Working Mothers Buying Detergents. Only Price Matters

Content

INTRODUCTION

Framework

OBJECTIVES OF THE STUDY

Methodology

Research Design

Statistical Treatment of Data

Results and Discussions

Conclusion

LITERATURE CITED

Working Mothers Buying Detergents: Only Price Matters

Vicente Salvador E. Montaño

University of Mindanao, Davao City Philippines

Manuel S. Ortega

Despite numerous marketing mix studies of detergents very little academic investigation to determine its significant marketing attributes exist. This paper aims to determine among advertising, branding and pricing attributes, working mothers significantly considers when buying a detergent. Allowing working mothers to assign values in each attribute, the conjoint analysis method was used to determine the derived importance instead of the stated importance. This enable the generation of a regression model with a variability of 0.70, describing the working mothers’ choice of detergent to reveal that price with a positive coefficient of 4.58, very high, p-value of 0.013, significant is the only attribute that emerge considerable, compared with brand with a positive coefficient of 0.83, very low, p-value of 0.61, not significant. Moreover, there were no significant difference among working mothers when grouped according to their employment status (full-time, part time or self-employed), civil status (single parent or married) and level of income (low, moderate or high). This implies that working mothers remains to be a market niche without any sub niche in the detergent market. Pricing strategy is the key for detergent companies who wanted to enter, maintain or increase their market share.

Key words: Marketing attributes, detergent pricing, conjoint analysis, multiple regression analysis, variance analysis, Davao City, Philippines, Southeast Asia

193 words

INTRODUCTION

Cleaning products play an important role among working mother’s daily lives. It removes soils, germs and pollutants that prevent household members from contacting diseases and keep the surroundings more clean (Fujishima & Zhang, 2006). One of these cleaning products usually in the grocery list of working mothers is the detergent (Baheshti, 2009). A detergent is like soap but more resolvable in hard water (Smulders et al., 2007). One of the largest usages of detergent is for washing clothes. It peels off stains and keeps clothes clean (Ottman, Stafford, & Hartman, 2006).

In Central European Economies there was globalization among the four fast-moving consumer goods; detergent is one of these items. The MNCs hasten globalization through their internationally-integrated and multi-tier brand strategies in the market (Schuh, 2007). A good brand strategy creates brand equity (Madhavaram, Badrinarayanan, & McDonald, 2005). In South Africa creating brand equity, especially in the detergent market with strong brand competition creates sustainable advantage. The most influential element of brand equity among detergent users in South Africa is strong brand loyalty and perceived quality (Saal, 2008). Previously MNCs promotes a single brand strategy in the market realizes later that there is a significant difference in the detergent market between the developed and developing economies particularly in Latin America. However, keen marketing enthusiast posits that developing economies extend commonality in the development, deployment and strategies in consumer market particularly detergents (Veliyath & Brouthers, 2010).

Selling sachet of consumer goods price at 2 pesos or 19 cents in Mexico, P&G aims to add one billion consumers, very poor women from developing countries who buys fast consumer items including detergent from corner stores. The limited income of households do not allow women to buy full-size goods even though buying small portion of detergents cost more. The seemingly successful strategy of P&G is attributed from their “reverse engineering” strategy. P&G identifies consumer item buyers can afford, adjusting the product features and manufacturing process to hold down its cost, with emphasize of not compromising quality (Byron, 2007).

A study in Singapore reveals that multi-national companies MNCs producing detergent continue their strategy in globalization even if faced with stiff competition in the local markets (Inkpen & Ramaswamy, 2007). In Bangladesh, Unilever with 30 percent market share is the market leader. The company is successful in their promotion activities demonstrating that positive relationships exist between price, promotion, quality and brand loyalty (Huq, 2005). Meanwhile in Japan, P&G face some challenges, a reduction in their brand portfolio which is the result of their poor market strategy of rationalization (Godey & Lai, 2011). In China, the largest market of detergent in Asia-Pacific, there is a growing preference on detergent products which are safe in the environment, economical, and with lasting fragrance. Aside from these preferences the Chinese market is turning to liquid detergent although the powder remains popular with 60 to 70 percent market share.

In the Philippines detergent makers who wanted to introduce new product use sachet marketing. Through the extensive network of corner store as the medium of distribution, detergent makers enable the affordability and accessibility of the product. The success of the sachet marketing depends on its brand equity and pricing strategy (Sy-Changco, Pornpitakpan, Singh, & Bonilla, 2011). Success of Sachet marketing in the Philippines was through the socio-cultural cause that favors the strategy. However it is not only limited to these factors, poverty prevalence, western advertisement, a strong consumer orientation and technology that cut cost of sachet sizing largely contributed to its success (Ang, 2007).

Mothers are those who usually go to groceries sometimes accompanied by their children to buy consumer items like detergents (Daviln, 2010). The existing fierce competition in the urban area and the emerging lucrative rural market created an opportunity for detergent makers to explore the untapped market. Some detergent makers, with strategies and approaches different from urban market, targeted the untapped mothers market in the rural areas offering these several brands such as Clinic plus, Dalda oils, Lovely and Wheel (Vasavada-Oza, Nagraj, & Krishna, 2012). Segmenting the market makes it easier for detergent makers to identify the characteristics buyers wanted from their product. Tide is the first one to target mothers and create their market segment (Coldwater, 2013).

