UNILEVER IN INDIA: BUILDING THE ICE CREAM BUSINESS

Chandru.J Devi.S Dheeraj.V.G Dinesh.N.G Elakkiya.K Madhumita Singh Poornima Pushpa.M Sujatha Sushmetha.V

OVERVIEW OF THE CASE

This case deals with How changing the strategy can cause a remarkable change in Business Growth HLL initially feared to increase the price. But in recent years, they have increased the price saying that the product is so good that people will see a value for their money.
William Hesketh Lever Margarine Unie Hindustan Vanaspati Manufacturing Hindustan Lever Ltd. (HLL)

1885 England

1930 Netherlands

1931 India

1956 India

MARKET ANALYSIS

2004: Indian ice-cream market was valued at Rs.1000 crore out of which Rs. 600 crore was under organized sector. HLL came up with Frozen Desserts 1980s and 1990s : 2-3% per annum market growth only. 1997: After the Indian Government liberalized rules for icecream industry, sector grew at a rate of 15-20% per annum. 1990s to 2000s : Multinational companies with their premium brands entered the scene.

MARKET SIZE

With a low per-capita consumption of 200 ml , opportunities in India for ice-cream marketers were abundant. Kwality walls VS Amul. Owned by GCMMF-KW claimed that it is the leading ice-cream seller in value and volume terms.

MARKET SIZE (contd.)

A.C. Nielsen data- reported Kwality walls market share to higher than Amul. But, Prasanna Shah , Head of GCMMF explained that Market surveys are based on sales reported by the same sample of outlets year after year. Amul has been adding nearly 10000 DFOs annually but HLL has withdrawn its ice-cream from virtually every market, barring 6 cities from where Nielsen sample is drawn.

HLLS STRATEGY
1.

PRODUCT RANGE: Product Name Feast Target Youth

Cornetto
Max Sundaes Softies

Young Adults
Children Families School Students

2. TARGETING:

It took 6 years for HLL to break-even (2001). To overcome the loss, they implemented a new strategy. Out of 40000 outlets countrywide, they started concentrating in 7 main cities- represented 2/3rd of 80 million litres ice cream market. Manufacturing units were cut down to 6 from 40 that were present in 1995. They launched new products backed by ads and innovative promotional offers with brand name KWALITY WALLS- Umbrella Brand. The ice cream division made profits of Rs. 9.74 crores for the first time during January June 2003.

3. HLL VS AMUL:

HLL

AMUL

Cornetto & Feast

TriCone and Frostik in 1990s 25% lower price than HLL Max (15ml for Re. 1) Fundoo in 2000. (45ml for Re. 1) Max retaliated by introducing Introduced flavors in Fundoo flavours in Max Focused on Hygiene, Premium Focused on Price. Positioning and Wholesome Food Value of its ice-creams. Preferred by youngsters (more Preferred by families (less price) contemporary image)

4. NEW MARKETING INITIATIVES

1. INNOVATION

PHASE:

HLL segmented consumers into Indian impulse consumers and takehome segments.

Out of the 70% take-home segment in the mature ice-cream market, only 20% contributed to the Indian market.
In India, ice-cream eating at home was confined to special occasions and they preferred only 3 regular flavors. To expand take-home segment, they introduced Home Delivery Concept in tie-up with Pizza Corner. Later, HLL set up exclusive ice-cream parlors across the country.

4. NEW MARKETING INITIATIVES (contd.)

2. COMMUNICATION

PHASE:

Kwality Walls was re-launched with the catch line Ho jaaya dil ka

connection

Target audiences were children, teenagers, adults to families.

They introduced International Heart Logo a symbol of warmth, togetherness and happiness.

4. NEW MARKETING INITIATIVES (contd.)

3. ACTIVATION

& VISIBILITY PHASE:

Valentines Day 2001: Contest called Cornetto Khao Jodi Banao May 2001: Promotional campaign for its Feast range - Whats on

your stick?

2002-Ek Din Ka Raja (EDKR). 2002-Fridge mein Kwality Wall's hai kya. Promoted kids portfolio of ice-creams in association with Cartoon Network- Max, the Lion King, `Bano Toonstar with Scooby-Doo and

Max.

