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 theFMCG market. In this scenario, HUL is predicting a lot of potential to growconsumption and penetration.
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
2005-04Observation 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 decreasedThis 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.
2002-2003In 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 .
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
IMCCavinKare 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)