HLL vs. P&G

This article was sent to me by one of my students, Nikil Khatri, in 2007 when I was teaching Business Policy and Strategy in the MBA course in the first batch at ICFAI National College, a business school, now renamed Adam Smith Institute of Management.

Tide is the largest selling detergent brand of P&G worldwide. Tide was launched with much fanfare in 2000.

Indian detergent industry is estimated to be around Rs5000 crores and is dominated by the marketing giant HLL. P& G although was in the Indian market for a long time was not a serious player in the detergent market. But when the Indian market opened up and the economy began to prosper, P&G could not resist entering the Indian market in a big way. As always MNCs are too proud of their brands that they want a premium from the consumers. Here also, Tide was launched as a premium brand and as usual got a lukewarm response from the value conscious Indian consumers. P&G had to settle with a miniscule 8 % of the detergent market.

Then came 2003 and the price war started and now there is no premium brands in the detergent market in India. The price war enabled P&G to popularize the brand and increase the penetration. Although HLL and P&G did not increase their market share because of the price cut, the overall market size increased because the regional players lost their share to these giants.

P&G had a serious problem after the price cut because there was a chance of cannibalizing between Ariel and Tide because there was no significant differentiation between the two brands.

Now Tide has found its formula, the same global positioning as a Detergent that cleans perfectly. So using whiteness (safedi) as a base Tide has now unleashed the campaign highlighting its whitening power against HLL's Rin which has the same positioning.

The campaign has a desi touch and well executed. The pricing is competitive and hence HLL is forced to rope in none other than Big B (actor, Amitabh Bachchan) to defend Rin.

Through the new strategy Tide aims to capture the safedi segment while Ariel will fight Surf in the Color segment.

A marketing fight worth watching....

Sunlight: Sunset?


Sunlight is the oldest brand in the HLL’s portfolio. Launched in India in 1888, this brand is a heritage brand. Sunlight came to India as a detergent brand.
Indian fabric wash market is expected to be around Rs.5700 crores. Sunlight over these 118 years had its life cut out in the “power brand strategy” of HLL.
Sunlight was famous as a detergent or laundry cake which was very popular in the early times. The change in the customer lifestyle has tilted the market towards powder detergents. HLL focused its efforts on the powder detergents market and Sunlight was lost in the woods. Detergent cakes are losing consumer preference because of the advantages of powder detergents. Earlier, powder detergents were considered to be premium and with the rationalizing of prices, consumers have shifted towards powders.

Under the “Power brand “strategy, HLL decided to phase out Sunlight brand and focus on Wheel and Rin. But in 2004, Sunlight came with the new avatar as a Powder detergent. What made the company think about this brand is unknown. Sunlight detergent is now positioned as an affordable detergent with differentiation of “Color Guard” feature. The detergent also has the Pure Clean Technology that minimizes the “Insoluble” in the detergents. Sunlight is priced above Wheel and below Rin. The brand is promoted more in Eastern India and Kerala.

Why brands that have such a heritage become a liability for HLL? It’s because HLL failed to use Sunlight to counter the onslaught of Nirma. Instead it chose a new brand Wheel. With the introduction of Wheel as a powder detergent and with the decline of the detergent cake market, Sunlight lost its relevance. HLL also extended Wheel and Rin to detergent cakes so further sidelining the Sunlight brand.

Now Sunlight is used as a brand to effectively fill the gap between Wheel and Rin, so that no competitor can come in that price point. It is also interesting to note that this brand does not feature in HLL’s website. The brand has a very relevant brand name which denotes brightness and cleanliness; it is a brand name you cannot afford to lose. Sunlight should be positioned as a “Value for Money “brand. This segment is vacant in the Indian detergent market. Wheel is perceived as a low priced brand, Surf Excel is a mid segment brand while Rin is for whiteness. Sunlight with its color guard and pure clean technology is in a position to create a market for itself.

