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ASSIGNMENT OF MARKETING MANAGEMENT II PHASE-I & II

COMPANY: HUL PRODUCT: SURF EXCEL DETERGENT POWDER

SUBMITTED BY:

Sankha Mohapatra

INTRODUCTION- Hindustan Unilever Limited (HUL) is India's largest Fast Moving


Consumer Goods Company; its journey began 75 years ago, in 1933, when the company was first incorporated. The company stirring the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages and also one of the country's largest exporters. HUL's brands includes Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, KnorrAnnapurna, Kwality Wall's - are household names across the country and span many categories soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured in over 40 factories across India. In the late 19th and early 20th century Unilever used to export its products to India. This process began in 1888 with the export of Sunlight soap, which was followed by Lifebuoy in 1895 and other famous brands like Pears, Lux and Vim soon after. In 1931, HUL set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company, followed by Lever Brothers India Limited in the year 1933 and United Traders Limited in 1935. In 1956, these three companies merged to form Hindustan Unilever Limited. HLL offered 10% of its equity to the Indian public, and it was the first among the foreign subsidiaries to do so. In the year 1958 the company started its Research Unit at Mumbai Factory namely The Hindustan Unilever Research Centre (HLRC). In the year 1962 the company's Formal Exports Department was started and HUL recognised by Government of India as Star Trading House in Exports in 1992. A turning point to the company was guaranteed in the year 1993, HUL's largest competitor, Tata Oil Mills Company (TOMCO), merges with the company with effect from April 1, 1993, the biggest such in Indian industry till that time. Merger ultimately accomplished in December 1994. HUL formed Nepal Lever Limited in 1994, HUL and US-based Kimberley-Clark Corporation form 50:50 joint venture as Kimberley-Clark Lever Ltd to market Huggies diapers and Kotex feminine care products. Factory was set up at Pune in 1995. HUL acquired Kwality and Milkfood 100% brand names and distribution assets accordingly HUL introduced Wall's. The company and Indian cosmetics major, Lakme Ltd came to joint ventures and formed Lakme Lever Ltd and HUL recognised as Super Star Trading House in 1995. A group company, Pond's India Ltd was merged with HUL on January of the year 1998. In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities. The company's spotlight was turned on to Ayurvedic health & beauty, HUL entered Ayurvedic health & beauty centre category with the Ayush range and Ayush Therapy Centres 2002. During the year 2003 the company launched Hindustan Lever Network, a strong initiative by the company worth of Rs. 1800 crore for Direct Selling Channel.

In line with company's business strategy to exit non-core business, the Company has disposed its Mushroom business, which formed part of KICM (Madras) Ltd and its Seeds Business also in the year 2004. As of December 2005, Lever India Exports Ltd, Lipton India Exports Ltd, Merry weather Food Products Ltd, Toc Disinfectants Ltd and International Fisheries Ltd was merged with the company, both the five companies are wholly owned subsidiaries of the company and Vasishti Detergents Ltd (VDL) came in to fold of the company as a result of amalgamation of the Tata Oil Mills Company Ltd, VDL was merged with the company in February, 2006. In February 2007, the company has been renamed to "Hindustan Unilever Limited" to strike the optimum balance between maintaining the heritage of the Company and the future benefits and synergies of global alignment with the corporate name of "Unilever". During 2008, Unilever announced its collaboration with the Indian Dental Association (IDA) in conjunction with World Dental Federation (FDI) through its Pepsodent, leading oral care brand to help improve the oral health and hygiene standards in India.

HUL identified five key platforms and have articulated goals, both short term and long term goals, stretching to 2015, would work in areas of health & nutrition & women empowerment on the social front, the economic agenda would be to enhance livelihoods and the environmental agenda would focus on water conservation and cutting green house gases. Currently, Unilever holds 51.55% equity in the company while the rest of the shareholding is distributed among about 380,000 individual shareholders and financial institutions.

HUL have an extremely wide market exposure with over 35 brands spanning across 20 distinct categories such as soaps, detergents, shampoos, skin care, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers. HULs brands -- like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Sunsilk, Clinic, Close-up, Pepsodent, Lakme, Brooke Bond, Kissan, Knorr, Annapurna, Kwality-Walls - are household names across the country and span many categories - soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured in over 35 factories, several of them in backward areas of the country. The operations involve over 2,000 suppliers and associates. HUL's distribution network covers 6.3 million retail outlets including direct reach to over 1 million.

