Table of contents

1. Executive Summary ............................................................................................................... 3

2. Introduction ............................................................................................................................ 4
3. Perceptual map ....................................................................................................................... 5
4. SWOT Analysis for Baby Cheramy ...................................................................................... 6
5. Porters five forces model ...................................................................................................... 7
6. GAP Analysis......................................................................................................................... 8
7. Repositioning ....................................................................................................................... 11
8. Reasons for repositioning the brand Baby Cheramy ........................................................... 11
9. Repositioning the Baby Cheramy brand .............................................................................. 12
10. Promotional platforms ....................................................................................................... 20
11. Promotional material .......................................................................................................... 22
12. Communication plan .......................................................................................................... 23
13. Conclusion ......................................................................................................................... 24
14. Appendix ............................................................................................................................ 25
14.1 Introduction .................................................................................................................. 25
14.2 Perceptual Map ............................................................................................................ 26
14.3 SWOT Analysis ........................................................................................................... 27
14.4 Porters five force model ............................................................................................. 30
14.5 GAP Analysis............................................................................................................... 33
14.5.1Strategies of filling a gap ....................................................................................... 33
14.5.2Limitations with Gap Analysis .............................................................................. 34
14.6 Brand repositioning ...................................................................................................... 35
14.7 Product repositioning ................................................................................................... 36
14.8 Reasons for repositioning ............................................................................................ 37
14.9 Baby Cheramy cloth diapers ........................................................................................ 38
14.10 Baby Cheramy hands free feeding bottles ................................................................. 39
14.11 The budget proposal for new attributes ..................................................................... 40
14.12 The budget proposal for new range ........................................................................... 40
14.13 The budget proposal for promotional budget............................................................. 41
14.14 Improving the quality of the product ......................................................................... 41

Page 2

14.15 Survey Analysis ......................................................................................................... 42
14.16 Summary of the survey done for customers .............................................................. 46
14.17 Summary of the survey done for retail outlets ........................................................... 49
15. Reference list ..................................................................................................................... 51
15.1 Books ........................................................................................................................... 51
15.2 Websites ....................................................................................................................... 51
16. Work load matrix ............................................................... Error! Bookmark not defined.

List of figures
Figure 1: Baby Cheramy product portfolio ............................................................................... 4
Figure 2: Perceptual Map ......................................................................................................... 5
Figure 3: Proposed Baby Cheramy cloth diapers and hands free feeding bottles .................. 14
Figure 4 : New theme of Baby Cheramy which emphasizes the bond between mother, father
and baby ................................................................................................................................... 16
Figure 5: Proposed Baby Cheramy logo ................................................................................. 17
Figure 7 : Proposed Baby Cheramy Cream under butterfly range ......................................... 18
Figure 6: Percentage of income received poorest to richest households by sector -2009 ...... 17
Figure 8 : Proposed Baby Cheramy Soap under butterfly range ............................................ 18
Figure 9 : Proposed Baby Cheramy cologne under Butterfly range ....................................... 19
Figure 10 : Proposed Baby Cheramy shampoo under butterfly range ................................... 19
Figure 11: Proposed Baby Cheramy oil under butterfly range ............................................... 19
Figure 12 : Proposed Baby Cheramy talc under butterfly range ............................................ 20
Figure 13: Promotional material for proposed Baby Cheramy products ............................... 22
Figure 14: Current Baby Cheramy ranges .............................................................................. 25
Figure 15: Baby Cheramy deluxe all in one cloth diaper ....................................................... 38
Figure 16: Baby Cheramy organic one size all in one cloth diaper ........................................ 38
Figure 17: Proposed Baby Cheramy hands free feeding bottles ............................................. 39
Figure 19: Basic factors considered when purchasing Baby care products ........................... 47
Figure 20: Most preferred brand ............................................................................................. 48
Figure 21: Most preffered product feature .............................................................................. 48


Page 3

1. Executive Summary

This report addresses the major concerns of Hemas Marketing when repositioning their one
of the brands Baby Cheramy under the category of personal care.
This report not only provides the repositioning strategies but also provides SWOT analysis
and Porters five force analysis for Baby Cheramy and perceptual map for baby care
products.
Moreover, it indicates the true facts regarding the perceptions and desires of the customers on
baby care products through a survey done by the authors taking 35 people as samples.
Through the survey the authors were able to find out the existing position of the marketing
mix of Baby Cheramy and their expected position and going further a GAP analysis was
made based on that information.
After presenting the repositioning strategies that can be used by Hemas marketing to
maximize the customer value, the possible promotional platforms and a communication plan
to reposition the products, are identified.


Page 4

2. Introduction
Baby Cheramy was established in 1962 by Mohsinally Esufally in cooperation with a French
multinational company. At that time there was no other baby care toiletry item in the market.
Then later Husein Esufally who is the current CEO of Hemas marketing joined the business
and he saw the potential of the product and the brand. Soon they attained the brand from the
parent company and started marketing effort for Baby Cheramy. During its life time of over
45 years Baby Cheramy has introduced wide range of toiletries and accessories for babies.
The product portfolio of Baby Cheramy is shown in the following diagram. (Super brands,
2011)







Figure 1: Baby Cheramy product portfolio
Source: Hemas Holdings PLC (2011)
Refer appendix 14.1
Baby Cheramy
Peach range Aloe vera range
Flowers range
Accessories
Soap
Cream
Cologne
Talc
Baby oil
Shampoo
Cream
Soap Soap
Talc
Cologne
Glass feeding
bottles
Silicone Teats
Cotton buds
Nappy wash
powder
Diapers

Page 5

3. Perceptual map
This map shows the current position of the Baby Cheramy when compared to its competitors.
The following perpetual map is based on the survey done by the authors.
Brand Rank
Quality (Y) Price (X)
Farlin 1 4
Johnson and Johnson 4 3
Baby Cheramy 3 2
Pears baby 1 -1
Kohomba baby -1 -1
Table 1: Perceptual map coordinates
Source: Authors work


