Getting into a lather
by Purvita Chatterjee
by Purvita Chatterjee
HLL is leaving no stone unturned to set its detergent brands apart in the highly competitive segment.
AVANTE-GARDE actress and erstwhile MP Shabana Azmi espouses the cause of water conservation in a Surf Excel ad and the Big B touting the virtues of the new Rin Advanced in yet another spot. With major investments in its detergent brands, FMCG major HLL, whose major share of revenue comes from detergents, is leaving no stone unturned to entice its consumers with new propositions and communication to protect its market share and provide an edge which will make it stand out in a highly competitive marketplace, made more so with an aggressive Procter & Gamble.
Notwithstanding issues such as price cuts, margin pressure and higher input costs, HLL is taking its detergent brands to a level where its consumers can expect a value-added proposition. Take the example of its Surf Excel franchise. The FMCG major has decided to support the cause of water conservation, apart from promising its consumers stain removal. Realising that consumers do not necessarily upgrade in a linear fashion, HLL has decided to straddle almost every price point and offer value-added solutions for each of its detergent brands. So while Surf Excel Quickwash now comes with a new low foam formulation requiring half the amount of water to wash clothes, Rin Advanced has had a makeover to enhance its whiteness proposition (with the B Big asking Yeh Naya Rang Kaun Sa Hai?). The Wheel franchise has also strengthened its proposition with an enhanced fragrance to differentiate itself in the discount segment.
Nitin Paranjpe, Vice-President (Laundry & Household Cleaners), HLL, claims, "With intense competition our challenge is to create differentiation and dominate every price segment."
Explains Paranjpe, "The challenge was to formulate a product which would have the capacity for outstanding cleaning with added features like water reduction and convenience for consumers." By helping consumers reduce the number of rinses while washing, Surf Excel Quick Wash was expected to reduce effort apart from saving `two buckets of water for India everyday.' Besides, roping in an activist-celebrity like Shabana Azmi is also expected to make a difference to the brand.
Surf Excel Blue also offers the added benefit of protecting colours. "People often fear that an expensive product can be harsh on removing stains. Surf Excel Blue promises great stain removal while protecting your colour," states Paranjpe.
Meanwhile, getting the Big B for its new Rin Advanced brand also indicates the steep investments made in the brand. "Having made significant changes in the quality of the product we had to signal the consumer to get appraised in terms of the investment we made in the brand. The story we were telling would benefit with a celebrity like Bachchan," says Paranjpe.
It has also unleashed a new promotion, Safedi Ka Shahenshah, whereby consumers can win guaranteed silver coins and realise their dream of meeting the Big B. Manish Agarwal, Senior Brand Manager, Rin, says, "Rin has always prided itself on its superior whiteness." The discount brand Wheel, with its two variants, Regular and Active, has also been getting a new lease of life. Wheel Regular was recently re-launched to provide enhanced sensorial effect. A new campaign is soon to be launched. To stand out from among the other discount brands such as Nirma, Ghadi and Fena, Wheel's perfume is expected to entice consumers who are looking for an expensive powder but do not have the money to buy it. Targeting the serious value-conscious consumer, Wheel is positioned as a seemingly expensive brand but one which is within the household budget. "Both the Wheel variants are centred around expensive cleaning within your budget," says Paranjpe.
While HLL continues to build new propositions around its brands, reacting to competition is an ongoing task for the FMCG behemoth. Early last year it fought a price battle with P&G when the latter suddenly decided to slash prices for its detergent brands. "Most of the price decreases were not led by us. We were clear that we would respond in a manner which was appropriate so that we do not lose our competitiveness in the market," says Paranjpe.
A senior official of P&G says that the price cuts by HLL and P&G have not led to either eating into the other's shares; rather, it is the smaller players who have been hit by the price cuts.
Industry observers feel that the detergent price wars have been a winning proposition for rivals HLL and P&G, boosting both their individual volumes and growth and growing the category. AC Nielsen estimates for February 2005 show that the detergent category is now growing at a comfortable 4 per cent.
Reacting with new launches to combat competition is also natural for the HLL. For instance, when P&G launched its Tide Bar last year, there was speculation that HLL might follow suit. While industry sources indicate that HLL has been undertaking research to launch a bar under the Surf Excel brand, there is still no sign of it in the market. While Paranjpe refrains from commenting, the company seems comfortable with its bar franchise which spans all detergent categories, including some regional brands such Sunlight and 501.
However, 2005 is going to be a difficult year for HLL with input costs rising. "Most of the detergents are linked to crude oil which is its active ingredient. With prices per barrel increasing, cost increases will be abnormal this year," observes Paranjpe.
Straddling an almost 40 per cent share of the Rs 5,000-crore detergent market, being a hardcore marketer, HLL intends unleashing differentiated offerings with adequate advertising to support its brands in spite of threatened profit margins due to the inflationary trend in raw material prices. Expect more lather to be generated in the detergent market in the months to come.