Indian fabric wash industry is worth Rs. 5100 crores and Rin is one of the super brands in the detergent bar segment. Rin was launched in 1969. The brand came into existence when there was a severe quota restriction from the government in the laundry bar segment. Rin was launched as a detergent bar.

For 37 years, this brand has been the market leader in the segment. The brand faced all the issues of competition, customer preference changes and price warriors. But it withstood all the challenges.

Rin is positioned on the whiteness platform. For years the brand is associated with whiteness. This positioning is reinforced by the famous mnemonic of lightning. Initially the brand was facing competition from laundry bars. Hence the task for the brand was to educate the customers about the new category of detergent bars. The campaign positioned the brand as the better way to wash indicating the category supremacy over laundry category. Later when the category evolved the positioning based on whiteness was communicated.

The success of Rin prompted lot of competitor activity in the segment. Many products came into the market with lesser price. Rin countered the competition by the famous “Zara Sa Rin” claiming the brand to be more powerful than the less priced brands.( source: superbrands.com/india).

Rin had its fair share of extensions. The brand had variants Rin Supreme, Rin Shakthi and Rin Advanced. The brand later extended to detergent powders to bridge the gap between Wheel and Surf.

Rin is facing its toughest competition in the form of Tide from P&G. The brand which came to India as a detergent powder brand has extended to bar category. Tide is positioned on the same whiteness platform with similar communication.

HLL is known for its obsession with market shares. It never compromises on the market share and is not stingy in investing in brands. 2005 saw one of the boldest marketing initiatives for Rin. None other than Amitabh Bachchan was roped in as brand ambassador (model) for the brand. The ads were trying to reinforce the positioning of Rin as the premium detergent soap. I was surprised seeing Big B endorsing such a brand.

There are reports that Surf Excel is extending to bar soap category and will be replacing Rin Supreme at the premium end. The logic is that Rin has a firm image of whitening bar while Surf has the strength of being a stain remover. HLL is trying to have Surf Excel to extend its leadership in the entire detergent soap category.
Rin has always tried to create the brand excitement alive by launching new variants or new promotions or some innovations. For example in 2002, the brand came out with a direct comparison with other laundry bars telling the customer that the soap is mud-free. The positioning was focused on pure clean technology that makes the brand mud-free.

2006 was another innovation of launching a cover for the soap that will prevent wastage of the soap. Although this innovation may be trivial, the brand is kept alive in the mind space. And that is the strength that has helped this brand to manage its product lifecycle.

Surf Excel has come out with a new campaign 10/10 ( pronounced 10 on 10). The campaign is aimed at raising fund for the educationally challenged poor kids. Every Surf Excel will have a piece of stained cloth. When washed, this cloth will reveal a number out of 10. SMS this number to 455 and that amount goes to a NGO that works in the field of education for poor. The campaign is set to collect Rs 25 lakhs for the underprivileged.

These types of campaigns are aimed at making the brand more humane. The brand gains from the positive attitude created by such campaigns. Some theorist calls this Corporate Social Responsibility. But as Drucker said, “The main purpose of business is to make profit” and as we say to create wealth for stakeholders. The problem is that only a management student understands such a concept. An ordinary person will view business as some thing that makes profit for a select few. Hence corporate are forced to display some actions to justify that they mean good to the society.

The latest Surf campaign also intends to do that. The brand is trying to ladder up to a higher level than just the cleaning ability. Lifebuoy also has successfully taken up the cause of preventing diarrhea thorough its Swasth Chetana campaign. The brands like Surf and Lifebuoy uses children in the advertisements. There are some people who consider themselves as “Moral Policemen” whose main job is to make the life of marketers difficult. These campaigns act as a preemptive measure to silence those critics.

It is a laudable effort from HLL to take such initiatives for the brand. The brands benefits immensely by associating with such activities through the positive vibes created by such campaigns. Another brand from HLL , Fair and Lovely also has taken up such initiatives to contribute to the cause of women empowerment.