Figure 2: Perceptual Map
Source: Authors work
Refer appendix 14.2


-2
-1
0
1
2
3
4
5
-2 -1 0 1 2 3 4 5
Q
u
a
l
i
t
y

Price
Farlin
Johnson and Johnson
Baby cheremy
Pears baby
Kohomba baby

Page 6

4. SWOT Analysis for Baby Cheramy
Strength


Vast range of products
Recognition as a super brand
Internationally recognized brand
ISO 9001 certification
Customer loyalty

Weaknesses


Value-based rather than competency-
based expansion at times.
Reduction in the investment rate of
the company
Lack of local and international
certification in regarding standards
Decrease of market share
Use of the same theme as the
competitors


Opportunities

Increased population of working
women
Emerging international markets
Quality conscious customers

Threats

Increasing inflation rate
Declining birth rate of Sri Lanka

Table 2: SWOT Matrix
Source: Authors work
Refer Appendix 14.3

Page 7

5. Porters five forces model

New Entrants
Threat of new entrants is moderate to low in
the industry because the market is already
captured by five companies. Potential
entrants reduce industry profitability through
impact of actual entry, or by forcing firms to
follow pre emptive strategies to deter entry
Competitors
Johnsons baby Pears baby Farlin


Kohomba baby Siddalepa Kekulu Doctor
Baby
Baby Cheramy
Customers
First time mothers
and young adults in
lower to upper
middle income
groups. Bargaining
power of customers
is relatively low due
to the high level of
differentiation, high
importance of
product to the
customers.

Competition among rivalries is high because
limited differentiation, lower market growth and
standardize generic products. Hemas marketing
PLC can manage the high competition by
conducting customer retention and loyalty
programs and buying out the competitors
Substitutes
Substitutes for baby care products that are available are as follows,
Plastic diapers: cloth diapers
Plastic bottles: glass bottles
Baby wipes: homemade wipes
Moisturizing cream: organic olive oil
Baby oil: Vegetable oil
High level of branding and differentiation of the product will help to
manage the threat of substitutes.
Suppliers
Baby Cheramy has
few suppliers supplier
power is high, Hemas
Marketing PLC can
manage this by
partnerships with
suppliers, supply chain
integration, Long term
contracts with suppliers
and etc.

Table 3: Porters five force model
Source: Authors work
Refer appendix 14.4

Page 8

6. GAP Analysis
Gap Analysis is a strategic planning tool which helps you to understand companys actual
position, their expected position and how the gap is going to be filled.
Criteria Current position Expected position Action/Strategy
Product Gap
Product
features




Currently the company is
focusing on moisture,
cleanliness and the
fragrance of the product.
According to the
survey, most
preferred features
are moisture and
cleanse of the
product.

Creating a new
formula that will
meet the customer
expectations.
Packaging Currently all products are
marketed in either glass or
plastic bottles, except the
soap which is available in
tablet form in a paper base
package.
Customers mostly
expect the
packaging with
attractive colors
and safe lids.
Design the
packaging while
focusing on the
quality and
durability.
Features Currently under Baby
Cheramy brand there are
plastic diapers and glass
feeding bottles.
According to the
survey, customers
prefer cloth diapers
and hands free
feeding bottles as
new product
varieties.
Company can
introduce cloth
diapers and hands
free feeding bottles
to the existing and
new markets.
Product
ranges

Under Baby Cheramy,
there are three ranges
which are known as
Aloe vera, flower and
peach range which include
baby cologne, baby cream,
baby soap, baby shampoo
and etc.
Customers expect
new product ranges
from Baby
Chearmy as most
of the competitors
have introduced
various ranges of
baby care products.
Introducing a new
range called
Butterfly range
with baby rose
fragrance.

Page 9

Criteria Current position Expected position Action/Strategy
Quality Currently the company has
obtained
ISO 9001 as a quality
standard.
According to the
survey, most of the
customers prefer
the quality aspect
when purchasing
baby care products.


Company can
improve the quality
of the products by
adding skin
nourishing
ingredients.
Price Gap Current prices of the Baby
Cheramy products:
Cologne(100 ml)- Rs. 180
Cream(100 ml)-Rs.105
Soap (75g)- Rs. 33
Oil(125ml)- Rs.90
Talc (100g)- Rs.70
Diapers(4 pack)-Rs.135
Silicon teats (large)-Rs. 47
Baby feeding bottles-
Rs.110
Shampoo (125ml)- Rs.90



According to the
survey, most of the
customers are
satisfied with the
current price range.
Company can offer
the products with
different prices to
different market
segments.
Place Gap
Distributio
n





Currently Baby Cheramy
products are offered in
many geographical areas
locally and internationally.

Company will
expect to expand
the distribution
channels to the
northern and east
provinces.



Make the products
available in retail
outlets in northern
and east provinces.


Page 10

Criteria Current position Expected position Action/Strategy


Promotion Gap


Currently the companys
theme is created
emphasizing the bond
between the mother and
the baby.

According to the
SWOT analysis, it
is a weakness of
the company that
they use the same
theme. Because
they expect to
come up with a
new theme.

Come up with a new
theme which
emphasizes the bond
between the family
including mother
father and the baby.
Table 4: GAP analysis
Source: Authors work
Refer Appendix 14.5












Page 11






7. Repositioning
Repositioning refers to changing a brands status in comparison to that of the competing
brands. How new and current items in the product mix are perceived in the minds of the
consumer. (Schiffman & Kanuk, 2007)
Therefore Hemas Marketing PLC has to reemphasize the importance of the perception of the
consumers on the Baby Cheramy.
New attributes: need to communicate the benefits
Exiting attributes: need to reinforce benefits
For Baby cheramy repositioning can be done in two ways,
Brand repositioning Refer Appendix 14.6
Product repositioning Refer Appendix 14.7

8. Reasons for repositioning the brand Baby Cheramy
According to the market survey, Baby Cheramy market share seems to be declining
and this has led the company to loose their position as the market leader.
Baby Cheramy operates in an oligopoly market, where all the baby care brands have
similar positioning platform (Mother and baby emotional connection). It is difficult
to differentiate brands using this platform. Therefore Baby Cheramy can reposition its
brand under a new platform.
And according to the survey, customers expect more innovative products such as
hands free feeding bottles and cloth diapers. Launch of these innovative products will
help Baby Cheramy to reposition their products in a unique way.

