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ITC’s launches are a serious threat to HUL!

ITC is at its best again! After storming the market with the launch of its branded snack food Bingo, ITC Ltd, in September 2007 launched its premium range of shower gels & shampoos, Fiama Di Wills. Interestingly October 2007 saw the company launching Superia, an exclusive range of soaps. Call that a flurry of attacks on HUL, but it actually has got ITC on the front foot.

As per ACNielsen, HUL’s best-selling brand Clinic Plus continues to lead the shampoo segment (which is growing annually by 14%) with a 31.3% market share. With HUL’s share in the shampoo market registered an increase from 46.9% in the first quarter of 2007 to touch 47.5% in the second quarter of 2007, it was indeed time for ITC to apply brakes to HUL’s acceleration. With R&D efforts spanning four long years for the product, ITC has surely ensured that its aggressive marketing (which is visible) is coupled with high-quality offering as Dibyajyoti Bora, Marketing Analyst, CII opines, “ITC Ltd positions its products at a different level altogether; it eats into the market with its heavy promotion and marketing. This added to great quality means a lethal combination.” ITC shrewdly has positioned Fiama Di Wills as a premium brand while Superia has been placed in the value-for-money category. This makes for a range of prices when faced with the challenge from HUL. It becomes more interesting as ITC has kept the pricing of Superia, close to 50% lower than HUL’s shampoos and closer to low price brands like Chik, Rejoice and Nyle. Clear advantage indeed as Bora adds, “A new brand always has the advantage of setting its own price, but for an existing brand to match that level of pricing becomes tough.”

Where the war looks tied in the distribution front, product differentiation and differential pricing is now being used as the new weapon by ITC. HUL, are you listening?

Savreen Gadhoke

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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