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CHAPTER 1 INTRODUCTION

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1.1.

CONCEPTUAL FRAMEWORK

In today's highly competitive environment, organizations are convinced that a company's success can increase with frequent launch of new products to satisfy the constantly changing customer preferences. Launching new products can be an attractive growth strategy; however, this can be risky too. According to the existing research, 30-35% of newly launched products fail. Due to factors such as high advertising costs and increasing competition, it has become very difficult to succeed with new products. An increasingly popular approach to reduce risks when launching new products is to follow a brand extension strategy. During the last two decades, more than 40 empirical studies have been conducted worldwide, to address the conditions under which brand extensions are successful, however many aspects still remain unexplored. This study primarily focuses on consumer evaluation of brand extension for FMCG (Fast Moving Consumer Goods), services and consumer durables product categories in the Indian context. The study examines the ways in which consumers evaluate brand extensions based on factors like parent brand reputation, similarity or fit between the parent brand and the brand extension, consumer innovativeness, and perceived risk or uncertainty. More importantly, the study explores the differences in the consumers' evaluation of FMCG, services and consumer durables brand extension and looks at the influence of various factors on the overall evaluation of the brand extension through HUL products. Research aimed at understanding how consumers respond to brand extensions has been an important area of inquiry in the past decade with the help of HUL brand extension. A number of factors have been identified that influence whether consumers will evaluate brand extensions in a favourable manner. Key among them is the degree to which a brand extension fits with the parent brand, which consumers judge in a variety of ways, including whether the extension is in a product class similar to other products produced by the parent brand and whether an attribute associated with the parent brand could be beneficial in the extension product class. Brand extensions that fit well with the parent brand are usually evaluated quite favourably.

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1.1.1.

FMCG INDUSTRY

A type of goods that is consumed every day by the average consumer, the goods that comprise this category are ones that need to be replaced frequently, compared to those that are usable for extended periods of time. While CPGs represent a market that will always have consumers, it is highly competitive due to high market saturation and low consumer switching costs. It is alternatively called as CPG (Consumer packaged goods) industry primarily deals with the production, distribution and marketing of consumer packaged goods. The Fast Moving Consumer Goods (FMCG) is those consumables which are normally consumed by the consumers at a regular interval. Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc. The industry also engaged in operations, management. FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is estimated to grow 60% by 2010. FMCG industry is regarded as the largest sector in New Zealand which accounts for 5% of Gross Domestic Product (GDP). Common FMCG products Some common FMCG product categories include food and dairy products, glassware, paper products, pharmaceuticals, consumer electronics, packaged food products, plastic goods, printing and stationery, household products, photography, drinks etc. and some of the examples of FMCG products are coffee, tea, dry cells, greeting cards, gifts. supply chain, production and general

Page |4 Market Potentiality of FMCG industry Some of the merits of FMCG industry, which made this industry as a potential one, are low operational cost, strong distribution networks, presence of renowned FMCG companies. Population growth is another factor which is responsible behind the success of this industry. Leading FMCG companies Some of the well known FMCG companies are Nestl, Emami, Amul, ITC, Marico, Hindustan Unilever, Procter & Gamble, Coca-Cola, Britannia, Pepsi and Mars etc. The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest sector in the economy. A well-established distribution network, intense competition between the organized and unorganized segments characterizes the sector. FMCG Sector is expected to grow by over 60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated that FMCG sector will rise from around Rs 56,500 Crores in 2005 to Rs 92,100 Crores in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments, says an HSBC report. Though the sector witnessed a slower growth in 2002-2004, it has been able to make a fine recovery since then. For example, Hindustan Levers Limited (HLL) has shown a healthy growth in the last quarter. An estimated double-digit growth over the next few years shows that the good times are likely to continue. Growth Prospects: With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded

Page |5 products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise in 2007, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas. FMCG companies extend brands to boost growth and gain market share. In a bid to garner higher market share and sustain long-term growth, fast moving consumer goods (FMCG) companies such as Coca-Cola, Nestle, PepsiCo, Dabur, Marico and Godrej have adopted a brand extension strategy amid negative factors such as high inflation and the global financial crisis. According to marketing research company IMRB, the FMCG companies launched 251 products (223 variants and 28 brands) in calendar year 2007 as against 191 (173 variants and 18 brands) in 2006. The industry pegs the number of variants and extensions launched this year to be in line with 2007. There has been evidence of down trading in the FMCG sector, especially the mid-level brands. Companies are likely to leverage their strong brands by introducing variants across high-end and low-end ranges. For instance, Nestle launched a record number of variants this year from its Maggi Cuppa Mania (the instant cup noodles), Maggi Pichkoo (a tomato ketchup pouch pack) to Maggi Bhuna Masala (a readymade cooking aid). It also introduced NesVita Pro-Heart, a fat-free packaged milk product in Delhi/NCR region.

Page |6 Other FMCG leading players such as Marico had launched Saffola Functional Food for diabetics management and Britannia launched Nutri Choice 5 Grain, a biscuit made from five healthy cereals. Dabur too unveiled a pudina variant of its popular Hajmola brand apart from extending its Gulabari skin-care range. Beverage Company Coca-Cola India introduced apple flavour for its Fanta brand as its rival PepsiCo chose to introduce apple flavour for its Tropicana Twister range. PepsiCos food wing, Frito Lay, extended its Kurkure range with Desi Beats apart from introducing new flavours for Quaker Oats. Godrej Consumer Products (GCPL) stretched its Ezee brand as a daily wash liquid detergent under the new variant, Bright & Soft, and it intends to further extend it to the post-wash category. Soup was another category which witnessed a lot of action. While HUL launched a range of Knorr soups targeted at mass markets, Nestle launched a slew of local variants of its Maggi soup. Rising income and growing aspirations, coupled with lower penetration levels, have fuelled strong demand for lifestyle and value-added products. Brand extensions provide a more economical and risk-free approach of sustaining growth in the present economic environment as against launching a new product for FMCG players. Industry observers also feel that for most of the brand variants, manufacturers need to marginally tweak the production line to accommodate the new product as against a new brand which may require more infrastructures. In terms of categories, brand extensions in personal-care, household-care and processed foods drove growth in the FMCG sector. Analysts believe that most of the new launches next year will also happen under these categories. In the processed foods segment, health and wellness has been the major theme playing out, with most players rolling out products around this platform.

