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HUL examples of managing Brands
May 14, 2008

in Sales/Marketing Management

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.

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http://marketingtypo.com/2010/09/27/marketing-strategy-making-
brand-portfolio-decisions/

Marketing Strategy : Making Brand Portfolio Decisions

Brand portfolio decisions are strategic in nature. These decisions have very powerful
impact on the entire brand architecture and marketing strategy of the firm. According to
marketing theory, there are two basic brand portfolio models –House of Brands and
Branded House.

Recently Rajiv Bajaj, CEO of Bajaj Auto announced a decision that the company
will not be using the corporate brand Bajaj for any of the motorcycles produced
by the company. Instead, the bikes will sport individual brand names and Bajaj
Auto will be a garage of independent brands like Unilever and P&G. According to
newspaper reports, the company will focus on four brands – Pulsar, Boxer,
Discover and KTM and will not use the parent brand to endorse these individual
brands. Bajaj Auto has made the decision to move from a Branded House
portfolio model to House of Brands portfolio model.

House of Brands

House of Brands model refers to a brand portfolio where firms will choose
different brand names for various products across categories. These brands will
have own identity and personality. Different products in the same category will
also have individual brand names. FMCG giants like Hindustan Unilever, P&G l
follow the model of House of Brands. For example HUL has soap brands like Lux,
Rexona, Hamam, Lifebuoy, Dove etc.

House of Brands portfolio model have many advantages. One of the biggest
advantages is the focus that managers can give to individual brands. Since each
brand will have separate identity, brand managers can devise focused strategies
with regard to segmentation, positioning etc. Individual brands also give
tremendous amount of freedom as far as strategies are concerned. Brand
managers are not constrained in devising their strategies since the brand is not
linked to any other brands in the portfolio.

Since the brands in the portfolio are independent, the failure of any one brand is
not going to have an impact on other brands. Controversies affecting one brand
will have minimal impact on other brands from the same company and brand
managers can distance other brands from the brand which is facing the issue.
House of Brands model also have its fair share of disadvantages. Since the firm
intent to have different brand names for various products, the cost of promotion
of these multiple brands will be more compared to Branded House model.

In the case of House of Brands, the promotional budget has to be shared which
will create internal competition among various brands for a larger share. While
internal competition can be beneficial, there is also a chance of internal conflicts
within the brand management teams.

Another potential disadvantage is the chances of brand cannibalization within a

category. For example soap brands Rexona and Hamam from HUL compete with
each other in some southern markets. Thums Up and Coca Cola compete with
each other in markets where they co-exist.

If not done carefully, different brands in the portfolio can also create confusion in
terms of positioning and segmentation. Overlaps in segments, cannibalization,
same positioning, and clutter etc can occur if the firm is not careful about the
individual brand strategy. At one point of time HLL (now HUL) found its brand
portfolio with too many brands that overlapped with each other. The company
had to undertake a brand rationalization exercise which reduced the number of
brands from 110 to 30 power brands.

Branded House

Branded House portfolio model is where the firm chooses to have one brand
name for all the products that is marketed by the company. Many firms use the
corporate brand name for all the products that they sell in the market. Dell is
often cited as a classic example of a Branded House.

The biggest advantage of Branded House is the economies of scale in terms of

brand promotion activities. Since there is only one brand to promote, the firm
can channel the entire resources more effectively.

Another advantage of Branded House is that the promotional cost of introducing

new products into the market will be significantly lower compared to House of
Brands. Since the new product will carry the common brand name, there is an
increased chance of consumer acceptance because of the existing brand equity of
the parent brand. The firm is thus spared of the task of building brand awareness
from the scratch.

A major disadvantage of Branded House model is the possibility of brand dilution

arising out of different products from the same brand. Unless carefully
monitored, product proliferation within the brand portfolio can dilute the core
positioning of the parent brand. It may not be possible for all products to have
the same positioning theme and any deviation from parent brand’s positioning
will dilute the core positioning them of the Branded House.
Firms strictly adhering to Branded House portfolio model may have to forego
many market opportunities if those categories do not fit into the parent brand’s
positioning. For example a Branded House marketing luxury product may have
to forego the mass market opportunities because of the positioning constraints.
That constraint is not applicable for House of Brands because the positioning of
one brand may not affect another.

Another disadvantage of Branded House portfolio is the impact of product

failures/controversies on entire portfolio. Since all products carry the same brand
name, failure of one product can have a negative impact on the parent brand. Any
controversy involving a single product can have devastating influence on the
entire product range.

