Monday, June 28, 2010

Brand strategy of Hindustan Unilever Ltd


UMBRELLA BRANDS

The 1980s witnessed a revolution in the understanding of the working of the brands. Marketers depict brands as a reflection of customers’ own personalities, so that they can relate to their products well. In fact the distinguishing aspect of the modern marketing has been its focus upon the creation of differentiated brands and using them as weapons for launching multi-level attacks on competition. Market research has been used to help identify and develop bases of brand differentiation. A brand identifies a product and its sources, but it does even more. Along came brand extension. Today brand extension strategies are widely employed because of beliefs that they build and communicate strong brand positioning, enhance awareness and increase profitability.
Brands are often extended beyond their original categories to include new product categories. Research has proved that the success of brand extension depends on the transfer of parent brand awareness and associations to the extension. The transfer of these quality perceptions is the key in umbrella branding. An umbrella brand is a brand that covers diverse kinds of products which are more or less related. It applies also to any company that is identified only by its brand and history. It is contrasted with individual branding in which each product in a portfolio is given a unique identity and brand name.
Mr. K.R.Senthilvelkumar, a professor at Jansons School of Business offers the most pragmatic of reasons behind an umbrella brand strategy, “with scarce financial resources, firms cannot afford to allocate huge budgets for building and maintaining several brands”.
Nowadays consumers have become quite unpredictable in their newspaper-reading or TV-viewing habits, it is very difficult to assure the reach of messages to the target audiences. The advertiser has to use many broadcast and print media with high frequency to create the desired effect for every brand, which ultimately puts huge burden on the budget. Hence, companies consider it wise to maintain a minimum number of brands in their portfolio so that they can do justice to each by effectively distributing their investment for promotion purpose.
Yes, umbrella branding is widely practiced. The Confederation of Indian Industry's second FMCG (fast moving consumer goods) conclave in 2003 almost declared that umbrella branding was the way to go in a competitive market environment. In an interesting anecdote, R S Sodhi, GM Marketing (Gujarat Cooperative Milk Marketing Federation l), compared the umbrella brand and individual brands to an Indian family, where in umbrella brands - like the Indian family, the father is the head, looking over the children. When they grow up and become independent, they hold the umbrella for the family. Individual brands on the other hand are like a western family, who grow up fast and leave the father behind. Amul’s strategy of using “umbrella branding” has really paid off. Amul’s advertising and marketing spend has never exceeded 1% of its revenues. Most other food companies spend 6-7% of revenues on advertising and marketing. They (GCMMF) are not big spenders compared to Britannia or Nestle. Despite a limited budget, Amul’s creatives—in the form of billboards or the Taste of India campaign—have always managed to evoke a larger-than-life brand feel, consistency and spirit of Indian culture in a contemporary way.
Companies phase out the brands which have become redundant and retain one or two umbrella brands for every category with necessary variations under each. For example consumer goods major Reckitt & Colman India Ltd. chalked out an expansion strategy to introduce 20 new brands in the year 1999-2000. The strategy also involved repositioning its existing brands and consolidating sub-brands under its main umbrella brands - Dispirin, Dettol, Harpic and Cherry Blossom. The strategy was designed to vault Reckitt & Colman, in terms of sales, into the big league. With the launch of new brands and the repositioning of its existing brands, the company aimed to achieve expected sales growth. The strategy worked well as Dettol as an antiseptic lotion provided brand support to Dettol soap, which was re-launched in a fragrant form called Dettol Fresh to take on HLL's Liril. Cherry Blossom acted as a mother brand for several easy-to-use home products.
Hindustan Unilever Ltd’s (HUL) beverage brands have been amalgamated under two umbrella brands – Brooke Bond and Lipton and in the fabric wash category, the company has retained only Rin, Surf and Wheel, HUL has withdrawn brands such as Sunlight, 501, Dalda and Nihar; it plans to withdraw some more brands and group them under a few umbrella brands. HUL is currently focusing on 35 power brands.
Nivea cosmetics brand has a presence in huge number of product categories and countries. Once upon a time Nivea's performance prompted a yahoo.com news article to name it the 'Queen of Mega Brands.' This title was appropriate since the brand was present in over 14 product categories and was available in more than 150 countries. Nivea was reportedly believed to be a brand of local origin - having been present in them for many decades. This fact went a long way in helping the brand attain the leadership status in many categories and countries. According to analysts, the brand was the single largest factor for the 4.4% increase in the company's (Beiersdorf) revenues (€ 4.74 billion) and 10.7% increase in after-tax profit (€ 290 million) for the year 2002. Beiersdorf never tried to disturb the umbrella branding of Nivea and got fruitful results.