2006 saw a unique marketing move from HLL. Rin Supreme bar is being migrated to Surf Excel. Although the decision is made in 2006, the ads are being aired more frequently in 2007 (I have only recently noticed this after one of my students pointed out this).I was wondering why HLL is messing up their successful detergent brand like Rin?

Indian Detergent market is valued at around Rs.5100 crores ($1.2 bn).Detergent bar market makes up for 43% of this market .HLL commands 38% of the fabric wash market.

The latest move comes in the wake of the high profile launch of Tide detergent bar. Tide and Ariel always created problems for Surf and Rin. The migration of Rin Supreme bar to Surf Excel bar is aimed at countering Tide.
While Rin is heavily positioned on the whiteness platform and Surf Excel on the stain removal platform, the new Surf Excel detergent bar is aimed to take both these attributes. The ad is already on air featuring kids conveying “Good News and Bad news" to their mothers.

It is true that the detergent bar market is important for HLL because in India, homemakers use a combination of bar, detergent and whiteners on their clothes. Hence any move from competitors should be seriously dealt with. But this migration initially did not make sense with me. Why spend money migrating brands? Does HLL gain by migrating Rin to Surf Excel?

But I feel that the logic behind the migration is to protect Rin and its USP of whiteness. It is true that Rin Supreme can counter Tide bar because both have whiteness positioning. Had HLL used Rin to counter any competition other than Tide, it will have to focus on the Whiteness Platform alone and any additional attribute may affect the parent Rin detergent powder brand. While having Surf Excel detergent bar will help HLL to counter competition not only from Tide but other competitors since Surf is known for its stain removal property. There will not be any dilution in the equity adding attribute of whiteness to Surf unlike Rin. My conclusion is Surf Excel has the ability to be a generalist than Rin. Is it good news or bad news?

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Idhayam is a strong regional brand in the hugely diverse and unorganised edible oil market in India. Indian edible oil market is huge with a consumption of 360,000 metric tonnes per year. The market is wide and varied with regional preferences diverse across India. For example, the preferences go something like this:

Groundnut oil is preferred in the West, coconut oil and sesame oil is preferred in the South, mustard Oil in East and North, soya bean oil in Central and North/West and sunflower oil in most parts of the country

Idhayam is the biggest brand in the sesame oil (Gingelly oil) segment. The brand has a rich heritage of over 60 years. The company came into existence in 1943 and over these years the brand has grown to occupy a major share in the South Indian market. Idhayam sells over 13 lakh liters per month.

Although in my house, traditionally we use coconut oil, Idhayam is a familiar brand because of the intense promotion by the company. The brand is promoted heavily through television and magazines. The brand uses the famous South Indian diva Jyothika to endorse the brand. Although the ads are dubbed from Tamil in Malayalam, the heavy and constant bombardment of ads never misses the audience.

What is more interesting is the message of the ad. Idhayam means Heart. The brand has its basic values rooted in health platform. I think the brand had this even before the Sunflower brands took over the health positioning.
Idhayam is positioned as an all purpose edible oil. The brand talks about low cholesterol content and great taste. The ad also reminds you that the oil is best to apply on hair too. Health + Taste have been the positioning of Idhayam for years now.

The company later entered the groundnut oil market with a brand: Mantra Groundnut oil.

The success of Idhayam lies in the ability of the company to build the brand. It had been a commodity business but Idhayam added value and now rules this segment. The brand over time has now come out with an innovative marketing strategy “Oil Pulling". This is an initiative of the company to pioneer the concept of Oil therapy in the country. Oil Pulling is the method of rinsing the mouth with oil for Twenty minutes by swishing the oil between the teeth. According to the company reports, this process effectively cures glaucoma and gum diseases. Check out the website & doctor before trying it.

Idhayam is a classic example of branding a commodity. The brand is now trying out new markets for its sesame oil. Whether it will be successful or not, time will tell.