Marketing Research Project

on Lever Ayush
SUBMITTED BY: GROUP 1

ADIT KUMAR - 2017PGP016

ARCHIT SRIVASTAVA - 2017PGP065
ANJU - 2014IPM016
ANKITHA ACHARYA – 2017PGP040
CHARVIE PUNIA - 2014IPM029
MRIDUL JHUNJHUNWALA – 2017PGP205
SHETE PRANIT ASHOK – 2017PGP341
SOUMYA HALDER – 2017PGP381
 1. Executive Summary
After failing to make inroads into the Indian FMCG Market for Ayurvedic products in 2001,
Unilever decided to re-launch its range of ayurvedic personal care categories including Skin
Care, Hair Care, Oral Care and Body Care which aims to address one’s everyday beauty
problems.

Hindustan Unilever Limited, an Indian consumer goods company, is a subsidiary of Unilever,

a British-Dutch company. It had launched Lever Ayush in 2016 to target the natural space,
which is one of the fastest growing consumer segments in present time.

The FMCG giant has positioned Lever Ayush as a premium brand with the products being two
to four times more expensive than competing brands. This decision has been motivated by
the inroads made by other competitors like Patanjali, Hamdard and Dabur which have grown
at a rapid pace with the advent of the “ayurvedic-rush”.

2. Ayurveda Industry
Ayurveda, the ancient science of life and health, is a unique heritage of India. Its official
practice is limited only to India and certain neighboring countries but with the changing
concepts of health and disease and shifting scenario of health needs of the present times,
there has been an amazing increase of interest which is likely to be accelerated with the
growing trends of information technology, economic globalization and industrial activism.

Ayurvedic products market in India has been growing at a robust pace.This has been
attributed to:

 Increasing urbanization

 Improving consumer lifestyle

 Rising awareness about harmful effects of synthetic cosmetic products.

 Popularising by spiritual leaders

The business prospects amounts to a $20 billion ready market, which is growing at a very fast
rate and would become a $5 trillion market worldwide by 2050. It goes without saying that
large portions of this market would be centered in India being the origin.

There are two big advantages in this industry to be gained by prospective investors

1. First, that it is recession proof as the healthcare industry has always been
2. Second, it reaches out to a larger chunk of target consumers across all income groups.

The Natural segment in India’s personal care market is estimated at Rs.18500 crore which is
41% of the total personal care market according to Nielsen. The Indian Ayurvedic health
products market is forecast to grow from $500 million to $1.1 billion by 2021.
 3. Competitors

Patanjali

Patanjali Ayurved has set the market alight with its growth and seems set to maintain the
momentum, with plans to double its turnover of Rs.10000 crore in the next 12 months.
Patanjali is leading the Ayurveda and naturals bandwagon, having already forayed into
categories such as cosmetics and personal care, while other segments like beverages and
dairy are being built up.
For instance, in toothpaste, Patanjali’s share has trebled to over 6% over the past year, even
as company officials claim it has a 15% share in shampoo and half of the market for honey.

Sri Sri Tattva

In Bengaluru, Sri Sri Tattva has also announced plans to have 1,000 stores selling its products.
Rather than just branding and marketing products, Sri Sri Tattva wants to extend it across the
value chain, from growing raw material to making products with it to establishing spas and
panchakarmas that will use these offerings. Currently, Sri Sri Tattva has about 300 SKUs.

Dabur
Over the past 12 months, Dabur has launched a slew of products such as what it claims to be
India’s first Ayurvedic gel toothpaste, under the Dabur Red franchise, an Ayurvedic cough and
cold remedy, under the Honitus and Honey-Ginger brands, and has introduced local
ingredients such as amla into its Real juice brand. To keep pace with this growing market,
Dabur plans to become the largest bulk grower of rare medicinal herbs in the country, by
more than doubling its area under cultivation to 4,500 acres from 2,000 acres at the end of
fiscal year 2017. It has tied up with internet commerce giant Amazon to make its products
available on its online market place, 30 products including Meswak toothpaste to start with
and plans to add 80 more going forward.

4. The Problem
Lever Ayush, the ayurvedic arm of Unilever is a premium brand. Desppite having the backing
from the largest FMCG company in India which strong portfolio and distribution channel, the
brand has not been able to make definite inroads into the fast growing Indian Ayurvedic
market.
In light of strong and growing “swadeshi” brands, Lever Ayush has not been able to gather
steam. A lot of people still don’t know about it. Its only bought by people who have prior
knowledge about the brand and are health conscious who see non-ayurvedic products as a
relevant threat.
The problem was understood by analysing various distribution channels ranging from Online
to “mom-and-pop” stores and exclusive Ayurveda shops to big supermarkets in and around
Indore. We always tried to understanding the product offerings.

Primary Questions:
1. What is the level of brand awareness of ayurvedic products in Indore
2. What is the perception of ayurvedic products among the residents of Indore
3. What are the main distribution channels from where the end users buy the products
from.
4. What is the consumption pattern in lieu of ayurvedic products in Indore
5. What motivates people to buy ayurvedic products
6. What factors do people take into consideration while buying organic products from a
store.
7. Who are the major influencers when it comes to analysing the buying pattern.