Today as organized retailing is gaining popularity, we can see that popularity of private labels owned by retailers. Retailers do not feel the need to develop many brands for various categories because it is the loyalty towards their store name which draws and retains the customers. Hence it is the umbrella retail store name which will be the brand for various product categories and not individual names for each. Customers prefer these brands over that of manufacturers, due to the fact that they address their functional needs well. The retailers also enjoy high margins for private labels. Today a retail chain like Shopper’s Stop’s 20% apparel section is driven by private labels. There are others like Trent from the TATAs which has developed its business model purely on private labels.
From Asian Paints in 2003 to Electrolux, Onida and Airtel in 2004, they have all made a move from individual product branding to umbrella branding. Just a few year ago Bharti Televentures had brand Airtel for mobile services, Touchtel for land line and India One for long distance calls. But with Airtel dominating the group's ad spends, the company figured that the other brands were hardly making their presence felt. The unified licensing regime in December 2003 - which means that only one license is required to offer fixed, mobile and other services - acted as a catalyst (new Airtel logo/ Airtel outlets). So come September 2004 and the company started selling all its services under one brand name - Airtel. It claims that the move not only upped brand visibility but also charged up its distribution network.
No doubt, umbrella branding has a number of advantages over individual brands in terms of low promotional costs and easy acceptance in trade but umbrella branding imposes on the brand owner a greater burden to maintain consistent quality and brand equity. If the quality of one product in the brand family is compromised, it could reduce sales of all the others. Single umbrella branding works relatively better for services like telecom; it may not be feasible in cases where there is a lesser degree of cohesion between categories, product values and target customers. So, maintaining a few umbrella brands is better option. For instance, suppose LG, a tech brand as far as Indian consumer is concerned, wants to sell you talc or toothpaste or detergent under that name. Consumers would find it very difficult to say what is transferred value from LG TV sets which they’re now going to put on their skin.
Nokia, a moralist for single umbrella branding dropped their single umbrella brand strategy in 2006 in naming it’s products. The company believed it needed to have a look at its competitors’ book. After the roaring success of the Moto RAZR, PEBL, SLVR and ROKR series, the Finnish mobile handset manufacturer felt that consumers found names easy to remember compared to the usual mundane numbers. Even LG launched its popular Chocolate range of phones under the Black Label series. For Nokia, barring few exceptions, numbers have been the only way its phones have been branded so far - remember 1100, 2600, 3310, 6020?
In 2006 they launched Nokia 8800 Sirocco Edition (a mixture of names and numbers). Nokia introduced this approach to make it easier for customers to navigate across their range of phones. They also launched E-series phones (which serve business users) and N-series (which have multimedia features).
While some players say that the naming trend will be restricted to the high-end, feature-led phones(for example- LG is also banking on the name game but in that case it is confined to the high-end range of designer phones), others like Motorola are banking on names irrespective of price slabs. Motorola believes that consumers don't look at these names in an abstract manner and therefore names convey a message to consumers.
A few umbrella brands or individual brands? According to experts, independent brands only make sense when the product clearly has a different proposition from the company brand; like Lexus from Toyota and Swatch from Omega. In the case of Asian Paints, there were so many sub-brands, there was a reduction of media weights for advertising each entity. Then, the company shifted to a brand-centric portfolio, which involved a change of logo, product names, packaging and advertising. But the response from the trade and consumers has been positive, overall brand synergy and shop presence have increased, and the advertising is more effective.
Most probably in near future the media environment will make it impossible to create newer brand names and the conditions at the consumer level, as well as the environment. So unless the product is clearly different in the mind of the consumer, umbrella branding is the way to go. Umbrella brands are going to rule!
THANK YOU

