Anti-Bacterial Deo Soap A Product of

By

Muhammad Aqib Munir Fariha Irfan Shakir Sarang Muhammad Raheel Arshad Zohaib Khan Anita Aslam

Presented to Sir Faisal Qureshi

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Executive summary:
This report aims to address the marketing strategy of the antiseptic soap Zest which is one of the products of the company Procter & Gamble. This soap professes to be different and having an edge over its competitors. It claims that it is not a soap, as it does not leave the sticky film that soap does. It helps to fight germs while preventing the deposition of soap scum on the surface. The report will discuss the effect of Macro and Micro Environment on this product and scrutinize the different opportunities present in the market to improve its overall sales. By the careful analysis of all the environmental factors we would be able to better formulate the strategy to aid in the success of the product. We will also be making a detailed and in-depth analysis of all the aspects of sales of the product including the market and consumer analysis to determine the target market, its size, segmentation, its competitors as well as the buying trends, motivations and expectations of the consumer. We will also be a giving a brief introduction of the companys mission and vision statements, its objectives and lastly conduct its SWOT Analysis.

In the last phase, we will be describing the 4 Ps of marketing with respect to our organizational strategies and plan. A completely articulated marketing plan will be devised to fully exploit the market keeping in mind the identified targets and the market segmentations.

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Introduction

Marketing is the main aspect of a company and thus a great emphasis is placed on it. This report aims to present the different prospects and opportunities that Procter and Gamble would have to launch its latest brand of antibacterial soap Zest .

This document includes the in-depth analysis of all the aspects of marketing needed by the company to successfully launch and distribute its product. Every independent and industrial research and analysis was utilized to formulate a systematic marketing strategy to give Zest the best possible way to exploit the present opportunities.

This report starts off with the inspection of the Micro and Macro Environment that would have an effect on the product. The market, its segmentation, its size and the target market has also been scrutinized to determine the best strategy to pursue the intended customer. Its current position and SWOT analysis have also been included to dissect the prospects as well as the threats that would determine the success of the product. A lot of emphasis has been placed on the target market and the best possible way to pursue it. Finally, a completely formulated marketing plan has been developed keeping in mind the market and sales potential in the country and the consumers motivations and expectations.

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Table of Contents
S.NO
I.

Particulars
Current Situation Macro-environment
A. B. C. D. E. Political & Legal Environment In Pakistan Demographics Of Pakistan Economic Conditions In Pakistan Cultural Values In Pakistan Technological State In Pakistan

Page
7
7 8 9 9 10

II.

Current Situation - Market Analysis

A. B. C. D. E. F. G. Market Definition Market Size Market Segmentation Target Market Target Market Strategy Competition and market share Competitors Analysis

11
11 11 11 12 13 13 13

III.

Current Situation - Consumer Analysis

A. Nature of Buying Decision B. Participants C. Buyer Motivation & Expectations

14
14 14 14

IV.

Current Situation Internal Environment

A. B. C. D. Mission Statement Vision Statement Corporate Objectives Marketing Objectives

15
15 15 15 15

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Table of Contents
S.NO Particulars Page

V.

Summary of Situation Analysis

A. B. C. D. E. Internal Strengths Internal Weakness External Opportunities External Threats Our Sustainable Competitive Advantage

16
16 16 16 16 16

VI.

Marketing Strategy - Product

A. B. C. D. E. F. Product Product Classification Product Line Product Features Brand Name Value Preposition Statement

17
17 17 17 18 18 18

VII.

Marketing Strategy Pricing

A. B. C. D. E. Pricing objectives Pricing method Pricing strategy Discounts and allowances Channel Partner strategy

19
19 20 21 21 21

VIII.

Marketing Strategy Promotion

A. B. C. D. E. F. Promotional Objective Promotional Mix Advertising Objective Advertising Strategy Advertising Media Shelving/Placement Strategy

22
22 22 22 23 23 24

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Table of Contents
S.NO Particulars Page

IX.

Marketing Strategy Distribution

A. Geographical coverage B. Distribution channels C. Logistics

24
24 24 26

X.

Sales Forcats
A. Sales Forcast B. Performa Imcome Statement

27
27 28

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I. Current Situation Macro-environment

In this phase we will be discussing various factors present in the Companys Macro Environment and analyze them.

