NEW DELHI: Hindustan Lever, Unilever's operation in India, is
chopping its 110-brand portfolio by 73 per cent to allow it to focus
resources and build the remaining 30 into power brands.
The move comes almost two years after the Anglo-Dutch group said it
would cull its portfolio of 1,600 brands to concentrate product
innovation and brand development dollars on 400 brands.
The 400 brands were chosen on the strength of their consumer appeal and
prospects of sustained growth.
Hindustan chairman M. S. Banga was part of the Unilever core group in
the UK, which spelled out details of Unilever's "Path to Growth"
programme to reduce its portfolio. As part of the initiative, Unilever
said it would invest £1 billion in additional marketing support
over five years on its power brands.
A spokesperson for Hindustan said the culling process would not result
in the consumer goods company ditching any categories.
The plan is to migrate consumers, not to kill brands, added the
spokesperson.
As an example, Lowe Lintas India, one of Hindustan's agencies, said the
company encouraged consumers to move to its Pepsodent toothpaste brand
with the launch of a new variant, Pepsodent-G. Hindustan said the
variant contains ingredients to ensure gum health.
Said Banga: "Historically, Hindustan acquired a number of brands, which
often targeted the same consumer segment. We will merge these brands
with some of the 30 power brands." Neither Hindustan nor its advertising
agencies would divulge which brands would be dropped.
Rivals are speculating that the power brands would include international
names such as Lifebuoy, Lux, Liril, Dove, Pears, Close Up, Surf and
Ponds, while the local offering would include detergents such as Wheel,
Breeze soap, Taj Mahal and Three Roses teas, and Kissan ketchup and
jams,among others. A key worry for Hindustan's competitors is how the
company will develop its power brands through variants, line extensions,
and service elements.
It is understood that Hindustan marketers have been talking to tea
shops, beauty salons, and ice cream parlours about possible alliances
with their brands.
Competitors are also concerned that the brand rationalisation process
will release Hindustan's marketing expertise and funds for the company
to explore new categories for future development, such as water, health
care and confectionery.
Hindustan has launched a promotion to migrate consumers of its tea
brands to Lipton Taaza tea.
A hidden in-pack coupon entitles winners to pick up as much gold
jewelery as they can in 60 seconds at a selected store.
With such a disproportionate level of spend, market sources doubt if
niche or challenger brand rivals will be able to take advantage of any
momentary weaknesses as India's consumer goods giant slowly changes
gears.
