Market and Consumer Analysis

Course: Marketing Management (Term 1)

Indian Institute of Management, Bangalore
 Consumer Analysis
To understand the consumer preferences and their consumption behavior, we have used
qualitative and exploratory research design methodology. We conducted
online surveys and focus group interview within IIMB to gather data and analyse consumer
behavior.

Details of the online survey:

Sample Size: 107
Selection criteria: Random and convenience sampling
Details of Focus group interviews:
Group Size: Conducted 5 group interview having a size of 5-6 people
Group Composition: Homogenous
Age Composition: 22 to 27 years
Time Duration: 15 to 30 minutes each
Recording mode: Pen and Paper

PEOPLE INVOLVED IN PURCHASE DECISION

1. INITIATOR Any member of the family

2. INFLUENCER Parents, Spouse, Kids

3. DECIDER Self

4. BUYER Either the decider or the eldest person in the family

5. USER Every member of the family

Buying Decision Process:

1. Problem Recognition
a. Internal Stimuli: Tooth Safety
b. External Stimuli: Word of mouth, Advertisement, Packaging
c. The trigger to purchase toothpaste comes from Safety Need of Maslow’s
hierarchy of Needs, but as time passed using toothpaste became a social need.

2. Information Search: The details about the Pepsodent regarding its taste, price,
availability, etc are found from 4 significant sources

a. Personal Family, Friends, Neighbours, Local retailers

b. Commercial Advertisement, Banners, Web Sites, Salesperson

c. Public Word of Mouth, Social Media

d. Experiential Usage of product, details on the back of the cover

3. Evaluation of Alternatives: Customers evaluation process usually considers Price,

Brand name, Herbal nature of the product, availability and past usage experiences. Out of
the factors mentioned above, recent usage plays an important role. 60.7% of our
respondents said that they are particular about their brand choice and 50% doesn’t want
to change their toothpaste to herbal brands. Hence the alternatives are tested in
successive purchases based on experiential benefits the customer derives from prior
usage.
While evaluating Pepsodent’s alternatives, customers followed a series of choices
which he classified as follows

4. Purchase Decision: In evaluation stage consumers form preferences among the

products available in the choice set and finally decide to buy the most preferred brand or
product. To take a final decision to buy Pepsodent, the consumer made as many as four
sub decisions: Which flavor to buy? How much Quantity to buy? When to buy? From where
to buy?

By seeing our sample size data, we analyzed that the Consumers generally
followed the Conjunctive heuristic to choose a particular brand of toothpaste. They carried
a preconceived notion of what minimum attribute they need in toothpaste. The brand which
satisfies their minimum requirements first and in a presentable manner is
purchased most. Negative feedback from friends and family also adversely impacts the
purchase decision.

5. Post purchase behavior:

a. Before trying new brand consumers develop an expectation about a product’s
performance. If the performace of the product is more
than their expectations, then the consumer is satisfied. This makes him brand
loyal and next time step two and three are fast tracked. In our sample, 60.7% are
brand or product loyal.
b. Customers provide positive/ negative feedback to others.
Thus, Pepsodent must try to satisfy consumers till last.
 CONTEXT ANALYSIS
DEMOGRAPHICAL
The working age
population is growing in
India which rise the per
capita income and GDP.
This increases the
purchasing power of
people and so, growth in
the sector can be
expected.
Rural people are moving
from tooth powders to
tooth pastes, but the
penetration is still low
which provides an
opportunity for big
players.
NATURAL
Tooth pastes made of
natural ingredients /
ayurvedic ingredients are
growing interests among
the consumers in India.
Companies such as
Colgate-Palmolive and
Dabur India have launched
their ayurvedic variants
like Colgate Cibaca
Vedshakti and Dabur Red
Paste. Patanjali is rapidly
emerging in this space.
So pepsodent not having
any herbal variant makes it
challenging to sustain.
competition.
ECONOMICAL
In India, incomes have risen
at a fast pace and will
continue rising given the
country’s strong economic
growth prospects.
GDP per capita of India is
expected to increase from
1,481.56 US$ in 2012 to
3,273.85 US$ in 2023
(FMCG-Report-July-2018,
2018)
The consequence of rising
incomes is growing appetite
for premium products like
mouth washes.
TECHNOLOGICAL
Technology has made the
availability of the products
more easier and
accessibility more
convenient.
It is expected that the count
of online users will cross
850 million by 2025. (FMCG-
Report-July-2018, 2018)
It is estimated that by 2020,
40% of FMCG purchases will
be by online. So, there’s a
scope for HUL to increase
their accessibility through
online. (FMCG-Report-July-
2018, 2018)
SOCIO-CULTURAL
Change in lifestyle,
improvement in the
standard of living and
awareness of oral hygiene is
driving people towards
products that target
different oral problems,
such as weak gums and
teeth, surface stains, and
teeth and bad breath.
But, Pepsodent hasn’t yet
entered into that range and
Colgate is leading in that
area.
POLITICAL-LEGAL
The reimbursement of
medical AND transport
expenses by Rs.40000 will
increase the disposable
income of people. (FMCG-
Report-July-2018, 2018)
The price of goods in
FMCG are decreased after
GST.
With the GST, it is
expected that logistics in
FMCG are transformed
into an efficient model as
they are going for larger
warehousing and logistics
 COMPANY ANALYSIS
Unilever’s major brand in the oral care sector has a variety of products. Pepsodent’s collaboration
with the Indian Dental Association (IDA) and the World Dental Association (FDI) came in to existence
in early 2008. The primary purpose of this was to create awareness of regular brushing among school
children.

