Confused on how to make profits out of crisis times? I wish to provide some info on my observations with one of the fast moving consumer goods (FMCGs) of Indian market. Surf Excel detergent bar is the example here.
Not sure if you know a little fact behind this soap – The same detergent bar was previously known as ‘Rin Supreme’ maha bar. We have been using this soap for over a number of years to wash clothes. The same soap got a make over as Surf Excel marketed by HLL ie., Hindustan Lever Limited. As far as I can recall, this soap used to cost only INR 25 till a year back. Now the price has shot up almost 50% to INR 38 as on today.
Take a close look at the attached image. There are 3 main things you should be observing:
1. Nett Weight
3. Time line
Initially, after the take over of Rin from Surf Excel, the price was increased to INR 33. Then came in picture the inflation which directly hit the the cost of input material to go skywards. Now the management funda starts… The picture talks the rest!
In a span of 2 months, they decreased the net weight from 400grams to 384g at first step. Then over the next couple of months, they increase the price! Whose money is it anyways? end user always takes the hit while companies continue to post profits inspite of inflation or even recession!