JAIPURIA INSTITUTE OF MANAGEMENT

LUCKNOW

SACHET MARKETING

SUBMITTED BY: SUBMITTED TO:

Sheena Saxena (JIML-10-131) Prof. Shalini Singh
Shobhit Srivastava (JIML-10-138)
Sujesh Khare (JIML-10-147)
Sparsh Mishra(JIML-10-)
Tulika Narayan (JIML-10-164)
SUYASH PRATAP SING (JIML-10-154)
 ACKNOWLEDGEMENT
We express our deep gratitude to Shalini mam for her constant
support, guidance and motivation that helped us immensely in
completing this project. The project provided us with an
opportunity to understand the sachet marketing.

In addition we thank every individual who are directly or indirectly

associated with the successful completion of this project.
SACHET – WHAT IT IS AND WHY
BUSINESS SHOULD CONSIDER USING IT
A SACHET is nothing more than sample size packets of various
products. These packets come in a variety of sizes, shapes and
packaging types. The three main types that you’ll see businesses
use for samples are the peel-away type that you often see in
magazines, the little tear corner packets and the newest version
which is an innovative container called Snap-pak that snaps open
using only two fingers. The peel-away type are typically used for
perfume samples, just so potential customers can smell the scent.
For many years, the tear corner packets have been the standard for
most products but they have disadvantages that have now been
overcome by the new snap open sachet – mainly they were hard to
open and splattered the contents easily.

Not only is offering a product sample sachet a great way to allow

potential new customers to try your product, it’s a fantastic
branding technique. Whether you buy the machinery needed and
assemble the samples yourself or use a service to do it for you, it is
easy to add your company logo and some information to these
packages. Even those who don’t try the product will still be
exposed to your company’s branding. Tests have shown that it can
take up to seven times for a person to see your logo before it
registers on his mind. Clearly getting your company’s brand in front
of people as many times as possible is to your benefit.

Obviously, there are some products that will not be suitable for a
sachet but there are many that are ideal for this type of sample
package. Anyone who manufactures body care, skin care or hair
care products will find these perfect to hold a one-time use amount
of the product. Paint manufacturers could offer tiny samples for
people to test the colors. Cosmetic manufacturers will find them
useful for allowing potential customers to test their products. If
your business offers any product that could be distributed this way,
it will be a marvelous branding and promotional tool.

C K Ranganathan, CEO of CavinKare is somebody who changed the

rules of the FMCG game and is widely regarded as the man behind
the sachet revolution. The FMCG business is becoming increasingly
complicated with the biggie HLL competing with regional players in
various parts of India.

1983, C K Ranganathan started selling shampoos in a sachet with an

investment of Rs 15,000 and dared to take on the multinationals,
Lever and P&G, the unquestioned leaders in that segment.
FEW FACTS ABOUT SACHET MARKETTING:
• Sachets were first introduced to India in the 1990’s by an Indian
company selling a 10-milliliter sachet of Velvette shampoo. Before
the sachet, shampoo in India was only available in larger bottles,
therefore limiting its sales success among people with small incomes .
Sachets meet the needs of the rural consumer in several ways. Sachets
are inexpensive, they occupy a small amount of space, and they allow
consumers to experiment with new products that they may never have
tried before
• Sachet marketing defined as the practice of serving products and
services in small, affordable size has been in prevalent use in the
emerging markets such as Philippines, India and Indonesia
• SACHET MARKETING: The most effective way of influencing a
customer to try out a product is to offer him enough for a trial. The
latest initiatives taken up by most of the successful newly launched
products are Sachet Marketing. This is where the producers make
available the product to the customer for either of the two main goals:
Offer the customer affordability. Give the customer the opportunity to
try out the product.
Here, the main objective is to convince the customers that the
shampoos are indeed gentle enough to be used for the desired results.
Hence, the product is offered in sachet, besides being made available
in normal sized packs.
• The biggest factors determining sachet sales are: 1) number of stores
per 1,000 population, number of corner stores per capita, 2) Frequency
of use, 3) Percentage of daily laborers (there you have daily, weekly,
casual laborers), 4) Strength of particular companies
• The single portion sachet revolutionizes convenience packaging for
food, cosmetic and pharmaceutical liquids and cream.
A LIST OF SACHET MARKETING IDEAS
FOR VARIOUS INDUSTRIES
Companies from airlines to small businesses are using sachet
marketing ideas these days. Since today’s advertising trends usually
involve promotional marketing products, it’s not very surprising
that something as seemingly simple as a sachet could provide so
many solutions to all types of businesses.
If you are looking for some unique sachet marketing
ideas for promoting a company, here are the some of the many
ways in which sachet products can be used:

 Product samples. Your samples will stand out more if you

give them out in a nice sachet. People will be less likely to
overlook the free samples or throw them away if they are
presented nicely with easy open containers.

 Beauty samples. Attract the interest of female consumers

by giving out free samples of makeup, bath products,
fragrances, etc. You can have liquids such as perfume, skin
cream, foundation, and shampoo packaged inside of sachets.

 Food packaging. If you’re in the restaurant business, you

could have sachets filled with condiments. It’s better to use
your own custom packaging than that of other brands.

 Medicine. If you’re in the pharmaceutical industry, these

small bags can really come in handy. They can hold any type
of medicine, including viscous liquids. Hand cream and
sanitizing wipes can also be placed inside of these packages.

 Bath products. Sachets can also be useful in the hotel

industry. Whether you’re running a small inn or a large resort,
you can have a large volume of shampoo, liquid soap,
conditioner, hand wipes, etc. manufactured with your hotel’s
name designed on the packaging.

Now that we have some sachet marketing ideas, we need to

order a filling and packaging service from a good provider. The
 right supplier should give you a variety of sachet sizes to choose
from. We should also be able to have each packet designed with
your company logo and name. Remember, the ease of use and
attractiveness of the packet will have a big impact on your
customer’s impression of your company.

WHAT IS SACHET MARKETING AND HOW

CAN IT HELP YOUR COMPANY GROW ?

If you’re looking for sample containers for your products,

why not go for sachet marketing? Sachets are often
underestimated by North American companies. Advanced
equipment is used for the creation of sachet packaging. Any type of
liquid you can imagine can be placed inside sachets. These small,
but useful packets can help you establish your brand name.

Despite common misconception, potpourri isn’t the only

thing that can go into sachet bags. These days, people are putting
everything from medicine to condiments inside of these pouches.
You know those little ketchup or mayonnaise packets you find at
restaurants? Those are sachets. So are those little packets which
contain medicinal swabs and bandages.

Contacting a manufacturer to help you produce a sachet

marketing campaign for your company is a great idea. Here are some
just some of the many types of sachet filling:

 Condiments
 Spices
 Powder for drinks
 Medicine
 Personal hygiene products
 Beauty samples
 Makeup
  Insect repellants

Restaurants, hotels, pharmaceuticals, cosmetics: these are

just a few of the industries that use the services of sachet
suppliers. As long as you choose a good manufacturer, you can trust
that the packets will keep your product fresh.

These days, sachet packaging machines are so advanced

that they can keep the substance fresh for a very long time!

The Snappak sachets are designed to keep the air out in order to
preserve the liquids within. Since air isn’t compressed when
dispensing these products, there won’t be a risk of splatter or
squirting. Thus, you won’t receive complaints from consumers over
ruined shirts or tablecloths. There is even at least one company
that produces the Snappak sachets that easily snap open, instead of
the old tear method, which is much less likely to splatter.

Why should you invest in sachet marketing? Well, think of

it as marketing investment. You can have thousands of these
packages produced at once, all of which will have your company’s
name and phone number printed! Tiny and disposable though they
may be, sachet can be the tool your brand needs to grow!

Does sachet lower down the sales?

In consumer goods parlance, `economy pack' has usually referred to

larger pack sizes. The economy pack is the marketer's way of
rewarding a consumer who buys more of his brand at one go. But in
2001, the new rage for low-priced sachets in the shampoo market
had just reversed this logic. With most shampoo sachets, one saves
more if one buys less.