Secondary Questions:
1. What is the perception of people towards Unilever as a ayurvedic company
2. What are the growth drivers of ayurvedic FMCG industry.
3. Why do people prefer less known brands like Patanjali over these multinational giants.
4. What premium are people ready to spend on ayurvedic products
5. What channels should be used for promotion

5. Research Approach
A deductive approach was used because of the following reasons:

 Shortage of time
 Availability of literature
 Avoidance of risk

Fig. Research Approach Procedure

A stepwise description of the Research Procedure:
1. Online Articles, forums, blogs and research papers in the relevant areas were
consulted and hypothesis were deducted
2. Formulated hypothesis in the context of the research questions and established
relations between the variables
3. Tested the hypothesis using relevant tests in SPSS based on the data collected via
primary research

Background Research:

Primary Research:

 Visiting Patanjali Exclusive Stores in Indore

We visited the Patanjali store in Rau and talked to the owner of the shop. We also tried to
gauge the perception of the people towards ayurvedic products especially Patanjali and
how its value proposition is different as compared to Lever Ayush.

 Focussed Group Discussion

We conducted a Focus Group Discussion of about 40 minutes with a group of students in

order to find out more about their perception of natural ingredients in cosmetic products
and their views about ayurveda. The participants were all millennial generation ranging
from 20-25 who shared their opinions and how effectively brands like Lever Ayush could
reach to people like them
  Depth Interviews
Depth interviews were conducted where we interviewed people of different demographics.

 New buyer who didn’t have any experience of Ayurveda products before and
was not really interested to venture into the same - He is reluctant to switch to
Ayurveda because of the “price” issue. He also believes that he has been using such
products for 30 yrs now. If nothing ill has happened for the past 3 decades what
adverse effect can happen now.
 New buyer who didn’t have any experience of Ayurveda products before but
are willing to venture into the same – She is an independent woman who is
working in an MNC in Indore. Being from a humble background, she thinks that she
could not afford these products before, but with an increase in disposable income,
she can now spend on going “ayurveda” rather than sticking to chemicals.
 Old Customer Base who have been using Ayurveda Products – He says that it is
better than the chemical products that he has been using previously.

6. Research Design
The primary objective of the research was to address the above questions through a
descriptive research consisting of qualitative as well as quantitative research procedures.
We used Descriptive research aimed at throwing light on current issues through a process of
data collection that enabled us to describe the situation in an elaborate manner

Data Collection:
  Secondary Data:

In order to increase the levels of research validity and reliability internet was used to
develop knowledge about the ayurveda industry. Client’s website, Competitor
portfolio and brand knowledge was a major source of information. Newspaper and
Magazine Articles were also consulted in areas related to the advent of ayuveda
industry in India as well as FMCG marketing. The links of newspaper articles are
attached in the references section. The following research papers were consulted:

1. Ayurveda Industry – Challenges and Opportunities by Mr. T Balakrishnan (CII)

2. Globalisation of Ayurveda a Global Vision for the Next Decade By Praful Patel,
General Secretary, IAF
3. Trends and Developments Of Ayurveda, University of Calicut

 Primary Data:

Both qualitative and quantitative data was collected in through respective procedures.

Qualitative Data: Three depth interviews and one FGD was carried out to find insights related
to brand perception, purchase patterns and scope of ayurveda. Stores were visited to gain
some insights. Competitors’ strategies were studied by visiting big retail stores and asking
people around. We acted as disguised customers as well as research students
Quantitative Data: A survey was conducted among the sampling frame wherein the research
questions were addressed in a direct as well as indirect way. 130 responses were recorded
and on the basis of these responses various tests and methods were carried out to generate
useful data.

7. Sample Size Calculation

Sample size is the number of completed responses your survey receives. It’s called a sample
because it only represents part of the group of people (or target population) whose opinions
or behavior you care about.

We are using simple random technique to do the sampling.

When conducting a market research survey, having a statistically significant sample size can
make a big difference. Market research surveys help you discover more information about
your customers and your target market. That means a statistically significant sample size can
easily help you discover insights on your overall target market. It also assures you’re getting
the most accurate information.
Before calculating the numbers, we need to understand the following terms:

Population size: The total number of people in the group you are trying to study. If you
were taking a random sample of people across the U.S., then your population size would be
about 317 million. Similarly, if you are surveying your company, the size of the population is
the total number of employees.

Margin of error: A percentage that tells you how much you can expect your survey results
to reflect the views of the overall population. The smaller the margin of error, the closer you
are to having the exact answer at a given confidence level.

Calculations

Present Population of Rau = 40000

18-35 yr old = 45% of the total population. Therefore,

N = 18000

Confidence Level (Z) = 95% which corresponds to a value of 1.96

Margin of Error (e) = 9%

p = 0.25

Sample Size =

Therefore, plugging in all the values in the above equation,

1.962 × 0.5(1 − 0.5)

0.092
2
1.96 × 0.5(1 − 0.5)
1+( )
0.092 × 18000

This gives us the sample size of 132.

 8. Data Analysis and corresponding recommendations for
the client
We have majorly used Discriminant Analysis combined with Regression and Correlation as to
as to analyse the data and come to the specific solution.

