Jaipuria Institute of

Management,
Vineet Khand, Gomti Nagar
Lucknow – 226 010

Academic Year 2020-21

Batch 2020-22
Trimester 1st Trisemester
Programme PGDM
(PGDM / PGDM-FS / PGDM-RM)
Name of Course MANAGERIAL ECONOMICS
Section A
Name of Faculty Professor R.K. OJHA

Nature of Submission Project Report

(Assignment / Project Report)
Topic of Assignment / Project Ariel Detergent

Deadline for Submission 19-10-2020

Group/ Learning Team Number LT-08
Maximum Marks Allotted

Contribution of Group/LT members in the

Assignment/Project
Sl. Name & Enrollment Contribution Signature
No. Number of Student
1 Arpit Tripathi
JL20PG030

2 Aishwarya choudhary
JL20PG013
3 Anushree
JL20PG029
4 JUHI DAULTANI
JL20PG060
5 Aman Tripathi
JL20PG016
6 Gauri Srivastava
JL20PG189
7 Amitanshu Anand
JL20PG018
8

Date of receiving at PMC: Signature of PMC Staff:

Penalty [Marks to be deducted (if any)]:

Table of content:
S.no Content Page number
1 Introduction 5-6
2 Major competitors in market 7-9
3 Demand for product 10-14
4 Supply for product 15-20
5 Substitutes and complements of the 21-23
product and cross elasticity of demand
6 Price elasticity of demand for product 24-27
 7 Income elasticity of demand for the 28-30
product
8 Government intervention 31
9 Market Structure for commodity 32-35
10 Business prospects for the products 36
11 Conclusion & suggestions 37

Acknowledgement

Primarily, we would like to thank professor RK Ojha sir for giving us the opportunity to do this
project and guiding us every step of the way during the course of our project. He guided us and
helped us throughout the project timeline. We would also like to extend our gratitude to Director
KAVITA PATHAK MA’AM and ENTIRE FACULTY OF JAIPURIA INSTITUTE OF
MANAGEMENT, LUCKNOW for their prompt support.
I would also thank our family and friends for supporting us morally, financially and physically.
Above all, to the great almighty, the author and wisdom, for his countless love.
 LTA08

1) INTRODUCTION/BACKGROUND
A) About the assigned product-

Ariel is a British laundry detergent brand owned by the American company Procter &
Gamble, the maker. It is the flagship brand in P&G. Ariel first appeared in 1967 on the
UK market and was the first stain-removing enzyme detergent. It was made for twin-tub
and top-loading washing machines as a high-sudsing powder and has a market share of
6%.
Ariel is a global pioneer in the detergent industry that assures that the hardest stains are
eliminated in only one wash. Ariel detergent was originally known as “Ariel Ultra”, and
later in nineties it was reformulated into “Ariel Future”.
 To become India's best stain removal detergent, Ariel was the first to bring the
"lightweight detergent" technology, the enzyme technology for healthy and superior
stain-removal capacity and the "smart eyes" technology to India.
The tagline of Ariel is “Sirf yaadein taaza rakhe, daag nhi”.
B) About the Company-
The Procter and Gamble Company (P&G) is an American International goods
corporation founded by William Procter and James Gamble in 1937 with its headquarters
in Cincinnati, Ohio. P&G serves the consumers around the World in a wide variety of
personal health and care, hygiene items including beauty, childcare and home care
products.
P&G have total of 65 brands which includes Ariel, Gillette, Tide, Vicks, and many more
to come during the coming years. David S. Taylor is the current CEO and Chairman of
P&G.
The major competitors for P&G are Colgate-Palmolive, Church and Dwight, and
Unilever.
C) About the Industry-
The detergent market is a mature growth segment in the Indian FMCG segment. Fast
Moving Consumer Goods are items that are delivered quickly and at a comparatively low
cost, often referred to as consumer-packaged goods (CPG). High volumes, low
contribution margins, high inventory turnover and extensive distributions are some of the
characteristics of FMCG from the market perspective.
The detergent market primarily consists of two categories- hand wash and machine wash.
The hand wash segment has subcategories of Bar detergents and Powder detergents.
While the machine wash segment is characterized by Liquid and Powder detergents.
Ariel is one of the FMCG Industry’s leading labels. Ariel Segmentation incudes those
people who want the quality and are ready to pay for good quality products. Ariel was the
first to introduce the fragrance in the market, also it does the social appeal regarding the
respect of the women that they are not made to do only household work.
2) MAJOR COMPANIES/ COMPETITORS IN THE MARKET AND
THEIR MARKET SHARES.
The laundry sector was around US dollar 60.88 billion in the year of 2019. It is predicted to rise
annually by 4.7% by the end of 2025. This segment has to face a very stiff competition because
there is a very less difference between all the detergents. As a result of which, new entrants keep
on coming. Detergents which are of hand wash types make up the 82% of market share whereas
the machine wash detergents make the 18%.

