Essay: Marketing of Ariel (Procter and Gamble) in the UK and Indian markets

SYNOPSIS
Procter and Gamble is an American based multinational company operating in 80 countries with customers from 180 countries. (Pg.com, 2018). Different product categories with variants make Procter and Gamble one of the biggest consumer goods company. Procter and Gamble has been able to make profits out of different cultures and very diverse international markets. I will be critically evaluating and commenting on the marketing of the star product of P&G: Ariel, in the United Kingdom and the Indian market. I will be reflecting on the environmental factors affecting the brand in United Kingdom and India, furthermore, I will be discussing on the industrial factors and challenges each country face. A detailed discussion on the marketing strategy opted by the brand in each country for segmentation, targeting and positioning of the brand will be followed by the marketing and promotional activities and how they differ from in each country.
MACRO ANALYSIS:
The UK is the fifth biggest economy on the planet by nominal GDP (The World Bank, 2017). It has maintained to remain one of the best countries to live in the whole world in terms of many factors. The business world of United Kingdom is facing challenges and uncertainties as Brexit is near. Corporate tax rate is 19% currently but it is expected to be lowered down to 17% by April 2020. (GOV.UK, 2018). The current minimum wage rate was increased to £7.83 for individuals matured 25 and for the age bracket of 21 – 24 years it was increased to £7.38. This rise in pay rate is important as it indicates the buying power of the people. However, keeping in account the inflation rate which rose up to 2.4% in June 2018 (Ons.gov.uk, 2018). The current population of the UK is estimated to be 66.57 Million. (Worldpopulationreview.com, 2018). UK has a large consumer market as indicated in the PESTLE (appendix 1) which implies that there is large number of people which uses fabric detergents. Most of the population in the UK is growing old and now Ariel has tapped into the new segment which will be discussed in the promotional activities section further.
In comparison, India is emerging quickly as developed and liberal country with its democratic roots spread evenly. As pointed in PESTLE (appendix 1) approximately 66.1% of the Indian population was in the 15–64 age group, 5.9% aged 65 and above, and the remaining 27.34% belonged to the 0–14 age group, in 2017. It is very important to mention the age brackets as the market segments relies on it. India has very strong culture and traditions. Which must be reflected via the advertisements of the case study brand to build positive relation with people. The literacy rate for people above the age of 15 stood at 71.2% in 2015 according to CIA–The World Factbook. There were 81.3% literate males compared to only 60.6% literate females in 2015. Indian culture suggests that only women are responsible for house chores even though women are also encouraged to work professionally and equally as men. Ariel started to educate the population in India which will be further discussed in the promotional section.
MICRO ANALYSIS:
The consumer goods industry is always on boom. With low switching costs consumers are less likely to be loyal. In the UK, Ariel faces a lot of competition from Persil (Unilever), and from its sister brands of P&G: Fairy and Bold. Persil enjoys the largest market share in the UK market. (Academic.mintel.com, 2018).
The pie chart clearly shows the market share of the laundry detergents of the UK Market. Bold is also a brand of P&G but a strong competitor of Ariel. In January 2018 Bold Detergent came up with the 3in1 pod detergent to save time and effort of the consumers, later this year Ariel launched a campaign of its 3in1 pod detergent to compete in the UK market which will be discussed in the promotional activities section. However, the new entrants are not a big threat to these giants, but store brands also acquire market share.
Indian detergent market is very competitive. The culture and the brand position must be synchronised for better sales. In India Surf (Unilever) enjoys the largest market share of 36.1% for 2017. A local but cultured oriented brand Ghari Detergent by RSPL Ltd. Is emerging into the market as a leader and gives Surf and Ariel both a challenging competition with a market share of 19.1% and the sales are growing. While Ariel comes third in the sequence with a market share of 10.4%. Following is the table of the market shares in percentages in the recent years to explain and support that Indian culture has a very strong influence on the products since Ghari Detergent is positioned as a very cultured centred product eating up the market shares of the big brands like Surf and Ariel:
BRAND NAME 2012 2013 2014 2015 2016 2017
Surf (Unilever) 36.1 36.6 36.5 36.5 36.4 36.1
Ghari (RSPL Ltd) — — 18.7 18.8 18.9 19.1
Ariel (P&G) 11.1 11.1 11.1 10.9 10.7 10.4
(Portal.euromonitor.com, 2018)
After the launch of Ghari in 2014 it was able to compete with the big giants and eat up there shares just because it is positioned in a very effective way, for example the packaging is in their own native language: Hindi, the advertisements are talking for the problems and caring about the Indian women who is the primary target.
MARKETING STRATEGY ANALYSIS:
In the market of UK, Ariel is viewed as extraordinary compared to other surfactants. It can give challenging competition. It has recently introduced 3 in 1 pods to compete with the rivals. There are numerous competitors in the detergent industry in the UK market and Ariel has done outstandingly well with regards to profit margins. To give growth, it has been doing promotional activities and the advertisement have been put to extraordinary impact. Ariel being viewed as the best quality item; the costs are high i.e. premium pricing and the consumers relates the costs of the detergent as the nature of the cleanser, yet company making profits. In UK the profits for Ariel is high when contrasted with that of its rivals. (Ariel, 2016)
In India, Ariel has maintained to remain a premium quality product. It used to lead the industry, however Unilever’s Surf, re-positioned its product as “dirt is good”, connecting emotionally with the consumers and it affected Ariel’s brand image since Ariel was only about functionality and removal of intense stains. Which tells us that Indian market is very conscious about connecting with a brand as discussed earlier. Surf explained how people can enable their kids to learn vital values of life without caring for their clothes. It had a great affect on Ariel’s brand image.
