Demand Analysis Of

Sunscreen
A Micro Economics Project

Introduction

Sunscreen is a lotion, spray, gel or other topical product that absorbs or reflects some of
the sun's ultraviolet (UV) radiation and thus helps protect against sunburn. It is also
commonly known as sunblock, suntan lotion, sunburn cream, sun cream or block out.

The measurement of protection provided by the sunscreens is calculated by the sunscreen

protective factor (SPF).

The gradual increase in depletion of the ozone layer has led to the increase in usage of
sunscreens as the active ingredients in sunscreens work either by absorbing the sun's
ultraviolet (UV) radiation, preventing it from reaching the deeper layers of the skin, or by
reflecting the radiation.

Objective
Our basic objective behind studying the demand of sunscreens is to answer the following
questions :

Who is the target audience of the product?

Why is the product purchased?

What are the factors affecting the demand of the product?

Any grievances regarding the product?

What leads to the spread of knowledge of the different types of the product?

Which all competitive brands of the product exist in the market?

Considering the result of the survey conducted and the opinion of an expert, demand for
the FMCG is forecasted and analyzed.

Proposed Methodology
The project aims at forecasting the demand of sunscreens by a survey method.
The method of approach adopted for the same is:

Preparing a questionnaire to conduct a survey among masses keeping all aspects of

demand of a sunscreen into consideration.

Conducting the survey by distribution and filling of online forms.

Analysis of the result of the forms i.e. demand analysis of sunscreens.

Studying the existing competition in the market for sunscreens.

Expert opinion method undertaken.

Hypothetical launch of a sunscreen in the market.

Industry

The total size of the Indian retail beauty and cosmetics market is currently estimated at
Rs. 6000 crores.

Indian cosmetics market is growing twice as fast as that of the United States and
European market.

The skin care market is still however at a primary stage in India. The penetration level
of this segment in India is around 20 per cent.

Major companies active in this segment include Hindustan Lever; Godrej Soaps,
Colgate-Palmolive, Marico, Dabur and Procter & Gamble.

Drivers of the Industry

Growing worldwide wealth

Changing consumer lifestyle

Globalization

Celebrity endorsement increases consumers awareness and interest

Competition
There are many competitive brands of sunscreens in the market. The biggest player in
sunscreen market in Mumbai is LOTUS. Other brands from which it faces fierce
competition are :

LAKME

NIVEA

NEUTROGENA

BANANA BOAT

VLCC

LOTUS
The market leader in sunscreens has two variants in Sun Blocks :

Kids

The kids sun block cream is made up with a sensitive skin formula. It is
sweat and water proof, non greasy with a SPF of 25. Its market price for
100gms is Rs. 295.

Normal

The normal Lotus sunscreens are available in many different fragrances.

They are usually sweat and water proof and non-greasy with a SPF of 20.

LAKME
Lakme produces a sun expert fairness + UV lotion. It has a
light feel formula and is dermatologist tested. It can be used
for normal to dry skin. The Hindustan Unilever branded
product has a market price of Rs400 for 100ml. It has SPF 30.

NIVEA SUN
Nivea sun gives you moisturizing and immediate sun
protection. It has a SPF of 30. It is non sticky and water
resistant. A 75ml bottle costs Rs. 200 in the market.

NEUTROGENA
It is an ultra sheer with a ultra light clean feel. It leaves the
skin smooth and soft. It is waterproof and dermatologically
tested. It has a SPF 50 and an MRP of Rs. 499 for 88ml.

BANANA BOAT
Banana boat has four different types of sunscreens.

Kids

Sport

Spray

Normal

Normal: It has an ultra defense broad-spectrum sunblock with SPF 50. It has a avo triplex
photostable UVA technology. Its UVA/UVB protection is long lasting. It is waterproof and
absorbs quickly.

OTHERS
There are many other sunscreens, which are only
medically prescribed by dermatologists. They are
extremely sun protective creams. Some of them are
VLCC, Suncross 50- Ranbaxy, Rivela etc.

Global Perspective

As per the data of 2013, sun care accounts for 10% of the global skincare market.

The sun care products are expected to show highest growth in the global skincare
market from 2013 to 2017 at the rate of +6.5%.

