unilever brand extensions in india

8/13/2019 Unilever Brand Extensions in India

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Unilever in IndiaManaging Brand ExtensionsCase study

Reference no 505-053-1

This case was written by Mridu Verma, under the direction of A V Vedpuriswar,

ICFAI Knowledge Center. It is intended to be used as the basis for class discus-

sion rather than to illustrate either effective or ineffective handling of a manage-

ment situation.The case was compiled from published sources.

2005, ICFAI Knowledge Center.

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In the 1990s, HLL expanded its operations through mergers and acquisitions. In April 1993, the

company acquired its largest competitor, Tata Oil Mills Company (TOMCO), the biggest such

deal in Indian industry till that time. HLL formed a 50:50 joint venture with another Tata

company, Lakme Ltd in 1995. The venture named Lakme Lever Ltd. marketed Lakmes leading

cosmetics and other associated products. (Subsequently in 1998, Lakme sold its products to HLL

and divested its 50% stake in the venture).

In January 1996, HLL absorbed a group company Brooke Bond Lipton India Ltd2 (BBLIL) in

January1996, followed by another group company, Pond's India Ltd in January 19983. By the late

1990s, the integration of the different Unilever entities operating in India, had been largely

completed. Till the mid-1990s, bulk of HLLs growth had come through acquisitions. Realising

that many of the growth opportunities had been exhausted, Chairman Keki Dadiseth launched

Project Millennium in the late 1990s.

In 1999, around the time Banga took charge, signs of slower growth were evident. In personal

products (which accounted for 17.4 percent of HLLs turnover), the growth rate declined to 16

percent while in soaps, detergents and scourers, (which formed 40 percent of the turnover), it was

less than 11 percent. In ice creams (where the company had a 50% market share), the growth ratewas 10%. In beverages, sales dropped by 12%. Overall, HLLs sales grew by about 7%, a

disappointing rate when one looked back at the heady days of the early and mid-1990s.

In categories like soaps and detergents, HLL discovered that consumers were shifting from

premium, high-value products to lower priced brands. Meanwhile, in businesses like personal

wash, where HLL had a nearly 70% market share, penetration levels had reached 90%, leaving

few growth opportunities.

In 2000, HLL examined its brand portfolio thoroughly and decided to put its resources behind 30

power brands out of 110. These brands were selected using various criteria such as size, brand

strength, brand relevance, competitive advantage and growth potential. HLL visualized each of

its mega brands achieving sales of Rs.1000 crores in the future and decided to put all its R&D

and marketing muscle behind these brands. Brand extension was identified as an important way

to grow these brands.

In the past, branch extensions had enabled HLL to enter new product categories more easily,

gave its products more instant recognition, credibility and early acceptance with much less

advertising outlay. But there had been instances of over extension. At times, the brand

extension had been inappropriate for the new product. The best results came when brand

extension increased the sales of both the new product and the existing product. An acceptable

result was where the new product sold well without affecting the sales of the existing product.

The worst result was where the new product hurt the sales of the existing product.

Lifebuoy

Since its launch in 1895, Lifebuoy had been synonymous with health and hygiene. The brick

red carbolic soap with its famous jingle Lifebuoy hain jahan, tandurusti hain wahan (Where

there is Lifebuoy, there is health) had become the largest selling soap in India, with two million

soaps being sold every day in the early 1990s. With consumers shifting to softer soaps that

gave more lather, Lifebuoys market share slid from 15.4% in 1997 to 12.5% in 2001.

2 Unilever had acquired Lipton in 1972, Lipton Tea (India) Ltd. was incorporated in 1977. Brooke Bond

had joined the Unilever fold in 1984 through an international acquisition. Brooke Bond and Lipton India

merged in July 1993 to form BBLIL. Prior to that TEI & DDI, two tea plantation companies had beenmerged with Brooke Bond.3 Ponds India Ltd. had been present in India since 1947. It became an HLL group company when

Unilever acquired Chesebrough Ponds USA in 1986.


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Initially, Lifebuoy decided not to tinker with the core brand. Instead it tried to cash on the

health platform and launched two extensions Lifebuoy Plus, which offered protection

against body odour, and Lifebuoy Gold, against acne and pimples. The core brand Lifebuoy

that offered protection against germs, was left undisturbed.

Through these extensions, Lifebuoy also attempted to tap new segments. While Lifebuoyplus was positioned as a family soap, Lifebuoy gold targeted teenage gir ls. The products

were moderately successful but did not do much to arrest Lifebuoys falling market share.

