PENETRATING THE SACHET MARKET

Implementing sachet strategy by Splash Corporation across targeted channels

By Christopher Bernardo

Case Background
Recently, Splash Corporation is pushing forward a strategy that will penetrate the tertiary account. There were several
attempts made before to penetrate the sachet market with the launches of smaller sizes skus. Maxipeel in particular, a
Php1B brand harboring on the sale made by its exfoliant, launches a 15ml size in 2005. This was done in the hope of
penetrating even tertiary accounts and independent drug stores. While it was able to penetrate the independent drug
stores and was even introduced in some other existing distribution channels, the expected result of actually increasing the
market for exfoliant was not met. Instead, the smaller size sku for the mean time eats up the market share of the larger
size exfoliant. Particularly, it preys on the 30ml which is the sku with a higher value. The effect, although not drastic, was
reflected with the decrease in sales of the 30ml for three months. Currently, the offtake in terms of volume is 41% of the
total Maxipeel Exfoliant. However, in terms of value contribution it only contributes 18% (see Figure 1). Thus, the question
of whether penetrating the sachet market is really worth penetrating considering that it does not contribute much in terms
of value to the total exfoliant market.
% CONT Value

% CONT Vol

18%

36%
41%
15ml
30ml
60ml

15ml
30ml
60ml

55%
27%

23%

Figure 1. Volume and Value Share of Maxipeel Exfoliant (per size)

Then there was also the introduction of Hiyas soap in the tertiary channel primarily the sari-sari store segment. In which,
massive seeding program was implemented in the hope that by forward selling the sachet in these channel it is possible
that when the commercial on this product is aired there will be a demand created and that the product will easily be made
available to the target market, CDE income bracket. However, the commercial was not sustained. The market was also
not able to see any unique selling proposition offered by the new papaya product. For the consumers, it was just another
me too product trying to imitate other existing products already sold in the market. Likas soap is the strong contender of
Hiyas. Infact, Likas Papaya Soap is actually selling more than any other papaya soap in the market. It is even beating
Safeguards papaya soap which for a time was heavily advertised. Eventually, the product was recalled which resulted to
million value amount worth of returns to the company thereby diluting the corporate profitability.
Eventually, the company launches a conditioner being positioned to be a hot oil that was designed to attack Creamsilk
lines. Initially, it was able to create a buzz across the industry, but this did not resulted to a sustainable offtake for the
product. Even with the launch of the 15ml sachets the company was not able to really create an entirely new category
since hot oil was perceived by the market as already one of those products that are already being sold in the market only
the product under the brand of Biolink VCO being sold only at lower price. The perception of the market towards the
product being a hot oil was actually not the intention of the company. It was the conditioner that it wanted to attack but it
was placed in the hair treatment category because of the name of the product itself. Eventually, the management changed
the name of Hot Oil with Hot Oil Conditioner, just another attempt to differentiate the product from existing conditioners.
Again, this was not accepted strongly by the market even if the product is o high quality. Then the management re-called
BVCO 15ml and replaced it with 30ml in the hope of being able to increase the value per unit being sold. The re-call