Page 12

Certain quality aspects also need to be improved as 17% of the people are not
satisfied with the quality of the existing products, according to the survey.

The existing products under Baby Cheramy brand lack the attractiveness and the
uniqueness when compared to its competitors. Therefore it needs to be improved by
introducing attractive packaging, logo, slogan and etc.
Refer appendix 14.8
9. Repositioning the Baby Cheramy brand
Baby Cheramy operates in the baby products market in Sri Lanka. It has an oligopoly market
where there are close substitutes available and there is no much differentiation among the
products. Therefore to regain the market position as the market leader and to capture more
market share company needs to apply brand repositioning strategy to retain existing
customers as well to attract new target customers.
Following table indicates sub brand repositioning strategies that Baby Cheramy could follow
to reestablish its brand and to increase the customer value
1
and the reasons for choosing those
strategies;
Strategy Reasons Effectiveness of the strategy
Introducing new
attributes (Modifying
diapers and feeding
bottles)
According to the gap
analysis customers prefer
cloth diapers and hands free
feeding bottles as new
product features for plastic
diapers and glass feeding
bottles.
Since the Coca-Cola
company has succeeded in
introducing a new product
feature Coca-Cola Zero
which has no calories,
Hemas marketing PLC can
use the same strategy to
reposition baby cheramy.
(The Coca-Cola company,

1
Customer value is defined as the ratio between the customers perceived benefits and the resources used to
obtain those benefits. (Schiffman & Kanuk, 2007)

Page 13

Strategy Reasons Effectiveness of the strategy
2011)
Changing the theme
(which emphasizes
the bond between
mother, father and
the baby)
As stated in the gap analysis,
the company needs to come
up with a new theme in
order to differentiate their
brand among competitors.
Dettol has succeeded in re-
introducing its soap as a
germ killer which was
previously introduced as a
beauty soap. Baby Cheramy
also can use the same
strategy as it has a potential
of succeeding.
(Drypen, 2011)
Redesign the logo
and the slogan
As stated above, the
company is expecting to
change the existing theme.
In accordance with that the
company needs to redesign a
new logo and a slogan.
Airtel has succeeded in
redesigning its logo. Baby
Cheramy also can use this
strategy by considering this
fact. (One India,2011)
Catering to new
segments
According to Super brands
(2011), Baby Cheramy
currently caters to lower to
upper middle class. In order
to increase the market share
the company needs to cater
to new segments.
Active attire company has
succeeded in offering swim
wear for Muslims. Therefore
Baby Cheramy has potential
of succeeding in introducing
a new segment.
(Modest Swim apparel,
2011)
Improving the
quality of the product
According to the gap
analysis, customers prefer
quality aspects when buying
the product.
Revlon has succeeded in
introducing ammonia free
hair dye which improves the
quality aspect of the brand.
Baby Cheramy can also use
this strategy to reposition its

Page 14

Strategy Reasons Effectiveness of the strategy
products.
(Buzzle, 2011)
Improving existing
product ranges
According to the gap
analysis customers expect
more product ranges from
Baby Cheramy.
Johnsons and Johnsons has
succeeded in introducing a
new product line called
Johnsons natural. Because
of this Baby Cheramy can
also use this strategy.
(Johnsons and
Johnsons,2011)
Table 5: Justification of selected repositioning strategy
Source: Authors work

1. Introducing new attributes
All the baby products in Sri Lanka basically have similar ranges of products with similar
attributes. Therefore Baby Cheramy could differentiate its existing products by adding new
attributes by introducing Baby Cheramy cloth diapers and baby Cheramy hands free feeding
bottles.

Figure 3: Proposed Baby Cheramy cloth diapers and hands free feeding bottles
Source: Authors work

Page 15

Refer appendix 14.9 and 14.10
Refer Appendix 14.11 for the budget proposal











2. Changing the theme
Generally most of the baby care products are positioned on the customers mind using the
relationship between mother and baby. Baby Cheramy can reposition its brand under a new
theme which emphasizes the bond between mother, father and baby. This will be a new
positioning platform for Baby Cheramy to differentiate its products from its competitors. Its
not just only mother, butalso father plays a vital role in taking care of a new born baby. So
the company can concentrate more on this theme when advertising its products.

Page 16














Figure 4 : New theme of Baby Cheramy which emphasizes the bond between mother, father
and baby
Source: Authors work


3. Redesign the product logo and slogan
To increase the brand awareness among existing as well as new customers, Baby Cheramy
can re design its logo as well as the slogan. The slogan should be easy for the customers to
pronounce and to retain in the mind. Hemas can concentrate more on its theme when
designing its logo and slogan. The logo should be designed with eye catching colors and fonts
to differentiate the brand among their competitors.

Page 17

Tagline- For those special everyday moments








Figure 5: Proposed Baby Cheramy logo
Source: Authors work
4. Catering to new segments
Their current target audience is first time mothers in upper middle to lower income groups.
(Super brands, 2011) This can be changed by repositioning its products to new segments in
the upper middle to higher income groups as the richest carries the largest share of the
income, according to the following diagram. So Baby Cheramy can use different target
marketing strategies and differentiation strategies to position the brand among the new target
audience.





Figure 6: Percentage of income received poorest to richest households by sector -
2009

Page 18

Source: Departments of census and statistics (2011)

5. Improving the quality of the product
All the products of Baby Cheramy can be improved by adding vitamin E which makes the
skin healthy. This ingredient can be added for all the products as it improves the product
image regarding the quality of the product.
Refer appendix 14.14
6. Improving existing product ranges
Currently Baby Cheramy product portfolio consists of Peach, Aloe Vera and Flower ranges.
(Hemas Holdings PLC (2011)
This product portfolio can be further improved by adding a new range called butterfly range
which includes the fragrance of baby rose.


