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SACHET MARKETING Sachet marketing can broadly be referred to as micro-selling concepts that may comprise small sized offerings, lighter product versions, services and loans in small portions. In other words, small sizes but larger volumes, while not sacrificing brand focus. It instantly brings to mind shampoos packed in sachets, edible oil in small pouches, mobiles bundled with connectivity at cheap cost, etc. It intends to increase product penetration at the bottom of the economic pyramid. Thus, it not only makes product affordable to the targeted consumers, it also helps build brand loyalty. These innovative micro-selling methods are aimed at new consumers in developing megaeconomies like China, India, The Philippines, Mexico and Brazil.
Why Sachet Marketing ??? It is estimated that the world over two-thirds of the human population (about four billion people) are at the bottom of the economic pyramid. Furthermore, India?s consumer market is one of the largest in the world. However, lack of distribution network, prevalent attitudes and habits, promoting brands and changing mindsets of the price-sensitive consumers poses a great challenge to the companies. The urban markets have matured and the companies have realised the need to expand the rural base. The price tag actually dissuades a rural consumer or a poor urbanite from purchasing a product. While the vast rural population is open to experiment with new products symbolic of a changing lifestyle, affordability continues to be a hassle. SACHET REVOLUTION Sachet marketing was revolutionised by Ranganathan. He separated from his brother?s shampoo-manufacturing business, run under the brand name Velvette and started Chik India Company in 1982. He peddled its Re 1 shampoo sachets through roadside shops and grocery outlets in rural areas. He then renamed Chik India as Cavinkare (Cavin means beauty in Tamil) in 1998. Other corporations also soon realised the power of the sachet and launched their own products in small, affordable packages. This got the two Ps of
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packaging and pricing right. There has been no looking back henceforth. Other examples 1. Marico has introduced their coconut oil „Parachute? a regular-use product in the rural areas in mini packs. 2. HLL has launched its range of products in sachet form. The most popular product is ‘Sunsilk’ shampoo sachets. Pepsodent toothpaste is available in sachets for Rs. 4, with the target consumers being travellers and the rural population.HLL has priced the 5 g Rexona deo-stick at just Rs 5.50-the lowest for such a product in the world. It has launched lifebuoy at Rs. 2 for 50 gm. 3. A half kg pack of Nescafe costs Rs 500. However, it has one cup of Nescafe sachets for Re.1. 4. Godrej has Cinthol, fairglow in 50 gm at Rs. 4-5. 5. Coke & Pepsi have 200 ml packs for the masses. Maaza is available in 200 ml bottles. 6. "Sunfill" a powdered soft drink concentrate is available in a single serve pack or sachet of 25 gm priced at Rs. 2. 7. Brylcream (Hair cream) is available in small tubes, thus ensuring trial and encourage occasional / regular Use. 8. ITC & HLL have launched aashirwad & annapurna atta in 1kg packs. 9. To make milk affordable for the large majority with limited purchasing power, the strategy is to pack milk in small quantities of 250 ml or less in polyethylene sachets. Butter milk and drinking water are selectively available in 50 to 250 ml packets. 10. Amul now has 25 gms “munna” butter packs in retail market. 11. Kellogg?s has also realised the pulse of the market and has small packs of corn flakes to attract non-consumers. 12. Telecom pre paid connections.
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Advantages • • • • • • Increased Penetration. Increased Acceptability. Increased Affordability. Trials. Portability. Low Cost
Drawbacks • • • Easy Brand Switching. Lower Margins. Resistance by Distributors
What after sachet revolution? Now companies are trying to persuade consumers to move up from sachets to bottles; though sales volume has risen because of sachets, the profits and revenues have dropped. HLL started `bubble pack' shampoos - a combination of mini packs, which is neither a sachet nor a bottle. Clinic Plus shampoo bubble was launched in South India, priced at Rs. 8 and Rs.14 against the normal sachet of Rs. 2. The logic of a shampoo bubble is to upgrade the sachet user to the next in line higher volume in shampoo.
