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HUL fighting the challenge in the growing FMCG market
The market in figuresData in Euros 2003-04 2005-06 Increase
Cosmetics 1.2billion 1.6 billion 33%
Skincare 300million 410 million 37%
Health Care 600 million 725 million 21%
Fragrances 200 million 262 million 31%
Deodorants 141 million 227 million 61%
Oral Care 490 million 638 million 30%
Soaps 905 million 909 million 0.1%
Male Grooming 165 million 253 million 53%
Total 2.7 billion 3.4 billion 25%
Growth in FMGC
•The rising GDP and Per Capita Income in India is promising growth in the FMCG market. In this scenario, HUL is predicting a lot of potential to grow consumption and penetration.
HUL - India’s largest FMCG company
Leadership across Diverse FMCG Categories
Opportunities & Challenges
• A buoyant & growing economy
• Increasing per capita income drives FMCG growth
• A changing profile of a differentiated set of consumers
• Opportunity to grow consumption and penetration
• Large scale potential to grow Foods
India - 2013
Opportunity to grow consumption
Opportunity to grow consumption
Opportunity to grow penetration
Segmentation Targeting &Positioning
Personal wash
Laundry
Hair care
Skin care
Tooth paste
Tea
Coffee
Packaged food
• Highly under penetrated• Implement the foods strategy• Use of Unilever know how to cater to local
tastes• Enter new exciting markets within the
processed foods space
LUX• upper middle and high income groups
additional benefits• one of the strongest brands
DOVE• premium pricing• psychographic
LIFEBUOY• lower income groups• more basic
LAKME• Behavioral +age + gender• range of products • tough challenges
FAIR & LOVELY• Age, gender, behavioral• middle income group• tough competition
PONDS• income group• across the different tiers• strong competition
PEPSODENT• middle income group • weaker category
SURF EXCEL• very popular• high pricing, yet preferred
HUL’s Quarter analysis across 2000-2007
2005-04
Observation through graphs:• In 2005 , we could see a significant increase in the %growth of
FMCGs in all quarters. This was due to:• Significantly higher brand investments.• Sunsilk “9 t0 9” conditioner and new variant of clinic all clear
black launched• Growth in all key HPC categories like shampoos ,laundry,
personal wash, skin care, tooth paste. Total HPC growth of 12% led by Shampoo & Laundry
• Rin Advance gains shares in a competitive context• Strong growth in closeUp and pepsodent and backed by all
other brands like ponds
2006-05
• In 2006, we could see that Q3 and Q2 %growth of FMCGs decreased , Q1 is almost flat and Q4 increased significantly about 18.3%. But overall %growth of FMCGs in this year got decreased
This was due to:• Adjusted for discontinued business (Nihar)• Strong performance by Lux portfolio and the recently
relaunched Lifebuoy.• Ice creams grew strongly, led by the impulse category• Advertizing and promotion spend for the quarter 4 jan-
Mar,was accelerated and recorded a 45% increase
2007-06
• In 2007, %growth of FMCGs in Q2&Q4 decreased significantly, in Q3 increased significantly , in Q1 increased. This was due to:
• Launch of Scalp Oil Control boosts sales in Clinic All Clear;
• Skin category got impacted due to the relaunch of Fair&lovely in July 2007.
• Ice cream performed its 20%+ growth in march quarter.
2002-2003
In 2002 , there is a significant decline in the %growth of FMCGs across all quarters. This was due to:
• Decline in %growth of personal products, ice creams,foods and beverages in march and December quarters.
In 2003, % growth of FMCGs across all quarters had a siginificant increase .
• Driving growth through appropriate price points positioning resulting Lifebuoy becomes the largest value share brand in June 2003
• Higher investments in quality, Quality investment drives Rin Supreme
• Growth in Rural market • Chik shampoo’s sales growth got declined
2004-03
• In 2004, %growth of FMCGs in quarters expect for jan-march quarter ,got decreased significantly. This is due to:
• Food market sales declined 42%• Impact of lower primary sales• Rin Shakti declines
Summary on Quarter analysis:
• From the above results we could say that even HUL’s market share is high its facing a lot of competition in FMCGs market.
• For instance, HUL’s share in the skin care segment, its most profitable division which accounts for at least 45% of profits, has declined by more than 3 percentage points to 54% in the last two years.
• Last year, the company’s rival Procter and Gamble (P&G) launched high-end skin care products under the Olay brand that have since emerged a significant threat to HUL’s offerings in the segment .