Even in rural areas where Lifebuoy had a strong foothold, the demand had become more

sophisticated with TV advertising highlighting the wide array of choices. HLL tested new

product formulations, six fragrances and different packaging options. In ear ly 2002, HLL

re-launched Lifebuoy with a new fragrance and a formulation that ensured the soap did

not dissolve easily. The Total Fatty Matter (TFM) content was increased from 41% to

72%. The communication also moved beyond the male and the association of health with

victory, to a more all-around benefit for the entire family, with the tag line, Lifebuoy

badal gaya hai (Lifebuoy has changed). The relaunch included two versions, Lifebuoy

Active Red and Lifebuoy Active Orange. Lifebuoys market share by value increased from11.9% in 2001 to 15% in June 2003.

In May 2003, HLL extended the Lifebuoy brand to talcum powder and also tested a herbal

variant of the soap. Positioned as a `complete family health' product, Lifebuoy Family talc was

expected to provide `all day protection' and was meant to fight body odour-causing germs all day

long. Besides, HLL also released a commercial devised by its agency, Lowe, to highlight the

odour-causing problems associated with youth.

Dominated by Ponds Dreamflower talc (another HLL brand), the talcum powder category

seemed to be maturing and had been witnessing declining growth rates in the 1990s and 2000s.

Another talcum powder brand from the HLL stable might eat into the market share of Ponds

Dreamflower talc. It was also feared that Lifebuoy Talcs positioning as an effective protection

against odour causing germs, would eat into the market for its existing deodorant brands.

HLL believed that consumers desire for "something different" was one of the main factors

responsible for Lifebuoys falling market share. Through line extensions, HLL hoped to provide

a wide variety of goods under a single brand umbrella, fulfill customers' desires and keep

them loyal to the brand franchise.

In August 2003, in association with McDonalds, Lifebuoy launched the Healthy Hindustan

campaign across Mumbai, Pune, Ahmedabad and Baroda. The campaign highlighted the risk

that unseen germs on hands posed to childrens health. The aim was to rejuvenate and give a

new lease of life to its 107-year-old heritage brand.


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Lux

Launched in 1905, Lux was one of HLLs biggest soap brands. Positioned as the

filmstars choice, Lux had been endorsed by popular filmstars like Leela Chitnis in the 1940s, Sri Devi

in the 1990s, and Karishma Kapoor and Rani Mukherji in recent times. Lux came in three variants, Lux

Pink, Lux White and Lux Black.

HLL introduced Lux International in India in 2002, after a successful launch in the US,

Europe and South East Asia. Variants included moisturizing, sunscreen and deep cleansing

soaps and face washes. Film star Aishwarya Rai endorsed the international range.

With its strong linkage to beauty, HLL believed that it could extend Lux from the toilet soap to an

entire range of beauty products such as Moisturing body wash and Sun-protection products. In

April 2000, HLL introduced Lux Skincare soap, positioned on the sunscreen platform. Priced

at Rs.14 for a 75gm cake, it was able to garner only a 0.5% share by 2000 end. In

comparison, the mother brand Lux had a share of 14%. Retailers claimed that the Lux variant

was faring poorly as it promised only protection from ultraviolet rays. While this soap

prevented a person from growing darker, it did not promise to enhance the complexion.

International Lux Skincare Sunscreen Formula had been launched in response to a successful farness

soap launched by a rival company. However, HLL did not make any inroads into the fairness soaps

category through Lux sunscreen formula (soap). This brand extension was later withdrawn.

In response to the arrival of several foreign brands like Garnier (LOreal) and Ultra

Doux, HLL decided to extend the Lux brand name to shampoos in 2001. In overseas

markets, Lux shampoos had been rece ived well by the consumers . Lux shampoos were

also made available in 4 ml and 7 ml sachets priced at 50 paise and Re 1 respectively. There was also a

50 ml bottle priced at Rs 7.50. The shampoo range was endorsed by film stars Sushmita Sen,

Tabu, Mahima Chaudhry and Urmila Matondkar.

Lux shampoo started off well, achieving 4.6% market share in the South and 7.3% across the

country in 2002. However, after the initial trial purchases by curious customers, sales steadily

declined. HLL had to later withdraw the product. People seemed to find it difficult to associate

Lux with hair care.

Arun Adhikari managing director-health and personal care at HLL admitted,

For instance, on shampoos we should have reacted quicker and deeper. Instead of

responding with our lead brands, we launched Lux shampoo. With the benefit of hindsight,

it would have been better to use Sunsilk and Clinic, since they have meaning for the

consumer.4

In 2002, Lux launched its premium range of Lux International skincare products in India after a

successful launch in Europe and USA. The range, which also marked the extension of Lux brand

to face wash and body wash (liquid soap) category, comprised variants of moisturizing, deep

cleansing and sun protection face washes, body washes and bars.

