Detergent Wars in India
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Case Details:
Case Code : MKTA007
Case Length : 21 Pages
Period : 1970-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Hindustan Lever Limited (HLL), Unilever, Procter & Gamble (P&G), Nirma
Industry : Fast moving Consumer Goods, 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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Excerpts
The Detergent Wars
Hindustan Lever Ltd. vs. Nirma
In 2004, HLL was one of the oldest players in the Indian detergents market. The company's origin went back to 1885 when the Lever Brothers set up "William Hesketh Lever", in England...
Procter & Gamble vs. HLL
Procter & Gamble was established in 1837 as a small, family operated soap and candle company in Cincinnati, Ohio, USA...
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Henkel SPIC
Henkel SPIC India Ltd. (HSIL), a 66 % subsidiary of Henkel KgaA, Germany, entered India in 1989. Detergent was the single largest contributor to the company's revenues followed by toilet soaps, talcum powders and personal grooming products. HSIL also exported detergents to Taiwan, Oman, Bahrain, Cyprus, Sri Lanka and Mauritius...
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Looking Ahead
P&G believed its lean business model would allow it to continue the onslaught. Each of P&G's distributors was doing business worth Rs. 65 to 70 crores, with returns on investment in excess of 25%. The model was so successful that even HLL wanted to emulate it. In late 2003, HLL appointed two distributors in Mumbai to serve the 300 odd self-service stores in the city.
The company also initiated a pilot project in key urban markets, by putting one distributor in charge of all its categories - soaps and detergents, personal care, foods and beverages...
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Exhibits
Exhibit I: Comparison of Prices Per Kilogram
Exhibit II: Prices of Detergent Brands after Price Cuts
Exhibit III: Market Share and Prices in the Compact Segment
Exhibit IV: TV commercial (stripe ad) for Tide
Exhibit V: TVC for Rin Shakti
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