For instance, while a consumer buying the 8 ml sachet of Sunsilk

Black (Rs 2) is paying just 25 paise an ml, a consumer buying the
larger 200 ml bottle would be shelling out 45 paise an ml.

But this was rectified after few months, so that sachets will be just
convenient and not economical.

The other viewpoint is that India is a huge market with 1.05 billion
population and around 0.2 billion household. So even considering
the very low price of shampoos, if 20% of the household buy a
shampoo sachet per month of Rs.2 then the monthy sachet shapoo
market is 0.2*0.2*2=Rs. 0.08 billion =80 million = Rs 8 crores .. so
annual sales - 8*12=Rs. 96 = approx 100crore. SO thats the size.

So the people who were initially not buying the shampoos, because
of sachet will start buying it.

TRENDS IN SACHET MARKETING

Consider the following examples highlighting the SACHET

MARKETING trend:

 In Brazil, fast moving consumer goods giant Unilever sells Ala,

a brand detergent created specifically to meet the needs of
low-income consumers who want an affordable yet effective
product for laundry that is often washed by hand in river
water. In India, Unilever successfully markets Sunsilk and
Lux shampoo sachets sold in units of 2-4 dollar cents;
Clinic All Clear anti-dandruff shampoo sachets at 2.5
rupees each; and 16 cent Rexona deodorant sticks. In
Tanzania, Key soap is sold in small units for a few dollar
cents.

 Filipino telco Smart has turned its customers into salespeople:

the Smart Buddy System allows cell phone customers to resell
their unused credits, which not only eases the strain on cash
flow, but earns them money as well! For each 1,000 pesos
sold, the 'merchant' receives a 150 pesos commission.
 Mexican Banco Azteca, which launched in December 2002, is
gearing a 'less is more' approach towards 16 million Mexican
households who make too little (from USD 250-1300 a month)
to attract the interest from established financial institutions.
These Mexican consumers, even those without a bank account
or solid proof of income, can now apply for a savings account,
wire transfers, mortgages, or small one-year loans (sometimes
purely based on their personal possessions).

The force behind Banco Azteca is Grupo Elektra, Mexico's

largest appliance retailer. Their 800+ appliance stores double
as bank branches, and quite often bank clients are loyal Grupo
Elektra customers as well, giving them a partial credit history.

 Grameen Phone, Bangladesh's leading cell phone operator, is

offering a special low-priced package to so-called 'phone
ladies' in small villages, where fixed telephone lines are non-
existent. The phone ladies share their cell phones with other
villagers at a few take a call.

 In a surprising twist, Microfinance, which has blossomed in

emerging economies in Asia, Africa and Latin America, is now
also catching on in mature economies. The practice, which
involves lenders granting small business loans to entrepreneurs
with low incomes or poor credit histories, is now tax
deductible in the US and the UK. In the UK alone, more than
20 microfinance banks (like WEETU for women and PRIME for
entrepreneurs over the age of 50) qualify for the tax program.
Another 40 are on the way, waiting to be accredited.
 Participating UK businesses usually have fewer than five
employees, and require unsecured loans of between EUR 1,500
and 15,000.

 Whirlpool is cashing in on its line of inexpensive yet

stylish washing machines in Brazil, India and China.
Both price and looks have received a SACHET
MARKETING makeover:
Machines cost USD 150 - 200 (about half of the
US average) and are customized to local tastes. For example,
in Brazil, customers wanted to see the machine operate, so
Whirlpool made a transparent acrylic lid, that also happens to
be cheaper than glass. Machines also have a smaller capacity,
because lower income Brazilians do laundry more frequently.
In China, where washers are considered status symbols and are
often placed in living rooms due to lack of space, extra
attention was paid to sleek looks. Wash cycles were named on
a by-country basis (in India, the delicate cycle is called the
'sari' cycle). And like microfinance, Whirlpool is already
exploring the possibility of bringing these 'people's washers' to
Europe and North America. (Source: WSJ.)

