Individual Assignment – Report

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.

Part 1. Honor Code Pledge

This is the first page of your assignment and you need to sign the below pledge electronically (possible after you turn the document into pdf). Without accepting or submitting Part 1, your actual work in Part 2 WILL NOT be graded.

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Honor Code Pledge

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On my honor, as an Özyeğin University student, I have neither given nor received unauthorized assistance on this assignment. Unauthorized assistance includes, but is not limited to:

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  • Recording or copying assignment questions or answers for the purpose of aiding other students (future or current) since doing so would be in violation of the OzU Honor Code

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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 2016Jun 2017Jan 2018Feb 2018Mar 2018Apr 2018May 2018
 BEIERSDORF 8X47666667
 BEIERSDORF NIVEA21212219202119
 EVYAP BELISIMA0011111
 EVYAP BLADE2223222
 EVYAP EMOTION4456567
 EVYAP FIRST CLASS0111000
 EVYAP PRIVACY2223222
 LOREAL GARNIER234344
 UNILEVER-PC AXE1311109888
 UNILEVER-PC DOVE2222223
 UNILEVER-PC DOVE MEN1111111
 UNILEVER-PC REXONA19191515151617

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 10MAT 11MAT 12MAT 13MAT 14MAT 15MAT 16MAT 17MAT 18
DEODORANT TOTAL39.237.738.036.337.437.538.442.046.3
REXONA10.910.810.69.910.311.411.311.812.8

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 Type201220132014201520162017
Store-Based Retailing76.277.179.078.077.077.8
    Grocery Retailers40.041.642.741.442.242.2
        Modern Grocery Retailers39.941.542.741.442.242.1
Convenience Stores1.31.51.61.61.71.7
Discounters6.87.18.07.88.07.9
Hypermarkets5.96.26.46.36.46.8
Supermarkets26.026.826.725.726.125.8
    Non-Grocery Specialists35.134.635.535.934.235.1
         Health and Beauty Specialist Retailers35.134.535.535.834.235.1
Beauty Specialist Retailers31.931.232.433.131.532.5
Chemists/Pharmacies3.02.82.62.32.32.2
Drugstores/pharmacies0.20.50.40.40.40.4
    Mixed Retailers1.01.00.80.60.60.6
Department Stores1.01.00.80.60.60.6
Non-Store Retailing23.822.921.022.023.022.2
    Direct Selling21.820.518.519.520.320.0
    Internet Retailing2.12.32.42.52.72.2
Total100.0100.0100.0100.0100.0100.0

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. 

  1. Acquisition/stimulate demand:              (15%)
  2. Acquisition/earn share:                         (15%)
  3. Retention/stimulate demand:               (15%)
  4. Retention/earn share:                          (15%)
  5. Recommend ways of increasing the conversion rate for each strategic quadrant. (15%)
  6. On which quadrant should the marketing strategy focus on? Why? (20%)
  7. Format, grammar, writing, clarity (5%)

Appendix – Prices by Brand, Turkey

CategoryBrand NamePack SizePack Price (Local)Unit Price (Local)Unit Price (USD)Per
Deo CreamsDeotak35 ml17.90511.43140.17litre
Deo CreamsPrivate label- Rossmann50 ml10.00200.0054.82litre
Deo PumpsNivea75 ml13.50180.0049.33litre
Deo PumpsNivea Men75 ml13.50180.0049.33litre
Deo PumpsPrivate label – Rossmann75 ml5.9979.8721.89litre
Deo Roll-OnsFa Roll-on50 ml5.50110.0030.15litre
Deo Roll-OnsNivea Deodorant50 ml18.00360.0098.67litre
Deo Roll-OnsNivea Men25 ml5.70228.0062.49litre
Deo Roll-OnsNivea Men50 ml7.00140.0038.37litre
Deo Roll-OnsNivea Men50 ml12.90258.0070.71litre
Deo Roll-OnsPrivate label – Watsons50 ml6.50130.0035.63litre
Deo Roll-OnsRexona50 ml12.90258.0070.71litre
Deo SpraysAxe150 ml13.9092.6725.40litre
Deo SpraysNivea Deodorant150 ml10.9072.6719.92litre
Deo SpraysPrivate label- Watsons150 ml5.9939.9310.94litre
Deo SpraysRexona150 ml12.9086.0023.57litre
Deo SpraysRexona35 ml5.50157.1443.07litre
Deo SpraysRexona for Men150 ml12.9086.0023.57litre
Deo SticksEternity for Men75 ml105.001,400.00383.71litre
Deo SticksLady Speed Stick50 ml18.90378.00103.60litre
Deo SticksNivea Deodorant40 ml12.90322.5088.39litre
Deo SticksRexona Reward Deo Stick50 ml12.90258.0070.71litre

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), 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.

Copyright © 2018 Koç University

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