Since its launch in 1993, the brand has found a niche for it in the Indian oral care market. With a wide
range of toothbrushes and toothpastes Pepsodent is committed to provide advanced oral care needs
of its customers. From providing fresh breath to fight germs to fight against cavity, Pepsodent
toothpaste works better in a variety of oral care needs. The recent enhancements in the toothpaste
also takes care of teeth sensitivity and problematic gums.

We adopted the SWOT framework to analyse the current scenario for HUL and Pepsodent.

Strengths Weaknesses
•

S W
Penetration only in Tier-1
• Global recognition cities
• Brand ambassador • Tough competition
• Health quotient
• Innovation
• Wide portfolio
• Parent company support
Threats

O T
• Internal and external
Opportunities competition
• Hygienic awareness
• Innovation in rural areas
• Social presence
• New packaging

Strengths

1. Global Recognition: Pepsodent is endorsed by FDI which the largest dental association in the
world with specialist groups across 130 countries is 1 and hence, Pepsodent has established its
credibility. Thanks to the strong distribution channel of HUL, Pepsodent has presence in 50+
nations.
2. Brand Ambassador and Recognition: Pepsodent has been associated with public figures
and celebrities like Shahrukh Khan as brand ambassadors.
3. Health Quotient: The brand offers health benefits such as cavity protection, strong teeth and
healthy gums.
4. Innovation: Due to the recent R&D development, Pepsodent expanded its offering in oral
care. This includes explicit solutions to oral problems such as bleeding of gums and high
sensitive teeth.

1
https://www.pepsodent.in/Socialmission.html
 5. Wide Portfolio: In addition to toothpastes, Pepsodent has been in the business of toothbrushes
and mouthwashes.
6. Parent Company Support: The strong position of HUL helps Pepsodent achieve financial
stability which one of its biggest strength.

Weakness

1. Penetration only in Tier-1 cities: Pepsodent has vast presence in Metro cities, but has not so
good penetration in the rural areas.
2. Tough Competition: The direct competition of Pepsodent is with the leading toothpaste brand
of Colgate-Palmolive. Public awareness is much higher for Colgate.

Opportunities

2. Innovation: Some of the innovative marketing strategies that Pepsodent has adapted recently
are an indicator of the potential growth. New packs launched in early 2002 used to have a Germ
Indicator2. This helped consumers in observing the germ controlling efficacy of the product.
3. Social Presence: The recent campaigns and initiatives started by Pepsodent aimed at creating
awareness among users on newly identified oral health problems.
4. New Packaging: To deepen the penetration in rural market, it can change the packaging to
make it more suitable.

Threats

1. Internal and External Competition: Direct competition with Close Up, an HUL brand and
Colgate in the same segment have been a matter of concern for Pepsodent. Increasing
popularity of Ayurvedic products such as Patanjali can be problematic for the growth of
Pepsodent.

Hygienic Awareness in Rural Areas: Awareness for oral hygiene is still not so significant in the
countryside parts. People are still indifferent to brands and their benefits.

2
https://www.thehindubusinessline.com/2002/04/10/stories/2002041000910600.htm
 COMPETITOR ANALYSIS
Patanjali has been riding a wave since its beginning, with word
of mouth publicity(Refer exhibit 2). Ayurveda along with Baba
Ramdev’s brand appeal has helped Patanjali leap forward in
terms of market share within few years taking away the market
share from key players including Pepsodent.

Colgate holds around 43% market share in the Indian market,

which is the largest for any toothpaste brand in India. Its long
presence in the Indian market and the varieties that it offers has
helped it make its way into many Indian households.
Sensodyne, targets customers with sensitive tooth. Its product
varieties are very limited. The testimonials of doctor’s in favour
of Sensodyne is one of the USP for the brand. The brand
projects itself as targeting a single segment. Therefore, limiting
itself to a less number of customers.
Dabur Red is a product of Dabur India. It was one of the first
providers of ayurvedic solutions in India through toothpaste.
The company has based its marketing mainly on the ayurvedic
ingredients. The unusual colour of the toothpaste gives it a
natural look. However, the marketing of Dabur red is limited.
Refer to Exhibit 3 for details on market share.
Table 1: Competitor analysis