Market share of popular-segment detergent was 45% followed by premium-segment ones which
was 15% in the year 2019 and that of mid range was 40%.

From the time of launch, Ariel has been one of the most known brands in India. USP of Ariel is
that the brand has been in the market for a very long duration and its image is positioned as a
product that can vanish even the dirtiest and impossible stains. The brands make its products in
accordance with the needs of users. The market share of Ariel is But, like all other brands Ariel
too has to face the threat of competitors.

Some of the competitors of Ariel are:

 Rin- Being established in the year 1969 by the Hindustan Unilever Ltd., Rin targeted for
middle class household. HUL is alleged to have a market share of 39.6%.

PARENT COMPANY - Hindustan Unilever Limited

TARGET CUSTOMERS – Middle class families
SEGMENT- Mid Range

 Surf excel-This Unilever-owned brand was launched in India in 1959. Initially, it was
positioned as ‘washes the whitest’ but later had to undergo various brand alterations. In
1996, it was relaunched as ‘Surf Excel’. The market share of Surf Excel is
approximately 14% of the company.

PARENT COMPANY - Hindustan Unilever Limited

TARGET CUSTOMERS - Middle to upper income class
SEGMENT – Premium Segment

 Nirma- Nirma was founded by Dr Karsanbhai Patel in 1969. He started selling it locally
in Gujarat. It got very successful by the year 1985 and was demanded in several parts of
India. The market share of Nirma is less than 6%.

PARENT COMPANY - Private

TARGET CUSTOMERS – All classes were targeted, consequently it became famous
among masses.
SEGMENT – Popular Segment
 GHARI- Introduced in 1987 by RSPL limited silently entered the market and became the
maket leader with a market share of 17.3%. They kept their cost low and targeted the
lower class.

PARENT COMPANY - RSPL

TARGET CUSTOMERS – Lower class
SEGMENT- Popular Segment

 Tide- Tide came into existence in 1946 by Proctor and Gamble. Tide is the fastest selling
brand globally. The market share of Tide is 13.5%.

PARENT COMPANY - P&G

TARGET CUSTOMERS - Middle to upper income class
SEGMENT– Mid Range segment

 Active Wheel It was launched by HUL in the year 1988 and is a well known brand since
then. The market share of active wheel is estimated to be 16.9%

PARENT COMPANY - HUL

TARGET CUSTOMERS – It targets masses
SEGMENT– Popular Segment

 FENA- Established in the year 1976, Fena is known for its long lasting fragrance left on
clothes. The market share of Fena is approximated to be 2.5%.

PARENT COMPANY - Private

TARGET CUSTOMERS - Middle class
SEGMENT- Mid Range segment
  HENKO- Jyothy labs introduced Henko in 1983 . They have led the market as fabric
whitener for a very long duration. The market share is 4.2%.

PARENT COMPANY - Jyothy Labs

TARGET CUSTOMERS - Middle class
SEGMENT- Mid range segment

HUL was the market leader before 1985, but due to emergence of new substitutes it has been
facing a lot of challenges.

GHARI detergent, as a result of low pricing emerged as a chief brand for Indian households
over a very long period of time.

3) Determinants of demand for the assigned product.

Before we analyze anything, it is important for us to understand the term demand in economics.

Demand- It is the need or want for something accompanied by ability and willingness to pay the
price. It is a relative concept.

The demand depends upon-:

1-Ability of the product to satisfy the want or desire of the customer

2-Willingness of the customer to pay for a certain product or services

3-Also, the capacity of the customer to pay for it.

