Household Products (India) Ltd

‘Sehra’ The Soap of Matchless Purity

 Decisions taken at critical stages of new product introduction
process: Concept Development
• Type of new product : Product line extension (incremental innovation)
• TG – Traditional Consumer, >15000 monthly income
• Why the decision to introduce new product?
- Profits of 2 low cost brands are decreasing
- Increase market share in fast growing high price soap segment (15% growth rate)
- Higher profit margin per tonne, stable profit generation

1. Decision to introduce jasmine 1. - High price sector is fragmented mkt

perfumed soap in high price
- Benchmarking against similar competitor
sector
product – 10% growth in 2 yrs
- Sandalwood > jasmine > rose > khus
- Decision based on industry growth rate
- No survey for consumer utility of pure
vegetable oil soap
- Could have gone for Sandalwood fragrance,
2. Why not medicated or cosmetic since Jasmine is already available at 1.5 lower
soap? than Shera
Decisions taken at critical stages of new product introduction
process: Concept Development & Testing

1. Introduce pure vegetable oil soap 1. - More than just perfumed soap
- Morphological analysis
- Utility of vegetable oil soap not tested

2. Formulation of 6 perfumes
2. Used screening by perfumer to decide the final 2
perfumes
- Used focus group consumer testing to finalise the
perfume
Decisions taken at critical stages of new product introduction
process: Market Testing

3.Full blown Test Marketing in 2 cities 3. Selection of 2 cities. While the segment is
Hyderabad & Indore growing at 15% annually, the data shows that
sales in these 2 cities have declined

4. Market tests usually last a few months to a

4. Length of test – 9 months year.

5. Information collected 5. All possible data has been collected

Purchase, stock and sales of Sehra as
well as competitors Bi monthly audit
of sample retail stores, sample
households
More Insights from the case

1. Jaimala has 10% share of high price segment which is itself only 10% of
total soap sales
2. Took 2 years to capture overall 3.5% share in soap category
3. Shera has been positioned as premium but has gained from low price
segment
4. Shera is targeting more than 10% in high price segment while priced
1.5 INR higher than the closest competitor Jaimala
5. Did Shera cannibalise on its own sister brands?
Recommendation

360
332.5 328
320
315
280
266
240 238
224 224 217
210
208 204

135 142.5
120 114
96 102 93
90 82 90
80
70
60 56 52 51

OCT '08 NOV '08 DEC '08 JAN '09 FEB '09 MAR '09 APR '09 MAY '09
Repeat in Hyderabad Trial In Hyderabad Repeat in Indore Trial in Indore

The test markets show declining trial rate but stable repeat purchase rate. The company should
develop more effective marketing communication to get more trials. Overall High price soap has been
declining in Hyderabad & Indore. Company should choose 2 more test cities and conduct full blown
market test with better advertisements.
Additional Information
• 700 companies, $ 17 billion annual revenue, 90% penetration level

• Brand loyality in this segment Factors influencing purchase

Price 25%
Hard Core Brand 40%
loyals Quality 40%

Brand Loyals 30% Hygiene 20%

Color / Fragrance 10%
Switchers 30%
Durability 5%

Brand Loyality Factors considered for

purchase

Hard Core Brand loyals

Brand Loyals
Switchers Price Quality Hygiene Color / Fragrance

Source: International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online), Vol. 2, Issue 1, pp: (211-217), Month: April 2014 -
September 2014