Fair & Lovely - Analysis Based on Principles of Marketting

Topics: Brand, Brand management, Human skin color Pages: 22 (7150 words) Published: March 17, 2013
Project Background
A friend works with HUL and in one of our conversations there was a casual reference that Fair & Lovely (F&L) as a brand is so huge for HUL, that it covers the entire salary cost of the company. We were intrigued by this fact. We checked the HUL annual report and collected some primary data and were surprised to see this was partially true. Employee Benefits Expenses for 2010-11 was Rs. 961.26 Cr and for 2011-12 was 1107.28 Cr. Market share of F&L is on an average 80% in the ‘Mass Skin Lightning’ segment and translates to around Rs. 1500 to 1700 Cr in Sales. When the opportunity for picking up a marketing project came up we thought of picking up F&L. In the initial days of our research through the internet we found F&L has been picked up by many MBA schools, authors and students as a project and were initially discouraged to pursue this product as a subject for the project. However, the very reason that so many projects have been done on this product suggests that it is a very interesting topic/product to apply and understand the concepts of marketing. Hence, we still decided to pursue with this product as we believe we shall be able to portray a perspective and analysis that is different. Define the Product /competitor

Fair & Lovely – Fairness cream and associate brand products. Company – Hindustan Unilever Ltd. (Formerly HLL)

History of the product
Scientists at the Unilever Research Laboratories in India were the first to discover the skin lightening action of Niacinamide (Vitamin B3) that led to the development of a unique and patented formulation of Fair & Lovely in 1972. Fair & Lovely was launched in 1978 in India. How does it work?

Fair & Lovely's formulation contains a unique fairness system that combines active agents and sunscreens. It works by gently controlling the dispersion of melanin and preventing the sun induced effects of melanogenesis. Melanin is the predominant factor in determining skin colour and is produced in the lower layers of the epidermis and then distributed to the upper layers. The dispersion/aggregation of melanin largely contributes to skin colour.

Fair & Lovely is formulated with optimum levels of ultra violet (UV) sunscreens and niacinamide, which is known to control the dispersion of melanin in the skin. It is a patented and proprietary formulation developed at the Unilever Research Centre. Niacinamide (Vitamin B3) is a water-soluble vitamin and is widely found in cereals, fruits and vegetables. The UV components of the formulation are scientifically chosen and used at optimum levels to provide wide spectrum protection from the UV rays of the sun. All the active ingredients in the Fair & Lovely formulation function synergistically to lighten skin colour through a process that is natural, reversible and totally safe.

Fair & Lovely products are designed to deliver benefits within and on the surface layer only.

1. Aggregate market factors
a. Market Size
F&L and its family of fairness products are categorized in a segment known as ‘Mass Skin Lightening’. The other segment is referred to as ‘Premium Skin Lightening’. In this segment Fair and Lovely has been the market leader at around 80% market share since 2009. For Aug’12 F&L share against market competitors clearly shows the brands dominance. A ‘packman’; looking at biting off the competitors share. Company| Brand / Product| % Share|

I T C| VIVEL| 2.6|

b. Growth
Specific data on the growth of the product over the years could not be obtained. Since HUL was the first to launch such a product, it obviously enjoyed 100% market share till such time the competition entered. The product seemed to have lost the market...
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