A. Political & Legal Environment In Pakistan

Pakistan has a Parliamentary Democracy System of Government. Since independence Pakistan has faced many political and legal dilemmas and has witnessed a number of military takeovers implementing martial law in the country. It has expectedly had a very adverse affect on the development of the country. Despite political instability, under the reign of our last President Parvez Musharaf (A Military Dictator), Pakistan has shown great progress and its GDP growth rate reached 6.60% in the year 2007. Sorrowfully Pakistan is still ranked as the 85th country in the world for the ease of doing business.

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B. Demographics of Pakistan
The majority of southern Pakistans population lives along the Indus River. Karachi is the most populous city in Pakistan. In the northern half, most of the inhabitants live about an arc formed by the cities of Faisalabad, Lahore, Rawalpindi, Islamabad, Gujranwala, Sialkot, Nowshera, Swabi, Mardan and Peshawar. Population and growth
y y y y y

Population: 172,800,000 (July 2008 best estimation) Growth rate: 2.2% (2008 estimation) Birth rate: 31 births/1,000 population (2008 est.) Death rate: 8 deaths/1,000 population (2008 est.) Net migration rate: -1.0 migrant(s)/1,000 population (2008 est.)

Historical populations Census Population 1951 1961 1972 1981 1998 2008 33,816,000 42,978,000 65,321,000 84,254,000 130,580,000 172,800,000 Urban 17.80% 22.46% 25.40% 28.28% 32.51% 32.34%

Age structure
y y y

014 years: 42% (male 33,293,428; female 31,434,314) 1564 years: 54.9% (male 48,214,298; female 46,062,933) 65 years and over: 4.1% (male 3,256,065; female 3,542,522) (2006 est.)

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C. Economic Conditions in Pakistan

As per information on Pakistan economic conditions in financial year 2008, the worth of Pakistani rupee has decreased in value because of political and economic instability. Pakistan is known to have one of fastest developing economies in world. Though it is a poor country, economic conditions in Pakistan point out that growth rate has been better than the global average growth rate.

D. Cultural Values In Pakistan

Pakistani culture is rich in traditions and has its roots running deep in the history of this region and certainly, it stands alone in recognition. Pakistani people and society is the unique pattern of belief, ideas, values highly influenced by thereligion Islam. Pakistan has many subcultures as it is the core of different races. It has four provinces - Punjab - Sindh - NWFP - Balochistan

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- FATA - FANA - Kashmir The inhabitants of each province has distinct cultural values which make them different from other groups of the society but these sub cultural groups too spend their life according to the teachings of Islam, therefore we can say that Pakistan has an Islamic Culture. People of Pakistan are very hospitable and hardworking. They are well educated and are playing a pivotal role in the development of the country. There is national unity and harmony in them which makes them a part of a completely Islamic society. The nation stands upfront and together in any national disasters they are misfortunate enough to suffer. The people of Pakistan are playing their due shares in the progress and development of the country and it is because of their patriotism that Pakistan is making progress rapidly.

E. Technological State In Pakistan

Government of Pakistan is making the kind of policies that are promoting Information Technology. Currently, Pakistan exports about $35 Million worth of software a year to the entire world, as compared to $8 Billion from India, $5 Billion from Ireland & $1.5 Billion from Israel. Meanwhile, Pakistans economy is still largely based on the low-tech, low-value industries that have long been fully mechanized and running very efficiently in the developed nations.

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II.Current Situation - Market Analysis

In this section we will analysis the vegetable markets in Lahore and identify market characteristics to determine the right target market for the Company

A. Market Definition
The Pakistan soap market represents one of the largest whitespace opportunities for companies to explore due to its size and scale. With the consumer base of 18 million out of which 67.66 % of the population living in rural areas which are not properly explored yet makes Pakistan one of the most viable markets in soap industry all around the world.

B. Market Size
In Pakistan, the soap market is 300,000 tons per annum business churning 125 million dollars a year. Soap is a major consumer item particularly the antibacterial segment. The overall soap market is growing by 10% per year with anti bacterial market segment growing at 7% due to increased consumer awareness and education on the benefits of anti-bacterial soaps.

C. Market Segmentation
The market is divided into three main segments: y y y Premium tier Mid tier Low tier.

Consumers from each tier are looking for a different offering in the market place making it very competitive. Our key competitors, Lux, Dettol, & Lifebuoy have a much stronger foothold in the market driven by local production & pricing flexibility, dominating both premium and mid tier segment in Pakistan.

