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Lux Project Report
Lux Project Report
A
PROJECT REPORT
ON
CONTEMPERARY ISSUE
Topic
SUBMITTED TO:
Raju Barwa
SUBMITTED BY:
DEPRT: MBA
MBA II
SEC, Sikar
PANKAJ SHARMA
nd
Semester
Hindustan Unilever Ltd. is a well-known and largest FMCG company in India. HUL has
always revamped its products to meet the changing needs of the consumer without
compromising on the quality. This report deals with one of its premier brands "LUX". HUL
leads the market in the toilet soap category with 54.3% market share. Lux has inched up to be
on par with Lifebuoy in HUL's soaps portfolio. The Lux brand now has an almost equal
market share as Hindustan Lever's largest selling soap brand - Lifebuoy. This report gives an
overview of the history of the company and the brand "Lux", the various strategies adopted
to survive in the market for over 75 years and the various competing brands. The promotional
activities adopted, the brand's strengths and weaknesses, threats faced are also analyzed. The
FMCG category is always a battleground for all the competing firms and the bathing soap
category is no different. With more firms entering the market, maintaining the customer base
is not very easy. Within six months, ITC's soap products have been able to capture 1.75% of
the market share.
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ACKNOWLEDGEMENT
First of all I am really thankful to god who gave me the strength to work on then project and
complete it in time without any hurdles. I would also like to thank my teacher Mr.Raju Barwa
who gave me the confidence and guidance at every step of my research. This project helped
me to know more about the Unilever and gave me a chance to see their marketing strategies
and to study on there product LUX.
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TABLE OF CONTENT
S. No.
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2.
3.
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5.
6.
7.
Particular
Abstract
Acknowledgement
Table of Content
Introduction
Industry Analysis
Major Players
Hindustan Uniliver ltd.
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Company profile
Mission
Principle of quality policy
Present structure
Division
Hindustan liver network
Exports
Water
Corporate responsibility
Lux
Study Of Lux With Respect
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Page No.
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Product
Promotion
Price
Place
SWOT analysis
Competitor analysis
Market segmentation
Position
BCG matrix
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Introduction
The origins of personal cleanliness date back to prehistoric times. Since water is essential for
life, the earliest people lived near water and knew something about its cleansing properties at least that it rinsed mud off their hands.
A soap-like material found in clay cylinders during the excavation of ancient Babylon is
evidence that soap making was known as early as 2800 B.C. Inscriptions on the cylinders say
that fats were boiled with ashes, which is a method of making soap, but do not refer to the
purpose of the "soap." Such materials were later used as hair styling aids.
Soap got its name, according to an ancient Roman legend, from Mount Soap, where animals
were sacrificed. Rain washed a mixture of melted animal fat, or tallow, and wood ashes down
into the clay soil along the Tiber River. Women found that this clay mixture made their wash
cleaner with much less effort.
Some of the early instances of commercial manufacturing of soap are:
In Britain references began to appear in the literature from about 1000AD, and in 1192 the
monk Richard of Devises referred to the number of soap makers in Bristol and the unpleasant
smells which their activities produced
A century later soap making was reported in Coventry. Other early centers of production
included York and Hull. In London a 15th century "sopehouse" was reported in Bishops gate,
with other sites at Cheapside, where there existed so pers Lane (later renamed Queen Street),
and by the Thames at Black friars Andrew pears. In 1789, he commenced production of a
transparent soap at a factory in Wells Street, off Oxford Street and became hugely successful.
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Industry analysis
The toilet soaps market is estimated at 530,000 tap including small imports. The market is
littered over with several, leading national and global brands and a large number of small
brands, which have limited markets. The popular and premium brands include Lifebuoy, Lux,
Cinthol, Liril, Rexona, and Nirma.
Toilet soaps, despite their divergent brands, are not well differentiated by the consumers. It is,
therefore, not clear if it is the brand loyalty or experimentation lured by high volume media
campaign, which sustain them. A consequence is that the market is fragmented. It is obvious
that this must lead to a highly competitive market. Toilet soap, once only an urban
phenomenon, has now penetrated practically all areas including remote rural areas. The
incremental demand flows from population increase and rise in usage norm impacted as it is
by a greater concern for hygiene. Increased sales revenues would also expand from up
gradation of quality or per unit value.