Saturday, June 26, 2010

HLL – Power Brand Strategy

Abstract

This case let provides an overview of the branding strategies of Hindustan Lever Limited (HLL), the Indian arm of the Unilever group. It describes the rationale behind the strategy and the concerted efforts of the company to focus on certain select brands. The case let sheds light on the brand extension strategy undertaken by HLL as part of the modified branding strategy. Finally, the caselet gives an idea of the complexities involved in such a branding strategy.
Issues:

» Power branding strategy
» Importance of consistency in conveying core benefits of the brand
» Role of mother brands
» Developing sub-brands under mother brands

Introduction

In 2001, Hindustan Lever Limited (HLL), the Indian arm of the Unilever group, restructured its strategy to concentrate on its core brands – brands that add to the bottom line of the company. This was because the FMCG segment, which accounts for most of HLL’s business, witnessed lower growth rates in comparison to the double digit growth rates in the nineties.

Besides, the company’s core competence was in these consumer brands where the top 30 of its brands contributed to 75% of its sales. Based on these factors, HLL identified 30 national power brands and 10 regional brands from its portfolio of around 110 brands and directed its entire marketing efforts at developing and building them. Focus on select brands helped HLL to increase the scale of resources and spend more per brand. According to Mr. M. S. Banga, Chairman, HLL, "Our objective is to deliver directionally with the focus on certain key products.

Questions for Discussion:

1. Analyze the branding strategy used by HLL. What were the advantages that HLL expected to secure by using such a strategy?

2. By undertaking a power brand strategy, HLL exited from certain segments. This enabled regional players to operate and develop their brands. Besides, some of the sub-brands were repositioned under mother brands in different segments. How did these changes in the branding strategy affect the marketing communications campaigns of HLL?

Wednesday, June 9, 2010

RAAJNEETI & MARKETING


The movie so called RAAJNEETI is realsed produced by Mr. Prakash Jha a man of Bihar soil. The management of character’s & branding of Prakash jha in the movie is really worth full. Movie will go hit that’s credit goes to its marketing & campaign made by.
Had sort of stopped updating any post on movie marketing, as for past few months most of the Bollywood releases have been doing almost the same stuffs for promotion – websites, social media, television presence, reality shows participation, some general on ground events, radio messages etc. Their marketing strategies looked repetitive and formulaic. But with Raajneeti, things seem to be different. Not only the movie is in news because of its political semblances but their promotion campaign which is revolving around the integration between reel theme and real issues is also attracting enough eyeballs amongst interested common man & the media fraternity.
After Aamir Khan touring across India for the promotion of 3 idiots amongst mass, now its stars like Katrina Kaif & Ranbir Kapoor who were on a nationwide on-ground campaign to promote their upcoming movie Rajneeti. Keeping the political theme in mind, Ranbir Kapoor and Katrina Kaif have been on a run, hosting debates called “Aaj ki Raajneeti” in colleges in Bangalore, Delhi, Chandigarh, Lucknow, Kolkata, Indore and Ahmedabad. The groups discuss political and social topics concerning youth on varous channels like Aajtak, Star news etc. For instance, at IIM Bangalore the discussion was on youth taking active part in politics. As a part of this discussion cum promotion drive, the team is raising issues such as whether voting should be compulsory in the country; whether a year’s military training should be mandatory for every citizen; and whether film stars should join politics.

Sunday, June 6, 2010

Marketing Mix


7P's of the marketing mix



Marketing professionals and specialist use many tactics to attract and retain their customers. These activities comprise of different concepts, the most important one being the marketing mix. There are two concepts for marketing mix: 4P and 7P. It is essential to balance the 4Ps or the 7Ps of the marketing mix. The concept of 4Ps has been long used for the product industry while the latter has emerged as a successful proposition for the services industry.

