What are some current events in your industry? What is the impact of these events on the industry?

The Household and Personal Products Industry is the distributor of products to meet personal needs such as: personal hygiene, beauty and health, and other household products. Recently, companies like Procter and Gamble (P&G), Colgate-Palmolive, and Haier America have been doing most of their work in countries with developing market to focus on the neglected low-income consumers. The low-income consumer market is perceived to have no money to spend on these items or impossible to reach. The previously mentioned companies are disproving these myths. Research, provided by A. T. Kearney investigators, showed much growth can be made from low-income consumers as seen in Russia, where the low-income consumers spend $104 billion annually. Companies in the household and personal product industry are aware that these consumers are very brand conscious, looking for reliable and fair costing products. Due to this an increase in the number of household and personal product companies has emerged in developing markets.

For example, P&G has geared toward putting their products in developing markets like Mexico, Pakistan, and Nigeria where products like Pampers and Tide are not everyday products like they are in the US. To be successful in these developing markets P&G plan to put their products in “golden” stores, tiny mom-and-pop shops that carry 40 or more P&G products and display them together on the shelf rather than next to competing brands. A trend to sell more in the low-income consumer sector in other countries is to offer smaller packages. Reason being, low-income consumer can only afford to purchase products on a daily basis because that is usually how they are paid. Smaller packaging makes high quality product within reach of the low-income population. Also, the “golden” stores described above have limited stocking capabilities thus smaller packaging can guarantee the products reach the shelves and are bought over the local brands. Businesses attempting to expand into the low-income consumer market must study the demographics of the social environment concentrating on income.

In addition to product adjustment, marketing must change in order to connect with the low-income consumer sector. The consumers must be aware of the new high quality products these companies are offering. Colgate-Palmolive market researchers found that in places like India, where they are expanding, television advertising is not very effective. As a result, Colgate-Palmolive has taken to the streets with an open-air marketing strategy equip with video vans showing local movies and advertising their personal care products.  Determining the how the new set of consumers will accept the product goes along with marketing. Home appliance distribution company, Haier America, had to learn that their washing machines, in China, were not only used to wash clothes but also vegetables. The mud and dirt from the vegetable would often clog the machines’ pipes, instead of ignoring the issue because of the consumers misuse, they made the pipes wider. These kinds of accommodations, for the consumers needs, are what make their products increasingly popular and demanded.

To enter into developing markets with attention to a new set of consumers, it is important to be aware of what the consumers can afford, how they use the products, and how to present the products to them. Household and personal product companies like Procter and Gamble, Colgate-Palmolive, and Haier America are focusing on establishing their products in the low-income consumer sector to gain revenue. Other companies within this industry are reacting to the change in market and are following the examples of the companies mentioned earlier.

Sources:http://www.atkearney.com/index.php/Publications/serving-the-low-income-consumer.html