FACTORS AND THEIR EFFECT ON DEMAND CURVE ON ARIEL-

1-Price of commodity itself, - Means how much is the price of the product and is it affordable for
all the sections of the society. The product ariel is a washing detergent which should be at an
affordable price so that it does not have a major impact on the budget of the customer. Each
customer should be able to purchase the product according to his/her need.

2-Price of the related good- The price of the products should be equal or should have only a
marginal difference with the related goods. In this case if the price of Ariel is more than Surf
Excel then it might lead to less sale of the product

Substitute goods- Two goods are substitutes if an increase in the price of one of the goods causes
consumers to demand more of the other good.

Complimentary goods- Two goods are complementary if an increase in the price of one of the
goods causes consumers to demand less of the other good.

3-Taste and preferences of the consumers-Taste and preferences of a customer changes from
time to time so, the company should keep in mind to change the product or add something in it to
keep its customers attracted towards it.

4-Income of the consumer- In this case the income and the demand of the consumer are directly
related to each other, If there is a increase in income it will cause an increase in demand and if
there is a decrease in income of the consumer there will be a decrease in demand of the product.
So, in the case as Ariel is a detergent which is a basic need then the price of the product should
be genuine and adjustable for very class of individual to purchase.

Normal good- A good or service for which on increase in income causes consumers to demand
more of the goods

Inferior good-A good or service for which an increase in income causes consumers to demand
less of the goods

5- Revenue generated by the population- Revenue generated by the population plays a major role
in the demand of the product. The product should be affordable by the major sections of the
society.
6-Growth rate of the population-The size of population affects the demand and price of the
commodity. The current population size and the growth rate of the population will affect the
market demand in the price and supply elasticity of the product

7-Marketing of the product- Marketing of the product has one of the major impacts on the sale of
the product. The customer should be familiar with the brand name or must have heard about it
which creates a good impression on the customer mindset. A good marketing strategy crates a
very positive impact on the demand of the commodity. The market strategy should change from
time to time and keep its customer attractive. Ariel has been adapting unique techniques for the
marketing of its product which keeps it customers constant and attracted towards it.

Demand Function-: It shows how quantity demand is related to price and other factors that have
an impact on demand.

D= (P, M, Pr, Tp, Pe, N)

Where, it refers as

P-price of the commodity

M-Income of the consumer

Pr-Price of commodity or service

Tp-Taste or preference

Pe-Expected price

N-no. of consumers

Linear form of the general demand function is-:

Qd=a+bP+cM+dPr+eTp+fPe+gN

Where, a is the intercept parameter which shows the value of QD when the variable P, M, Pr ,Tp
,Pe, and n are all simultaneously equal to zero
Where, b, c, d, e, f and g are slope parameters which measure the effect on quantity demanded of
changing one of the variables.

Law of Demand-Law of demand states that the amount determined of a commodity and its
prices are inversely related, other remaining constant.

There is an inverse relation between price and quantity demand,

Assumptions-

1-If the income of the consumers remains unchanged

2-Also the taste and preference of the consumer remains unchanged

3-The price of the goods and services remains same with no change in the future

4-If there is no substitute available for the product in the market

Demand Schedule and demand Curve

Qd=1400-10P

P Qd (Demand Curve)
0 1400
10 1300
20 1200
40 1000 140
60 800
80 600
100 400
120 200
140 0

Change in price of ariel leads to Change in quantity demanded for Ariel Movement along
demand curve

Interpretations from demand curve

1. Maximum amount of good that will be purchased if a specific price is charged

0
2. Maximum price that consumers will pay for a specific amount of a good 1400
Shifts in Demand Curve

A rightward shift in the demand curve: More demand at a price is caused by , rise in the
income and rise in substitute and also the fall in the price of a compliment with the change in
taste, and increase in population and the income of the customers.

A leftward shift in the demand curve: Less demand at a price is caused by, fall in the price of
the commodity, and rise in the price of a compliment, also the change in taste for the product.
Also, the decrees in the population and the income of the customers who want to purchase the
product.

Change in consumer income and change in demand of Ariel

If consumer income increases-:

1-Demand for normal good increases and demand curve shifts to right

2-Demand for inferior good decreases and demand curve shifts to left.