The Teen Vardaan Contest

THE SUPPLY CHAIN

RAW MATERIALS AND INGREDIENTS

15.3

billion spent on raw materials and packaging from over 10,000 suppliers in 2009.

Preliminary data pending audit.

MANUFACTURING
264

manufacturing sites. Continuous improvement in eco-efficiency in factories (19952009):

41% reduction in CO2 from energy 65% reduction in water use 73% reduction in total waste

Preliminary data pending audit.

DISTRIBUTION & RETAILING one-fifth of Unilevers sales are through ten major retail chains.
Our Around

products are sold in over 10 million small shops in developing and emerging markets.
of sales from developing and emerging markets.

50%

CUSTOMER PARTNERSHIPS

Unilever manages a number of partnerships globally.

CONSUMERS 2 billion consumers use a Unilever product on any day.

Top

13 brands with combined sales of 23 billion in 2009. The net sales of HUL in 2013 is Rs. 25810 crores in India.
5.3

billion invested in advertising and promotion. 891 million invested in R&D.

PRODUCT PORTFOLIO

PRODUCTS

TARGET SEGMENT
young generation with an attitude

Feast range

Cornetto

Young adults

Max range

Solely children

Sundae range

Family, take away, 10pm frozen dessert

Softies

Children, college students

PRICE

Costly Reason: quality, taste No human contact with ice-cream Dare to compare promotion

PLACE

Ice-cream parlor, restaurants, swril parlor

Softy: available even in kirana shops

PROMOTION

Valentines

Cornetto Khao Jodi Banao

Day

2001:

Contest

called

May 2001: Promotional campaign for its Feast range - Whats on your stick? 2002-Ek Din Ka Raja (EDKR). 2002-Fridge mein Kwality Wall's hai kya. Promoted kids portfolio of ice-creams in association with Cartoon Network- Max,

the Lion King, `Bano Scooby-Doo and Max.

Toonstar

with

The Teen Vardaan Contest

BCG MATRIX

BCG MATRIX- (contd.)

CASH

COWS CORNETTO , FEAST STARS MAX QUESTION MARKS SOFTIES DOGS FAMILY SUNDAES

PORTERS 5 FORCE MODEL

1. WITHIN AN INDUSTRY
Competition

is very intense due to low differentiation. Ice cream industry accounts to around 2000 cr and organized segment is 10001100 crores Amul Mother dairy Baskin & Robbins Local competitors

2. THREAT OF NEW ENTRANTS

High

in the industry

Liberalization

& globalization policies made it easier for foreign players to enter the market. E.g. Baskin Robins

3. THREAT OF SUBSTITUTE
It

is very high for ice creams in Indian market due to its culture of traditional desserts & sweets. Some of the substitutes are- traditional sweets, homemade desserts like halwa & kheer, kulfi or faludas

4. BARGAINING POWER OF BUYERS

Pretty

high
of existing substitute

Availability

products

Buyer

is price sensitive

5. BARGAINING POWER OF SUPPLIERS

It

is pretty low as manufacturers can easily switch to a different supplier at a low cost.

SWOT ANALYSIS

1. STRENGTHS
Strong

brand name

Excellent
Good Lots

advertising and visibility

product distribution and availability

of flavours and varieties available

2. WEAKNESS
Food

products have a low shelf-life

Input

cost is high

3. OPPORTUNITIES

In early 2000s the consumption of ice creams per head in India was very low at 200 ml
In 1997 government liberalized the rules for the ice cream industry resulted in 15-20% growth per annum Huge number of young population which is prevalent in India

4. THREATS

Powerful local players in the market ( top in town very popular in MP & UP, cream bell, metro)
Entry of foreign brands like BR, Mc Donalds Indian sweets market Substitute products have a strong hold in the consumer psyche of tier 2 & tier 3 cities.

CONCLUSION
They

were able to create a brand through some excellent promotional strategies on the quality of product to retain brand value.
to connect with customer psyche and gain their affection.

Concentrated

Able

THANK YOU