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Market Review

32% 45% Low tier Premium tier Mid tier 23%

D. Target Market
Zest Soap historically has been a Premium Tier brand all around the world. In Pakistan we will be targeting the following sections of the market. Geographically: Geographically we will be targeting all Urban, Sub-Urban, Small towns and some rural areas of Pakistan. Demographically: We are targeting the youth segment of the population in Pakistan as this segment have is never been directly targeted by any of our competitors and demographically it is the largest segment Gender: Male & Female Age: 18 to 35 years Social Status: We will mainly be targeting Premium and Mid Tier segments residing in our geographic market which is Urban, Sub-Urban, Small towns and some rural areas.

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E. Target Market Strategy

We will adopt Undifferentiated Marketing strategy to cater our target audience which is Youth. The scale of our target market is very huge and mass marketing efforts are required to reach out to them.

F. Competition and market share

The competition in our market is very tough as most of our competitors have established their brands in the market and has a strong market share. Our competitor such as Safeguard is a clear market leader in the anti bacterial segment of the market where as Lux is the overall market leader in soaps category. Both of them are premium tier brands. Recently Dettol has re-launched itself and has started gaining market share from other competitors. It will be one of your key competitors. The table below indicates market share for leading soap brands in Pakistan.
Lux 29.7% Capri 9.8% Lifeboy 13.5% Dettol 12.9% Safeguard 20.4% Others 13.7%

G. Competitors Analysis
As Zest soap is Deodorant anti-bacterial bath soap. We consider Safeguard as our internal competitor as it is a product by P&G where as Lux, Dettol & Lifeboy as our external competitors. All of our competitors are well established in the market and has penetrated the existing market. Their target market is upper class, middle class and lower class. They have produced products for each class with respect to different prices. They have heavily advertised their products on mass media. They display their product brochures at every retailer. These companies have strong financial background and have much excess budget for launching new campaigns tomaximize their market share is in soap.

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III.Current Situation - Consumer Analysis

Consumer analyses are very essential to understand your target market and to access the needs and wants of the consumers. In this section we have tried to analyze many factors to understand our consumer needs and demands.

A. Nature of Buying Decision

In soaps the buying decision falls under the category of Dissonance Reducing Buying Behavior as soaps are purchased on regular intervals. There isa very low difference between brands available in market and normally consumers have highly involved in the buying process due to skin care and hygiene issues.

B. Participants
Mostly individuals are the participant of buying decision when it comes to personal care or hygiene products such as soaps. Whereas Social (Reference groups & Family) and Personal (Occupational, Economical & Lifestyle)factors plays a vital role in influencing the buying decision.

C. Buyer Motivation & Expectations

y y y y y

To have a product which provide hygiene cleaning To have a product which suites the skin type To have a product which smells good To have a product which fulfills every day hygiene needs To have a product which produce good leather

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IV. Current Situation Internal Environment

A. Mission Statement
We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.

B.

Vision statement
Be, and be recognized as, the best consumer products and services company in the world.

C.

Corporate Objectives
y Bring together transactional activities such as accounting and order management in a single organization to provide services to all p&g units at best in class y Remains on the cutting edge of the industry. y To be a thought leader within each corporate function. y To be the first consumer goods company in Pakistan. y Be competitive with other high quality companies in order to help, attract, motivate and retain the talent needed to lead and grow P&Gs business. y Strive to be best in all areas of strategic importance to the company.

D.
y y y y

Marketing Objectives
To create awareness about our products among our target audience. To create a corporate image of the company. To expand our target audience. To change peoples perception about personal hygiene and influence buying behavior

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V. Summary of Situation Analysis

In this section we will discus and carry out SWOT analysis to access the companys Strengths, Weakness, Opportunities, and Threats in the market in the light of above discussion.

A.

Internal Strengths
Innovation:P&G build a sustainable culture of innovation and establish innovation as a process that was superior to its competition. A process that is scalable, repeatable, sustainable, and hence superior to its competitors. Culture:The biggest and most important strength of P&G is its culture. It has the element to develop its employees talent. Its culture has the tendency to transform top talent into leadership
.

B.

Internal Weaknesses
y Where innovation is one of the major strengths of P&G, the initiation of the innovation is its weakness. In some regions of the company, the implementation of an idea takes more time then it should. y In Pakistan, P&G only deals with the Tear1 products AKA the high level products. This can be counted as its biggest threat, since its competitors has the option to cover there losses form the alternate brands where as P&G cant do the same.

C.

External Opportunities
y Market Growth Rate indicate positive market potential y Huge number of market untargeted indicates higher potential growth y Non of the soap brands targeting 60% of the youth population in Pakistan giving an 1st movers opportunity to target this segment

D.

