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?

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