As the market is constituted now, it can be divided into four price segments: premium,
popular, discount and economy soaps. Premium soaps are estimated to have a market volume
of about 80,000 tones. This translates into a share of about 14 to 15%.
Soaps form the largest pie of the FMCG Market with bathing & toilet soaps accounting for
around 30% of the soap market, by value. Currently, the soap industry is divided into three
segments namely Premium, Popular and Economy/ Sub popular.
To fight competition, major players Hindustan Unilever Ltd (HUL), Godrej Consumer
Products Ltd (GCPL) and Wipro Consumer Care & Lighting are now drawing up fresh game
plans. And the accent is clearly on innovation to gain mind share as well as market share in
this overcrowded category.
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Major Players
Hindustan Unilever Ltd.
With over seven brands LUX, LIFEBUOY, HAMAM, REXONA, BREEZE,
DOVE and PEARS has 54.3% share of the overall soap market. HUL is India's largest
Fast Moving Consumer Goods Company; its journey began 75 years ago, in 1933, when the
company was first incorporated. The company stirring the lives of two out of three Indians
with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages
and also one of the country's largest exporters. HUL's brands includes Lifebuoy, Lux, Surf
Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme,
Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's - are household names across the
country. They are manufactured in over 40 factories across India. In the Rs7,000 crore by
sales soap market, HULs market share has dropped to 54.3% in March 2008 from 55.9% in
March 2006.
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b. Mission
Unilever's mission is to add Vitality to life. They meet everyday needs for nutrition, hygiene
and personal care with brands that help people feel good, look good and get more out of life.
Their deep roots in local cultures and markets around the world give them strong relationship
with consumers and are the foundation for their future growth.
A key requirement is building in the quality expectations of their consumers into their
products.
To win consumers confidence and loyalty, they need to consistently deliver branded products
of excellent quality.
The Quality Policy describes the principles that everyone in Unilever follows, wherever they
are in the world, to ensure that they are recognised and trusted for their integrity, the quality
of their brands and products, and the high standards they set.
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d. Present stature
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 Foods & Beverages. They endow the company with a
scale of combined volumes of about 4 million tonnes and sales of nearly Rs.13718 crores.
HUL is also one of the country's largest exporters; it has been recognised as a Golden Super
Star Trading House by the Government of India.
The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is
to "add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care
with brands that help people feel good, look good and get more out of life. It is a mission
HUL shares with its parent company, Unilever, which holds 52.10% of the equity. The rest of
the shareholding is distributed among 360,675 individual shareholders and financial
institutions.
HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk,
Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality
Wall's are household names across the country and span many categories - soaps,
detergents, personal products, tea, coffee, branded staples, ice cream and culinary products.
They are manufactured over 40 factories across India. The operations involve over 2,000
suppliers and associates. HUL's distribution network, comprising about 4,000 redistribution
stockists, covering 6.3 million retail outlets reaching the entire urban population, and about
250 million rural consumers.
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HUL has traditionally been a company, which incorporates latest technology in all its
operations. The Hindustan Unilever Research Centre (HURC) was set up in 1958, and now
has facilities in Mumbai and Bangalore. HURC and the Global Technology Centres in India
have over 200 highly qualified scientists and technologists, many with post-doctoral
experience acquired in the US and Europe.
Group operates through seven segments: Soaps and Detergents, Personal Products, Exports,
Beverages, Foods, Ice Creams and Other. The products include home and personal care
products, foods and beverages, industrial and agricultural products. Home and personal care
products consists of personal and fabric wash, household, oral care, skin and hair care,
deodorants, perfumery, colour cosmetics and baby care. Foods and beverages includes tea,
coffee, cooking fats and oils, bakery fats, ice creams, tomato products, fruit and vegetable
products, rice, salt, atta and rawa, marine products and mushrooms. Industrial and
agricultural products includes specialty chemicals, bulk chemicals, fertilisers, animal feeds,
seeds, plant growth nutrients, processed-tri-glycerides and agri commodities, yeast, leather,
footwear and carpets, thermometers and plantations.
Its brands are spread across 20 consumer product categories. Hindustan Unilever markets
consumer goods throughout India. The company faces competition from international, local
and regional players.
