Consumer Sovereignty

Case Analysis: Axe Deodorants

By
K Mythreya
12095
Sec - B
INTRODUCTION
When Bajaj launched their new brand of motorcycle – Avenger, they promoted with the
tagline “Feel like God”; this is what the consumers are treated today. The whole notion of
consumers being utterly important and being a part of the production is the concept of
Consumer Sovereignty. The new mantra “Customer is king” has prevailed everywhere.

What is Consumer Sovereignty?

The great Austrian economist Ludwig von Mises formulated the idea of "consumer
sovereignty," to describe the role of consumers and producers in the market process. Even
Adam Smith stated “final consumption is the ultimate purpose of all economic activity;
production and distribution exist solely to increase the well-being of consumers.” In this
view, consumers are the justification for economic activity and therefore for economic theory
as well. It is the consumer who keeps the economy going by generating demand for goods
and services. Without this demand, the supply side of the economy would expire: How long
can producers keep producing if no one buys their goods? From this perspective, consumers
as a source of demand are central to the mechanism that makes the economic system run.
The power seems to be shifting from producers to consumers.

The thing which moves power to consumers is competition. The further to the left on the
scale of competition1 we go, the more consumer sovereignty tends to be adhered to. When a
company has many rivals, it is forced first to minimize its costs by becoming efficient, but
then to increase quality to make consumers favour it over its competitors. The consumer is
much less open to abuse in this situation, and will tend to have his needs met more exactly.

The market today has no dearth of choices for the consumer. Even if an individual
consumer wishes to buy what the majority are not interested in, he gets it. For example, it is
seen that in times of recession, majority of the consumers prefer small and economical cars
but few people still want to buy luxury cars. So the producer not only caters to the majority
but also to the specific targeted needs.

The producers are also adapting to this concept to get the maximum benefits. Even for the
smallest of the smallest product, it has become very important to study the consumer
behaviour and a proper research is done so to customize the product to meet the requirements
of the consumers. Some companies like DELL even allow the consumers to design their own
products. This is the level of consumer sovereignty.

Hence what a producer needs is the ability to anticipate the demands and requirements of the
consumers, and to come up with innovations which could satisfy them.
But then there are lot of questions which need to be answered. Like does the consumer really
know what he wants? With consumer sovereignty has the producer lost his? Well there are
different perspectives. But to have a detailed analysis of the topic let’s take up the case of
“Axe Deodorants”.

___________________________________________________________________________

References:

http://www.eoearth.org/article/Consumption_and_consumer_sovereignty

http://www.helium.com/items/112764-the-concept-of-consumer-sovereignty-in-economic-
theory
Case Analysis: Axe Deodorants
Hindustan Unilever Limited (abbreviated to HUL) formerly Hindustan Lever Limited, is
India’s largest consumer products company. 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. According to Brand Equity, HUL has the largest number of brands in the
Most Trusted Brands List. It’s a company that has consistently had the largest number of
brands in the Top 50 and in the Top 10 (with 4 brands).

The Launch of Axe In India

HUL launched AXE in India. Opportunity in business is absolutely everywhere. A company
hardly even known a little over a decade ago is now a pioneer in its field. Axe deo spray has
built a legacy and a fortune on it’s commitment to remove the stink of other men’s bodies and
they’re proud of it. That’s been a starting point and since then they’ve diversified into a range
of men’s toiletries from fragrances to aftershaves. Axe has now like many companies set it’s
sights on India and for a sector that many aren’t interested in, the competition from Indian
brands has just begun and is on the way to becoming bigger.

Axe’s entry into India was based on it simply ‘testing the waters’ as such. The deodorant
industry in India had been largely unorganized. Men-the gender  Axe exclusively make
products for have long relied on traditional methods to remove body odor and for many it’s
not even been an issue.  

Axe was born in France in the Year 1983. 24 years later, this brand became Unilever's
bestselling brand worldwide. It has an iconic status in whichever market it has entered. It is
also one of the rare brands which can boast of replicating its entire marketing mix across
geographical boundaries. The campaigns that we see in India are what the entire world is
watching. For those who propound Glocalisation, AXE is an exception. Glocalisation refers
to the individual, group, division, unit, organization, and community which is willing and
able to “think globally and act locally”. That is to understand the local market and to mould
according to it to promote a global brand. But AXE didn’t have to worry.

References:

http://marketingpractice.blogspot.com/2007/07/axe-axe-effect.html

http://www.theindiastreet.com/2008/11/the-battle-of-the-deodorants.html
 Axe deo was launched in India during 1999. The brand launch was very quiet and
theoretically the brand was having the strategy of Slow Skimming that is High Price Low
Promotion. Axe at that time was the leading men's deo brand in Europe and was popular in
India in the Grey market (available in duty paid shops). HLL may have launched this brand
inspired by the volume of Axe sold in the Grey market. At that time, the deo market was a
nascent one with an estimated market size of Rs 72 crores. HLL had the brands Denim and
Rexona and was ruling the market. Axe was priced at a premium above the Denim brand
which was positioned as a male deo brand.
Axe initially was launched in the fragrance Java, Alaska and Atlantic. HLL did not bother to
fine tune its Promotional mix to Indian market but just imported the promotions that is the
company just ran the ads which was popular in the Europe and other markets. At that time,
the product was also imported from Europe. And it clicked! Rest as they say is History.
Axe in 2002 was having a market share of over 35% and soon HLL phased out Denim brand
to concentrate on this Star.