If consumer income decreases-:

1-Demand for normal good decrease and demand curve shifts to left

2-Demand for inferior good increases and demand curve shifts to right.
4) Determinants of supply of assigned product

Entire relation between price and quantity supplied in a market during a given period of time,
ceteris paribus.

Three main variables that influence the quantity supplied of a product are:

1. Price of the product (P)

2. Price of inputs used to produce the product (PI)

3. Number of firms supplying the product (F)

Relation between quantity supplied and above 3 factors is referred to as the general supply
function and is expressed as:

Qs = f (P, PI, F)

Linear form of the general supply function is:

Qs = h + kP + mPI + nF

Where

Qs is dependent variable and P, PI, F are independent variables

h is intercept parameter and k, m, n are slope parameters

Slop parameter k measures the change in quantity supplied per unit change in price.
Slop parameter m measures the change in quantity supplied per unit change in price of inputs
used for producing the good.

Slop parameter n measures the change in quantity supplied per unit change in number of firms
supplying the good.

Determinants of supply of Ariel

1. Price of the product (P) – if the price increases the supply also increases and if the price
decreases then the supply too decreases. There is a positive relationship here.

With the increase in price of Ariel, the company will increase the supply too to get more
profits. On the other hand, decrease in the product price will force the company to reduce
the supply because the profit margins have decreased.
Suppose, the supply function is Qs = 100 + 20P – 10PI + 20F
Suppose PI = 100 and F = 25

Qs = 100 + 20P - (10*100) + (20*25)

= 100 + 20P – 1000 + 500
Qs = - 400 + 20P

P Qs
20 0
40 400
60 800
80 1200
 100 1600
120 2000
140 2400

2. Price of inputs (PI) – There is an inverse relationship between the price of inputs used to
produce and the supply of the product. If one increases the other decreases and vice
versa.

Suppose, the supply function is Qs = 100 + 20P – 10PI + 20F

Suppose PI = 100 and F = 25

Qs = 100 + 20P - (10*100) + (20*25)

= 100 + 20P – 1000 + 500
Qs = - 400 + 20P

P = 20 + 0.05 Qs

P Qs
20 0
140 2400
 Price of input increases PI = 120
Qs = 100 + 20P - (10*120) + (20*25)
= 100 + 20P – 1200 + 500
Qs = - 600 + 20P

P = 30 + 0.05 Qs

P Qs
20 0
140 2200

With increase in price of inputs from 100 to 120, the supply decreased from 2400 to
2200.
  Price of input decreases PI = 80
Qs = 100 + 20P - (10*80) + (20*25)
= 100 + 20P – 800 + 500
Qs = - 200 + 20P

P = 10 + 0.05 Qs

P Qs
20 0
140 2600

With decrease in price of inputs from 100 to 80, the supply increased from 2400 to 2600.

3. Number of firms supplying the product (F) - There is a direct relationship between the
number of firms supplying the product and supply. More the number of firms, more is the
supply and vice versa.

Ariel Detergent Powder Supply

1. Price - The current price for 1 kg of Ariel detergent powder is around 300 rupees in
India. If the price goes above 300, supply is likely to increased and if it goes significantly
below 300, the supply will decrease.

Price Supply
300 Normal
 >300 More than
normal
<300 Less than
normal

2. Price of inputs – Ariel detergent powder is made up of a number of chemicals and the
individual prices of these chemicals affect the final supply of the finished product.
Ingredients of Ariel detergent powder -

Alcohol Ethoxylate (AE) -Non-ionic surfactant. Removes greasy stains from your garments
Amine Oxide - Amphoteric surfactant. Used along with other surfactants to remove stains.
Carboxymethyl Cellulose (CMC) - A polymer that comes from natural cellulose. Helps stop
stains from returning to the garment they’ve been removed from.
Citric Acid - The acid found in lemons and citrus fruits, it’s mild and helps to remove bad
smells from clothes. Known as a chelating agent.
Hydrogen Peroxide - One of the simplest and most common bleaching agents.
Percarbonate - Sodium percarbonate is a bleaching agent used in detergents.
Sodium Disilicate - Used as a builder in detergents.
Sodium Hypochlorite -A chlorine based bleaching agent.
Tetra Acetyl Ethylene Diamine (TAED) - A bleaching activator and oxidizing agent used in
detergents and bleaches.
Titanium and Titanium Dioxide - The most commonly used white pigment.
Zinc Phthalocyanine Sulphonate (ZPS) - Used as a photobleaching agent where line drying is
common.