Figure 7 : Proposed Baby Cheramy Cream under
butterfly range
Source: Authors work



Figure 8 : Proposed Baby Cheramy Soap under
butterfly range
Source: Authors work


Page 19




Figure 9 : Proposed Baby Cheramy cologne under Butterfly
range
Source: Authors work






Figure 10 : Proposed Baby Cheramy shampoo under
butterfly range
Source: Authors work









Figure 11: Proposed Baby Cheramy oil under butterfly
range
Source: Authors work

Page 20







Figure 12 : Proposed Baby Cheramy talc under
butterfly range
Source: Authors work




Refer Appendix 14.12 for the budget proposal






10. Promotional platforms
The following promotional platforms can be used to reposition the Baby Cheramy brand.

Sales Promotion

Buy one get one free offers (For
Colognes)
Price-pack deal (Offers 25 ml extra

Page 21

for the same price for cream and talc)
Gift packs (A pack which contains all
the products under the same brand
that can be given as a gift)
Advertising Print media
Broadcast media
Electronic media
Display media
Direct marketing E-mail campaigns
Through web page

Table 6: Promotional platforms
Source: Authors work
Refer Appendix 14.13 for budget proposal

Page 22

11. Promotional material

Source: Authors work


Figure 13: Promotional material for proposed Baby Cheramy products

Page 23

12. Communication plan
The advertising campaign of Baby Cheramy can be carried out through following media
types.
Media type Description
Medium Middle class High class
Print media News papers English Daily news, Sunday
observer
Daily news, Sunday
observer
Sinhala Lankadeepa,
Lakbima, Divaina
and Silumina
Lankadeepa, Lakbima,
Divaina and Silumina
Tamil Thinakaran,
Virakesari and Sudar
Oli
Thinakaran, Virakesari
and Sudar Oli
Magazines English Go and Hi magazines Business today,
Chocolate and Vogue
magazines
Broadcast
media
Radio English Gold fm and Sun Fm Sun fm and Gold Fm.
Sinhala Sirasa Fm, and Neth
fm
Y Fm and Neth Fm
Tamil Shakthi Fm Shakthi Fm
Television English MTV and ETV MTV and ETV
Sinhala Swarnavahini, Sirasa,
Rupavahini and
Derana
Swarnavahini, Sirasa,
Rupavahini and Derana
Tamil Channel eye and
Shakthi TV
Channel eye and
Shakthi TV
Electronic
media
Web page Modify the Baby Cheramy website

Page 24

Display media Billboards Targeting both of the classes
Table 7: Communication plan
Source: Authors work

13. Conclusion
This report is prepared to analyze the major concerns for Hemas Marketing PLC in
repositioning one of its personal care brands Baby Cheramy through maximization of
customer value. This report has also identified the requirement of repositioning the brand
Baby Cheramy and the possible repositioning strategies that can be followed by the Hemas
Marketing PLC.
This report has also outlined various areas in which Baby Cheramy needs to improve and
different steps that can be taken to maximize the customer value regarding Baby Cheramy.
In conclusion it can be suggested that, to be the market leader in baby toiletries and
accessories industry of Sri Lanka, to retain the existing customers, to attract new customers
and finally to outperform its competitors, Hemas Marketing PLC needs to adopt effective
repositioning strategies to upgrade the customer value.


Page 25

14. Appendix
14.1 Introduction

Baby Cheramy currently has the following product ranges.

Peach range Aloe Vera range









Flowers range Accessories







Figure 14: Current Baby Cheramy ranges
Source: Hemas Holdings PLC (2011)


Page 26

14.2 Perceptual Map

Table 8 : Perceptual map
Source: Authors work
Assumptions:
Accordingly the ranks were given as follows,
Quality and prices from 3 4 is considered as High
Quality and prices from 1-2 is considered as medium.
Quality and prices from 0 (-1) is considered as low.










Brand Quality Rank (Y) Price Rank (X1)
Farlin Medium 1 High 4
Johnson and
Johnson
High 4 High 3
Baby cheremy High 3 Medium 2
Pears baby Low 1 Low -1
Kohomba baby Low -1 Low -1

Page 27

14.3 SWOT Analysis

Strengths
Vast range of products
Baby Cheramy offers a wider range of products including colognes, baby soap, Talc and
other accessories such as glass feeding bottles, silicone teats, cotton buds, diapers and etc.
(Hemas holdings PLC, 2011)
Recognition as a super brand
According to Super brands (2011), the Baby Cheramy is considered as one of the super
brands in Sri Lanka and it is the only baby care product which is rated under this super
brand category when compared to its competitors.
Internationally recognized brand
Baby Cheramy is not only a recognized brand in Sri Lanka but also a prominent brand in
other countries such as Maldives, Australia, New Zealand, India and etc.
(Super brands, 2011)
ISO 9001 certification
The manufacturing company of Baby Cheramy which is known as Hemas holdings has
gained the ISO 9001 certification for its manufacturing process and it has provided
incredible stature to its baby care products and other products.
(Sunday Times, 1998)
Customer loyalty
Baby Cheramy products have managed to gain customer loyalty in the local market since
they have been operating in the market for more than 40 years while offering quality and
differentiated products to its customers.
(Hemas holdings PLC, 2011)





Page 28

Weaknesses
Value-based rather than competency- based expansion at times
Baby Cheramy mostly consider value based expansion rather than going for competency-
based expansion. This can be identified as a weakness since the competitors can get the
opportunity to take over the market share by offering innovative products to the market.
(De Silva & Bandaranaike, 2005)
Reduction in the investment rate of the company
According to statistics of the Hemas Company, investment rate has been reducing over 5
years and investments on property plant equipment also have been reducing. As a result
of this fact there will be a shortage in using new technology in the manufacturing process.
(Hemas Holdings PLC annual report, 2010)
Lack of local and international certification in regarding standards
When compared to Pears baby products, Baby Cheramy doesnt have the international
certification which the Pears has obtained from royal institute of public health, UK. And
also they have not obtained one of the most important certifications, SLS, for Baby
Cheramy products. (Unilever, 2011)
Decrease of market share
According to statistics of LMRB in 2005, Baby Cheramy has gained 47% of a market
share against its competitors in the toiletries market for new born babies. (Super brands,
2011)
But according to the survey done by the authors in 2011, the current market share seems
to be declining as it has gained only small quantum of a preference among the existing
brands.
Use of the same theme as the competitors
Baby Cheramy also uses the same theme (Mother -baby theme) which is used by the
competitors. This is a weakness of the company as they follow a traditional theme as its
competitors.
(Super brands, 2011)





