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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

100 Crores in 2010. and the chocolates and confectionery categories are estimated to be the fastest growing segments. FMCG Sector is expected to grow by over 60% by 2010. which made this industry as a potential one. Because of the low per capita consumption for almost all the products in the country. the Indian rural FMCG market is something no one can overlook. i. Hindustan Unilever. ITC. hence providing better growth prospects to the FMCG companies. household care. says an HSBC report. Better infrastructure facilities will improve their supply chain. Leading FMCG companies Some of the well known FMCG companies are Nestlé. Hair care.1 billion is the fourth largest sector in the economy. Population growth is another factor which is responsible behind the success of this industry. FMCG companies have immense possibilities for growth. An estimated double-digit growth over the next few years shows that the good times are likely to continue. Increased focus on farm sector will boost rural incomes. male grooming. female hygiene. For example.e. if they are able to take the consumers to branded . presence of renowned FMCG companies. That will translate into an annual growth of 10% over a 5-year period. Emami.500 Crores in 2005 to Rs 92. Britannia. it has been able to make a fine recovery since then. FMCG sector is also likely to benefit from growing demand in the market. Procter & Gamble. Coca-Cola. Though the sector witnessed a slower growth in 2002-2004. Growth Prospects: With the presence of 12. Marico. intense competition between the organized and unorganized segments characterizes the sector. Hindustan Levers Limited (HLL) has shown a healthy growth in the last quarter. strong distribution networks. A well-established distribution network. The Indian FMCG sector with a market size of US$13. And if the companies are able to change the mindset of the consumers. Pepsi and Mars etc. It has been estimated that FMCG sector will rise from around Rs 56. Amul. are low operational cost.Page |4 Market Potentiality of FMCG industry Some of the merits of FMCG industry.2% of the world population in the villages of India.

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

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

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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 Pond’s 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 today’s 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 Pond’s 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 today’s 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.

A brand gives particular information about the organization. Brand carries an assurance about the characteristics that make the product or service unique. Branding has become so strong today that hardly there is anything unbranded. It shapes customer’s expectations about the product. . service or organization. Dove. A brand is an identity which represents a promise of value associated with a particular product. etc. “A brand is a name. Brand is an accumulation of emotional and functional associations. Brands usually have a trademark which protects them from use by others. Brand is a promise that the product will perform as per customer’s expectations. while products are “what companies make”. good or service. A strong brand is a means of making people aware of what the company represents and what its offerings are. differentiating it from others in marketplace. Fair & lovely.P a g e | 10 BRAND Brand – Brand is an important part of a product & branding can add value to a product. intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”. symbol. or design or a combination of them. Examples: Brooke Bond Red Label. Brands are different from products in a way that brands are “what the consumers buy”. term. sign.

As long as the consumers get benefits and satisfaction from consumption of the product. Brands also play a crucial role in signifying certain product features to consumers. It is a set of functional. they will more likely continue to buy that brand. If the consumers recognize a particular brand and have knowledge about it. etc. Benefits are the basis for purchase decision. ideas and even personality. emotional and rational associations and benefits which have occupied target market’s mind. Also. 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. they make quick purchase decision and save lot of time. Associations are nothing but the images and symbols associated with the brand or brand benefits. management and shareholders.P a g e | 11 To a consumer. employees. A brand connects the four crucial elements of an enterprise. 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.customers. they save search costs for product. Over a period of time. consumers discover the brands which satisfy their need. Brand is nothing but an assortment of memories in customers mind. The Nokia sound. The Nike Swoosh. Brand represents values. such as. . Brands simplify consumers purchase decision.

negative association and wrong communication strategy do harm to the parent brand even brand family. 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. the failures of brand extension are at higher rate than the successes. For instance. But it is now extended to sunglasses. and lowers risk. and measures brand’s relevance and appeal. and if these values and aspirations are embodied in the brand. 81% of new products used brand extension to introduce new brands and to create sales. Poor choices for brand extension may dilute and deteriorate the core brand and damage the brand equity.P a g e | 12 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. soccer balls.” Brand Extension is the use of an established brand name in new product categories. identifies resource requirements. 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. it is likely to be accepted by customers in the new business. In the 1990s. Nike’s brand core product is shoes. 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. If the customers of the new business have values and aspirations synchronizing/matching those of the core business. An existing brand that gives rise to a brand extension is referred to as parent brand. In practical cases. resulting in a diluted or severely damaged brand image. Most of the literature focuses on the consumer evaluation and positive impact on parent brand. In spite of the positive impact of brand extension. . and golf equipments. basketballs. Some studies show that negative impact may dilute brand image and equity. Extending a brand outside its core product category can be beneficial in a sense that it helps evaluating product category opportunities. Brand extension may be successful or unsuccessful. there can also be significant risks.

