We shall now take up one company, HUL (Hindustan Uni Lever Ltd) formerly HLL and see how the complex task of brand management is actually handled. This company is taken for this article as HUL is considered as one of the most successful in Brand Management.
HLL has a large brand portfolio consisting of nearly 110 bands. In every product line, it has built a number of brands over a period of time. Quite a few brands have come to its fold from the parent company. It has also acquired several ongoing brands from the market. HLL also vigorously pursues brand extension strategy. And concurrently, HLL undertakes line pruning and brand restructuring and consolidation, based on marketing compulsions. HLL is also playing the rejuvenation and re-launch game. With great benefit the corporate-level endeavors at business expansion and diversification are also throwing new challenges on the brand strategy front. HLL lends itself for a proper understanding of the complexity of the brand management task. We shall examine how HLL handles the complex demands in brand management.
Such an array of brands is the outcome of a conscious corporate strategy by HLL. As a corporate, HLL wants to be a leader in every one of its businesses and the strategy is to fight on the strength of the competitive advantage arising from the possession of strong brands. It is this strategy that is getting reflected in the development of a multitude of strong brands. If we take the business of bathing soaps, as an example, HLL has the objective of being a national player (not a niche or a regional marketer) and the leader therein. HLL also wants about 30 per cent of the corporate income to come from this line.
So, HLL opted for the strategy of developing quite a few strong brands in this line, and among them they cover different market segments and price points. Dove, Lux, Liril, Rexona, Pears and Lifebuoy are the outcome of such a well planned brand strategy implemented over time. Lifebuoy is 100 years old and Liril 15 years old. In fact, HLL has about 10 brands of toilet soaps each having good volume of sale to its credit . The point is that decisions on brand portfolio are a fundamental expression of the company’s objectives and strategy governing a given business.
HLL Locates Positioning Opportunities:
HLL methodically goes about the task of developing a brand portfolio across a product category. It first identifies the various positioning opportunities across benefits, target groups and price points. Existing brads are mapped across these positioning opportunities, and gaps for possible new offers are explored.
The company then estimates the likely volumes for each of the possible opportunity and the financial viability and sustainability of the propositions in the long term. If some of these gaps look promising, HLL goes ahead with the plans.
It examines the existing set of brands with the company, the product technologies available, the benefits that can be provided and other considerations that have a bearing on the company’s long term interests in the business. Finally, if the company decides to go in for the new offer, a decision has to be taken as to whether new brands should be created or extensions if existing brands should be preferred or ongoing brands from the market acquired.
HLL hires brands to capture new opportunities:
Towards the close of the 1990s, HLL found that the germicide segment of the soap market was growing fast, with RCI’s Dettol antiseptic soap leading it. HLL did not have suitable offer in its stable to capture a share of this segment. Lifebuoy was not strictly meeting the particular benefit.
HLL knew that launching and developing a new brand would take a lot of time and resources, and the company would miss the market if it chose this route. HLL did not have the product formula either to enter this segment. It was in this background that HLL decided to hire the Savlon brand from J&J. Savlon was a successful antiseptic lotion, a competitor to Dettol lotion. Just as the Dettol soap owed its origin to the success of the Dettol lotion, HLL assessed that a Savlon antiseptic soap could be successfully extended from the Savlon lotion.
It entered into an agreement with J&J for the use of Savlon brand name and the product formula, and launched the Savlon antiseptic soap. HLL very deftly managed successfully new brand launch and merged as a challenger to Dettol soap. J&J secures a good royalty from HLL for lending the brand. It is a potentially win-win arrangement for both companies.