The global spending on sun-care products in 2013 was $8.7 billion, the distribution
among the products was as follows :Self Tanning Products

$1.4 Billion (16%)

After Sun Products

$1.7 Billion (20%)

Sun Protection Products

$5.6 Billion (64%)

Demand Analysis
Demand is the amount of goods that consumers or buyers are willing and capable to buy at
a specific price in a specific time period while everything else remains the same.
Demand Analysis
is
the
research into
the
desire
of consumers for
a
particular product or service. Demand analysis is used to identify who wants to buy a given
product, how much they are likely to pay for it, how many units they might purchase, and
other factors that
can
be
used
to determine product
design, selling cost,
and advertising strategy for a product.
Demand Analysis for our project was done through customer surveys. From these surveys
we realized the following patterns in the Demand for sunscreen :-

Age
30

25
24
20

20

15

10
7

18 o r y o u n g e r

19-24

2 5 - 34

35-44

4 5- 5 4

55 - 64

65 o r o ld e r

Target market for the sunscreen is people below 25 years of age (72%)

Gender
45
40
39

35
30
25
20

21

15
10
5
0

M ale

F e ma le

More number of females (64%) use sunscreen than men (36%) but the demand for
sunscreen in men is also high.

Employment Status
50
45
40

43

35
30
25
20
15
10

12

5
0

Students are more aware about the benefits of a sunscreen and make up 70% of the demand
for sunscreens.

People using sunscreen

50
45

47

40
35
30
25
20
15
13

10
5
0

Yes

No

Out of all 60 people that were surveyed, it was found that 77% of them use sunscreens.

Usage of Sunscreen
25
20
15
10
5
0

21
15
9

11
4

The awareness for sunscreen is good but still a lot of people only use it in the sun instead
of everyday.

Doctor's Prescription
60

50
49
40

30

20

10

11

Yes

No

Only 18% of the people use sunscreens after being prescribed by a doctor. The rest use it
because of their awareness for its need.

Application of Sunscreen
35
30

30

25
20

23

15
10
7

5
0

O n ly o n t h e F ac e

O n ly o n t h e b o d y

On b o t h

People tend to ignore putting sunscreen on their body too with 38% of the people on
applying it on their face only.

Frequency of Application
30
25

27

20
15

17

10
9
5

People dont apply the sunscreen frequently when they go out. It shows that there is a lack
of awareness in the market about the lasting effect of the sunscreen.

Form of Sunscreen
30

25

27

20

20

15

10

C re a m

Lot ion

Ge l

S p ray

Fo am

Oil

Wipes

0
St ick

Majority of the people prefer to use a cream or a lotion based sunscreen than the other
forms.

Brand
16
14

14
13

12

11

10
8

B an a n a B o at

Lotus

4
2
0

Ne u t ro ge n a

Ot h e r

L a k me

Nivea

Neutrogena emerges as the market leader amongst other sunscreen brands.

Sun Protection Factor (SPF)

30
27

25

20
18
15

10

11

5
4
0

b e lo w 2 0

20 - 4 0

4 0- 6 0

6 0- 8 0

People generally tend to use sunscreen with an SPF ranging from 20-40 the most which is
good as in a tropical country like India, an SPF 30 sunscreen is enough.

Money spent per bottle of Sunscreen

16
15

14

15

12
10

12
11

8
7

6
4
2
0

L e s s t h an 2 0 0

20 0 - 3 0 0

3 00 - 40 0

4 00 - 5 0 0

mo r e t h a n 5 0 0

50% of the people tend to spend around 200-400 on every bottle of sunscreen that they
buy.

Awareness
40
35

36

30
25
20
15
10
5
0

18
13

10
5

60% of the people came to know about their particular sunscreen brand by word of mouth
while only 30% came to know about it from electronic media showing that people
generally tend to use sunscreen advised to them by others rather than being influenced by
Ads.

Product Life
30

25
24

24

20

15
12

10

L e s s t h an 3 mo n t h s

U p t o 6 mo n t h s

A y e ar

It can be observed that sunscreens have a longer product life compared to other FMCG
products.

Factors determining the demand for a particular sunscreen

50
45
40

43

35
30

34

25
20
15

17

10

10

10

5
0

S u n P r o t e c t i v e Fa c t o r ( S P F )

6
P ri c e

Tex t u r e

W a t e r R1e s i s t an t

We realized that people generally look at 2-3 factors when buying a sunscreen. Most
important of them is Sun Protection Factor (SPF) with 70% people checking the SPF
before buying a sunscreen followed by the brand (56%).

Medium of Distribution
35
30
25
20
15
10
5
0

31
16
10
2

More than 50% of the people buy sunscreens from the pharmacy showing that it is the most
preferred medium of distribution.

From the customer survey done by us, we analysed the demand

function for sunscreen and selected the target market, the important
characteristics, the pricing, and other factors needed to launch our
own sunscreen.

Now we will proceed towards the product launch.