Detergent Powder

Introduction Detergent is a material intended to assist cleaning. The term is sometimes used to differentiate between soap and other surfactants used for cleaning. The term detergent by itself is sometimes used to refer specifically to clothing detergent, as opposed to hand soap or other types of cleaning agents. Bangladesh has a detergent market of about 8. 8 billion taka of which Unilever occupies a share of 48% making it the market leader. The major competitor brands in the detergent market for RIN are Keya, Chaka and Jet, Surf Excel.To fight this steep competition the above mentioned companies constantly run consumer promotion in hope to sell more than the respective competitors. Although this strategy worked well at first but with the passage of time, the intense consumer promotions have done little to prevent Unilever from loosing shares to its competitors. In 2004, Wheel (which is now RIN), Unilever’s largest detergent brand ran about nine consumer promotions where as i n 2005 it ran no consumer promotions at all. Consumer promotion over all is a very expensive affair.Unilever has the largest brands of detergent and so the cost of providing a consumer promotion offers is also large by the same proportion. Besides the competitor brands are known to involve in some unfair practices. They pay a very low wage rate to their labors so overhead costs are low, they under invoice their imported raw materials so that they can evade import taxes and other duties, so they save a lot of money in the process. They can then utilize this money for consumer promotion and other competitive activities that can earn them a higher share of the market.Therefore it is imperative that consumer promotions and other dependant elements have to be studied, to make sure that if a consumer promotion activity is implemented it is a highly effective one. This way, precious monetary resources have the minimum chances of being wasted. To understand the competition in the detergent market better price perceptions and product quality perceptions about the brands of detergent on promotion are also considered being worth studying. To look at market share issues, the brand loyalty element should also be explored. 1. 1 Brief Overview about the Detergent MarketThe use of washing powder started rising from late nineties after Unilever Bangladesh entered the market with its ‘Wheel' brand washing powder. Local brand Jet was the lone player in the washing power segment prior to Unilever's entry. Wheel Washing Powder (WWP) was launched in August of 1997 by leveraging the equity of the Wheel laundry soap. Wheel laundry soap was considered the best soap and stood for quality and care. The brand was initially launched and replaced the NSD powder brands of Unilever. WWP was launched with two stock keeping units (SKUs), 500g and 1 KG and achieved a volume of 2,280 tons in 5 months.Despite a price increase from beginning of the following year the brand showed a strong gr owth achieving the total annual volume of 12,700 tons; a third SKU of 40g was added to the brand during the year. 1999 a second price increase was taken for the larger two SKUs but the brand continued to show good growth, ending the year with a volume of 22,800 tons. A major re-launch was rolled out in beginning of 2000 for the brand, during the re-launch the packaging was significantly improved, the perfume was also improved and the proposition changed from lemon to Powerons.The innovation was a response to the launch of the competition Aromatic Washing powder. Prior to the re-launch, the competition was aggressively blocked with continuous promotion behind the brand. After the re-launch the brand grew and countered the competition in 2000, achieving a volume of 29,500 tons. In order to get an even faster growth in 2001 vs. 2000; the brand was aggressively promoted- which yielded in a growth of 43%; ending the year with a volume of 42,200 tons. With the explosive growth of WWP in 2 001, it attracted competition like Chaka and Keya, both of which entered the segment in beginning 2002.In order to contain competition and continue the growth of 2001, WWP maintained the high degree of promotions (free volume promotions) it failed to deliver any considerable growth as expected, however the volume sales increased to 46,500 tons. During the year WWP was re-staged with the ingredients changing from â€Å"Powerons† to â€Å"Powerfoam†. In 2003, WWP promotions were predominately cross-brand promos, with the cost born by the other brand. This resulted in good growth for WWP in 2003, ending the year with 48,000 tons.During the period of 2002 onward, the brand has been losing shares to competition and in order to differentiate the brand further a relaunch was planned in 2004 Q1. The RL involved incorporation of coloured granules to the powder and increase in incorporation of perfume by 25%. However there was no change in the formulation of the powder. Post the re-launch the share decline has not stopped, despite heavy support behind the brand. Unilever is now the leader in the market controlling half of the total washing powder market, the size of which was nearly Tk 450 crore in 2007, up from about Tk 360 a year ago. 1. 