Fairness Wars

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Themes : Marketing Mix
Period : 1999-2001
Organization : Cavin Care Ltd, HLL
Pub Date : 2001
Countries : India
Industry : FMCG

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Case Code : MKTG009
Case Length : 7 Pages
Price: Rs. 200;

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Fair (Ness) Wars Contd...

In 1999, HLL and CavinKare hiked the price of F&L and Fairever by Re. 1 from Rs.25 and Rs.26 respectively. In 2000, Fairever was back to its original price to maintain price parity. Many stockists said that this was done to push the product against F&L. A stockist commented, "The company was trying out this price to compete with F&L and other new brands that have come in.

But we did not see higher sales due to this and the company reverted to its original price." F&L too followed suit. During 2000-01, while the fairness cream market was growing at an average of 15% Fairever's growth had slowed down. Analysts felt that this was mainly because Fairever was priced higher than competing products. Meanwhile, in January 2000, HLL filed a patent infringement suit for Rs.100 million in the Kolkata High Court against CavinKare Ltd.

HLL alleged that CavinKare was using its patented F&L formula without its knowledge or permission. HLL obtained an ex-parte stay on CavinKare, but CavinKare got the stay vacated in a week's time. It also filed a patent revocation application in the Chennai High Court and defended the suit on the grounds that HLL's patent was not valid. CavinKare further claimed that the ingredients contained in the composition were 'prior art' and that the new patent was not an improvement of the earlier patent, which had expired in 1988. In September 2000, the companies suddenly opted for an out-of-court settlement.

CavinKare gave an undertaking to the court that the company would not "manufacture and/or market either by themselves or by their agents any fairness cream by using silicone compound in combination with other ingredients covered in patent no. 169917 of the plaintiff (HLL), namely Niacinamide, Parsol MCX, Parsol 1789, with effect from September 15, 2000." HLL also gave an undertaking that it would not interfere with the sale of the cream manufactured on or before September 15, 2000, lying with the wholesalers, re-distribution stockists, and retailers.

Promotional Wars

During 2000-01, with major players entering the market, the existing products were promoted with renewed vigor through price reductions, extra volumes, etc. Many products were marketed aggressively. While F&L advertisements projected fairness comparable to the moon's silvery glow, FairGlow offered the added benefit of a blemish-free complexion.

But Fairever, which sold at a higher price, did not initiate any promotional activities. B. Nandakumar, President (Marketing) CavinKare, explained, "We will not tailor our product to the competition. We'll do so for the consumer. Freebies are not the only way to garner sales." However, analysts believed that CavinKare did not undertake any promotional activities due to lack of financial muscle.

On February 14, 2000, as a part of its promotional activities, Godrej Soaps announced the 'Godrej FairGlow Friendship Funda'⁵ in various colleges in Maharashtra. In August 2000, it launched the 'FairGlow Express,' the first branded local train in India, in Mumbai, in partnership with Western Railways. In December 2000, Godrej took its FairGlow brand to the web by launching www.fairglow.com. Later, it launched a unique online promotional scheme - 'the FairGlow Face of the Fortnight.'

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5] 'Friendship Funda' was a system for delivering messages on Valentine's Day. About 50,000 cards were distributed so students could write their Valentine's Day love messages. Special mailboxes for collecting these cards were spread out over 50 different campuses. The cards were collected, sorted, and handed over to the addressees.