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Analysis Of Deodorant Industry

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Antiperspirant/deodorants are used to reduce underarm wetness and control body odor. These products are made by blending active ingredients with waxes, oils, and silicones and molding the mixture into stick form. Body odor is primarily generated in the area under the arms where there is a high concentration of sweat glands. While sweat from these glands is initially odorless, it contains natural oils, called lipids that provide a growth medium for bacteria living on the skin. These bacteria interact with the lipids, converting them into compounds that have a characteristic sweaty odor. Isovaleric acid, for example, is one chemical compound that gives sweat its smell. There are two primary types of products used to control body odor. The first, deodorants, reduce body odor by killing the odor-causing bacteria. These products do not affect the amount of perspiration the body produces. Antiperspirants, on the other hand, inhibit the activity of sweat glands so less moisture is produced. In addition to avoiding unpleasant wetness, these products also decrease odor because there is less sweat for the bacteria to act upon. While deodorants are considered to be cosmetic products because they only control odor, antiperspirants are actually drugs because they affect the physiology of the body. Although the exact mechanism of this physiological interaction is not fully understood, theory has it that antiperspirant salts form temporary plugs in some of the sweat gland openings so that moisture is not secreted. While this moisture reduction is not severe enough to interfere with normal body metabolism, it does noticeably lessen underarm wetness. 2. EVOLUTION OF DEODORANTS Products to control body odor and wetness have been used for centuries. Before bathing became commonplace, people used heavy colognes to mask body odor. In the late nineteenth century, chemists developed products that were able to prevent the formation of these odors. Early antiperspirants were pastes that were applied to the underarm area; the first such product to be trademarked in the United States was Mum in 1888. It was a waxy cream that was difficult to apply and extremely messy. A few years later, Ever dry, the first

antiperspirant to use aluminum chloride was developed. Within 15 years, a variety of products were marketed in a number of different forms including creams, solids, pads, dabbers, roll-ons, and powders. In the late 1950s, manufacturers began using aerosol technology to dispense personal care products such as perfumes and shaving creams. In the early 1960s, Gillette introduced Right Guard, the first aerosol antiperspirant. Aerosols became a popular way to dispense antiperspirants because they allowed the user to apply without having to touch the underarm area. By 1967, half the antiperspirants sold in the United States were in aerosol form, and by the early 1970s, they accounted for 82% of all sales. However, later that decade two technical issues arose which greatly impacted the popularity of these products. First, in 1977, the Food and Drug Administration (FDA) banned the primary active ingredient used in aerosols, aluminum zirconium complexes, due to concerns about long term inhalation safety. (This ingredient remains safe for use in stick form.) Next, the Environmental Protection Agency (EPA) strictly limited the use of chlorofluorocarbon (CFC) propellants used in aerosols due to growing concerns that these gases may contribute to the depletion of the ozone layer. CFCs were preferred as propellants for antiperspirants because they gave a soft dry spray. Although the industry reformulated their products to be safe and efficacious, it was too late. Consumers had lost confidence in aerosol antiperspirants. By 1977, sales of the reformulated versions dropped to only 50% of the market, and by 1982, they dipped below 32%. While some brands still offer antiperspirants in aerosol form, today these account for a very small percentage of the total market. As the popularity of aerosols waned, antiperspirants in stick form became increasingly popular. In 1974, sticks held only about 4% of the market and they were considered to be wet and aesthetically unpleasing. Such products were generally associated with deodorants for men. Because of breakthroughs in ingredient technology that allowed for drier, more efficacious products, sticks gained acceptance between 1974-1978. Consumers embraced sticks as an alternative to aerosols and their market share swelled to over 35% by the mid 1980s. Today, sticks are the single most popular antiperspirant form. 3. COSMETICS AND TOILETRIES IN INDIA Indias deodorant and antiperspirant industry is part of the cosmetics and toiletries market, which was worth about Rs 140 billion in 2002. The market grew at almost 6% in current value terms over 2001. Sun care and deodorants posted the strongest growth during this period. Marketing and educational initiatives by leading players such as Henkel SPIC and Hindustan Lever assisted the growth in the deodorants market. Changes in consumer behavior also fueled the demand. The Indian cosmetics and toiletries market is fragmented, with many manufacturers. Top five cosmetics and toiletries companies are: - Hindustan Lever - Colgate-Palmolive - Nirma - Godrej Consumer Products

- Dabur India.

