Case study On Failure of Ganga Soap

Background Information
This report brings out the launching of Ganga Soap, failure to make a
mark in toilet soap industry, being re-launched again, failing yet leading
to absolute end of the product in the market.

Launched by Godrej Industries in 1993, Ganga soap was produced from

the holy water of the Ganges. It was considered to be an innovation on
the part of the company. With the focus on the lower to middle
consumer segment, it was priced affordably.

The promotion techniques used for selling the product ended as the
company claimed it to be created from the holy water of Ganga. With
the achievement of fairly enough sales, the company looked forward to
derive more.

By involving its brand endorsement through famous Bollywood

personality like Govinda and thereby, the promotions took off very well.
By giving the tagline as “now bath in Ganga”, the message being
conveyed to the customers was very clear. The company targeted both
urban and rural areas for its marketing and specially with promoting it as
soap from The Ganga, it centered around the people with religious
beliefs.

However, there were many reasons that in spite of the strong initiatives
for marketing the brand, it failed to sustain itself.

With the company Godrej’s fallout with P&G being considered as one of
the main reasons, the fact that the product was not being able to sustain
itself due to its differentiation of being made from the water from the
Gangas. After it was re-launched by Godrej again in 1997 it was named
as “Doodh Ganga”. The company’s desperate attempts to gain
momentum through the product all went down.

By promoting in the similar way, it was well understood that it failed to

make any mark as the people became more aware of relating the product
on realistic. The amount of pollution affecting the Ganges and purity of
water declining making even more difficult to the company to gain sales.
By introducing the product merely on the religious basis, it was
understood that the company needs a broader scale to make the product
strike the customer. Therefore, a strong strategy is needed for bringing
the soap to a level where it can match up to the standards of its own
counterparts. Introduction

Godrej Consumer Products (GCPL) is a leader among India’s Fast

Moving Consumer Goods (FMCG) companies, with leading Household
and Personal Care Products. Brands, which include Good Knight,
Cinthol, Godrej No. 1, Expert, Hit, Jet, Fair glow, Ezee, among others,
are household names across the country. We are one of the largest
marketers of toilet soaps in the country and are also leaders in hair colors
and household insecticides. ‘Good Knight’ brand has been placed at an
overall rank 12 and continues to be the most trusted household care
brand in the country in Brand Equity’s Most Trusted Brands Survey
2010.

Branch Offices in Mumbai, Delhi, Kolkata and Chennai ensure pan-

India coverage, while factories located at Malanpur (Madhya Pradesh),
Thana (Himachal Pradesh), Katha (Himachal Pradesh), Guwahati
(Assam) and Sikkim cater to the diverse requirements of our product
portfolio and also have a strong emerging presence in markets outside
India. With the acquisition of Keyline Brands in the United Kingdom,
Rapidol and Kinky Group, South Africa and Godrej Global Mideast
FZE, They own international brands and trademarks in Europe,
Australia, Canada, Africa and the Middle East.
As part of increasing global footprint, also recently acquired Tura, a
leading medicated brand in West Africa, Megasari Group, a leading
household care company in Indonesia and Issue Group and Argencos,
two leading hair colorant companies in Argentina. We are driven by our
mission to continuously enhance the quality of life of consumers in high-
growth markets with superior-quality and affordable home care, personal
care and hygiene products. The brand “Ganga” by its name says that it is
derived from the holy water of the Ganges.

It is evident that it is not only targeting the customer base having

sentiments with the holy water i. e on religious norms but also the
typical customer base in urban areas. Thus, to create a giant base of
customer, it has to be well understood that the customer needs a proper
requirement of the product. Thus, it is the constant process of the
company to understand the requirements of the customers and bring out
the best in it. The strategies involving the Ganga soap in improving its
marketing will include the four P’s of marketing which are places,
product, promotion and price.

Using these methods, the whole product process of launching this soap
will be processed. Industry Analysis The toilet soaps market is estimated
at 530,000 tap including small imports. The market is littered over with
several, leading national and global brands and a large number of
small brands, which have limited markets. The popular and premium
brands include Lifebuoy, Lux, Cinthol, Liril, Rexona, and Nirma.
Toilet soaps, despite their divergent brands, are not well differentiated
by the consumers. Itis, therefore, not clear if it is the brand loyalty or
experimentation lured by high volumemedia campaign, which sustain
them.