negatively impact the company as some accounts had problem in the transition. Later, management had to bring back
15ml in the market and pull out the 30ml which again diluted P&L.
There were also similar attempts done by Splash Corporation to enter the sachet market it its other existing lines. There
are sachets introduced for lotion, face cream, and face wash. Majority of the sachets introduced are already pulled out
from the market. Then there was the introduction of Skinwhite Powder Face Cream 8g, which was negatively received by
National Accounts due to the history of the sachets already introduced by the company. Thus, even though SKinwhite has
a strong brand equity, the companys past performance on this market created doubt among the National Accounts as to
the success of the new product. Some accounts like Super Shopping Market (SM Hypermarket) and Super Value Inc. (SM
Supermarket) refused to carry the mentioned sku.
Then, after two months of the introduction of the Skinwhite Powder Face Cream sachet, (which was distributed among
other retail accounts) the 20g tube of the same product was introduced to the market. After the introduction of the product
massive advertisement was aired with Kim Chu being the endorser for the product. Weekly tracking of the product
revealed that upon the airing of the commercial, the offtake which was already comparable to the offtake of Ponds sachet
(main competitor) doubled. This threatened Unilever asking their agencies to proposed merchandising tactics designed to
stunt the growth of Skinwhite Powder Face Cream, but it is SKinwhite Powder Face Cream moment in the marketing
spotlight. It was able to send its message across its target consumers (thru, segment buys in Tayong Dalawa, portraying
Kim Chu [as an actual user of the product and is also a push girl actually endorsing the product to consumer] and TVC)
and the product was well received by the consumers. This was evident with the increasing purchase of the consumers
upon the airing of the above the line activities.

Figure 2. 334% Growth in March vs February upon the airing of the commercial
The challenge now for the Skinwhite Powder Face Cream is to increase its distribution particularly to tertiary channels. It
should also be able to increase trial usage and purchases from the Supermarket Channels particularly National Accounts.
Thus, the need to introduce the Skinwhite Powder Face Cream sachet in National Accounts.
In addition to sachet introduction, the Account Manager handling National Account should also be able to manage the
budget spent by the accounts. This can be done either by increasing the offtake thru below the line activities that may
complement existing above the line. In particular, Super Shopping Market is already at 9 weeks covered whereas the
1
Inventory Control Objective (ICO) for this account is only 2 weeks. This implies that Super Shopping Market is already 7
weeks overstock (see Figure 3 and Table 1)

ICO level is the number of inventory which is maintained by the account. It is computed by dividing Total Ending Inventory of a
particular sku, brand, line or total products by their corresponding offtake for the week.

2500000

2000000

1500000
Data
Sum of Offtake Value
Sum of Inventory Value
1000000

Figure 3. Offtake and Inventory value per Brand in Super Shopping Market Inc.

Table 1. ICO Level per Brandin SSM

Brand

Offtake Value

Inventory Value

Wks

Baby Spa

30,932.75

640,660.75

20.71

Biolink Green Papaya

62,586.75

465,019.25

7.43

Biolink Tea Tree Oil

17,254.50

131,688.00

7.63

Biolink VCO

96,773.50

2,344,515.25

24.23

Control

55,301.37

234,451.67

4.24

Extract

85,962.25

665,549.50

7.74
36.61

Extraderm

44,912.25

1,644,366.75

Kolours

183,537.25

1,557,994.00

8.49

Maxipeel

188,244.75

1,174,112.25

6.24

Skinwhite

312,497.50

1,733,296.75

5.55

1,274.00

146,214.50

114.77

103,716.50

432,392.75

4.17

Skinwhite Gluta
Skinwhite Power
Theraherb

51,686.00

521,415.00

10.09

Tricks

15,836.25

158,914.00

10.03

Vitress

109,711.14

686,365.48

6.26

1,360,226.76

12,536,955.89

9.22

Grand Total

Vitress

Tricks

Theraherb

Skinwhite Power

Skinwhite Gluta

Skinwhite

Maxipeel

Kolours

Extraderm

Extract

Control

Biolink VCO

Biolink Tea Tree Oil

Biolink Green Papaya

Baby Spa

500000

Industry Overview
Splash has been known for its strong brand management. It was able to strengthen market leadership in the whitening
category. Currently, the brand name of Skinwhite and Maxipeel is well accepted by the consumers and retail partners of
Splash. Skinwhite and Maxipeel have been the dominant market leader in the whitening lotion and exfoliant category
respectively.
Skinwhite has been the market leader in the whitening lotion category with 23% market share. This is followed by Silka
whitening with 21% and Block and White at 14%. The market share data comes from AC Nielsen and reflects the period
of November 2008. Since, then, the market share of Skinwhite Whitening lotion has increased tremendously and is now at
32% of the over all whitening lotion category. Even with the introduction of new entrants such as Belo did not affect the
leadership of skinwhite in this category.