7. It increases market coverage as it brings new customers into brand franchise. 14. 11. 2. 12. The expense of introductory and follow up marketing programs is reduced. Cost of developing new brand is saved. There are feedback benefits to the parent brand and the organization. It allows the subsequent extensions. . 4. Customers associate original brand to new product. 13. 15. The efficiency of promotional expenditure increases. It increases brand image. Advertising.P a g e | 13 ADVANTAGES OF BRAND EXTENSION Brand Extension has following advantages: 1. 8. Brand image is clarified. It makes acceptance of new product easy. 16. It revives the brand. 6. The risk perceived by the customer reduces. The likelihood of gaining distribution and trial increases. There are packaging and labelling efficiencies. There are economies of scale as advertising for core brand and its extension reinforces each other. Consumers can now seek for a variety. 9. 3. An established brand name increases consumer’s interest and willingness to try new product having the established brand. selling and promotional cost are reduced. 5. 10. hence they also have quality associations. The image of parent brand is enhanced.

4. . Brand extension in unrelated markets may lead to loss of reliability if a brand name is extended too far. If the brand extension has no advantage over competitive brands in the new categories.P a g e | 14 DISADVANTAGES OF BRAND EXTENSION 1. 3. then it will fail. 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. There is risk that the new product may generate implications that damage the image of the core brand. 2. An organization must research the product categories in which the established brand will work.

The rest of the shareholding is distributed among about 360. . India and has employee strength of over 15. 13.3 million outlets in the country. HUL is also one of the country's largest exporters. followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).000 employees and contributes to indirect employment of over 52. The company was renamed in June 2007 as “Hindustan Unilever Limited”. Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company owned by the European company Unilever. HUL offered 10% of its equity to the Indian public. it has been recognized as a Golden Super Star Trading House by the Government of India.2. In 1931.10% equity in the company. It is headquartered in Mumbai. touching the lives of two out of three Indians with over 20 distinct categories in home & personal care products and food & beverages.675 individual shareholders and financial institutions. The company claims that two out of three Indians use its many home and personal care products. being the first among the foreign subsidiaries to do so. These three companies merged to form HUL in November 1956.000 people. They endow the company with a scale of combined volumes of about 4 million tones and sales of over Rs. food and beverages.P a g e | 15 1.000 Crores. Hindustan Unilever's distribution covers over 1 million retail outlets across India directly and its products are available in over 6. nearly 80% of all retail outlets in India. BRIEF INTRODUCTION ABOUT HUL Hindustan Unilever Limited Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company. Unilever now holds 52. Unilever set up its first Indian subsidiary. Hindustan Vanaspati Manufacturing Company. The Anglo-Dutch company Unilever owns a 52% majority stake.

In 2005. It is a unique win-win initiative that catalyses rural affluence even as it benefits business. Senior HUL executives wondered if these brand extensions would yield the benefits they promised. was the country's largest fast moving consumer goods (FMCG) company. HUL's entry into Bread is a strategic extension of the company's wheat business. HLL's portfolio of brands included Lux. . HUL launched a slew of new business initiatives in the early part of 2000’s. Currently. It is a rural initiative that targets small villages populated by less than 5000 individuals.P a g e | 16 In the early 2000s. HUL acquired the government's remaining stake in Modern Foods.000 Shakti entrepreneurs covering over 100. the government decided to award 74 per cent equity in Modern Foods to HUL. Vaseline and Fair & Lovely to Talc category. In 2003. as HUL struggled to generate growth. there are over 45. In January 2000. HUL also extended Lifebuoy. HUL extended its popular brands into the premium segment to increase its profits. HLL had extended many of its popular brands with varying degree of success. Over the years. In 2002. HUL decided to strengthen its already overwhelming presence in the talcum powder category where its brand. HUL made its foray into Ayurvedic health & beauty centre category with the Ayush product range and Ayush Therapy Centres. was already the market leader. in what seemed to be in response to intensifying competition in several segments.000 villages across 15 states and reaching to over 3 million homes. in a historic step. HUL had launched a number of brand extensions with varying degrees of success. In 2002. Most of these brands had been market leaders for several years in their respective product categories. Direct to home business was launched in 2003 and this was followed by the launch of ‘Pureit’ water purifier in 2004. Ponds Vaseline. Surf. Lifebuoy. Hindustan Lever Limited (HLL). the Indian subsidiary of Unilever. By early 2003. thereby beginning the divestment of government equity in public sector undertakings (PSU) to private sector partners. Vim. Clinic All Clear and Axe. Hindustan Unilever Network. Liril. “Project Shakti” was started in 2001. brand extension became an important strategic option. Ponds Dream flower.

HUL has the largest number of brands in the Most Trusted Brands List. Hindustan Unilever was rated as the most respected company in India for the past 25 years by Business world.HUL was one of the eight Indian companies to be featured on the Forbes list of World’s Most Reputed companies in 2007. one of India’s leading business magazines. It has over 35 brands. 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). detergents and shampoos amongst others with over 700 million Indian consumers using its products. while others like Ponds Toothpaste had been a dismal failure.P a g e | 17 Some extensions like Clinic All Clear anti-dandruff shampoo to hair oil category had been successful. tea. In 2007. . HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps. Sixteen of HUL’s brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2008).

