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Vicks comes out from the cold, sees price cut

24-September-2004
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Vicks comes out from the cold, sees price cut

Close on the heels of price cuts it made in product categories such as detergents and shampoos, Procter & Gamble has taken the scissors to yet another product.

Vicks Vaporub, the market leader in the cold rub category, has seen its price drop by about 10 per cent to Rs 30 for a 25 gm pack. Only, P&G has also dropped the grammage for Vicks from 30 gm, priced at Rs 40.

When contacted, a P&G spokesperson told Business Line, "P&G has not reduced prices on existing Vicks variants. It has moved from a 30 gm jar of Vicks Vaporub priced at Rs 40 to a new 25 gm SKU (stock keeping unit) priced at Rs 30. This new budget pack has been launched to enable larger number of consumers to experience the relief that Vicks Vaporub offers."

The spokesperson confirmed that the product at the new price point is already on shop shelves.

The price slash comes close on the heels of the Vicks portfolio crossing the Rs 200-crore sales mark for the 12 months ended June 2004.

As per the annual report of P&G Hygiene and Healthcare Ltd, the Vicks fraternity witnessed volume as well as value growth last fiscal, but Vicks Vaporub sales grew the least - at 12 per cent.

Besides pointing out the growth parameters of the Vicks portfolio in the annual report, the Chairman, Mr Bharat V. Patel, said the launch of Vicks Vaporub's 5 gm pack last fiscal was one of the reasons for a healthy financial performance.

"It is also important to highlight that some of the contributors to our growth (last fiscal) were also one-time parameters such as the strong and timely monsoons last year and the reintroduction of the Vicks Vaporub's small 5 gm pack."

According to market sources, Vicks has an approximately 60 per cent share of the cold rub market, with players such as Amrutanjan's cold rub, Cold Snap, and Paras Pharma's D'Cold as competition.

An Amrutanjan spokesperson said that the company was not contemplating any price cuts as its product was already priced lower than Vicks earlier.

Comparing prices, he said Amrutanjan's Cold Snap was available at Rs 6 for a 5 gm pack whereas 5 gm packs of Vicks and D'Cold sold for Rs 9.

He said Amrutanjan's popular pain balm, also used as an applicant for cold, was now priced the same as Vicks; a 25 gm pack sells for Rs 30. Both Zandu Balm and Amrutanjan are positioned as balms for headaches, body aches and cold as well. Ten gm pack of Zandu costs Rs 15, and 9 gm pack of Amrutanjan sells for Rs 14.50.

Vicks has seen a price drop while prices of menthol, the main ingredient in cold rubs, has seen prices shooting up from Rs 450 a kg, which prevailed for the past 6-7 years, to Rs 640 per kg, according to market sources.

In P&G's annual report, the Chairman pointed out that the company's healthcare sales registered a 26 per cent growth to Rs 201.9 crore last fiscal.

"This unprecedented performance benefited from good monsoons, which not only increased rural purchasing power but also demand for cold relief remedies. There has been volume and value growth across the Vicks fraternity. Vicks Cough Drops sales grew by 34 per cent, Vicks Action 500 by 48 per cent and Vicks Inhaler by 23 per cent."

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