Personal Care Sector Analysis: Trends-Insights & Learnings

Narsee Monjee Institute Of Management Studies, Hyderabad

Dr.Kavita Sasidharan Kulkarni, Supervisor , Narsee Monjee Institute Of Management Studies, Hyderabad

Objective of the study Major Factors Discussed

To analyze information about the various competitors and to find out Scope of the industry has been discussed in the first part of the report.
various strategic characteristics of personal care consumer goods
industry to conclude on the Key Success Factors. Stakeholders for the industry including the customer base, the
regulatory bodies and the competition has been discussed.

Scope of the study The financial analysis using the annual report for the companies
chosen.
The purpose of analysis is to determine - “what critical resources a
company in a particular industry should possess to achieve PESTEL Analysis
success” and “what critical activities the company should do to
achieve success”. Effect of GST
(a)Identify companies that compete to satisfy the same customer Effect of Demonetisation
needs.
(b) explore factors that explain the success of most successful Summary
companies in terms of revenue.
Market Structure for personal care products

Methods used for Analysis

Research Methodology : Financial Analysis

Research Instrument : Annual Reports Companies Analysed

 HUL  Marico
Data source : NDTV Profit  ITC
 Godrej
Sample size ; 5 Personal Care Consumer
Goods Companies  Dabur
 Proctor & Gamble

Additional work
Analysis
 Stakeholder Analysis for the sector

 Research on the market structure for the personal care sector.

 PESTEL Analysis of the sector.

 DuPont Analysis, Commonsize Analysis and Comparative Analysis

done for 5 companies.

Market Penetration for Personal Care Sector

Beauty & Grooming
 Produces consumer products that
are used beautification and
personal hygiene
 Compounded annual growth rate
of the beauty & wellness business
in India has been around 18 per
cent.
 Revenue in the Personal Care
sector amounts to US $1,150
million.
 Average revenue per user (ARPU)
currently amounts to US $7.30
Proctor & Gamble
 Products sold in > 180 Countries
 On the ground operations in 80 countries
 Organized into 2 Global Business Units (GBU’s)
Market Structure
• According to a KPMG report, the size of India's beauty and wellness
market is expected to touch Rs. 80,370 crores by 2017-2018.
• Domestic market for personal care products projected to grow at a
CAGR of around 24.4% during the period 2017-2022.
• India’s import of personal care and cosmetic products is around
$778 million.
Competition and Growth
 Competitors
◦ Unilever
◦ L’Oreal
◦ Private Labels

 3% Net sales growth from 2010

◦ 24% of P&G’s Net Sales are from the Beauty segment
Financial Analysis
LIQUIDITY 2014 2015 2016 2017 2018
RATIOS
CURRENT RATIO 7.83 3.31 3.08 3.45 3.69
(X)
QUICK RATIO (X) 7.25 2.61 2.28 2.45 2.38

INVENTORY 7.49 7.00 6.01 5.63 4.89

TURNOVER
RATIO(X)
Marketing Analysis
SEGMENTATION,TARGETING AND POSITIONING OF PROCTOR & GAMBLE (STP)

SEGMENTATION • Demographic Family Size

• Higher Middle Class People
• Urban and Semi urban area
• Many products segmented to both men and women

TARGETING • General Customers

• Target Products targeted to babies of 4to 5 months to
16 yrs age children and the adults
• ted to Upper, Middle and Lower class people

POSITIONING • Premium brands against its competitors

• Superior Technology
• Importance to Quality
• Enviornmental Friendly
PESTEL Analysis
Political Factor
1. Rising governmental support
for e-commerce (threat &
opportunity)
2. Stable overall governmental
support for globalization
(opportunity)
3. Governmental support for
higher energy efficiency
(opportunity)
Economic Factor
1.High growth rate of developing
markets (opportunity)
2.Improving disposable income
levels (opportunity)
3.Economic stability of the majority
of developed markets
(opportunity)
Social Cultural Factor
1. Increasing preference for high-
quality consumer goods
(opportunity)
2. Increasing preference for
healthful products (opportunity)
3. Declining population growth rate
in developed countries (threat)

Technological Factor Ecological Factor Legal Factor

1. Growing online market
(opportunity)
2. Business automation
(opportunity)
3. Increasing fuel efficiency in
transportation (opportunity)
1. Growing opposition to forest 1. Increasing product safety
conversion to oil palm plantations regulations (opportunity)
(threat) 2. Expansion of environmental
2. Changing weather patterns and protection regulations (threat &
linked effects on farming (threat) opportunity)
3. Increasing availability of 3. Increasing business
recyclable materials (opportunity) sustainability regulations (threat
& opportunity)
Future Trends in the Sector

1. Growth of e-commerce
2. Consumers demand product convenience
3. Greater focus on healthier products
4. Greater disposable income and more consumers in Asia
5. Millennials to become big FMCG influencers