The prices of different chemicals vary and the final cost of all the inputs decides the
supply.

3) Number of firms - The greater the number of firms, the more will be the supply.

Some other firms producing detergent powder are –

  Procter & Gamble – Tide detergent powder
 Nirma – Nirma washing powder

 Fena – Fena Super wash detergent powder

Question 5 : Substitutes and Compliments of the assigned product and associated cross elasticity
of demand. (detailed explanation)

Substitute Goods

Substitute products are those goods similar goods present in the market which can be utilized to
serve the same need. For example, if we talk about detergents, Ariel and surf-Excel, if we see
from a broader prospective then they are close substitute goods but for two sets of customer
using each surf(s) are entirely different.

These goods can be used as a alternative in the market according to taste and preference of
customers, that is why change in price of one effects directly to other substitute. If the price of
one good increases, then the demand for the substitute good is expected to increase in the market.

Therefore, we can say substitute goods have positive Cross Elasticity of demand.

Complimentary goods:
Complimentary goods are those goods or services which are used in co-existence with another
goods or services. Co-existence here means that they are dependent on each other when it comes
to usage. So we can say that they have least value to its utilization when consumed alone, when
used together in a pair it provides value to its utility its providing to the customer. For example,
Nokia Lumia mobile phone and Microsoft apps. They go hand in hand.

When there is increase in price of one good, there is less demand for other goods by consumer in
the market.

Therefore, we can say complimentary goods have negative Cross elasticity of demand.
5)Substitutes And Complements of assigned product and associated Cross
Elasticity of demand :
CROSS ELASTICITY OF DEMAND :
It is measured as the percentage change in demand for the first good that occurs in response to a
percentage change in the price of the second good.

PRODUCT ASSIGNED – ARIEL DETERGENT

 Product type- Biological detergent
 Owner-Procter & Gamble
 Country-United Kingdom
 Introduced-1967; 53 years ago
 Related brands- Joy
 Markets-Europe, Latin America, East, Southeast and South Asia, South
Africa, Maghreb, North Africa, Pakistan and the Middle East.

SUBSTITUTES AVAILABLE IN THE MARKET OF THE ASSIGNED

PRODUCT- (ARIEL)
1) Surf Excel-
2) NIRMA
3) GHARI
4) HENKO
5) Rin
6) Active Wheel
7) Tide
8) Safe Wash Anti Germ Liquid
9) 365 Laundry detergent

COMPLEMENTS AVAILABLE IN THE MARKET OF THE ASSIGNED

PRODUCT :

(ARIEL)
 1) Everyday clothes worn
2) Liquid soap
3) Detergent cakes
4) Washing machine

ARIEL AS A BRAND :
 This brand targets upper middle class- rich class of society who wants superior quality.
 Washing machine users are also targeted by its one the product, ARIEL MATIC.
 This product is positioned as a good quality stain remover, offering fragrance and
preserving old colors, for a good reasonable price.

ASSOCIATION OF CROSS ELASTICITY OF DEMAND :

The cross-price elasticity of demand shows the relationship between two goods or services. More
specifically, it captures the responsiveness of the quantity demanded of one good to a change in
price of another good.

Substitute goods have a positive cross-price elasticity: as the price of one good increases, the
demand for the other good will also increase. They go hand in hand.

Two goods that complement each other have a negative cross elasticity of demand: as the price
of good Y rises, the demand for good X falls.

A positive cross-price elasticity value indicates that the two goods are substitutes. For substitute
goods, as the price of one good rises, the demand for the substitute good increases. For example,
if the price of coffee increases, consumers may purchase less coffee and more tea. Conversely,
the demand for a substitute good falls when the price of another good is decreased. In the case of
perfect substitutes, the cross elasticity of demand will be equal to positive infinity.

