nirma case

of 24/24
CASE A: Hindustan Lever Limited Contemplates India’s poor

Post on 09-Mar-2015

129 views

Category:

Documents

5 download

Embed Size (px)

TRANSCRIPT

CASE A: HINDUSTAN LEVER LIMITED CONTEMPLATES INDIAS POOR

CONTENTS

Introduction Brief about HLL Brief about Nirma

INTRODUCTION

There was an important meeting between the top managers of HLL They were discussing on the launch of the operation of STING (the strategy to inhibit Nirma growth)

CONTu

Nirma had overtaken HLL in the detergent sector over the past decade HLL had ignored the rural India Three questions that had been discussed were:

CONTu

Strategy: Should HLL enter the rural market? Marketing and Distribution: Considering the logistical hurdles of this market how should HLL plan its entry? Design: What kind of products should HLL introduce to combat Nirma?

BRIEF ON HLL

HLL which was the Indian subsidiary of Unilever PLC, the largest MNC Founded in 1930 and based jointly in Netherlands and UK Sold its products in 150 countries

CONTu

The first product to be introduced in India was Sunlight Soap It was available to the British citizens After exclusive foreign managers, Mr. Prakash Tandon became the 1st director

CONTu.

HLL was the first to offer Indian equity and had 10% Indian participation HLL was considered Indias largest household PMCG company

CONTu

It was the undisputed leader It had introduced surf washing powder in 1959 Only few housewifes could afford the product (surf) as it was costly

BRIEF ON NIRMA

Nirma was the second largest volume seller in the country in 1977 Marketing Gurus believed that Nirma was seeing a temporary success They predicted that the margins provided by Mr. Karsanbhai Patel was very low and would not last long

CONTu.

HLL considered themselves as the best The belief was that the rural sector was to disorganised to bother about The question arised why HLL had ignored rural market?

CONTu

C.K Prahalad & Stuart Hart help to understand so Looked at the market as a pyramid The top tier consists 75-100 Million people who earn $20,000 a year.

CONTu

Second and Third tier consists of rising middle classes living in developing countries earning $1500$20,000 a year 1500-1750 people lived in 2 & 3 tier The 4th tier which consists of 4 billion people who earn less $1500

CONTu

MNCs have focused on the 1st tier because of the highest margins they earn Even the 2nd and 3rd tier have also been focused Bottom has been ignored

CONT...

HLL stayed away from rural markets was not only because of physical challenges but also due to social & cultural challenges

CONTu.

HLLs would be dealing with the clients which never focused before on by MNCs Banners & leaflets alone were not effective HLL could not depend on television

NIRMA OVERTAKE SURF

Mr karsanbhai patels products were in high demand Nirma had pushed HLL from the top In the men time surf remained expensive between 2.5-3.6 times than nirma

CONTu

According to HLL nirma was a low quality product It commented that Nirma did not contain any whitening ingredient Nor there was a perfume

CONTu

HLL blamed that Nirma contained high soda ash which affected the skin

DESIGNING

HLL was shocked as to how Nirma was able to achieve so much success Here Mr. Karsanbhai patel said the:

CONTu.

I found a massive market segment that was hungry for a good quality product at an affordable price..so I decided to keep my margins low and was happy if I could net between 3 & 5%.....profits really came from the huge volumes we generated

DISTRIBUTION

Mr. Karsanbhai Patel was very aware about the distribution He gave importance to keep the costs down First distributed through bicycle then vans and then trucks

ADVERTISING

Late in 1970s televisions slowly spread in rural areas and so did the Nirma campaign ad with simple message and catchy jingle HLL had predicted that Nirmas bubble would burst but they were shocked that Nirma would survive on the miniscule per unit margins

THANK YOU