A consequence is that the market is fragmented. It is obvious that this

must lead to a highly competitive market. Toilet soap, once only an
urban phenomenon, has now penetrated practically all areas including
remote rural areas. The incremental demand flows from population
increase and rise in usage norm impacted as it is by a greater concern for
hygiene. Increased sales revenues would also expand from upgradation
of quality or per unit value. As the market is constituted now, it can be
divided into four price segments: premium, popular, discount and
economy soaps.

Premium soaps are estimated to have a market volume of about 80,000

tones. This translates into a share of about 14 to 15%. Soaps form the
largest pie of the FMCG Market with bathing & toilet soaps accounting
for around 30% of the soap market, by value. Currently, the soap
industry is divided into three segments namely Premium, Popular
economy/Sub popular.
To fight competition, major players Hindustan Unilever Ltd (HUL), God
rej and Wipro Consumer Care & Lighting are now drawing up fresh
game plans. And the accent is clearly on innovation to gain mind share
as well as market share in this overcrowded category.

Industry Analysis
P’S OF MARKETING {MARKETING MIX}
4p’s of marketing is the base of marketing. The decisions in marketing namely
depends on mix marketing. This concept give sense to the owner that in what way
product can be produced in market. A manufacturer can capture the market by
applying 4p’s systemically. 4p’s of marketing is as under: 1. Product 2. Price 3.
Place (distribution) 4. Promotion There are two types of promotion- 1. Advertising
2. Sales promotion 1. Product: - Product is anything that is offered to satisfy needs
and wants of the customer. So that they can easily survive. . Price:- Whenever
company launches a product in the market they have to fix certain price according
to the product so that customer buys the product economically. 3. Place
(distribution) Place is also called distribution. If a company launches a product in
market it should be made available conveniently so that the consumer can easily
buy it. If distribution is not proper in the market the product may fail. 4. Promotion
Promotion is the mode of communicating with the customer. This is the area where
people get to know about the product.

PRODUCT

Godrej products have been aptly considered as a marketing miracle and this is
reflected in the strength of the brand. Godrej has successfully challenged and
changed the conventions of soap marketing and today leading business schools are
analyzing it’s strategies to demystify this miracle. Godrej’s core marketing thrust
revolves around prompting consumer trials by offering a good quality product at
most competitive price and retaining these new consumers by continuously
offering the same ‘Value for Money’ equation. This is borne by the fact that today
Godrej can boast of a strong brand loyalty from its 400 million consumer base.

Godrej has been increasingly successful in extending its brand equity to other
product categories like deodorants, Premium Toilet Soaps, hair color, thus opening
new vistas to the field of Brand Building. By launching its old product in a new
way to target the lower middle customer base segment, it is reaching out to a wider
scope by improving Ganga soap in terms of added ingredients, soothing fragrance
and keeping the skin fresh. Not only has it contained the new added functionalities
but also the trust of keeping up with the relationships with the new and existing
customers.

PRICE

For harried housewives, struggling to balance their monthly budgets, or people

who cannot afford premium soaps, for its natural properties, it is indeed affordable.
It is much cheaper than its counterparts like Dettol, which had already gone well
out of their reach. Its cleansing power is far superior. It is estimated that by the
mid-2011, the burgeoning sales of Ganga soap will reach a rate of growth that is
twice or thrice that of the industry in general. Moreover, Ganga operates in the
small-scale sector and, therefore saves an enormous amount of excise duty that
multinationals have to pay on every unit produced.

The latter simply could not hope to bring the price down to a level that was
attractive enough for the middle and lower-middle classes, which will be the bulks
segments for Ganga sales. The pricing policy adopted by Godrej for Ganga soap i.
e. adequate Quality at an Affordable price has challenged the mighty HLL’s
Dettol. Ganga soap 50gm| 15. 00| Ganga soap 100 gm| 25. 00| The Ganga soap
name itself is a guarantee of quality for the consumer. It will find ready
acceptance. Today, Ganga toilet soap is priced in the range of Rs. 15.

In comparison to Ganga’s price range, HLL’s toilet soap brands are priced at a
slight premium. Lifebuoy is priced at Rs 24, and Lifebuoy Gold at Rs29. The price
of Rexona is Rs29. 50. Primarily the area where Ganga will save millions will be
in labor costs. Being a cottage industry Ganga was not compelled to abide by
minimum wage rules. That started to mechanize their production process. Ganga’s
labor costs for 8000 workers is estimated to be between Rs 15-20 per person day in
comparison to HLL who paid their semi-skilled workers approximately 30-40 per
person day.

