SESSION 6:COMPETITION

COMPETITION

Internal Competitor:

Ø  Lifebuoy: 1895, 18% Market shares

Ø  Dove

Ø  Dettol soap

External Competitor:

Ø  Godrej consumers products limited (GCPL):

·         2nd Largest soap maker after HUL

·         9.2% Market share

·         Brands: Cinthol, Fairglow, Nikhar

Ø  Wipro:

 Brand: Santoor and Chandrika

Ø  ITC:

Brand: Superia, Fiama di wills and

Vivel

Competitor’s analysis:

(Porter's 5 forces)

  1.                  Competitor rivalry: A segment becomes inattractive if it has already existent competitors as it leads to slow market growth and similar cost structures. The competitors for lux are lifebuoy, cinthol & fairglow. This leads to price wars, brand wars and ad wars.

2.                  New or potential entrants: The local or new entrants will face difficulty as there is already high and tough competition, thus there will be very high entry barrier. Though I feel for potential entrants it’s a pretty attractive segment. Since lux has been the oldest brand, it has managed to build trust in the eyes of customers. To compete in this segment is very difficult for new entrants and would require many efforts to brand the new product.

3.                  Threats of substitute product: it is highly a competitive product, and threat from substitute product means the threat from another product to company’s product. In case of lux, which is a personal care product, substitute product can be bodywashes, as they serve the same basic purpose of bathing product.

4.                 Bargaining power of suppliers and buyers: The segment becomes quite unattractive if buyers and sellers have high bargaining power. In case of lux, due to highly competitive market and a good reputation, it is very attractive segment as no such bargaining is required.

Lux manages to have a 15% marketing share and is clearly a market leader. Visit any departmental store or retail outlet, and you find its shelved stocked with Lux Beauty soaps in different variants, with attractive colours on the packaging and its permanent sign of the female model present on the package. Today, Lux is a household name when it comes to soaps and in many places. it has become a synonym for soaps. People often walk into a shop and ask for Lux, when they mean, that they wish to buy a soap.

Due to its strong image and expertise in the sector, I feel it will continue to be the market leader, because of its reach in rural as well as urban cities and trust it has built in so many years.