Procter & Gamble (P&G) has announced a cut in the prices of its low-end shampoo brand, Rejoice, by over 20 per cent. The 100 ml bottle will now cost Rs 30 (Rs 39 previously), while the 200 ml bottle will cost Rs 59 (Rs 75).
SSKI Securities vice-president research, Nikhil Vora sees this as a realignment of prices of part of P&G to take Hindustan Lever (HLL), headon.
Mr Vora predicts more price realignment happening in near future in the shampoo market. HLL is likely to further cut prices of some brands. Another Mumbai-based analyst finds this as a reaction to HLL’s price cuts done some time ago. Now both, Rejoice and HLL’s Clinic Plus, are priced at Rs 30 for 100 ml. Clinic Plus costs Rs 55 for 200 ml pack.
However, P&G India director-marketing & sales, Chester Twigg, said that the company has no plans to further cut prices of any of its shampoo brands. The company claims encouraging response to the launch of Rejoice in January 2004 and has initiated the cuts to provide competitive pricing. The price of 7.5 ml Rejoice sachet remains unchanged at Rs two. HLL, when contacted for their possible reaction to P&G’s move, refused to comment on any issue related to competition.
An analyst opined that P&G is determined to match HLL in pricing and is particularly getting aggressive in the low-end segment of shampoos. Mr Vora said that P&G is using Rejoice as a flanking brand, since it cannot reduce the prices of its high-end brands like Pantene and Head & Shoulders.