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MARKETING MANAGEMENT I Ariel : THE JOURNEY SO FAR By Group A-III Amit Choudhary 03P005 _______________________ Anil Kumar Shaw 03P008 _______________________ Divya Jain 03P019 _______________________ Hemant Kr. ... Anita Goyal Management Development Institute Gurgaon September 12, 2003 ACKNOWLEDGEMENT This project is aimed at developing an understanding of the initial concepts in Marketing Management, through Ariel, a detergent powder from Procter & Gamble. ... On the basis of the same, the Strengths, Weaknesses, Opportunities and Threats of/to Ariel have been identified. ... 2 Ariel 13 4. ... ; Procter & Gamble – with Ariel Front-O-Mat, Ariel Total Compact, Ariel Gain, Mr. ... P&G brands include Tide, Ariel, Crest, Pantene Pro-V, Always, Whisper, Pringles, Pampers, Oil of Olay, Iams and Vicks. ... The detergent brand Ariel, shampoo brands Pantene and Head & Shoulders and baby care brand Pampers are marketed by PGHP. ... 2 ARIEL ARIEL FRONT-O-MAT Just as different cars require different fuel (unleaded and leaded) different detergents work best in different machines. The unique tumble wash technology of front-loading machines needs a special chemistry, which Ariel Front-O-Mat provides. ... Using Ariel Front-O-Mat completely eliminates the need to bucket soak and a scrub. ARIEL TOTAL COMACT In the Laundry segment Ariel delivers impeccable cleaning and is changing the way consumers take care of their clothes. New Ariel Total Compact with its revolutionary new technology Smart Eyes helps detect and remove stains better than any other detergent. ... With New Ariel Total Compact anybody can do laundry with ease. New Ariel Total Compact is ideal for hand wash and top loading washing machines. ... Ariel has always been on the cutting edge of best washes and hence continues to innovate to help the consumer, do her laundry with little effort and time. ... 1 The Competitive Scenario P&G’s older brand in the Indian market, Ariel (launched in 1991), is suffering. Ariel’s volume share has dipped from 2. ... HLL reacted with a premium variant of Surf — Surf Excel — in 1992, to combat the entry of P&G’s Ariel. Surf Excel managed to wean away consumers from Ariel thanks to HLL’s stronger distribution muscle (1. ... Ariel’s value share wavered at 8 per cent of the premium detergents market while Surf Excel surged ahead with 11 per cent by 2001. Ariel launched with two variants — Green and Blue. But Surf Excel upstaged Ariel with variants like Surf Excel Power and Excel with Power Boosters. Ariel then introduced variants like Super Soaker and Front O’ Mat to combat Surf’s moves. Between 1998 and 2003 Ariel had nine variants in the Indian market while Surf had only five. But at present, Ariel is left with only two variants – Ariel Total Compact (for both washing machine and hand wash) and Ariel Front O’ Mat (for front-loading washing machines) — both priced at Rs 135 per kg. ... So Ariel’s variants were never advertised separately. Says an ad executive who previously worked on the account, “The rationale was to build the mother brand Ariel’s equity as the company believed that people were smart enough to pick out variants. ... The large number of firms, slow market growth, low switching costs, low levels of product differentiation, diversity of rivals with products targeted at nearly all consumer segments and accordingly priced alongwith players like HLL who have diversified their risk over a huge range of products, all suggest the intense rivalry faced by Ariel in the detergent segment. ... Players are just doing today what Nestle did some time back — get the price equation right The major competitors of Ariel can be identified as HLL’s Surf Excel and the other offering from P&G, Tide. ... Surf Excel Surf Excel which was launched in 1992 to combat the entry of P&Gs Ariel, still leads in the concentrates market with almost a 70 per cent value share. ... HLL’s Surf Excel has increased its share in value terms to 65 per cent in March 2002 from 58 per cent a year ago, ahead of P&G’s Ariel in the concentrate detergent segment, according to ORG data. On the other hand, the value share of P&G’s Ariel has declined to 35 per cent in March from almost 42 per cent in the domestic concentrate market during the period, analysts quoting ORG estimates said. Surf Excel had a market share of 60 per cent in the premium part of the detergent market compared to a 40 per cent market share for Ariel for calendar year 2001 as a whole. Market shares in the concentrate segment are seen flowing to Surf Excel from Ariel partly due to aggressive consumer promotion schemes by HLL, analysts added. ... Both Surf Excel and Ariel are currently priced at Rs 155 for a 1 kg pack. ... Giving in to the colourful advertisements, and the freebies on