Sales Volume (Ml) Total Whitening Lotion

Total Supermarket

% Volume Share Total Whitening Lotion Per Brand

Total Supermarket November 2008
Biolink
Extract
Love
Whitening Whitening, 4 Whitening
Naturals, 1
Naturals, 4

200,000,000
150,000,000

Other Brands
Whitening, 5

100,000,000
50,000,000

Belo Whitening
Scientific, 5

DE

C0
JA 7
N0
FE 8
B0
M 8
AR
0
AP 8
R0
M 8
AY
08
JU
N0
8
JU
L0
AU 8
G
08
SE
P0
O 8
CT
0
NO 8
V0
8

TOTAL WHITENING LOTION

Vaseline
Whitening
Scientific, 7

Skin White Whitening Scientific

Maxi-Peel
Whitening
Scientific, 1
Skin White
Whitening
Scientific, 29
Silka Whitening,
21

Nivea
Whitening, 8

Block & White

Whitening, 14

Figure 4. Whitening Lotion Market Share

Maxipeel created the exfoliant market. It is but justified that it is leading the market at 92%. Other brands have already
penetrated the market but they are unable to match the leadership of Maxipeel primarily because of the efficacy of the
product itself and also the massive campaigns that supports the Maxipeel product. However, multinational companies
such as Unilever have positioned its product, Ponds to go against Maxipeel when it launches its Ponds toner. The Ponds
toner was well received in the market but its sales decreases in time.
Sales Volume Exfoliant Segment
Total Supermarket

%Volume Share Exfoliant Segment Per Brand

Total Supermarket November 2008
Extraderm
Exfoliant, 1

35,000
30,000
25,000

RDL Exfoliant,
7

20,000
15,000
10,000
5,000

08
JU
N0
8
JU
L0
8
AU
G
08
SE
P0
8
O
CT
08
NO
V0
8

8
R0

AY
M

AP

B0
8
AR
08
M

FE

8
N0

JA

DE

C0

Exfoliant

Figure 5. Exfoliant Market Share

Maxipeel Exfoliant

Maxipeel
Exfoliant, 92

In the Whitening Soap category, Skinwhite still dominates the market with 43% market leadership. It is followed by Belo at
21% and Block and White at 13%. With the entry of Belo in the market, the whitening soap category has expanded. Belo
soap has a strong offtake in major National accounts and is already eating up the share of Skinwhite. This can be
attributed to the affinity of the consumers with the endorsers that promotes the Belo soap relative to Skinwhite soap which
is not emphasized in SKinwhite ATL campaigns (priority has been given to the whitening lotion).
Sales Volume (Kgs) Whitening Scientific Soap
Total Supermarket
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-

%Volume Share Whitening Scientific Soap Per Brand

Total Supermarket November 2008
RDL Whitening
Scientific, 2

Bioderm
Whitening
Scientific, 2

Heno De Pravia
Whitening
Scientific, 1

08
FE
B0
M 8
A
R0
8
AP
R
0
M 8
AY
08
JU
N0
8
JU
L0
8
AU
G
08
SE
P0
8
O
CT
08
NO
V0
8

JA
N

EC
0

Silka Whitening
Scientific, 3

TOTAL WHITENING SCIENTIFIC

Others
Whitening
Scientific, 5
Palmolive
Whitening
Scientific, 10

Block & White

Whitening
Scientific, 13

Kissa
Whitening
Scientific, 1
K.S.A. Magic
Whitening
Scientific, 1

Belo Whitening
Scientific, 21

Skin White
Whitening
Scientific, 43

Skin White Whitening Scientific

Figure 6. Whitening Soap Market Share

In the Facial Cleanser Category dominated by Sarah Lee (Eskinol and Masters), Splash is able to penetrate the market
with the introduction of Extract lines. Furthermore, the sale of Extract facial cleansers increases with the endorsement
coming from Judy Ann. Splash will continue to support the Extract lines thru similar strategy of ATL with Judy Ann as the
main endorser. This will be supported with Ryan Agoncillos endorsement of the same product line.

