Individual Assignment
Basic Information
Deliverable: Individual Assignment – Report
Format: .pdf (max 3 pages, 12 pt. font, excluding references and other appendices)
Deadline: 05.04.2021
Time required for preparation: 10 hours
Grade: Out of 100 and makes up 10% of course grade
Notes: 1. Follow APA guidelines while writing the report and referencing.
2. Work individually and submit via Turnitin, LMS.
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Part 2. Marketing ROI
Koç Üniversitesi
Prepared by Prof. Ayşegül Özsomer for class exercise
Rexona © in the Deodorant Category
The deodorant market is a growing category in Turkey. Retail value was 321 million TL in 2012, reaching 347 in 2013, 401 in 2014, 464 in 2015, 525 in 2016. The retail value of deodorant sales increased by 19% in 2017 in current prices to reach 626 million TL. Marketing investments by leading companies fuel this growth. Deodorant pumps lead growth in this category, with current retail value sales rising by 23% in 2017.
Deodorants, as a category is expected to register a value CAGR of 6% at constant 2017 prices over the forecast period, with sales reaching 822 million TL in 2022. Nivea Beiersdorf is the leader in sales, posting a value share of 28% in 2017. In terms of brand level market shares, Beiersdof’s Nivea is the market leader with 19% and Unilever’s Rexona is a close follower with 17%.
Table 1. Volume Shares of Main Players in the Deodorant Market, Turkey
| Volume Share of Main Players % | Jun 2016 | Jun 2017 | Jan 2018 | Feb 2018 | Mar 2018 | Apr 2018 | May 2018 |
| BEIERSDORF 8X4 | 7 | 6 | 6 | 6 | 6 | 6 | 7 |
| BEIERSDORF NIVEA | 21 | 21 | 22 | 19 | 20 | 21 | 19 |
| EVYAP BELISIMA | 0 | 0 | 1 | 1 | 1 | 1 | 1 |
| EVYAP BLADE | 2 | 2 | 2 | 3 | 2 | 2 | 2 |
| EVYAP EMOTION | 4 | 4 | 5 | 6 | 5 | 6 | 7 |
| EVYAP FIRST CLASS | 0 | 1 | 1 | 1 | 0 | 0 | 0 |
| EVYAP PRIVACY | 2 | 2 | 2 | 3 | 2 | 2 | 2 |
| LOREAL GARNIER | – | 2 | 3 | 4 | 3 | 4 | 4 |
| UNILEVER-PC AXE | 13 | 11 | 10 | 9 | 8 | 8 | 8 |
| UNILEVER-PC DOVE | 2 | 2 | 2 | 2 | 2 | 2 | 3 |
| UNILEVER-PC DOVE MEN | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
| UNILEVER-PC REXONA | 19 | 19 | 15 | 15 | 15 | 16 | 17 |
Source: Passport – Euromonitor International
Market Potential
In developed markets such as the United Kingdom (UK) and USA, research shows that younger people use deodorant more often than the older generation. The results of a 2017 survey in which female respondents from the UK were asked how frequently they use deodorant, broken down by age group, 90% of 18 to 29 year olds reported using it every day, compared to 78% of those aged 60 and over. Around 6% of women aged 60 years and above said they never use deodorant (Statistica 2018). In another study conducted among males in the USA in June 2017, 80% of respondents aged 30 to 59 years reported using deodorants every day.
The challenge in emerging markets such as Turkey is low market penetration rates. Market penetration has been rising steadily in the last decade, reaching 46% in June 2018 (See Table 2).
Table 2. Household penetrations of deodorants in Turkey.
| JUNE PENETRATIONS % | MAT 10 | MAT 11 | MAT 12 | MAT 13 | MAT 14 | MAT 15 | MAT 16 | MAT 17 | MAT 18 |
| DEODORANT TOTAL | 39.2 | 37.7 | 38.0 | 36.3 | 37.4 | 37.5 | 38.4 | 42.0 | 46.3 |
| REXONA | 10.9 | 10.8 | 10.6 | 9.9 | 10.3 | 11.4 | 11.3 | 11.8 | 12.8 |
Source: Passport – Euromonitor International
According to TUIK (2018a), the population in Turkey is roughly 81 million people as of December 31, 2018. There was an increase of about 1 million people from the previous year. The male-female proportion is very even at 50.16% males. With 92,5% living in city and town centers, urbanization is extremely high.
