Fogg PESTLE Analysis
Detailed PESTLE analysis of Fogg examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Fogg is the market leader in the deodorant category, whose parent company is Vini Cosmetics. The product is subject to cosmetic regulations in India. Thus, the company is subject to Drug and Cosmetics Act, 1940. The Act deals with the importing, producing, distributing and selling of cosmetics and drugs in India. Thus, any amendments which include more stringent requirements in terms of production and distribution could increase regulatory burden for Fogg. Also, as more evidence emerges that overuse of cosmetics is harmful to the skin, there is a risk of more stringent regulatory requirements.
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This concludes the political factors in the Fogg PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Fogg:
Fogg targets youngsters from the middle and upper middle-income category in the urban areas. Any change in the economic conditions, like very high inflation or recession could impact the disposable income of these consumers.
Also, the deodorant market in India is very price-sensitive. Any increase in the cost of raw materials could reduce the margin on the products or force the company to raise the prices for its products. This may again lead to loss in demand, as the consumers are very price-conscious. A prime example is the effect of Covid-19 induced lockdown in India. The sales of deodorants in India fell by 80% during the 2 months of lockdown in 2020. Thus, this affected the financial performance of Fogg also, in terms of reduced revenue. Also, consumers’ discretionary spending has reduced post -lockdown. The founders have themselves stated that it would take at least 2 more quarters for the market to recover and reach growth phase.
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Social Factors:
Following are the social factors impacting Fogg PESTLE Analysis:
The deodorant market in India is worth more than Rs. 2500 crores, and is growing annually at an estimated rate of 15-18% p.a, indicating huge potential in the market. Also, the trends are changing as the consumers become more fashion-conscious than before. Another factor is rising disposable income of the consumers. Before Fogg’s entry, the deodorant market had similar products. The advertising strategy, too, focused on males attracting females. The brand, instead, sensed a gap in the market and came up with a different strategy. One gap in the market was lack of any perfumes which lasted for longer periods of time. Thus, it positioned itself as a deodorant which lasted for long hours at price points similar to other brands in the market. Also, it targeted both men and women with separate variants, with combo gifting packs for each. For example, there are 18 variants in the men’s category alone. Some of them are Fogg Black Collection Fresh, Fantastic Four Extreme No Gas, Macro Deodorant, etc. Some of the brand’s deodorants for women are Fogg Black Collection Blossom, Paradise Deodorant, I Am queen Eau De Parfum, etc.
Technological Factors:
The technological factors in the PESTLE Analysis of Fogg are mentioned below:
Fogg made a big entry in the market by way of product innovation. The company did market research and discovered that consumers have one common grievance – the perfumes don’t last for longer hours. This was because most of the perfumes were gaseous sprays, which lasted for few hours only. Thus, it was developed as a non-aerosol perfume and one can was equivalent of 800 sprays. It also has a very unique advertising strategy. In a market dominated by brands, centered around one theme – men attracting women, it came up with a neat advertising campaign. The tagline of the campaign was simple, yet impactful – “No gas, only Spray”, as it is a non-gaseous, liquid perfume. The brand did extensive advertisement on TV commercials, magazines, newspapers, social media, etc to build their own brand. Another tagline of their campaign was this – “Kya chal raha hai? Fogg chal raha hai”. This tagline captured the imagination of Indian audience.
Presently, it is the market leader with a significant market share in India.
Legal Factors:
Following are the legal factors in the Fogg PESTLE Analysis:
Fogg is a trademark of Vini Cosmetics. Yet, there is still the possibility that an entity illegally uses the name of Fogg to market its products. In such cases, the company may have to file legal cases against fake products and incur legal costs. Such fake products may also reduce the sales of the brand. The brand is also bound by consumer laws, since FMCG products have to abide by basic quality standards. Also, any brand which focuses on global expansion need to consider the laws of the country they want to have their business in.
Environmental Factors:
In the Fogg PESTLE Analysis, the environmental elements affecting its business are as below:
Any uncontrollable factors such as natural disasters like cyclones, floods, lightning, earthquakes, contagious diseases, etc. can adversely affect the sales of the brand. The impact of Covid-19 is a clear example, which lead to reduction in sales of all deodorants in the months of April and May, 2020. Another factor is that perfumes are harmful to the environment. One can of perfume contains several fragrances. These fragrances evaporate in the air and cause damage to the environment. Also, perfumes are known to carry volatile organic compounds (VOCs). When the gas from the perfume is released in air, these VOCs react with sunlight and chemicals. This also leads to ozone pollution.
It is for this reason that many consumers are turning towards ayurvedic or organic alternatives. Yet, this is a risk for the brand as it may have to face reduced sales in the future. Thus, any negative perception of Fogg due to environmental concerns can negatively affect its sales and profits in the future.
To conclude, the above Fogg PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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