External Threat
Another threat for P&G is the government policies. Govt. of Pakistan has the policy which implied 10 -15% of duty on all hair care finished goods. In 2009 theres been a shift in the policy and the duty has been raised from 15% to 35%.
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VI. Marketing Strategy Product

In this section we will discuss the products which will be offered by the Company. We will be doing complete product analysis and determining the Product Classification, Product line, its features & brand name etc.

A. Product
Zest is an Anti-Bacterial Deodorant Soap. Unlike other anti bacterial soaps it has a arousing fragrance and provides and alternative to the consumers who do not use anti bacterial soaps because of its fragrance.

B. Product Classification
Our product zest soap is categorized as a consumer product which is further classified below.

C. Product line Zest Soap will be available in market in the following variants
y Zest Aqua y Zest Rain Forest y Zest Natural

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Zest Soap will be available in the following sizes

y Small 75 gm y Medium 125 gm y Large 175 gm

D. Product Features
Zest Soap is quality soap and has all the features to be a market leader. Features of Zest soap are listed below
y y y y

Quality Anti Bacterial Soap Arousing Fragrance Low Dissolvability Fine Lather

E. Brand name
Our products Brand name is Zest Soap it is a world renowned brand owned by P&G since 1958.

F. Value Preposition Statement

Honestly Clean This Value Preposition Statement is a very famous slogan in USA we will be using the same statement in Pakistan to sustain Global image whereas the statement is in line with our target market.
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VII. Marketing Strategy - Pricing

We are launching Zest Soap in Karachi- Pakistan and our main competitors are following: 1. Lux 2. Lifebuoy 3. Safe guard The table below indicates market share for leading soap brands in Pakistan. Lux 29.7% Capri 9.8% Lifebuoy 13.5% Dettol 12.9% Safeguard 20.4% Others 13.7%

We are indicating those soaps which have large market share in order to sustain a long term in market According to our research the prevailing market price of these soaps are as follows: Soap Lux Lifebuoy safeguard Small Bar 27 19 25 Medium Bar 37 27 34 Large Bar 73 36 -

A. Pricing objectives
Our pricing objective is Quantity Maximization (Market Share) We are focusing upon this objective in order to maximize the number of items sold.

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B. Pricing method
According to our pricing objective and strategy, we will apply Cost-Plus Pricing Method The objective of this method is to set a price at the production cost plus a certain profit margin. Cost-Plus Pricing Method and Its Calculation: Cost-plus pricing is a retail markup used by many companies when pricing products and services on contracts. Cost-plus pricing is fairly simple; sometimes the hardest part is ensuring that an accurate cost is used when calculating the markup. After determining the proper cost of a product or service, the cost-plus formula is applied to calculate the price. Cost-Plus Formula Two basic forms of cost-plus formulas are used by businesses. The first one is a standard retail formula, the second a more detailed manufacturing formula. Price = Cost + (Markup percentage x Cost) Price = (AVC x FC %) x (1 + Markup %) AVC = average variable cost FC% = percentage of fixed costs allocated to each product The second formula is subject to changes based on how manufacturing costs are allocated by the accounting department. Price Procter & Gamble puts a 50% gross margin over its total cost. A standard zest bar soap costs around 20PKR. Whereas it will be sold for the following prices for different SKUs.
Size Small Medium Large Prize 25 35 70

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C. Pricing strategy
Our strategy is to penetrate the market and gain entry into a new market. The objective for employing penetration pricing is to attract and grow market share. Once desired levels for these objectives are reached, product prices are typically increased. Penetration prices will not garner the profit that we may want; therefore, this pricing strategy must be used strategically.

D. Discounts and allowances

At the time of launching this new product our company has decided to introduce the product on Discount Introductory price for 1 month of 30 PKR.

E. Channel Partner Strategy

Distribution Margin We will be following the marketing trend and will be offering our distributors 12% commission. Retailer Margin We will be following the marketing trend and will be offering our distributors 10% commission. Super Stores We will be offering exclusive 22% commission to larger Super stores like Naheed, Aghaz, Metro, Mackro Etc Allowances to Sales Staff All those staff which will achieve the assigned target in the 1st quarter will have a cash award of Rs. 50,000/-Plus if the staff perform efficiently and outstanding throughout the year than they will be awarded a trip to Dubai.
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VIII. Marketing Strategy Promotion

In this section we will discuss the Promotional plan for our products which will be offered by the Company. We will be setting our Promotional Goals, Mix & Strategies in detail.

A. Promotional objective
To create awareness among the target audience related to Zests soaps & persuade them to use our product.

