P&G launches new Pantene shampoo range
15 Oct 2004
Hyderabad: Procter & Gamble (P&G) has launched a new range of Pantene Pro-V shampoos with Amino Pro-V Complex phasing out the old range. According to officials the company has withdrawn the entire stock of the old range of Pantene Pro-V shampoos from the market. P&G's Pantene is positioned in the premium slot of the shampoo market opposite Hindustan Lever's Sunsilk shampoo and comes priced at Rs98 for a 200ml-pack and Rs51 for a 100ml-pack.
HLL and P&G have been slugging it out to gain greater market share in the shampoos market in India. The leader is HLL's Clinic Plus with a 25 per cent share. This month, P&G cut prices of its mass shampoo brand Rejoice from Rs39 to Rs 30 for a 200ml-pack while last month P&G cut prices of Pantene prices by 16 per cent. The price cuts are seen as a response to market leader Hindustan Lever's promotional offer of 'Buy one, get one free' on large packs of premium brands Sunsilk and Clinic Plus.
Till recently, P&G had been satisfied with its niche at the upper end of the Indian market. But the company seems to have settled upon a strategy, in which the shampoo price cuts may not be its last move.
The company will soon launch its Crest toothpaste and offer it at a discount to Close-Up and Pepsodent, in which case Hindustan Lever will face severe pricing pressures in three categories analysts believe.
There is tremendous potential for growth in the $230-million domestic shampoo market, as only 40 per cent of urban homes and 16 per cent of rural homes use shampoos. Nearly all FMCG companies have launched small packs to promote shampoos and get consumers to use large packs once the brand preference sets in.
However, while the strategy has worked to the extent of increasing overall sales, sales of large packs have not taken off. 70 per cent of shampoo sales come from single-use sachets, and companies have not cut their prices.
The shampoo segment, though a small part of the companies' overall revenues, is still a growing one.
Despite its price cutting tactics, analysts feel P&G will not be able to raise its market share significantly. Nikhil Vora, vice president of research at SSKI Securities, says P&G does not have significant ground presence to increase its market share substantially. Andhra Pradesh is among the biggest markets in India for P&G's shampoos and contributed between Rs25 and Rs27 crore to last year's revenues. The company earned around Rs80 crore for all its products from the state. P&G's Pantene Lively Clean brand is the most popular in the state. Pantene is growing at a compounded growth rate of 7 to 8 per cent in AP while the entire range of P&G products, grew by around 34 per cent last year.
