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.

Sum of all respondents

400

350

300

250

200

150

100 Sum of all respondents

50

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:

Head &
Attribute Evaluation Vivel Chik Satin Pantene Shoulders
7ml shampoo
sachet for less
than Rs.2 69.17
17.78 21.98 13.85 15.55
Hair Cleansing
121.97 27.73 25.18 34.03 35.02
Anti-Dandruff
96.50 20.75 18.00 25.25 32.50
Hair Conditioning
104.77 26.97 21.50 29.43 26.87
Non-Chemical
Content
72.07 19.13 18.62 17.68 16.63
Attractive
Packaging
74.13 18.00 13.78 21.43 20.92
Hairfall
Protection
102.32 25.18 19.88 29.98 27.27
Celebrity
Endorsement
59.48 14.55 10.75 17.10 17.08
Different
Varieties for
Different Hair
Types
88.08 21.73 17.20 25.85 23.30
Good Brand
Name
98.82 22.78 16.53 29.27 30.23
 Good Fragrance
106.67 26.32 24.02 28.90 27.43
Total 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

Vivel
Chik
Pantene
H&S

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

Hair Ceansing

Vivel
Chik
Pantene
H&S

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

Vivel
Chik
Pantene
H&S

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

Hair Conditioning

Vivel
Chik
Pantene
H&S

Pantene is suited best for hair cleansing according to the consumers

 Non-Chemical Content

Vivel
Chik
Pantene
H&S

Vivel is considered having non-chemical contents

Attractive Packaging

Vivel
Chik
Pantene
H&S

Consumers find Pantene most attractive with respect to Packaging

 Hairfall Protection

Vivel
Chik
Pantene
H&S

Consumers trust Pantene the most when it comes to Hairfall Protection

Celebrity Endorsement

Vivel
Chik
Pantene
H&S

Celebrity endorses Head & Shoulders the most according to the consumers
 Different Varieties for Different Hair Types

Vivel
Chik
Pantene
H&S

Pantene provides with the maximum varieties as per consumers

Good Brand Name

Vivel
Chik
Pantene
H&S

Head & Shoulders scores highest in Brand Name

 Good Fragrance

Vivel
Chik
Pantene
H&S

Pantene provides the best fragrance according to the consumers

Ranking of the four brands based on all the factors together

Ranking
16368 14456

Vivel
Chik
Pantene
H&S

12447
16367

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:

Male Respondents
200
180
160
140
120
100
185 175 181
172
80 155
142 149
60 124 127
114
40 88

20
0
.2 ng t e
Rs
g ff nt g on en pe
s
nc
e
n n sin dru o ni n te agin e cti m ty nam
r a
ha a an iti o k t se d g
s t cle -d nd alc pac p ro dor hair r an fra
es ir ti co ic
ve all en t b od
rl ha an ir em cti ir f ty re
n
od go
tf
o ha ch r a h a r i ff e go
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po r ieti
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The ranking given to different attributes by female consumers could be seen in the following
graph:

Female Respondents
180 170
154 158 154
160 150
140 145 142
140
120 109
100 90 89
80
60
40
20
0

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.

Gender
Male Female

50% 50%

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.
 Monthly Family Income

7% 20%
<=15000
47% 15001-30000
30001-45000
>=45001
27%

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

Occupation
13%
Student
Public
Sector/Private
Sector/Self
Employed

87%

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.
 Education
3% 2%
XII
28% Graduation
Post Graduation
Professional
67% Certification

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
e
c
n
g
a
r
F
 Chic Shampoo
1600
1400
1200
1000
800
600
Score
400
200
0
t g e y l ce g
en gin m iet ru
ff ica on ng ve sin
m a Na ar d m e cti oni ecti r an n
e k n e t g a
rs Pa
c
an
d tV Da Ch o iti Eff Fr
a Cl
e
do e r d uc ti n l Pr ond ost ir
n B n o l
E tiv Pr
o A N fa C C Ha
r ity r ac air H air
H
leb Att
Ce

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