2 Market trendsToday’s consumer-oriented marketplace is characterized by a countless number of products and brands. Globalization causes increased competition, national borders disappear, consumers demand more and more, and the pressure on producers to efficiently and effectively live up to consumer’s expectations keeps increasing. For companies to survive these difficult circumstances and to secure their growth and market share figures, proper marketing techniques are of utmost importance. Besides printed and non-printed advertising techniques (such as TV and radio commercials, public relations and sponsorships), sales promotions try to attract consumers.Sales promotions can take many different forms and a distinction can be made between price and non-price sales promotions. 1. 3 Background Sales promotions have been studied very extensively over the past decades. The research findings from Blattberg, Briesch and Fox (1995) provide a perfect base to a short overview of promotional topics and generalizations regarding sales promotions. Nine generalizations regarding sales promotions are made that summarize sales promotion literature so far: – â€Å"Price promotions significantly increase sales – Brands with higher market share are less deal elastic Consumers’ reference prices are influenced by the frequency of deals – The more often a promotion occurs; the lower is the respective sales increase – Cross-promotional effects are asymmetric – The pass-through rate of retailers to consumers is less than 100% – Support promotions like displays and advertising that accompany a price promotion have a great impact on sales – Advertised p romotion can increase store traffic – Promotions affect sales in complementary and competitive categories† (Blattberg, Briesch ; Fox, 1995) Statement of the ProblemThere are many companies that are operating to serve the detergent markets; as a result the competition has heightened. Consumer promotions are being heavily used in the detergent markets to increase sales of each available brand. Consumer promotions, when implemented use up a lot monetary resources. Failure to implement the consumer promotion activity effectively may result in major loss of money. Purpose of the Study The purpose of this research is to explore the relationship between consumer promotions, price perceptions with product quality perceptions and brand loyalty in the detergent market of Bangladesh. LimitationsThere are vast amounts of information and write-ups relating to the topics of this research that are present in the internet and various other sources, but it were not possible to gain acce ss to many such information. So missing out some important aspect of the discussed topics can be a possibility. There is a major time constraint in doing the research work and preparing the report, a much larger pool of information could have been dealt with if there was more time to analyze them. A minimal sample size will be used for this research; if a larger sample was taken into consideration the research would have been more accurate.The survey will be conducted in Dhaka city which could be a possible reason for the people’s mind set to be similar and survey results not being very different from each other, the results could be different if people from outside metropolitan cities were brought under consideration. Literature Review Consumer Promotion Consumer promotion is thought to be a tool that helps manufacturers and retailers to achieve their objectives of generating sales (Alvarez and Casielles, 2004). Consumer promotion (e. g. oupons, samples, contests, sweepstake s, and price packs) is a part of sales promotion that is targeted towards the final buyers of consumer products (Kotler and Armstrong, 2002). There can be various types of consumer sales promotion some are incentive based while others are communicative in nature (Kotler et al. , 1999; Tellis, 1998). The incentive based promotions can be price – oriented promotion or non price-oriented promotion. According to Britannica (article 21279) advertising presents a reason to buy a product but consumer promotion offers a short-term incentive to purchase.Consumer promotions often attract brand switchers (those who are not loyal to a specific brand) who are looking primarily for low price and good value. Abraham and Lodish (1987) stated that many consumer goods categories sold 90% of their volume on special deals which is a result of consumer promotion. They also stated that the influence of sales promotions on the consumer will also depend on the consumer’s characteristics. Prom otions Price PromotionNon-price Promotion Promotion Packs Sampling POS Advertising Loyalty Discount Premiums DisplaysCoupons Sweeptakes Promotion Packaging Rebates Events Others From Sales Promotion by Gedenk; K. Neilson, Page- 34. Consumer benefits of sales promotions Benefits of sales promotions to consumers are numerous. Chandon, Wansink and Laurent (2000) for example distinguish six different types of consumer benefits regarding sales promotions: monetary savings, quality, convenience, value expression, exploration and entertainment. The first and most obvious benefit a consumer might encounter