Page 29

Opportunities
Increased population of working women
Currently female labor force participation rate of Sri Lanka is 33.7%. Due to the increase
of this rate, buying power of an average family has been increased and as a result females
who have small children will spend more on baby care products.
(Department of census & Statistics, 2011)
Emerging international markets
Brazil, Hungary, Mexico, Poland, South Africa and Taiwan are considered as emerging
market countries for baby care products. This is an opportunity for Baby Cheramy
products to expand their market.
(PRlog, 2011)
Quality conscious customers
According to the survey done by the author, the majority of the customers most preferred
feature is the quality. This is an opportunity for Baby Cheramy products since their main
target is to offer quality products to the market.
(Super brands, 2011)
Threats
Declining birth rate of Sri Lanka
According to the statistics of Central Bank, the birth rate of Sri Lanka in 2010 has been
declined to 17.6 per 1000 when compared to the birth rate in 2009. This can be
considered as a threat for baby care market.
(CBSL, 2011)
Increasing inflation rate
Currently Sri Lanka faces 9.8% of an inflation rate according to the central bank statistics
for the month April, 2011. Due to the increase of the inflation rate, the cost of
manufacturing may increase.
(CBSL, 2011)




Page 30

14.4 Porters five force model

Porters five force model is a useful framework that Hemas Marketing Ltd could use to help
it asses the competitive forces at work in the baby toiletries and accessories industry in
SriLanka. (Purdue extension, 2011)
Porters model brings together the following five competitive forces:
Threat of new entrants/ barriers to entry
Bargaining power of suppliers
Bargaining power of buyers
Threat of substitute products/services
Competitive rivalry
It is the collective strengths of these forces that will determine the profit potential of the baby
toiletries and accessories industry in SriLanka. The information from the analysis would also
help in identifying the factors driving profitability and inform the competitive strategy
needed.
Taking each force in turn:

Threat of new entrants/barriers to entry
Hemas Marketing Ltd has been in the baby toiletries and accessories industry for more than
45years. They have already position their brand name in the baby toiletries and accessories
industry as well as in the minds of their targeted customers and also most importantly they
have already access to appropriate distribution channels. Basically in SriLanka Government
policies and other legal factors does not adversely affect the baby toiletries and accessories
industry. Baby toiletries and accessories market in SriLanka is already captured by five
companies (Unilevers, siddalepa, kohomba baby, Johnson and Johnson, Farlin),so if there are
firms with strong brand names with high market share in the baby toiletries and accessories
market it may be hard for a new entrant to rival these. To reduce the average cost per unit
Hemas Marketing PLC has to achieve economies of scale in long term. But however we
cannot predict that, in the future weather the new firms will enter in to the market or not .So
the threat of new entries is likely to me moderate to low.

Page 31

Bargaining power of suppliers
Bargaining power of suppliers is primarily related to the power of suppliers to raise their
prices to the industry .Power will increase where the supply is dominated by few firms, or
suppliers have propriety product differences. Since Baby Cheramy has few suppliers
supplier power is high, Hemas Marketing PLC can manage this by partnerships with
suppliers, supply chain integration, Long term contracts with suppliers and etc.
Bargaining power of customers/buyers
Bargaining power of buyers is gained through their ability to either gain products /services at
low prices or get improved product quality .It also depends on the size and number of buyers.
Power will be grater when buyer power is concentrated in a few hands and when products are
undifferentiated. Hemas Marketing Ltd needs to determine who its buyers are but assuming
these are the end consumers, as individual buyers they will have relatively little bargaining
power. Buyer power is increased when there are low switching cost, in other words where
moving to a different supplier involves little risk. This would be the case in terms of buying
baby toiletries and accessories, from the perspective of consumers, because they are relatively
low value purchases. The buyer could, however be, the distribution channel in which case
buyer power may be high if there is a concentration of these buyers.
Threat of substitutes
Pressure of substitutes is where there are other products that satisfy the same need. In the case
of baby toiletries and accessories related products, it is probable that there will be a low threat
of substitutes in the industry since there are limited numbers of alternatives available in the
market. Substitutes for baby care products that are available are as follows,
Plastic diapers: cloth diapers
Plastic bottles: glass bottles
Baby wipes: homemade wipes
Moisturizing cream: organic olive oil
Baby oil: Vegetable oil

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High level of branding and differentiation of the product will help to manage the threat of
substitutes.
Competitive rivalry
In the baby toiletries and accessories industry, the rivalry amongst existing competitors will
be influenced by the number of firms operating in the industry, and industry growth rates. If
there are numerous organizations, particularly with strong brand images already operating,
and there is low industry growth then this will not be an attractive market for Hemas
Marketing Ltd. If however, in contrast, the rivals are relatively small domestic producers with
a poor brand image, the market could prove to be attractive. Price wars and heavy
discounting, expensive advertising and promotional efforts of main competitive brands like
Pears baby, Kohomba baby, Johnsons baby, Farlin will create heavy competition for Baby
Cheramy. Hemas Marketing PLC can manage this situation by providing customer retention
and loyalty programs, buy out competitors, and etc.

















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14.5 GAP Analysis

14.5.1Strategies of filling a gap
Efficiency strategies
These strategies are designed to increase profits (or throughput) by making better use of
resources. (Botten, 2009)
Hemas Marketing PLC can use this strategy to fill the production gaps, sales gaps, quality
gaps, and distribution gaps in Baby cheramy by adopting modern management business
techniques such as business process reengineering, Total quality management (TQM), Just in
Time (JIT) value analysis, lifecycle costing and kaizen costing.

Intensive strategies
These exploit the firms exiting products and markets further. (Botten, 2009)
Hemas Marketing PLC can use this strategy to fill the gaps in Baby Cheramy by,
-penetrating the market to increase sales in the existing markets
-market development to find additional markets for the products
-product development to find additional products for the firms existing customer base

Diversification strategies
This aim is to reduce the risks of the business or increase its growth prospects by taking it
into new industries. (Botten, 2009)
Baby Cheramy can enter in to another industry while operating in the baby toiletries
and accessories industry to bridge the production gaps, sales gaps, quality gaps, and
distribution gaps.