The company derives 44.3% of its revenues from soaps and detergents, 26.6% from personal
care products, 10.5% from beverages, and the rest from foods, ice creams, exports, and other
products. As counterfeit trade increases, the company stands to lose on its brand equity and
exclusivity.
New Products introduced by HUL in recent years:
Lux strawberry and cream
Clinic plus multi sachet
Ponds age miracle
Axe shock and recover
Paddle pop
Wheel active Green
Divisions
Home and Personal Care
The HPC business is made up of Fabric Wash, Household Care, Personal Wash and Personal
Care categories.
Personal Wash: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears, Rexona
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Foods
The Foods Division of your Company comprises Beverages, Processed Foods, Ice-Creams
and Modern Foods businesses. The Division recorded strong growth in 2007.
Coffee: Bru
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g. Exports
Today, HUL is one of Indias Largest exporters of branded Fast Moving Consumer Goods. It
has been recognized by the Government of India as a Golden Super Star Trading House.
Over time HUL has developed into a viable & competitive sourcing base for Unilever world
wide in Home and Personal Care & Foods & Beverages category of products. HUL is also a
global marketing arm for select licensed Unilever brands and also works on building
categories with core country advantage such as branded basmati rice. HUL Exports offers
high level of service with flexibility and responsiveness thorough out the supply chain. It has
a dedicated organization structure to support this endeavour and this has helped in growth of
these businesses in particular. Intrinsic cost competitiveness in the end to end Supply chain
with appropriate technology and competitive capital investment operations while delivering
best in class quality enables HUL to position itself as a key sourcing hub for Unilever and
also become a preferred partner for Global customers in categories we operate.
HULs key focus in the exports business is on two broad categories. It is a sourcing base for
Unilever brands in Home & Personal Care (HPC) and Food and Beverages (F&B) for
supplies to other Unilever companies. It also focuses on becoming a preferred supplier to
both non-Unilever and Unilever clients in three categories in which India, as a country, has
competitive advantage Branded Rice, Marine Products and Castor and its Derivatives .
HUL enjoys international recognition within Unilever and outside for its quality, reliability
and speed of customer service. HUL's Exports geography comprises, at present, countries in
Europe, Asia, Middle East, Africa, Australia, North America etc
h. Water
Pureit, a breakthrough offering of Hindustan Unilever (HUL), comes with many unique
benefits complete protection from all water-borne diseases, unmatched convenience and
affordability.
Pureits unique Germkill Battery technology kills all harmful viruses and bacteria and
removes parasites and pesticide impurities, giving you water that is as safe as boiled. It
assures your family 100% protection from water-borne diseases like jaundice, diarrhea,
typhoid and cholera. Pureit not only renders water micro-biologically safe, but also makes
the water clear, odourless and good-tasting.
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i.
Corporate Responsibility
As in the earlier years, your Company continued to involve itself in social welfare initiatives
across the Country, both through charity and social investment around issues like education,
health, nutrition and initiatives for the economic upliftment of the underprivileged.
The company has commenced a pilot in its tea business, in partnership with an NGO
(Partners in Change) to source tea directly from small producers and thereby improve their
livelihood. The effort of the Company in improving water availability through soil
conservation and water harvesting methods has borne good results. Company believes that
brands must be at the forefront of driving social change.
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LUX
Lux soap was first launched in 1916 as laundry soap targeted specifically at 'delicates'. Lever
Brothers encouraged women to home launder their clothes without fear of satins and silks
being turned yellow by harsh lyes that were often used in soaps at the time. The flake-type
soap allowed the manufacturer some leeway from lye because it did not need to be shaped
into traditional cake-shaped loaves as other soaps were. The result was a gentler soap that
dissolved more readily and was advertised as suitable for home laundry use.
Lux toilet soap was introduced in 1925 as bathroom soap. The name 'Lux' was chosen as a
play on the word "luxury." Lux has been marketed in several forms, including bar and flake
and liquid (hand wash, shower gel and cream bath soap).
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Lux in step with the changing trends and evolving beauty needs of the consumers, offers an
exciting range of soaps and Body Washes with unique elements to make bathing time more
pleasurable. One can choose from a range of skincare benefits like firming, fairness and
moisturising.
