Surf Excel

PRESENTED BY:-

• Avick Biswas I.S.B&M, BANGALORE

MANAGERIAL ECONOMICS

MISSION STATEMENT

Unilever's mission is to add Vitality to life.

LOGO

This is the logo of “UNILEVER”

INTRODUCTION TO HUL • Lever brothers is founded by WILLIAM HESKETH LEVER in 1890 • Key player in food & household product industry • Historically grew through acquisitions • LEVER BROTHERS, THE OLD NAME WAS CHANGED INTO UNILEVER AFTER THE MERGER OF LEVER BROTHERS & MARGARINE UNIE IN 1930 • UNILEVER IS A MULTI NATIONAL COMPANY • IT IS ONE OF THE LARGEST CONSUMER GOODS COMPANIES IN THE WORLD • ITS BRANDS ARE ON SALE IN 151 COUNTRIES

PRODUCT OF FOCUS SURF EXCEL It is the oldest detergent To be present in INDIA Since 1960. • It believes that children must be free to experience their LIFE for themselves… •

BRAND EVALUTION HISTORY:•

•

Launched in 1959 & first in Indian detergent powder market. It was the first Fast Moving Consumer Goods (FMCG) for Detergent.

•

Brand to set up a one-stop shop - called Care line - for people seeking solutions to their varied laundry problems.

•

Surf was the first brand of detergent that was advertised on TV. It is advertise on more than 300 channels across the globe .

•

Introduced the concept of bucket wash to housewives who were used to washing clothes with laundry soap bars.

PRODUCT • • • • • • •

SURF EXCEL Advance Tropical Small & mighty Automatic Blue detergent Quick wash

RANGE & PRICEOF PRODUCT

2KG 25G Rs405 RS10

1KG Rs5

Rs210

500G Rs115

115G Rs20

50G

A comparison of cost price with sale price of Products in product line

•

Quantity

25 grams 50 grams 115 grams 500 grams 1000 grams 2000 grams

Cost Price in Rupees

Sale Price in Rupees

4.7 9.5 19 110.50 199.50 385

5 10 20 115 210 405

PROFIT RATIO

DEMAND ANALYSIS Factors affecting demand: 

Price of the product,



Price of substitutes and complements,



Income of the household,



Taste and preference of the household, and The amount annually spent on advertisement of the

 product.

Law of demand : Law of demand states that the amount demanded of a commodity and its prices are inversely related, other remaining constant.

CAUSES OF CHANGES IN DEMAND Increase in demand  Consumers income rises  Prices of substitute good rises  Prices of complements fall

decrease in demand Consumers income fall. Prices of substitute good fall Prices of complements rise

 Taste and preference change

Taste and preference change

• in favor of the commodity

in against of the commodity

SUPPLY FOR THE PRODUCT

• Supply channel : Distributers. wholesalers. Retailers. • Cheaper price range of Rs.450 to Rs.2 • Very good geographical distribution across whole India. • Both Urban and Rural market segment covered.

Distribution channel

PRICING STRATEGY

• Primary : 1. Cost-plus pricing : Mark-up to the cost of the product 2. Competitive Pricing : Price dependent upon price of the competitors. • Secondary : 1. Customer-Segment Pricing. DISTRIBUTION PRICING STRATEGY: FOR EXAMPLE: List price Add: Distributor price (5%) Add: Trade price (5%) Final Retail price (10%)

Rs. 100 Rs. 105 Rs. 110.25 Rs. 121

CROSS ELASTICITY OF DEMAND : • Cross Elasticity of the demand is defined as the ratio of the percentage change in the demand for one good to the percentage change in the price of some other goods.

• Substitute goods: Tide, Ariel, Rin, ghadi etc. Cross Elasticity will be positive in this case

• Complement goods: detergent cake, liquid soap . Cross Elasticity will be Always negative.

SWOT FOR SURF EXCEL

• STRENGTH

• India’s largest selling detergent company. • Brand innovation and renovation. • Reach of the product. • Competitive advantage. • Supply chain & distribution.

WEAKNES SES • Labour and input cost. • Finance. • Managing scale. • Raw material.

OPPORTUNITIES • Indian market for FMCG is growing @ 20% • Niche target market. • Market penetration • Geographical export

THREAT • Cheaper product eat into HUL market share. • Competitor trade strategy. • Urban consumer are shopping less. • Product from it’s own stable.

DEMAND FORCAST

IN SHORT RUN:

• Increase the promotion and marketing of surf excel . • Reduce the price of quick wash surf excel to wither the competition from P&G • ( TIDE ) • Investment of rupees 150 core in distribution network . (Specially on Wednesday and Thursday ) • Work on R & D to find tune Cost reduction to make the pricing more competitive.

IN LONG RUN • Introduce existing products into a new market, build on a strength. • Identify key sustainability issue for detergent market in India , as well as bench marking current sustainability. • Increase the production to 10 -12 tones / hour. • Maximize the share in 5000 Crore in detergent market. • Wider geographic coverage than rivals. • Recognition as a leader in technology and/or product innovation

•

MARKET STRUCTURE Type of market : OLIGOPOLY

= An oligopoly is a market form in which • Oligopoly a market or industry is dominated by a small number of sellers (oligopolists) • Because there are few sellers, each oligopoliest is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. • REASONS – FEW PLAYERS LIKE : HUL ( blue,matic) Nirma P&G ( Tide,Aerial) Henkel India (Mir, persil, porwall, vernel,purex)

Reckitt Benckiser ( Varnish)

• RESTRICTED MARKET. • AVAILABILITY OF VARITIES. • SELLING COST. • SIMILAR PRODUCTS. • STABLE MARKET. • PRICING.

Break Even Analysis of Surf

Total Sales Total Variable Cost Total Fixed Cost

Break Even Analysis

Break Even Point = unit

Total Fixed Cost S.P per unit- V.C per

Fixed cost

Break even(2005) = 1-

=

Variable cost Sales 1,205,298 14,474,255 118,119,110

= RS 5,991,714 Break Even(2004)

= Rs 7,521,253

Break Even (2003)

= Rs 6,808,887

Break-Even Analysis TC

Revenue

VC

FC

2005

2004

2003

Sales

Break-Even Analysis TC

Costs

VC

Loss

FC

2004

Sales

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