Soap Industry Analysis (Dove)

2646 Words Sep 10th, 2012 11 Pages
SOAP INDUSTRY:
DOVE
(ANALYSIS)

SOAP INDUSTRY ANALYSIS

ABSTRACT

The origins of personal cleanliness date back to prehistoric times. Since water is essential for life, the earliest people lived near water and knew something about its cleansing properties - at least that it rinsed mud off their hands. A soap-like material found in clay cylinders during the excavation of ancient Babylon is evidence that soap making was known as early as 2800 B.C. Inscriptions on the cylinders say that fats were boiled with ashes, which is a method of making soap, but do not refer to the purpose of the "soap." Such materials were later used as hair styling aids.

Soap got its name, according to an ancient Roman legend, from Mount Sapo,
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India is a country with a population of 1,030 million people ,with 98% of household penetration of soaps .
People belonging to different income levels use different brands, which fall under different segments, but all income levels use soaps, making it the second largest category in India. Rural consumers in India constitute 70% of the population. Rural demand is growing, with more and more soap brands being launched in the discount segment targeting the lower socio-economic strata of consumers.
Soap manufacturers originally targeted their products to the lowest income strata in urban as well as rural areas, positioning their brands as a way to remove dirt and clean the body. For some brands, that positioning persists even today with a focus on removal of body odour and keeping the user healthy. Medicated positioning like germ killing and anti-bacterial are marketed to families. However, soap positioning are moving towards skin care as a value-added benefit.
The market is growing at 7% a year. This means that the incremental demand generation is 5% over and above the population growth. With increasing awareness of hygienic standards, the market for the Soaps could grow at a rate higher than 8% annually. Interestingly, 60% of the market is now sourced from the rural sector. This means that the variance between the two segments is not very large. Since upper-end market focus is the urban areas, margins come from the urban sector.

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