Managing Customer Value - Group AssignmentEXECUTIVE SUMMARY Hemas is one of the top diversified conglomerates in Sri Lanka. Out of Hemas’ various business stances in Sri Lanka, FMCG industry plays a significant part in generation of profits which help them to be market leaders. Baby Cheramy is the flagship brands in Hemas’ FMCG sector. It is being in the market for baby products for more than 40 years. Due to immense competition emerging from existing local and international products for babies Hemas is now facing threats. Author’s carried out a primary survey to recognize what is the current positioning about the brand in the customer’s mind and what are their expectations. After identifying the current stance in the customer’s mind author’s developed repositioning strategies which could be adopted by Hemas to retain the market leadership and to improve the market share. The following report has been prepared based on the analysis carried out in the following areas: Introduction to the company (SWOT, Porter’s 5 force Analysis and strategic group mapping) Gap Analysis Repositioning strategies and justifications Relevant appendices to give support to the analysis Based on the research findings possible recommendations are also been given at the end of the report. Group 1 – HF10C1BA Page 1 Managing Customer Value - Group Assignment ACKNOWLEDGEMENT The authors are heart fully thankful to their “Managing Customer Value” lecturer Mr. Rajitha Silva, whose encouragement, guidance, and support from the initial to the final level enabled to the authors’ to develop an understanding about the subject. Also the authors are thankful to Dr. Mahesha Samarathunga, for directing them in the correct path regarding citation and references. The authors also wish to thank the librarian. Lastly, the authors offer their regards to all those who supported them during the completion of this group assignment. The authors are responsible for any errors that remain in this assignment. Group 1 – HF10C1BA Page 2 Managing Customer Value - Group Assignment TABLE OF CONTENTS EXECUTIVE SUMMARY .......................................................................................................................... 1 ACKNOWLEDGEMENT ............................................................................................................................ 2 TABLE OF CONTENTS .............................................................................................................................. 3 1. COMPANY BACKGROUND ............................................................................................................. 5 1.1 1.2 1.3 Introduction to Hemas ................................................................................................................... 5 Marketing Philosophy ................................................................................................................... 5 Product Portfolio ........................................................................................................................... 6 2. SITUATION ANALYSIS ........................................................................................................................ 7 2.1 SWOT Analysis .................................................................................................................................. 7 2.1.1 – Strengths ................................................................................................................................... 7 2.1.2 – Weaknesses ............................................................................................................................... 7 2.1.3 – Opportunities............................................................................................................................. 7 2.1.4 – Threats....................................................................................................................................... 7 2.2 Porter’s Five Forces Analysis ............................................................................................................ 8 2.3 Strategic Group Mapping .................................................................................................................... 9 3. GAP ANALYSIS .................................................................................................................................... 10 4. REPOSITIONING STRATEGIES ......................................................................................................... 14 5. RECOMMENDATIONS ........................................................................................................................ 16 REFERENCES ........................................................................................................................................... 17 APPENDICES ............................................................................................................................................ 18 1) 2) 3) 4) 5) SWOT Analysis .............................................................................................................................. 18 Porter’s 5 Forces Analysis .............................................................................................................. 23 Strategic Group Mapping ................................................................................................................ 24 Sample Questionnaire ..................................................................................................................... 27 Survey Analysis .............................................................................................................................. 31 WORK LOAD MATRIX ........................................................................................................................... 39 Group 1 – HF10C1BA Page 3 .............................................. 