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Project Report On
Lux Soap
Vision Unilever products touch the lives of over 2 billion people every day whether that's through feeling great because they've got shiny hair and a brilliant smile, keeping their homes fresh and clean, or by enjoying a great cup of tea, satisfying meal or healthy snack.
Mission Unilever's mission is to add Vitality to life. They meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life. Their deep roots in local cultures and markets around the world give them strong relationship with consumers and are the foundation for their future growth. A key requirement is building in the quality expectations of their consumers into their products. To win consumers confidence and loyalty, they need to consistently deliver branded products of excellent quality. The Quality Policy describes the principles that everyone in Unilever follows, wherever they are in the world, to ensure that they are recognized and trusted for their integrity, the quality of their brands and products, and the high standards they set. LUX 1916: Lux soap was first launched in 1916 as laundry soap targeted specifically at 'delicates'. Lever Brothers encouraged women to home launder their clothes without fear of satins and silks being turned yellow by harsh lyes that were often used in soaps at the time. The flake-type soap allowed the manufacturer some leeway from lye because it did not need to be shaped into traditional cake-shaped loaves as other soaps were. The result was a gentler soap that dissolved more readily and was advertised as suitable for home laundry use. 1925: Lux toilet soap was introduced in 1925 as bathroom soap. The name 'Lux' was chosen as a play on the word "luxury." Lux has been marketed in several forms, including bar and flake and liquid (hand wash, shower gel and cream bath soap). Lux in step with the changing trends and evolving beauty needs of the consumers, offers an exciting range of soaps and Body Washes with unique elements to make bathing time more pleasurable. One can choose from a range of skincare benefits like firming, fairness and moisturizing. 1929: Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands. Since its launch in India in the year 1929, Lux has offered a range of soaps in different colours and world class fragrances. Lux is a beauty soap of film stars. Lux recognized the need for a compelling message about beauty that would resonate with women of today.
1930: From the 1930s right through to the 1970s, Lux soap colours and packaging were altered several times to reflect fashion trends. 1958: In 1958 five colours made up the range: pink, white, blue, green and yellow. People enjoyed matching their soap with their bathroom colours. 1990: In the early 1990s, Lux responded to the growing trend away from traditional soap bars by launching its own range of shower gels, liquid soaps and moisturizing bars. 1992: Lux beauty facial wash, Lux beauty bath and Lux beauty shower were launched in 1992. 2004: In 2004, the entire Lux range was re-launched in the UK to include five shower gels, three bath products and two new soap bars. 2005: saw the launch of three exciting new variants with dreamy names such as Wine & Roses bath cream, Glowing Touch and Sparkling Morning shower gels. Lux has recently launched its two fruit extract variants New Lux Strawberry & Cream and Lux Peach & Cream contain a blend of succulent fruits & luscious Chantilly cream. The most recent addition in the brand is Lux Crystal Shine. Some of the prominent variants Lux Almond Lux Orchid Lux Fruit Lux Saffron Lux Sandalwood Lux Rose Lux International Lux Chocolate Lux Aromatic Extracts Lux Oil and Honey Glow Lux Provocateur
Economic Factors Soaps in India cost very high in India as compared to other countries like Indonesia. This is primarily attributed to the high cost of imports due to high import duties. Since India is now a WTO member India will have to bring down the import duty rates to as much as 20% from35%. Also the excise rate at 16% forms formidable portion of the cost. For toilet soap, the average expenditure per user household for low-income households is Rs. 237, while it is Rs. 706 for high-income groups.
Social factors: With the rising education and disposable income levels, the need for hygiene and personal / skin care becomes important. Premium soaps are thus targeted at the audience to change their habits by raising their aspiration levels. Fragmented approach of govt. and NGOs towards inefficient PHC-primary health center also aggravates the problem. The growing reach of advertising medias like satellite and cable TV too is expected to give a boost to the market penetration initiatives of the industry players.