Company Market Share Strengths4 Weakness2

(volume)% 3
Patanjali 9.2 Association with Baba Narrow range of products,
Ramdev, Customer Saturation with Ayurvedic
preferences changing to products, Overdependent on the
healthier products like face value of Baba Ramdev
Ayurveda, Rapid growth,
Aggressive pricing model
Colgate 43.4 Brand Name, Large High price compared to
Market share, Variety in competitors,
product line Market saturation
Sensodyne 2.1 Has the trust of Doctors, Low market coverage,
Capturing niche market Expensive than competitors
Competition from other brands

Dabur Red 8.5 Ayurvedic Ingredients, Limited Marketing,

Indian brand, Limited loyal customer base
Cheaper compared to
other brands like HUL,
Colgate

3
www.euromonitor.com
4
https://www.marketing91.com/
 CHANNEL ANALYSIS
Pepsodent has presence in varied channels of sale. The channels can be broadly classified
in three categories.

1. Direct to Consumer (D2C)

Producer Consumer

2. Through Retailers

Producer Retailer Consumer

3. Through Wholesaler

Producer Wholesaler Retailer Consumer

Pepsodent (HUL) has implemented an distribution and retail channel for most of it products.
Pepsodent leverages this channel by HUL to reach all corners of the country. HUL has
currently more than 7 thousand plus redistribution wholesalers distributing for about one
million retail stores. There are about 2 thousand plus suppliers & over 7 thousand distributors
work with hundred plus currently operating HUL factories in India. Pepsodent is available from
supermarkets to small shops (kirana stores) now in India.5
HUL aims at making the products easily accessible to the consumers for all its products and
implemented very efficient supply chain and delivery system. The products are made available
in approximately 80% of the retail stores through this efficient delivery system. 6

Special Focus for distribution channels:

Millions of men and women in HUL’s distribution channel network their major portion of the
income by enabling the company to connect with the consumers. The 'small-scale retailers'
making their sales in the streets or directly to the house, make a crucial contribution to
millions of consumers every day by bringing the products at their doorstep, HUL states in
their report that the company’s success is directly linked with these retailers’ success. The
overall distribution network for oral care segment is given in Exhibit 1.

5
https://www.mbaskool.com/marketing-mix/products/17235-pepsodent.html
6
https://www.marketing91.com/marketing-mix-pepsodent/
Lever EDGE:
HUL has implemented an framework for helping their retailers improve their capacity and
addressing the barriers that they currently face to sustain the market. HUL has used their
advanced data analytics techniques to increase our opportunities to improvise sales.7
HUL has implemented a strategy framework to improve on their distribution network and this
is communicated to the distributor and advise them to use it in their activities.

Project Shakthi7

HUL markets and sells its products to low income consumers in rural Indian villages through
Project Shakti via employing rural women. New managers were hired and, each of them was
made responsible for 2,000 Shakti Ammas. Performance metric of the managers was
calculated according to the Shakti Ammas’ income level. The managers gave access to
credit resources to fund their business and helped them in generating revenue additional to
their HUL business. HUL believes that this is very crucial for their network’s sustainability

7
https://www.unilever.com/sustainable-living/enhancing-livelihoods/inclusive-business/empowering-small-
scale-retailers-for-growth/
8
https://www.unilever.com/Images/aspire-framework_tcm244-520506_en.pdf
7
https://csrbox.org/India_CSR_Project_Hindustan-Unilever-Limited--(HUL)-Project-Shakti-pan-india_116
In this program during their year, managers should spend a month living in a village. HUL
draws observations about the perception of the rural people through this personal
experience of the managers. Most of the HUL managers who were part of this program
agreed that they got far more insights from this program than they would get from reading
reports. 9
HUL has built a GPS and density mapping technology and this was used to design their
supply network in the rural areas. This technology was used to determine the number of
Shakti Amma and Shaktimaan recruits, and the number of products to be sold. 10
In last two years, HUL executed an aggressive expansion of 50% increase in its distribution
network. From growing rural markets, HUL gets more than a third of its sales. 11
Since 2015, HUL has turned its focus on the E-commerce and “recognized this shift in
consumer preference and identified the growing e-commerce opportunity ahead of the
curve”, HUL chairman Harish Manwani.12

9 https://hbr.org/2016/12/how-unilever-reaches-rural-consumers-in-emerging-markets
10 https://www.accenture.com/_acnmedia/Accenture/Conversion-assets/DotCom/Documents/Global/PDF/Dualpub_23/Accenture-
Unilever-Case-Study.pdf
11 https://www.livemint.com/Companies/ZzGVBz0dRGg83OazY7rYDN/HUL-expands-distribution-network-by-50-in-two-years.html
12 https://www.livemint.com/Industry/TIuVeZDfZfRIp4bQcl7tnL/HUL-looks-at-ecommerce-opportunity.html
APPENDIX

Exhibit 1

Exhibit 2

Pie Chart about people who are conscious

about a particular brand.
60.7% are particular, about the brand they
use.

Pie chart about the decision makers in

buying toothpaste.
 Pie chart on the influencing source for
buying toothpaste

Exhibit 3