Lux stands for the promise of beauty and glamour as one of India's most trusted personal care
brands. Since its launch in India in the year 1929, Lux has offered a range of soaps in
different colours and world class fragrances. Lux is a beauty soap of film stars. Lux
recognized the need for a compelling message about beauty that would resonate with women
of today.
From the 1930s right through to the 1970s, Lux soap colours and packaging were altered
several times to reflect fashion trends. In 1958 five colours made up the range: pink, white,
blue, green and yellow. People enjoyed matching their soap with their bathroom colours.
In the early 1990s, Lux responded to the growing trend away from traditional soap bars by
launching its own range of shower gels, liquid soaps and moisturizing bars. Lux beauty facial
wash, Lux beauty bath and Lux beauty shower were launched in 1992.
In 2004, the entire Lux range was re-launched in the UK to include five shower gels, three
bath products and two new soap bars. 2005 saw the launch of three exciting new variants
with dreamy names such as Wine & Roses bath cream, Glowing Touch and Sparkling
Morning shower gels.
Lux has recently launched its two fruit extract variants New Lux Strawberry & Cream and
Lux Peach & Cream contain a blend of succulent fruits & luscious Chantilly cream. The most
recent addition in the brand is Lux Crystal Shine.
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LUX and other soaps fall into the category of Convenience Good
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Lux has also launched a 45 g variant called Mini Lux priced at Rs. 5.
b. Promotion
The great Indian brand wagon started nearly four decades ago. Great brands sometimes
outlast their ambassadors as proven by Lux which celebrated its 75th anniversary in India.
The first ambassador, Leela Chitnis featured in a Lux advertisement which flagged off the
Lux wagon. She gave way to a galaxy of stars which includes Madhubala, Nargis, Meena
Kumari, Mala Sinha, Sharmila Tagore, Waheeda Rehman, Saira Banu, Hema Malini, Zeenat
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Leela Chitnis in the first Lux print adverstisement featuring an indian actress
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USP or the common thread through all the advertisements is the Presence of Movie
Stars through the ages.
The product has been positioned on the basis of REFERENCE GROUP by using a
celebrity popular at that point in time.
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Some amount of attribute positioning by mentioning the various ingredients has also been
done.
Lux campaigns have wooed millions of people over the decades. Popularly known as the
beauty soap of film stars, Lux has been an intimate partner of the brightest stars on the silver
screen for decades. An ode to their beauty, an announcer of their stardom, advertising
campaigns on Lux have featured film stars across the nation, promising their beauty and
complexion to ordinary women.
With top movie stars from Madhubala to Madhuri, from Babita to Karisma and Kareena
having endorsed the goodness of Lux over generations, it was natural that the brand has built
equity as the best beauty soap in India.
From the beginning Lux, by using a leading film star of the time, has fulfilled the consumers
aspirations of using beauty soaps via the rationale if its good enough for a film star, its
good for me. This later moved into a transformation role of having a bath with Lux, which
transports the user into a fantasy world of icons, film stars and fairy lands.
Change in communication strategy
However, the communication was slowly seen to be losing relevance, as consumers were
beginning to question if the film star actually used the brand.
In addition to this, several competitive beauty soap brands had begun advertising using
similar methods of communication. In this context, the global brand team for Lux developed
a new communication strategy. This strategy bring out the star in you for the first time
moved the brand away from the long-running film star route. The film star still features in the
new communication but not as her gorgeous self but rather as an alter ego/projection of the
protagonist (a regular girl), for a few seconds of the entire ad.
Thus, for the first time the film star was used as a communication device and not as the main
feature of the ad. The move away from the film star and her fantasy world to a regular Lux
user, with the focus on the protagonists star quality, is a change from the norms set by Lux
advertising in the past. With the new communication strategy, the film star is used purely as a
communication device to portray star quality in every Lux user. This can be significantly
seen in the latest TV commercial of Lux Crystal Shine where Priyanka Chopra is portrayed
as a normal woman.
This idea bring out the star in you puts the consumer at the heart of the brands promise.
This promise goes beyond the functional deliverables of soap, beyond bathing and the
bathroom to the world outside. Its a world where with Lux on her side, an ordinary woman
can impact her world with her own star quality.