The Age Pyramid for 2017 is provided in Figure 1. Roughly %15 of the population is 15-24 years old, another 25% in the 25-39 age group and 25% fall in the 40-59 age group.
Figure 1. Age Pyramid, 2017 – Turkey
Source: TUIK (2018b)
Consumer Usage Behavior
Deodorant usage starts in puberty. While some may start using deodorant earlier, in emerging markets it is safe to take 15 years as the age to enter the category for the first time. According to research, first time deodorant buyers (as well as continuous users), usually buy 1 unit every six months. Rexona sells a 50 ml unit (pack of roll-on or stick) for an average price of 7.-TL per roll to retailers. A large scale, integrated communication campaign which includes mass media, social media, sampling, and visiting cities to distribute free samples lets and targeting non-users would cost 4 million TL/year. A famous celebrity would ask for a minimum of 1 million TL for a year for endorsing the brand and becoming the spokesperson, taking part in ads, PR, etc. While it is very tough to change consumption habits and convince non-users to use deodorants, market research shows that 10 % of nonusers could be converted if a 360° campaign is implemented.
Campaigns targeting current Rexona users are assumed to have similar conversion rates (10%) leading both to increasing consumption or value by 20%. These campaigns would cost about 1 million TL to lead to these results.
Data also reveals that 25% of those who buy Rexona, also buy other brands of deodorant in a year, specifically Nivea. Research shows that these multi-brand users usually consume equal amounts of the brands they buy. That is, the share of wallet of each brand is about 50%. Multi-brand users are promotion prone or “loyal” to many brands simultaneously and keep switching between brands. Hence, the Rexona marketing team believes that a campaign aimed at increasing share of wallet could only convince 10% of mult-ibrand users to become sole Rexona users (use only Rexona the whole year). Such a campaign is expected to cost about 1 million TL as well.
Table 3. Retail Sales by Value by Distribution Outlet Type
| Outlet Type | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
| Store-Based Retailing | 76.2 | 77.1 | 79.0 | 78.0 | 77.0 | 77.8 |
| Grocery Retailers | 40.0 | 41.6 | 42.7 | 41.4 | 42.2 | 42.2 |
| Modern Grocery Retailers | 39.9 | 41.5 | 42.7 | 41.4 | 42.2 | 42.1 |
| Convenience Stores | 1.3 | 1.5 | 1.6 | 1.6 | 1.7 | 1.7 |
| Discounters | 6.8 | 7.1 | 8.0 | 7.8 | 8.0 | 7.9 |
| Hypermarkets | 5.9 | 6.2 | 6.4 | 6.3 | 6.4 | 6.8 |
| Supermarkets | 26.0 | 26.8 | 26.7 | 25.7 | 26.1 | 25.8 |
| Non-Grocery Specialists | 35.1 | 34.6 | 35.5 | 35.9 | 34.2 | 35.1 |
| Health and Beauty Specialist Retailers | 35.1 | 34.5 | 35.5 | 35.8 | 34.2 | 35.1 |
| Beauty Specialist Retailers | 31.9 | 31.2 | 32.4 | 33.1 | 31.5 | 32.5 |
| Chemists/Pharmacies | 3.0 | 2.8 | 2.6 | 2.3 | 2.3 | 2.2 |
| Drugstores/pharmacies | 0.2 | 0.5 | 0.4 | 0.4 | 0.4 | 0.4 |
| Mixed Retailers | 1.0 | 1.0 | 0.8 | 0.6 | 0.6 | 0.6 |
| Department Stores | 1.0 | 1.0 | 0.8 | 0.6 | 0.6 | 0.6 |
| Non-Store Retailing | 23.8 | 22.9 | 21.0 | 22.0 | 23.0 | 22.2 |
| Direct Selling | 21.8 | 20.5 | 18.5 | 19.5 | 20.3 | 20.0 |
| Internet Retailing | 2.1 | 2.3 | 2.4 | 2.5 | 2.7 | 2.2 |
| Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
Source: Passport – Euromonitor International
THE TASK
Your task is to help the marketing team at Rexona who is anxious to shake up things a bit. As a challenger brand, they could try to steal share from Nivea. Alternatively, given the 46% market penetration, the team could see this as an opportunity and try to grow the market. Before they make a decision, they need to be able to calculate the Marketing Return of Investment for the four different strategic options. To help their decision making, they compiled the data in this case.