from a sales promotion is the monetary saving they provide.Second, consumers consider normally unaffordable products now to be in their choice set and therefore encounter the quality benefit. The convenience benefit, thirdly, is achieved by reduced search and decision efforts since sales promotions’ promotional status is advertised. Fourth, â€Å"sales promotions can enhance consu mers' self-perception of being smart or good shoppers and provide an opportunity to reaffirm their personal values† (Chandon, Wansink & Laurent, 2000) which is translated into the value expression benefit.The exploration benefit is achieved by the ever-changing shopping environment that provides stimulation for consumers’ information need. Last but not least, the sixth benefit consumers might encounter from sales promotions is the entertainment benefit. Sales promotions are often simply fun to see or to participate in (Chandon et al. ). Interesting to see is that consumers experience (either conscious or unconscious) more benefits from sales promotions than are often thought of. Price Perceptions According to Schiffman and Kanuk (2004) price perception is about how customers see a product’s price, as high, low or fair.They also stated that perception of price unfairness affect consumers’ perceptions of value and ultimately their willingness to buy a produc t. According to Moore et al. (2003) years of research concerned with price show both positive and negative perceptions serve as marketplace cues. Several studies have also portrayed the role of price perceptions as an attribute to success (Jiang and Rosenbloom, 2004). When the price perceptions are high this is a sign of positive quality, prestige and status (Moore et al. , 2003). The concept of reference price is related to price perceptions.Schiffman and Kanuk (2004) stated that reference price is the price the consumers use as a basis for comparison in judging another price. It is through reference price that the price perception of a brand of product is formed. When the consumer plans to buy a product, he or she will judge prices comparatively with the reference prices in order to determine whether the price is acceptable or not (Alvarez and Casielles, 2004). They also stated that, a result of consumers’ comparison between the prices and the reference price, potential los ses and gains emerge.The consumer perceives a gain when the reference price is higher than the observed price. If the observed price is higher than the reference price, the consumer experiences a loss. Product Quality Perceptions Product quality perceptions represent consumer judgment about the superiority of a product, which the user-based approaches think is essential in describing quality (Forker et al. , 1996). Bundles of attributes together represent a certain level of quality, which therefore provide utility to the customer (Snoj et al. 2004). The benefits are measured through a perceived level of quality (level of working superiority), a bundle of attributes in comparison with the consumer’s expectations. Schiffman and Kanuk (2004) stated consumers often judge the quality of a product on the basis of a variety of informational cues that they associate with the product. They also stated that the cues can either be intrinsic or extrinsic. Intrinsic cues are related to th e physical characteristics of the product itself, like size, colour, flavour, aroma etc.The extrinsic cues on the other hand are related to elements that are put together with the actual product like packaging, pricing, advertising etc. The perceived quality of products and services is central to the theory that strong brands add value to consumers' purchase evaluations (Low and Lamb, 2000). Brand Loyalty Brand loyalty is the ultimate desired outcome of consumer learning (Schiffman and Kanuk, 2004). According to Rawly and Dawes (1999) brand loyalty is the likelihood of positive attitudes and behaviors of consumers towards a particular brand, this could amount to repeat purchase and positive word of mouth.They also stated that a loyal customer base is an asset for a company and it reduces the need for seeking new customers. It is also a known fact that retaining current customers requires less money and effort than getting new ones. The strongest measure of brand value is the loyalty a company produces among customers (Aaker, 1996). Rowley and Dawes (1999) stated that to understand brand loyalty better the following components of attitude model should be considered: 1. Cognitive component – associated with a â€Å"rational† decision making based on informational determinants. 2.Affective component – associated with emotions and feelings about the product or service. 3. Co native components – associated with a behavioral disposition. Research Questions The following questions have to be addressed for the study: 1. Is there any significant relationship between consumer promotion and product quality perception in the detergent market of Bangladesh? 2. Is there any significant relationship between price perception and product quality perception in the detergent market of Bangladesh? 