offer, housewives now experiment with the latest, and usually settle on one among what is available on the shelves: apart from the Surf brands (of which Excel has quite a following, especially because of its catchy punch-line), there is Ariel, Henko, Tide (all in the range of Rs 70-80 for 500 gms), as well some less expensive ones such as Nirma, and Rin (Rs 35-40 for a one-kg pack). ... As pointed out in Part B of the study, Ariel often suffers low visibility. ... STRENGTHS: Ariel draws its major strength from technology-specific application. ... Ariel is environment friendly which can be established from the fact that IS:13933-1995 terms it “readily and ultimately biodegradable”, on the parameter that the material giving a result of greater than 60% of field carbon dioxide within 28 days is regarded as readily biodegradable. ... The recent Shiksha Drive is a case in point where not only the society but also, the sales of Ariel rose significantly. Promotion policies by tying up with majors like Samsung to introduce live washing machine demonstrations at Samsung dealer outlets, and brand endorsements with major textile players as to ‘the recommended detergent” have been working well for Ariel. Incidentally, Ariel was the only brand to be endorsed by Vimal, one of the leading textile manufacturers. WEAKNESSES: The failure to recognize the growing middle class in the rural segment, and nurturing misconceptions as to only the urban segment sees premium segment users has been a pertinent weakness on Ariel’s part. Among the reasons behind why the major competitor, Surf Excel from HLL, is way ahead of Ariel is the distribution that can be seen through the wider distribution of the former and also the Direct Marketing drives that have been initiated by HLL. ... The Brand Equity of Ariel has been fast declining and this must be checked at once. According to A C Nielsen Retail Audit, September 2001 - August 2002, Wheel was ranked 10th, Rin 12th, Nirma 25th, Surf 27th, Ghari 29th and Ariel 78th! ... Understandably, the competition from bar cakes and the unorganized apart, there lies an opening for P&G’s Ariel. ... THREATS: The deteriorating brand image as pointed out, could soon turn into a deciding factor for Ariel’s existence. ... HLL’s Surf Excel has increased its share in value terms to 65 per cent in March from 58 per cent a year ago, ahead of P&G’s Ariel in the concentrate detergent segment, according to ORG data. The value share of P&G’s Ariel has declined to 35 per cent in March from almost 42 per cent in the domestic concentrate market during the period, analysts quoting ORG estimates said. Surf Excel had a market share of 60 per cent in the premium part of the detergent market compared to a 40 per cent market share for Ariel for calendar year 2001 as a whole. ... Objectives of the undertaken study, primarily Exploratory, are as under: • Factors influencing the buying behaviour of consumer towards detergents • The most favourable choice of detergents • The effect of substitutes like detergent bars on the detergent powder market • The price-demand relationship analysis • The usage and consumption pattern of detergents • The preferred packaging material • Brand loyalty and reason thereof • Awareness level among consumers with respect to Ariel Research Methodology: The consumer behaviour towards Ariel in specific and other detergents at large was studied on the basis of the following chart: 6. ... These findings hint at the possibility of expansion of market for Ariel. ... A substantial difference of 10% is seen as the nearest competitor, Ariel, tries to leave the others behind. ... Procter & Gamble, P&G has some 32% to itself with Tide and Ariel contributing some 10% and 22% respectively. ... During the study it was found that among the brands used but now substituted, Ariel led the line. Some 37% of those changing brands were dissatisfied with Ariel on various relative or absolute counts, identified later in the report. This could be a great threat to Ariel if the numbers go unchecked and it continues to lose customers, in this otherwise consistent demand pattern industry. ... Past Brand of Detergent Reason for shift Wheel Poor cleaning Nirma Trial Basis Poor cleaning Trial Basis Ariel Trial Basis Poor cleaning Front-loading washing machine Skin Sensitivity Surf Excel Lack of Fragrance Trial Basis Tide Trial Basis Various causes for shift from Ariel were noticed. ... Price Sensitivity: The study showed that when price was not one of the selection criterion, even then, the majority of the population preferred Surf Excel to Ariel. This throws light on the fact that the competition between Surf Excel and Ariel is more than that of prices. ... Blind Brand Recall: 1st Recall 2nd Recall 3rd Recall Ariel 17 Ariel 13 Tide 8 Surf Excel 7 Surf Excel 8 Ariel 