The moisturizing body wash with an international formulation had fifty percent moisturizers,

mild cleansers and an enhanced fragrance. The product when used with the loofah worked up an

extra rich lather which left the skin exceptionally soft and pampered. The Deep Cleansing Body

Wash with natural glycerine and active cleansers penetrated deep into the skin removing excess

oil when used with the loofah. The Sun Protection Face Wash protected the skin from the harsh

rays of the sun and works towards maintaining fairness of the skin. Unlike shampoos, Luxs

4Gupta, Indrajeet and Rajshekhar M. Remaking Lever, www.businessworld.com,30thAugust 2004.


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extension to body wash did not seem to create any dissonance in the minds of consumers. Both

Lux Face Wash and Body Wash were moderately successful.

Through innovative schemes5, the market share of Lux in value terms increased from 13.3% in 2001

to 16.2% in June 2003. In mid-2003, Lux was re-launched in four variants - Rose Extracts,

Almond Oil, Fruit Extracts and Sandal Saffron with a base of rich milk cream. These soapswere packed in a metallic wrapper to retain the freshness and fragrance for a longer period

than usual. The TFM content was raised from 60% to 71%.

In 2004, Lux was given a make over to induce the more affluent consumers to upgrade to

higher priced premium products that offered a superior wash experience. The slow volume

growth in the soap market hit HLLs profits hard. Unable to increase volumes significantly,

HLL decided to increase unit profitability through such brand extensions. The new Lux was

moderately successful in select pockets. Luxs recent efforts aimed at increasing the Indian usage

of soaps, which continued to be low compared to international standards. Sachet and affordable

low unit packs were being used to attract more consumers.

Fair &Lovely

Fair & Lovely had been test marketed in 1975 and launched nationally in 1978. It

dominated the market in the 1980s and early 1990s, relatively unaffected by various

imitations launched by local players. Fair & Lovelys market share was larger than that of

the next seven skin cream brands put together.

In December 1999, Godrej launched FairGlow fairness soap, which claimed to remove blemishes

to give the user a smooth and glowing complexion. Positioned as twin advantage soap a

clean fresh bath and the added benefit of fairness, FairGlow, became very popular among

consumers. By 2000 end, Fair & Lovely cream seemed to be losing ground not only to

other creams but also to FairGlow soap. The switch from cream to soap was largely becausesoaps were perceived to be less harmful to the skin than cream. HLL did not have a product

in its soap portfolio for this segment. This was where Godrej seemed to have gained. In view

of the slowdown in the mass-market category, HLL launched Fair & Lovely Fairness Soap in

2001. This was also expected to develop and grow the premium segment of the market. Fair

& Lovely realized that it owned the skin fairness benefit strongly enough to extend the brand

from the original fairness cream to a lotion to a soap to an under-eye cream. HLL believed that it

was a low-cost, low-risk strategy to meet the needs of var ious customer segments.

Unwilling to be caught napping again, HLL decided to launch products in all the segments

in the fairness category. In early 2001, HLL launched Nutririch Fair & Lovely Fairness

Reviving Lotion targeted at the premium segment. The new product claimed to be scientifically

formulated to protect the skin from harmful ultraviolet rays and enhance natural fairness.The new formula, containing Triple UV Guard Sun protection system and the fairness

ingredients Vitamin B3 and milk proteins, promised to restore and protect the natural skin

colours from the suns darkening effects. The product also claimed to contain Niacinamide making it

the only patented formula fairness cream. It was targeted at women in the age group of 18-35

and was priced at a premium. A 50ml pack was priced at Rs.38 and a 100ml pack at Rs.68.

HLL also launched Pears Naturals Fairness cream at the same time.

5 In 2001, Lux announced its popular offer of the year 2000 - the Lux 22-Carat Gold Star, themed Chance

hai, in which consumers had a chance to find a gold coin inside their Lux soaps. The winners of these

gold coins had an opportunity to win an additional 30 grams of gold if after having found the gold coin,they called up an advertised telephone number. Each week, the first ten callers got an additional 30

grams of gold each. The offer was on 100 gms Lux (Pink, White and Black), which contained a 3-gmgold coin and 150 gms Lux (Pink and Black), which contained a 5-gm gold coin.


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The Fair & Lovely brand was extended todark circle under eye cream following the success

of a similar product from the LOreal stable. But this cream could not make a significant dent

into LOreals market share. Research revealed that mass-market consumers, with whom Fair &

Lovely was extremely popular, did not feel the need for a separate under eye cream. They

satisfied the need for an under eye cream with all purpose creams, fairness creams and home

remedies. Those who were willing to spend on an under eye cream, associated higher pricedglobal brand LOreal with superior performance and were willing to pay a premium.

