Saturday, September 30, 2006

Snuggy : Everyone Loves A Snuggy Baby

Brand : Snuggy
Company: Godrej Consumer Products
Agency: Mudra

Brand Count : 131

Snuggy is India's first Diaper Brand. Launched in 1987 by Shogun Diapers Ltd, Snuggy was acquired by Godrej in 2003.
Indian diaper market is worth Rs 100 crore and growing at the rate of 10 %. The market is dominated by three players

Huggies from Kimberly Clark & Lever with a market share of 70%, Pampers of P&G with 20% and Godrej with Snuggy with around 10%. Even after 20 years of the introduction of this product category, the category is not being growing in line with the potential.
The main factors that inhibit the growth of this category are the Cultural factors and the price. Indians are not used to this product. This category is concentrated on urban market. Diapers when launched in India was priced at a premium which kept of the majority of the customers. When launched, the price for diapers for a pack of ten where any where between Rs 150 - 200 which was perceived to be pricey.
Diaper is competing with the traditional way of using Clothes which has the advantages of reuse,inexpensive and to a certain extent more healthier for the babies. Healthier in the sense, diapers used to cause rashes while clothes didn't. While Diapers has the advantages of convenience and cleanliness.
In India, unlike the west, parents tend to use Diaper on babies only during travel to minimise cost. Inside the house they use the traditional method since no one is bothered what the kids do inside a house.
In the last two years , the marketers have tried to reduce the price of diapers to induce more usage. The prices have come down to Rs 10 per piece. But still the market has not grown to the expectation. The reason is the simple economics. A diaper at best can be used on a kid for around 3 hrs ( that too is risky) that calls for 4 diapers per day and 6 if also used at night. That will cost an amount ranging from 40-60 per day working out to Rs 1200 to 2000 per month on diapers alone. That is totally unimaginable expense for a middle class family.
Hence in the Brand Report Card, the category scores very low in terms of value to the customer. Since the product is a use and throw kind, the customers try to use the product only during travel.
To reduce this price barrier, the marketers have come out with nappy pads that costs around Rs 5 per piece that is much more affordable but again the value factor is not justified, because one has to change nappy pads more often hence when the total cost is taken into consideration, diapers and nappy pads costs equal.
Diapers are usually imported from other countries and branded in India. This product category also face competition from cheaper imports .
Snuggy although is the pioneer in this category is dominant only in the south. With the distribution reach of Godrej, this brand has a good potential to increase its share in other markets also. Godrej has plans to extend the brand to other children's products.
The challenge for this brand is to expand the diaper market. For that the company may have to create a price disruption. I feel that the right price for Diaper to break into Indian consumers will be Rs 5. For nappy pads it is Rs 2. It is a tall order and with the current cost structure, it may not be possible.
But that is a challenge that companies should take if they want Indians to use this product more. The potential is high because of the changing psychographics of Indian consumer. With both the couples working and kids being sent to Playschool even at the age of 2, there is going to be a huge market waiting to be tapped.
Source :, agencyfaqs,dnaindia