21. CHECKLIST: THE SOAP MARKET

The investigations into the soap market involve the following:

1. Acquiring a comprehensive knowledge of the market knowledge in terms of:

· statistics: size, value, clientele, segmentation into rural/urban market and monetised/non-monetised market, quantities sold, prices etc.;

· the products sold: type of soap (household, toilet, laundry), grade (lathering/detergent properties, consistency, dissolution rate, lather stability), shape, weight, size, colour, perfume, packaging etc.;

· its structure: importer, producer, distributor, wholesaler;

· its operation: customs tariffs, taxation system, usual margins, method of supply, statutory framework etc.;

· its trends: discerning the structural and economic parameters which might eventually alter market prospects.

2. Getting to know the competition, their market shares and their ability to react to a new production run. A distinction should be made between:

· local competition: local producers, production capacity, turnover, market share, type and quality of soaps marketed, assessment of the clientele, distribution circuit etc., and

· foreign competition: local importers and foreign producers, the origin of the soaps (Eastern Europe, Southern Europe, Africa and Asia)*.

* Soaps imported from Poland, Italy, Spain, South-east Asia. This competition can be very fierce given that the local market may be part of a wider commercial strategy.

3. Identifying the opportunities and constraints, and the comparative advantages which can be developed** and which can and must be exploited as part of a market penetration and market share acquisition strategy.

** Comparative advantages can be developed at several levels, in particular:

· quality,
· selling price,
· greater attractiveness,
· a better distribution circuit,
· greater regularity of supply or availability of soaps,
· a non-exploited or under-exploited market segment,
· closer proximity of the market or a warehouse,
· a better supply of raw materials,
· better operation of the production unit, etc.

Key parameters:

Knowledge of the clientele, its purchasing power, its location, and above all*:

· Who buys? (man? woman?)
· Where, when, in what quantity and for what purpose do they buy?
· What brand do they buy and why?

* The size of the soap market depends essentially on the proportion of the population living in a true monetised context, whereas the population's purchasing power (which can be estimated from the GDP) influences the type of soap used: low grade versus high grade soap.

The competition's brand image and importance of the brand image in the decision to buy.

Evaluation of the ability to change clientele (often overestimated).

Evaluation of alternative markets (export, high-grade, industrial, public organisations) in order to draw up a contingency plan.

Evaluation of the logistics required for soap distribution (often involving thousands of tonnes!). Scope of existing distribution circuits.