3. Is there any significant relationship between consumer promotion and brand loyalty in the detergent market of Bangladesh? . Is there any significant relat ionship between price perception and brand loyalty in the detergent market of Bangladesh? 5. Is there any significant relationship between product quality perception and brand loyalty in the detergent market of Bangladesh? Hypothesis The hypothesis that can be derived from the research questions are: 1. There is significant relationship between consumer promotion and product quality perception in the detergent market of Bangladesh. 2. There is significant relationship between price perception and product quality perception in the detergent market of Bangladesh. . There is significant relationship between consumer promotion and brand loyalty in the detergent market of Bangladesh. 4. There is significant relationship between price perception and brand loyalty in the detergent market of Bangladesh. 5. There is significant relationship between product quality perception and brand loyalty in the detergent market of Bangladesh. Development of Conceptual Framework * Consumer Promotion * Pr ice perception Product Quality Perception Figure 1: Conceptual Framework of research variables * Consumer Promotion * Price Perception Product Quality Perception Brand Loyalty Figure 2: Conceptual Framework of research variables Methodology Research design The illustrations of the conceptual framework Figure 1 and 2 above give a visual idea of the relationship and structure that exists among the study variables. The main purpose of the research is to assess the existing correlation among the variables. This research is about exploring and understanding the relationship that exists between consumer promotion, price perception with product quality perceptions and brand loyalty in the detergent market.Here in the figure 1the independent variables are assigned to be consumer promotions and price perceptions. The dependant variable on the other hand is product quality perception. In the second figure 2 the independent variables are consumer promotions, price perceptions and product quali ty perceptions, in this case the dependant variable is brand loyalty. So the researcher is attempting to find out, if any changes in the independent variable have a changing effect on the dependant ones as well, thereby proving that a relationship exists.The researcher also tried to find out the degree to which a change in the dependant variables has an impact on the independent ones, in other words the degree of relation is also explored here. Therefore the correlation study was chosen for this research. Sampling method The required data for this research was collected from the regular customers of detergents. There was no particular sample frame available for this research so convenience sampling was used, as it is also the cheapest and the easiest methods of sampling.The sample frame for this research consisted of shoppers (mainly house wives) at different shopping centers and stores etc, and also the parents of school children were included. In the shopping centers the researche r surveyed the people who seemed to be the most appropriate respondent for this kind of survey. The parents of kindergarten students, who spend time waiting for their kids outside the schools, were also surveyed, because they usually have a lot of time to spare and can give valuable inputs. Due to time constraints the survey was conducted in Dhaka city only. Over all there were about a 240 people who participated in the survey.Survey instrument A structured questionnaire was used to collect data. The questionnaire consists of different parts to gather information on the different variables under considerations. With questionnaires, no responses of the respondents can be missed out. It gives more time to the respondents to think and then give the answers. And it is a quicker and cheaper way to conduct the survey. Questionnaires can be conducted in any environment, with minimum influence of the outside environment. Questionnaires also have the advantage of keeping the personal details of the respondents confidential.MULTIPLE CHOICE QUESTIONS In which respondents have to choose one answer from many options. These questions gives a wide choice to the respondents so that they can give the most accurate and reliable answer. LIKERT SCALE Where the respondents are provided with a scale that has a number or brief description associated with each category. This scale is useful as respondents readily understand how to use the scale, making it suitable for almost all kind of surveys. Data Collection The data collection was done through both primary and secondary sources.The primary data was collected through questionnaire surveys and the secondary data was collected from the available archives of Unilever Bangladesh Ltd, for addressing the research questions. Data Analysis This is a study of relationship of various variables. So after the data collection a correlation analysis was performed using the acquired data, to ascertain if relationship between the variables exist or not. For doing the data analysis SPSS 12 was used, because it is a very systematic computer program that can deal with a large amount of data and can give out accurate results.