4. MAJOR BRANDS IN DEODORANT INDUSTRY Although new players entered cosmetics and toiletries, and existing players added to their offerings, Hindustan Lever Ltd remained well ahead of the competition. In a highlyfragmented market, Hindustan Lever Ltd was the only player to hold a double-digit value share in 2006, with Colgate-Palmolive India Ltd a distant second. Hindustan Lever Ltds success was on account of its breadth of presence across various cosmetics and toiletries products, coupled with the best distribution system nationally and continued investment in product promotion. Domestic companies also looked at the buyout of brands and companies as a means of improving value growth, with players like Dabur India Ltd, Godrej Consumer Products Ltd and Marico Ltd all on the prowl for companies and brands that not only add to the top line but also bring in intangible benefits. The leader, Hindustan Lever, with its large portfolio of brands and products, accounted for approximately 41% of total value sales. Each of the other major players had about an 8.5% value share. Newer companies like Cavincare have also managed to garner a reasonable market share. Revlon, J L Morrison, L'Oreal are some of the major multinationals in the industry. The players with a significant presence in deodorant and antiperspirant brands are Hindustan Lever, L'Oreal, YSL, Procter & Gamble, JK Helene Curtis, Baccarose, and Menezes Cosmetics etc. The major products are: 1. Rexona 2. Fa 3. Axe 4. Zatak 5. Nivea range 6. Gillette series 7. Adidas 8. Avon 9. Spinz 10. Park avenue 11. Charlie 12. Temptation 13. Secret 14. Old spice 15. Playboy 16. DO IT 17. El-Paso 18. Denim range 4.1. REXONA Rexona was the first Deodorant to be launched in India in 1995. It is the only deodorant in

the Indian market that promises 24 hour protection from Body Odour. Rexona has ingredients that combine body odour protection and cosmetic values which are proven to work in challenging situations. 4.2. FA RANGE Fa Atomizer gently refreshes with fascinating fragrances. It gives you the feeling of long lasting protection through its effective deodorant system. Fa Stick makes you experience mild but efficient deodorant protection throughout the day with the new alcohol free formula. Its trendy new form has been developed for handy and quick application. Fa Roll-on has modern and trendy bottle design for easy application. Fa Deo-spray gently refreshes with luxurious fragrances. 4.3. AXE Axe, the deodorant that is considered cool, fashionable and stylish by young men was launched in India in 1999. Available in more than 60 countries around the world, it is a world leader in male toiletries. Axe has a mix that is completely harmonised globally from its proposition and communication to the product, as available on the shelf. Axe is available in five fragrances: Java, Pulse, Dimension, Voodoo and Phoenix. Axe has become the leading male deodorant brand in India within just one year of its launch. Consumers associate a lifestyle of cool clubs, cool music and cool fashion with Axe. The youth view it as an icon which introduces many 'firsts' to their world of music and dance like the first "World's Longest Dance Party" and the first ever 'Axe Voodoo Island Party'

4.4. NIVEA RANGE NIVEA DEODORANT SENSITIVE PROTECT with chamomile extracts offers the real confidence of effective 24h regulation of perspiration, anti-irritation. NIVEA DEODORANT FRESH ACTIVE with ocean extracts offers the real confidence of 24h effective deodorant protection providing a fresh feeling. The optimal combination of reliable deodorant protection and NIVEA?s mild care. 24h reliable deodorant protection and a fresh feeling Without colorants or preservatives Skin tolerance dermatologically proven NIVEA DEODORANT DRY IMPACT with minerals offers the real confidence of effective 24h regulation of perspiration and guarantees a dry skin feeling. NIVEA DEODORANT AQUA COOL with its Cool-Care Formula offers the real confidence of effective 24h regulation of perspiration with a kick of freshness.

4.5. SPINZ Spinz perfumed deodorants are made exclusively for the women of today, keeping her feeling fresh and active throughout her hectic day. It is safe to use and does not leave stains. Exotic and Enchante are the two perfumed variants filled with a fragrance that lasts for a long time. The new Hip-Hop variant comes with a sporty fragrance while Salsa comes with a romantic sweet fragrance. The spinz girl is around18-26 years old, fun-loving and filled with endless energy. Spinz is fast becoming known for its innovation. From the shape of the pack to the quality of the fragrances, Spinz ensures that it keeps up with the demands of modern and young India.