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1.1.2. Brand & Brand Extension

Brand extension or brand stretching is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category. Organizations use this strategy to increase and leverage brand equity (definition: the net worth and long-term sustainability just from the renowned name). Brand extension is not a new notion in the FMCG industry; rather it is in use for several years. It has been observed that brand extensions are mostly preferred by FMCG companies due to the low involvement of the customers and highly competitive market environment which leads the companies to introduce the product frequently in the market. The present study makes an effort to study consumer responses towards brand extension in FMCG industry. Because a new brand involves huge cost and risk, therefore, companies may alternatively resort to extend their brand or lines as a more feasible growth strategy option. Brand Extension can happen in two ways: extending the line (line extension) and extending the category (category extension). In Indian FMCG market, most of the big players are using the line extension rather than brand extension because in line extension, parent brands give strong recognition to the new brand and some of the famed and successful examples lines of extension under parent brand are Lux, Dairy Milk, FritoLays, etc. On the other hand, category extension is playing an important role in grabbing the market share because category extension provides differentiation strategy to attract large number of consumers and some of the famed names of category extension are HUL soap category, GSK malted beverages, etc. A brand extension under the parent brand also reduces the goodwill in the market due to the failure and over success of the extended brand and misconception to some extent. Brand extension sometimes also results in cannibalization where the extended brands eat the sales of parent brand. Cannibalization is a very real threat for the vast majority of new product launches. But there have been little empirical work which quantifies this threat, or which examines the measures which can be used to define it. Some of the examples of failure of brand extensions are Ponds toothpaste, Frito-Lay Lemonade, Heinz all natural cleaning vinegar and lot more. Here, brand reputation plays a very important role because status for a new brand is totally dependent on the parent brand and its qualities. In brand extension, there is a benefit for

Page |8 consumers to reduce risk and to choose new brand which has been launched under the wellestablished parent brand, this factor provides dual benefits first for the brand company and second for the consumer. The risk involvement also varies from extension to extension; in category extension, risk is more because brand is totally new for the consumer and perceived risk is also there, but in the line extension, it will be less because brand reputation of parent brand already exists in consumers mind. In todays scenario, it is very normal and active, due to low involvement in FMCG industry & these companies are very rigorous about innovation and new ideas about extensions to attract more and more consumers and to compete in the market. Therefore, it is imperative to know the consumer understanding of brand extension and whether they recognize such phenomena or not. Generally a successful parent brand rules the mind of the customers and gives a sturdy perception to consumer about their new expansion which resulted in the launch of new product/ innovations under the parent brand through line and category extension. Further it has also been observed that consumers are more influenced towards parent extended brands. The research tries to explore the brand extension concept and duly assess the impact of extending a brand on the brand from the customer point of view.

The contemporary hypercompetitive market makes it inevitable for the companies to introduce extensions strategically and efficiently to survive and compete. And more so, in case of FMCG (Fast Moving Consumer Goods) industry, this is attributed to the low emotional loyalty and low involvement in most of the product categories. Brand extension is not a new notion in the FMCG industry; rather it is in use for several years. It has been observed that brand extensions are mostly preferred by FMCG companies due to the low involvement of the customers and highly competitive market environment which leads the companies to introduced the product frequently in the market. The present study makes an effort to study consumer responses towards brand extension in FMCG industry. Because a new brand involves huge cost and risk, therefore, companies may alternatively resort to extend their brand or lines as a more feasible growth strategy option. Brand Extension can happen in two ways: expending the line (line extension) and extending the category (category extension). Indian FMCG market most of the big players are using the line extension rather than brand extension because in line extension parent brands give strong recognition to the new brand And some of the famed and successful examples line extension under parent brand are Lux. Dairy Milk, Frito-Lays, etc. On the other hand, category

Page |9 extension is playing an important role in grabbing the market share because category extension provides differentiation strategy to attract large number of consumers, and some of the famed names of category extension are HUL soap category, GSK malted beverages, etc. A brand extension under the parent brand also reduces the goodwill in the market due to the failure and over success of the extended brand and misconception to some extent. Brand extension sometimes also results in cannibalization where the extended brands eat the sales of parent brand. Cannibalization is a very real threat for the vast majority of new product launches. But there have been little empirical work which quantifies this threat, or which examines the measures which can be used to define it. Some of the examples of failure of brand extensions are Ponds toothpaste, Frito-Lay Lemonade, Heinz all natural cleaning vinegar and lot more. Here, brand reputation plays a very important role because status for a new brand is totally dependent on the parent brand and its qualities. In brand extension there is benefit for consumers to reduce risk and to choose new brand which has been launched under the well-established parent brand, this factor provides dual benefits first for the brand company and second for the consumer. The risk involvement also varies from extension to extension; in category extension risk is more because brand is totally new for the consumer and perceived risk is too, but in the line extension it will less because brand reputation of parent brand already exists in consumers mind. In todays scenario it is very normal and active, due to low involvement in FMCG industry companies are very rigorous about innovation and new ideas about extensions to attract more and more consumers and to compete in the market. Therefore, it is imperative to know the consumer understanding of brand extension and whether they recognize such phenomena or not. Generally a successful parent brand rules the mind of the customers and gives a sturdy perception to consumer about their new expansion which resulted in the launch of new product/ innovations under the parent brand through line and category extension. Further it has also been observed that consumers are more influenced towards parent extended brands. The research tries to explore the brand extension concept and duly assess the impact of extending a brand on the brand from the customer point of view.

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BRAND Brand Brand is an important part of a product & branding can add value to a product. Branding has become so strong today that hardly there is anything unbranded. A brand is an identity which represents a promise of value associated with a particular product, service or organization. A brand is a name, term, sign, symbol, or design or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Examples: Brooke Bond Red Label, Fair & lovely, Dove, etc.

Brands are different from products in a way that brands are what the consumers buy, while products are what companies make. Brand is an accumulation of emotional and functional associations. Brand is a promise that the product will perform as per customers expectations. It shapes customers expectations about the product. Brands usually have a trademark which protects them from use by others. A brand gives particular information about the organization, good or service, differentiating it from others in marketplace. Brand carries an assurance about the characteristics that make the product or service unique. A strong brand is a means of making people aware of what the company represents and what its offerings are.

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To a consumer, brand means and signifies:

Source of product Delegating responsibility to the manufacturer of product Lower risk Less search cost Quality symbol Deal or pact with the product manufacturer Symbolic device.

Brands simplify consumers purchase decision. Over a period of time, consumers discover the brands which satisfy their need. If the consumers recognize a particular brand and have knowledge about it, they make quick purchase decision and save lot of time. Also, they save search costs for product. Consumers remain committed and loyal to a brand as long as they believe and have an implicit understanding that the brand will continue meeting their expectations and perform in the desired manner consistently. As long as the consumers get benefits and satisfaction from consumption of the product, they will more likely continue to buy that brand. Brands also play a crucial role in signifying certain product features to consumers. A brand connects the four crucial elements of an enterprise- customers, employees, management and shareholders. Brand is nothing but an assortment of memories in customers mind. Brand represents values, ideas and even personality. It is a set of functional, emotional and rational associations and benefits which have occupied target markets mind. Associations are nothing but the images and symbols associated with the brand or brand benefits, such as, The Nike Swoosh, The Nokia sound, etc. Benefits are the basis for purchase decision.