By observing changes in consumer behavior and in business

thinking, on a broad a scale as possible. So whereas INSPERIENCES
may be about conspicuous consumption, our sachet
marketing trend caters to the other end of the spectrum: those
consumers who cannot (yet) afford to fully be part of the consumer
society. As you may recall, when we introduced our sachet
marketing trend, we noted that two-thirds of the world's
population makes USD 1,500 or less per year.

This is not to say that there's no market opportunity: according to a

recent article in Foreign Policy by University of Michigan Business
School professor C. K. Prahalad, and Allen Hammond of the World
Resources Institute, the 18 largest developing nations are home to
some 680 million families earning USD 6,000 a year or less. These
low-wage earners take in USD 1.7 trillion a year -- roughly the size
of Germany's gross domestic product.

The money is there, but why try selling these consumers expensive,
bulky goods and services originally designed for consumers who
easily make thirty times as much in North America, Western Europe
or Japan?

The solution: SACHET MARKETING, named after single-use

shampoo sachets which sell for a few cents in emerging economies
(for example, more than 60 percent of the value of the shampoo
market and 95 percent of all shampoo units sold in India are now
single-serve; source: Foreign Policy), which is all about micro-
selling methods, about serving up products, services and loans in
small portions and sizes, light versions, or single-use sachets, so
that aspiring consumers can afford AND get to know and like your
brand. Like the Smart Buddy system in the Philippines we recently
highlighted, and Banco Azteca in Mexico, Unilever in Tanzania, or
Whirlpool in South America.

With the number of aspiring MASS CLASS members steadily

rising, SACHET MARKETING is on a roll. Time for some inspiring new
spotting, proving that virtually every business discipline and B2C
industry can play at this game:

 DOMESTIC APPLIANCES
Consul, a Brazilian affiliate of Whirlpool, has designed a fully
automatic three-cycle centrifuge washing machine that costs no
more than a clunky tank washer, about USD 220. In India,
Electrolux Kelvinator launched a refrigerator that keeps ice
frozen for up to six hours after a power failure, which is an
 essential feature in a region plagued by blackouts. (Sources:
NYT, Newsweek.)

 FINANCIAL SERVICES, MICROFINANCE

Bradesco, Brazil's biggest private bank, invested USD 100 million
to set up very basic teller services (called Banco Postal) in
underused post offices. Even though most depositors earn USD 65
a month or less, Banco Postal has already captured 1.6 million
new accounts, and is expected to break even soon.

In India, India's ICICI Bank together with engineers at the Indian

Institute of Technology in Chennai have built the first rural ATM
to serve micro-savers in remote areas of the subcontinent. It can
process small denominations (normal ATMs don't dole out 10-rupee
notes, yet many Indian consumers need them) and worn notes that
are the main currency in Indian villages, and at only $800, the
machine costs less than one-twentieth of the price of a regular
ATM.

Meanwhile, Citibank India was the first in India to open online-

only accounts for small savers. Customers with only USD 20 to
deposit can get special convenience accounts whereby they do
everything through ATMs, the Internet or the phone. The
number of these accounts has surged more than 60 in the past
year to one million.

 PACKAGING

With sachet marketing innovations taking off, it will come as no

surprise that the sachet itself is ready for innovation too. Check
out Snap! International and Snap Pak, two companies that provide
packaging of sachet products and a unique new advertising
medium. The units are designed to open and dispense the product
with a two-fingered snap-and-squeeze (rather than cutting or
tearing). In addition to more convenience, one side of the
packaging can be printed with high-resolution, photographic quality
artwork. For more info, see an earlier article on Springwise New
Business, our other website.

 TELCO
The Cell Phone is the new Car, and nowhere does
this ring more true than in SACHET
MARKETING prone regions! For example, one of
the most popular cell phones in rural India is the
sturdy Nokia 1100, which is advertised as dust-
resistant and doubles as a flashlight, as power
supply isn't always as reliable as it should be.

In China, China Mobile brought out the Shenzhouxing brand, aimed

at low-end users, many of them rural. The brand offers plans with
heavy roaming restrictions that cost as little as 0.20 yuan a minute,
a price that rural residents, most of whom rarely travel, are willing
to pay. Low-end wireless services from Netcom and China Telecom
- also with restricted roaming - are comparably priced.