14 Figure 7 ...........................................................Purchase Decision ...................................................................................Ratios........................Gap Analysis ...................................................................Brand Switching ...................................................................Group Assignment LIST OF FIGURES Figure 1 .............................................................................................Sri Lanka J & J – Johnsons & Johnsons FMCG – Fast Moving Consumer Goods B/C – Baby Cheramy Group 1 – HF10C1BA Page 4 .....................................................................................................Product Varieties ..........................................................................................................................................Attribute Preferences ...... 5 Figure 2 ..................................... 35 LIST OF TABLES Table 1 ......................Brand switching rate .............................................................................................Brand Perception ..............................Piyawera CSR scheme of Hemas ............................................................................................................................................................................................................................................................................................................ 13 Table 2 .. 35 Figure 14 ..... 6 Figure 3 ..............................................................................................Customer Awareness .........Porter's 5 Forces .............................................................Market share of toiletries .................. 22 Figure 9 .............................. 20 Table 4 ..................................................................................................................................................... 8 Figure 4 ................................................ 26 Table 5 ............................ 18 Table 3 ............Positioning Map ......................................................................................................................... 34 LIST OF ABBRIVIATIONS CDDA – Cosmetics Drugs and Devices Authority 5S – Japanese Quality Management System ECCD – Early Childhood Care & Development SL...........Taxation on Profits ........Preference Level ....................................................... 34 Figure 13 ..........Product Portfolio............................ 33 Table 7 .................................................................................................................................................Repositioning Strategies ................................................................................ 34 Figure 12 ..............................Product Range ................................... 32 Figure 10 ............... 31 Table 6 .Attribute Preferences......................................................................................................................................... 19 Figure 6 .......................... 33 Table 8 .....Market Share for soaps ..................................... 9 Figure 5 . 33 Figure 11 ................. 19 Figure 8..........................................................................Perception ......Managing Customer Value .......................................................................................................Preference Rates ........................................................................ This has started 32 pre schools all round the nation which educates more than 3000 students. They have invested in “Piyawera” scheme which has the motive to improve ECCD developments in early childhood of children in SL. 1.2 Marketing Philosophy Hemas has adopted societal marketing concept. obsession for performance.Managing Customer Value . power and leisure. transportation. Renowned for simple purity of product. Figure 1 . 2009). According to Hemas corporate website (2011). “In its life span of over 40 years B/C has grown into a complete range of toiletries and accessories for babies.Piyawera CSR scheme of Hemas Source: Hemas corporate website.1 Introduction to Hemas Hemas is one of the top diversified conglomerates in SL with 20 active subsidiaries which operates in 5 different sectors – FMCG. 2011 Group 1 – HF10C1BA Page 5 . COMPANY BACKGROUND 1. started its operations in 1948 (Hemas Annual Report. This is a listed company guided by its core values passion for customers. healthcare. 2009).Group Assignment 1. The following report is prepared based on the flagship brand – Baby Cheramy – of Hemas. using ingredients carefully tested for mildness and suitability for use on babies”. driven by innovation and concern for people (Hemas Annual Report. Group Assignment 1.Product Portfolio Source: Austceyl corporate website (2011) & Authors’ work Group 1 – HF10C1BA Page 6 .3 Product Portfolio FMCG Transportation Leisure Health Power Personal Care Home Care Foods Paper Products Traded Brands Figure 2 .Managing Customer Value . 2009).3) 2. 2011). 2011 & hemas annual report. B/C racks in super markets are filled with some other brands which could have an impact on the purchase behaviour. (Refer appendix 1. 2011). 2011). Many universities offer industry oriented degrees which the company can adopt. More recognition is there towards Unilever and P & G.1% (Hemas annual report. B/C product range has been in the market since 1962 (austceyl corporate website. Maybe due to the above reasons Hemas facing difficult times in certain segment like baby soaps. Financial policy is in a good position.Managing Customer Value . customer spending patterns has increased to a certain extent. (Refer appendix 1.1 – Strengths Hemas is a Sri Lankan company with 20 active subsidiaries and shares being traded in stock exchange (Hemas corporate website.1. (Refer appendix 1.16.1 SWOT Analysis 2.1. According LBO corporate website (2011). On average 340000 children are born in SL gives a available market for B/C (super brands corporate website. Customers mostly prefer foreign brands thinking that they have more quality than B/C.4) Group 1 – HF10C1BA Page 7 .2 – Weaknesses B/C has to face various competitive activities from its close rivals like Pears and J & J which make Hemas to retaliate based on their strategies.1. (Refer appendix 1.Group Assignment 2. Environment can get polluted by the polythene based packages.1. Tax rate has gone up from 14. 