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Failure of Rejoice Shampoo

Essay by   •  May 21, 2012  •  Case Study  •  2,977 Words (12 Pages)  •  7,264 Views

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Rejoice has a strong global heritage and is the No. 1 i.e., the largest selling shampoo in Asia (China, Japan, Singapore, Thailand, Philippines, Hong Kong, Indonesia, Malaysia, Vietnam, etc.). It is loved by consumers in 85 countries. Historically, Rejoice was the world's first Shampoo-cum-Conditioner launched in 1987, and in 1995, it was awarded a Gold Medal for Technology by Former US President - Bill Clinton for its innovative technological breakthrough of the 'shampoo + conditioner' formula specially designed for making hair softer and smoother.

Rejoice has been launched by P&G to specifically meet the unique needs of Indian consumers. It's patented 'Micro-Silicone' conditioning technology gives twice as smooth, detangled and easy to comb hair than ordinary shampoos or the combination of home remedies such as henna, amla, reetha and shikakai. The shampoo's unique high-tech suspension system holds the surfactant and conditioner together, thus ensuring both wet and dry conditioning.

P&G has launched Rejoice in three unique variants:

* Rich: Specially formulated with higher conditioning to make hair extra smooth and superbly easy to comb. Suitable for those with dry hair.

* Silky Clean: Specially formulated for hair which is oiled frequently. It provides gentle, effective cleaning of oil and dirt from hair and then conditions the hair to make it silky smooth. Suitable for those who oil hair/ whose hair tends to get naturally oily or sticky.

* Complete: Specially formulated as a 3-in-1 shampoo that fights dandruff, and gives silky smooth hair that smells great all day long. Suitable for the entire family.

Rejoice shampoo is available at an affordable price in 7.5 ml sachets, 100 ml. and 200 ml. bottles.

Chennai Jan. 19

Rejoice, one of the company's internationally popular shampoo brands is priced at Rs 39 for a 100 ml bottle and Rs 2 for a 7.5 ml sachet.

Mr Ashok Chhabra, Executive Director, Procter & Gamble (P&G), said that Rejoice is the largest selling shampoo in Asia, and on an average 1,000 bottles are purchased per minute all over the world. Rejoice has a global sales of $500 million annually.

He said that the product's patented `micro silicone' conditioning technology gives it an advantage over other shampoos or home remedies such as henna, amla, reetha and shikakai. Mr Chhabra said that given the diversity of the Indian consumer and their varied hair needs, P&G has launched Rejoice in three variants - Rich, Complete and Silky Clean.

The company, along with AC Neilsen, conducted a survey and found that smooth tangle-less hair was need that ordinary shampoos did not meet. He said that in India, this problem was more acute as more women had long hair. The shampoo market in India is estimated to be around Rs 900 crore, with 61 per cent of the products being sold in urban areas. Mr Chhabra said that sachets accounted for almost 70 per cent of the sale.

It is loved by consumers in 85 countries, and on an average 1,000 bottles of REJOICE are purchased per minute across the globe.

REJOICE has been launched by P&G to specifically meet the unique needs of Indian consumers. Firstly, P&G in association with market research firm ACNielsen, spoke to a cross-section of 1500 consumers across the length and breadth of India and found that 'smooth, detangled hair' is one of the top unmet needs by ordinary shampoos. Hair tangles are a problem more acute in India because majority of Indian women keep their hair long, and the longer the hair the more it tangles. For example, REJOICE shampoo's low conditioning Silky Clean variant is specially suited for heavy-oiling consumers in South and East India; while the Rich variant is more suited for dry climactic conditions of North India. Thirdly, quality products at the right price are of special concern to the discerning majority of Indian masses. Keeping this in mind, REJOICE shampoo is available at an affordable Rs. 2 for 7.5 ml sachets, Rs. 39 for a 100 ml. bottle and Rs. 75 for a 200 bottle.

REJOICE will be available in all general and chemists stores in attractive neon green packaging.

Mumbai, Jan 14: : The launch of 'Rejoice' brand of shampoo by Procter & Gamble (P&G) is being viewed as a step in the direction of expanding the shampoo market, which may benefit with the economy growing at 8.5 per cent. Some industry analysts' feel that, in the long-term, Rejoice could be a threat to Clinic Plus, but not immediately since the former needs to create a base first. Others opine that there could be some impact on existing shampoo brands initially (possibly even on P&G's own shampoo brands), but later consumer experience will decide the winner.

Jagdeep Kapoor, chairman and managing director of Samsika Marketing Consultants said that P&G has two tasks on hand. Firstly, they need to expand the market. Secondly, they need to see whether they can bring about a brand switch by offering the 'value' sought by the consumers. Clinic Plus, priced at Rs 37.5 per 100 ml bottle, for the mid-segment, is slightly cheaper than Rejoice which is priced at Rs 39. But Mr Kapoor commented that consumers go for value and not just the price. Other analysts added that a slightly lower price has little role to play here. Hindustan Lever, when contacted, was unable to give any information or views on the launch of Rejoice.

Mr Kapoor feels that shampoo in sachet form has been doing well in India, due to many entry-level consumers. Thus the width of the market is currently expanding and the depth will start expanding only at a later date. Only then can one expect a gradual move from sachets to bigger packs by consumers. Sachets have been particularly popular in semi-urban areas due to their one-time use nature and affordability. Sachets form about 70 per cent of the entire shampoo market.

Analysts believe that if the players go in for price cuts, then naturally there will be a pressure on their margins. Mr. Kapoor opines that ideally the players should not go for price cutting when there is so much untapped rural potential. However, with competition, some level of pressure on margins is expected because of initial launch expenses.

Rejoice is thus said to have entered a market which has huge potential even though it has slightly stagnated at the moment. P&G should continue to maintain attractive, but competitive pricing and at the same time establish the brand using some unique selling



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