HUL BRANDS HUL products are a household name in India. number of distributors has decreased drastically from 22 in 2007 to only 5 in 2008.1. As per the pilot project in Mumbai. 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. The giant HUL distribution network comprises of around 4000 redistribution stockists and 6. Following are the three key pillars in this approach: . With the introduction of ‘Hindustan Unilever Network’ in 2003 – HUL is trying its hand at ‘Network Marketing’. As a responsible corporation of the country.3 million retailer outlets. HUL consistently has highest number of brands in top 50 or top 10 Indian brand’s list. Of late. HUL has adopted the triple bottom-line approach to address environmental and social concerns. Over 2000 suppliers and associates are involved in its operations. 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. HUL is trying to reduce the inventory requirements by unbundling the distributors. The wide-spread distribution network reaches almost entire urban India and around 250 million rural consumers.2. b) Distribution Channel: HUL products are manufactured in over 40 factories across India. In the year 2008 AC Nielsen-Brand Equity list of 100 Most Trusted Brands Annual Survey featured 16 HUL brands.P a g e | 18 1. HUL’s Shakti program. Its brands across categories touch lives of over 700 million Indian consumers every day. Lately. a) Brands: HUL has around 35 major brands most which are leaders in their individual categories.

Food and Water Purifier.P a g e | 19 HUL is the proud owner of around 35 major Indian brands. HUL has divided its products into following categories: Home and Personal Care. It is again subdivided into eight sub-categories: The individual brands within these sub-categories are listed next: . In the ‘Home and Personal care’ category. HUL has maximum number of brands.

with two million soaps being sold every day in the early 1990s. there is health) had become the largest selling soap in India. The brick red carbolic soap with its famous jingle 'Lifebuoy hain jahan. Lifebuoy had been synonymous with health and hygiene. With consumers shifting to softer soaps that gave more lather. .P a g e | 20 The ‘Food’ port folio of the company comprises of following brands: Examples: Lifebuoy Since its launch in 1895.4% in 1997 to 12.. tandurusti hain wahan' (Where there is Lifebuoy.. Initially. Lifebuoy's market share slid from 15. Lifebuoy decided not to tinker with the core brand.5% in 2001.

after a successful launch in the US. HLL introduced Lux International in India in 2002. Europe and South East Asia. Shri Devi in the 1990s. which was synonymous with petroleum jelly. Lux came in three variants. Lux had been endorsed by popular filmstar’s like Leela Chitnis in the 1940s. In 1956. and Karishma Kapoor and Rani Mukherji in recent times. The Vaseline petroleum jelly was perceived as an effective. .P a g e | 21 Lux Launched in 1905. the brand was extended to talcum powder category with the launch of Dreamflower Talc. sunscreen and deep cleansing soaps and face washes. Lux White and Lux Black. though sticky protection from dry skin problems experienced in winters. Vaseline The other well-known brand from the Pond's stable was Vaseline. Lux was one of HLL's biggest soap brands. Ponds Pond's Cold Cream was launched in India in 1947. Variants included moisturizing. Positioned as the filmstar's choice. Lux Pink. which effectively became a 'generic' product in the Indian talcum powder market.

milky. In 2000. Positioned as the 'Hair Expert. .' Sunsilk identified different hair needs and offered specific variants to the consumer.P a g e | 22 HLL retained the formulation. Clinic Plus was launched in 1987 as a new variant of Clinic Special.. Dark Reddish Brown. a 30 year old brand. Clinic Plus Clinic Plus was the largest shampoo brand with a market share of 31%. In 1999. In 2001. the brand name was extended to Vaseline body lotion. a range of seven hair colours (Natural Black. Light Brown with Gold tint and Copper with Red Tint) specially suited for the dark Indian hair and skin tones.. Dark Brown with Purple tint. Sunsilk was the largest beauty shampoo brand in the country. but began to sell Vaseline lip guard in tubes and small plastic jars. Natural Dark Brown. Clinic Special was positioned as a hard-core anti-dandruff treatment shampoo. HLL introduced six hair specific variants of Sunsilk. a thick. Sunsilk Launched in 1964. Sunsilk toyed with extending the brand to 'ceramide hot oil treatment' and test marketed it. An instant success. The communication for Clinic Plus emphasized the mother-daughter bond. The packaging showed a family with healthy hair. Clinic Plus was advertised as a family shampoo with the positioning of 'protein nourishment for the scalp'. HLL extended Sunsilk's association with hair care by launching Sunsilk Pro-Colour. nonsticky body lotion that provided effective protection from winter dryness.