4.6. LYNXS DARK TEMPTATION Unilevers Lynx Deodorant (the UK version of Axe) has a new scent that sounds good enough to eatand thats the whole idea. Concocted from chocolate, frozen ginger, coriander, sage, black basil, pear sorbet and whipped cream, Dark Temptation is supposed to turn on womens taste buds, making men into man candy. 5. MARKET SEGMENTATION OF DEODORANTS GEOGRAPHIC DEMOGRAPHIC PSYCHOGRAPHIC BEHAVIORAL Climate Age Family life cycle Gender Income Occupation Race Social class Lifestyle Occasions Benefits Usage rate Readiness stage Attitude toward product

GEOGRAPHIC SEGMENTATION The geographic segmentation of deodorants is based on climate as it is a product which is preferred according to the weather. In hot countries, such deodorants are promoted which last long and have a mild fragrance. DEMOGRAPHIC SEGMENTATION Age constitutes a major factor in the segmentation of deodorants. Different deodorants are targeted for different age groups like Spinz deodorant has been targeted for the age group of

18-26. Family life cycle based segmentation means whether it is targeted for married people, teenagers or young. Gender based segmentation is the most important in deodorants as the needs of males and females in this concern are varied. Females like refreshing, mild and sweet fragrances while males go for strong ones. Income based segmentation is done where employed people spend more on their grooming and hence constitute a good market for deodorants, unlike those who fall in the lower income group and are satisfied with any cheap deodorant. PSYCHOGRAPHIC SEGMENTATION Lifestyle constitutes the basis of psychographic segmentation where different lifestyles demand different varieties. BEHAVIORAL SEGMENTATION Deodorants are used regularly as well as occasionally. Hence there are different choices for different occasions and uses. Usage rate also counts here as some people are staunch users of deodorants and apply it more than thrice in the same day while some apply it just for freshness. 6. MARKETING STRATEGIES ACCORDING TO PRODUCT LIFE-CYCLE The marketing strategies of deodorants have changed over time following the concept of Product Life-Cycle (PLC). An analysis of the strategies in different cycles is: INTRODUCTION STAGE Earlier when Itra, Gulabjal, soaps, perfumes, etc. were used and deodorants were initially launched in the market, they were considered a premium product. The prices were also high because promotional expenditures were high and the firms focused mainly on those buyers who were ready to buy, usually the higher-income group. Informing the potential consumers and inducing product trials was a costly affair. GROWTH STAGE Now the deodorants have entered the growth stage which is marked by rapid climb in sales. It is a stage where additional consumers starts buying it, new competitors are entering into the market, new features are being introduced into the product and the distribution is getting expanded. Prices are also lowering down and it is becoming an economic product. To sustain the main product, that is, deodorant, new features are being added to it like introduction of new fragrances, trendy bottle designs, lasting effects, anti-bacterial features, etc. 7. TRENDS IN DEODORANTS The above pie chart depicts how concerned are people about the smell of their sweat as it affects the overall deodorant industry. The above figure shows the growth rate of fragrances as compared to hair care, skin care and other cosmetics.