In fact, the team has already selected their primary strategy regarding which strategic quadrant to focus on. However, to convince top management and to have more confidence in their chosen strategy, they need to calculate the market potentials for each strategic quadrant. Please help them by doing the 4B analysis (bodies, beliefs, behaviors, bucks) for each strategic quadrant using the data provided in the case. You will need to make some assumptions. Please specify them.
- Acquisition/stimulate demand: (15%)
- Acquisition/earn share: (15%)
- Retention/stimulate demand: (15%)
- Retention/earn share: (15%)
- Recommend ways of increasing the conversion rate for each strategic quadrant. (15%)
- On which quadrant should the marketing strategy focus on? Why? (20%)
- Format, grammar, writing, clarity (5%)
Appendix – Prices by Brand, Turkey
| Category | Brand Name | Pack Size | Pack Price (Local) | Unit Price (Local) | Unit Price (USD) | Per |
| Deo Creams | Deotak | 35 ml | 17.90 | 511.43 | 140.17 | litre |
| Deo Creams | Private label- Rossmann | 50 ml | 10.00 | 200.00 | 54.82 | litre |
| Deo Pumps | Nivea | 75 ml | 13.50 | 180.00 | 49.33 | litre |
| Deo Pumps | Nivea Men | 75 ml | 13.50 | 180.00 | 49.33 | litre |
| Deo Pumps | Private label – Rossmann | 75 ml | 5.99 | 79.87 | 21.89 | litre |
| Deo Roll-Ons | Fa Roll-on | 50 ml | 5.50 | 110.00 | 30.15 | litre |
| Deo Roll-Ons | Nivea Deodorant | 50 ml | 18.00 | 360.00 | 98.67 | litre |
| Deo Roll-Ons | Nivea Men | 25 ml | 5.70 | 228.00 | 62.49 | litre |
| Deo Roll-Ons | Nivea Men | 50 ml | 7.00 | 140.00 | 38.37 | litre |
| Deo Roll-Ons | Nivea Men | 50 ml | 12.90 | 258.00 | 70.71 | litre |
| Deo Roll-Ons | Private label – Watsons | 50 ml | 6.50 | 130.00 | 35.63 | litre |
| Deo Roll-Ons | Rexona | 50 ml | 12.90 | 258.00 | 70.71 | litre |
| Deo Sprays | Axe | 150 ml | 13.90 | 92.67 | 25.40 | litre |
| Deo Sprays | Nivea Deodorant | 150 ml | 10.90 | 72.67 | 19.92 | litre |
| Deo Sprays | Private label- Watsons | 150 ml | 5.99 | 39.93 | 10.94 | litre |
| Deo Sprays | Rexona | 150 ml | 12.90 | 86.00 | 23.57 | litre |
| Deo Sprays | Rexona | 35 ml | 5.50 | 157.14 | 43.07 | litre |
| Deo Sprays | Rexona for Men | 150 ml | 12.90 | 86.00 | 23.57 | litre |
| Deo Sticks | Eternity for Men | 75 ml | 105.00 | 1,400.00 | 383.71 | litre |
| Deo Sticks | Lady Speed Stick | 50 ml | 18.90 | 378.00 | 103.60 | litre |
| Deo Sticks | Nivea Deodorant | 40 ml | 12.90 | 322.50 | 88.39 | litre |
| Deo Sticks | Rexona Reward Deo Stick | 50 ml | 12.90 | 258.00 | 70.71 | litre |
Source: Passport – Euromonitor International
References
Statista (2018), “Frequency of deodorant use among women in the United Kingdom (UK) 2017, by age,” (December 20), https://www.statista.com/statistics/725069/deodorant-usage-among-women-by-age-united-kingdom-uk/
TUIK (2018a), p=Nufus-ve-Demografi-109“>https://data.tuik.gov.tr/Kategori/GetKategori?p=Nufus-ve-Demografi-109.
TUIK (2018b), https://biruni.tuik.gov.tr/medas/?kn=95&locale=tr
Professor Ayşegül Özsomer prepared this note. The information in this note is hypothetical. The case is prepared for purely educational purposes rather than reflect effective of ineffective managerial decisions.
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