. nutrition and healthcare. The HUL. 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. diagnostic process that analyses the social and economic value. the company started to embed the sustainability agenda into their brands by using a process called “Brand Imprint”. . Despite advances in science and increasing prosperity. millions of people still lack access to basic sanitation. In 2005. Social and environmental considerations are now integrated with innovation plans for their major brands. access to a better life. It is a rigorous. This process has been carried out across all their key categories. from all income groups. as an organization believe that their brands can grow by addressing some of the most important social and environmental challenges facing the country today. as well as the negative impacts of a brand.P a g e | 23 Consumers: Making a difference through HUL brands Making a difference through HUL brands….

giving stiff competition to the market leader Colgate. frequently purchased daily use items. Despite being the global leader in this segment. Brand equities are built over a period of time by technological innovations. consistent high quality. HUL has emerged as a strong No 2 player. HUL is strong on both these fronts with 110 brands and a 1mn strong direct retail reach. In the foods business. has been unable to achieve a critical mass in India due to premium pricing strategy. and Godrej Pillsbury in staple food are the main competitors. In the skin care market. HUL has also been losing share to south based player Cavincare Ltd. Competitive Position: HUL is the market leader in the detergent and soap industry. besides competition from leading global players. .strong brand equity and a wide distribution network. In oral care segment. characterize the fast moving consumer goods business. Availability near the consumer through a wide distribution network is another crucial success factor. aggressive advertisement and marketing. Nirma is a close competitor in detergents and has been slowly gaining ground in toilet soaps too. Tata Tea in packet tea. as products are of small value. In the hair care segment. Nestle in coffee and culinary products. HUL dominates the shampoo market and is the No 2 player in hair oils.P a g e | 24 Two pillars . The other significant competitor in detergents is P&G. GCMMF (Amul) in ice creams.

Water management has been a key area of focus for HUL across the entire value chain. They believe that the true worth of an organization comprises more than just its business achievements. They are also engaged in community projects to conserve water. with mutual benefits for both their business and their partners. 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. more than 50%of the population lives on less than 10 litres of water a day. In 2009. . HUL has committed to create a responsible leadership that has a positive impact on society. These issues are likely to be exacerbated by climate change. India is an agri-economy. The United Nations reports that people need a minimum of 50 litres of water a day for drinking and other basic needs. and as its population grows. HUL contributed INR 30 crores towards community related initiatives. Approximately 70% of the total water is consumed by the agriculture sector.P a g e | 25 Society: Creating a Positive Impact Creating a positive impact….. In India. there will be an increase in water consumption by the agriculture sector. Their contribution in 2009 went either to long-term community investment partnerships or to commercial initiatives. The service it renders to society bestows great value on the organization itself. They aim to conserve more than 20 billion litres of water by 2015. and helps solve its most challenging issues. They are working in close partnership with their stakeholders to conserve precious drops of water.

Awards & Recognition These are some highlights of recognition that HUL have received from external bodies on their social. This is a rigorous fact-based assessment which is conducted by a team of external assessors. Logistics & Supply Chain Awards by APL Logistics..2. Indiatimes. 2009 HUL ranked fourth in the ‘Top Companies for Leaders. • • • 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. 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). 2009 Kwality Wall's Swirl's awarded 'The Franchisor of the year' for the Ice-cream parlour category by Franchise India in 2009 • • • . Nasscom Foundation and Times Foundation Awarded in the Category 'FMCG Manufacturing Supply Chain Excellence' at the Third Express. Mindscape. HUL has won this award for the third consecutive year.2. 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. • Awarded top Indian company in the 'FMCG' sector for the third consecutive year at Dun & Bradstreet-Rolta Corporate Awards.P a g e | 26 1. economic and environmental performance during 2009 and 2010….

Green Company of the Year . Six HUL brands (Lux.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. In 2009. Clinic Plus. • Received CNBC AWAAZ Consumer Awards in six categories for 2010: . Lux. and seven in the top twenty. Fair & Lovely and Pepsodent) feature in the top 10 and eight in the top 20. Lifebuoy. 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 | 27 • HUL brands have topped Brand Equity's ‘India’s Most Trusted Brands Survey’ rankings for 2010.Marketer of the Year award across all categories .Ad Effectiveness Award . All together there are 17 HUL brands among the ‘100 most trusted brands’ in the 2010 survey. This recognition was accorded to brands which consistently ranked high in the survey over the last 10 years since its inception. Pond's. Pepsodent and Pond’s) featured in the list of ten Hall of Fame brands.Value for Money Brand of the Year .Most Preferred Personal Care Company in FMCG category (for the third consecutive year) . Lifebuoy. three HUL brands featured in the top ten. Additionally. five HUL brands (Fair & Lovely.

.. throughout the network..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.. CHAPTER 2 REVIEW OF LITERATURE .

and it is hoped that the strength of the mother brand will aide in overcoming the shortfall. And it needs special promotion and language. 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. or which examines the measures which can be used to define it”. Marketing Mastermind (2003) HUL’s rural marketing initiatives have given the perspectives in which HUL has approached towards rural marketing. Martinez and Pina (2003) argued that line extension “decreases the risk of failure of new products. But there have been little empirical work which quantifies this threat. . Kim and John (2008) defines that “consumers evaluate brand extensions on the basis of their perceived fit with the parent brand”. Thus it makes sense to launch them as extensions.  There is not enough marketing budget for effective launch & continued support of standalone new brand.P a g e | 29 Thomas J. Branding strategy of HUL reveals that brand ambassadors plays an important role. Delong (2010) illustrate HUL’s conflict resolution and people development policies using “leading from the middle” approach. because consumers initially are more willing to accept products marketed under known brands”.  The products themselves are not good enough. According to Ries and Trout (1986) “cannibalization is a very real threat for the vast majority of the new product launches.