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Breaking away from tradition, HLL resorts to a male and metro sexual Shah Rukh to revive
Lux, which turned 75 in 2005.
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Lux presented 30 gm gold each to the first three winners of the Lux Gold Star offer
from Delhi. According to the promotional offer that Lux unveiled in October 2000, a
consumer finding a 22-carat gold coin in his or her soap bar got an opportunity to win
an additional 30 gm gold. The first 10 callers every week got a 30 gm gold each.
The offer could be availed only on 100 gm and 150 gm packs of Lux soap.
Lux Star Bano, Aish Karo contest: All one needed to do was buy a special
promotional pack of Lux soap. The pack comes with a special scratch card. The 50
lucky winners and their spouses were flown down to Mumbai to live a day like
Aishwarya Rai would. They could also be given gift vouchers worth Rs 50,000 from
Shoppers' Stop along with an exclusively designed Neeta Lulla sari and a beauty
makeover by Michelle Tung, Aishwarya's preferred designer and stylist. The pice de
rsistance was a dinner date with Aishwarya Rai herself.
Lux celebrated 75 years of stardom with the Har Star Lucky Star activity.
All wrappers of Lux had a star printed inside them. If the consumer found written
inside the star, any number from 1 to 5, she would get an equivalent discount (in
rupees) on her purchase from her shopkeeper. If the consumer found 75 years
written inside the star, she will get a years supply of Lux free.
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Online contests:
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Public Relations:
Not only must the company relate constructively to customers, suppliers and dealers, it must
also relate to a large number of interested publics. A public is any group that has an actual or
potential interest in or impact on a companys ability to achieve its objectives. PR involves a
variety of programs designed to promote or protect a companys image or its individual
products.
LUX PR Activities
Press relations:
Lux has been maintaining constant communicating with its customers and potential
customers, of the various developments taking place in the brand by using press
relations.
Events:
Lux celebrated 75 years of existence in a grand way by unveiling Shahrukh Khan as
their latest brand ambassador. Kareena Kapoor, Juhi Chawla, Sridevi and Hema
Malini graced the event and made it special. All the stars have endorsed Lux in the
past. The event was held at the grand Intercontinental in Mumbai.
Limited edition:
Coming up with limited edition of the brand is also a way of attracting attention towards the
brand. It creates a buzz and a feeling of urgency to try out the product and helps in promotion
of the brand. This strategy was also implemented by Lux by bringing out limited editions like
Chocolate Seduction, Aromatic Glow, Festive Glow and Haute Pink.
c. Price
If price is too high then a company may never sell a single item of it. If price is too low then
one can lose money on every sale once all of costs of doing business are considered.
Therefore the key is to price it in such way that it appears attractive to the customer as well
as profitable to the company. HUL seems to have mastered this idea. Prices of HUL are
considered the most competitive in Indian market. The main fact for this huge success story
is the strategic pricing decision the company has adopted from time to time.
HUL always gives value for money to their consumers. It is known for its competitive
pricing. It has the advantage of quoting a reasonable price due to its economies of scale. HUL
also can quote a very competitive price due to its superior technology and optimum
utilization of inventory. It has the product range that meets the needs of all classes of
consumers. It has the products that are categorized as premium and mass products. HUL
matches its prices with the competitor who is operating in the same category.
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HUL also gives price offs on its products to reward consumers who are using it for a long
time and also to attract new consumers.
The price of the premium segment products is twice that of economy segment products. The
economy and popular segments are 4/5ths of the entire soaps market.
Segment
Premium
Popular
Economy
However, recently HUL has been forced to hike its price by one rupee, to Rs17 (for 100 gm),
giving in to the pressures of inflation. This paves the way for competing soap makers like
Godrej Consumer Products (GCPL) to take price increases.
Lux has versions in all the three price segments:
Rs 17
Rs 15
Mini Lux
Rs 5
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d. Place
Cutting-edge distribution network
HULs distribution network is recognized as one of its key strengths -- that which helps reach
out its products across the length and breadth of this vast country. The need for a strong
distribution network is imperative, since HULs corporate purpose is to meet the everyday
needs of people everywhere.