Technological Factors: The industry though capital intensive is not very technology intensive. Premium soap manufacturing though compared with other soaps manufacturing relies to an extent on technology especially in the finishing stage). The more important is logistics management where marketing and distribution play a pivotal role. Here technology like (SCM) Supply Chain Management and (E-CRM) Electronic Customer Relationship Management will play a pivotal role. Companies like HLL are working very hard towards such a system to rope up the entire small stores and retailers (Kirana Stores).
The results of a survey done by National Council of Applied Research (NCAER) suggest that Indian FMCG space is all set to enter a new growth phase, sample this: the study says that the lower income group is expected to shrink from over 60 percent (1996) to 20 per cent by 2007 and the higher income group is expected to rise by more than 100 per cent. It looks; the industry is all set for a fastpaced race ahead.
makeup. I would assume that the materials needed to create makeup and perfume is not hard to attain at all. (FAVORABLE)
4. Threat of substitute products The fourth force is the threat of substitute products which is extremely high in this industry. Lets use me, for example. When I need new eyeliner, I buy the same brand as the one I previously used 50% of the time. But the other 50% of the time, I browse the selection of eyeliner in Sephora and buy a new brand. I am not speaking for every woman out there, but for me, I like to switch makeup brands around because I get sick of using the same old thing. Substitute products affect the profitability of an industry by limiting the prices a company can charge. So for those who dont want to spend $25 on a Christian Dior lip gloss, they can opt for an LOreal lip gloss with a similar shade at Duane Reade for $4. Perfume is the same too, if you dont want to spend $60 for Cartier Delices de Cartier, you can spend $25 for a bottle of CK One. Even though these scents dont smell the same, their function is the same; the purpose is to make you smell good. (UNFAVORABLE) 5. Rivalry among existing competitors :- Finally, the last force is rivalry among existing competitors, which is relatively strong in the cosmetics and toiletries industry. There are a large number of small firms in this industry, where there is no particular dominant firm that exists. Also, as mentioned before, it is easy for the customers to switch from one companys makeup or perfume to another. Another thing to keep in mind is that in this industry, there is little product differentiation where most makeup is relatively the same and the same applies for perfume, where scents smell similar.(UNFAVORABLE) So after analyzing the toiletries industry, it is clear that 4 out of the five forces are unfavorable while only 1 is favorable. This indicates that THE TOILETRIES INDUSTRY IS NOT AN ATTRACTIVE INDUSTRY TO ENTER AT THIS TIME
PRODUCT LIFE CYCLE LUX Beauty Bar is in the maturity stage of its life cycle.
Introduction( 1929-1950s)
Company Objective Sales Cost of manufacturing Profits Marketing Objective Product strategy Price strategy Distribution Advertising strategy Low High Negative
Actions
Create product awareness in major cities Offer a basic product Higher than Lifebuoy Created network in major cities Awareness among early adopters.
IGOR ANSOFF MODEL FOR LUX: New Product Current Product Market Penetration Strategy Attract users : Gold coin offer Gold coins hidden in soaps selectively 100 gm contained 3-gm gold coin 150 gm contained 5-gm gold coin Product Development Strategy Product Reformulation: Introduced variants with different ingredients Honey, chocolate, strawberry, etc Product feature addition: Lux Crystal shine (with sparkles) Product line extension : addition of small size (Rs 5/-,45 gms) Diversification Strategy Related Diversification : Introduction of body wash
Current Market
Market development Strategy New Market A new variant called Lux Nalangu pindi was introduced in Andhra Pradesh.
High
Star
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Dog Godrej No.1
low
low
Question Mark
Rin Pepsodent Domex
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Dog
Wheel
low
LUX The soap industry is seen to have a market growth rate of about 10%. This shows that industry has a high growth rate. HUL is a market leader in the industry and its soap Lux enjoys a market share of 17 % in India. So according to the concept of BCG matrix any product which has high market growth and market share is classified as STARS. The major objective of products coming in Stars is to maintain their high market share. Since Lux falls into the category of Stars in the BCG MATRIX as the market share is high and the market growth is also high. Here, the product is well established, so its easy to get attention and exploit new opportunities. Even the growth is exciting which suggests that there are fantastic opportunities, and lux should work hard to realize them.