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BRAND EXTENSION Brand extension is using the leverage of a well known brand name in one category to launch a new product in a different category. Brand Extension is the use of an established brand name in new product categories. This new category to which the brand is extended can be related or unrelated to the existing product categories. A renowned/successful brand helps an organization to launch products in new categories more easily. For instance, Nikes brand core product is shoes. But it is now extended to sunglasses, soccer balls, basketballs, and golf equipments. An existing brand that gives rise to a brand extension is referred to as parent brand. If the customers of the new business have values and aspirations synchronizing/matching those of the core business, and if these values and aspirations are embodied in the brand, it is likely to be accepted by customers in the new business. Extending a brand outside its core product category can be beneficial in a sense that it helps evaluating product category opportunities, identifies resource requirements, and lowers risk, and measures brands relevance and appeal. Brand extension may be successful or unsuccessful. In the 1990s, 81% of new products used brand extension to introduce new brands and to create sales. Launching a new product is not only time consuming but also needs a big budget to create awareness and to promote a product's benefits. Brand extension is one of the new product development strategies which can reduce financial risk by using the parent brand name to enhance consumers' perception due to the core brand equity. While there can be significant benefits in brand extension strategies, there can also be significant risks, resulting in a diluted or severely damaged brand image. Poor choices for brand extension may dilute and deteriorate the core brand and damage the brand equity. Most of the literature focuses on the consumer evaluation and positive impact on parent brand. In practical cases, the failures of brand extension are at higher rate than the successes. Some studies show that negative impact may dilute brand image and equity. In spite of the positive impact of brand extension, negative association and wrong communication strategy do harm to the parent brand even brand family.

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ADVANTAGES OF BRAND EXTENSION Brand Extension has following advantages: 1. 2. 3. 4. It makes acceptance of new product easy. It increases brand image. The risk perceived by the customer reduces. The likelihood of gaining distribution and trial increases. An established brand name increases consumers interest and willingness to try new product having the established brand. 5. The efficiency of promotional expenditure increases. Advertising, selling and promotional cost are reduced. There are economies of scale as advertising for core brand and its extension reinforces each other. 6. 7. 8. 9. Cost of developing new brand is saved. Consumers can now seek for a variety. There are packaging and labelling efficiencies. The expense of introductory and follow up marketing programs is reduced.

10. There are feedback benefits to the parent brand and the organization.

11. The image of parent brand is enhanced. 12. It revives the brand. 13. It allows the subsequent extensions. 14. Brand image is clarified. 15. It increases market coverage as it brings new customers into brand franchise. 16. Customers associate original brand to new product, hence they also have quality associations.

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DISADVANTAGES OF BRAND EXTENSION 1. Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended too far. An organization must research the product categories in which the established brand will work. 2. There is risk that the new product may generate implications that damage the image of the core brand. 3. There are chances of less awareness and trial because the management may not provide enough investment for the introduction of new product assuming that the spin-off effect from the original brand name will compensate. 4. If the brand extension has no advantage over competitive brands in the new categories, then it will fail.

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1.2. BRIEF INTRODUCTION ABOUT HUL

Hindustan Unilever Limited
Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages. They endow the company with a scale of combined volumes of about 4 million tones and sales of over Rs. 13,000 Crores. HUL is also one of the country's largest exporters; it has been recognized as a Golden Super Star Trading House by the Government of India. Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company owned by the European company Unilever. The Anglo-Dutch company Unilever owns a 52% majority stake. In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity in the company. The rest of the shareholding is distributed among about 360,675 individual shareholders and financial institutions. It is headquartered in Mumbai, India and has employee strength of over 15,000 employees and contributes to indirect employment of over 52,000 people. The company was renamed in June 2007 as Hindustan Unilever Limited. Hindustan Unilever's distribution covers over 1 million retail outlets across India directly and its products are available in over 6.3 million outlets in the country, nearly 80% of all retail outlets in India. The company claims that two out of three Indians use its many home and personal care products, food and beverages.

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In the early 2000s, as HUL struggled to generate growth, brand extension became an important strategic option. HUL extended its popular brands into the premium segment to increase its profits. By early 2003, HUL had launched a number of brand extensions with varying degrees of success. In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern Foods to HUL, thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of the company's wheat business. In 2002, HUL acquired the government's remaining stake in Modern Foods. HUL launched a slew of new business initiatives in the early part of 2000s. Project Shakti was started in 2001. It is a rural initiative that targets small villages populated by less than 5000 individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages across 15 states and reaching to over 3 million homes. In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the Ayush product range and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home business was launched in 2003 and this was followed by the launch of Pureit water purifier in 2004. In 2003, in what seemed to be in response to intensifying competition in several segments, HUL decided to strengthen its already overwhelming presence in the talcum powder category where its brand, Ponds Dream flower, was already the market leader. HUL also extended Lifebuoy, Vaseline and Fair & Lovely to Talc category. Senior HUL executives wondered if these brand extensions would yield the benefits they promised. In 2005, Hindustan Lever Limited (HLL), the Indian subsidiary of Unilever, was the country's largest fast moving consumer goods (FMCG) company. HLL's portfolio of brands included Lux, Lifebuoy, Liril, Surf, Ponds Vaseline, Vim, Clinic All Clear and Axe. Most of these brands had been market leaders for several years in their respective product categories. Over the years, HLL had extended many of its popular brands with varying degree of success.

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Some extensions like Clinic All Clear anti-dandruff shampoo to hair oil category had been successful, while others like Ponds Toothpaste had been a dismal failure. In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25 years by Business world, one of Indias leading business magazines. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. It has over 35 brands. Sixteen of HULs brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2008). HUL has the largest number of brands in the Most Trusted Brands List. Its a company that has consistently had the largest number of brands in the Top 50 and in the Top 10 (with 4 brands).HUL was one of the eight Indian companies to be featured on the Forbes list of Worlds Most Reputed companies in 2007.

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1.2.1. HUL BRANDS

HUL products are a household name in India. Its brands across categories touch lives of over 700 million Indian consumers every day. That means roughly two-third of Indian population uses HUL products. The two biggest strengths of HUL are: its leading brands and extensive distribution network. a) Brands: HUL has around 35 major brands most which are leaders in their individual

categories. In the year 2008 AC Nielsen-Brand Equity list of 100 Most Trusted Brands Annual Survey featured 16 HUL brands. HUL consistently has highest number of brands in top 50 or top 10 Indian brands list. b) Distribution Channel: HUL products are manufactured in over 40 factories across India.

