Closeup 2003

1Product Survey on CloseUp

History of Hindustan Unilever Ltd. Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company, with leadership in Home & Personal Care Products and Foods & Beverages. HUL's brands, spread across 20 distinct consumer categories, touch the lives of two out of three Indians. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.13,718 crores. The mission that inspires HUL's over 15,000 employees is to "add vitality to life". With 35 Power Brands, HUL meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds 52.10% of the equity. A Fortune 500 transnational, Unilever sells Foods and Home and Personal Care brands in about 100 countries worldwide.

Hindustan Unilever Limited. Product Mix Product-mix Width

ProductLine Length

ProductLine Length

Soaps Dove Liril Lux Pears Rexona Lifebuoy Hamam Breeze

Laundry Surf Excel Rin Wheel

Beverages Oral Care Brooke Bond Bru Close-Up Brooke Bond Pepsodent Lipton

Foods Kisan Annapurna Knorr

Hair Care Sunsilk Naturals Clinic

Deodrants Axe

Skin Care Fair N Lovely

Ayurvedic Aayush

Rexona Denim

Ponds Vaseline Aviance

Cosmetics Lakme

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Toothpaste Industry in India •

The Indian toothpaste industry is worth 2500 crores.

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India is still a nascent country in dental hygiene, with the majority of the population still not having access to modern dental care but relying on substances like coal ash and neem sticks. The toothpaste industry in India is growing at a steady state. About 50 % of India's population uses toothpastes, 27 % uses toothpowder while 23% in the rural areas are yet to adopt oral care.

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Mouth freshening washes, dental floss and teeth whitening products are at a primary stage in India.

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Industry sources expect an increase in penetration level of oral care products to 70% from current level of around 49% because of increase in advertising campaigns and awareness.

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Colgate-Palmolive is the market leader in oral care segment. Colgate and HLL together account for 85% of organized toothpaste market.

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The per-capita consumption of tooth paste is very low in India. Per capita consumption India Europe Thailand Malaysia Vietnam

in Gms 74 300 150 350 300

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•

Given the low per capita consumption and penetration rates, toothpaste demand is mainly being driven by the overall market growth of 8-10%.

• About 60% of toothpastes are sold on family platform; around 35% is sold on cosmetic propositions. • With the huge consumer base waiting to be tapped and the expected rise in purchasing power as the economy picks up, oral hygiene in India may receive a fresh lease of life.

Main Players & Their Market Shares For any product to improve and serve the people better, good competitors are of immense importance. Little wonder that teeth were bared between the market leader, Colgate Palmolive, and the challenger, Hindustan Lever, as the marketing war between the two FMCG giants for protecting market share got tough. As if that was not enough, these players found new aggressive competition coming their way from regional low priced competitors such as Anchor Healthcare & Ajanta India, who priced their offerings at over 40% discount, giving market leaders a run for their money The following are the main players in the toothpaste market of India:

Colgate – The market leader o

Been in the domestic oral care industry since the last 70 years and enjoys strong brand equity in the market.

o Currently occupies a 48% market share in the domestic market of India. o Brand Portfolio of Colgate in toothpaste: Colgate Dental Cream Colgate Fresh Energy Gel Colgate Cibaca Colgate Herbal Whitening 5. Colgate Kids Toothpaste 1. 2. 3. 4.

6. 7. 8. 9.

Colgate Colgate Colgate Colgate

Active Salt Max Fresh Total Advanced

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HLL – The Challenger o

Been in the domestic oral care industry since the last 33 years and came up in 1980 with the innovative novelty element of gel in toothpaste to make steady inroads in Colgate’s dominance in oral care market, making it the 2nd largest paste brand.

o HLL has a market share of 30%, including Close-Up and Pepsodent. o

Close-Up - addresses the youth with new benefits and valuedriven propositions. Pepsodent – Family and oral health.

o Brand Portfolio of HLL in toothpaste: Close-Up 1. Close-up Active Gel (red) with Vitamin Fluoride System 2. Close-up Lemon Mint

Pepsodent 1. Pepsodent Cum Care 2. Pepsodent 2 in 1 3. Pepsodent Complete 10 4. Pepsodent Whitening

3. Close-up Milk Calcium

Dabur – Growth by acquisitions o

The Dabur group has managed to grab a 7.2% market share by acquiring Balsara’s oral care brands: Babool, Promise and Meswak, which were small but significant players in the 2400cr toothpaste market of India, in addition to its own brand Dabur Red. It was mainly targeted to capture consumers shifting from toothpowder to toothpaste.

Anchor toothpaste & Ajanta toothpaste o It was launched by a Mumbai based manufacturer & it is mainly marketed as ‘Pure Vegetarian’ toothpaste because of which it was able to grab 4% of the market share in a very short span of time. This sudden growth was also because of the aggressive

5Product Survey on CloseUp

promotion strategies used like giving a toothbrush free with toothpaste. Earlier it was mainly in the western region of India only. o Moreover, Anchor and Ajanta also offered their products at a price less than 405 of the competitors which helped them penetrate in the toothpaste market and give the big players like Colgate and HLL, a run for their money.

Close-Up grew 20.9% by value, Pepsodent grew only 2.8% while rival Colgate grew 16.4% during the period. Babool grew by 54%.

4 P’s – Product, Price, Promotion and Place PRODUCT Quality: Close-up gel is the toothpaste for a super fresh mouth and shiny white teeth.

Product Variety: 1) Close-Up milk calcium: It is a new toothpaste which bring the revolution in the close up sales. It contains the goodness of milk calcium which is completely new thing, with white milk calcium nutrient on the inside and a refreshing blue gel on the outside. 2) Close-Up active gel: It contains vitamin fluoride and gives three benefits of stronger teeth, whiter teeth and fresh breath. 3) Close-Up lemon mint: Its major emphasis is on cleanliness of teeth. This was adapted to Indian taste and it uses same positioning of fresh breath and white teeth.