2011).4 – Threats Unregistered CDDA imports are dominating the market (LBO corporate website.2) 2. Hemas has adopted lean manufacturing systems recently and won various prices for brand excellence especially for B/C (you tube corporate website. As said by super brands corporate website (2011) it has the market share of 47% currently in toiletries segment.3 – Opportunities Tormenting war came to an end in SL which has created a gateway to enter into North and Eastern markets. SITUATION ANALYSIS 2. 2011) with a wide range of products.1) 2.6% . -Benefit over the economies of scale Existing Rivalry .2 Porter’s Five Forces Analysis Threat of Substitutes -Herbal products:Aloe vera soap -Home made remedies: Egg york. -Cost of changing brand -Buyer fragmented and dispersed.More than 11 competitors.Porter's 5 Forces Source: Done by Authors (Refer appendix 2) Group 1 – HF10C1BA Page 8 . Threat of new entrants and entry barriers -Government policies. -Health and safety rules. -Trade barriers. -Organic products.Group Assignment 2. -Registered trademarks with high brand loyalty. neem oil -Aromatherapy products. -High asset specificity -High exit barriers Buyer Bargaining Power Supplier Bargaining Power -Low bargaining power over suppliers. -Higher switching cost. -High switching cost -Monopolistic competition -Constant changes in prices and differentiation in product.Managing Customer Value . -Moderate power -Labour inputs -Raw material supplies -Utilities Figure 3 . -Legislation process. -Initial investment. Group Assignment 2.Managing Customer Value .3 Strategic Group Mapping Source: Done by Authors Figure 4 .Positioning Map (Refer appendix 3) Group 1 – HF10C1BA Page 9 . Features Very differentiations few Customers are various expect J & J offer various in fragrances which are fragrances available regarding the B/C. could thing of attractive colors.Group Assignment 3. toothpaste. offer all the variety as offer in their bottom balm. GAP ANALYSIS Attributes Available Expected Market (Local/Foreign) Product Variety B/C offers a large There are some more J & J. favored by babies. Package In 2009 October B/C Customers re-launched its product satisfied relatively J & J uses see through with new bottles. range of baby care varieties that the present launched products and customers and potential customers products are extremely happy expect from the brand Foreign brand does not about it. relating to kids and also packing.Managing Customer Value . such as baby bath. 2010). Pears have almost similar like B/C. Other local firms still have to improve their product range to make it comparable with B/C. products. they lotion etc mother countries. packaging to enhance packaging but Hemas Other brands do not customer acceptance could use various shapes make any difference in (Hemas annual report. Group 1 – HF10C1BA Page 10 . offers at the similar like quality and sense of price as B/C. Gift packs available at lower price consists of most of the product range of B/C. J/J. kohomba. need to go to purchase them eventually Price Market Price Price available in the According to the survey Local brands like market is the lowest young parents seek to kekulu.Managing Customer Value . Special Schemes B/C offers triple value People from sub urban Kohamba pack and offers gift BOGOF areas seek more value packs at a high price schemes for cologne for money from B/C comparing to B/C.Group Assignment Size Shampoo size is only Can improve the size of J & J offers 1 litre available 40ml – 400ml the bottles to 600ml – 1 bottles at a different liter where they do not package. Promotion Tag Line “Pure Love” products. look at other attributes etc. J/J offers different sizes of gift packs with a price lower than B/C. panda price. Avent. consumption. Group 1 – HF10C1BA Page 11 . satisfaction rather than only price. Curash & Mother care offers at a relatively high price. . Group Assignment Tools B/C uses national level Comparing to J & J B/C J & J uses repetitive TV radio etc to advertisement. improve childhood development. Imaginative Pears use to animative capture Hemas is one of the and creative ads can be creatures conglomerate which used to bridge the gap. Cargills etc and boutique shops. wide level distribution channels to all the super markets like Keels. early B/C and Pears purchased through word of mouth publicity by TV the users in the foreign are countries and in SL. Group 1 – HF10C1BA Page 12 . (Hemas advertisement website. potential customers. tries to promote ECCD development in Sri B/C can use repetitive Mother care. They are available in most of the regions in SL. awareness. racks provided. similar in nature so it These CSR might confuse B/C the can activities improve its audience. branded products to promote them. Place Channel B/C island second is distributed Current users of the J & J and Pears products through brand are satisfied with are displayed in separate of the placing of B/C. bond between mother and child. It has launched advertising on channels Curash “Piyawara” scheme to as like J & J. corporate 2011). is lacking behind in the advertisements which announcements development of emotion promotes bond between reach the which enhances the mother and child. small toddler’s attention. Avent and are mainly Lanka.Managing Customer Value . change it current ads with taking the above Stores are provided mentioned points into with racks to shelf their consideration. Keels online etc sell B/C brands.Managing Customer Value . Table 1 .Commerce websites Most of these brands were purchased online through e. Online E.Gap Analysis Source: Table was prepared based on survey findings and direct observations in supermarkets Group 1 – HF10C1BA Page 13 . So it is available at all possible shops which are very distributed island wide. locations in the areas few. their market leadership. shopping like Kapruka. low new strategies to make Mother care & Curash income to upper middle sure that the brand is are sold in baby care income.Group Assignment Reach B/C’s target segment Hemas spreads from can establish Other brands like Avent. Due to this they retain aftermath of war. Store Displays B/C racks are displayed in prominent places to attract and make the customers easily reach what they wanted. Alibaba. Local customers mostly get these brands imported or got them from friends in other countries.commerce websites. 