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14.5.2Limitations with Gap Analysis
Objectives of Hemas Marketing PLC may conflict to some extent, and closing the gap for
one objective may widen it elsewhere.
Some objectives may not have been put in measurable terms, or at least are capable of
being measured in other ways.
It may be acceptable to achieve the objective in absolute terms if there are longer-term
benefits (such as accepting government work at low profit with the expectation of further
contracts).
It assumes that the expected performance can be accurately predicted, but in a uncertain
environment this will depend on external factors such as competitor, customers, and
government action.
It also assumes that any new initiatives taken on to close the gaps are predictable in terms
of costs and revenue.











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14.6 Brand repositioning

The product remains the same, but is now offered to a new market, there will be a new
competitors and a new marketing mix.
Brand repositioning Process can be explain as follows:
Step: 1
Determine the current status of the brand Baby Cheramy. This can be done through by
conducting a marketing research on the current baby care brands available in the market and
finally based on the results brands can be rated and the current status of the Baby Cheramy
can be understood.
Step: 2
Next step is to understand and determine what does the brand Baby Cheramy stand for
today. This is where the company wants its brand to be in the market (expected position in
the market).
Step: 3
Third step is to develop the brand positioning platforms to maximize the customer value.
Identifying and selecting various brand repositioning strategies to grow the rand tomorrow.
Step: 4
Refining the brand positioning and take necessary actions where needed by the management
of Hemas Marketing PLC to maximize the customer value.















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14.7 Product repositioning

The product is changing and is now offered to a new market. There will be new appearance,
new features and benefits, and new competitors.
Following is the product repositioning processes,
Step: 1
Re- evaluating competing products for Baby Cheramy in the market. This can be done
through conducting a marketing research on the baby toiletries and accessories industry in
SriLanka.
Step: 2
Identifying attributes, product space. Product space refers to the geometric representation of
customer/consumer beliefs about current brands and given product category baby toiletries
and accessories industry.
Step: 3
Next step is to collect information and relevant feedback from customers about the current
status of the product.
Step: 4
Determine the share of mind of the product.
Step: 5
Determine the current location of Baby Cheramy products in product space. (Product
space refer to the geometric representation of customer/consumer beliefs about current bands
and given product category)
Step: 6
Determine the target markets. Hemas Marketing PLC can conduct strategic marketing
(Segmenting, targeting, and positioning) process to identify its target markets. Baby
Cheramy is heavily targeted at first time mothers in upper middle to lower income groups.
Step: 7
Examine the position of the competing products, position of Baby Cheramy products and
the ideal vector.
Step: 8
Finally select the optimal position


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14.8 Reasons for repositioning
When a brand goes through all of these, or any of these, that may be the time where the brand
needs to be repositioned.
When the sales are declining.
Even though the offering of goods and services are at its best, but it still doesnt continue to
attract consumers, then it could be that the brand needs to be presented differently.
Selected target audience is not the best target.
The selected audience may not be gaining profits as expected. This may also be a reason for a
brand to reposition.
New competitors have a better value proposition.
If customers identify other brand offer better, they may tend to shift. Therefore the initial
position will be destabilized.
When the customers think your brand is not updated and established.
Even though the brand is in the market for a longer period it may not put the brand in higher
position. Thats because the customers may see the brand as outdated or irrelevant. This is
where the brand needs to be established. When the brand is established customers trust the
brand and buy again and again.
When the products and services have evolved drastically.
Over time, organizations change and expand their activities. This may be done through
adding new products, refining the old ones, by expanding the line. This helps the organization
to stay relevant. However, if the products or offerings are changed over a long period of time,
then theres a chance that the started branding strategy does not reflect the brand anymore.
(E- Releases, 2011)




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14.9 Baby Cheramy cloth diapers
In Sri Lanka there are no baby product brands that offer cloth diapers. Cloth diapers are made
from soft fabrics and are perfectly contoured to fit the shape of the body. And these diapers
can be used for babies above 5 months. Currently the plastic diapers which are available in
the market can cause skin diseases and rashes for babies. And also it is uncomfortable to wear
in countries like Sri Lanka because of the heat. Cloth diapers protect the baby against
bacterial and fungal agents and infections. And it also provides more comfort and grooves for
high absorbency.
The following are the varieties of cloth diapers;
Baby Cheramy deluxe all in one cloth diaper
This cloth diaper with the absorbent layer integrated into the water proof outer layer. It goes
on in one step. These are made with an outer fabric that is safe to Wash in hot water. The
inner cause is ultra absorbance. No diaper cover and folding means that this is the easiest to
use and quite possibly the most convenient diapering system that one can buy.

Figure 15: Baby Cheramy deluxe all in one cloth diaper
Source: Authors works

Baby Cheramy organic one size all in one cloth diaper
This organic size cloth diapers are stretchy and combined with brand new snap fasteners
which make cloth diapering easy. Two rows of snap ensure the trim that fits the baby every
time. And this diaper is made out of certified organic cotton inner.

Figure 16: Baby Cheramy organic one size all in one cloth
diaper
Source: Authors work

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14.10 Baby Cheramy hands free feeding bottles

Baby Cheramy hands free bottles allow you to hold your baby instead of the bottle. This is a
great solution for those mothers who are unable to breast feed or for dads who want bond
more with their babies while feeding them. With the Baby Cheramy hands free bottle mothers
can feed their babies hand free in an upright position while driving, walking, doing house
chores, shopping in the mall or grocery stores. This bottle can be filled with expressed breast
milk, juices, liquids and etc. The Baby Cheramy tubing draws the liquid from the bottom of
the bottles which limits the babys air intake. Less air helps to prevent colic, baby gas and
spit ups. Babies take in only the right amount of liquid and are able to drink at their own
pace.








