Why Soaps & Detergents? Regularly and frequently purchased products Brand loyalty to household products Key players stand out High advertising-to- sales ratio
Soap & Cleaning Compound Manufacturing in the United States
Industry Overview Definition: Substances that loosen and remove soil from a surface for personal hygiene, sanitization or cleaning clothes, linens, and furnishings. Major products: Soaps and detergents, polishes and other sanitation goods, surfactants and finishing agents Major functions: Prepare, manufacture, and package cleaning compounds
ProductProducer Cost Consumer Cost: Average Retail Price Laundry Detergent Ingredient costs are 35- 40% of wholesale price Labor costs absorb 20% of total costs High initial capital expenditures for plants and technology $5 Soap$2.50 Dishwashing Detergent $2
Demand Drivers World Price of Crude Oil Per Capita Disposable Income Drive/stifle industry growth
Demand Drivers FY13: The increase in per capita disposable income is expected to drive growth in the industry in 2013.
International Trade Industry exports generate $8.6B annually, or 15.4% of industry revenue. Core Market Expansion Opportunity
Market Segmentation Commercial Sales Food Service Establishments Healthcare Providers Lodging Establishments Household Sales Supermarkets and Mass Merchandisers Convenience Stores Independent Retailers Soaps and detergents are sold directly from the wholesaler to commercial businesses and through retail outlets for the everyday, average consumer
Industry Trends Employment Fewer workers due to increased automation Decrease in production costs Emerging Markets The U.S. market is stagnant Increased of acceptance of products and per capita income in undeveloped nations Increasing Regulation Further the green movement within the industry
Ad Characteristics Observations Frequency of Characteristics Mentioned: High Average Number of Characteristics Mentioned: 3 Common Trends: cleaning power, concentration Frequency of Characteristics Mentioned: Medium Average Number of Characteristics Mentioned: 2 Common Trends: freshness, clean boost, scent Frequency of Characteristics Mentioned: Low Average Number of Characteristics Mentioned: 0-1 Common Trends: clean, color enhancement
Product Spending on Prime Daypart Total Ad Spending Percent of Total Spending on Prime All$8,228,173$19,878,16041% Gain$3,719,908$8,898,49942% Tide$29,486,556$67,277,10244% Ad Spending on Primetime
Ad Observations: Key Findings High frequency of characteristics Limited to no comparative advertising No celebrities, humor, or emotion Demographic: children Gain Repetition of the word “Freshness” References to “that other stuff” in indirect comparison Money back guarantee Humor was evident in almost all cases Tide Library of commercials was extensive Humor and emotion was evident in almost all cases Demographic: parents “That’s my Tide. What’s yours?” All
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