2010). In terms of the requirements to be in the baby care market B/C has required functionalities. 2002). This is because of the strong image of quality regarding other brands created through promotional campaign.Repositioning Strategies Source: Adapted from Jobber and Fahy. Through image repositioning strategy Hemas could focus on how to implant the view that B/C is a good quality product. word of mouth etc. Jobber (2010) explained that there are four strategies that a firm can adopt into to reposition. Hemas could get advice from SL College of dermatologists who Group 1 – HF10C1BA Page 14 . REPOSITIONING STRATEGIES Repositioning is where a firm tries to change the perception that their customers’ hold in their mind regarding a particular product (Lovelock &Wright. Hemas could focus on getting medical approvals that ensures that the brand is out of any harm to the skin conditions of toddlers. Hemas can adopt “image repositioning strategy” to improvise the mental perception of people about the brand. 2008). Image repositioning is where keeping the product and target market the same but to change the image of the product (Jobber & Fahy. Figure 5 . But it is lacking behind in creating a strong brand image to combat competition stemming from the industry.Managing Customer Value . According to the primary survey conducted by the authors it is evident that customers’ perception on quality regarding B/C is considered to be low. Repositioning has gained vital importance in today’s context due to ever changing customer preferences (Jobber. 2008 .Group Assignment 4. 2011). So Hemas could make use of these graduates to enhance the current ingredients to make it more effective on tender skin conditions. It is a general issue that author’s came across that most of the customers are expecting more variety from B/C. So Hemas can give more emphasis in this additional recognition from an international treaty to convince that they are producing reliable baby care brand with giving more concern for the society in which they operate. Hemas signed an MOU with UNICEF in 2001 relating to its ECCD development programs initiated to enhance ECCD developments in SL (Hemas corporate website. Appearance of doctors would create more awareness towards the brands. Hemas could be benefited from carrying out promotional campaigns which would give more focus to the relationship of mother and child rather than of limiting to animated creatures.Group Assignment can give advice regarding quality enhancements they can have in each product variety of B/C.Managing Customer Value . Hemas could improve their backward vertical integration with their suppliers to get best quality products to manufacture requested product varieties of the customers. It is essential to look into the capabilities of the firm to get quality ingredients to manufacture varieties of fragrances. J & J seems to be the leader for varieties of products. Ads should not be of high end standard but could be able be understood by low income level as well. It is already said in SWOT analysis that there are chemical and bio technological degrees offered through local universities in SL. Repetitive ads could be able to lift up the need to purchase a product variety of B/C. For example they were expecting baby bath. Another strategy that could be used by Hemas is “product repositioning”. If they going get imported from other regions of the world the cost aspect Group 1 – HF10C1BA Page 15 . So Hemas could use this strategy to make their position better in terms of varieties. bottom balm and requested some variations in term of cologne fragrances. where target market would be the same but product will be enhanced. Hemas could use celebrity endorsements that would be inspirations to mothers having kids. The TV ads would give more impression to the customers rather than in any printed medium. RECOMMENDATIONS As per the research findings illustrate it is clearly evident that Hemas is in a very crucial point to reposition its flagship brand to bring up the perception of quality.Group Assignment should also be given much concern otherwise the current position of the brand in pricing would be cannibalized.Managing Customer Value . So above mentioned strategies could shift the current position of Hemas to a different and yet desirable place to improve market position and profits in future. Hemas is doing relatively well in sub urban areas and as well as in urban areas. By doing all the above it should be able to develop a customer centered culture which would lead to the success of the repositioning of the business venture. Hemas should again be able to promote it to the customers in a way which could get good reach. By coming up with products satisfying customer expectations the culture could be enhanced on being “customer focused”. Group 1 – HF10C1BA Page 16 . 