At Hindustan Unilever Limited, distribution network is one of the key strengths that help
them reach their products across the length and breadth of this vast country. It has 2000+
suppliers and associates 7,000 stockists and direct coverage in over 1 million retail outlets
across India.
To meet the ever-changing needs of the consumer, HUL has set up a distribution network that
ensures availability of all their products, in all outlets, at all times. This includes, maintaining
favourable trade relations, providing innovative incentives to retailers and organizing demand
generation activities among a host of other things. HUL boasts of placing a product across
the country in less than 72 hrs.
The first phase of the HUL distribution network had wholesalers placing bulk orders directly
with the company. Large retailers also placed direct orders, which comprised almost 30 per
cent of the total orders collected.
Today, the goods are transferred from the factory to the company warehouses and are sent to
the distributor from there on a daily basis. From the distributor, the stock reaches the market
through daily sales. Typically, these include the salesman registering the order of a retail
outlet and delivering the goods the next day.
Recently HUL has changed its traditional way distribution and came out with a new strategy
of distribution. Its because of the change in buying pattern of the consumer due to more
disposable income. There are different channels of distribution like Modern Trade, which
covers all chains of super markets like Food World, who get the stocks directly from the
company. Wholesalers and second leg of big retail outlets called Super Value stores come
under the surveillance of the distributor along with the mass retail outlets. There is also this
new concept in the HUL distribution channel called Kiosk. Kiosk is a small shop that sells
only sachets and low priced items (below Rs.10/-). Kiosk also does not come under the
surveillance of the distributor.
In addition to the ongoing commitment to the traditional grocery trade, HUL is building a
special relationship with the small but fast emerging modern trade. HUL's scale enables it to
provide superior customer service including daily servicing, improving their range
availability whilst reducing inventories. HUL is using the opportunity of interfacing more
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SWOT ANALYSIS
SWOT analysis is a basic, straightforward model that provides direction and serves as a basis
for the development of marketing plans. It accomplishes this by assessing an organizations
strengths (what an organization can do) and weaknesses (what an organization cannot do) in
addition to opportunities (potential favorable conditions for an organization) and threats
(potential unfavorable conditions for an organization). The role of SWOT analysis is to take
the information from the environmental analysis and separate it into internal issues (strengths
and weaknesses) and external issues (opportunities and threats). Once this is completed,
SWOT analysis determines if the information indicates something that will assist the firm in
accomplishing its objectives (a strength or opportunity), or if it indicates an obstacle that
must be overcome or minimized to achieve desired results (weakness or threat) (Marketing
Strategy, 1998).
The SWOT analysis summarizes the external environmental factors as a list of opportunities
and threats.
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1.Strong Market Research (door to door sampling is done once a year in Urban and Rural
areas)
2.Many variants (Almond Oil, Orchid Extracts, Milk Cream, Fruit Extracts, Saffron,
Sandalwood Oil, and Honey to name a few)
3.Strong sales and distribution network backed by HLL
4.Strong brand image
5.Positioning focuses on the attractive beauty segment
6.Dynamically continuous innovation of the product and brand rejuvenation new variants
(Aromatic Glow and Chocolate Seduction and Lux White Spa body wash) and innovative
promotions (22 carat gold coin promotion Chance Hai)
7.Perceived to have high value for money (strong brand promotion but relatively lower price
which is a winning combination in the popular segment)
8.Though it is in popular segment, it is having mass appeal/market presence across all
segments (15% of the soap market captured by Lux (sales / volume)
9.Unique advantage of having access to resources and assets of HLL
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WEAKNESSES
1.Lux is mainly positioned as beauty soap targeted towards women, hence it lacks unisex
appeal
2.Usage rate/ wear rate is high and is generally mushy and soggy
3.Some variants like the sunscreen, International variant did not do well in the market
4.Certain advertisements like the recent one with Shah Rukh Khan resulted in controversial
interpretations of the message of the advertisement and lead to some loss of focus (of
message of the advertisements)
5.Stock out problems - replenishment time is high in semi-urban/rural areas
6.Earlier positioning as the soap of the stars has somewhat alienated the brand from a
portion of the consumers especially in rural areas.