INTRODUCTION OF PRODUCT- Surf Excel, launched in 1959, is one of the


oldest detergent powders in India and Pakistan. Initially, the brand was positioned on the clean proposition of washes whitest. However, with the emergence of numerous local detergent manufacturers and the entry of other global brands, Surf Excel underwent various changes in its Brand Communication. This is in line with the global communication platform of Dirt Is Good, which is a communication strategy of Unilever for its premium detergent products, sold under various brand names; such as Omo in Brazil and Persil in UK and France. Today, Surf Excel leads the Premium Fabric Wash Category in India.

PRODUCT RANGE- Surf Excel products include Surf Excel, a detergent powder designed especially for washing machines as it has a low lather formula. Surf Excel Matic was launched in the year 2002. Surf Excel Matic has 2 variants Top Load & Front Load. Surf Excel Matic Top Load with special Multi Active System molecules is specially designed to work in large quantities of water & remove tough stains in the washing machine itself. While Surf Excel Matic Front Load with its concentrated 'low foam'2X Formula is designed to remove stains without generating excess foam which is harmful for washing machine. Quick Wash is a product that saves up to 2 buckets of water and Blue is used for Fabric and Colour Care. Surf Excel also has some specialist products like Gentle Wash, a liquid detergent, and Surf Excel Bar, a nil mineral detergent bar.

PRODUCT SEGMENTATION
SPECIFICATION TYPES DETERGENT POWDER Quick Wash Detergent Powder, Blue Detergent Powder, Matic Top Load, Matic Front Load

USES

Mostly used in washing machines to wash clothes.

PRICES

Depends upon sizes. Matic Top Load & Matic Front Load is expensive. Surf Excel (mummys best friend) is positioned as the brand that a housewife will look to upgrade herself. It is clearly positioned as premium and up market brand.

POSITIONING

MARKET SEGMENT

Washing machine users and others.

SUCCESS

Semi-urban and urban areas.

SURF EXCEL QUICK WASH- Used in Washing Machines and laundry. Medium priced. Affordable. Saves time in washing clothes.

SURF EXCEL BLUE- Used to remove tough stains. Affordable.

SURF EXCEL MATIC TOP LOAD & FRONT LOAD- Expensive product. Used by high income families. Used in washing machines.

PRODUCT LIFE CYCLE

1. Product Life Cycle and market stage have an impact on the positioning of the product surf excel 2. During the early stages, i.e. in 1950s, Surf excel was the first ever detergent to be marketed in India and hence the product was in an introductory stage. Accordingly the communication strategy adopted was one of awareness, information all leading to market incubation. As at introduction level surf has been positioned as one of the best detergent which remove stains and do not harm cloth moreover at that time customer were more concerned about the whiteness of the cloth it was positioned as the effective and intelligent buying therefore In mid '80s the woman in the Surf Ad got a name Lalitaji and was brought to life on television by Kavita Chaudhary in a TV commercial with the tag line SURF ki Kharidari mai hi Samajdari hai. (It makes better sense to buy Surf). Consumers' faith in Surf was restored, and not just because she offered a rational argument of the two-jar comparison showing how half-a-kilo of Surf was equivalent to one kilo of Nirma. The real reason Lalitaji was believed was because she was trusted by the Indian housewife to get her a good bargain. In a TV commercial her bargaining with the vegetable vendor about good tomatoes and bad tomatoes. Sasti cheez or achchi cheez me farak hota hai, bhai saab This clearly differentiates the surf from its competitors.

3. In the growth stages of the 1970s,the communication strategy changed to one of product differentiation educating customers of advantages of Surf Excel in terms of its superior quality and value for money, over its newly emerged rival-Nirma 4. In the maturity phase of the 1990s,the market for detergents started getting fragmented in the organized sector, with the entry of several other players, all vying for India`s growing market. This prompted Surf to come up with a reminder strategy of communication- repeated positioning of effective stain removal. The commercial Jaise bhi daag ho, surf excel hai na', and is today communicated on the platform of 'Daag achcha hai'. This is in line with the global communication platform of Dirt Is Good, which is a communication strategy of Unilever for its premium detergent products. Surf Excel has constantly upgraded itself over the years, to answer the constantly changing washing needs of the Indian homemaker. Today Surf Excel offers outstanding stain removal ability on a wide range of stains. 5. The positioning of Surf Excel continues to change, in line with innovative product features and communication themes, each time trying to capture an increased market share.

BCG MATRIX

STAR:

QUESTION MARK

SURF EXCEL DETERGENT POWDER

Market growth

CASH COW

DOGS

Market Share

STARS: The stars though generate funds but need to be constantly invested into because their prospectus of becoming cash cows depends on the pre-requisite of them being the market leader. HUL is the market leader in detergent segment. Its market share is 37%. It has detergent powder for all the segments: high-price, mid-price and low price. Surf Excel is a high-price, premium detergent powder. The market share of Surf Excel is 15%. Its market is expected to grow at a rate of 6.18% which is a high growth rate in this sector. Having a high market share and high growth rate, places this product in the STAR quadrant of BCG Matrix. It is facing a stiff competition from Ariel, a product of P&G. Thus, it is constantly using a strategy of repeated communication, as the best stain remover.