In 2003, Fair & Lovely held a 53% market share followed by CavinKares Fairever with a

12% share and Godrej FairGlow with 3.5%. Other players included Emami with its Gold

Turmeric and Naturally Fair creams and Revlon (Fair & Glow).

HLL launched an ayurvedic version of Fair & Lovely, with ingredients like kumkumadi tailam

and jast bhasma, to cash in on the popularity of herbal products. In September 2003, HLL

came up with yet another variant, Fair & Lovely Fairness Cream with Extra Brightness

Saanwali Thwacha ke Liye (For Dark Skin). The new product was expected to bring extra

brightness with ingredients such as pearl extracts and milk cream, to the consumer who

was a shade darker. The white and purple pack came with a shade card that helped decipher the skincolor. The product was priced at Rs 26.50 and Rs 48 for 25 gm and 50 gm, respectively.

The commercial portrayed a dark complexioned girl, who on her friend's advice, chose to use the new

Fair & Lovely cream instead of the existing fairness cream. The groom was congratulated on

being a lucky man.

By mid-2003, the fairness concept was no longer restricted to creams and soaps, but had

expanded to talcs also. Emami test marketed a herbal fairness talc in the south. HLL also

extended Fair & Lovely brand to talc. Apart from tapping the fairness market, HLL wanted to

have more products in the talcum powder category so that it was not caught unawares by

rivals on any platform in the talcum powder category. (It had also launched extended Lifebuoy

and Vaseline to talcum powders apart from launching various variants of Ponds Dreamflower,the market leader in the category). HLL also realized that the usage of talcum powder as a

fairness product was quite prevalent, particularly in eastern and southern India. After test

marketing the product, HLL soon withdrew Fair and Lovely talcum powder.

In 2004, HLL also extended Fair and Lovely to the premium skin care segment by launching the

Perfect Radiance range. The extension highlighted radiance in a bid to attract the sophisticated

audience which was willing to spend money on radiance and thought that the emphasis on

fairness was downmarket.

Ponds

Pond's Cold Cream was launched in India in 1947. In 1956, the brand was extended to talcumpowder category with the launch of Dreamflower Talc, which effectively became a generic

product in the Indian talcum powder market. With a 53% share of the Rs 250-crore talcum

powder market, the brand penetrated almost every talc-consuming household in India. Apart

from Pond's Dreamflower, there were Pond's Dreamflower Magic, Pond's Sandal Talc with

'Natural Sunscreen' and Pond's Prickly Heat talc with SAM (Sweat Absorption Material).

But Ponds extension to toothpaste failed. Ponds brand equity was in the area of skincare and

freshness while consumers wanted hygiene from toothpaste.


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Banga mentioned,

The extension brought with it many of the associations of the parentage, which became

a limiting factor."6

In July 2003, HLL relaunched its Ponds Magic Talc with enhanced fragrance and a uniquedispensing mechanism. Instead of the traditional flip top caps, Ponds new packaging sported a

shutter mechanism to make dispensing easier, at the same time maintaining the talcs freshness

and fragrance.

Pond's also had a significant presence in the cold creams segment (worth about Rs 80

crores), with Pond's Cold Cream and Pond's Vanishing Cream. The 1990s witnessed plenty of

action in the skincare category. Specialized skincare products made rapid inroads overtaking

regular skin creams. To keep up with the times, Ponds launched variants and extensions in

quick succession -- Pond's Oil-Balance Formula and Pond's Age Defying Complex in the

specialized skin cream segment; Pond's Dreamflower Moisturizing Body Lotion, Pond's

Complexion Defense Moisturizer and Pond's Moisturizing Lotion in the moisturizer segment and

Pond's Face Wash in the face wash category.

Emphasizing the attribute of self- confidence, Ponds brand was targeted at Indian women

who were achievers in their own way. To strengthen its relationship with consumers, HLL established

the Pond's Institute in 1992 where consumers could send in their queries or walk in for expert advice on

skincare and personal care.

In the late 1990s, Ponds extended the brand to the soap category. One of the variants offered was

soap with the goodness of cold cream. There were trial purchases initially. However, the

product seemed to merge with the companys other offerings in the category like Lux skin care

soap and Dove soap with one quarter moisturisng cream. It was later withdrawn.The brand was

also extended to face wash category with skin protecting qualities. The product was successful in

the market.