Keeping the product ARIEL DETERGENT in mind we can say that.,

When the price of this product (ARIEL) increases, the demand of the substitutes available(SURF
EXCEL, HENKO, RIN) will also increase. The demand and price are directly related. Because
with the increase in price of ARIEL in the market, consumers will have an option/alternative in
the market to shift the demand to other brands and products.

On the contrary, when the price of product increases (ARIEL), the demand of compliments
available will go down. As we all know the compliment goods work in pair, they lose its value
when is used alone. Thus,there will be low demand of the compliments available in the market.

6) Price elasticity of demand:

Why we use it ???? what is its need?? Price elasticity of demand is the degree of resopnsivness
of quantity demanded of goods or services due to change in price and other things will remains
the same .

All the normal goods with downward sloping demand curves will have a negative price elasticity
of demand. Because both the quantity moves in opposite direction,,

We are more focused on the co-efficient of elasticity.

Factors determine the PED of product in mathematical form :

We can express it in mathematical term ;

Price elasticity of demand = percentage change in quantity demaned/percentage change in the

price

So here we can see that there is the direct relation between the the price elasticity of the good and
the demand for the good. If one increase or decreases than other quantity will directly effect.

Taking a example , price elasticity can be better expressed ,suppose if the price of a ariel soap
falls from 100 to 80 per unit. And due to which the quantity demand of the product increases
from 1000 to 1200 units.

So here using mathematical formula we will get the price elasticity of demand , in several steps ;

1) so initially the price of initial price of good that is 100

2) initial quantity demand of the product is 1000
3) and the change in the price 100-80 is 20
4) change in the quantity demanded for consumer is 1200-1000=200
5) so the piece of elasticity demanded will be Ep=(200*100)/(20*1000) that is: So here we
can see that the quantity demanded for ariel soap increases by 1 percentage due to the fall
in the price by 20 rupee.

Now we will see some other Factors that determine PED of a product :
 1) Number of close substitutes available for consumers ; more the number of close
reserves , the more will be price elasticity of demand

2) Price of the product in relation to total income: demand is usually height when the
percentage of budget is more.

3) Cost of substituting between different products: demand of product is more inelastic if

there is increase in price of reserves.
4) Brand loyalty and habitual consumption; demand for product for price is less elastic if
there is brand loyalty. And the brand loyalty can be created between seller and consumer
through advertisement also.

5) Degree of necessity /luxury: it can be define as the luxury of one’s . Means on the need
of the person and the income.

These were the factors in which some include the standard assumption, brand quality, finding
substitute, when price is high and demand is less. So all these are the needs which one give
preference in his/her life.

Price Elasticity of Demand can be used in firms to estimate the change in the effect of price on
total revenue, price volatility in a market, the effect change in an indirect tax on price and
quantity demanded. PED can also be used for price discrimination in a business.
Price Elasticity Demand Graph:

We can see through the graph given below, the relation between the price and demand, if PED
=1 the demand is unit elastic, if PED > 1 than the demand is elastic , if PED =0 demand is
perfectly inelastic and if PED <1 inelastic demand .

We are concerned with the PED, when the demand does not change with the change in price than
PED=0, and if the there is the change in the price and the demand decreases or increase than
PED can be greater than or smaller than 1. And if the price decrease by 5 % and demand increase
by 10% than PED<1, on other hand if the price of the product increase by 5% and demand
decrease by 20% than PED>1
7)INCOME ELASTICITY OF DEMAND FOR THE ASSIGNED PRODUCT
AND BUSINESS DECISIONS

Income elasticity refers to the sensitivity of quantity demanded of a certain good with change in
real income of consumers who buy this good, keeping all other things constant. It measures the
responsiveness of demand of a particular product in relation to consumer income. FOR
EXAMPLE, if we talk in the context of ariel detergent the income elasticity would be the change
in the quantity demanded of the product to the change in consumer income keeping all the other
factors constant.

TYPES OF ELASTICITY: -
 HIGH: - A rise in income comes with bigger increases in quantity demanded
 UNITARY: - The rise in income is proportionate to the change in quantity demanded
 LOW: - The rise in income is less than proportionate to the change in quantity demanded
 ZERO: - No change in quantity demanded even if there is a change in income
 NEGATIVE: - An increase in income will decrease the quantity demanded.