Figure 17: Proposed Baby Cheramy hands free feeding bottles
Source: Authors work







Page 40

14.11 The budget proposal for new attributes

Product attributes Expected costs Expected
profit margin
Expected
selling price
Cloth diapers (for both of the
varieties)- 4 pack
Rs. 225 Rs. 25 Rs. 250
Hands free feeding bottles

Rs.150 Rs. 50 Rs.200
Table 9: proposed budget for new attributes
Source: Authors work
Target profit margin for cloth diapers is 10% and target profit margin for hands free feeding
bottles is 25%.
14.12 The budget proposal for new range

Products under the new
range
Expected costs Expected
profit margin
Expected
selling price
Talc Rs. 72 Rs.8 Rs. 80
Cream Rs.103.5 Rs.11.5 Rs. 115
Cologne Rs.180 Rs. 20 Rs. 200
Soap Rs. 31.5 Rs.3.5 Rs. 35
Shampoo Rs.90 Rs.10 Rs. 100
Oil Rs. 85.5 Rs.9.5 Rs. 95
Table 10: Proposed budget for the new range
Source: Authors work
Target profit margin of the new range is 10% of the selling price.







Page 41

14.13 The budget proposal for promotional budget

This table contains total promotional cost of repositioning Baby Cheramy.
Type of Cost Expected cost
Print media Rs. 1,014,000
Broadcast media Rs.1,389, 600
Electronic media Rs. 120,000
Display media Rs. 393,000
Total Rs.2,916,600
Table 11: Proposed promotional budget
Source: Authors work

14.14 Improving the quality of the product
Vitamin E is an essential ingredient in many beauty and skincare products as it has powerful
skin healing benefits. It can be effective in accelerating the healing of damaged skin. And it
also can be used in treatments for stretch marks, scars and burns. (Green planet, 2011)
The benefits of adding vitamin E to Baby Cheramy products is concerned about the health of
both mothers and their babies.
Baby Cheramy Vitamin E products moisture the skin and it hydrated in order to maintain a
healthy skin care. The vitamin E soap is mild and gentle and it cleanses even the most
delicate skin. Baby Cheramy Vitamin E cream gives deeper moisture and protects the skin
against dryness, chapping and chaffing leaving the skin feeling smooth, soft and healthy. And
the talc, oil, shampoo and the cologne ensures overall protection of baby's skin.







Page 42

14.15 Survey Analysis

Questionnaire for the retail outlets
1. What is the most selling baby care brand in the market?
i. Farlin
ii. Baby charamy
iii. Johnson & Johnson
iv. Pears
v. Kohomba baby
vi. None of the above

2. What is the most selling baby care product category in the market?
i. Baby food
ii. Personal care (shampoo, Lotion etc.)
iii. Baby toys
iv. Baby clothes & diapers
v. Accessories (glass feeding bottles, cotton buds etc.)

3. Total monthly revenue earned by selling baby care products?
i. Below 50,000
ii. 50,000-200,000
iii. 200,000- 500,000
iv. Above 500,000

4. What is the total percentage for the baby care products out of all the products in the
supermarket?
i. Below 5%
ii. 5%- 10%
iii. 10%-20%
iv. 20% above


Page 43

5. Which product line do you see as offering a stronger competitive position to dealers/
distributors?
i. Farlin
ii. Baby charamy
iii. Johnson & Johnson
iv. Pears
v. Kohomba baby

6. How would you rate following brands based on their prices and customer demand?
(highest lowest)
Farlin
Baby charamy
Johnson & Johnson
Pears
Kohomba baby

7. What is the brand you recommend for the customers?
i. Farlin
ii. Baby charamy
iii. Johnson & Johnson
iv. Pears
v. Kohomba baby

8. How many inquiries and complaints do you get annually regarding baby care products?
i. Below 10
ii. 10- 30
iii. Above 30



Page 44

Questionnaire for the customers

1. Gender
Male Female
2. What is your residential area?
City area Country side
3. What is the occupation?
Government sector Private sector

Family business House wife
4. How often do you use baby care products?
Rarely Frequently
5. Who mostly uses baby care products in the family?
Children Young adults (13-21)

Adults
6. Monthly income of the family
Below 15,000 15,000- 25,000

25,000- 50,000 Above 50,000
7. How much are you willing to pay for the baby care products monthly
Below 1,000 1,000-2,000

2,000-5,000 Above 5,000
8. What are the basic factors considered when purchasing a baby care product?
Price Quality

Brand name Special offers




Page 45

9. What is the brand you buy most?
i. Farlin
ii. Baby cheramy
iii. Johnson & Johnson
iv. Pears
v. Kohomba baby
vi. None of the above
10. What is the most preferred product feature you consider when buying baby care products?
i. Fragrance
ii. Sun protection
iii. Cleanse
iv. Moisturize
v. Herbal ingredients
11. Are you satisfied with the current prices of the baby care products?
Yes No
12. Are you satisfied with the quality of the protection?
Yes No
13. Do you expect new features in baby care products?
Yes No
14. If yes what is the feature you would prefer?








Cloth Diaper Hands free feeding bottles

Page 46

14.16 Summary of the survey done for customers


Question

Summary of the answers
Gender Male-6
Female-29
What is your residential area? Country side-8
City area- 27

What is the occupation?
Private sector-16
Government sector-7
Housewife-12
How often do you use baby care products? Rarely-8
Frequently-27
Who mostly uses baby care products in the
family?
Children-33
Young adults-2
Monthly income of the family?
\
15,000-20,000- 1
25,000-50,000- 11
Above 50,000- 23
How much are you currently paying or
willing to pay for baby care products
monthly?
Below 1000- 10
1000-2000- 16
2000-5000- 2
Above 5000- 7
What are the basic factors considered when
purchasing a baby care product?
Price- 4
Quality- 27
Brand name- 11
What is the brand you buy most? Farlin- 4
Baby Cheramy- 8
Johnson & Johnson- 23
Pears baby- 5
What is the most preferred product feature
you consider when buying baby care
products?
Fragrance- 6
Sun protection-2
Cleanse- 9
Moisturize- 11

Page 47


Question

Summary of the answers
Herbal ingredients- 7
Are you satisfied with the current prices of
the baby care products?
Yes-22
No- 13
Are you satisfied with the quality of the
product?
Yes- 29
No- 6
Do you expect new features in baby care
products?
Yes -29
No-6
If yes what is the product you would prefer? Cloth diaper- 23
Hands free feeding bottles- 7
Table 12 : Summary of the survey done by the customers
Source: Authors work