7 Tide 7 Tide 8 Henko 6 Surf 6 Surf 8 Wheel 5 Nirma 3 Nirma 1 Nirma 4 Wheel 1 Surf Excel 2 Henko 1 Rin 2 It was a striking revelation that despite being the market leader, Surf Excel lost out to Ariel in the top-of-the mind blind recall by a huge margin. This goes on to indicate that Ariel and also, Tide (as indicated by the findings), enjoy considerably high recall. “Detergents” are associated with Ariel almost instantly and this can be used to the product’s benefits, as in the case of Coca-cola’s “Thanda Matalb Coca-Cola” campaign. ... This finding is important for two reasons: the continuous emphasis on Washing-machine oriented detergents from Ariel and association with Samsung for the same. This shows that hand wash based varieties like Ariel Super Soaker should receive due emphasis, and association with leaders in the Washing Machine segment, like Whirlpool, should also be considered. Brand Awareness The study revealed that the majority of the population was unaware of Ariel’s association with Vimal textiles and Samsung Washing Machines, more so in the case of the latter where some 72% were ignorant of the same. Brand endorsements by majors have probably not been highlighted sufficiently by Ariel and thus, that it is the recommended detergent by them has not been able to create the desired impact. Also, the availability of two different types of Ariel in the washing machine segment suffers from low level of awareness, which explains why many consumers perceive that Ariel does not offer any detergent variety for the front-loading washing machines. Trial by Consumers Of the 31 non-users of Ariel, 18 had tried it and 13 had not. ... Also, an unhappy experience on a prior occasion with inferior quality in Ariel Super Soaker was reported by a few consumers. ... of Buyers Ariel Henko Surf Excel Wheel Friday, August 1, 2003 10 2 2 3 3 Saturday, August 2, 2003 16 3 5 4 4 Sunday, August 3, 2003 28 5 8 8 7 • Consumers came in greater numbers on weekends, particularly so on Sundays. ... Understandably, Ariel was not even considered by many consumers and perceived possibly as a low-moving item. Also, obstruction to visibility of the product contributed to low sales of Ariel over the three days. ... Among those who considered Ariel for purchase, lack of justification for the price charged seemed to be a major hindrance, for on seeing the price, they moved to other detergents. ... Among those who bought Ariel, the tendency was to pick the ½ Kg Pack which showed prices being slashed down from Rs. ... NO POWER NOS 1 2 3 4 5 6 7 SURF EXCEL SURF WASH BOOSTER ARIEL COMPACT RIN SHAKTI WHEEL SURF ACTIVE OTHERS 30 15 20 15 10 05 05 TOTAL 100 Brand Usage Pattern • Most buyers bought ½ - 1 kg packs. ... 1 Segmentation and Targeting P&G, after deciding to withdraw Ariel Super Soaker, took upon itself to identify its target market. Project Spearhead, which was meant to identify consumers who would see value in P&Gs superior offering, Ariel and also have the purchasing power to buy it on a regular basis, identified the consumer on the following lines: • Given that 55-60% of sales were from the top 23 towns, she would typically be in these towns. ... Understandably, Ariel Total Compact and Ariel Front-O-Mat, are for Top and Front loading washing machines respectively. ... Even in higher-end detergents like compact detergents (Surf Excel and Ariel), a significant portion of sales is from sachets (small packs which could be used twice only). ... Ariel has positioned itself on the functional aspects: • A superior product that uses advanced technology • Stain Removal • Ease of wash (Highlighted in all promotional activities, glaringly noticed in the advertisements where males undertake washing owing to its simplicity and no-scrubbing nature) • Economy of use, low-cost-per-wash • Cleaning plus something more (Be it germs-free washing or no pilling or the presence of enzymes for that matter) Ariel is positioned as a premium quality product and to reinforce the tag of premium quality, it tied up with consumer durable companies such as Samsung, to vouch for its quality when used with their brand of washing machines. Ariel has been on a sharp learning curve, launching all sorts of variants at assorted price points. ... Today, Ariel is trying to bring back into dominance the brands alleles (to use genetics terminology) that werent able to find expression earlier (the ban-the-bar ads have staged a comeback). ... The Ariel launch began with a series of miscalculations. ... As evidenced, the profit-making company, P&G, suddenly started making losses in 1991 with the launch of Ariel. ... The Introduction Stage After its introduction in 1991, P&G managed to pre-empt adversary Hindustan Lever Limited (HLL) to some extent by launching Ariel, a premium brand first in the Indian market.