Fairness Wars

            
 
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Case Details:

Case Code : MKTG009
Case Length : 7 Pages
Period : 1999 -2001
Pub Date : 2001
Teaching Note : Available
Organization : Cavin Care Ltd, HLL
Industry : FMCG
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"The saffron and milk combination in Fairever clicked with the people because they were familiar with the goodness of the products. And we changed the rules by introducing saffron which had never been used in fairness creams in the past."

- C.K. Ranganathan, CEO & MD, CavinKare Ltd

"Fair & Lovely continues to grow in a healthy manner. Only two out of ten Indians use face creams. That means strong growth prospects for all brands."

- A HLL Spokesperson

Who's The Fairest of Them All?

In June 1999, the FMCG major Hindustan Lever Ltd. (HLL)1 announced that it would offer 50% extra volume on its Fair & Lovely (F&L) fairness cream at the same price to the consumers.2

This ve was seen by industry analysts as a combative initiative to prevent CavinKare's3 Fairever from gaining popularity in retail markets.

HLL's scheme led to increased sales of F&L and encouraged consumers to stay with F&L and not shift to the rival brand.

In December 1999, Godrej Soaps4 created a new product category -fairness soaps -by launching its FairGlow Fairness Soap.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

The product was successful and reported sales of more than Rs. 700 million in the first year of its launch. Godrej extended the brand to fairness cream by launching FairGlow Fairness Cream in July 2000.

By 2001, CavinKare's Fairever fairness cream, with the USP of 'a fairness cream with saffron' acquired a 15% share, and F&L's share fell from 93% (in 1998) to 76%. Within a year of its launch, Godrej's FairGlow cream became the third largest fairness cream brand, with a 4% share in the Rs. 6 billion fairness cream market in India.

The other players, including J.L. Morrison's Nivea Visage fairness cream and Emami Group's Emami Naturally Fair cream, had the remaining 5% share. Clearly, the fairness cream and soaps market was witnessing a fierce battle among the three major players -HLL, CavinKare, and Godrej -each trying to woo the consumer with their attractive schemes...

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1] HLL, a 51.6% subsidiary of Unilever Plc, was the largest FMCG company in India, with a turnover of Rs114 billion in 2000. The company's business ranged from personal and household care products to foods, beverages, specialty chemicals and animal feeds.

2] Initially HLL offered Rs. 5 off on F&L. This was followed by 20% extra volume for the same price, which was later increased to 50% extra volume.

3] In 1983, C.K. Ranganathan (Ranganathan) established Chik India, with an investment of Rs.15000. Chik India was later renamed Beauty Cosmetics, and then went public in 1991. In 1998, the company was renamed CavinKare Ltd.

4] Godrej Soaps' major product lines were toilet soaps and detergents, industrial chemicals, cosmetics and men's toiletries. It had interests in several other businesses such as real estate, agro produce, etc through its subsidiaries. In April 2001, the consumer goods business of Godrej Soaps was demerged into a new company. The chemicals division remained with Godrej Soaps, with the new name, Godrej Industries.

 

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