Ariel India has come up with a new strategy for connecting with people since the market is greatly stimulated by emotional connections a brand builds. It launched a #sharetheload campaign (which will be discussed further below). This campaign’s main objective was to educate the consumers that only women should not do house chores despite working professionally and as equally as men, and men should share the load of the laundry and other house chores. This re positioning of Ariel helped it in uplifting of the declining brand image in Indian market.
STP ANALYSIS OF ARIEL
The segmentation of this industry has two most prominent divisions: Psychographic and Demographic division. Market Segmentation is a technique of partitioning the customers with comparable purchasing behaviour and propensities. They are the individuals with the similar needs and thus they purchase similar items. Ariel is a solitary item that is required by all fragments of the public yet the size of the variants they buy is different. However, in consumer goods industry people tend to switch between the brands and buy the one which can be more beneficial for them.
Demographic Segmentation:
Ariel is generally utilised by the young and moderately aged people who wash garments. Recently a new younger age group is introduced by 3in1 pod launch. No gender specification is observed in the UK market; however, married women tend to buy more amount as they wash garments of whole family. Washing powder is utilised by all the segments of the general public regardless of their occupation and educational background.
While Indian market is different for consumer goods industry as women are the key drivers and decision makers for the rest of the family. Young to middle aged women who have the responsibility of doing obdurate house chores is a major segment. However, Ariel has recently launched #sharetheload campaign to educate and create a new segment of men since in India only women are supposed to do all the house chores.
Geographic Segmentation:
Most of the customers of this premium quality detergent reside in the urban zone both in India and the UK.
Psychographic Segmentation:
Washing powder or bars is a necessity for every one of the general population regardless of their identity and way of living. Hygiene conscious and time conscious people in the UK market can be considered as shown in their new campaign of 3in1 pods. The upper white-collar class is mostly brand conscious, so they go for costly items which includes SEC A, B+, B and C+
Even in India Ariel has the same psychographic segment despite the fact that Indian market is more inclined towards their culture and likes to connect to any brand emotionally.
TARGETING:
Ariel targets itself in segments of the general public both in UK and Indian Market, for example, upper and middle class. All class of individuals need to wash their garments. Ariel has introduced little sachet for SEC C+ and lower segment of individuals. The real sales of Ariel is from extensive urban communities. The real focus of Ariel are the women of family units who wishes to keep their garments clean and in great condition. In UK as the launch of their new campaign it clearly says in the TVC advertisement that “you don’t need to call your mum” which indicates that youngsters who move out for studies and careers felt difficult to wash clothes but with the usage of their new 3in1 Pod they can do it their selves which indicates the introduction of targeting a new segment. Where as in India Ariel launched a campaign saying #sharetheload which targets married men who did not used to help their wives doing house chores.
POSITIONING:
Ariel has always focused on the function-based positioning to create an image of the best detergent brand in the UK and India. Ariel taglines are always based on functionality for example: “Superior Stain Removal”, “Outstanding Ariel Clean”, “Works brrr..illiant in cold temperature”, “Removes stain in 1 wash” etc.
PROMOTIONAL ACTIVITIES
Ariel UK had got some flat profits in the recent years. To make a comeback to the UK market and competition the owner company Procter and Gamble invested £10.5M on the launch of their new 3in1 pods. It is basically to convince the audience to use liquitabs. They launched a TVC on March 7th this year which very specifically tells about their target audience, use of their new pod and some safety precautions.
Supporting the TV promotion will be print, outside and particularly internet publicising that will target individuals that Ariel knows don’t utilise units yet may be available to exchanging. Besides Ariel is propelling a training effort around how to utilise the pods and store them securely. With this campaign, Ariel is increasing its media investment by 40% over 2018 and spend around its education message by 68%, with the hope of reaching 95% of UK households up to 10 times across the year. (Vizard et al., 2018). Ariel UK has also been engaged with sponsoring tennis events and partnering with designers to connect the specific audience.
Indian market entirely differs in terms of culture and religion. Promotions in India must be synchronised with their traditions and culture to be successful. Connecting emotionally is very important to gain large profits. Ariel India has carried out many different promotional activities for customer acquisition, brand image, brand recall and customer retention. From TVCs to ads in newspapers and billboards to brand activation, Ariel has always tried to convince the audience that it is functionally the best, however it has always missed out on the emotional connection with the audience which is very important for the Indians. In recent times, to tap into a new market segment and to educate the targeted group Ariel launched a campaign based on the gender equality to connect to the audience. The campaign #sharetheload is a huge success for the brand since it pointed out a vital societal factor of India that not only women are solely responsible for doing house chores and men should share the load. Ariel was successful in increasing sales by astonishing 76% by encouraging progressive gender roles (The Thinking Brand, 2018).
CONCLUSION AND RECOMMENDATION
Ariel is very successful brand of P&G, consumed by people from all over the world. In recent years Ariel has been losing its market share in both Indian and UK markets. In UK Brexit can have uncertain implications on the brand. However, with the launch of new variant and investment in marketing of £10.5M should be fruitful for the brand. Ariel India took a long time to realise that they were not emotionally connected with their target audience which is very important for India, but with their new campaign of #sharetheload the brand has increased sales and will hopefully re gain its market position.
18.11.2018