Sales Volume Facial Cleansers

Total Supermarket

%Volume Share Facial Cleanser Per Brand

Total Supermarket November 2008
Others Facial
Cleanser, 5

300,000

Biolink Facial
Cleanser, 3

RDL Male Facial

Cleanser, 1

250,000

Skin White
Facial Cleanser, 1

Silka Facial
Cleanser, 6

200,000
150,000

RDL Facial
Cleanser, 7

100,000
50,000

Eskinol Facial
Cleanser, 48

FE 8
B0
MA 8
R0
AP 8
R0
MA 8
Y0
8
JU
N0
8
JU
L0
AU 8
G0
SE 8
P0
OC 8
T0
NO 8
V0
8

N0

JA

DE

C0

FACIAL CLEANSERS

Extract Facial Cleanser

Ponds Facial
Cleanser, 7
Extract Facial
Cleanser, 11

Master Male
Facial Cleanser,
12

Figure 7. Facial Cleanser Market Share

The hair dye market previously been dominated by Loreal and other multinational products is now being controlled by
Splash Kolours Hair Dye. It has dominated the premium hair coloring market with 72% market leadership.

Sales Volume (Pcs) Premium Hair Dye Less Powder

Total Supermarket

% Volume Share Premium Hair Dye Less Powder Per Brand

Total Supermarket November 2008

45,000

Others
Premium, 3

40,000
35,000
30,000

Loreal
Garnier Premium,
2

Wella
Premium, 1

Loreal (
Less Garnier)
Premium, 10

25,000
20,000
15,000
10,000
5,000

Bigen
Premium, 11

DE

C0
7
JA
N0
8
FE
B0
8
M
AR
08
AP
R0
8
M
AY
08
JU
N0
8
JU
L0
8
AU
G
08
SE
P0
8
O
CT
08
NO
V0
8

Kolours
Premium, 72

PREMIUM

Kolours Premium

Figure 8. Hair Dye Market Share

PRODUCT DETAILS
SKINWHITE POWERWHITENING FACE CREAM POWDER 20g tube (also available in 8g sachet) is the newest product
innovation coming from SkinWhite.
Filipinas follow a four-step daily regimen for their face. First, they wash their face; second, they cleanse or tone using
facial cleansers or toners; third, they use FACE CREAMS to whiten and moisturize their skin and protect them from the
rays of the sun; and finally, they finish off with POWDER (either pressed or loose) because the face cream they are using
is not mattifying enough.
The first ever 3-in-1 POWERWHITENING FACE CREAM POWDER
1. WHITENING Has the PowerWhitening Technology that whitens in as fast as 7 days, gives you your whitest white
and whitens continually.
2. MOISTURIZING Just like other face creams, it moisturizes the skin making it soft and smooth.
3. POWDERY FINISH The only face cream in the country that magically transforms itself into a powder for long
lasting mattifying effect.
It also contains SPF 10 for sun protection and Vitanourish Formula, a blend of vitamins for healthier skin.
It comes in 2 variants WHITE (for fair skin) and LIGHT BEIGE (for slightly dark complexion).
PROMOTIONS
At launch, SkinWhite will be supporting its new face cream powder through
massive bundling with its fast-selling SkinWhite Lotion (to induce trial from loyal
SkinWhite lotion users) and limited edition testers. TV commercials, tie-ins with
local networks and school activations are also scheduled to promote the new
SkinWhite PowerWhitening Face Cream Powder in the months to come.
With the relevant consumer insight, innovative and superior product, winning pricing
and all-out promotion, we are confident that SkinWhite Power Whitening Face
Cream Powder will be another SkinWhite success. So, make your POWER to WOW
3 times more powerful with the new SkinWhite Powerwhitening Face Cream Sachet
the first of its kind in the face category!