5. It could seek the unarticulated needs of their customers and should utilize its unique resources and capabilities to develop new products. it could invest more in R & D and quality standards. So shift of target market is not essential. Due to emerging concepts on organic product and Hemas’ societal marketing concept this would aligned. Hemas could adopt image/product or both repositioning strategies to get rid of the emerging competition from baby care products. Hemas could also use organic and natural ingredients to their new varieties or could introduce a product range. Hemas could be able to develop marketing intelligence to gather useful information about any moves of its rivals. Hemas could get adapted to the evolving changes in the current market to be successful in the market. By using the strengths identified in SWOT. com. USA.pdf [Accessed on 18th May 2011] Scribd corporate website.shtml [Accessed on 30th May 2011] Super brand corporate website.com/index. UK.dailymirror. Sri Lanka Hemas corporate website.Group Assignment REFERENCES Austceyl corporate website. Available at: http://www. D & Fahy. Available http://print.html [Accessed on 5th June 2011] Hemas Holdings. Availble http://www.au/index_files/Page820. [online]. Available at : http://www.youtube. (2011).hemas. Available http://www. Quick MBA corporate website. (2011).hemas. 2nd edition.htm [Accessed on 20th May 2011] Daily mirror corporate website.com/watch?v=Xf-NG7-ROqA [Accessed on 29th May 2011] Group 1 – HF10C1BA Page 17 .Managing Customer Value . D.superbrands. (2011). (2009). (2011). and Wright.pdf [Accessed on 19th May 2011] Hemas corporate website. (2011).com/finrepos/98_Hemas%20Holdings%20AR%202009-10. (2011).php?action=nav&main=newsnmedia&sec=news&sel=15&ex=1&i d=69 [Accessed on 28th May 2011] Jobber. Pearson Education. [online]. Available http://www. [online]. (2011). Principles and practice of marketing. 6th edition. Hemas Annual Report 2009. [online]. Foundation for Marketing.com/lkc1/pdf/07_consumerSB. LBO corporate website. Available http://austceyl. Available at: http://www. [online]. Available http://www. Jobber.lk/business/127-local/19546.lbr.lk/fullstory. J. UK.com/strategy/porter. C. [online]. Mc Graw Hill.php?nid=201006091528589716 [Accessed on 20th May 2011] at: at: at: Lovelock. [online]. Principles of Service Marketing and Management. L.quickmba. Baby Cheramy – Pure Love. (2011).com/doc/22046549/A-PROJECT-ON-BRAND-REPOSITIONINGSTRATEGY-OF-TITAN-WATCHES [Accessed on 29th May 2011] at: at: at: You Tube Corporate website. [online]. (2008). (2011). (2002). [online]. Mc Graw Hill. (2010).scribd. As it is a baby care brand this has created bond with mothers and children and the value has been transferred from generation to generation.1 STRENGHS Being a product of Sri Lankan company Baby Cheramy is a product from Hemas. Position as the market leader Baby Cheramy is in the market leader position in the market of toiletries with 47% (Colognes 35%. Creams 54%. Talc 38%.Managing Customer Value . Wide range of products Napkin rash powder Baby Cologne Body Oil Baby Shampoo Baby Soap Pampers Cotton Buds Gift Packs Baby Talc Prickly Heat Powder Baby Cream Napkin rash cream Table 2 . Group 1 – HF10C1BA Page 18 . and Soap 42%) and accessories for babies (Super brands corporate website. 2011).Group Assignment APPENDICES 1) SWOT Analysis 1. This has enabled the brand to reach the target group without any difficulties. Long term sustainability in the baby care market Baby Cheramy is being in the market since 1962 (austceyl corporate website. 2011). It is in a healthy lead against Pears. 2011).Product Range Source: Author’s Work The product range satisfies almost every need of a baby. which is one of the Sri Lanka’s top 10 diversified conglomerates (Hemas corporate website. 2011).Group Assignment Market Share . Best local brand (2007). The pricing seems to be reasonable.Market Share for soaps Source: Authors’ Work based on youtube corporate website (2011) and superbrands corporate website (2011) Affordable pricing and island wide distribution Baby Cheramy targets the lower income to upper middle target segments (super brands corporate website. Brand of the year (2007).Market share of toiletries Market Share . “Baby Cheramy now permeates all geographical and socio-economic households in Sri Lanka”. Group 1 – HF10C1BA Page 19 . Best product brand (2007) and it is the No 1 brand for Hemas (YouTube corporate website. According to super brands corporate website (2011). New Zealand. Product is also been distributed to Australia.Toiletries 3% 19% 47% 31% Baby Cheramy Pears J&J Others Figure 6 . Recognition through awards received B/C has received SLIM brand excellence (2007).Baby Soaps 3% 5% Baby Cheramy 9% 42% 41% Pears Kekulu J&J Others Figure 7 . 2011).Managing Customer Value . Maldives etc. Ratios Source: Adopted from Hemas Annual Report (2009) Lean manufacturing production systems Hemas’ first step towards implementing 5S lean manufacturing system is now complete where Hemas has also received Gold award in the manufacturing sector and Silver award in overall category in the Taiki Akimoto award competition in 2010 (Hemas annual report.Group Assignment Financial Stability The financial highlights through ratios show a steady improvement over the past few years. Eg: Aloe Vera cream – 2004. This activity would increase the potential market share of Pears which is already the market leader in soaps for babies.Managing Customer Value . Table 3 . Continuous product developments and product launches In order to combat the immense competition in the market Hemas continuously launches new product ranges time to time.2 WEAKNESSES Lacking back in certain Segments Pears launched new soap range with flower fragrances which is new to the market. Plastic Cologne bottles – 2005 1. 2009). Group 1 – HF10C1BA Page 20 . In that various other brands were placed. So this would have an impact on purchase decision at the store where as this is not the case in J & J racks. It hit a peak of 28 percent in mid-2009 but fell thereafter”. most FMCG categories saw double digit growth. If Hemas tap these markets in could generate more revenue. Other brands placed in B/C racks B/C has provided certain racks which promotes its brands. Qualified work force accessibility Many universities in SL for example Moratuwa provides chemical engineering degrees and Colombo University provides biotechnological degrees. Quality wise J & J seems to be preferred first. Child Birth Rate In SL approximately 340000 children are born each year on average (Super brands corporate website. Increase in consumer spending pattern According to LBO corporate website (2011). Hemas can reach the Northern Province markets easily. Sri Lanka had high inflation in 2008.3 OPPORTUNITIES End of civil war in Sri Lanka "Aided by markets that were previously underserved. 