The sample file has been attached herewith

Data File (Offline

Survey).xlsx

The files are hereby attached

MR Analysis - Reg
& Cor.xls

MR Analysis -
Discriminant.xls

Correlation and Regression

The correlation table shows pairwise correlation. The values in the table are standardized and
range from 1 to -1. We observe that past use of beauty care products is highly correlated
(0.482) with preference of natural beauty care products compared to other variables.
Regression is helpful in eliminating some of the independent variables as all of them are not
required.
The regression model of the following form has been used by entering 3 ‘X’ variables in the
model.
Y = a + b1X1 + b2X2 + b3X3 ……………… (1)
Where,
Y = Preference of natural beauty care products
X1 = past use of beauty care products
X2 = recognition of organic cosmetic products from their advertising
X3 = likelihood of increase in purchase on basis of recommendation
And the value of a, b1, b2 are obtained from regression model output.
a = 0.733
b1 = 0.367
b2 = -0.012
b3 = -0.012
Hence substituting the above values in eqn. (1)
Y = 0.733 + 0.367 X1 - 0.012 X2 - 0.012 X3
The p-level is observed to be is less than 0.05, indicating that the model is statistically
significant at a confidence interval of 95%. The R2 value is 0.238. t-Test for induvial variables
indicates that for confidence interval of 95% only past use of beauty care products is
significant.
The equation shows us that Use of natural beauty products will increase if the customer has
already used beauty products of any sort in the past, will decrease based on increase in
recognition of organic cosmetic products from their advertising.
Backward stepwise regression was performed on the same set of three independent
variables. This model starts with all three variables and gradually eliminates one after the
other until an optimal mix of independent variables is achieved. In this case it results in a
model with only one independent variable i.e. past use of beauty care products. So the
equation is
Preference of natural beauty care products = 0.667 + 0.364 (past use of beauty care products)

Discriminant Analysis
Strength of the model
From classification matrix, it is clear that the both discriminant functions are able to classify
100% of the 132 objects correctly.
Wilks’ Lambda for both discriminant functions was found to be on the higher side, more than
0.5 indicating lower discriminating power of the models.
We have 4 independent variables, which are as follows
Gender
Age
Income Level
Monthly budget for natural beauty products
Now for 1st function, it can be inferred that best predictor for willingness to pay more for
Ayurvedic products is Gender with higher coefficient 0.836 (absolute value). For 2nd function,
it can be inferred that best predictor for willingness to pay more for Ayurvedic products is Age
with higher coefficient 0.738 (absolute value).
The unstandardized discriminant functions are
Y = -2.004 + 1.692(Gender) + 0.322(Age) – 0.291(Income Level) + 0.046(monthly budget for
natural beauty products) ……………… (1)
Y = -2.555 + 0.08 (Gender) + 0.78(Age) – 0.561(Income Level) -0.25(monthly budget for natural
beauty products) ……………… (2)
Where Y = willingness to pay more for Ayurvedic products
Functions at Group Centroids table indicates the means of the discriminant functions. If we
have the customer’s gender, age, income level and monthly budget for natural beauty
products the above discriminant functions can give us score that helps to classify the
customer whether he is willing to pay more for Ayurvedic products or it depends upon
Ayurvedic Product.
From Standardized Discriminant Function Coefficient, the most important variable is gender.

9. Appendix

Questionnaire used for preliminary research

1. https://docs.google.com/forms/d/1UhpqeKWrCeqHfnM61Ar-
IcHMcxed5MhlNAyf2UuToQI/prefill

10. References

Economic Times
2. https://economictimes.indiatimes.com/industry/cons-products/fmcg/why-
companies-like-hul-patanjali-dabur-are-taking-a-crack-at-the-market-for-ayurvedic-
and-herbal-products/articleshow/61084207.cms
3. https://www.leverayush.com/
4. https://www.hul.co.in/Images/annual-report-2016-17_tcm1255-507593_en.pdf
5. https://www.hul.co.in/brands/brand-stories/lever-ayush-launches-ayurvedic-range-of-
personal-care-products.html

Wellness Fargo
6. https://www.franchiseindia.com/wellness/How-FMCG-companies-are-giving-new-
dimensions-to-Ayurveda-industry.9458

Competitors
7. https://www.leverayush.com/
8. https://www.patanjaliayurved.net/
9. http://www.dabur.com/
10. http://www.hamdard.in/

Papers/Articles Referred
11. http://shodhganga.inflibnet.ac.in/bitstream/10603/55659/9/09_chapter%202.pdf
12. http://iaf-ngo.org/pdf/Globalisation%20of%20Ayurveda%20-
%20a%20global%20vision%20for%20next%20decade%20(No.1).pdf
13. http://cii.in/WebCMS/Upload/Mr%20T%20Balakrishnan.pdf
14. https://www.slideshare.net/ConfederationOfIndianIndustry/vision-2022-roadmap-study-
for-indian-ayurveda-industry
15. http://re.indiaenvironmentportal.org.in/files/Ayurvedic%20Manufacturing%20in%20Kerala.
pdf