AVANTE-GARDE actress and erstwhile MP Shabana Azmi espouses the cause of water conservation in a Surf Excel ad and the Big B touting the virtues of the new Rin Advanced in yet another spot. With major investments in its detergent brands, FMCG major HLL, whose major share of revenue comes from detergents, is leaving no stone unturned to entice its consumers with new propositions and communication to protect its market share and provide an edge which will make it stand out in a highly competitive marketplace, made more so with an aggressive Procter & Gamble.
Notwithstanding issues such as price cuts, margin pressure and higher input costs, HLL is taking its detergent brands to a level where its consumers can expect a value-added proposition. Take the example of its Surf Excel franchise. The FMCG major has decided to support the cause of water conservation, apart from promising its consumers stain removal. Realising that consumers do not necessarily upgrade in a linear fashion, HLL has decided to straddle almost every price point and offer value-added solutions for each of its detergent brands. So while Surf Excel Quickwash now comes with a new low foam formulation requiring half the amount of water to wash clothes, Rin Advanced has had a makeover to enhance its whiteness proposition (with the B Big asking Yeh Naya Rang Kaun Sa Hai?). The Wheel franchise has also strengthened its proposition with an enhanced fragrance to differentiate itself in the discount segment.
Nitin Paranjpe, Vice-President (Laundry & Household Cleaners), HLL, claims, "With intense competition our challenge is to create differentiation and dominate every price segment."
Explains Paranjpe, "The challenge was to formulate a product which would have the capacity for outstanding cleaning with added features like water reduction and convenience for consumers." By helping consumers reduce the number of rinses while washing, Surf Excel Quick Wash was expected to reduce effort apart from saving `two buckets of water for India everyday.' Besides, roping in an activist-celebrity like Shabana Azmi is also expected to make a difference to the brand.
Surf Excel Blue also offers the added benefit of protecting colours. "People often fear that an expensive product can be harsh on removing stains. Surf Excel Blue promises great stain removal while protecting your colour," states Paranjpe.
Meanwhile, getting the Big B for its new Rin Advanced brand also indicates the steep investments made in the brand. "Having made significant changes in the quality of the product we had to signal the consumer to get appraised in terms of the investment we made in the brand. The story we were telling would benefit with a celebrity like Bachchan," says Paranjpe.
It has also unleashed a new promotion, Safedi Ka Shahenshah, whereby consumers can win guaranteed silver coins and realise their dream of meeting the Big B. Manish Agarwal, Senior Brand Manager, Rin, says, "Rin has always prided itself on its superior whiteness." The discount brand Wheel, with its two variants, Regular and Active, has also been getting a new lease of life. Wheel Regular was recently re-launched to provide enhanced sensorial effect. A new campaign is soon to be launched. To stand out from among the other discount brands such as Nirma, Ghadi and Fena, Wheel's perfume is expected to entice consumers who are looking for an expensive powder but do not have the money to buy it. Targeting the serious value-conscious consumer, Wheel is positioned as a seemingly expensive brand but one which is within the household budget. "Both the Wheel variants are centred around expensive cleaning within your budget," says Paranjpe.
While HLL continues to build new propositions around its brands, reacting to competition is an ongoing task for the FMCG behemoth. Early last year it fought a price battle with P&G when the latter suddenly decided to slash prices for its detergent brands. "Most of the price decreases were not led by us. We were clear that we would respond in a manner which was appropriate so that we do not lose our competitiveness in the market," says Paranjpe.
A senior official of P&G says that the price cuts by HLL and P&G have not led to either eating into the other's shares; rather, it is the smaller players who have been hit by the price cuts.
Industry observers feel that the detergent price wars have been a winning proposition for rivals HLL and P&G, boosting both their individual volumes and growth and growing the category. AC Nielsen estimates for February 2005 show that the detergent category is now growing at a comfortable 4 per cent.
Reacting with new launches to combat competition is also natural for the HLL. For instance, when P&G launched its Tide Bar last year, there was speculation that HLL might follow suit. While industry sources indicate that HLL has been undertaking research to launch a bar under the Surf Excel brand, there is still no sign of it in the market. While Paranjpe refrains from commenting, the company seems comfortable with its bar franchise which spans all detergent categories, including some regional brands such Sunlight and 501.
However, 2005 is going to be a difficult year for HLL with input costs rising. "Most of the detergents are linked to crude oil which is its active ingredient. With prices per barrel increasing, cost increases will be abnormal this year," observes Paranjpe.
Straddling an almost 40 per cent share of the Rs 5,000-crore detergent market, being a hardcore marketer, HLL intends unleashing differentiated offerings with adequate advertising to support its brands in spite of threatened profit margins due to the inflationary trend in raw material prices. Expect more lather to be generated in the detergent market in the months to come.
Business Line a Financial Daily from THE HINDU group of publicationsThursday, Jun 09, 2005
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