In 2005, the skin offerings under the Pond's Brand name included Moisturising Cold Cream, All

Day Oil Control Cream, Daily Face Wash and Dreamflower Body Lotion. In talcs, Pond's had

four variants. Pond's Dreamflower Talc was enhanced with 'Floral Extracts', Pond's Sandal.

Vaseline

The other well-known brand from the Ponds stable was Vaseline, which was synonymous with

pet roleum jelly. The Vaseline petroleum jelly was perceived as an effec tive, though sticky

pro tection from dry skin problems experienced in winters .

HLL retained the formulation, but began to sell Vaseline lip guard in tubes and small plastic jars.

An instant success, the brand name was extended to Vaseline body lotion, a thick, milky, non-

sticky body lotion that provided effective protection from winter dryness. Vaseline body lotion

was different from Lakme body lotion in texture and appearance. While Ponds products targeted

face care, Vaseline stuck to body care. In response to the success of Krack Cream, a very

successful offering from a local company (Paras Pharmaceuticals), the Vaseline brand was

extended to heel care in 2000s. The Vaseline brand was also extended to talcum powder in mid-

2003. Unlike Ponds Dreamflower, Fair & Lovely and Lifebuoy which aimed at addressing the

freshness, fairness, and health need through talcs, Vaseline Talc was expected to address the skin

protection requirement. Vaselines extension to talcum powder category seemed to be another

attempt by HLL to hold on to its reigning 58 per cent value share in the talcum powder market.

6www.geocities.com/vedbsen/pw-brand-extension.htm


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Sunsilk

Launched in 1964, Sunsilk was the largest beauty shampoo brand in the country. Positioned

as the 'Hair Expert,' Sunsilk identified different hair needs and offered specific variants to

the consumer. In 1999, HLL introduced six hair specific variants of Sunsilk. In 2000, Sunsilk toyed

with extending the brand to ceramide hot oil treatment and test marketed it.

In 2001, HLL extended Sunsilks association with hair care by launching Sunsilk Pro-Colour,

a range of seven hair colours (Natural Black, Natural Dark Brown, Dark Brown with Purple

tint, Dark Reddish Brown, Light Brown with Gold tint and Copper with Red Tint) specially suited for

the dark Indian hair and skin tones. Priced at Rs.220 for a 200 ml pack, Sunsilk Pro-Colour was

launched after extensive clinical tests carried out in-house and via external associations such

as Cosmetology Society of India (CSI) to ensure the product's efficacy.

HLLs foray into hair colour was prompted by LOreals entry into India. With its Nutrisse

brand, L Oreal successfully created and captured the hair colour category in India (previouslyhair colour in India was only associated with hair dyes to cover grays). Wella, another cosmetic

major, also made a foray into professional hair colour category in India. Instead of entering the

hair colour category with a fresh brand, HLL decided to extend the Sunsilk brand, cashing on its

immense brand awareness and the brands association with hair care.

Despite the logical nature of the extension, the market share of Sunsilk hair colour continued to slip.

Industry observers felt that the product was not positioned properly. Moreover, the communication

strategy for Sunsilk Hair Colour did not seem to stand a chance against LOreal, which was backed by

international names like Cindy Crawford and Indian Miss Worlds like Aishwarya Rai and Diana

Hayden. The LOreal ads were also successful in communicating the superior finish of the hair colour.

Sunsilk Hair Colour was later withdrawn.

In 2002, HLL discontinued its Bouncy Volume and Ceramide Plus variants of Sunsilk

shampoo and decided to concentrate only on the four core variants, flagship black shine variant,

Sunsilk pink, Clean and Soft, and in an anti-dandruff variant. In late 2003, HLL relaunched its

Sunsilk brand under Sunsilk Natural shampoo with additional natural ingredients such as

lemon, amla and curd without any change in prices for its existing bottles and sachets.

The hair conditioning market had a few brands like Ultra Doux (from Garnier Labs) and Pantene from

P&G. Most shampoo brands offered conditioning as an additional benefit but HLL decided to

launch a stand-alone conditioner brand under the Sunsilk umbrella. In early 2003, HLL made a foray

into the hair conditioner market by another extension of the Sunsilk brand Sunsilk `Pro-

Conditioner. The product was moderately successful.

D Shivakumar, business unit head, Haircare, HLL mentioned,

Expert studies have shown us that everyday activities like rough brushing, incorrect

combing, harsh sunlight and pollution takes a toll on ones hair, making it dull and

lifeless. Sunsilk Pro-Conditioner with ingredients like Nutra-C and lotus flower extracts

forms a protective layer around each hair strand making it more manageable, strong and

lustrous.7

HLL also extended the Sunsilk brand to hair oil segment and test marketed Sunsilk Hot Oil

Actionhair oil in 1999. The product received a luke-warm reception in the market. Sunsilk Hot

7 Shetty, Sunayana. Sunsilk launches pro conditioner with Nutra-C,www.domain-b.com, 11

thFebruary

2003.