The sachet strategy is being employed in the nascent deodorant market. HLL has priced the 5 g Rexona deo-stick at just Rs 5.50 _ the lowest for such a product in the world. This strategy is also aimed at hooking the consumer with small packs and then getting them to buy the brand. The deodorant companies feel a huge consumer market can be opened up by this strategy. The problem with the deodorant market was that people hesitated to accept body odour as a problem. And even if it was, they preferred talcum powder to deo. More important, pricing of deodorants was a major deterrent. A sampling exercise was done to change these perceptions and outreach the consumer. But unlike the shampoo segment, where a sachet user remains that, the marketing of mini deos is not seen as a long-term strategy. However, the Chennai-based CavinKare has introduced single-use sachets for its Spinz Singiez perfumes in two fragrances priced at 1.50 each. The perfume market is estimated to be about Rs. 70 crores, but the market penetration is only 1 per cent. Given t he universal appeal of perfumes, the market can expand significantly if perfumes can break the price barrier and brought within the reach of the middle-class, which itself is very large, as NCAER studies show. Procter & Gamble is expanding its Secret female deodorant brand with the launch of a new product that is said to be clinically proven to provide prescription strength protection against wetness. The product has been developed using a patented triple-action technology that provides three layer protection to fight wetness, odour and provide skin soothing conditioners. On top of its unique formulation, it has also been developed for application at night, when P&G says that the body is most receptive to forming a strong barrier against perspiration. P&G has developed the new extra-strength deodorant on the back of statistics, claiming that 23 per cent of women currently classify themselves as 'heavy sweaters'. The New Secret Clinical Strength Anti-Perspirant/Deodorant will be launched in the US in March, in an Advanced Solid Scents: Light and Fresh and Powder Protection. Growing number of women in white-collar jobs and their growing taste for sophistication has propelled India to become one of the fastest growing markets for cosmetics and toiletries in the world. Indian women entering the workforce are placing greater emphasis on personal appearance and spending more to look their best, the study released today by global consulting and research firm Kline and Company said. Cosmetics and toiletries sales in India grew by 12.6 per cent in 2006, and companies see a tremendous potential in this budding market, it added. To garner a significant share of this growing segment, companies are now coming up with innovative products and revamped pricing strategies. The consumers are also moving away from traditional talcum powder toward more modern deodorants and anti- perspirants. 8. SWOT ANALYSIS

STRENGTH Acceptability by both male and female sections. Greater chances of incorporation of more features in the product. WEAKNESS Trends move according to fashion and style. No customer loyalty. OPPORTUNITY Industry in the growth stage so better future prospects. More segments to enter into. THREAT Stiff competition faced from national and international brands. Other alternatives like perfumes also growing up. 9. NEW LAUNCHES HENKEL SPIC India Ltd has added a variant to its Fa range of deodorants. Called Spring Flower, this is the first flowery fragrance and the sixth in the range. The company is highlighting its use of the active ingredient, Sensiva, in its deodorants, through this variant. Sensiva SC 50 reportedly inhibits the growth and multiplication of odour-causing bacteria, while at the same time not affecting the natural skin flora. This ingredient has been proved to be far more effective than Triclosan, which is used in deodorants made by competitors. There is a promotional offer on the company's deodorants, which retail for Rs 110 for a can of 175 ml and an extra 25 ml free. In the grey market, the deodorants are available for anything between Rs 120 and Rs 200. Henkel has started mentioning the price in its TV commercials as it wants to close the gap between the prices in the grey market and retail market. Fa's market share stood at 13.7 as of July 2002, according to ORG. The market share of Rexona deodorant, which is marketed by Hindustan Lever Ltd, stood at 26.1 per cent. Consumer products giant Unilever claims its new Dove brand anti-perspirant will not leave the irritating 'white marks' on clothing that traditional deodorants are renowned for. Unilever says white marks can be avoided by using the new Dove Ultimate Clear AntiPerspirant/Deodorant which is said to stay on skin rather than clothes. The new Dove Ultimate Clear product is available in the full line of Dove fragrances as well as in a new fragrance, Cool Essentials 10. NEWS Procter & Gamble (P&G) is considering selling its Sure deodorant brand after a portfolio review of the business. The move would coincide with P&G's increased prioritization of other brands, such as the young deodorant brand Tag within its' portfolio and falling Sure brand sales of $37.8 million in the 52 weeks ended July 16. Given that P&G sold its Gillette brand for $420 million off the back of sales of $275 million, the Advertising Age journal suggests that P&G could sell Sure for more than $100 million. Sure is currently operating in an increasingly gender-orientated market represented by brands such as Dove and P&G's Old Spice. The sale would be one of the first major strategic moves by the new president of global

deodorant Mary Anne Pesce since taking over the role in May. Potential buyers include market rivals Henkel, Colgate-Palmolive and Kao Brands. Kama Sutra has launched a range of deodorants in major cities, including Bangalore, Mumbai, Delhi and Hyderabad. Kama Sutra said the deodorants would be available for both men and women. The male fragrances consist of Spark, Dare and Urge, and the women's will be called Provoke and Intention. The Indian company said it would leverage its distribution network to make the new products available in approximately 100,000 stores