DISTRIBUTION {PLACE}

Ganga is estimated to sell over 800,000 units of soap in the starting year and
expects a 35% share of the Indian soap market, thus striving to become one of the
world’s biggest soap brands. The brand promotion efforts are complemented by
distribution reach and market penetration, through a country wide network of 400
distributors and over 2 million retail outlets, making the product available from the
smallest rural village to the largest metro. The product set up for Ganga a parallel
distribution and sales channel consisting of independent sales force.
A two-tier network, the distribution channel is ‘flat’ enabling swift market
response. The company takes great care that the new brand did not cannibalize on
the existing brands. The company portfolio today complements the product range,
furthering the company’s strategy of Value for Money.

PROMOTION

Ganga looking for advertising only after product is launched in place. It is believed
that nothing can be more irritating for a customer than to see a product advertised,
and then find it has not reached his grocer.

Advertising just tells people that a product is available. After that, the product has
to stand on its own feet on quality and price. The appearance on the cover has been
designed to bring out the freshness of the Ganga, and senses filling with the
fragrance of rose water keeping the skin fresh and good smelling. The
advertisement that has been made ready for on television has been devised keeping
in mind the psyche and choice of the middle class housewives. With the increase
the popularity of the T. V.

Soaps and there amplified impact on their thinking and daily life, these serials have
become an inseparable part of their lives. The new commercial has thus tried to
encase on this very aspect. The commercial is a reflection of these soaps and in a
way a mockery of these T. V. serials. Thus the commercial has been made to
attract a substantial amount of the audience. Furthermore Ganga is shown a “new
and improved look” in its promotional activities which will also be achieved
through this new commercial.
Findings
Ganga soap was launched with much fanfare in 1993. The soap was
positioned on the religious platform and was claimed to be made of
water from the river Ganges. It was considered to be an innovation on
the part of the company. With the focus on the lower to middle
consumer segment, the soap attained salvation in the early 2000. The
brand comes from an accomplished marketer who markets such iconic
brands like Cinthol.

The brand comes from an accomplished marketer who markets such

iconic brands like Cinthol. The brand was promoted heavily and even
had the film stars like Govinda endorsing it. Promoted using the tagline
“Now bath in Ganga" very directly puts the soap in a religious platform.
Reports suggest that the brand's initial sales was encouraging and also
there are reports that blame on the P&G and Godrej break up caused the
brand to decline.

Ganga had a revitalization effort in 1997 when Godrej tried to relaunch

the brand under the name Doodh Ganga. But those effort went in vain.
The primary reason why the brand failed was that the differentiation was
not sustainable over time. Although Hindu's are very religious in nature
and revers the tradition but the consumers are discerning when it comes
to purchasing products. There is a clear divide between religion and
products. Consumers seldom like mixing the two. It is OK if religion
and politics are mixed not soaps and gods. That may be the reason why
the toys of Hindu mythological characters are not popular in India.
The brand when launched was really praised for its innovative thinking.
One could see through the logic of the launch. Just looking at the crowd
at Kumbh Mela would encourage any marketer to think about launching
a product for the devotees of Ganga. But a closer look at the customers
could have proved the marketer wrong. Why would a customer buy a
product? That is a question that could reveal that Love for Ganga would
not rake in sales.

Rather than using Ganga as a differentiator, Godrej could have

positioned the product on the basis if Purity and Gentleness like
the Pears Soap. The can show the use of Water from Ganga to reinforce
the positioning. But the religious platform failed miserably. More over
this platform is too old dated for our new generation. Another funny
element is that although Hindus revere the Ganges, people are aware that
the river is the most polluted one. Hence there were consumer buzz that
using a soap made from such water may be dangerous. Sensing this
consumer talk, Godrej had to tell that the water was taken from places
near the origin of Ganges hence not polluted. Overall it was a messy
affair.

Ganga is a brand that could have survived as a small niche. I am still not
sure about the exact reasons that brand have failed in the Indian market.
The failure of such a brand should inspire a marketer to delve deep into
the psyche of Indian consumer before jumping into conclusions.