Marketing Management Recession Report 2009

8/10/2019 Marketing Management Recession Report 2009

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IQRA UNIVERSITY MAIN CAMPUS

Marketing Management

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Recession impacts on Head & Shoulder and SunSilkSurvey Report"

Introduction to the Topic

What Is Recession?

Many professionals and experts around the world believe that a trueeconomic recession can only be confirmed if GDP (Gross Domestic Product) growth

is negative for a period of two or more consecutive quarters.

The roots of a recession and its true starting point actually rest in the several

quarters of positive but slowing growth before the recession cycle really begins. Often

in a mild recession the first quarter of negative growth is followed by slight positive

growth, then negative growth returns and the recession trend continues.

While the "two quarter" definition is accepted globally, many economists have

trouble supporting it completely as it does not consider other important economic

change variables. For instance, current national unemployment rates or consumer

confidence and spending levels are all a part of the economic system and must to be

taken into account when defining a recession and its attributes.

The agency that is officially in charge of declaring a recession in the United

States is known as the National Bureau of Economic Research, or NBER. The NBER

defines a recession as a significant decline in economic activity lasting more than a

few months.

We often do not receive official word of an economic recession until we are

several months into it as NBER must take time to calculate the multitude of variables


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available before making their decision. While economic recessions are foreseeable,

they generally are not detected until already in motion.

It is actually more common than you might realize for countries around the

world to experience mild economic recessions. Recession (or contraction) is a natural

result of the economic cycle and will adjust for changes in consumer spending and

consumption or increasing and decreasing prices of goods and labor.

Rarely though entirely possible, experiencing a multitude of these negative

factors simultaneously can lead to a deep recession or even long economic depression.

Causes of economic recession

An economic recession is primarily attributed to the actions taken to control

the money supply in an economy. The Federal Reserve is the agency responsible for

maintaining the delicate balance between money supply, interest rates, and inflation.

When this delicate balance is tipped, the economy is forced to correct itself.

The Fed sometimes deals with these situations by dumping huge amounts of

money supply into the money market. This helps to keep interest rates low, even as

inflation rises. Inflation is the rise in the prices of goods and services over a period of

time. So, if inflation is increasing, it means that goods and services are costing more

now than they did before. The higher the level of inflation, the smaller the percentage

of goods and services is which can be bought with a certain amount of money. There

can be many contributing factors for inflation, which include but are not limited to

increased costs of production, higher costs of energy, and/or the national debt.

In an environment where inflation is prevalent, people tend to cut out things

like leisure spending. They also budget more, spend less on things they usually

indulge in, and start saving more money than they did. As people and businesses start

finding ways to cut costs and derail unneeded expenditures, the GDP begins to

decline. Then, unemployment rates will rise because companies start laying off

workers to cut more costs, because consumers are not spending like they were. It is

these combined factors that manage to drive the economy into a state of recession.


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This set of circumstances, coupled with the ability of people to get access to

greater amounts of loan money due to extremely lax loan practices, creates a cycle of

unsustainable economic activity that will eventually grind an economy to a near

halted existence. You could also say that a recession is actually caused by factors that

might stunt the growth that is available from the short term benefits to an economy

that can be brought about by such things like spiking oil prices or even war. And

while these are very short term in nature usually, they have been known to correct

themselves quicker than the full blown recessions that have happened in the past.

Effects of economic recession

Generally, an economic recession can be spotted before it actually happens.

There are ways to spot it before it actually hits by observing the changing economic

landscapes in quarters that come before the actual onset. You will still see GDP

growth, but it will be coupled with signs like high unemployment levels, housing

price declines, stock market losses, and the absence of business expansion. When an

economy sees more extended periods of economic recession, it goes beyond a

recession and is declared that the economy is in a state of depression.

The only real benefit of an economic recession is that it will help to cure

inflation. In fact, the delicate balancing act that the Fed struggles to pursue is to slow

the growth of the economy enough so that inflation will not occur, but also so that a

recession will not be triggered in the process. Now, the Fed performs this balancing

act without the help of fiscal policy. Fiscal policy is usually trying to stimulate the

economy as much as is possible through such things as lowering taxes, spending on

programs, and ignoring account deficits.