The SWOT analysis for Lux Strengths 1. Lux possesses a very strong network of market research. Door to door surveying and sampling is done annually in rural as well as urban areas selectively. 2. Lux has a very wide range of products to offer. 3. The parent company of Lux has helped in establishing a strong supply and distribution network. Besides, it also has access to the resources of the parent company of Unilever. 4. Lux possesses a very strong brand image in the market. 5. The focus of Lux is going strong on beauty segment. 6. Lux is a dynamic brand and is undergoes changes as per the changes in demand and trends, which is evident from the launch of the new range of body washes Magical Spell, Scarlet Blossom, Strawberry & cream and Peach and cream have been launched with the tag line of the secret to liquid silk skin. 7. The brand has innovative sales promotions tactics that spread across different forms of media print, electronic and social. 8. The brand is known to deliver value-for-money in the eyes of the consumers. 9. It has a broad market presence and mass appeal, being the market leader in so many countries. As per the BCG matrix, developed by the Boston Consulting Group, Lux can be put into the STAR category for high market growth and high market share. Weaknesses 1. Lux lacks a unisex appeal as it has essentially been portrayed as a womens beauty soap and has a lot of feminine appeal. 2. The wear rate of the soap is very high. It gets dissolved pretty fast and gets mushy and soggy quickly. 3. Certain variants of the soap, like the Haute Pink, Sunscreen, etc did not do so well in the market as some of its other variants have. 4. Some of its advertisements have been quite controversial, specially the one with Shah Rukh Khan in the bath tub, and the one of Haute Pink soap with the model in the bath tub flying up in the air in a hot air balloon. 5. The stock replenishment in semi-urban areas and rural areas is quite long, despite having such a wide distributor network. This leads to stock out in these areas. Opportunities 1. The industry today, is growing at a rate of more than 10% per annum. 2. The compounded annual growth rate, better known as CAGR is also rising at a steep pace. This is evident from the performance of Fair and Lovely in its segment. So, Lux can yield great benefits by reinforcing itself in the beauty segment.
3. Promotions strategies like kiosks, price offs, sample distributions, etc are essential with competitors like ITC, etc catching up fast. 4. The soap, as mentioned above, is in the maturity stage of its life cycle. So it is essential that a retentive strategy be adopted so that this can be sustained. 5. Ayurvedic variant of Lux could have a big scope in the market. So far, the only variant of Lux that has somewhat come close to Ayurveda, though not actually is the festive glow variant, which had the goodness of haldi and chandan ubatan. This could cater to a new segment in the market. 6. Lux Kids Special soap would also help the brand greatly, as this segment has been running dry for quite some time now. In this way, brand loyalty could be caught young! 7. The brand extension products of Lux the body washes, with its new range launched recently, is in the growth stage of its life cycle. They can pick up fast pace is positioned and marketed properly. Active marketing of these body washes is going on in the social media. 8. During the sales promotions schemes, the level of servicing goes very high and this needs to be brought down. 9. Lux has only near about 20% penetration in rural markets. Lux holds great scope if it taps the rural markets. Threats 1. Number of competitors is rising ITC, P&G, etc are fast catching up. 2. High internal competition also exists for the soap. 3. Lux seems overly relied on the beauty segment, so in case the consumer trends or preferences change, then Lux stands to be highly vulnerable. 4. More focus needs to be put on the newer technology currently body washes being the latest technology. This can already be seen in the market, but it needs to be enforced further. 5. If constant reinvention is not there, then Lux can slip down from the maturity stage it currently is in and get into a declining phase.
Pricing Stratergy
Competitive Prices: Beihter high nor low Price segments of toilet soaps Segment Premium > Popular Economy Lux has versions in all the three price segments: Recent pricing of Lux (100 g)
Price/weight > Rs. 15 / 75 gms Rs. 8-15/75 gms < Rs. 8 /75 gms
Rs 17 Rs 15 Rs 5