Figure 9. Skinwhite Powder Face Cream

PRICING
Product

Pack

Description

Size

Pcs/Case

List Price (VAT In)

SRP

CM

Per Case

Per Unit

Per Case

Per Unit

Per Unit

SkinWhite PowerWhitening Face

CreamPowder (Light Beige)
SkinWhite PowerWhitening Face
CreamPowder (White)

20g

36

1,500.00

41.67

1,620.00

45.00

3.33

20g

36

1,500.00

41.67

1,620.00

45.00

3.33

SkinWhite PowerWhitening Face

CreamPowder (White)

8g

144

1,332.00

9.25

1,440.00

10.00

0.75

SkinWhite PowerWhitening Face

CreamPowder (Light Beige)

8g

144

1,332.00

9.25

1,440.00

10.00

0.75

DISTRIBUTION AND INITIAL PIPELINING VOLUME (IPV) AND CONSTRAINTS

ACCOUNTS
SVI/ SSM MDC -

SUYSING
AND
SUPER8
GAISANO
SMKT &
DEPT

GAISANO
CAPITAL
GROUP
"ALL OR
NOTHING"
GAISANO
SOUTH
GROUP
"ALL OR
NOTHING"
ROSE
PHARMACY

CONSTRAINTS
IPV CAN RANGE 2-5 CASES PER SKU
PUT SUFFICIENT IPV FOR PRODUCT HIGHLIGHT - CONSULT NAG
LISTING FEE FOR MDC WAIVED FOR SUCCEEDING NPIS.
PREPARE SUBPACKING BY 6'S (IDEAL) c/o PRODUCTION
UNDER MT BUT INCLUDED IN NAG AS IT IS A DIRECT SPLASH ACCOUNT.
MBD TO INSTRUCT POLD THAT THIS IS ONLY IN IPV TEMPLATE: SUYSING IS STILL UNDER MT
IN TERMS OF MGT AND PERF.
SUYSING LISTING FEE IS TOO COSTLY AT 60K PER SKU + 3MOS 5% INTRO DISC.DIRECTIONALLY NOT RECOMMENDED FOR INTRO
For Gaisano: if listing fee is allocated to Supermarket, no need to give listing fee to its cosmetic
counterpart AND vice-versa.
NOTE: 2 out of the 4 groups of Gaisano Account in Visayas require "all or nothing" intro (see reminder
below). The other 2 groups technically can be pushed for per branch selection. However, take note of
total number of outlets that shall carry the new skus. If by strategy, we shall own the Supermarkets,
then it should reflect in the number of Supermarkets to be given with listing fee. If only 1 outlet shall be
alloted with listing fee, please re-think allocation as distribution objective and ccd negotiation shall
suffer.
GAISANO CAPITAL GROUP'S listing fee was negotiated down from P7,500 to P3,500 plus 5% intro
discount. However, negotiation involved intro of skus for all the group's 9 branches in terms of ALL OR
NOTHING. COVERED BRANCHES ARE: gaisano city iloilo; gaisano guanco; gaisano kalibo; gaisano
ormoc; gaisano tacloban; gaisano san carlos; gaisano south; gaisano mactan; gaisano danao.
GAISANO SOUTH GROUP'S listing fee was negotiated down from P7,500 to P5,000 plus 5% intro
discount. However, negotiation involved intro of skus for all the group's 9 branches in terms of ALL OR
NOTHING. COVERED BRANCHES ARE: gaisano roxas, gaisano marketplace, gaisano city roxas,
gaisano main - bacolod, gaisano kabankalan, gaisano fiesta mall and gaisano carcar.
INITIAL STOCKING- MEANING PAYMENTS CAN ONLY BE PROCESSED AND RELEASE BY THE
ACCOUNT AFTER THEY MADE REPEAT ORDERS from first booking. IF STOCKS REMAIN
UNSOLD THEY WILL ADVICE TO PULL OUT THE STOCKS.
LISTING FEE IS P2500 / sku for all the branches nationwide