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

Broniarczyk and Alba (1994) explain that “brand-specific associations moderate the role of product category similarity in brand extension judgments. According to Broniarczyk & Alba (1994) “higher degrees of knowledge about the parent brand are associated with more favourable attitudes toward the consumer brand extension”. As the perceived quality (termed Quality) of the parent brand is 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”. 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”. 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”. Broniarczyk and Alba (1994) reveal that “the boundaries for the appropriateness of a certain brand extension were determined by knowledge about the incumbent brand”. the transfer of positive attitudes toward the extension is also higher”. rather than “diluting ”the global affect associated with the established brand name”. According to Kapferer (1994) “a brand extension strategy can be beneficial because it reduces the .P a g e | 31 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. Aaker and Keller (1990) propose “a relation between perceived quality of parent brand and consumers’ attitude toward the extensions in unrelated product categories.

. 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”.e. 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”. 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 (1996) explain that “the brand concept consistency is a better facilitator of brand extension acceptance than product related similarity”. 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”. 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”. Morrin (1999) propose that “consumer exposure to brand extensions will increase parent brand awareness in terms of recognition and recall”. Bottomley and Holden (2001) reveal that “cultural differences influence how brand extensions are evaluated with respect to relative measurement factors”.P a g e | 32 product introduction cost and also increases the chances of success”. Bottomley and Holden (2001) propose “consumer’s brand extension evaluations are also determined by (a) the dimensions of fit (i. the complementarily and transferability of assets and skills between the parent brand and the brand extension.

. Keller (2003) reveals that “firstly extensions can clarify the brand meaning to consumers and define the boundaries of the domain in which it competes”. the brand extension) based on their existing knowledge about the brand”.. Kim and John (2008) defines that “consumers evaluate brand extensions on the basis of their perceived fit with the parent brand”. Balachander and Ghose (2003) reveal that “forward spill over effects from advertising of a parent brand on choice of a brand extension are limited”.e.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. 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 Keller (2003) “the image of the parent brand can be hurt irrespective of the success or failure of the extension”. 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 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”.

P a g e | 34 CHAPTER 3 OBJECTIVE OF THE STUDY .

P a g e | 35 Every task is undertaken with an objective. brand loyalty and goodwill of the company has also been duly undertaken. Without any objective. . a task is rendered meaningless. 2 3 To know the change in consumer’s perception towards HUL’s brand extension. To know impact on the parent brand. Secondary Objective: 1 To understand the conceptuality of HUL brands. The main objectives for undertaking this research project are: Primary Objective: The study intends to understand the consumer’s perception towards HUL brands.

P a g e | 36 CHAPTER 4 RESEARCH METHODOLOGY .

2.P a g e | 37 4. 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. .1. Secondary data This data was collected by common sources:  Books  Research Papers  Published Documents  Journals  Websites. 4. THE STUDY Duration of Study: The study was carried out for a period of three months.

4. .3. non-disguised questionnaire on “5 point Likert’s Scale” on which the respondents were ask to indicate the degree of agreement or disagreement.4. Data has been presented & analyzed with the help of pie chart.P a g e | 38 4. Indore region has been selected for primary data collection. SAMPLE SIZE The sample of present study consists of 100 respondents. The Close-Ended Questionnaire was helpful to get a clear idea about respondent’s perception. The research was carried out through survey method with the help of self-developed structured. TOOLS FOR DATA ANALYSIS Percentage analysis tool is used for data analysis. Random sampling technique was used for data collection.

P a g e | 39 CHAPTER 5 DATA PRESENTATION. ANALYSIS AND INTERPRETATIONS .

8 percent respondents are disagree. 42 percent respondents are agree. 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. 9 percent respondents are strongly disagree and 5 percent respondents don’t know about the statement. So we can conclude that most of the respondents support the statement. 31 per cent respondents are agree. 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.P a g e | 40 Q1. So it can conclude that success or failure of the product affects the sales of parent brand. Q2. 6 percent respondents are strongly disagree and 10 percent respondents are not familiar with the statement. . 12 percent respondents are disagree.

7 percent respondents are strongly disagree and 12 percent respondents are not aware about the statement. 11 percent respondents are disagree. So we can conclude that most of the respondents are agree with the statement. 43 percent respondents are agree. 63 percent respondents are agree. 7 percent respondents are strongly disagree and 5 percent respondents are not familiar with the statement. Do you think that HUL brand extension adds value to the parent brand? Inference: Since 14 percent respondents are strongly agree. So we can conclude that most of the respondents are agree with the statement. 17 percent respondents are disagree. Q4.P a g e | 41 Q3. . HUL Brand extension affects the loyalty of the consumers? Inference: As 21 percent respondents are strongly agree.

