Lux Project

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PROJECT REPORT ON INTEGRATED MARKETING COMMUNICTION OF LUX SOAP BY HINDUSTAN UNLEVER LIMITED

Submitted byLalit Kothari 17028 Ravi Kumar 17041 Soniya Yadav 17048

FacultyProf. Dr. Madhavi Pandya

Siva Sivani Institute of Management Kompally, Secunderabad (2008-2010)1|P ag e

ABSTRACT

Hindustan Unilever Ltd. is a well-known and largest FMCG company in India. HUL has always revamped its products to meet the changing needs of the consumer without compromising on the quality. This report deals with one of its premier brands "LUX". HUL leads the market in the toilet soap category with 54.3% market share. Lux has inched up to be on par with Lifebuoy in HUL's soaps portfolio. The Lux brand now has an almost equal market share as Hindustan Lever's largest selling soap brand - Lifebuoy. This report gives an overview of the history of the company and the brand "Lux", the various strategies adopted to survive in the market for over 75 years and the various competing brands. The promotional activities adopted, the brand's strengths and weaknesses, threats faced are also analysed. The FMCG category is always a battleground for all the competing firms and the bathing soap category is no different. With more firms entering the market, maintaining the customer base is not very easy. Within six months, ITC's soap products have been able to capture 1.75% of the market share.

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Table of ContentsABSTRACT ........................................................................................................................... 2 TABLE OF CONTENTS ........................................................................................................ 3 EXECUTIVE SUMMARY ..................................................................................................... 4 INDUSTRY ANALYSIS ........................................................................................................ 5 MAJOR PLAYERS ................................................................................................................ 5 EXTERNAL COMPETITORS....................................................................................................8 HINDUSTAN UNILEVER LIMITED (HUL) ........................................................................... Company profile ................................................................................................................... 10 Mission ................................................................................................................................. 11 Principles of the Quality Policy ............................................................................................ 12 Present stature ....................................................................................................................... 12 Divisions ............................................................................................................................... 13 Hindustan Lever network ...................................................................................................... 14 Exports ................................................................................................................................. 15 Water ..................................................................................................................................... 15 Corporate Responsibility ....................................................................................................... 16 PRODUCT PROFILE ........................................................................................................... 17 PRODUCT CATEGORY, MARKET SEGMENTATION, TARGET MARKETING AND POSITIONING..18 TACTICAL MARKETING TOOLS Product ................................................................................................................................. 20 Promotion ............................................................................................................................. 20 Price............21 Place ..................................................................................................................................... 21 INTEGRATED MARKETING COMMUNICATION PROMOTION.23 PUBLIC RELATIONS24 POINT OF PURCHASES.26 ADVERTISEMENTS.27 PUBLIC RELATIONS40 DISTRIBUTION.40BIBLOGRAPHY.42

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Executive SummaryUnilever is a multinational consumer product manufacturing giant operating in over hundred countries all around the globe. Unilever Bangladesh is the Bangladesh chapter of Unilever, where the company holds 60.75% share whereas the Government of Peoples Republic of Bangladesh holds 39.25% share. Unilevers one of the most popular brand is LUX. They segments LUX.s market according to geographical locations. It further differentiates these segments into Socio Economic Cluster (SEC) which takes into account the criteria of education and profession which ultimately measures the financial ability of consumers. The cluster is divided into five parts starting from A to E. Unilever targets the urban and sub urban upper middle class and middle class segment of the population, who falls under A to C of SEC. Tactical marketing tools, 4Ps, are extensively used by the company to market LUX. Though LUX is produced in Bangladesh, Unilever Bangladesh maintains the same standard all around the globe. The product is available in six different fragrances under three different sizes. Since the demand for beauty soap market is to a great extent oligopolistic, variations in price lead to price war which can eventually break down the companys market share. Thus Unilever cannot provide a better price than its competitors. But the price is affordable by most of the people. Unilever Bangladesh has outsourced its distribution channels to third party distributors which allow them to distribute LUX in massive bulks amounting to around ten million pieces. It undertakes the largest promotional activities in the beauty soap industry. The beauty soap industry has a few major producers of which Unilever holds market share of slightly less than 50%. Other competing brands like Tibbet, Aromatic and Keya have started to have a strong consumer base, but LUX.s product features distribution and promotional activities have created high brand loyalty for which it is still the market leader. Unilever, with the aid of its heavy promotional activities, has been able to penetrate the market. But the other producers in the industry are posing a threat towards Unilevers market share as they have moved towards the rural masses of the population. Therefore, Unilever Bangladesh should undertake further steps such as moving towards the rural and/or poorer segment; attract children (by making a special product for kids) and other innovative promotional activities to retain its command in the industry.4|P ag e

Industry analysisThe toilet soaps market is estimated at 530,000 tpa including small imports. The market is littered over with several, leading national and global brands and a large number of small brands, which have limited markets. The popular and premium brands include Lifebuoy, Lux, Cinthol, Liril, Rexona, and Nirma. Toilet soaps, despite their divergent brands, are not well differentiated by the consumers. It is, therefore, not clear if it is the brand loyalty or experimentation lured by high volume media campaign, which sustain them. A consequence is that the market is fragmented. It is obvious that this must lead to a highly competitive market. Toilet soap, once only an urban phenomenon, has now penetrated practically all areas including remote rural areas. The incremental demand flows from population increase and rise in usage norm impacted as it is by a greater concern for hygiene. Increased sales revenues would also expand from up gradation of quality or per unit value. As the market is constituted now, it can be divided into four price segments: premium, popular, discount and economy soaps. Premium soaps are estimated to have a market volume of about 80,000 tonnes. This translates into a share of about 14 to 15%. Soaps form the largest pie of the FMCG Market with bathing & toilet soaps accounting for around 30% of the soap market, by value. Currently, the soap industry is divided into three segments namely Premium, Popular and Economy/ Sub popular. To fight competition, major players Hindustan Unilever Ltd (HUL), Godrej Consumer Products Ltd (GCPL) and Wipro Consumer Care & Lighting are now drawing up fresh game plans. And the accent is clearly on innovation to gain mind share as well as market share in this overcrowded category.

Major PlayersHindustan Unilever Ltd. With over seven brands LUX, LIFEBUOY, HAMAM, REXONA, BREEZE, DOVE and PEARS has 54.3% share of the overall soap market. HUL is India's largest Fast Moving Consumer Goods Company; its journey began 75 years ago, in 1933, when the company was5|P ag e

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, Knorr-Annapurna, Kwality Wall's - are household names across the country. They are manufactured in over 40 factories across India. In the Rs7,000 crore by sales soap market, HULs market share has dropped to 54.3% in March 2008 from 55.9% in March 2006.

Godrej Consumer Products GCPL, Indias second largest soap maker after Hindustan Unilever Ltd, has nearly 9.2% market share. With 11% market share in value terms, it is the second largest soap maker after Hindustan Unilever. Godrej Consumer Products (GCPL) is a major player in the Indian FMCG market with leadership in personal, hair, househ