Brand Policy (HUL case)

In this article we are giving the case of HUL formerly HLL adopted by them a few years back and the results they could get.

Every brand must be viable in its own right: HLL operates across a number of product categories and within each category, it has a number of brands Some of these brands are in an investment phase while others are going through steady growth and profitability stages. A basic criteria however, is that each brand is viable in its right. In looking at viability, HLL, of course takes a long term perspective. For instance, HLL’s investments behind brands like Dove soaps based on their assessment that these will be strong, profitable brands in 5 to 10 years time.

Determining Number of brands, extensions, variants and Pack Sizes:

In deciding the number of brands, extensions, variants and pack sizes, HLL goes by the cost and complexity dimensions. Each SKU (stock keeping unit) adds complexity and consequently cost to the entire supply chain, HLL has now come to the view that ‘less is more’ is a good guiding principle in deciding the ideal number of brands, extensions and variants. When there is proliferation, the innovation resources that an organization is able to commit is spread out thin across a large number of products and projects. If an organization wishes to grow by introducing real product-break through and new brands in the market, it needs to concentrate its R&D resources and marketing efforts behind set of big projects that are likely to succeed.

Enriching the Brand:
Product up-gradation /augmentation is one sure way of enriching a brand. The consumer loyalty to the brand is ensured when more benefits are offered through the brand. HLL’s market research and R&D wings are constantly involved in the product up-gradation task. HLL conducts 15 to 20 rejuvenation programs every year, spread over its 30 major brands in various product categories.

Brand Strategy in diversification context- Example of Foods: The second half of the 1990s saw HLL in the grip of major acquisitions, mergers and consolidation. They were part of the expansion and diversification programs of the company. One major diversification was into the food business, where a major issue to be sorted out was the brand strategy. HLL, ‘the soaps & shampoo company’ was now poised to become a foods major. Naturally, brands were required to wage the battle.

Five Umbrella Brands to cover the entire Foods Business: HLL developed a comprehensive marketing strategy. As part of this strategy, it decided to bring its various food lines under five brands.

To quote HLL, the idea is to create five umbrella brands to drive the entire foods business.

The brands are: Broke Bond, Lipton, Kissan, Dalda and Kwality-Walls. Brook Bonds and Lipton for beverages, Dalda for edible fats, Kwality-Walls for ice creams and frozen deserts and Kissan for natural and wholesome foods.

It is to be noted that they are all strong ongoing brands. The brands Brooke Bond and Lipton came into the HLL fold with the merger of BBLIL with HLL. Kwality came to HLL through a buyout of the brand in specified market. The idea obviously is to exploit established brand identities. Each of these brands has a tremendous equity built over the years. For instance, Brooke Bond’s brand equity/worth is estimated to be Rs 850 crore, Lipton’s Rs 370 crore Dalda’s Rs 225 crore Walls Rs 160 crore and Kissan’s Rs 100 crore. HLL’s strategy is to make these brands work in the market with more and more products entering the market under their umbrella.

Kissan, the Traditional Brand Widens its Wings: Traditionally identified as a tomato ketchup and squash brand, Kissan is being positioned as an umbrella brand of the entire foods business, which will include even basic food items, like flour and salt. In tune with the strategy HLL renamed the Annapurna as Kissan Annapurna and plans more products under the Kissan brand.

HLL, right now is in the process of working out a considerable investment decision in the food categories to help make the foods business contribute to around 50 per cent of the total HLL turnover from present contribution level of 37 per cent.

HLL finds the businesses of processed foods and semi-processed foods in the stage of takeoff and want to be at the vanguard. The five brands will be put to work towards this goal. In fact, these five brands have the responsibility of earning a rue of Rs 7,000 crore or HLL.

Comments are closed.