Figure 18: Basic factors considered when purchasing Baby care products
Source: Authorswork
10%
64%
26%
0%
Basic facor considered when purchasing baby
care products

Price Quality Brand name Special offers

Page 48


Figure 19: Most preferred brand
Source: Authors work


Figure 20: Most preffered product feature
Source: Authors work

11%
22%
62%
2%
3%
Most peferred brand
Farlin Baby cheremy Johnson and johnson Pears baby Kohomba baby
6.14% 6%
9.26%
31%
20%
Fragrance Sun protection Cleanse Moiturize Herabal ingredients
Most preffered product feature
Percentages

Page 49

14.17 Summary of the survey done for retail outlets


Question

Cargills food city

Keels super market
1. What is the most selling baby
care brand in the market?
Johnson & Johnson Johnson & Johnson
2. What is the most selling baby
care product category in the
market?
Baby Food Baby food

3. Total monthly revenue earned
by selling baby care products?
Above 500,000 Below 50,000
4. What is the total percentage for
the baby care products out of all
the products in the super
market?
5%-10% Below 5%
5. Which product line do you see
as offering a stronger
competitive position to
dealers/distributors?
Johnson & Johnson Johnson & Johnson
6. What is the brand you
recommend for the customers?
Johnson & Johnson Kohomba baby
7. How would you rate following
brands based on their prices and
customer demand?



Farlin

Baby Cheramy

Johnson&Johnson

Pears

Kohomba baby


Farlin

Baby Cheramy


Johnson&Johnson

Pears

Kohomba baby

8. How many inquiries and
complaints do you get annually
regarding baby care products?
Below 10 Below 10
4
1
2
2
3
5
1
2
3
2
5
4

Page 50

Table 13: Summary of the survey done for retail outlets
Source: Authors work



Page 51

15. Reference list
15.1 Books
Botten, N (2009), CIMA Enterprise Strategy, London: CIMA Publishing
Schiffman, L and Kanuk, L. (2007), Consumer Behavior, 9th edition, New Delhi: Prentice-
Hall of India Private Limited
15.2 Websites
Buzzle (2011), Hair dry brands, [Online]. Available from:
http://www.buzzle.com/articles/hair-dye-brands.html (Accessed on 11th June, 2011)
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.pdf (Accessed on 22 of May, 2011)
Central Bank (2011), Inflation, [Online]. Available from: http://www.cbsl.gov.lk/ (Accessed
on 22
nd
of May, 2011)
Department of Census & Statistics (2011), Sri Lanka Labour Force Survey Fourth Quarter
2010, [Online] Available from: http://www.statistics.gov.lk/samplesurvey/Bullet2010q4-
final.pdf (Accessed on 22nd of May, 2011)
Department and Census (2011), Household income and expenditure, [Online]. Available
from: http://www.statistics.gov.lk/HIES/PreReportHIES2009Eng.pdf (Accessed on 24th of
May, 2011)
De Silva, S. & Bandaranaike, C. (2005), a Sri Lankan Case Study of Firm-Level
Competitiveness: Hemas Holdings Limited, [Online]. Available from:
http://pdf.usaid.gov/pdf_docs/PNADU399.pdf (Accessed on 22nd of May, 2011)
Dry pen (2011), Brand Repositioning and Types of Brand Repositioning, [Online]. Available
from: http://drypen.in/branding/brand-repositioning-and-types-of-brand-repositioning.html
(Accessed on 11th June, 2011)
E-releases (2011), five good reasons to consider repositioning your brand, [Online].
Available from: http://www.ereleases.com/prfuel/reasons-repositioning-brand/ (Accessed on
24
th
of May, 2011)

Page 52

Green planet (2011), the health benefits of vitamin E, [Online]. Available from:
http://www.greenplanet.com/the-health-benefits-of-vitamin-e/ (Accessed on 27
th
May, 2011)
Hemas holdings PLC (2011), Personal care/ baby care, [Online]. Available from:
http://www.hemas.com/index.php?action=corporate&sec=fmcgpercare&sel=1&sel2=7&cat=
1 (Accessed on 21
st
of May, 2011)
Hemas Holding PLC (2010), Annual report 2009-2010, [Online]. Available from:
http://www.hemas.com/finrepos/98_Hemas%20Holdings%20AR%202009-10.pdf (Accessed
on 22
nd
of May, 2011)
Johnsons and Johnsons (2011), Johnson's Brand Launches Johnson's Natural Product Line
for Babies and Kids, [Online]. Available from:
http://www.jnj.com/connect/news/all/johnsons-brand-launches-johnsons-natural-product-
line-for-babies-and-kids (Accessed on 11th June, 2011)
Modest Swim apparel (2011), Muslim women keep faith, enjoy water with special swimsuits,
[Online]. Available from: http://www.modestswimapparel.com/news.html (Accessed on 11th
June, 2011)
One India (2011), Airtel fetes 200mn user mark with new logo, [Online]. Available from:
http://news.oneindia.in/2010/11/18/airtel-fetes-200mn-user-mark-with-new-logo.html
(Accessed on 11th June, 2011)
PRlog (2011), New Market Report: Baby Personal Care Market in the Advanced Emerging
Markets 2014, [Online]. Available from: http://www.prlog.org/11370960-new-market-report-
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of May, 2011)
Purdue extension (2011), Industry Analysis: The Five Forces, [Online]. Available from:
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Superbrands (2011), Super brand volume 1: 2006-2008, [Online]. Available from:
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d=35 (Accessed on 21
st
of May, 2011)
Super brands (2011), Baby Cheramy, [Online]. Available from:
http://www.superbrands.com/lkc1/pdf/07_consumerSB.pdf (Accessed on 21st of May, 2011)

Page 53

Sunday Times (1998), Hemas receives ISO 9001 for its products, [Online]. Available from:
http://sundaytimes.lk/980726/bus3.html (Accessed on 21st of May, 2011)
The Coca-Cola Company (2011), Products, [Online]. Available from: http://www.thecoca-
colacompany.com/brands/index.html (Accessed on 11th June, 2011)
Unilever (2011), Pears Baby, [Online]. Available from:
http://www.unilever.com.lk/brands/personalcarebrands/pears.aspx (Accessed on 22nd May,
2011)




















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