Most working mothers complain of time scarcity, prioritizing feeding their children and then quickly moving to do other household task (Jabs et al., 2007). Part of these household tasks is purchasing of consumer items for their family. Women who increasingly earn disposable income make 80 percent of buying decision in the household and they prioritized consumer items including detergent in their purchases (Kelan, 2008). An increasing number of households with working mothers tend to have more direct consumer instruction in making purchasing decision (Neeley, 2005). Suggested brands appear to strongly influence mothers with children during their shopping (Şener, 2011). Working or non-working mothers usually passes their purchasing pattern, acting as role model to their daughters (Huddleston, Schrader, & Minahan, 2010).

Framework

Successful detergent companies who established or increased their market share accomplished it through strategic breakthroughs. Identifying the existing gaps in the industry and finding means to close these gaps made them successful in contacting new customers through unconventional advertising which create profitable markets (Anderson & Markides, 2007). These unconventional advertising may come in the form of product packaging. In one study, detergent market symbols, signs and different product packaging is an effective advertising tool (Silayoi & Speece, 2007).

Advertising agencies face problems on limited thinking, because non-fashionable goods such as detergent require creativity in advertisement to succeed in the market (Kawashima, 2006). Exposing consumer to the advertisement of competing brands test the advertising creativity. Competing brands that advertises more often harm the advertising effectiveness of focal brand, eventually, recovers due to their advertising creativity. Marketers believed that competitive advertising interference influence sales (Danaher, Bonfrer, & Dhar, 2008).

To capture more sales in the detergent market one study recommend the combined use of brand-advertising and generic advertising strategy. The study further suggested that detergent company who wanted a short-term result may engage in generic advertising, however detergent companies who wanted a long-term effect should engage in brand advertising (Bass, Krishnamoorthy, Prasad, & Sethi, 2005). Proponents of comparative advertisement claimed others wise. They inferred that comparative advertisement where the detergent company compared their brand to several brands in terms of loyalty, truthfulness, and undeceiving and objectiveness criteria, though it attracts more law suits from competing companies was more successful (Mihaela, 2008).

In the detergent industry there is an ease of entry for other producer through artificial product differentiation and huge advertising outlay (Steiner, 2013). Detergent makers venturing into new market with new product based their advertisement on the economic and cultural variants of the place tend to heavily utilizes argument based appeal to differentiate their product (Verissimo). Due to easy entry of other detergent, strong brands were prone to decline. New players planning to enter the market faced expensive and risky undertaking (Thomas & Kohli, 2009).

Brand equity consisted of the company’s name, symbols and slogans which conveyed to consumers the reputation and perceived quality. New players considered brand equity very important (Aaker, 2009) because detergents with very strong brand equity can command price premium in a market niche (Sriram, Balachander, & Kalwani, 2007). The technique to sustain strong brand equity is to constantly adapt to changes in consumer taste (Slotegraaf & Pauwels, 2008). Consumers’ unwanted experience in purchasing detergent reduces their repeat buy and weakens the brand equity (Warlop, Ratneshwar, & Van Osselaer, 2005). Detergents that keep up inherent appeal continued to offer earning opportunity for the company (Bellman, 2005).

A separate study with different result claimed that lower brand equity products benefited more from product introduction than with strong brand equity. Even with low brand equity small brands can still experience positive sales evolution from promotional activity. This means that brand equity is not a result of a sustained promotional effectiveness (Slotegraaf & Pauwels, 2008). Another study that investigated the brand equity of P&G reveals that brand management with relationship selling is more effective than trying to strengthen brand equity (Gabay, Moskowitz, Beckley, & Ashman, 2009). A similar study declares that increase sale is the result of brand awareness, perceived quality and loyalty of consumers (Chi & Yeh, 2009).

The observed decline in the laundry group of P&G brand is traceable on their brand equity strategies. There are several questions that remain unanswered in the analysis of international brand equity (Godey & Lai, 2011). One major question that arises is the influx of brand advertising that convey different messages to consumer. It becomes a challenge for brand manager who wanted to present the brand’s core. The situation gives inconsistent brand message that creates brand confusion, resulting into negative perception on brand equity. Surprisingly, strengthening of brand equity through advertisement may result into brand confusion. Addressing brand confusion has more satisfactorily marketing result than the strengthening of brand equity (Kocyigit & Ringle, 2011).

Pricing strategy aims to overcome or meet the challenges of market competition (Lages & Montgomery, 2005). Pricing strategy based on the principles of game theory is competitive and effective (Sengupta, Chatterjee, & Ganguly, 2007). An innovation in the pricing strategy using game theory is the use of static discrete game where the firm chooses action compatible with their rival (Ellickson & Misra, 2008). Pricing strategy regardless of its principle aims to meet the ideal pricing, a condition where pricing attract buyers (Wee & Yang, 2007).

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