• Another multinational brand, Garnier, owned by the L’Oreal Group, has increased its focus on India, too
What can HUL do to fight back?
• According to a CavinKare executive, 75 per cent of Chik sales come from the rural market, while the industry sells only 52 per cent of its shampoo brands in the rural markets, so HUL can improve its market growth by reducing the prices of the products and focusing on rural market.
• In the Indian shampoo market, where sachet (7ml) format accounts for 75 per cent of the total sales, Chik has been bringing in 90 per cent of its sales in this format. So to improve on shampoo market HUL should focus on sachet format
What can HUL do to fight back?
• Cavinkare: The pricing of the new product is also done with an intention of taking on market leaders such as Clinic Plus. Chik Satin is priced at Rs 56 for a 200-ml bottle, while Clinic Plus is priced at Rs 63 and Sunsilk at around Rs 87 at the higher price point. So HUL can focus on the pricings of the new product should be taken with an intension to beat the competitors
• While going through annual and quarter reports of HUL , I noticed that in most of the quarters HUL’s % of growth in salt and tooth paste sector got decreased frequently . so to increase the % growth of FMCG, HUL should focus on salt and tooth paste sector for better results .
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OTHERSCAVIN KARE
HUL
SHAMPOO
POWDERS
1 2 3 40
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CAVIN KARE OTHERS DONT USE
HUL
DEODORANTS
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CAVIN KARE
DONT USE
HUL OTHERS
FACIALS
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CAVIN KAREDONT USE
HUL
WOULD YOU BUY A PRODUCT ON BASIS OF PRICE AND QUALITY?
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PRICE
QUALITYBOTH
DEODORANT
Aviance
AxeRexona
0
20
40
60
80
100
120
140
160
1 2 3
Price
FAIRNESS CREAMS
Fair ever Fair & Lovely
50556065707580859095
100
1
Price
TOOTH PASTE
Pepsodant Whitening
Close up Pepsodant 2 in 1
0
5
10
15
20
25
30
35
1 2 3
Price
TALCUM POWDERS
Ponds MagicSpinz
Ponds Sandal
30
31
32
33
34
35
36
37
38
39
1 2 3
Price
Lifebuoy
RexonaHammam
Liril
Pears
Dove
0
10
20
30
40
50
60
1 2 3 4 5 6
PriceSOAPS
WASHING POWDERS
Wheel
Rin
Surf excel
0
20
40
60
80
100
120
140
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Price
SHAMPOOS- LOW END PRICE
Clinic plus Chik Meera
0
5
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30
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45
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Price
MEDIUM PRICE
SunsilkDove
0
10
20
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40
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60
70
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Price
HIGH END PRICE
Clinic PlusSunsilk
Dove
66
67
68
69
70
71
72
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74
75
76
1 2 3
Price
Advertising
LUX
• Celebrity endorsement• Grandiosity• Benefits of the product• Rare promotions
(Poor choice during occasions)
DOVE• emotionally appealing• across all segments • dove family
AXE• exaggerated end effect• cross-promotions
LIFEBUOY• kids from residential complexes• germ protection and hygiene• targeted market segment ??
LAKME• flashy colourful adds• grandiosity and celebrities• features and benefits down the line
FAIR & LOVELY• Middle income group• new horizons in life• POP and sampling
pepsodent• repent if you don’t buy• concentrates on USPs
Surf excel
• shoulders a lot of responsibility• features housewives
IMC
CavinKare Vs HUL
•Interviews given by top level managers to media
•Innovations and entry
•Future plans
•Transparency of the company
•Reaching the common man
PR ACTIVITIES
• Shakthi• Gren barrnes• CASHE (credit and saving for house hold
enterprises)• LSBC(Life bouy swasthya chetan)• Fair and lovely foundation.• Ashadaan• Yashodayam
Cavin kare
• Ability award• Competitions • Open shows (Nyle and shine)
Supply Chain Management Solution for HUL Problem• nearly 1000 products, four warehouses, more than 40 agents, 7,500 wholesalers and a
number of large institutional customers.• excess finished-goods inventory reaching distribution centers
Supply Chain Management (SCM) solution ensures informed decisions in • procurement,• manufacturing, • replenishment and • distribution.
Solution needs to provide visibility and prioritize the demand-fulfillment process based on individual profiles. Dynamic data such as daily production, distribution, sales and related constraints need to be considered.
How to Implement ?? Adexa - industry-specific planner (software)