Axe is the naughtiest brand in the Indian market. The brand is targeted at male aged 16-25.
Internationally this brand targets male aged 15-25. I personally feel that it targets all 'Young
at heart" naughty guys. The brand has its brand values of Cool, Fashionable and Stylish. And
world over, the brand sticks to its core values. The biggest strength of this brand is the
underlying message or the DNA which is that the brand users are High on Confidence and
always for the Axe users. The whole idea was to attract the whole youth population.
Empower them. The ads showed that even the average guy can be successful with AXE. And
that clicked. The power of this Big Idea has ensured that Indian consumers lap up the foreign
commercials without any hitch. In fact there no India centric ads for Axe especially in
Television. And Indian consumers are not complaining either.

So if we look at this one wonders, where does consumer sovereignty comes into play when
this popular brand didn’t even bother to find out the demands of the consumer. Rather I
would put it this way, AXE empowered the consumer with a whole new notion. Though it
was purely incidental that the commercials clicked big time. But what Axe has done is purely
innovation. It’s commercials are so well directed to its target market.

References:

http://www.geneawright.com/
 Even the new campaign for Axe body spray which replaces the “Axe Effect.”  The spots
in this campaign again show women taken out of their normal routine by the effects of Axe
body spray.  In one execution, a woman is preparing for a date with her man but when she
arrives at the restaurant she is distracted by a waiter carrying bread.  She bursts out with the
phrase “Bom Chic A Wah Wah” while undulating.  Then she catches herself and looks
embarrassed.  A second execution has a woman teaching English to a group of foreign
students when a teenager enters and she repeats the Bom Chic A Wah Wah and shimmy
which the foreign students repeat. Unilever has gone to some lengths to ensure that this new
campaign for Axe - the proverbial golden goose - is memorable.  They have certainly put
together spots that are unique on television and should be highly memorable.

As with most Unilever advertising, this campaign does focus on the unique selling
proposition of Axe and the advertising strategy has good continuity with the old campaign. 
This adds credibility to the effort.

So here is a company which looks like it has worked it’s way into India with just the ads
and the brand name. But there is actually much more to it. Even AXE had to follow the
custom. Along with these campaigns, the brand also ensured that customers are constantly
engaged with new fragrances and campaigns. In 2005, Axe had a high profile launch of its
new fragrance CLICK and before that there was Axe Land campaign and followed by Axe-
Academy then Axe Voodoo and the latest one Phenomenon. It also adapted Viral marketing.
They have done a great job of focusing on how to adapt and use digital media in marketing.
Uniliver strived to build “digital brands.” They started by defining the type of experience
they want consumers to have with our brands, and then determine the right media channels
that deliver that experience. They found that the digital channels such as online, interactive
television and mobile are the best solutions for creating that dialogue. The most important
thing is that they did’t let the technology drive the strategy. “When you focus from the very
beginning on creating a conversation about your brand among consumers, not just sending a
message “brand to consumers,” your approach is much more effective” states Kevin George,
GM of Deordorants division of Unilever (AXE) in one of his interviews.

Axe is one of the rare brands that have embraced new media to the maximum extent. The
brand has started its Internet based marketing initiative in India with Axe Land which
involved a virtual trip to the Axe world. Globally also this brand has lot of online initiatives
which are almost always naughty. And not only is that Axe known for providing the
consumers with a number of choices. Every year it comes up with new variants. And these
variants are promoted very well to reach out to the consumer.
 By looking the case of Axe, we clearly understand that communicating with the
consumer is very important. It’s not only about how better your better product is it’s also
about how better your reach your customers. And to survive the competition one has to
understand it’s customers. Give them options and experiment with their tastes. Had Axe only
limited itself to few variants and fragrances then it would have never worked as different
individuals have different tastes. Apart from their variants like click, phoenix, voodoo, pulse,
essence, touch, etc Axe also came up with limited edition variants to be available only in few
months of the years. Like their variant ‘summer’ which was available only in the summer
season. Hence it tried to experiment to cater to individual tastes.

Summary
To summarize consumer sovereignty can be looked at different perspectives. Some
companies allow the consumers to design their own product, some help their consumers to
choose from a variety of products and some communicate their product so well that the
consumers are convinced that this is what they wanted. The power has shifted from the hands
of producer to the consumers. But this doesn’t mean the producers have lost their
sovereignty. But to make profits the producer has to listen to the consumers.
Bibliography

http://www.eoearth.org/article/Consumption_and_consumer_sovereignty

http://www.helium.com/items/112764-the-concept-of-consumer-sovereignty-in-economic-
theory

http://marketingpractice.blogspot.com/2007/07/axe-axe-effect.html

http://www.theindiastreet.com/2008/11/the-battle-of-the-deodorants.html

http://www.geneawright.com/

http://www.wikkipedia.org