Over 2000 suppliers and associates are involved in its operations. The giant HUL distribution network comprises of around 4000 redistribution stockists and 6.3 million retailer outlets. The wide-spread distribution network reaches almost entire urban India and around 250 million rural consumers. With the introduction of Hindustan Unilever Network in 2003 HUL is trying its hand at Network Marketing. Lately, HULs Shakti program, which supports rural women to become entrepreneurs and sell HUL products in villages increases the reach of HUL and provides it a unique capability to tap the still unexplored bottom-of-the-pyramid opportunities. Of late, HUL is trying to reduce the inventory requirements by unbundling the distributors. As per the pilot project in Mumbai, number of distributors has decreased drastically from 22 in 2007 to only 5 in 2008. As a responsible corporation of the country, HUL has adopted the triple bottom-line approach to address environmental and social concerns. Following are the three key pillars in this approach:

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HUL is the proud owner of around 35 major Indian brands. HUL has divided its products into following categories: Home and Personal Care, Food and Water Purifier. In the Home and Personal care category, HUL has maximum number of brands. It is again subdivided into eight sub-categories:

The individual brands within these sub-categories are listed next:

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The Food port folio of the company comprises of following brands:

Examples: 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, Lifebuoy's market share slid from 15.4% in 1997 to 12.5% in 2001. Initially, Lifebuoy decided not to tinker with the core brand...

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Lux
Launched in 1905, Lux was one of HLL's biggest soap brands. Positioned as the filmstar's choice, Lux had been endorsed by popular filmstars like Leela Chitnis in the 1940s, Shri 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.

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

Vaseline
The other well-known brand from the Pond's stable was Vaseline, which was synonymous with petroleum jelly. The Vaseline petroleum jelly was perceived as an effective, though sticky protection from dry skin problems experienced in winters.

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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, nonsticky body lotion that provided effective protection from winter dryness.

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 Sunsilk's 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...

Clinic Plus
Clinic Plus was the largest shampoo brand with a market share of 31%. Clinic Plus was launched 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.

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Consumers: Making a difference through HUL brands

Making a difference through HUL brands.. Despite advances in science and increasing prosperity, millions of people still lack access to basic sanitation, nutrition and healthcare. The HUL, as an organization believe that their brands can grow by addressing some of the most important social and environmental challenges facing the country today. In 2005, the company started to embed the sustainability agenda into their brands by using a process called Brand Imprint. It is a rigorous, diagnostic process that analyses the social and economic value, as well as the negative impacts of a brand. This process has been carried out across all their key categories. Social and environmental considerations are now integrated with innovation plans for their major brands. They believe that they can make a difference through their brands and behaviour change campaigns in the space of nutrition and hygiene, and by providing consumers, from all income groups, access to a better life.

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Two pillars - strong brand equity and a wide distribution network, characterize the fast moving consumer goods business. Brand equities are built over a period of time by technological innovations, consistent high quality, aggressive advertisement and marketing. Availability near the consumer through a wide distribution network is another crucial success factor, as products are of small value, frequently purchased daily use items. HUL is strong on both these fronts with 110 brands and a 1mn strong direct retail reach. Competitive Position: HUL is the market leader in the detergent and soap industry. Nirma is a close competitor in detergents and has been slowly gaining ground in toilet soaps too. The other significant competitor in detergents is P&G. Despite being the global leader in this segment, has been unable to achieve a critical mass in India due to premium pricing strategy. In oral care segment, HUL has emerged as a strong No 2 player, giving stiff competition to the market leader Colgate. In the hair care segment, HUL dominates the shampoo market and is the No 2 player in hair oils. In the skin care market, besides competition from leading global players, HUL has also been losing share to south based player Cavincare Ltd. In the foods business, Tata Tea in packet tea, Nestle in coffee and culinary products, GCMMF (Amul) in ice creams, and Godrej Pillsbury in staple food are the main competitors.

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Society: Creating a Positive Impact

Creating a positive impact.. They believe that the true worth of an organization comprises more than just its business achievements. The service it renders to society bestows great value on the organization itself. HUL has committed to create a responsible leadership that has a positive impact on society, and helps solve its most challenging issues. In 2009, HUL contributed INR 30 crores towards community related initiatives. Their contribution in 2009 went either to long-term community investment partnerships or to commercial initiatives, with mutual benefits for both their business and their partners. The United Nations reports that people need a minimum of 50 litres of water a day for drinking and other basic needs. In India, more than 50%of the population lives on less than 10 litres of water a day. Approximately 70% of the total water is consumed by the agriculture sector. India is an agri-economy, and as its population grows, there will be an increase in water consumption by the agriculture sector. These issues are likely to be exacerbated by climate change, making access to water an issue for farmers and society. What they do? HUL have identified water conservation as an issue they would like to focus their energies on. They are working in close partnership with their stakeholders to conserve precious drops of water. Water management has been a key area of focus for HUL across the entire value chain. They are also engaged in community projects to conserve water. They aim to conserve more than 20 billion litres of water by 2015.

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1.2.2. Awards & Recognition

These are some highlights of recognition that HUL have received from external bodies on their social, economic and environmental performance during 2009 and 2010..

Awarded top Indian company in the 'FMCG' sector for the third consecutive year at Dun & Bradstreet-Rolta Corporate Awards, 2009 HUL ranked fourth in the Top Companies for Leaders, 2009' (Asia Pacific region) and 10th place in the global rankings in a survey carried out by Hewitt Associates HUL received the Award for Excellence in HR in 2010 from Confederation of Indian Industry (CII). This is a rigorous fact-based assessment which is conducted by a team of external assessors. HUL has won this award for the third consecutive year.

Awarded Customer and Brand Loyalty Award by Business India & Business Standard in 2009 Awarded for Best Corporate Social Responsibility Practice at the Social & Corporate Governance Awards 08-09 by BSE, Nasscom Foundation and Times Foundation Awarded in the Category 'FMCG Manufacturing Supply Chain Excellence' at the Third Express, Logistics & Supply Chain Awards by APL Logistics, Indiatimes, Mindscape, Business India Group in 2009

Our Orai unit received the Gold Excellence award and the Khalilabad unit received the Silver Excellence award in the environment category by Greentech Foundation in 2009 HUL's Goa factory won a Gold Trophy at the Greentech Awards in 2009 the manufacturing sector category for their outstanding work in Safety Management Project Shakti won the Silver Trophy at the EMPI-Indian Express Indian Innovation Awards, 2009 Kwality Wall's Swirl's awarded 'The Franchisor of the year' for the Ice-cream parlour category by Franchise India in 2009

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HUL brands have topped Brand Equity's Indias Most Trusted Brands Survey rankings for 2010. Six HUL brands (Lux, Lifebuoy, Clinic Plus, Pond's, Fair & Lovely and Pepsodent) feature in the top 10 and eight in the top 20. All together there are 17 HUL brands among the 100 most trusted brands in the 2010 survey. Additionally, five HUL brands (Fair & Lovely, Lifebuoy, Lux, Pepsodent and Ponds) featured in the list of ten Hall of Fame brands. This recognition was accorded to brands which consistently ranked high in the survey over the last 10 years since its inception. In 2009, three HUL brands featured in the top ten, and seven in the top twenty.