Brand Name :

Close Up – The Closer, the Better Everyone knows that being close is a fundamental human need. Each Close Up product, gives an individual the social confidence that one needs to get closer to others.

Features: There are following features provided by Close Up:-

6Product Survey on CloseUp

1) Vitamin Fluoride System: - Gives stronger teeth. 2) Mouthwash: - Gives fresher breath. 3) Micro Whiteners: - Remove yellow for shiny white teeth.

Product: The Company has also upgraded the carton and tube packaging of the product so as to change the look and feel of the brand. The picture of a young couple which was earlier printed on the carton has now also been embossed on the laminated tube. This is to emphasize on the USP of the youth brand as one which delivers fresh breath that lasts longer.

PRICE List price: 61 Rs. for 150 gm. List price: 48 Rs. for Close Up active gel The product is in the popular segment which is priced higher to only the economy segment and lowers than the gel and premium segments in the toothpaste market.

PROMOTION Sales Promotion: The product is placed at just below eye-level at the stores surveyed. Place near payment counter is preferred by keeping in mind that it can promote the sales.

Advertising: 1) Close Up ad jingle “Kya aap Close Up

karte hai?”

has promoted its sales on a larger scale.

2) Internet is probably the only medium with the fastest turnaround time

in terms of break through Yahoo! India, Sify or India face red page branded by three websites were totally

innovations. Starters, if one logged on to the times portals, one founds a stunning in-yourthe new Close Up. The home pages of these branded by the splashy new Close Up.

7Product Survey on CloseUp 3) Close Up has also tied up with AXN's Alias. The connection: Just like the protagonist in Alias - Jennifer Garner - changes her identity time and again to tackle different situations, the tie up with it signifies that Close Up too has changed now and is in a brand new avatar! AXN assistant VP marketing and sales Rohit Bhandari said, "The basic essence of branding Close Up with Alias was to bring out the element of change that Close Up has gone through and also to match the change of identities that Garner goes through in Alias." 4) Close-Up Toothpaste - Mouth to Mouth Certified - Ad Campaign Promotional - T-

shirt.

Public Relations: The most important ways in which Unilever makes a contribution is by enhancing public relations. Some of the examples are:•

• • • • •

Enhancing the health and well-being of consumers through its products and brands.e.g HLL has been slowly trying to re-position Close Up by introducing more of oral health benefits than simply `fresh breath and white teeth' kind of cosmetic positioning. Addressing the sustainability challenges related to climate change, water, packaging and sourcing of agricultural raw materials. Creating wealth in the communities where they operate and bringing benefits to their stakeholders. Introduced new marketing guidelines limiting advertising to children under 12 and banning the use of 'size-zero' models. Launched new climate change strategy with target to reduce CO2; from energy in manufacturing by 25% by 2012. Named Wal-Mart's Supplier of the Year for Sustainable Engagement.

PLACE Channel: The product is sold in retail outlets like Kirana stores, supermarkets, medical shops etc. It is distributed through the supply chain of company distributor to wholesaler to retailer to final consumers.

Coverage: HINDUSTAN Lever Ltd (HLL) is rejigging its oral care portfolio to arrive at a 50:50 sales turnover ratio between its rural and urban sales for its two toothpaste brands, Close up and Pepsodent. After removing Aim from its

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portfolio recently, the FMCG major plans to put all its additional resources behind its two power brands to divide its sales turnover equally between the urban and the rural markets. The product is available in the all-India market, including semi-urban and rural markets which are their primary focus.

Location:

9Product Survey on CloseUp

Present Products

New Products

I. Market (Intensive III. Product Development 10Product SurveyPenetration on CloseUpGrowth) (Intensive) 1. Attract users of competitors products

P r e s e n t

1. Product reformulation strategy

o Close-Up tried to attract its o Close-Up added many new nearest competitors’(Colgate) ingredients in their toothpaste to customers by introducing several improve the freshness of breath, variants like Tingly Red, Eucalyptus whitening of teeth, the strength of Waves and Close-Up Whitening, teeth, etc(E.g.: Close-Up Lemon Close Up Milk Calcium Nutrient and Mint, Close Up Milk Calcium Lemon Mint Nutrient) o Pepsodent has introduced a tooth gel with mouthwash added in it

M 2. Convert nonusers into users 2. Product quality a o Close-up tries to attract the improvement strategy r Close-Up tried to bring about customers from the rural market by o k making them aware of the functional preferences by adding e importance of personal hygiene. enamel strengthening fluoride in t The penetration levels of the rural their toothpaste. toothpaste market is only 30 percent providing a gaping scope for improvement as compared to the urban market penetration of 70 percent. 3. Increase the frequency of purchase

3. Product line extension strategy

o When the toothpaste is used o HUL has several product-lines twice a day, the frequency of like toothpastes, detergents, purchase of the product is bound to beverages, bathing soaps etc. increase. II. Market Development (Intensive) 1.

Expand geographically

N Close-Up is trying to expand to new e geographical areas, especially in the w rural markets M a r k e t

2. Target new segments Close-Up targets new segments of the market like the old age population, who need more calcium rich ingredients in their toothpaste(E.g.: Close Up Milk Calcium Nutrient) Hindustan Unilever has entered the kids segment in the toothpaste category under a new sub-brand — Pepsodent Kids.

IV. Diversification 1.

Related

HUL has already ventured into other personal care product category including hair care, skin care, deodorants etc. 2.

Unrelated

HUL has diversified in unrelated areas also, like the detergent industry (Surf brand) and also food industry (Knorr soups)

11Product Survey on CloseUp

Ansoff’s Model for Close-Up