The 7Ps of the marketing mix can be discussed as:

Product
It must provide value to a customer but does not have to be tangible at the same time. Basically, it involves introducing new products or improvising the existing products.

Price
Pricing must be competitive and must entail profit. The pricing strategy can comprise discounts, offers and the like.

Place
It refers to the place where the customers can buy the product and how the product reaches out to that place. This is done through different channels, like Internet, wholesalers and retailers.

Promotion
It includes the various ways of communicating to the customers of what the company has to offer. It is about communicating about the benefits of using a particular product or service rather than just talking about its features.

People
People refer to the customers, employees, management and everybody else involved in it. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people's hands.

Process
It refers to the methods and process of providing a service and is hence essential to have a thorough knowledge on whether the services are helpful to the customers, if they are provided in time, if the customers are informed in hand about the services and many such things.

Physical (evidence)
It refers to the experience of using a product or service. When a service goes out to the customer, it is essential that you help him see what he is buying or not. For example- brochures, pamphlets etc serve this purpose.

MARKETING FUNDAMENTALS


The marketing concept is the philosophy that firms should analyze the needs of their customers and then make decisions to satisfy those needs, better than the competition. Today most firms have adopted the marketing concept, but this has not always been the case.

In 1776 in The Wealth of Nations, Adam Smith wrote that the needs of producers should be considered only with regard to meeting the needs of consumers. While this philosophy is consistent with the marketing concept, it would not be adopted widely until nearly 200 years later.


To better understand the marketing concept, it is worthwhile to put it in perspective by reviewing other philosophies that once were predominant. While these alternative concepts prevailed during different historical time frames, they are not restricted to those periods and are still practiced by some firms today.


THE PRODUCTION CONCEPT

The production concept prevailed from the time of the industrial revolution until the early 1920's. The production concept was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of low-cost products would in and of itself create the demand for the products. The key questions that a firm would ask before producing a product were:
• Can we produce the product?
• Can we produce enough of it?
At the time, the production concept worked fairly well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. Virtually everything that could be produced was sold easily by a sales team whose job it was simply to execute transactions at a price determined by the cost of production. The production concept prevailed into the later.


THE SALES CONCEPT

By the early 1930's however, mass production had become commonplace, competition had increased, and there was little unfulfilled demand. Around this time, firms began to practice the sales concept (or selling concept), under which companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling. Before producing a product, the key questions were:
• Can we sell the product?
• Can we charge enough for it?
The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard selling. Even today, many people use the word "marketing" when they really mean sales.



THE MARKETING CONCEPT


After World War II, the variety of products increased and hard selling no longer could be relied upon to generate sales. With increased discretionary income, customers could afford to be selective and buy only those products that precisely met their changing needs, and these needs were not immediately obvious. The key questions became:
• What do customers want?
• Can we develop it while they still want it?
• How can we keep our customers satisfied?
In response to these discerning customers, firms began to adopt the marketing concept, which involves:
• Focusing on customer needs before developing the product
• Aligning all functions of the company to focus on those needs
• Realizing a profit by successfully satisfying customer needs over the long-term
When firms first began to adopt the marketing concept, they typically set up separate marketing departments whose objective it was to satisfy customer needs. Often these departments were sales departments with expanded responsibilities. While this expanded sales department structure can be found in some companies today, many firms have structured themselves into marketing organizations having a company-wide customer focus. Since the entire organization exists to satisfy customer needs, nobody can neglect a customer issue by declaring it a "marketing problem" - everybody must be concerned with customer satisfaction.
The marketing concept relies upon marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing team makes decisions about the controllable parameters of the marketing mix.

Hello and Welcome to my blog!


I hope you'll take some time to look around and enjoy reading blogs.
Feel free to check back from time to time.
Thanks for stopping by!

-Kamal