B. Promotional mix
The following elements of promotional tools will be used in our Promotional Mix.
y Advertising y Personal selling y Exhibitions

C. Advertising Objective
Our advertising objective is informative advertising to educate the public about our product and its impact on their life style. y Create awareness in market about product. y Create a brand image in the market. y Increase the usage of our soaps. y Promote societal marketing for anti-bacterial bar soap and liquid soap.

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D. Advertising Strategy
Here Zests Brand is going for Pull Marketing Strategy by high spending on advertising and customer promotion to create awareness about the product among the target audience. It the customers are attracted towards the product they will ask it from retailers, the retailers will ask wholesaler and the wholesaler to the manufacturer.

Message Strategy
Honestly Clean

Message Execution
Rational Evidence: We will be providing Rational Evidence that it is not necessary for an anti bacterial soap to be odor less. A soap can have qualities of a good anti bacterial as well as a deodorant soap. Scientific Evidence: This style presents survey or scientific evidence that the brand is better and better liked than one or more other brands. We will use scientific evidence to convince buyers that Zests anti-bacterial soaps are better than other brands in fighting with germs and dirt.

E. Advertising Media y y y y y y y
Concerts Consumer Expos Stall Activity Television Outdoor- Bill Boards Internet- Links on face book and msn. Newspaper and Magazines
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F. Shelving/Placement Strategy
In the 1st month of our launch we will be looking for primary/front line position for our product at retail outlets. For this purpose we will be using our established trade relations and will be offering extra incentives to the retailers. Afterward we will be looking for a comparative position along soap brand such as Lux, Dettol, Safeguard&Lifeboy

IX. Marketing Strategy Distribution

In this section we will discuss the Distribution Strategy for our products which will be offered by the Company. We will be analyzing our Geographical Coverage & selecting our Distribution Channels.

A. Geographical coverage
Geographically we will be targeting all Urban, Sub-Urban, Small towns and some rural areas of Pakistan.

B. Distribution channels
We will sell our soaps to selected distributors who will distribute it to the wholesalers and retailers and finally to the end user. For distribution to supermarkets such as Aghas, Naheed, and Chase, general stores such as Imtiaz store and medical stores we will use the Direct Marketing Channels in which there will be no intermediaries and we will apply direct selling.Display at large stores, general stores for noticeable to consumers.

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Target Distribution Outlets According to our product we will be targeting Top End Retailers and Walk in Stores which is 65% of the overall Trade.

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Distribution Intensity:
There are three broad options for distribution - intensive, selective and exclusive distribution. Distribution of Zests soap will be done intensively. Our aim is to cover the market by using all available outlets, sales mainly depends on the number of outlets used.

C. Logistics
The delivery of product to the final consumer involves aseries of steps including raw material delivery, conversion to a finished product, transportation toa distributor, transportation to the store and placement on theStore shelf and finally to the customer. Zests logistics system includes:
y Supplier y Manufacturer/ Producer y Distributor/ Warehouse y Retailer y Customer

Distributors have not only direct link with wholesalers but they are connected with retailers too, they will supply Zests products to wholesalers as well as retailers. There must be a good relationship among all the stakeholders for the efficient functioning of supply chain.

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X. Sales Forecast
According to our targeting market strategy our market size is 25 % of the total market which makes 31.25 million dollar per year. When converter to Pakistani Rupees at the initial year it makes 2.5 billion rupees.

YEAR
ONE TWO THREE FOUR FIVE

Target Market Size

RS. 2.5 Billion Rs. 2.75 Billion Rs. 3.025 Billion Rs. 3.33 Billion Rs. 3.66 Billion

SHARE OF MARKET
8% 10% 12% 15% 18%

TOTAL REVENUE
Rs. 250 Million Rs. 275 Million Rs. 363 Million Rs. 499 Million Rs. 659 Million

y The market growth rate has been assumed @ of 10% per year

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Performa Income Statement

Rs in million

Rs in million

Rs in million

Rs in million

Rs in million

Particulars Sales Less: Cost Of Goods Sold 40% of sales

1st year 250 100

2nd year 275 110

3rd year 363 145.2

4th year 499 199.6

5th year 595 238

Gross Profit Less: Operating Expense Advertising 10% Sales Expense 22% Other Expenses 5%

150

165

217.8

299.4

357

25 55 12.5

27.5 60.5 13.75

36.3 79.86 18.15

49.9 109.78 24.95

59.5 130.9 29.75

Earnings Before Tax

57.5

63.25

83.49

114.77

136.85

Less Tax 17%

9.775

10.7525

14.1933

19.5109

23.2645

Net income

47.725

52.4975

69.2967

95.2591

113.5855

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