SKINWHITE POWDER FACE CREAM vs PONDS

This report documents one particular account, Super SM and the reaction of Unilevers PONDS in the Below the line
activities implemented by Splash in this account.
Leadership in Face Category
7 out of 9 stores (78%) shows that SKINWHITE POWDER FACE CREAM is already market leader (in SSM). The initial
week offtake being monitored in SSM for Skinwhite Powder Face Cream averages at 20 units per week, this is already
near PONDs 30. The offtake of Skinwhite Powder Face Cream is phenomenal, from an average of 20 units per week, its
offtake now averages at 58 unit (Beige) and 50 unit (White). Even the merchandisers interviewed by the CDM attested to
the surge in offtake of the product.

80

Sum of Offtake

70

60
Product
50

Belo Blue Pore Minimizing 50ml

PONDS WHITE BEAUTY FACE CREAM
PINKISH WHITE 10ML X 4
SKINWHITE POWER WHITENING FACE
CREAM POWDER (LBEIGE) 20G
SKINWHITE POWER WHITENING FACE
CREAM POWDER (WHITE) 20G

40

30

20

10

Valenzuela

The Block

Sucat

Pasig

Muntinlupa

Molino

MOA

Bicutan

Baliwag

Branch

Figure 10. Dominance of Skinwhite Powder Face Cream in National Accounts

Dominance in SM Taytay

180

Sum of Offtake

160

140

120

Product
Belo Blue Pore Minimizing 50ml

100

PONDS WHITE BEAUTY FACE CREAM

PINKISH WHITE 10ML X 4
SKINWHITE POWER WHITENING FACE
CREAM POWDER (LBEIGE) 20G
SKINWHITE POWER WHITENING FACE
CREAM POWDER (WHITE) 20G

80

60

40

20

0
Taytay
Branch

Quite interesting is the case of SM Taytay because of the ironic outcome of SWPFC offtake. It is the branch with the
lowest offtake as seen even with the competition (10 pc for Belo and 11 for Ponds, per week). However, Skinwhite
Powder Face Cream registered the highest in terms of Offtake for all SSM outlets for the recent week (Mar 14-20) at 164
pc for both skus. The case of Taytay, the CDM believe is an outlier. It is possible that a single wholesaler purchases in
Taytay, nevertheless, this outlet will be closely monitored by the CDM.
Competitors Reaction
Panicky! Even with the behavior of the coordinators of Unilever, it can be seen that the company is pushing them to drive
for result. The Coordinators of Unilever were the ones who are creating the proposal on shelf expansion. However their
strategy of purchasing shelf is just a band aid solution approach. The CDM believes that it will not arrest the increase in
demand for Skinwhite Powder Face Cream. Thus, the Unilever started with the shelf expansion strategy beginning with
SM MOA. However, just the same with the strategy of PH Care of expanding its shelf occupied and eating the space of its
competitor, (where the CDM instructed the merchandisers to expand BTTO spray ) upon the expansion of Unilevers
PONDs, the CDM instructed the merchandiser to allow the shelf expansion to be finished and afterwards re-face the
stocks of Splash to occupy a bigger shelf space (or atleast, blocking) thus defeating the purpose of Unilevers shelf
expansion the same with what the CDM did against PH Care.
The CDM also attacked Unilevers PONDs facing. During the work with of the CDM with Mr. Albert Leoveras, NCDM, they
have instructed the merchandiser of MOA for the re-facing of SW PFC to be placed near PONDs. The same
merchandising direction was also implemented by the CDM in other branches (see example below).
SSM NORTH EDSA