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Oil Action hair oil was withdrawn in early 2002 when HLL launched Nihaar brand coconut hair

oil.

Clinic

Clinic Plus was the largest shampoo brand with a market share of 31%. Clinic Plus waslaunched in 1987 as a new variant of Clinic Special, a 30 year old brand. Clinic Plus was

advertised as a family shampoo with the positioning of protein nourishment for the scalp. Clinic

Special was positioned as a hard-core anti-dandruff treatment shampoo. The

communication for Clinic Plus emphasized the mother-daughter bond. The packaging showed a

family with healthy hair. To pre-empt P&Gs high-end launch of Pantene with Pro-Vitamin B5,

HLL launched a new variant in 1991 Clinic Active with Pro-V. HLL extended Clinic Plus to

a non-sticky hair oil in the mid 1990s. But the variant met with poor response owing to competition

from Maricos Parachute.

In 1995, HLL turned its attention to Clinic Special and repositioned it as Clinic All Clear.

In 1999, in the face of onslaught from P&Gs Head & Shoulders, HLL relaunched Clinic All

Clear with a new formula ZPTO (Zinc Pyrithione, a chemical agent that removed flakes

from the scalp). The communication and endorsement were made by popular actor Shah

Rukh Khan (Exhibit: X). The punchline Dho Dala (washed out) implied dandruff free

hair at one go, coupled with the promise of healthy and shiny hair (Dandruff hataye, balon ko

swasth mulayam banaye) helped Clinic All Clear, to garner a 13% share. Due to its pricing

(Rs 71 for a 160 ml bottle against Rs. 68 for a 100 ml bottle of Head & Shoulders anti-

dandruff shampoo), the brand also had a significant rural market share of 44 %.

In the late 1990s, HLL extended the Clinic brand to the hair oil category. As Clinic had a strong

association with anti-dandruff qualities, it was felt that hair oil with the same USP would create

its own niche. HLL's Clinic Plus non-sticky hair oil (which combined coconut oil and mineral oil)

was an unqualified success initially. After successfully launching Nihaar hair oil in 2002 (It soonbecame the number two player in the hair oil category), HLL positioned Nihaar as its main brand

in the hair oil category, and Clinic was positioned as a niche brand targeting the anti-dandruff

market. The anti-dandruff hair oil market was very small in India. Clinic was the market leader in

this segment.

Axe

In 1999, HLL launched its Axe brand of deodorants in India. Priced at Rs. 120 per 150 ml, Axe

was Unilevers largest selling male toiletry brand in the world. The ad campaigns for Axe were

highly distinctive. For instance, HLL came up with a missing women campaign, where one

hoarding showed the Manhattan skyline, minus the Statue of Liberty with the tag line -

Courtesy Axe. Another example was the print ad that Axe ran on Valentines Day of 2000, in a

leading English daily. Axes black-and-white ad stood out with its message, Dont use Axe today, give

the other guys a break. Axe deodorants were so successful that its market share exceeded that of

HLLs largest selling brand Rexona. HLL even thought of phasing out Rexona.In late 2002, HLL extended Axe to a range of male grooming products like shaving cream,

shaving foam and after-shave lotion. Positioned as a cult brand for males, Axe targeted the 16

24 age group. Axe shaving cream, like the powder and deodorant offerings, had variants such as

Voodoo and Java. The campaigns for Axe were designed by Lowe and were unique in the sense that

they were based on the theories of Kamasutra, describing various after-shave positions

while using the brand.


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Pranesh Misra, Director, Lowe India commented,

The core ofAxe has always been seduction and we will be extending it to the shaving

products. But the seduction signal will have some difference and this is where we have

taken a leaf out of Kamasutra which gives the ultimate rules of seduction.8

The various brand extensions of Axe were very successful in the Indian market.

Lakme

Lakme dominated the Rs 1300 crore colour cosmetics market in 20059, with around 50%

market share, followed by Revlon. Lakme was a leader in nail, lip, face and eye makeup

products. Elle18, Lakmes mass brand aimed at teenagers was introduced in the mid-1990s.