7 percent respondents are strongly disagree and 15 percent respondents are not familiar with the statement. 47 percent respondents are agree. 4 percent respondents are strongly disagree and 18 percent respondents are not familiar with the statement. 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. 10 percent respondents are disagree. .P a g e | 42 Q5. Brand extension affects the goodwill of the company? Inference: Since percent respondents are agree. 18 percent respondents are disagree. So we can conclude that most of the respondents are agree with the statement. percent strongly 46 14 7% 14% 18% 15% 46% Strongly Agree Agree Neutral Disagree Strongly Disagree respondents are agree. So we can conclude that most of the respondents are agree with the statement. Q6.

26 percent respondents are disagree. Do you think that the attributes of the extended product is better than previous one? Inference: Since 15 percent respondents are strongly agree.P a g e | 43 Q7. Since agreed and disagreed respondents are almost same in numbers. . Q8. 30 percent respondents are agree. it can say that quality of the extended product is not always better than the parent brand. Do you think the quality of the extended product is always better than the parent brand? Inference: 15 percent respondents are strongly agree. 28 percent respondents are agree. 11 percent respondents are strongly disagree and 18 percent respondents are not familiar with the statement. So it is conclude that respondents are not exactly support the statement. 12 percent respondents are strongly disagree and25 percent respondents are not familiar with the statement. 20 percent respondents are disagree.

7 percent respondents are strongly disagree and 16 percent respondents are not familiar with 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 | 44 Q9. 10 percent respondents are strongly disagree and 17 percent respondents don’t know about the statement. 42 percent respondents are agree. 45 percent respondents are agree. Q10. Do you think the extension can satisfy consumer’s desire by providing a wide variety of goods under a single brand of HUL? Inference: Since 15 percent respondents are strongly agree. Do you think that the extensions are often used as a short term competitive weapon to increase a HUL brand’s image? Inference: 17 percent respondents are strongly agree. . 17 percent respondents are disagree. 14 percent respondents are disagree. More than 50 percent respondents are agreeing with the statement. It means consumers like to buy different products of the same brand.

Do you think the extension is the HUL’s best adopted way to introduce the new product into the market? Inference: 18 percent respondents are strongly agree. Do you think brand extension is a risky step? Inference: Since 8 percent respondents are strongly agree. So we can conclude that brand extension is a highly risky step. 11 percent respondents are strongly disagree and 11 percent respondents are not aware of the statement. 19 percent respondents are disagree. 9 percent respondents are strongly disagree and 12 percent respondents are not familiar with the statement. 51 percent respondents are agree. Q12. 20 percent respondents are disagree. . As most of the respondents are agree with the statement so it inferred that companies should adopt this strategy to launch a new product. 41 percent respondents are agree.P a g e | 45 Q11.

P a g e | 46 Q13. 40 percent respondents are agree. 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. 12 percent respondents are disagree. Q14. . 42 percent respondents are agree. So it can conclude that success or failure of the product affects the sales of parent brand. Do you think the success of an extended product can affect the sales of parent brand? Inference: Since 30 percent respondents are strongly agree. 9 percent respondents are strongly disagree and 20 percent respondents are not familiar with the statement. 11 percent respondents are disagree. 6 percent respondents are strongly disagree and 10 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.

30 percent respondents are disagree. 16 percent respondents are disagree. Do you think brand extension enables a company to enter new categories at significantly lower cost? Inference: Since 14 percent respondents are strongly agree. 34 percent respondents are agree. 48 percent respondents are agree. 8 percent respondents are strongly disagree and 12 percent respondents are not familiar with the statement. Do you think brand extension stops consumers to switch over to some other brand? Inference: Since 16 percent respondents are strongly agree. 14 percent respondents are strongly disagree and 8 percent respondents are not familiar with the statement. So it can conclude that brand extension not necessarily makes consumers loyal of the brand. .P a g e | 47 Q15. Q16. From the analysis it is conclude that companies can enter into new categories at lower cost.

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. 13 percent respondents are disagree. 44 percent respondents are agree. 12 percent respondents are strongly disagree and 19 percent . 36 percent respondents are agree.P a g e | 48 Q17. 19 percent respondents are disagree. Brand extension must be a logical fit with consumers’ expectations. Inference: Since 18 percent respondents are strongly agree. Q18. Do you think that HUL’s brand extension reduces the risk of failure of new product by already established awareness and trust? Inference: Since 20 percent respondents are strongly agree.

35 percent respondents are agree. Q20. 36 percent respondents are agree. HUL’s brand extension allows consumers to draw conclusions and form expectations about the potential performance of a new product. Brands should not be extended unless they are well-known. Inference: Since 26percent respondents are strongly agree. Q19. Inference: Since 10 percent respondents are strongly agree. 15 percent respondents are disagree. have high awareness and a good reputation among the new target market. 12 percent respondents are strongly disagree and 15 percent respondents are not familiar with the statement. 11 percent respondents are disagree.P a g e | 49 respondents are not familiar with the statement. 11 percent respondents are strongly disagree and 29 percent . So we can conclude that awareness and reputation are the major factor in the success of brand extension. So we can conclude that extension should be according to the expectation of the consumers.