PRICING STRATEGY
HUL practices two types of pricing strategies for Surf Excel: 1. Competitive Pricing; dependent upon the price of the customers. 2. Value-Based Pricing. HUL uses both these strategies to determine the price of Surf Excel Detergent Powder. There are many competitors in the market. As their products are of highly quality so usually they charge high prices. Thus, the Management has considered about the competitive price while selecting new price and schemes. Prices are set by taking into consideration: o o o o What Customer believes for high price & high quality? There price are high because they believes in zero defects. They charge different prices to registered and unregistered retailers. Prices are set by taking into consideration the size, type of product.

Also, value-based pricing is used where price is determined according to the customers perception of the product. Surf Excel is sold in 25 grams sachets as well as 2000 grams packs to make purchase more convenient. Sachets contribute about 35% to Surf Excels total sales. The prices of these packs are determined according to the value perceived by the consumers. HUL conducts survey and observes focus groups to know about the customers perception of the product.

Price list of Surf Excel is as follows: QUANTITY (in gms.) 25 50 115 500 1000 2000 PRICE (Rs.) 5 10 20 115 210 405

Comparing Pricing strategy of Surf Excel and Ariel The First Detergent War was fought in the 80s when a small manufacturer in Gujarat aggressively marketed a detergent powder called Nirma nationally at one-fifth the price of existing brands. As mentioned earlier, Surf Excel practices competitive pricing policy. Its nearest competitor is P&Gs Ariel. It also follows the same competitive pricing. As and when one company decides to change the price of it product, the other company goes for an immediate change. The change in average price of the product is also approximately the same. This can be observed by the following table where price changes of Surf Excel and Ariel is shown.

CHANNELS OF DISTRIBUTION & PROMOTIONAL STRATEGY


Distributors Distributors are the institution through which availability of products is possible. HUL has good relationship with its distributors. They are integrated into total marketing mix because of time and money required to set up an efficient channel.

Distribution Channel used by HUL for Surf Excel HUL is expanding its so-called go to market (GTM) initiative, launched in Mumbai in 2008, in an attempt to revamp its national distribution network and streamline its supply chain. This channel is common to all the FMCG products of HUL. Surf Excel also uses this channel to reach to its end users. HULs GTM initiative in Mumbai was aimed at rationalizing its distribution network, make it more efficient, deliver stocks to retailers faster and reduce inventory on their product shelves. It farmed out the task of stock deliveries to logistics provider Mahindra Logistics as part of the Mumbai project. The company consolidated its 21 distributors into four mega distributors, who now account for sales of about Rs 480 crore. This was a pilot plan which is now introduced in the whole country by HUL. As part of its effort to streamline distribution, HUL has also started outsourcing most of the sales team to professional staffing firms. Traditionally, bookings from retailers were the responsibility of the distributors sales team.

Distributors salesmen have generally been not very competitively paid and have no job security and decent working conditions. While they have traditionally been paid between Rs4,000-7,000, the new salesmen are graduates wherever available and are paid Rs7,00011,000 and are from a staffing services company. HUL is now asking its distributors to use their own resources to upgrade staff offices and training. Currently, about 2,400 distributors across the country employ 9,000 salesmen to take weekly orders from a million retail outlets. Engaging Mahindra Logistics led to a system being put in place that has cut seven-day inventory to one day. Orders are logged in the evening by distributors staff and delivered by the company the next evening to the distributor. Mahindra Logistics delivers stocks to retailers the next morning. Essentially this frees distributors resources that are otherwise tied up in stocking excess inventory and preventing losses due to in-transit damage. Consumers get fresher stock from retailers. The system also ensures that products that languish on a retailers shelves are not supplied, eliminating losses from expired stock. The shift from dependence on the unorganized sector to an external logistics supplier will also reduce loss due to pilferage.