2011). 2011).Managing Customer Value . foreign brands (J & J) promotes repetitively. and the improvement in the local economy. Group 1 – HF10C1BA Page 21 . Lack of Promotion Hemas does promotion when they do product launches or when they do CSR to kids whereas.Group Assignment Customer Perception Hemas is yet to retaliate the misconception of the quality of the product range. 1. “Hemas group’s said its FMCG division grew revenues at double digit rates in the latest financial year and it re-launched brands as consumer spending rebounded." Hemas chief executive Husein Esufally told shareholders in the annual report (Lanka Business Online corporate website. Packaging is not that attractive compared to other brands. Hemas can be able to access these students to improve their R & D functions for better products. " says Esufally (Lanka Business Online corporate website.16.1% during last year which is a threat as it would have an impact on the revenue generated by the product ranges of baby cheramy.4 THREATS Competition from imported brands There are many international companies which cater to the same market of baby cheramy. Increase in taxation rate The taxation rate has increased from 14. Farlin are also in the same markets. Overcoming this brand recognition creates immense threats to the company.Managing Customer Value . "Over the years our fragrance category has been adversely impacted by the plethora of unregistered with CDDA imported fragrance produces available in the grey market. P & G’s pampers. 2011). J & J for premium price and Pears for average price range. Group 1 – HF10C1BA Page 22 .Group Assignment 1.6% . Figure 8. More recognition towards Unilevers and P & G Hemas has to compete with Unilevers which has baby care brands targeted towards segment in two extremes i.e. There is a threat of reduction in the market share of the brand.Taxation on Profits Source: Hemas corporate website (2011) Environmental Pollution Product range often uses plastic and polythene based packages. This would have an impact on the environment and would go against their “social responsibility” concept. There are various foreign and local emerging players which makes the market monopolistic competition.e Baby Cheramy. Products are differentiated. raw materials. gingili oil. Asset specificity will be high as equipment used in production is very unique in nature and wouldn’t be able to find a readily available market price. Home remedies are also available such as egg yolk. 3. When customers switch from one brand to another they have to face switching costs where the brands offer products at different prices. If those brands enter the market it would be a substitute. neem oil etc. 2. Pears and J & J. There are not standardized. So the demand curve remains inelastic due to lack of alternatives. Buyer Bargaining Power Buyers are fragmented and widely dispersed around the country. Supplier Bargaining Power Suppliers are powerful to a certain extent as companies in the sector needs to get inputs from various sources such as labour. Organic products are been developed. So there is no way that a particular customer can have bargaining power over suppliers. Aromatherapy remedies are also available.Group Assignment 2) Porter’s 5 Forces Analysis 1. Group 1 – HF10C1BA Page 23 . Existing Rivalry Baby care market is highly concentrated as there are 3 dominant players i. In order to retaliate this threat now B/C and J & J has also launched herbal range.Managing Customer Value . differentiation in products etc. But this has not created that intense threat. Demand sometimes tends to be cyclical where it fluctuates over birth rate (Quick mba corporate website. Threat of Substitutes Most of the rivals produce chemical based baby cosmetics where as some of the new players like Kohomba baby and kekulu came up with herbal products which created a threat for the market leaders. So exit barrier would be high. utilities etc. 4. The dominant players face difficulties in the market due to changing prices. 2011). Health and safety rules. It can be said that this force’s impact is moderate. All the brands in the segment are registered trademarks with high brand loyalty. Threat of new entrants and entry barriers Government procedures are to be followed when a new competitor enter into the market. legislation process and initial investments can be said as potential barriers for a new comer.Managing Customer Value . But as it is a monopolistic market there are very little barriers to ban the entry to avoid cut throat competition as in oligopolies. Firms are well established foreign or local companies which has significant benefit over the economies of scale rather than of a new comer to the industry. 3) Strategic Group Mapping The strategic group mapping was done based on the two variables mentioned below: Product Variety Product Prices The bases for the analysis were taken from the table below consisting of the information for each brand for the above variables.Group Assignment 5. Brand BABY CHERAMY Variety SOAP SOAP ALOE SOAP FLOWERS COTTON BUDS CREAM CREAM MILK POWDER PRICKLY HEAT TALC NAPPY RASH CREAM SHAMPOO FEEDING BOTTLE POWDER CREAM CREAM ALOE TALC FLOWERS CREAM MILK HA/BODY OIL ALOE COLOGNE COLOGNE FLOWER Quantity Price 75G 75G 75G 100S 50ML 50ML 100G 100G 100ml 125ml 120ml 200g 100ml 100ml 200g 100g 125ml 50ml 50ml 33/= 33/= 33/= 43/= 58/= 58/= 67/= 70/= 85/= 90/= 100/= 105/= 105/= 105/= 105/= 105/= 110/= 110/= 110/= Group 1 – HF10C1BA Page 24 . Managing Customer Value .Group Assignment FEEDING BOTTLE DIAPERS SMALL 4S DIAPERS MEDIUM 4S DIAPARS LARGE 4S SOAP 5S SHAMPOO BABY CHERAMY TALC CREAM CREAM ALOE VERA COLOGNE BABY DOLL COLOGNE TEDDY BEAR BABY CHERAMY COLOGNE COLOGNE FLOWER OIL COLOGNE FLOWER COLONGE GIFT PACK CREAM NAPPY WASH