Received CNBC AWAAZ Consumer Awards in six categories for 2010: - Green Company of the Year - Value for Money Brand of the Year - Ad Effectiveness Award - Marketer of the Year award across all categories - Most Preferred Personal Care Company in FMCG category (for the third consecutive year) - Most Preferred Home care Company in FMCG category (for the third consecutive year)

HUL was felicitated for receiving the highest number of patents in the year 2009 at Annual Intellectual Property Awards 2010. The award was instituted by Confederation of Indian Industry (CII) in association with Department of Industrial Policy & Promotion (DIIP) and Intellectual Property India (IPI) in New Delhi.

P a g e | 28 HUL has discovered the best way to maintain its Success Story through the use of BRAND EXTENSION as a tool, throughout the network.....

CHAPTER 2 REVIEW OF LITERATURE

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Thomas J. Delong (2010) illustrate HULs conflict resolution and people development policies using leading from the middle approach. Marketing Mastermind (2003) HULs rural marketing initiatives have given the perspectives in which HUL has approached towards rural marketing. Research International (2004) Micro test found three keys for preference by companies to launch extensions: The innovations are not distinctive enough to be able to stand on their own. Thus it makes sense to launch them as extensions. The products themselves are not good enough, and it is hoped that the strength of the mother brand will aide in overcoming the shortfall. There is not enough marketing budget for effective launch & continued support of standalone new brand. Branding strategy of HUL reveals that brand ambassadors plays an important role. And it needs special promotion and language. According to Ries and Trout (1986) cannibalization is a very real threat for the vast majority of the new product launches. But there have been little empirical work which quantifies this threat, or which examines the measures which can be used to define it. Kim and John (2008) defines that consumers evaluate brand extensions on the basis of their perceived fit with the parent brand. Martinez and Pina (2003) argued that line extension decreases the risk of failure of new products, because consumers initially are more willing to accept products marketed under known brands.

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Martinez and Pina (2003) defines that this strategy is not free from risks, since it is not convenient for all the brands, and moreover it may have negative effects on the image of the extended brand. According to Leif E. Hem (2001) brands with higher perceived reputation should provide consumers with greater risk and so encourage more positive evaluations than brands of lower reputation, this notion should be true for FMCG. According to Montoya-Weiss and Calantone (1994), more than 30-35% of all new products fail. According to keller (1993), consumer attitudes and responses depend upon many factors like physical characteristics, product features, product class and many things, so this concept shows that consumer response related to brand extensions not only depended Broniarczyk & Alba (1994) explain that a brand can be associated with a salient attribute, but this association is per se not strongly associated with competing brands or the product class as a whole. Aaker and Keller (1992) asserted that in brand extensions stronger brands provides more leverage as compared to the weaker brands. Reputation of a parent brand is an essential factor for consumers to analyze and choose a new brand. According to Boush & Loken, (1991) if the attributes or beliefs are consistent with the parent brand image, an extension is considered to be acceptable or perceived to fit the category. Loken & John, (1993) propose when a new brand extension is launched, a set of attributes or beliefs in addition to the already existing family or parent brand image is introduced.

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Loken & John (1993) reveal that an inconsistent brand extension can have a negative impact on the parent brand by diluting specific attribute beliefs that consumers have come to hold about an established brand name, rather than diluting the global affect associated with the established brand name. Aaker and Keller (1990) propose a relation between perceived quality of parent brand and consumers attitude toward the extensions in unrelated product categories. As the perceived quality (termed Quality) of the parent brand is higher, the transfer of positive attitudes toward the extension is also higher. Loken and John (1993) reveal that unsuccessful brand extensions can dilute brand names by diminishing the favorable attitudes t hat consumers have learned to associate with the family brand name. Broniarczyk and Alba (1994) reveal that the boundaries for the appropriateness of a certain brand extension were determined by knowledge about the incumbent brand. Broniarczyk and Alba (1994) explain that brand-specific associations moderate the role of product category similarity in brand extension judgments; a brand extension is more preferred in an unrelated category that valued its association than in a similar category that does not value its associations. According to Broniarczyk and Alba (1994) a perceived lack of fit between the product category of the parent brand and the proposed extension lack of fit between the product category of the parent brand and the proposes category can be overcome if key parent brand associations are salient and relevant in the extension category. According to Broniarczyk & Alba (1994) higher degrees of knowledge about the parent brand are associated with more favourable attitudes toward the consumer brand extension. According to Kapferer (1994) a brand extension strategy can be beneficial because it reduces the

P a g e | 32 product introduction cost and also increases the chances of success.

Bottomley and Holden (1996) explain that the brand concept consistency is a better facilitator of brand extension acceptance than product related similarity. The findings of Keller and Aaker (1997) suggest that corporate marketing efforts can be beneficial as it improves perceptions and evaluations of a corporate brand extension. Kapferer (1997) suggest that the brand extension that is intended to boost sales should be distinguished from new product that carries brand image and exist to fuel the brand. Keller (1997) explains that the possibility of acceptance of brand extension and parent brand is higher. Morrin (1999) propose that consumer exposure to brand extensions will increase parent brand awareness in terms of recognition and recall. Urde (1999) suggest that the main objective of brand extension is to leverage the intangible qualities of a brand since the functional benefits can generally be imitated. Bottomley and Holden (2001) propose that the quality of the parent brand and the fit between the parent brand and the brand extension are key determinants of consumer evaluations of brand extensions. Bottomley and Holden (2001) reveal that cultural differences influence how brand extensions are evaluated with respect to relative measurement factors. Bottomley and Holden (2001) propose consumers brand extension evaluations are also determined by (a) the dimensions of fit (i.e. the complementarily and transferability of assets and skills between the parent brand and the brand extension, and (b) to what extent consumers perceive the brand extension is difficult to produce. Klink & Smith (2001) explain that the success of a brand extension is largely determined by how customers evaluate the extension.

