Top Story

e4m_logo.png

Home >> Marketing >> Article

Price cuts fail to enthuse shampoo market

25-December-2004
Font Size   16
Share
Price cuts fail to enthuse shampoo market

This year has failed to produce much lather for the shampoo industry. Analysts estimate a healthy volume growth of anywhere between 10 and 15 per cent but this has largely been the result of deep price cuts effected by market leaders. However, overall value growth has been, at best, a marginal 1-2 per cent, according to industry estimates.

And despite a series of price cuts, freebies and promotional offers showered by market leader Hindustan Lever Ltd (HLL), the company's brands together lost market share in terms of volume as well as value between January and October against the corresponding period previous year.

Neither have brands of domestic companies gained much favour with the consumer this year, declining in volume terms while showing no growth in value terms.

According to data by market research agency ORG, brands such as Vatika, Dabur Anmol, Ayur, Chik and Nyle together lost 2.3 percentage points in volume terms whereas the value gain was merely 0.1 percentage points during January-October.

However, a CavinKare spokesman said that the company did not lower prices as a result of which its shampoo brands such as Chik and Nyle saw a 10 per cent growth in both volume and value. Says this spokesman: "As the year has progressed the market has begun looking up and this trend should continue."

He points out that while the market for shampoos grew by 10 per cent over the whole year, the last three months have seen a growth of 11.5 per cent which augurs well for the category as a whole. "Next year should be even better," he says.

Taken together, volume market share of HLL brands Sunsilk, Clinic Plus and Lux Super Rich came down to 43.9 per cent from 44.6 per cent between January and October whereas the volume market share of Procter & Gamble (P&G) brands Rejoice and Pantene Pro-V together jumped up to 5.7 per cent from 3.7 per cent.

However, the only exception to this general trend was Clinic Plus from HLL, which gained in volume terms by 2.5 percentage points during the 10 months under review.

Mr S. Raghunandan, Vice-President-Sales at Dabur India Ltd, admitted that the deep price cuts effected by multinational companies had put pressure on the Indian brands. "Last year, the price value-equation was in favour of Indian brands but this trend was reversed in 2004 and home-grown brands came under severe pressure. Some of us did undertake price cuts, but these were done rather late in the year and could not match those undertaken by the multinationals."

Meanwhile, in value terms also HLL took a beating. Sunsilk, Clinic Plus and Lux Super Rich together lost three percentage points to settle at 40.1 per cent market share whereas the two P&G brands Rejoice and Pantene gained 2.2 percentage points to climb to 9.6 per cent of the value market share between January and October.

And while 2004 does not appear to have been a memorable year for shampoo makers, there could well be further price cuts since many companies including HLL, P&G, Dabur and CavinKare are setting up facilities in excise-free zones.

Analysts said this excise saving would ease margin pressure and could lead shampoo makers to again tempt the consumer with even lower prices.

Tags

Siddharth Kumar Tewary, Founder, Chief Creative, One Life Studios and Swastik Productions, on owning the IP on his most ambitious project 'Porus,' the risk of recovering its cost and his distribution strategy

Webscale plans to build the brand around smooth operations for the e-commerce sector and then move on to demand generation

Shriya Ghate, Business Head, Tinkle, spills the beans on the company's vision for its special line of merchandise launched to celebrate its 37th anniversary, its pricing, marketing strategies, and more

Vivek Patni, Director of Wonder Cement, on the current marketing strategies and challenges that brand owners face

There was reportedly an altercation between the two in Bodhjung Nagar, Tripura

The New Realities study in India is its sixth year. Over 600 online interviews (per country) were conducted in seven countries, as a part of the study.

Rohit Bansal, Group Head of Corporate Communications, Reliance Industries Limited was speaking about the emerging tools of PR through Social Impact during his keynote address at IPRCCA 2017