Elasticity may differ with different goods

TYPES OF GOODS: -

 NORMAL GOODS: - These goods are also referred to as necessity goods, these are the
goods who have zero income elasticity i.e. consumer will purchase the product even if
there is a change in income. E.G. (Food, water, electricity).
 INFERIOR GOODS: - These goods have a negative elasticity of demand i.e. as the
consumer income increases, they purchase less and less of inferior goods. E.G. (If a
person consumes Bajra and his income increases he will switch to wheat, and decline the
consumption of Bajra).
 LUXURY GOODS: - These goods have a high-income elasticity i.e. a little change in
income will lead to a proportionately greater change in quantity demanded. E.G.
(Premium cars, jewellery).
 PRODUCT ASSIGNED – ARIEL DETERGENT
• Product type- Biological detergent
• Owner-Procter & Gamble
• Country-United Kingdom
• Introduced-1967; 53 years ago
• Related brands- Joy
• Markets-Europe, Latin America, East, Southeast and South Asia, South Africa,
Maghreb, North Africa, Pakistan and the Middle East

Ariel detergent comes under premium quality detergent which makes it a normal good. As a
normal good ariel detergent has zero income elasticity i.e. people with average income will keep
purchasing the brand even if their income changes.

BUSINESS DECISIONS
Ariel detergent follows the premium pricing strategy in its marketing mix, under this strategy its
products cost a little more than the products of its competitors which makes the upper middle
class its target market which makes its elasticity zero i.e. even with the change in income the
quantity demanded does not change. However, it has also launched small sachets for the lower
middle class so that people with below average income can also consume it as a normal good.
Recently they have also come up with mid-pricing products like ariel super soaker for
penetrating the rural market.

7)Government Intervention
Government intervention refers to regulatory action that the government takes to promote
economic justice and as a responsibility towards the society and environment. It is done in every
segment including the detergent sector. Some of the guidelines for detergent sector are as
follows:

Detergent should consist of environment friendly contents. If detergent consists of some allergic
substance and is exceeding the limit of 0.01% by weight, it should be mentioned on the label as
well as on the website. The product datasheet should mention all the ingredients along the weight
they are present in the product whereas manufacturers can just mention the constituents on the
website.

As per the Detergents Regulation, following things should be clearly written on the package:

 Name of product
 Trade name / Trademark
 Address
 Telephone number
As per the law, consumer laundry detergents (CLD) cannot possess phosphate more than
0.5 grams per suggested quantity.
Detergent waste disposal should be done effectively.

Ariel, being a responsible brand uses ingredients, provides effective guidelines for disposal,
promotes awareness about their contents and follows an eco-friendly approach. The phosphate
content in Ariel was found to be negligible. It adheres to the guidelines that the government has
mentioned.

9)Market Structure For Commodity : (Ariel)

Market Structure can be defined as the characteristics of a market. A market consists of buyers
and sellers. And the characteristics that are involved are the pricing of goods, selling, buying
nature, and product, etc.

Market structure is used to analyze the kind of market in which the product is going to be
launched. So analysis is very important because before launching a product. Competitors are also
a very important part of market structure.

The main aspects that determine the market structure are the number of agents in the market and
the number of negotiation strength.

Ariel is a brand and it produces a high quality of product and which is very popular for
detergents that are used to remove strain from the clothes. Now everyone uses a washing
machine for cleaning their clothes so it has introduced a new product of detergent for washing
machine, means the firm/company knows what is the demand of the market so the company
changes its products on the upcoming demands of the market to be stable in the market. And
ariel has been able to meet the demands of its customers by producing good quality of products.
Natural colors and no bleach is used as clearly can be seen in the advertisement. So we are
talking about detergent than it means ariel. It provides washing powder, tablets, gel etc.

And it has decided to enter the rural market so it has launched a low-cost product that is available
at a cheaper cost with no compromise in the quality of the product.

Earlier it was sold in the shops now it is available on the online store for the convenience of the
customers, with cheaper rates and direct from the industry.

Ariel is regarded as the best detergent in the market of the UK as it has come up with low-cost
detergent so that it can destroy the competitors in the market. Ariel was fully focused on its
promotions and advertisement that it has come up with low-cost best quality detergent, the main
aim is to compete with the competitors.

