Hindustan Unilever Ltd - Wheel Powder

Hindustan Unilever Ltd.

Case Study

Presented by

Sneha Shorewala

Course - PGDM

Sec - C

Roll No - 11DM152

Under the Guidance of

Prof. Dhruva Chak

Assignment:

1. Based on the case study, critically examine HUL's Marketing strategy (STP) for Wheel since its inception and the reasons for the success of the brand.

Solution:

Wheel Powder was launched by Hindustan Unilever Ltd. in 1987 in response to the success of Nirma detergent powder - a local Indian brand launched in 1977 by Karsanbhai Patel, a well known entrepreneur and philanthropist of Gujarat. Nirma was introduced at a price that attracted the cost-conscious Indian consumer. Prior to 1988, Wheel had existed, for about a decade, in the bar form before it was launched as a powder. In its new avatar, the principal task of Wheel was to arrest the growth of Nirma and exploit the emerging low-end market potential.This product was created specifically by Hindustan Lever to counter Nirma, the low cost detergent, which had taken the ground away from Surf, the top selling detergent at that time From HLL.

Earlier reaction of HUL towards Nirma was dismissive,saying," That is not our market",and "We need not be concerned." Their perspective was that Nirma was an inferior quality product being sold at Rs 7/kilo to people who weren't currently purchasing Surf(priced at Rs 21/kilo that time), and that their sales would be unaffected by any growth in Nirma's popularity.Stung by the falling market share,HUL recognized the disruptive threat posed by Nirma, and realized that although it was a undisputed leader in the FMCG sector as a whole, it catered only to the elite class of customers leaving the Bottom of pyramid open.Hence ,they adapted their own strategy to compete, launching Wheel detergent to try and stem the tide of Nirma into the low end of the market.

Today with sales of over Rs. 2,000 crore ,Wheel is 'Brand No 1' in the HUL portfolio and the world's largest selling detergent in volume terms. The reason for the success of the brand Wheel lies in HUL's Marketing Strategy of Segmentation,Targeting,Positioning(STP) since its inception.To cater to the wants

of low-priced or the mass-market segment,HUL targeted to make a low cost laundry detergent and positioned itself as a superior quality detergent available at an attractive price in the minds of the target buyers. Along with it, relevant consumer insight, optimum supply chain and wide distribution reach together have led to a win-win situation.

Major reasons for success of Wheel since its inception can be summarized as below:

1)To dominate the low price segment,HUL came up with a low cost product without diminishing its quality and conforming to its brand value. HHL noted that the primary source of water for washing was river water, and so created Wheel with a high percentage of oil relative to water.

2)For Wheel to have a standalone business of its own, HUL opted for a dynamic pricing technique i.e. the pricing would differ from state to state depending on local tax structures, extent of competition in each state and other such factors.

3)Wheel was marketed,advertised and distributed better than Nirma.Initially HUL used its detergents Surf and Sunlight in advertising to take on Nirma but these did not work out fine.Hence it created entirely new production, distribution and marketing capabilities in order to deliver and sell Wheel, investing heavily in creating entrepreneurial door-to-door programs(colourful flyers,posters,street performances) aimed at driving sales at the village level by tapping into the networks of local rural women, just as Nirma had done.Also to counter Nirma's lively advertisements,HUL Levers