And this May, in the run-up to Mother's Day, Brazilian

consumers snapped up 1.5 million cell phones, the vast majority of
them 'prepagos' -- basic, cut-rate handsets that operate on prepaid
phone cards and which can be had on installment plans for as little
as USD 3 a month. In neighboring Venezuela, BellSouth
International's USD 4 phone cards (instead of the usual USD 10 or
USD 20 cards) are wildly popular, and sell at more than 30,000
retail outlets. (Sources: IHT, Foreign Policy, Newsweek.)
 AUTOMOTIVE

At the lower end of the MASS CLASS you'll find consumers dreaming
of owning a Volkswagen Golf, though insufficient funds may entice
them to go for a Chery QQ or Renault X90 instead. These new 'MASS
CLASS' cars, sometimes costing less than 2000 euros, come in 'light'
versions, though sport nice enough design to not be uncool.

 TRAVEL

And in an interesting (if not ironic) twist, 'mature' members of the

consumer society are discovering the convenience of sachets:
both Mikrotravel and TravelBags offer stylish sachet kits to service
last minute travelers, or those just tired of having to lug around a
multitude of heavy flasks and tubes.

 Cigarettes:

We have seen the minimum pack of 10 cigarettes. They can

introduce packs of 4 cigarettes. So the users who smoke 1 or 2
cigarettes at a time, will like to buy 4 as it will be
economical. Just take case of Wills Classic - Rs. 65 for 20
sticks, so mathematically it should be Rs. 13 for 4. Now the
 loose cigarettes are sold at Rs. 16 for 4 sticks. So consumer
will see a benefit of Rs. 3.

 Salt packs of Rs 1: This will help in travelling

From mikroTRAVEL's website: "We address the needs of the

consumer whilst away from home with innovative personal
care and grooming products that can be easily used at the
beginning and end of the day. Our products will allow you to
reduce the time spent packing toiletry containers that are
too bulky to travel with and too time consuming to use." It's
a SACHET world, indeed!

RCOM targets rural customers with new services & sachet pricing for
mobile Internet access.

RCOM targets rural customers with new services & sachet pricing for
mobile Internet access.
Reliance Communications, India’s largest dual network operator and one of
India’s biggest telecom player has introduced major strategic initiatives
aimed at growing the mobile telecom and internet penetration in Rural
India. This is in line with the company’s objective of bridging the Digital
Divide.

With this rural drive, RCOM is launching three initiatives i.e.

1- BharatNet plan
2- Grameen VAS
3- M2M (Machine to Machine) solutions.

1-BharatNet Plan: RCOM’s strategy to drive rural internet penetration.

Today, there is an existing addressable market base of around 4 million
PC users in rural India. However these users are faced with an inherent
limitation of dial-up services on quality, speed and an effective broadband
service, which are currently available only to urban territories.
To address this clear need, RCOM is launching BharatNet plan, the high-
speed wireless internet service in over 20,000 rural locations across the
country. This will be a high-speed variant of its Reliance Net Connect
service, but specifically designed for the rural and sub-urban markets
offering speeds of approximately 153 Kbps, which is 4 to 8 times the
current dial-up speed of the wire-line services.

Additionally, speed quality will improve since it is no longer dependent on

the quality of the copper wire. As part of this, RCOM is offering Bharat
Net internet access for just Rs 98 /week with downloads upto 350 MB.

With this sachet pricing, RCOM plans to create appeal with both, casual
and heavy users. This tariff will be available across rural India excluding
the metros and top 100 cities.

