(Detergent Wars-Wheel v/s Nirma)
Prof.Dhruv Chak Submitted by: Ankita Beri PGDM-I Sec.-A Roll no.-022
1. Based on the case study above, critically examine HUL’s Marketing strategy for Wheel since its inception and the reasons for the success of the brand.
2. Assume you are the new Marketing head of HUL. Will the present value proposition, positioning and marketing strategy for Wheel hold good for the next 5 years? If not, suggest changes you would initiate. In either case give reasons for your answer.
HUL’s Marketing strategy for WHEEL since its inception
VALUE additions, price cuts, improved technology. Hindustan Lever's detergent division and R&D have been on an `upgrading' mission since its epiphany of Nirma’s emergence as a potential threat with regards to competition, simultaneously trying to balance the price-value equation for its consumers. Hindustan Unilever or the then called Hindustan Lever Limited (HLL) used to be an undisputed leader in the FMCG sector as a whole, leave alone only the detergent market. However, it catered only to the elite class of customers leaving the Bottom of pyramid open. This is where Nirma moved in and caught Surf-HLL’s detergent brand, offguard. Karsanbhai Patel introduced Nirma detergent which was targeted at and priced for, lower income customers, particularly those in the rural areas. As Nirma grew rapidly, HLL could see its local competitor winning in a market it had initially disregarded. Ultimately, Nirma’s instant success forced HLL to take notice of it’s new competitor. HLL’s strategy to combat the growing competition from Nirma 1. Segmentation of the market
Taking a fresh look at the market HLL found that different income groups existed in the country and each had its own set of aspirations and expectations from detergents and washing powders.Moreover, it was found that Nirma’s popularity was limited to a particular area, mainly Gujarat and areas nearby. Thus to counter attack from Nirma, HLL launched a white detergent powder called Sunlight priced to match Nirma. Through this it targeted the eastern and southern markets where Nirma was not very strong. This strategy of segmenting market helped HLL to revive and win back some of its lost market. However, HLL still needed to combat competition from Nirma in the other regions where Sunlight did not have an appeal, especially in the rural market.
2. Launch of Wheel-HLL’s low price detergent.
R&D department of HLL was given the responsibility of producing a low-cost detergent, which gave better performance. HLL changed the cost structure of its detergent business so it could introduce Wheel at a low price point. Wheel was thus introduced into the market with the idea of capturing the low price detergent market. The brand was targeted at the ‘striving’ segment
3. Easy access to raw materials
As mentioned in the article, HLL carefully selected the locations for new plants and located the headquarters of Wheel in Chandigarh thus ensuring easy availability of inbound logistics. HLL supplied the raw materials, labour was hired on cheap rates and the detergent was produced. This resulted into significant cost savings thus making it easier for HLL to start new units as the finance and other resources were readily available.
4. Providing values that Nirma lacked
Through market research, HLL discovered that many consumers did not like the harshness of Nirma, and so they stressed on the ‘safety on hands’ platform. It thus came out with a formula which did not have any side-effects like ones caused by high soda-ash...