P a g e | 33

Keller (2003) argues that the brand extensions allow consumers to draw conclusions and form expectations about the potential performance of a new product (i.e., the brand extension) based on their existing knowledge about the brand. Keller (2003) reveals that firstly extensions can clarify the brand meaning to consumers and define the boundaries of the domain in which it competes. Keller (2003) propose that a new or rejuvenated product can be a mean to renew interest and improve attitude towards the parent brand. According to Keller (2003) the image of the parent brand can be hurt irrespective of the success or failure of the extension. Balachander and Ghose (2003) reveal that forward spill over effects from advertising of a parent brand on choice of a brand extension are limited. The findings of Mortimer (2003) suggest that brand extension makes economical sense to try to deliver the same emotional benefits in a different market. According to Mortimer (2003) companies should do the brand extension to a large extent. According to Keller (2003) new product introduction are crucial for a firm to sustain its longterm competition. Kim and John (2008) defines that consumers evaluate brand extensions on the basis of their perceived fit with the parent brand.

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CHAPTER 3 OBJECTIVE OF THE STUDY

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Every task is undertaken with an objective. Without any objective, a task is rendered meaningless. The main objectives for undertaking this research project are: Primary Objective: The study intends to understand the consumers perception towards HUL brands. Secondary Objective:
1

To understand the conceptuality of HUL brands. To know impact on the parent brand, brand loyalty and goodwill of the company has also been duly undertaken.

To know the change in consumers perception towards HULs brand extension.

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CHAPTER 4 RESEARCH METHODOLOGY

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4.1. THE STUDY Duration of Study:

The study was carried out for a period of three months.

4.2. METHOD OF DATA COLLECTION Data collection

Tools used for data collection are: Primary data Data was collected from primary source based on field survey where self-administered questionnaire was used. Secondary data This data was collected by common sources: Books Research Papers Published Documents Journals Websites.

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4.3. SAMPLE SIZE

The sample of present study consists of 100 respondents. Indore region has been selected for primary data collection. Random sampling technique was used for data collection. The research was carried out through survey method with the help of self-developed structured, non-disguised questionnaire on 5 point Likerts Scale on which the respondents were ask to indicate the degree of agreement or disagreement. The Close-Ended Questionnaire was helpful to get a clear idea about respondents perception.

4.4. TOOLS FOR DATA ANALYSIS

Percentage analysis tool is used for data analysis. Data has been presented & analyzed with the help of pie chart.

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CHAPTER 5 DATA PRESENTATION, ANALYSIS AND INTERPRETATIONS

P a g e | 40 Q1. Do you agree on that the HUL Products serve the best to their customer needs in comparison with the other market players?

Inference: Since 30 percent respondents are strongly agree, 42 percent respondents are agree, 12 percent respondents are disagree, 6 percent respondents are strongly disagree and 10 percent respondents are not familiar with the statement. So it can conclude that success or failure of the product affects the sales of parent brand. Q2. Do you think that to launch a product under any existing brand is beneficial to the HUL?

Inference: Since 47 per cent respondents are strongly agree, 31 per cent respondents are agree, 8 percent respondents are disagree, 9 percent respondents are strongly disagree and 5 percent respondents dont know about the statement. So we can conclude that most of the respondents support the statement.

P a g e | 41 Q3. Do you think that HUL brand extension adds value to the parent brand?

Inference: Since 14 percent respondents are strongly agree, 63 percent respondents are agree, 11 percent respondents are disagree, 7 percent respondents are strongly disagree and 5 percent respondents are not familiar with the statement. So we can conclude that most of the respondents are agree with the statement. Q4. HUL Brand extension affects the loyalty of the consumers?

Inference: As 21 percent respondents are strongly agree, 43 percent respondents are agree, 17 percent respondents are disagree, 7 percent respondents are strongly disagree and 12 percent respondents are not aware about the statement. So we can conclude that most of the respondents are agree with the statement.

P a g e | 42 Q5. Do you think that brand extension fulfils the requirements of the consumers in addition to the parent brand?

Inference: Since 21 percent respondents are strongly agree, 47 percent respondents are agree, 10 percent respondents are disagree, 4 percent respondents are strongly disagree and 18 percent respondents are not familiar with the statement. So we can conclude that most of the respondents are agree with the statement. Q6. Brand extension affects the goodwill of the company?

Inference: Since percent respondents are agree, percent strongly 46 14

7% 14% 18% 15% 46%

Strongly Agree Agree Neutral Disagree Strongly Disagree

respondents are agree, 18 percent respondents are disagree, 7 percent respondents are strongly disagree and 15 percent respondents are not familiar with the statement. So we can conclude that most of the respondents are agree with the statement.

P a g e | 43 Q7. Do you think that the attributes of the extended product is better than previous one?

Inference: Since 15 percent respondents are strongly agree, 28 percent respondents are agree, 20 percent respondents are disagree, 12 percent respondents are strongly disagree and25 percent respondents are not familiar with the statement. So it is conclude that respondents are not exactly support the statement.

Q8. Do you think the quality of the extended product is always better than the parent brand?

Inference: 15 percent respondents are strongly agree, 30 percent respondents are agree, 26 percent respondents are disagree, 11 percent respondents are strongly disagree and 18 percent respondents are not familiar with the statement. Since agreed and disagreed respondents are almost same in numbers, it can say that quality of the extended product is not always better than the parent brand.

P a g e | 44 Q9. Do you think the extension can satisfy consumers desire by providing a wide variety of goods under a single brand of HUL?

Inference: Since 15 percent respondents are strongly agree, 45 percent respondents are agree, 17 percent respondents are disagree, 7 percent respondents are strongly disagree and 16 percent respondents are not familiar with the statement. More than 50 percent respondents are agreeing with the statement. It means consumers like to buy different products of the same brand.

Q10. Do you think that the extensions are often used as a short term competitive weapon to increase a HUL brands image?

Inference: 17 percent respondents are strongly agree, 42 percent respondents are agree, 14 percent respondents are disagree, 10 percent respondents are strongly disagree and 17 percent respondents dont know about the statement. As most of the respondents are agree with the statement so it can be say that the brand extension can be used as a tool to enhance the brand image.

P a g e | 45 Q11. Do you think the extension is the HULs best adopted way to introduce the new product into the market?

Inference: 18 percent respondents are strongly agree, 41 percent respondents are agree, 19 percent respondents are disagree, 11 percent respondents are strongly disagree and 11 percent respondents are not aware of the statement. As most of the respondents are agree with the statement so it inferred that companies should adopt this strategy to launch a new product.

Q12. Do you think brand extension is a risky step?

Inference: Since 8 percent respondents are strongly agree, 51 percent respondents are agree, 20 percent respondents are disagree, 9 percent respondents are strongly disagree and 12 percent respondents are not familiar with the statement. So we can conclude that brand extension is a highly risky step.

P a g e | 46 Q13. Do you think a rejuvenated product can be mean to renew interest and improve attitude towards the parent brand?

Inference: Since 20 percent respondents are strongly agree, 40 percent respondents are agree, 11 percent respondents are disagree, 9 percent respondents are strongly disagree and 20 percent respondents are not familiar with the statement. So we can conclude that most of the respondents support the statement but some are not aware of the statement. Q14. Do you think the success of an extended product can affect the sales of parent brand?

