skin and otherwise (for external application

to hair, and for intake) was found to be moderate-high in terms of depth and very common

in terms of number of people.

Experience of the benefits on skin with the use of Aloe Vera based products:

suppleness, reduction in blemishes, tightening of loose skin, shine, smoothness.

A few told that disliked direct application of ‘Aloe Vera’ due to the sticky nature of

the gel apart from cumbersome process from finding the plant to application of its gel,

however many have tried using it and found it good.

7. Concerns with the use of Aloe-Vera

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Seniors (Age: 22-25) were found to be cautious of the use of ‘Aloe Vera’ based products due

to ‘stated reversal’ of ‘Aloe Vera’s benefits by their elders. Some were found to be reluctant

to use Aloe-Vera products due to its need to be used daily.

8. Opinion development about a product

Preference for ‘Aloe Vera’ mainly emanated through elders (mainly female members of the

family) apart from friends’ personal experience. Many of the respondents’ mothers have

asked them to use aloevera directly from the plant.

9. Frequency of change of skincare products

Opinions were somewhat diverse about the habit of changing the product frequently. Some

were always keen to try something new, while others enjoyed sticking to a product and

developing a bond with the product.

10. Influence of packaging on the buying behavior

To girls, packaging was least likely to drive a purchase. Ingredients of the product and

friend’s recommendation drove the buying behavior. Most of them seemed to pick products

which were either known to them or recommended to them by their friends. The decision-

making was backed by the availability of the herbal ingredients in the product which held

value according to their knowledge.

Most were least likely to get enticed with the glamorous advertisements, whereas some

men attributed poor advertising to lesser usage of herbal products by them. They are

influenced by advertisements and packaging.

It was generally observed that men were influenced by products that had good packaging

and which were advertised well.

SUMMARY: ‘Aloe Vera’ has been used in conjunction with other herbs, and sometimes used

directly. Its use and benefits have been experienced by elders (mainly mothers) in many families of

the girls who formed a significant part of the FGDs that were conducted. But due to the increase d

pace of life of people the direct use of ‘Aloe Vera’ by girls has become extremely limited. This has

seemingly opened the doors for the Aloe-Vera based products.

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References

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3151377/

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