doc_542967798.docx
SACHET MARKETING Sachet marketing can broadly be referred to as micro-selling concepts that may comprise small sized offerings, lighter product versions, services and loans in small portions. In other words, small sizes but larger volumes, while not sacrificing brand focus. It instantly brings to mind shampoos packed in sachets, edible oil in small pouches, mobiles bundled with connectivity at cheap cost, etc. It intends to increase product penetration at the bottom of the economic pyramid. Thus, it not only makes product affordable to the targeted consumers, it also helps build brand loyalty. These innovative micro-selling methods are aimed at new consumers in developing megaeconomies like China, India, The Philippines, Mexico and Brazil.
Why Sachet Marketing ??? It is estimated that the world over two-thirds of the human population (about four billion people) are at the bottom of the economic pyramid. Furthermore, India?s consumer market is one of the largest in the world. However, lack of distribution network, prevalent attitudes and habits, promoting brands and changing mindsets of the price-sensitive consumers poses a great challenge to the companies. The urban markets have matured and the companies have realised the need to expand the rural base. The price tag actually dissuades a rural consumer or a poor urbanite from purchasing a product. While the vast rural population is open to experiment with new products symbolic of a changing lifestyle, affordability continues to be a hassle. SACHET REVOLUTION Sachet marketing was revolutionised by Ranganathan. He separated from his brother?s shampoo-manufacturing business, run under the brand name Velvette and started Chik India Company in 1982. He peddled its Re 1 shampoo sachets through roadside shops and grocery outlets in rural areas. He then renamed Chik India as Cavinkare (Cavin means beauty in Tamil) in 1998. Other corporations also soon realised the power of the sachet and launched their own products in small, affordable packages. This got the two Ps of
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packaging and pricing right. There has been no looking back henceforth. Other examples 1. Marico has introduced their coconut oil „Parachute? a regular-use product in the rural areas in mini packs. 2. HLL has launched its range of products in sachet form. The most popular product is ‘Sunsilk’ shampoo sachets. Pepsodent toothpaste is available in sachets for Rs. 4, with the target consumers being travellers and the rural population.HLL has priced the 5 g Rexona deo-stick at just Rs 5.50-the lowest for such a product in the world. It has launched lifebuoy at Rs. 2 for 50 gm. 3. A half kg pack of Nescafe costs Rs 500. However, it has one cup of Nescafe sachets for Re.1. 4. Godrej has Cinthol, fairglow in 50 gm at Rs. 4-5. 5. Coke & Pepsi have 200 ml packs for the masses. Maaza is available in 200 ml bottles. 6. "Sunfill" a powdered soft drink concentrate is available in a single serve pack or sachet of 25 gm priced at Rs. 2. 7. Brylcream (Hair cream) is available in small tubes, thus ensuring trial and encourage occasional / regular Use. 8. ITC & HLL have launched aashirwad & annapurna atta in 1kg packs. 9. To make milk affordable for the large majority with limited purchasing power, the strategy is to pack milk in small quantities of 250 ml or less in polyethylene sachets. Butter milk and drinking water are selectively available in 50 to 250 ml packets. 10. Amul now has 25 gms “munna” butter packs in retail market. 11. Kellogg?s has also realised the pulse of the market and has small packs of corn flakes to attract non-consumers. 12. Telecom pre paid connections.
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Advantages • • • • • • Increased Penetration. Increased Acceptability. Increased Affordability. Trials. Portability. Low Cost
Drawbacks • • • Easy Brand Switching. Lower Margins. Resistance by Distributors
What after sachet revolution? Now companies are trying to persuade consumers to move up from sachets to bottles; though sales volume has risen because of sachets, the profits and revenues have dropped. HLL started `bubble pack' shampoos - a combination of mini packs, which is neither a sachet nor a bottle. Clinic Plus shampoo bubble was launched in South India, priced at Rs. 8 and Rs.14 against the normal sachet of Rs. 2. The logic of a shampoo bubble is to upgrade the sachet user to the next in line higher volume in shampoo.
doc_542967798.docx