From paint :
Types of Market Structure :

There are few market structure which are characterize an economy, these structure refers
basically to competition in the market. We will discuss some more determinants of market
structure as number of sellers, nature of product and services, nature of goods and products.

We will discuss mainly 4 types of market and it’s not possible that all these types of market are
actually exists. they are:

1) Perfect Competition
2) Monopolistic Competition
3) Oligopoly
4) Monopoly
Perfect Competition:
In perfect competition there are large number of buyers and sellers, these sellers are in
competition with each other and these are smaller in respect to each other.

In perfect competition there are assumption that one has to follow, the products should be
completely identical, maximum profit should be the firms first motive, there is no barriers,
everyone is free to exit or enter and no consumer preference. Now a days it’s rare to find these
kind of market structure

The best example for this agriculture market, internet industry.

Monopolistic Competition:
Same as Perfect competition there are a large number of buyers as well as sellers but the
products that are sold are not identical

means products can be the same and these types of market structures are nowadays more
common and occur in the real world.

As in perfect Competition, there is no consumer preference but in this structure, consumers have
more preference for choosing a product over another. And on the same hand, the sellers also
have the power of increasing or decreasing the price of goods/products.

The best example, in this case, is restaurants, clothing business, etc

Oligopoly:
Not like upper two structure in the market structure there is various barriers to enter in the
market. And it’s really difficult to establish business for new firms. There are only few firms and
kind of monopoly, but not full monopoly, in this case buyers are more greater than the sellers.
There is domination of few firms that controls and runs the market. It is said to be highly
concentrated and Maximum profit for seller.
High Concentration reduces consumer choice. The best example for this is auto industry ,
television cable etc

Monopoly:
There is only one seller so single firm will concentrate on highly profit making and control the
entire market because these kind of market structure control all kind of power in the market .
Customer looses all his powers and monopolies are highly undesirable. The best example for this
our natural gas provider, Microsoft etc.

Here the seller has all the rights of decreasing or increasing the prices of goods and services.

Monopoly is not good for consumer because there is no power in the hands of consumer.

10)BUSINESS PROSPECT FOR ARIEL DETERGENT

Ariel detergent is a British detergent brand owned by an American company Proctor&
Gambler(P&G) . Ariel detergent has been a leading premium product in the detergent
industry and now it’s launching its biggest marketing push for the decade as it is planning to
acquire more customers by introducing premium quality liquid detergent

The 10.5 million investment in a recent television campaign launched on 7th march 2020,
showcased the usage of Ariel liquid detergent helping a range of different people with varying
washing needs, wash better and quicker than other detergents.

P&G (Proctor and Gambler) is also gearing up to launch Ariel laundry detergent in next
generation gel format. The new product will have a consistency like a shower gel. It will be
designed in a manner that the gel will be dispensed in the machine with a nozzle reminiscent to
that of a squeezable ketchup bottle which will make it environment friendly. It will mark the
entry of Ariel detergent into compact detergent market as the battle for environmentally
conscious consumers gathers pace.

P&G has invested 20 million of marketing money into Ariel in particular the liquid detergent,
with this investment Ariel is increasing its marketing investment by 40% over 2018 and spend
around its education message by 68%. P&G products also contribute in community services, in
INDIA they provide holistic education for underprivileged children through their flagship CSR
programe “P&G SHIKSHA”.

P&G has been at the forefront of “green” initiatives in the laundry sector with its Future Friendly
labelling scheme but has yet to launch any specifically eco-friendly products under the Ariel
brand.

11)CONCLUSION :
From the deep study on Ariel , we got to learn a lot about how Ariel established itself in market
of India. They faced numerous difficulties in their journey of success in FMCG sector, they
overcome most of them by applying and adopting the several strategies relating to marketing,
advertising,creating customer value and their satisfaction by the services provided by them.
Ariel continues to be most preferred washing powder in India and around globe as well.

We feel that Ariel must focus on several key aspects to continue to grow and be more successful
like introducing low cost detergent for the lower class people to and to establish a good will
among its customers . Ariel keep its nose above its strong competition.