Sales promotion & Advertisement The brand advertisement plan is based on an annual basis, which is made on the basis of assumptions and competitors moves. These plans are discussed and reviewed every month and modifications / changes are made if required. If any change is required than it needs to be approved from the Directors. They divide the advertisement budget into two parts, first part is focused on theme advertisement, and other focused on promotional activities. As a premium brand Surf Excel needs to have heavy advertisement on television. Other media also used keeping in view the target consumers. The reason for heavy advertisement on Television is because TV is the major influencer media, so major share of the advertisement goes to TV. For Promotion purposes, they give Trade offers For trade offers, they offer 36 Rs. Discount per carton etc. Sales Force Promotion For distribution sales force, they give 1,000 Rs. to the District sales representatives (if they achieve their targets). Consumer Promotion For consumers they offer promotions from time to time by providing offers such as 25% Extra quantity, 26 Rs. off, they also sometimes include sachet of the other products in order to generate the trials of different Unilever brand SKU(s) through the strength of Surf Excel large consumer base.

Distinctions in promotion of Surf Surf was the first brand of detergent that was advertised on TV. It is advertised on more than 300 channels across the globe. Introduced the concept of bucket wash to housewives who up till now used to washing clothes with laundry soap bars. Brand to set up a one-stop shop - called Care line - for people seeking solutions to their varied laundry problems. Surf Excel underwent various changes in its Brand Communication; from Lalitaji' to 'dhoondte reh jaaoge' to 'jaise bhi daag ho, surf excel hai na', and is today communicated on the platform of 'Daag achcha hai'. HLL is now reworking the Surf Excel strategy by moving away from positioning the brand on functional benefits, to building an emotional connect. Surf Excel is currently running two campaigns riding on the popularity of the "Daag Ache Hain" (Dirt is good) campaign. The new campaign too strikes a chord with the consumers. Power of a "Big Idea. The second campaign takes a cue from the World cup. The ad features a group of kids preparing for World Cup 2015. The company has re-packaged the product using brick packaging which is a first among detergents in the country.

Radio city campaign Surf Excel, a leading detergent brand from Hindustan Unilever Limited, has come together with Indias leading Radio Network, Radio City 91.1 Fm to celebrate International Peace in Mumbai, where Children across the city got dirty for a noble cause and spread the message of peace in a unique & colourful way. Children across Mumbai are invited to participate in this activity through an on air campaign on Radio City. Across schools, kids will leave colourful hand impressions on multiple canvases. Surf Excel will then showcase these canvasses on hoardings and in malls across the City, in a bold statement for World Peace as defined through a Childs eyes.

Surf Excel: Creative Strategy for Daag Acche Hain Surf Breaking the Clich Informational Appeal from early days of Lalitaji Ads have been only about unhappy housewives Comparison of white shirt and yellow shirt Boring stereotype, predictive and formulaic ads Says its OK to soil your clothes for a good cause Known for its newness, simplicity and clutter breaking ability Emotional connect with the audience Focus centered around people rather than brand or the product, intangible aspects are highlighted

History of Advertising

Present status

Came up with Surf Excel Forgiveness Campaign (Sequel of Daag Acche Hain) It has increased the brand recall value

Surf Excel: Media Strategy (Traditional) Various categories of communication systems like broadcasting, print media, etc. are used for Surf Excel. Billboards and posters In the Print Media, such as newspapers, magazines, direct mails, outdoors, etc. are used In the broadcasting media, television and radio (FM channels) are the major tools The frequency of ads is higher during the time slots 1.00 pm to 3.00 pm and 9.00 pm to 11.00 pm for stronger impact on target population Word of mouth publicity

Surf Excel: Media Strategy (Non- Traditional) Title sponsors of TV shows (Surf Excel Little Masters) Every year Surf Excel organizes childrens festivals Kala Ghoda 2010, 2009; Anand Mela 2007, D-Mart 2008 Surf Excel has its own YouTube channel wherein children share their Dirt is Good experiences Surf Excel tied up with the movie Chillar Party Organizes various competitions , e.g. Worlds largest Hand-Printing Competition (over 70,000 children participated, Surf excel smart choice contest lucky winner to get Whirlpool washing machine Online promotion strategies website www.surfexcel.in Various initiatives: 1. Surf Excel and You suggesting mothers to encourage active learning in their children, mothers pride in which mothers can share their pride stories special moments from the moment they have children, knowledge beyond books, expert advice

2. Childrens Club Social media marketing through facebook Santa Claus Carnival etc.

SWOT Analysis
Strengths Enjoying economies of scale Good will in the market Strong financial position Surf has become the generic name in detergents Have Strong distribution channel in Pakistan Abundant financial resources Well-known brand name Well brand image Committed employees

Weakness Huge inventory stocks of raw material Weak spending on R & D Internal operating problems

Opportunities Rapid market growth Changing customers needs & wants as life style change To create relation with society on the social marketing basis Pakistan peoples moves from soap to detergent

Threats

There is very tough competition in detergents markets Low profit margins Smuggled brands of CHINA New competition in the market Increases in taxes Increases in prices due to fuel prices

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