So we can conclude that consumers can form their own perceptions about the brand extension but some of the respondents are not think so.P a g e | 50 respondents are not familiar with the statement. CHAPTER 6 FINDINGS .

to launch a product under any existing brand is beneficial to the company. as they use their knowledge and imagination to translate science into products that meet a range of consumer’s needs.  It was found that the quality of the extended product is not always better than the previous one. it is proven that HUL serve the best to all the customer’s categories & market segments according to their needs.  It was found that the brand extension stops consumers to switch over to some other brand.  It was found that brand extension affects the loyalty of the consumers. .P a g e | 51 According to the research. it is found that HUL believe in Product innovations.  It was found that the extension should be according to the expectation of the customers.  Most of the respondents are agree with the point that the brand extension is a risky step.  The success of the extended brand affects the sales of the parent brand.  It was found that the extension adds value to the parent brand.  Brand extension enables the HUL to introduce new products at significantly lower cost.  According to the research. tastes.  The success and the failure of the brand extension highly affect the goodwill of the company’s parent brand.  Extension provides a wide variety of goods under a single brand.  On the basis of research survey.  The reputation of the HUL’s parent brand is a crucial factor that influencing the likelihood of successful brand extensions.  It was found that HUL is often uses ‘extensions’ as a short term competitive weapon to increase a brand’s image  The awareness and trust about the brand is a strong factor for HUL to reduce the risk of failure of new product. desires & pocket capacities as well.

SUGGESTIONS AND LIMITATIONS .P a g e | 52 CHAPTER 7 CONCLUSION.

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. They need the knowledge of extension. on the other hand. the young and middle-age group consumers. On the basis of this research. it is concluded that some of the consumers don’t know the extension. that upto which extent HUL brands have succeeded in FMCG industry. it is concluded that people know that ‘new product’ which has launched under the same parent brand on which they trust. These fact figures are as the evidences about “Consumer’s Perception towards HUL Brands”. Building a favourable reputation for a parent brand is an important contributor to the success of brand extensions.P a g e | 53 CONCLUSION HUL products are a household name in India. consumers have showed very . This study advances knowledge of brand extensions in several ways. But they actually don’t know that the process is called “brand extension”. roughly two-third of Indian population uses HUL products. It is also concluded that the failure of extension affects the goodwill of the company as well as parent brand. The two biggest strengths of HUL are: its leading brands and extensive distribution network. And extension cements their trust in the parent brand. it is observed that customers evaluate ‘extension’ as trustworthy. They just buy the products according to circumstances. Its brands across categories touch lives of over 700 million Indian consumers every day. By and large. The concept of brand extension is the life line of HUL for succeeding in the battle of dynamic competition. During the survey. Brand extension is very important tool for HUL to expand its business. People buy those products on which they have faith or they are well known with them. Overall. And they also trust on new one as the previous one. it is concluded that the awareness regarding brand extension among the consumers is very high. especially. We found that brand extension is one of the crucial factors in enhancing the equity of the parent brand. “Brand” plays important role for the organizations. That means.

. Because.. And HUL includes endless product categories and in every product category.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. HUL is taking hard steps to improve the success rate of brand extensions.. The success or failure of brand extensions is vastly dependent on how the customers evaluate the brand extensions (Klink and Smith. approach and attitude. consumers have different perception. 2001). so the company should follow the strategy which includes a specific extension related to the product image in the market and its content. Theoretical and managerial understanding of how a consumer evaluates the brand extensions is given substantial importance. Moreover. HUL has discovered the best way to maintain its “Success Story” through the use of “BRAND EXTENSION” as a tool. throughout the network. HUL & any company need to understand the significance of these factors and their relative importance to develop a right brand extensions strategy. brand extensions can increase the efficiency of promotional efforts. improve access to distribution channels. to understand consumer’s response towards their own brands & brand extension as well and provides an overview of the company from customer’s point of view. In order to improve the success rate of brand extensions. So this particular study will help the Hindustan Unilever Ltd. it is imperative to understand the parameters or factors affecting the brand extensions evaluations. and reduce consumers' perceived risk of purchasing a product or service. . compared to launch a new product under a new brand name..

 When brand managers decide to grow their brands using brand extension strategies.  Brand managers are advised to evaluate their brands with the factors. clear and excited towards the brand. to measure the differential change in output due to the changing marketing strategies.  Company should initiate loyalty programs like emotional loyalty. emotions and feelings and not based just on consumers’ cognitive evaluation of the brand.  Extension should match the perception of the consumers which would make them more efficient. they are advised to consider the potential effects of unrelated brand extension.  The extended brand should have compatibility with the nature of parent brand.P a g e | 55 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. and also highlight the same expertise.  HUL should follow the strategy which includes a specific extension related to the product image in the market and its content. .  HUL must follow different & effective promotional strategies for its various product categories which would ensure its long run success.

