Household Products (india) Limited

HOUSEHOLD PRODUCTS (INDIA) LIMITED

1. Soap being an FMCG it needs higher repeated purchase percentages. Here the surveys revealed that

People are happy with the product and perfume is perceived to be mild and people couldn’t relate to the purity aspect of it. In pilot test majority of users were low price segment. This means

• Point of parity is not as good as the competitors
• Perceived point of difference (vegetable oils) is either not valued by the customers or is not communicated well enough.
• As the majority of the sales in the pilot tests were from low price segment hence HPL failed in reaching to targeted customers.
• There seems to be a seasonal pattern in the kind of soaps brought.
• The product successfully passed the first four stages in consumer adoption process i.e., awareness, interest, evaluation and trial, but it failed in the adoption stage and this indicates that the soap is not delivering desired customer value in practice.
• The high wear rate might be one of the causes for low repeat purchase rates.

1. The low price soap market segment is highly competitive,  offering lower margins and it is expected to grow at 4% per annum where as the high price premium segment is expected grow at 15% per annum and is offering relatively higher margins. Thus the premium segment offers a higher space for growth. HPL decided to enter the premium segment and ended up choosing perfume soap segment.

Company decided to launch soap with jasmine fragrance and thought making soap with only vegetable oils will be the differentiating factor. HPL conducted feasibility study and came up with a price of Rs 7.5 per soap. R&D came up with two jasmine fragrances which are subjected to blind tests. These tests indicated that one of the soaps is better than the competitor’s soap (though the preference was not significant) but the soap wear was significant.HPL devised advertising campaign highlighting the jasmine fragrance and the use of vegetable oils only.

The market tests conducted in Hyderabad and Indore didn’t reach the pre test target of 10% market share and conducted market survey to ascertain the acceptance of brand.

• The effectiveness of the usage of vegetable oils in the soaps was not ascertained before it was put it in the product.
• HPL might have conducted a conjoint analysis so as to ascertain the utility of their offering which might have helped them to come up with a soap which delivers highest utility.
• Even during the initial tests only fragrance was tested. The test differences were insignificant statistically to conclude the preference of one over the other. (Here the sample selected becomes crucial).HPL should have come up with other test with better sample so that they could have concluded confidently.
• The product offering is not consistent because the perception of fragrance and vegetable oils do not go hand in hand. This may affect the believability of the offering. Alternatively they could have combined the vegetable oil with medicinal or beauty soaps which complement each other.

Action Plan:

• Conduct a survey to get the customer preference to the vegetable oil soaps and the readiness of the consumers to trade this benefit with higher wear rate.
• Re engineer the product to offer better or equal jasmine fragrance and to reduce the wear rate. The company might do away with vegetable oil and can add other benefits based on the survey results.
• Positioning of the product needs to be checked as the product couldn’t reach the targeted segment.
• HPL can also look at the option of combining two or more segments in premium market with offerings like beauty soap with greater fragrance.