Inference: Since 30 percent respondents are strongly agree, 42 percent respondents are agree, 12 percent respondents are disagree, 6 percent respondents are strongly disagree and 10 percent respondents are not familiar with the statement. So it can conclude that success or failure of the product affects the sales of parent brand.

P a g e | 47 Q15. Do you think brand extension stops consumers to switch over to some other brand?

Inference: Since 16 percent respondents are strongly agree, 34 percent respondents are agree, 30 percent respondents are disagree, 8 percent respondents are strongly disagree and 12 percent respondents are not familiar with the statement. So it can conclude that brand extension not necessarily makes consumers loyal of the brand.

Q16. Do you think brand extension enables a company to enter new categories at significantly lower cost?

Inference: Since 14 percent respondents are strongly agree, 48 percent respondents are agree, 16 percent respondents are disagree, 14 percent respondents are strongly disagree and 8 percent respondents are not familiar with the statement. From the analysis it is conclude that companies can enter into new categories at lower cost.

P a g e | 48 Q17. Do you think that HULs brand extension reduces the risk of failure of new product by already established awareness and trust?

Inference: Since 20 percent respondents are strongly agree, 44 percent respondents are agree, 13 percent respondents are disagree, 10 percent respondents are strongly disagree and 13 percent respondents are not familiar with the statement. So it can be said that awareness and trust about the brand is a strong factor to reduce the risk of failure of new product.

Q18. Brand extension must be a logical fit with consumers expectations.

Inference: Since 18 percent respondents are strongly agree, 36 percent respondents are agree, 19 percent respondents are disagree, 12 percent respondents are strongly disagree and 19 percent

P a g e | 49 respondents are not familiar with the statement. So we can conclude that extension should be according to the expectation of the consumers. Q19. Brands should not be extended unless they are well-known, have high awareness and a good reputation among the new target market.

Inference: Since 26percent respondents are strongly agree, 36 percent respondents are agree, 11 percent respondents are disagree, 12 percent respondents are strongly disagree and 15 percent respondents are not familiar with the statement. So we can conclude that awareness and reputation are the major factor in the success of brand extension. Q20. HULs brand extension allows consumers to draw conclusions and form expectations about the potential performance of a new product.

Inference: Since 10 percent respondents are strongly agree, 35 percent respondents are agree, 15 percent respondents are disagree, 11 percent respondents are strongly disagree and 29 percent

P a g e | 50 respondents are not familiar with the statement. So we can conclude that consumers can form their own perceptions about the brand extension but some of the respondents are not think so.

CHAPTER 6 FINDINGS

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According to the research, it is found that HUL believe in Product innovations, as they use their knowledge and imagination to translate science into products that meet a range of consumers needs. Brand extension enables the HUL to introduce new products at significantly lower cost.
According to the research, to launch a product under any existing brand is beneficial to the

company. On the basis of research survey, it is proven that HUL serve the best to all the customers categories & market segments according to their needs, tastes, desires & pocket capacities as well. The reputation of the HULs parent brand is a crucial factor that influencing the likelihood of successful brand extensions. It was found that the brand extension stops consumers to switch over to some other brand. The success and the failure of the brand extension highly affect the goodwill of the companys parent brand. The success of the extended brand affects the sales of the parent brand. Most of the respondents are agree with the point that the brand extension is a risky step. Extension provides a wide variety of goods under a single brand. It was found that the extension adds value to the parent brand. It was found that the quality of the extended product is not always better than the previous one.
It was found that HUL is often uses extensions as a short term competitive weapon to

increase a brands image The awareness and trust about the brand is a strong factor for HUL to reduce the risk of failure of new product. It was found that the extension should be according to the expectation of the customers. It was found that brand extension affects the loyalty of the consumers.

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CHAPTER 7 CONCLUSION, SUGGESTIONS AND LIMITATIONS

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CONCLUSION
HUL products are a household name in India. Its brands across categories touch lives of over 700
million Indian consumers every day. That means, roughly two-third of Indian population uses HUL products. These fact figures are as the evidences about Consumers Perception towards HUL Brands, that upto which extent HUL brands have succeeded in FMCG industry. The two biggest strengths of HUL are: its leading brands and extensive distribution network. On the basis of this research, it is concluded that people know that new product which has launched under the same parent brand on which they trust. And they also trust on new one as the previous one. But they actually dont know that the process is called brand extension. Overall, it is concluded that the awareness regarding brand extension among the consumers is very high. Brand extension is very important tool for HUL to expand its business; on the other hand, it is concluded that some of the consumers dont know the extension. They just buy the products according to circumstances. They need the knowledge of extension. During the survey, it is observed that customers evaluate extension as trustworthy. Brand plays important role for the organizations. People buy those products on which they have faith or they are well known with them. And extension cements their trust in the parent brand. It is also concluded that the failure of extension affects the goodwill of the company as well as parent brand. The concept of brand extension is the life line of HUL for succeeding in the battle of dynamic competition. This study advances knowledge of brand extensions in several ways. We found that brand extension is one of the crucial factors in enhancing the equity of the parent brand. The study shows that consumers have an idea about the brand extension and they are comfortable about it as it provides an ease of selecting a brand for consumption, especially, the young and middle-age group consumers. Building a favourable reputation for a parent brand is an important contributor to the success of brand extensions. By and large, consumers have showed very

P a g e | 54 positive approach towards brand extension for HUL products as it helps in fulfilling their needs and wants.

Brand extension is very important for making a brand successful and building trust, so the company should follow the strategy which includes a specific extension related to the product image in the market and its content. And HUL includes endless product categories and in every product category, consumers have different perception, approach and attitude. So this particular study will help the Hindustan Unilever Ltd. to understand consumers response towards their own brands & brand extension as well and provides an overview of the company from customers point of view.

HUL has discovered the best way to maintain its Success Story through the use of BRAND EXTENSION as a tool, throughout the network..... Because, compared to launch a new product under a new brand name, brand extensions can increase the efficiency of promotional efforts, improve access to distribution channels, and reduce consumers' perceived risk of purchasing a product or service. The success or failure of brand extensions is vastly dependent on how the customers evaluate the brand extensions (Klink and Smith, 2001). HUL is taking hard steps to improve the success rate of brand extensions. Theoretical and managerial understanding of how a consumer evaluates the brand extensions is given substantial importance. In order to improve the success rate of brand extensions, it is imperative to understand the parameters or factors affecting the brand extensions evaluations. Moreover, HUL & any company need to understand the significance of these factors and their relative importance to develop a right brand extensions strategy.

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SUGGESTIONS
Brand extension is very important for making a brand successful and building trust so:
HUL should adopt various marketing strategies for its number of products, to measure the

differential change in output due to the changing marketing strategies.