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OPPORTUNITIES
1. Soap industry growing by 10% in India
2. Beauty segments Compounded Annual Growth Rate (CAGR) is very high. An indication
of this is that Fair and Lovelys segment is increasing at a fast rate - Lux must reinforce its
presence in the beauty segment
3. More promotions like price-offs and samples
4. Retentive strategy required as the soap segment is in the mature stage of its product life
cycle
5. Line extension probably with more variants catering to the beauty segment like natural,
herbal soap etc
6. Liquid body wash is currently in the growth stage Lux should come out with more
variants in this segment
7. Level of servicing is high during sales promotion schemes this could be brought down
8. It has a large market share and hence has a strong hold over the market
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THREATS
1. New entrants/local competitors/MNCs would increase the competition (Camay, P&G)
2. High internal competition Pears also catering the beauty segment (also from HLL stable)
3. Excessive dependence on beauty segment makes Lux vulnerable to changing customer
tastes
4. Technological change makes the existing products obsolete Lux should focus on
technological innovations like Body Wash
5. Its in the maturity stage in the Product Life Cycle and has a threat of slipping down to
decline stage if constant reinvention of the brand is not carried out.
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Competitor analysis
Internal competitors
Lifebuoy:
Born: 1895
History: Owned by Unilever Plc., the parent company of Hindustan Unilever Ltd.
Status: Has 18% market share in the bathing soaps category, worth Rs6,000 crore
Lifebuoy landed on Indian shores in 1895, when the country was in the grip of a plague
epidemic. With its positioning as a powerful germicidal and disinfectant, and with a strong
carbolic smell, it was what the nation was looking for. But the health advantage waned over
time as competitors came out with soaps that promised both health and beauty.
It was around 2002 that the product moved from being a hard soap to a mild soap that
delivered a significantly superior bathing experience. The new soap had a refreshing
fragrance and its overall positioning changed, painting its promise of health in softer, more
versatile and responsible huesfor the entire family. The packaging was also changed: The
rugged looking packs were soon replaced with a softer pinkish cover. This was followed by a
series of ads highlighting the soaps germ-fighting benefits.
Lifebuoy had become a family soap with hygiene as its core promise. Right from the early
days, the brand has preferred effective communication to celebrities. An exception is its
recent, limited exposure campaign with cricketer Yuvraj Singh.
External Competitors
Santoor:
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Vivel Sandal Sparkle is enriched with Sandalwood Oil and Active Clay which helps in
providing clear skin.
Vivel Ayurveda Essence is enriched with multiple Ayurvedic Ingredients which help protect
skin from germs and harsh environment, keeping it healthy and beautiful.
In the popular segment, ITC has launched a range of soaps and shampoos under the brand
name Superia. Superia Soaps enriched with natural ingredients give radiant glowing skin.
Superia Soaps are available in four variants:
1.
2.
3.
4.
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Market Segmentation
One cannot be everything to everyone, but can be everything to a selected few. This is the
basis for segmentation. The definition of segmentation is market segmentation is a process
of dividing a heterogeneous market into homogeneous sub units. Market segmentation is the
identification of portions of the market that are different from one another. Segmentation
allows the firm to better satisfy the needs of its potential customers.
A good market segmentation will result in segment members that are internally homogenous
and externally heterogeneous; that is, as similar as possible within the segment, and as
different as possible between segments.
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Income :
One of the essential characteristic of an FMCG product is an affordable price which is very
important for its fast sales. Its the meeting point of demand for a product and its price that
decide whether the product will sell or not. And the demand for a product is highly dependent
on the income of the customer. Lux is not very costly toilet soap. Its price varies from Rs.15
to rs.20.Therefore its target market starts from the middle income group.
Positioning
Luxderived from the word luxury was launched in 1899 as a laundry soap in the UK. In
1925, the brand was extended to the toilet soap category. It was positioned as a beauty soap
in India, and HUL has since used successful film actors of the timesuch as Leela Chitnis,
Madhubala, Hema Malini and Kareena Kapoorto endorse the product.
Luxs secret of longevity has been its consistent evolutionbe it the soap colour, packaging
or new variants, the brand has banked on innovation to keep its youthful image intact.
Extending the soap cake to a range of shower gels, liquid soaps and moisturizing bars has
helped the brand keep consumers excited and the competition at bay.