Elle18 accounted for about 30% of HLLs colour cosmetics sales. The combined

distribution strength of Lakme and Elle18 brands spanned 65,000-odd outlets. In the late

1990s, Lakme faced new challenges in the cosmetics segment. Revlon staged an entry

through a 74:26 joint venture with Modi Mundi Pharma, followed by Maybelline. Competition

further intensified with the arrival of players like Oriflame, Avon and Amway, all directselling companies, which owned reputed global brands. While these brands served the premium end of

the colour cosmetics and skin care segment, inexpensive Chinese brands filled whatever gaps

existed in the mass market. The decision to launch minis in 2000 came in response to Modi

Revlon's move to introduce smaller pack sizes for lip colour and nail enamel (like the 8ml nail

enamel bottles instead of the usual 15 ml ones).

In the late 1990s, Lakme was extended to the branded beauty salon business, the first of its kind

in the country then. The Indian beauty parlour business was growing at 22 % a year with women

frequenting parlours on a regular basis, not just for special occasions, such as weddings, as they

did before. Lakme took note of that trend.

"We saw this mega shift taking place -- that women had started going to beauty parlours

and were aware of what they wanted. We realised that more and more women say 'I want

to look good, I don't know exactly how, so let me go to a salon because the beautician

and hair stylist there is the expert'."10

- mentioned Anil Chopra, head speciality business, HLL.

Lakme opened its first salon in Pune in 1999 as a test. It took six months to work out the glitches

and fine-tune its operations. The model that evolved was cloned in all its salons. The success in

Pune prompted Lakme to enter Mangalore, Mysore and Coimbatore. The company built

infrastructure in these southern cities, using Bangalore as a hub. The decision to expand in the

south and not the north first was logistically sound because the firm had established itself inBangalore and Chennai. But Lakme had other things on its mind too. The south was steeped in

tradition. As a rule, its colour cosmetics division had always struggled there. Cosmetic majors

had always found it easier to tap customers in the north and west with beauty products, than in

the tradition bound southern and eastern markets. HLL planned to strengthen its hold in the west,

north and south before it moved to Bengal or Assam.

In 2002, the Rs 500-crore11

cosmetics industry was growing at between 7 and 9 per cent a year --

with international brands entering the market at the rate of almost one a month.

8

Purvita, Chatterjee. HLL extends Axe to shaving range, www.blonnet.com,16

th

November 2002.9Industry-wise Releases & Financials, medianet.indiatimes.com, April 2005.10

Vidya, Srinivas. Beauty Spread,Business India,10thJune 2002.

11 Krishnan, Sowmya. Cosmetics more than skin deep, www.blonnet.com,8thJuly 2002.


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An analyst observed,

"If we look in macro perspective, the market in the cosmetic category is approaching

product quality parity as well as, to some extent, price parity with the launch of several

brands in recent times. Hence any retailer or marketer who wants to differentiate his

brandneeds to look at the 'service' element. Lakme beauty salon is a very good exampleof product extension to service."

12

Analysts believed that if the plan succeeded nationwide it would strengthen the Lakme brand.

As one of them mentioned,

"It has spin-off effects. It will help in acquiring new customers, developing customer

intimacy and relationships, and will become a place to experiment with new products. 13

In 2002, HLL decided to reposition Lakme as an upper-end brand and target the top 10 million

women in the country. Its task is not to upgrade women in small towns. HLL has a presence in

mass and upper mass skin-care products. We have now decided to tap the affordable premium

skin segment, because this segment is growing, mentioned Vivek Rampal, General Manager,

skin care, HLL.

Lakmes new variants of existing products line like moisturizers, lipsticks, creams and cleansing

milk targeted the premium and super premium segment. Even as the company launched high-

priced products in rapid succession, it slowly withdrew the older products.

Lakmess brand extensions also reflected the new strategy. In late 2002, it launched Lakme anti-

wrinkle cream Forever Young (priced at Rs 110 for 30 ml), Lakme Perfect Definition Lip Liners

(Vitamin E enriched, hypoallergenic and water-resistantlipliners cost Rs 90) and Lakme

Strawberry Silk Crme (priced at Rs 65 for 50 ml). Though the Lakme brand reached 90,000retail outlets, the premium skin products were distributed only to specific towns and cities. Conclusion

In May 2004, HLL decided to withdraw Lifebuoy talc, which had captured a 2% market share

in the talc category. As Lifebuoy was the largest selling soap brand in its kitty, HLL felt that its

powder variant also needed to have significant shares to justify its existence in the market.

"We have had reasonable success with Lifebuoy talcum powder and are not exactly

gloriously happy about it. When you have a brand as big as Lifebuoy, you have got to

have entries that are equally big. We are not satisfied with a 2 per cent share for

Lifebuoy Talc. It should have either a 10 per cent share or should not exist at all,'' 14

- mentioned Gopal Vittal, Vice-President, Personal Wash, HLL.