POWDER DIAPERS X/LARGE 10S DIAPERS LARGE 12S DIAPERS MEDIUM 12S SOAP TIP TO TOE WASH BABY CREAM COLOGNE COLOGNE POWDER MIST POWDER BABY LOTION SHAMPOO HAIR OIL MILK CREAM MILK BATH GIFT BOX BABY BATH PEARS HERBAL SOAP SOAP SOAP FLORAL CREAM PEARS BABY POWDER SHAMPOO COLOGNE FLORAL 240ml 110/= 135/= 135/= 135/= 145/= 155/= 175/= 178/= 178/= 180/= 180/= 195/= 195/= 195/= 290/= 290/= 300/= 325/= 335/= 380/= 380/= 380/= 65/= 65/= 100/= 115/= 125/= 125/= 135/= 160/= 180/= 200/= 210/= 225/= 280/= 300/= 33/= 33/= 33/= 58/= 68/= 90/= 105/= 75G 250ml 400g 200ml 200ml 125ml 125ml 100ml 100ml 250ml 200ml 200ml 400ml 1kg J&J 75g 50ml 100ml 50g 50ml 50ml 100g 100ml 100ml 100ml 100ml 100ml 200ml 75g 85g 75g 50ml 100g 120ml 55ml PEARS Group 1 – HF10C1BA Page 25 . Product Varieties Source: Done by Authors Group 1 – HF10C1BA Page 26 .Managing Customer Value .Group Assignment OIL COLOGNE FRESH HERBAL CREAM CREAM COLOGNE MAGIC DROPS SOAP 75G 5S SAVE 20 HERBAL CREAM CREAM COLOGNE COLOGNE MAGIC DROPS MOSTURINSING LOTION MILK BATH SHAMPOO BABY OIL FACE CREAM SOAP SHAMPOO BABY WASH COLOGNE CREAM BABY TALC SOAP COLOGNE TOOTHPASTE SOAP FEEDING BOTTLES COTTON BUDS SOAP FREE BATH BABY WIPES SILICON TEAT FEEDING BOTTLE CREAM COLOGNE MOISTURIZING LOTION BOTTOM BALM FEEDING SPOONS COLOGNE GIFT PACK BABY SOAP CREAM 115ml 50ml 100ml 100ml 50ml 200ml 200ml 100ml 100ml 100ml 100ml 100ml 100ml 100ml 120ml 120ml 100ml 100g 75g 50ml 75g 110/= 110/= 115/= 115/= 115/= 155/= 178/= 195/= 210/= 210/= 120/= 120/= 120/= 140/= 160/= 110/= 130/= 100/= 95/= 68/= 32/= 95/= 50/= 220/= 431/= 767/= 1145/= 1031/= 45/= 45/= 98/= 140/= 175/= 1350/= 1250/= 725/= 175/= 380/= 33/= 105/= BABY BONN NS – PANDA BABY SIDDHALEPA KEKULU FARLIN CURASH BABY 200ml 400ml LARGE MEDIUM 100g 100ml 200ml 125ml 100ml 80g 100ml MORRISON’S BABY AVENT KOHOMBA BABY Table 4 . 000-100. Baby Cheramy b. Avent l. Panda j. Rate the brands which you are familiar with. Other _________________________________ (Give ranking from 1-10) Group 1 – HF10C1BA Page 27 .000-20. Income level a. 20. <10. Morrison’s baby d. Rebeca Lee e. Pears h.000 e.000 02.000 d. 50.000-50.of kids at home: _______ 01. Baby Bonn i. Kekulu Baby g. a. Curash f. J & J c.000 b.000 c. 10. >100.Managing Customer Value . Farlin m.PRIMARY SURVEY- a) Location / Address: ________________________________________________________ b) No. Kohamba Baby k.Group Assignment 4) Sample Questionnaire BRAND PREFERENCES – BABY CARE PRODUCTS IN SRILANKA . Word of mouth Group 1 – HF10C1BA Page 28 . Value for money b. What triggers/ affects your purchase decision on a baby product? a. Cost c. Quality b. What is the perception on your mind in relation to baby cheramy product range? a. Very Frequently b. What is your primary preference when it comes to brand for babies? a. Varieties d.Group Assignment 03. How frequently would you switch from one brand to another? a. What about your post purchase experience of the above preferred brand? Brand ______________________________________ Very good Good Moderate Bad Very bad 06.Managing Customer Value . Other ______________________________________ 04. Price c. Availability e. Never 05. Availability e. Family culture b. Sometimes c. Superior quality c. other ________________________________________________ 07. Reasonable price d. No Group 1 – HF10C1BA Page 29 .Managing Customer Value . Yes b. Would you recommend your brand to other person? a. Store display e. Status 08. Do you intend to change your brand in future? a. Are Baby cheramy brand readily available in the market? a. Variety e. Word of mouth (Family & Friend) b. Other ______________________________________________ 09.Group Assignment d. Rate your satisfactory level after using Baby cheramy for your kids? + 1 + 2 + 3 + 4 + 5 10. No 14. How did you get to know about Baby cheramy? a. Yes b. Do you buy branded products? a. CSR projects d. No Reason? ______________________________________________________________________ 13. No If yes states the brand ______________________________________ 11. Yes b. TV ads c. Yes b. Till what age do you use baby products for your kids? ______________________ 12. Yes b. I am price conscious. Group 1 – HF10C1BA Page 30 . quality. No 17.Group Assignment 15 Kindly choose an option. I am brand conscious d.Managing Customer Value . What is your expectation from the brand mentioned above? Give your suggestions. I am quality conscious. Both Quality& brand g. Both price & brand e. Price. What is your most favourite variety in Baby Cheramy? ________________________________________________ 18. Both price & quality f. ___________________________________________________________________________ Thank You. Do you think that low price goods would have quality? a. c. & brand 16. a. b. Managing Customer Value . First Preference Second Preference Third Preference First Preference Brand Baby Cheramy J&J Curash Pears Baby Bonn Mother Care No of Respondents 27 36 4 10 2 5 Brand Second Preference No of Respondents 34 14 20 2 8 6 Baby Cheramy J&J Pears Baby Bonn Avent Farlin Third Preference Brand Baby Cheramy J&J Morrison's baby Rebecca Lee Curash Pears Baby Bonn Kohomba Baby Avent Farlin No of Respondents 16 12 2 4 2 30 4 6 4 4 Table 5 .Group Assignment 5) Survey Analysis According to the preferences of the sample group from whom information was gathered the preference level of the baby care brands has been divided into three.Preference Rates Source: Compiled by Authors Group 1 – HF10C1BA Page 31 . Preference Level Morrison's baby Baby Bonn Rebecca Lee Kohomba Baby 5% 2% Source: Done by Authors Group 1 – HF10C1BA Page 32 .Group Assignment First Preference Baby Cheramy Curash Baby Bonn 2% 6% 12% 5% 32% Second Preference Baby Cheramy Pears Avent J&J Pears Mother Care J&J Baby Bonn Farlin 7% 2% 10% 40% 24% 43% 17% Third Preference Baby Cheramy Curash Avent J&J Pears Farlin 5% 5% 7% 19% 14% 36% 5% 2% Figure 9 .Managing Customer Value . Brand switching rate Source: Done by Authors Group 1 – HF10C1BA Page 33 .Group Assignment Source: Compiled by authors Next concern was on what attribute the parent prefers when