Economic Environment of Dettol - Case Study Example

About Dettol Dettol is a world largest antiseptic household and personal healthcare, hygiene products selling company which is owned by the parent company Reckitt Benckiser. Reckitt Benckiser is a UK based multinational firm which has a diversified portfolio and owns some of the world’s most renowned and well known fast moving consumer goods brands including Dettol, Veet, Strepsils, Durex and Vanish ( Dettol, 2012). Dettol has a wide range of hygiene products including products for around the house, soaps, cleansers, hand wash, hand sanitizer, etc. Dettol is an international company present in about more than 70 countries around the globe with a very strong presence in Asia and most of the emerging economies. Mission Statement of Dettol From the products we make, to the education we provide, and the causes we champion, we are on a Mission (Dettol, 2012). Dettol in UAE, is imported by the importers and distributors who then supply Dettol products in the local market of UAE where Dettol products are readily available off the shelf. Macro Environment of the company – Dettol The macro environment of the company refers to the external environment factors that affect and influence the business in its operations. Following are the six macro environmental factors for Dettol UAE (principals of marketing, 2008); Demographics - UAE has a population of about 5,148,664 people with a median age of about 30 years (Reckitt Benckiser, 2011). The average population growth rate is approximately 3.3% per year with high rate of foreigners entering and leaving the country on a regular basis. UAE in most of its emirates has a metropolitan culture with a fast moving pace of life. Literacy rate in UAE is high at about more than 77% with the literacy rate being high for both men and women across the country. This indicates a well-educated, well aware and a knowledgeable consumer base in UAE. Economic Environment UAE is a strong oil based economy backed by the rich oil reserves with a positive and sizeable annual trade surplus. UAE has centrally-planned free-market capitalism market structure as described by The International Herald Tribune. The inflation rate is low and controlled at about 0.9% (index mundi, 2011) as of 2011 giving people a substantial amount of disposable income to spend on goods and services. Technological and Natural Environment The natural environment consists of the climate conditions, availability of resources, infrastructure and general operating environment for an organization. UAE ‘s infrastructure is well established with a well-connected and reliant transport system, road network, high speed internet facilities, availability of media and state of the art communication networks, shopping malls, etc. Resources in UAE are easily obtainable due to the relaxed laws and regulations of the government pertaining to imports and exports. However, the climatic conditions are harsh as UAE is a hot desert with an extremely hot and long summer season. Political Environment and Role of Government in the Macro Environment Till date most of anarchy prevails in UAE. UAE is a federation of member emirates with whom the power and authority rests for governing their own emirates. As UAE is an Islamic state the legal system is a mixture of both Islamic laws as well as the Civil law (index mundi, 2012). Cultural Environment UAE is a Muslim state with Islam being practiced in all parts of the country however the country is multi cultured due to the high percentage of expatriates being a part of the population of UAE. Market segmentation The market segmentation is based on a number of elements. These are: Geographic: This includes all locations be it urban or suburban or a small town or rural areas. Demographics: These comprise of individuals male and female. Usually targets mothers and female between ages of 18 to 45 who make purchasing decisions for families. Socio economic class: Mostly middle class and upper middle class in urban as well as sub urban localities. These can be cities or areas close by. However it is seen that rural market penetration is severely limited and dominated by indirect channels, such as wholesale. Psychographics: These consumers are segmented based on their key status within the family; Such as concerned mothers or the head of the family. Current Product description There are several products that are launched by Dettol. The first of these is the Dettol Antiseptic liquid. This is an antiseptic which effectively and safely rids the user of numerous bacteria as well as provides basic protection from germs that can be a source of infection and illness. The market share for this product is about 83%. Other key benefits of the product are that is can be used for a safe antiseptic for the purpose of cleaning wounds and disinfecting them. It’s available in many sizes ranging from 50 ml to 500 ml. The product is marketed based on its efficiency and multi-purpose nature. Other Dettol products include the Dettol hand wash, the Dettol soap, Dettol Prickly heat powder