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Sunsilk Mission Statement

The New Sunsilk Shampoo aims at fulfilling the needs of its target market by

offering a high quality, assessment of the concept in terms of its acceptability,

credibility and perceived benefits, that it offers a healthy choice shampoo alternative

to the targeted consumer. The theme of the product shall be anchored around the

motto:

Softness, shine and manageability of Hair


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Introduction of Sunsilk

Product History:

Sunsilk was introduced in 1989 in Pakistan with three variants related to hairtypes. Endorsement of a hair stylist was the first step in building the image of the

brand as a hair care expert.

With the competition from local and multinational companies due torationalization of excise duties, Sunsilk has not been able to gain the desired share in

the market. To strengthen the brand, UPL decided to re-launch Sunsilk with a

premium range consisting of four variants in January 2000. In 2001, due to the

constant research of their affiliated hair care institutes, the need of a shampoo for oily

hair was observed and they launched a new variant of Sunsilk having citrus extracts.

All Sunsilk variants have been formulated especially keeping in view the Pakistani

consumer hair composition and hair care needs so as to provide the consumer with a

complete range for all hair types.

Target Market:

Their main target market is females between the age group 16-40 belonging to

the two upper income classes. But in their promotional activities, they cover the

whole market irrespective of these classes.

Competitors Review:

The major competitor of Sunsilk in the rural areas is Bio Amla while in theurban areas; Sunsilk faces cutthroat competition with P&G.

The main advantage of Bio Amla is its Herbal composition and low price,

which attract the rural market, but in terms of quality, they are far behind Sunsilk.

In urban areas, Sunsilk is acting as a market challenger against P&G. Sunsilk

has got the advantage of keeping their prices lower than P&G shampoos but P&G has

captured a bigger share of the market due to its intense promotional activities.

Currently, the main range consists of:

SunSilk Softening Anti-Dandruff Shampoo:

SunSilk Softening Anti-Dandruff Shampoo is a unique pearlized formulation

with Chamomile & Vitanol to drive out dandruff and nourish your hair back to its

natural beauty.


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Pricing Objectives:

Unilever claims to practice value-based pricing in which the customers

perception of the products price provides a starting point for developing the

marketing mix of the product. The research department determines this price usually

by using focus groups. The price of RS 3 for Sunsilk shampoo sachets shows how the

price also reflects a concern to make the purchase more convenient, since the rupee is

denominated in this value.

Last year P&G revised their prices which has increased the prices of their

shampoos considerably but Sunsilk has maintained its prices and their prices are much

lower than P&Gs, which is a major blow to P&G because being a poor country

people go for products which are within the range of Rs.100.

20 0m l bottle Rs .1206 m l S ac he t R s .3


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Head & Shoulders Introduction

Head & Shoulders works with a panel of leading experts including scientists,

dermatologists, beauticians and stylists who really understand what individuals needs

to stand out, both on the outside as well as on the inside. With their advice, P&G has

been able to bring to its consumers, the worlds No. 1 shampoo.

P&G unveils new Head & Shoulders

The new Head & Shoulders was unveiled amidst a spectacular fireworks

display, followed by the Up Close and Confident show; showcasing everyday lifes

spotlight moments in which one needs the confidence to be at their very best. The

show was directed by leading choreographer Juni who fashioned a creative blend of

freedom and confidence.

Unveiling the new Head & Shoulders, Country Manager P&G Pakistan,

Qaisar Shareef said, Throughout its 46-year history, Head & Shoulders has been

striving to introduce new and improved products that help eliminate dandruff; giving

consumers a healthy scalp with beautiful strong hair. In Pakistan, the new Head &

Shoulders range of 5 different variants offers outstanding dandruff defense, resulting

in a scalp in excellent condition and beautiful hair.


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Brand Manager Head & Shoulders at P&G Pakistan, Saqib Zia commented,

In order to help restore the confidence of our consumers, Head & Shoulders

scientists have focused their research to better understand their needs and how best to

provide a product for an unhealthy scalp. The result is a new range of Head &

Shoulders, boosted with the Active ZPT system.