OPPROTUNITIES:

Thinking small in large volumes -- the essence of SACHET

MARKETING -- yet never losing brand focus, could open up entirely
new markets for many of the worlds B2C and B2B manufacturers
and service providers. If your customers are willing but cash
strapped, think micro loans, think mini-sizes, think leasing, think
bundling, think reselling! It will make you money, AND lay the
foundation for brand awareness with future affluent customers.
And as the microfinance and Whirlpool examples show, some of the
thinking may eventually translate in innovative products for mature
markets as well.
With SACHET MARKETING innovations taking off, it will come as no
surprise that the sachet itself is ready for innovation too. Check out
Snap! International and Snap Pak, two companies that provide packaging
of sachet products and a unique new advertising medium. The units are
designed to open and dispense the product with a two-fingered snap-and-
squeeze(rather than cutting or tearing). In addition to more convenience,
one side of the packaging can be printed with high-resolution,
photographic quality artwork

Tapping the Indian Rural Market through SACHET marketing:

Ten years ago, foreign consumer products were scarce in India and
only available to the affluent. Import restrictions prevented or
severely hindered foreign consumer goods from entrance to India.
With the economic liberalization that ensued, foreign brands are
now prevalent across India (Luce,2002). Today, multinational
corporations view emerging markets such as India as prime
opportunities for growth. According to Shanthi Kanaan, writer for
The Hindu, rural markets are growing twice as fast as the urban
markets (2001).With a rural population equal to just under 2.5
times the population of the entire United States as of the 2000
census, the potential consumer base is astounding. But generally
speaking, success in India’s rural markets for multinational
corporations has been mediocre at best. It is from these struggles
and
failures, however, that multinational corporations seeking to enter
the rural Indian market can learn how to do so more wisely.
Kellogg’s‚ is an excellent example of a company that has struggled
in the Indian market. Kellogg’s entered the Indian market in the
mid-1990’s. They had the intentions of finding a new market,
which would consist of over a million people, many of whom did
not eat cereal. What Kellogg’s discovered
was that they were introducing a completely new product
category. This meant they would have to invest large sums of
money to create new eating habits in consumers. The most
common Indian breakfast consists of biscuits and tea (Dawar and
Chattopadhyay, 2002).While Kellogg’s was busy creating new eating
habits, local competitors were able
to snatch away portions of India’s already small cereal market by
introducing local
cereal flavors at lower prices (Prahalad and Lieberthal, 2003). The
unimpressive
sales that followed in their first three years resulted in Kellogg’s
needing to completely realign their marketing to meet local needs
as well as introduce a
line of inexpensive breakfast biscuits. Disappointments like this
have caused
companies who seek to enter the rural Indian market to reevaluate
their entire
approach to sachet marketing.
HUL is credited with pioneering sachet marketing in India - a
marketing format that refers to selling in small packs with low unit
price so as to be affordable to people with low disposable incomes.
Interestingly, Aditya Nath Jha, vice-president and head of global
branding Infosys Technologies, came up with a completely different
take on marketing to the bottom of the pyramid.
He said Infosys sold jobs because, as a knowledge company, its
main resource is talent.
“The key question before us was how to get talent without
reducing the currency for selling jobs - domain skills,
communication skills and analytical skills,” Jha said.
“We did it through our Campus Connect programme which trains
people coming from diverse backgrounds, including from low-
income and rural households,” he said.
Advertising guru Alique Padamsee brought up the rear by declaring
the rural poor may seem to be visually illiterate but “they are
aurally smart.”With rising disposable incomes, they have emerged
as a huge business opportunity.

CONCLUSION

Thinking small in large volumes -- the essence of SACHET

MARKETING -- yet never losing brand focus, could open up entirely new
markets for many of the worlds B2C and B2B manufacturers and
service providers. If your customers are willing but cash strapped,
think micro loans, think mini-sizes, think leasing, think bundling,
think reselling! It will make you money, and lay the foundation for
brand awareness with future affluent customers. And as the
microfinance and Whirlpool examples show, some of the thinking may
eventually translate in innovative products for mature markets as well.
Keeping in mind the low literacy levels at the BOP, it is important for
companies to help consumers associate their products visually.
Emotional Surplus Identity (ESI) is a concept in which packaging of a
brand is made distinctive to the eye of the customer by applying a
particular shape, color, and content.
A brand’s value could be communicated in a better way through
attractive packaging that has a ready appeal to the human eye. It’s
not all about low pricing product customization plays a pivotal role
Visual communication is important given the high illiteracy rate.