HUL must follow different & effective promotional strategies for its various product

categories which would ensure its long run success. HUL should follow the strategy which includes a specific extension related to the product image in the market and its content. The extended brand should have compatibility with the nature of parent brand, and also highlight the same expertise. Extension should match the perception of the consumers which would make them more efficient, clear and excited towards the brand. When brand managers decide to grow their brands using brand extension strategies, they are advised to consider the potential effects of unrelated brand extension. Brand managers are advised to evaluate their brands with the factors, emotions and feelings and not based just on consumers cognitive evaluation of the brand. Company should initiate loyalty programs like emotional loyalty.

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LIMITATIONS
During the survey, it is found that few of the persons were not so responsive. There may be possibility of errors in data collection because many of investors may have not given actual answers of my questionnaire. Sample size is limited to 100 respondents of Indore region. The sample size may not adequately represent the whole market. Few respondents were reluctant to divulge personal information which can affect the validity of all responses. The research is confined to a certain part of Indore.

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CHAPTER 8 IMPLICATIONS OF THE STUDY

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A big boom has been witnessed in FMCG industry in recent time. A large number of new player have entered the market and trying to gain market share in this rapid improving market. The above research would facilitate the Hindustan Unilever Ltd. to incorporate the fine tuned results in their marketing strategy. Brand extension with respect to HUL is a very vast concept. HUL includes endless product categories and in every product category, consumers have different perception, approach and attitude. This particular study provides an overview of the extension in FMCG industry through the platform of HUL products from the customers point of view. Therefore, an extensive and focused research can be undertaken to understand the consumer response for extension. The research would provide a framework for HUL to understand the buying behaviour of the consumers with respect to brand extension in FMCG industry. This project report may help the company to make further planning and strategy.

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BIBLIOGRAPHY

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Tauber, E. M. (1981),Brand Franchise Extension: New Product Benefits from Existing Brand Names. Nijssen, E.J.; Hartman, D. (1994) Consumer Evaluations of Brand Extensions. Keller, Kevin Lane (1993), Conceptualizing. Measuring, and Managing Customer Based Brand Equity. Journal of Marketing Keller, Kevin Lane and Aaker, David A. (1992), The Effect of Sequential Introduction of Brand Extensions. Journal of Marketing Research. Kim, Hakkyum and John, Deborah Roedder (2008) Consumer response to Brand Extension: Construal Level as a Moderator of the Importance of perceived Fit. Journal of Consumer Psychology.

Martinez and Pina, (2003) The Negative Impact of Brand Extension on Parent Brand Image, Journal of Product and Brand Management. McWilliam, G. (1993), The Effect of Brand Typology on Brand Extension Fit: Commercial and academic research finds, European Advances in Marketing Research. Montoya-Weiss, Mitzi M. and Calantone, Roger (1994)Determination of New Product Performance: A Review and Meta- Analysis, Journal of Product Innovation Management.

Smith, Daniel C. and Park, C. Whan (1992), The Effect of Brand Extension on Market Share and Advertising Efficiency, Journal of Marketing Research. Park, C.W.; Milberg, S.; Lawson, R. (1991) Evaluation of Brand Extensions: The Role of Product Feature Similarity and Brand Concept Consistency, Journal of Consumer Research.

http://www.hdfcsec.com/Research/FResearch.aspx? Heading=FundamentalResearch&FP_Code=HINDUNILVR&View=FRHistory.ascx http://www.brandchannel.com/images/papers/Factorsinfluce.pdf

P a g e | 62

QUESTIONNAIRE

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A Study of Consumers Perception towards HUL Brands

Customer Name: Age: 16-25 Sex: Income: Up to 1 Lakh 12 23 3 5 above 5 Lakh Govt. Employee
26-35 36-45 45-55 Above 55

Male

Female

Designation: Student Pvt. Employee Other

Professional

Educational Qualification: Address: . . .

Contact No:

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1. Do you agree on that the HUL Products serve the best to their customer needs in comparison with the other market players? Strongly Agree Agree Neutral Disagree Strongly Disagree

2. Do you think that to launch a product under any existing brand is beneficial to the HUL? Strongly Agree Agree Neutral Disagree Strongly Disagree

3. Do you think that HUL brand extension adds value to the parent brand? Strongly Agree Agree Neutral Disagree Strongly Disagree

4. HUL brand extension affects the loyalty of the consumers? Strongly Agree Agree Neutral Disagree Strongly Disagree

5. Do you think that brand extension fulfils the requirements of the consumers in addition to the parent brand? Strongly Agree Agree Neutral Disagree Strongly Disagree

6. Brand extension affects the goodwill of the company? Strongly Agree Agree Neutral Disagree Strongly Disagree

7. Do you think that the attributes of the extended product is better than previous one? Strongly Agree Agree Neutral Disagree Strongly Disagree

8. Do you think the quality of the extended product is always better than the parent brand? Strongly Agree Agree Neutral Disagree Strongly Disagree

9. Do you think extension can satisfy consumers desire by providing a wide variety of goods under a single brand of HUL? Strongly Agree Agree Neutral Disagree Strongly Disagree

P a g e | 65

10.

Do you think that extensions are often used as a short term competitive weapon to Agree Neutral Disagree Strongly Disagree

increase a HUL brands image? Strongly Agree 11.

Do you think the extension is the HULs best adopted way to introduce the new Agree Neutral Disagree Strongly Disagree

product into the market? Strongly Agree 12.

Do you think brand extension is a risky step? Agree Neutral Disagree Strongly Disagree

Strongly Agree 13.

Do you think a rejuvenated product can be mean to renew interest and improve Agree Neutral Disagree Strongly Disagree

attitude towards the parent brand? Strongly Agree 14.

Do you think the success of an extended product can affect the sales of parent brand? Agree Neutral Disagree Strongly Disagree

Strongly Agree 15.

Do you think brand extension stops consumers to switch over to some other brand? Agree Neutral Disagree Strongly Disagree

Strongly Agree 16.

Do you think brand extension enables a company to enter new categories at

significantly lower cost? Strongly Agree 17. Agree Neutral Disagree Strongly Disagree

Do you think that HULs brand extension reduces the risk of failure of new product

by already established awareness and trust? Strongly Agree Agree Neutral Disagree Strongly Disagree

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18.

Brand extension must be a logical fit with consumers expectations. Agree Neutral Disagree Strongly Disagree

Strongly Agree
19.

Brands should not be extended unless they are well-known, have high awareness and

a good reputation among the new target market. Strongly Agree

20.

Agree

Neutral

Disagree

Strongly Disagree

HULs brand extension allows consumers to draw conclusions and form expectations

about the potential performance of a new product. Strongly Agree Agree Neutral Disagree Strongly Disagree

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APPENDIX