Hindustan Unilever Ltd: The Wheel Saga Essay
Hindustan Unilever Ltd: The Wheel Saga
1. Based on the case study above, critically examine HUL’s Marketing strategy (STP) for Wheel since its inception and the reasons for the success of the brand.
The core reason of the introduction of the “Wheel” brand from the Hindustan Unilever Pvt. Ltd. (HUL) was to damage control the loss of market share due to the short-sightedness and the complacent attitude of the senior level managers to the potential of low income market for branded detergents. Due to the unprecedented success of Nirma brand, HUL did six things right to get back to the low price detergent market. i. Made two committees (C.R.I.S.P & S.T.I.N.G) to come out with a strategy to counter Nirma. Committees are focused & effective bodies to tackle, analyze and give solutions to problems in the fastest and most cost effective way. ii. It finally realized that buyers of Nirma were not only from the low income group, but also from higher income groups, thus acting on it (albeit late) by launching a low priced product -Wheel. Good thing was that, HUL empowered and motivated the employees to go ahead in creating a low cost product too.
iii. Had a different management system only for wheel apart from HUL- this was the best strategic decision that HUL took. It enabled freedom for the employees to churn out a competitive product without much interference from other similar systems, directly under HUL leadership. Also, it eliminated unprecedented budget cuts in the middle of the year (which could have happened if it were a part of a parent organization). HUL used the concept of decentralization well. iv. Pricing of the product was different in different areas thus facilitating competitive pricing in the areas where Nirma’s competition was stiff. To ease margins, the same product was sold at a marginally higher rate in areas where competition was less.
v. Studied the product weakness of Nirma, i.e. burning of hands after Nirma’s use, and used it effectively against them to market its own product (which was bereft of this negative trait). This changed the misconception of the consumers and they shifted from Nirma to Wheel. vi. HUL did not stop only at ‘Wheel’ it made more sub-products to tap sub-strata in the low-priced detergent market. HUL didn’t just stop in making commercials, it constantly made its presence felt by making actual programs to involve the homemaker for better marketing and advertisement, an idea which captured the imagination of the people. The above points show that despite losing the early entrant advantage to Nirma, HUL has been able to emerge successful in the low-cost detergent business in the recent years, even beating Nirma in share of business.
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.
No, I feel the current marketing strategy was too Nirma (or any other competitor) centric. It does not take into cognizance of a threat of a new entrant, who incidentally could use the same marketing strategy to upstage Wheel. Although, one can say that the market is saturated, it does not rule out the presence of a bigger fish to target the half a billion plus market. An example of this is the presence and increasing popularity of Proctor & Gamble’s ‘Tide’ a low cost product with prices comparable to Wheel. Tide is incidentally the most popular detergent brand in the world, with one out of every four detergents bought being Tide.
Tide, which was launched in India in 2000, is comparatively a very new entrant compared to Wheel (1987) and Nirma (1969) and yet is able to effectively take a chunk of the market-share in India. It has innovatively made a new advertisement where a Tide packet whooshes across a seemingly white cloth, making it visibly brighter. It has even targeted the weakness of Wheel, that being presence of a particular detergent smell; used it against Wheel (and even surf) and made fragrant detergent (Tide Jasmine). The changes that I as a marketing head can initiate:
i. As a part of a multi-billion dollar company, I would strive for innovation to constantly find a Unique Selling Proposition (USP). Even though the product is not high-end, high sales volume would cover my expenses. ii. Tell the production guys to bring out a cheaper washing machine variant of Wheel, as now-a-days even some lower-middle income households tend to have at least a semi-automatic washing machine. iii. Do constant research on the competitor to find their strengths and weaknesses using all means (Public domain, private domain, company spies, etc.) iv. Have an aggressive marketing strategy, using all means to reach out to the household customer.
Blowback as a result of aggressive marketing will be less because Wheel is a quality product. v. Motivate the dealers to stock my products and sign a contract with him/her on stock loyalty for a certain period of time. Recognize the best dealer and facilitate him/her. vi. Bring out more and more variations of the product, so that the product will not be stagnant in the market. vii. Target the rural markets; bolster the supply and distribution systems to handle sales in the remotest cornet of India.
Thus constant market changes and new players emerging in the market have become major threat to the advantage gained by possessing Nirma’s market-share before. Changes should be made annually, if not quarterly, and one cannot have the same proposition, positioning and marketing strategy fixed for a period of five years.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 14 October 2016
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