Target Market:

Their main target market is males and females between the age group 12-30

belonging to the two upper income classes. But in their promotional activities, they

cover the whole market irrespective of these classes.

Competitors Review:

The major competitor of Head & Shoulders is Pantene than it faces cutthroat

competition with Uni-livers.

There are many products against Head & Shoulders as we can name Sunsilk,

Clear, Garner, Bio Amla etc. But Head & Shoulder is unique due to have anti

Dandruff composition in every productive shampoo.

Currently, the main range consists of:


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In our everyday life we encounter a numerous spotlight moments where we

need the confidence to get close to others. With the new Head & Shoulders range, we

offer our consumers the chance to get 100% dandruff free hair, thus giving them

100% confidence to get close to others, said Assistant Brand Manager Head &

Shoulders at P&G Pakistan, Saba Malik while highlighting the consumer benefits of

the new collection.

With the 5 variants in the Head & Shoulders range in Pakistan, consumers are

sure to find the right anti-dandruff shampoo. I personally use and recommend Head &

Shoulders to patients who come to me with dandruff and other related scalp

problems, said Prof. Syed Atif Hasnain Kazmi, leading dermatologist, member of

Pakistan Association of Dermatology (PAD) and General Secretary of South Asian

Regional Association of Dermatologists (SARAD) at the Head & Shoulders Up

Close and Confident launch event.

P&G has captured a bigger share of the market due to its intense promotional

activities.


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Research overview:

Research word can be defined with simple explanation. Research; in my point

of view, Its a merger of two words which are Re and Search. Re means to do work

again or repeat the work, and on the other hand search means to explore something or

we can say find out the problem, it would rather be correct if we say that research is

made for identify errors, problems and finding the current position of objective.

How I did the research:

I have conducted this research with primary data collection. I have distributed

my survey forums into five different areas of Karachi in the retailer market. Survey

was consistent on ten different questions in which 2 open questions are being asked

and on scale and percentage point of view, rest of all questionnaire was based on

agree disagree type of views.

There were five places being marked:

A B C D E

Defense Clifton Malir Gulshan North karachi

I distributed forum among the retailers with kindness and they filled up with

my guidance and explanation. The questionnaire was so easy that an illiterate can

understand and answer easily, and finally I achieved my goal to get my info collected.

The results are compiled together and resulting as graphically presented with

the questions of survey. They were calculated by simple average method or self

admiring judgments.


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RESULTS ACHIEVED AFTER SURVEY

1) Do you think customers go for prices?

No

24%

Yes

76%

2) Do you agree customers from this area are quality conscious?

YES

72%

NO

28%

3) Is Head & Shoulder sachet is easily available after increase in prices?

Yes

44%No

56%


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4) Due to Price Variation, What impacts the sale of both (Head & Shoulder

and Sun silk)?

a) Head & Shoulder b) Sun silk

Increase 20% Decrease 80% Increase 80% Decrease 20%

5) Which Shampoo gives you more earnings?

Sunsilk

80%

H&D

12%

Other

8%

6) What people ask for more? Answer in percentage 1% to 100%

Sunsilk

47%

H&D37%

Others

16%

7) Are Head & Shoulders and Sun Silk customers loyal with their brands?

Rate your answer from 1 to 5

0

5

10

15

20

25

30

35

1 2 3 4 5

Sunsilk

Buyers

H&D

buyers

8) Are customers diverting towards Sun Silk shampoo?


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Sunsilk

88%

H&D

12%

9) What do you say that the increasing of prices are useful for Head &

Shoulders or not (tell in two lines)?

People answer in similar way that it doesnt impact on loyalty of H&D

because people are very much trust worthy with this product so they keep asking forH&D although its not available in sachet packs.

10) Do you still buy Head & Shoulders for your shop? If yes then tell the

reason.

In this thought people were totally negative but fewer were in the favor ofcompleting their items of shop or good will its important to keep H&D on shelf.

Marketing Management Recession Report 2009

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