 Sample size is limited to 100 respondents of Indore region.  There may be possibility of errors in data collection because many of investors may have not given actual answers of my questionnaire.P a g e | 56 LIMITATIONS  During the survey. .  The sample size may not adequately represent the whole market.  The research is confined to a certain part of Indore.  Few respondents were reluctant to divulge personal information which can affect the validity of all responses. it is found that few of the persons were not so responsive.

P a g e | 57 CHAPTER 8 IMPLICATIONS OF THE STUDY .

The research would provide a framework for HUL to understand the buying behaviour of the consumers with respect to brand extension in FMCG industry. HUL includes endless product categories and in every product category. an extensive and focused research can be undertaken to understand the consumer response for extension. approach and attitude. This project report may help the company to make further planning and strategy. consumers have different perception. to incorporate the fine tuned results in their marketing strategy. This particular study provides an overview of the extension in FMCG industry through the platform of HUL products from the customer’s point of view. Therefore. The above research would facilitate the Hindustan Unilever Ltd. . Brand extension with respect to HUL is a very vast concept.P a g e | 58 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.

P a g e | 59 BIBLIOGRAPHY .

P a g e | 60 .

com/images/papers/Factorsinfluce. Roger (1994)”Determination of New Product Performance: A Review and Meta. E.”Brand Franchise Extension: New Product Benefits from Existing Brand Names”. David A.hdfcsec.. C. Lawson. Whan (1992).com/Research/FResearch. Daniel C. Deborah Roedder (2008) “Consumer response to Brand Extension: Construal Level as a Moderator of the Importance of perceived Fit”. “The Effect of Brand Typology on Brand Extension Fit: Commercial and academic research finds”. E. Journal of Marketing Research. Journal of Product and Brand Management. D. (1994) “Consumer Evaluations of Brand Extensions”. • • Smith. (2003) “The Negative Impact of Brand Extension on Parent Brand Image”. Journal of Consumer Research..brandchannel.Analysis”. C. Journal of Product Innovation Management. Hartman. (1993).P a g e | 61 • • Tauber. (1981). (1991) Evaluation of Brand Extensions: “The Role of Product Feature Similarity and Brand Concept Consistency”.aspx? Heading=FundamentalResearch&FP_Code=HINDUNILVR&View=FRHistory. and Calantone. (1992). R. S. Journal of Consumer Psychology. Hakkyum and John.. Measuring. • • http://www. “The Effect of Brand Extension on Market Share and Advertising Efficiency”. Keller. “Conceptualizing. European Advances in Marketing Research. Kim.pdf . Journal of Marketing Keller. Kevin Lane (1993). • • • • • • Martinez and Pina. McWilliam. G. Journal of Marketing Research. Kevin Lane and Aaker. and Park.W. Montoya-Weiss. M. Mitzi M.ascx http://www. Nijssen. Milberg. Park. “The Effect of Sequential Introduction of Brand Extensions”. and Managing Customer Based Brand Equity”.J.

P a g e | 62 QUESTIONNAIRE .

Employee Other Professional Educational Qualification: …………………………………………………………… Address: …………………………………………………………………………….P a g e | 63 “A Study of Consumer’s Perception towards HUL Brands” Customer Name: ………………………………………………………………………… Age: 16-25 Sex: Income: Up to 1 Lakh 1–2 2–3 3– 5 above 5 Lakh Govt. ……………………………………………………………………………. ……………………………………………………………………………. Employee 26-35 36-45 45-55 Above 55 Male Female Designation: Student Pvt. Contact No: .

Do you think extension can satisfy consumer’s desire by providing a wide variety of goods under a single brand of HUL? Strongly Agree Agree Neutral Disagree Strongly Disagree . 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. 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. Brand extension affects the goodwill of the company? Strongly Agree Agree Neutral Disagree Strongly Disagree 7. 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 the quality of the extended product is always better than the parent brand? Strongly Agree Agree Neutral Disagree Strongly Disagree 9. 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.P a g e | 64 1. 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 brand extension enables a company to enter new categories at significantly lower cost? Strongly Agree 17. Do you think brand extension is a risky step? Agree Neutral Disagree Strongly Disagree Strongly Agree 13.P a g e | 65 10. Agree Neutral Disagree Strongly Disagree Do you think that HUL’s brand extension reduces the risk of failure of new product by already established awareness and trust? Strongly Agree Agree Neutral Disagree Strongly Disagree . Do you think the extension is the HUL’s best adopted way to introduce the new Agree Neutral Disagree Strongly Disagree product into the market? Strongly Agree 12. Do you think that extensions are often used as a short term competitive weapon to Agree Neutral Disagree Strongly Disagree increase a HUL brand’s image? Strongly Agree 11. 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 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.

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. Brand extension must be a logical fit with consumers’ expectations.P a g e | 66 18. Strongly Agree Agree Neutral Disagree Strongly Disagree . Agree Neutral Disagree Strongly Disagree HUL’s brand extension allows consumers to draw conclusions and form expectations about the potential performance of a new product. Agree Neutral Disagree Strongly Disagree Strongly Agree 19.

P a g e | 67 APPENDIX .

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