What has not changed is the consistency in its communication and its positioning. Its tag
linesif its good enough for a film star, then its good for you too to Play with beauty
have conveyed the same message over the years. It taps into an emotion very close to
humanitys basic needsocial interaction. The brand has always hired celebrities when they
have reached a certain height rather than using them at the start of their careers. This has
helped the customers to relate to their idols on screen.
From being a soap for the stars, Lux has recently started positioning itself in such a way that
the ordinary woman can relate to the brand. The advertisements show not the star, but the
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BCG Matrix
BCG matrix method is a portfolio management tool developed by Boston Consulting
Group .It is a method based on the product life cycle theory that can be used to know what
priorities should be given in the product portfolio of a business unit.To ensure value
creation ,a company should have a portfolio of products that contains both high growth
products in need of cash inputs and low growth products that generate a lot of cash.There are
2 dimensions : market share and market growth.Placing products in the BCG matrix results
in four categories in a portfolio of a company:
Star
Cash cows
Question marks
Dogs
Innovation seems to be the main theme of the Indian soap industry in 2008. With the entry of
ITC, the stage is all set for a major tussle between the new entrant and existing players in the
Rs 6,500-crore branded toilet soaps sector in India. The soap industry is seen to have a
market growth rate of about 10%. This shows that industry has a high growth rate. HUL is a
market leader in the industry and its soap Lux enjoys a market share of 17 % in India. So
according to the concept of BCG matrix any product which has high market growth and
market share is classified as STARS. The major objective of products coming in Stars is to
maintain their high market share. HUL comes up with various variants in LUX quite
frequently in order to maintain their position.
STARS
Market
Growth
Rate
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LIFEBOUY
LUX
QUESTION
MARKS
SANTOOR
CINTHOL
42
DOGS
CASH COWS
Relative Market
Share
Current Product
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hidden
in
Crystal
New
Diversification Strategy
Market
Lux has been in this industry for more than 75 years. It has constantly applied various
strategies to survive and succeed in the industry. Some of the recent ones are mentioned in
the above model.
Recommendations
Lux has been following a trend of constant product development and improvement since its
inception. This has always proved to be successful for the brand. Therefore a similar strategy
can be followed in the future: Lux can go for a high end Ayurvedic variant. Lux has been
associated with beauty and feminine grace till now. In the present day consumers are into
naturopathy and believe in natural treatments like the Ayurveda. Keeping with this trend, Lux
can foray into Ayurvedic variant. HUL already has Hamam soap in this category. But it is a
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REFERENCES
www.capitaline.com
www.hll.com
www.wikipedia.com
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www.scribd.com
Appendices
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Urban Rich
Rural Poor
High Income
Upper
Middle Level
Income
Education High Level of Educated
Education
Slightly Less
than Cluster A
C
Mid
Level
Income
Educated
Slightly
Less than
Cluster B
Very
Low
Level
of
Literacy
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BRAND
Lux
Aromatic
keya
Tibet
(Table 3.1): Comparative scenario of soaps price
Division
Dhaka
Chittagong
Sylhet
Rajashahi
Khulna
Barisal
Location of Warehouse
Dhaka City
Kalurghat Heavy I/A
Sylhet City
Rajshahi city
Khulna City
Barisal City
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Sl. No.
Company
Square
Division)
Keya Cosmetics Ltd.
Aromatic Cosmetics Ltd.
3
4
5
6
7
8
Brand Name
Lux International
Soap
(Toiletries Meril Beauty Soap
72 Core
48 Core
10.00%
6.66%
72 Core
72 Core
60 Core
36 Core
720 Core
10.00%
10.00%
8.35%
5.00%
100%
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Bibliography
1.
www.unilever.com
http://www.unileverea.com/ourbrands/personalcare/lux.asp
http://www.unilever.co.uk/ourbrands/personalcare/lux.asp
2.
www.unileverbd.com
3.
4.
http://www.gfk.be/ProductsAndServices/ConsumerDiagnosticTools/SpecialAnalyses/
BrandHealthCheckUp
5.
http://en.wikipedia.org/wiki/Unilever
6.
http://ladytobaby.com/show.php?item=155
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