and the newly launched Dettol Multi-purpose cleaner recently launched in the floral and citrus variants. Current target market An effective way to describe the target audience of Dettol can be seen as basing their products on psychographic segmentation, which is dependent on the nature of activities an individual undertakes. So the target market of Dettol can be defined by individual who undertake outdoor activities, ranging from driving to eating out to everyday activities like using a computer or making calls. It can be little children who enjoy playing outdoors, or the working individuals. So Dettol is a product that encompasses giving value in terms of germ free cleanliness to individuals going about their daily activities. Description of the marketing opportunity and marketing analysis Although Dettol has successfully been able to position itself as a brand which is mainly for families for the purpose of hygiene and keeping them germ free. With its claims of killing of 99.9% germs Dettol is a popular product when it comes to daily cleanliness. Even though they have established their brand as a clean product which is convenient and dependable there still exists an opportunity for Dettol to add to their current product depth by introducing a brand which is for today’s more aware consumer. With the consumer’s preference for environment friendly brands which endorse recyclable materials in product use and aim for convenience. Free refills for their no hands liquid hand washes and introduction of the product in bigger sizes is an opportunity that the brand can benefit from in the UAE market. Proposed product The product that is proposed is to introduce the concept of refills for a basic bottle of liquid hand wash in a variety of fragrances. In this way a strategy much like Gillette does with its razor blades can be followed. When the overall price of the product is comparatively less the cost is transferred to the purchase of refills. So basically the big bottle, available in a refill greater than 250ml (the biggest in the market so far), would cost sufficiently lesser on its own (as it will be reused) however the greater share of the price of the product would be dependent on the refills that the consumer will purchase. This also gives the customers a chance to try out different fragrances and for the company to judge which ones are most popular and concentrate production in those. Proposed pricing As far as price of the product goes by the use of the bigger bottles with refills the consumers will be willing to pay a higher price if they associate the premium price as a return for higher value. This can be firstly done by associating the newer bottles with a more environmentally responsible aspect. The material being used environment friendly and recyclable and the concept of using refills instead of more plastic bottles promoted. This will effectively aid the brand in capturing the environmentally conscious segment consumers. Furthermore the price conscious segment will also be captured by associating the new bottles by the division of the price with the basic bottle and the refills, leading the price conscious consumers to associate more value with the premium price. Furthermore this new product aims to fulfill the needs of the consumer who looks for product attributes such as nicer fragrance and softness. Distribution Process and Placement A key characteristic of the hand wash market is the fact that it is disproportionately dependent on the modern distribution channels. This basically comprises of self-service stores. All the products of Dettol are distributed this way to the consumers. Approximately 25% of the sales of this product come from this channel. This environment based on self-selection of the target consumer goes to have various implications for the brand. This makes the introduction of variants critical in order to drive the consumer choice when it comes to their frequent shopping patterns and the availability of the product in the stores they shop from is essential for the product sales. Packaging The packaging for the product would firstly focus on making it with environmentally friendly materials. Furthermore the color will be green and white which serve to be more favorable with the environmental concept. The refills will be available in convenient portable packages which can easily be inserted into the new bottle for the liquid hand washes. Promotion The promotion of the product will be based on highlighting its key benefits. These will comprise of ads and print adverts that show consumers the environmental benefits as well as the price saving benefits of the product with its variety of fragrances as well as convenience that it gives to the consumers. Resources Dettol, 2012. Official web page. Retrieved on 28th April 2012 from: http://www.dettol.co.uk/ Index, Mundi. 2011. UAE Economic Profile. Web. Retrieved on 29th April 2012 from: http://www.indexmundi.com/united_arab_emirates/economy_profile.html Reckitt, Benckiser. 2012. 75 Years of Dettol : Case Analysis. Web. Marketing Experts. Read More