Although theoretically these two portfolio models exist, in practice firms tend to
use various elements of both models together while devising their brand portfolio
strategy.

(Reference: Tybout, A., & Calkins, T. (2006). Brand Portfolio Strategy. In Kellogg
on Branding (pp. 104-129). Wiley India.)

Originally Published here at Adclubbombay.com

http://marketingtypo.com/2010/05/05/marketing-strategy-how-to-create-brand-
experience/

Marketing Strategy : How to Create Brand Experience

Creating Brand Experience
Originally Published here in Adclubbombay
We are living in an experiential society. The consumers are moving towards selecting
products based on experiential factors and marketers have the opportunity to sell products
at a premium if the product is able to deliver the right kind of experience.

Bernd Schmitt in his book Customer Experience Management: A revolutionary

Approach to Connecting with Your Customers; has defined customer experience
management as the process of strategically managing a customer’s entire
experience with a product or a company. Experiential marketing aims to engage
the consumers so that he gets a complete experience of the product or service.
Rather than depending on features, brands are looking at ways to deliver a
holistic experience to the consumer.

There are many factors that drive this experience economy. Consumers are now
armed with lot of information. This information has made many a differentiation
irrelevant. Hence more than the product’s features, consumers tend to evaluate
products based on their experience with the product and the company.

Marketers earlier had tried to create brand experience through standalone

promotional activities. These activities were short-term and were intended to give
a peek into the brand’s projected experience. But the situation now demands that
the brand deliver its experience every time the consumer makes a contact with
the brand or the company.

In this period where product feature based differentiation is hard to sustain,

marketers must create a brand experience which can act as a sustainable
differentiation platform.

Understand consumer’s world.

The first task for the marketer is to thoroughly understand the consumer’s world.
Consumers live their experience from their own world. Hence when the
marketers try to create brand experiences it should resonate with the consumer’s
own world.

Brands which target children practice this principle very effectively. Take the
example of Cadbury’s Diary Milk Wowie. The brand takes the kids through a
chocolate world where the hero Mickey Mouse helps the kids to enjoy the
chocolate world and protect them from harm. This fantasy world appeals to the
kids intensely and the level of involvement of kids in this campaign is very high.
Be Relevant

Another critical factor for creating effective brand experience is the relevancy of
the experience. For creating relevant brand experiences, marketers must get
inside the life of a customer. In the highly insightful book “The Game Changer”
P&G CEO: A G Lafley describes the importance of understanding the life of the
consumers. P&G made it compulsory for its marketing team to involve deep into
their consumers life so that they could come out with products that made their
life easier.

Credible

The brand experiences that marketers create should be authentic and credible.
Fantasy works best for children but for adults, the experience must be based on
realism. The promise has to be delivered. This calls for the organization to be
highly customer centric.

Kingfisher Airlines created a very meaningful credible experience by making the

most of customer touch points. The ushers who helps the traveller at the entrance
of the airport to the cabin services and food served created a new brand
experience for the travellers.

Memorable

Consumers should cherish the experiences created by the brand in their

memories. The experience should appeal both to the rational and emotional mind
of the consumer. Catering to the emotional self of the consumer will help the
brand to build attachment with the consumer. Appealing to the rational self will
enhance the credibility.

Asian Paints in its clutter breaking campaign “ Har Rang Kuch Kahta Hain
“achieved both these objectives. The campaign touched the emotional chord with
the consumers and also appealed to the rational mind of the consumers. The
brand made the experience more rational by launching sample packs where the
consumers can paint a portion of the wall to see how the colour will actually look
like.

Involve

It is absolutely important for a brand to involve the consumers in any brand

related activity if it wants to create a complete experience. The popularity of
internet has opened many opportunities for the brand to involve the consumers.
The brand can motivate consumers to sign up in an online community, visit the
website or play games, share experience etc.

Brands can create involvement offline too. Kinder Joy has a unique method of
creating a brand experience by bundling its chocolate with a surprise gift. Kids
eat the chocolate and play with the toy and it created a unique brand experience
for them which compel them to buy more.

Brands can create involvement by devising interesting brand rituals. Kitkat

smartly taught its consumers a unique ritual of eating KitKat. Consumers
willingly adopted this brand ritual making the experience of eating Kitkat unique.
Brands can extend the involvement with the consumers by introducing
memorabilia and collectables which will further enhance the brand experience.