Vaseline Talc was withdrawn after a lukewarm reception in the market for two years.

12 Mentioned Hemendra Mathur, an executive with the retail consultancy, KSA-Technopak.13

ibid.14Purvita, Chatterjee. HLL reviewing market for Lifebuoy talcum, www.blonnet.com,11th May 2004


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Exhibit 1

Lifebuoy

Source: www.hll.com

Exhibit 2

Fair & Lovely

Source: www.hll.com


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Exhibit 3

Lux

Source: www.hll.comExhibit 4

Ponds

Source: www.hll.com

Exhibit 5

Clinic All Clear

Source: www.hll.com


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Exhibit 6

Sunsilk

Source: www.hll.com

Exhibit 7

Lakme

Source: www.hll.com


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Exhibit 8

Axe

Source: www.hll.com

Exhibit 9

Lakme Beauty Salon

Source: Lakme salon launched in Kochi, Business Line, 28thMarch 2002.


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Exhibit 10

HLL Brand Activity Since 2000

YEAR BRAND ACTIVITY

2000 Lakm Cosmetics brand extended into beauty salons

2001 Sunsilk Shampoo brand is relaunched

2001 Sunsilk Shampoo brand extended into hair colour

2001 Fair & Lovely Fairness cream extended into soap

2001 Lux Relaunched with four variants

2002 Fair & Lovely Fairness creams ayurvedic variant launch

2002 Axe Deodorant brand extended into male grooming products

2002 Vaseline Petroleum jellys Crack Relief variant launched

2002 Lifebuoy Relaunched as a milled toilet soap with new perfume, sheddingthe earlier carbolic form

2003 Fair&Lovely Anti-marks variant launched

2003 Fair&Lovely Deep Skin variant launch

2003 Sunsilk Shampoo brand is relaunched with natural ingredients

2003 Pepsodent Toothpaste brand is relaunched with two new flavours

2004 Fair & LovelySub-brand Perfect Radiance, a range of premium skin care

products, launched2004 Lux Soap brand extends into body wash

2004 Lifebuoy Toilet soap relaunched and shape changed again

2004LuxInternational

Toilet soap brand relaunched

Source: www.hll.com


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Bibliography

1. Quelch, John A and Kenny, David. Extend Profits, Not Product Lines, Harvard

Business Review,September/October 1994, Vol. 72, Issue 5, pp.153-160.

2. Aarati, Krishnan. Putting money where the lather is, www.blonnet.com, 21st

January2001.

3. Gagandeep, Kaur. HLL to reposition Close Up to add zing to oral care sales,Business

Standard, 5thFebruary 2002.

4. Ratna, Bhushan. Leveraging Lakme, The Hindu Business Line- Catalyst, 7th

February

2002.

5. Prasad, Sangameshwaran. A fresh lease of Lifebuoy?Business Standard, 19th

February

2002.

6. Lakme salon launched in Kochi, www.blonnet.com, 28thMarch 2002.

7. Vidya, Srinivas. Beauty spreadBusiness India,10th

June 2002.

8. Gouri, Shukla and Prasad, Sangameshwaran. Think global, act glocal, Business

Standard, 27th

August 2002.

9. Krishnan, Sowmya. Cosmetics more than skin deep, www.blonnet.com, 8thJuly 2002.

10. Sravanthi, Challapalli. Alls fair in this market, www.blonnet.com, 5thSeptember 2002.

11. Purvita, Chatterjee. HLL extends Axe to shaving range, www.blonnet.com, 16th

November 2002.

12. Purvita, Chatterjee. HLL forays into hair conditioners market, www.blonnet.com,21st

January 2003.

13. Shetty, Sunayana.Sunsilk launches pro conditioner with Nutra-C,www.domain-b.com,

11th

February 2003.

14. HLL relaunches Ponds Magic Talc, www.indiantelevision.com,2nd

July 2003.

15. Fair & Lovely communicating on a different pitch, www.domain-b.com,7th

July 2003.

16. Lifebuoy launches the Healthy Hindustan campaign, www.retailyatra.com, 22nd

August 2003.

17. Purvita Chatterjee, HLL comes out with a new variant of Fair & Lovely,

www.blonnet.com,9th

September 2003.

18. Purvita, Chatterjee. HLL withdraws Vaseline talc, www.blonnet.com, 30thMarch 2004.

19. Purvita, Chatterjee. HLL Reviewing Market for Lifebuoy Talcum, www.blonnet.com,

11th

May 2004.

20. Industry-wise Releases & Financials, medianet.indiatimes.com,April 2005.

21. www.geocities.com/vedbsen/pw-brand-extension.htm

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unilever brand extensions in india

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