it comes to the purchase of baby care products. Brand Switching No of Frequency Respondents Very Frequently 7 Sometimes 53 Never 24 Table 7 . Attribute Preference Attributes No of Respondents Quality 48 Price 7 Variety 13 Availability 16 Table 6 .Attribute Preferences Source: Compiled by authors 60 50 No of Respondents 40 30 20 10 0 Quality Price Attributes Variety Availability Figure 10 .Managing Customer Value .Attribute Preferences Source: Done by authors The next concern was on the frequency of switching from one brand to another. Managing Customer Value .Brand Perception Source: Compiled by authors Group 1 – HF10C1BA Page 34 .Brand Switching Source: Compiled by authors Next element was based on the perception about B/C on customers. Customer Perception about B/C Perception No of Respondents Value for Money 8 Superior Quality 16 Reasonable Price 29 Availability 25 Never Used 6 Table 8 .Group Assignment Figure 11 .Perception Figure 12 . Group 1 – HF10C1BA Page 35 .Customer Awareness An MCQ based question was asked to know which aspect of the product makes them take conscious decisions. Customer awareness Variables No of Respondents Word of mouth 17 TV ads 27 CSR project 25 Store display 15 Source: Compiled by authors Figure 14 . The table below is prepared based on the gathered information. Triggers of Purchase Decision Stimuli No of Respondents Family Culture 21 Cost 6 Word of Mouth 23 Variety 27 Status 7 Source: Compiled by authors Figure 13 .Managing Customer Value .Purchase Decision People get knowledge about the B/C brand from various sources.Group Assignment Survey also focused on the triggers which affects the purchase of a baby care product. The finding showed the results below. Group Assignment Elements Price conscious Quality conscious Brand conscious Price & brand Price & quality Quality & brand Price. quality & brand No of Respondents 22 2 20 14 26 Source: Compiled by authors Another focus was on the perception of customers regarding price and quality. Second preference is given mostly to B/C (40%) and Pears got 24% of preference as second. 57% of the respondents said that they assume that low price doesn’t have quality. It is evident after the survey by the gathered information.Managing Customer Value . As SL is in the middle income position in global rating of countries it has managed to sustain the market leadership throughout these years. baby soap etc. They gave more preference to quality features of J & J and few foreign brands like Mother Care and Curash. Customer generally does not use only one brand satisfy their baby’s needs but pick different products from 2-3 brands to get maximum satisfaction. Summary As per the preference ratings. Group 1 – HF10C1BA Page 36 . Mainly in urban areas income level seems to be high and they are eligible to spend significant amount on their baby’s daily needs. B/C is being the first preference among sub urban people. Most of the customers preferred J & J (43%) where as B/C occupied the second place (32%). This shows that B/C is even used in urban households for their popular product ranges such as baby cologne. cologne and soap varieties if B/C but they expect more variations in flavors and quality aspect of it. Customers are greatly satisfied with baby oil. 28% of the respondents preferred positive word of mouth publicity received from their Group 1 – HF10C1BA Page 37 . The post purchase perception of B/C. 29% of the respondents remain loyal to brands they use. When considering about the willingness to switch from one brand to another. Mainly the variety of goods impressed most of the sample group of the survey (32%). There is very low room to convince them to change their mind set unless some value addition is done to Baby Cheramy. 71% of the people think of changing their brands if there is a better brand is available.Group Assignment In the third preference level Pears takes up its position of 36% and in B/C 19% which shows that Pears is considered to be the second best to B/C in overall view. Unilever’s product range J & J and Pears are considered as in the proceeding and succeeding positions.Managing Customer Value . B/C is well known among the sample group for the reasonable pricing (35%) and availability (30%). Regarding product attributes. They always think of post purchase experience they gathered after consuming a particular brand and always wanted to avoid rashes. More than 50% of the respondents wanted good quality for their baby care products. B/C’s perception for value for money and superior quality is lacking behind as very few has voted for them. Next preference is given to variety and availability of the specific product range. Purchase decision of baby care products is triggered by. B/C has to focus more on R & D to create more value to the existing emphasizing on quality to tap the people who prefer to change their mind set from other brands to B/C. Price is considered as the least preferred as the very last option for most of the respondents as they are ready to spend more for the sake of their kids. itching or any skin effects. Managing Customer Value . Group 1 – HF10C1BA Page 38 . The sample group got to know about the brand mostly from television advertisements (32%) and 30% of them came to know through their CSR projects carried out island wide. brand comes the next.Group Assignment colleagues and relatives. ECCD programs conducted by Hemas group have been resulted in more awareness generated to the general public. Sample group seems to be more focused towards quality where price. .Archchana CB003654 100% Swot Porter’s 5 force Positioning map 33...... J...Kugadhep CB3721 50% 33.F.Group Assignment WORK LOAD MATRIX V.33% 50% 40% 30% 30% ....33% 30% 30% 40% …………….33% 50% 50% 50% 33..Farista CB3753 50% 33....33% 50% 50% 33...Managing Customer Value ... Executive Summary Company Background Situation Analysis Gap Analysis Questionnaire Questionnaire Summary Repositioning strategies Recommendations Documentation Signature Group 1 – HF10C1BA Page 39 ..33% 50% 33..33% 50% 30% 40% 30% ……………… C.