sheetal mrp main contents (1)
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CHAPTER 1
INTRODUCTION
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1.1. CONCEPTUAL FRAMEWORK
In today's highly competitive environment, organizations are convinced that a company's success
can increase with frequent launch of new products to satisfy the constantly changing customer
preferences. Launching new products can be an attractive growth strategy; however, this can be
risky too. According to the existing research, 30-35% of newly launched products fail. Due to
factors such as high advertising costs and increasing competition, it has become very difficult to
succeed with new products. An increasingly popular approach to reduce risks when launching
new products is to follow a brand extension strategy. During the last two decades, more than 40
empirical studies have been conducted worldwide, to address the conditions under which brand
extensions are successful, however many aspects still remain unexplored. This study primarily
focuses on consumer evaluation of brand extension for FMCG (Fast Moving Consumer Goods),services and consumer durables product categories in the Indian context. The study examines the
ways in which consumers evaluate brand extensions based on factors like parent brand reputation,
similarity or fit between the parent brand and the brand extension, consumer innovativeness, and
perceived risk or uncertainty. More importantly, the study explores the differences in the
consumers' evaluation of FMCG, services and consumer durables brand extension and looks at
the influence of various factors on the overall evaluation of the brand extension through HUL
products.
Research aimed at understanding how consumers respond to brand extensions has been an
important area of inquiry in the past decade with the help of HUL brand extension. A number of
factors have been identified that influence whether consumers will evaluate brand extensions in a
favourable manner. Key among them is the degree to which a brand extension fits with the
parent brand, which consumers judge in a variety of ways, including whether the extension is in a
product class similar to other products produced by the parent brand and whether an attribute
associated with the parent brand could be beneficial in the extension product class. Brand
extensions that fit well with the parent brand are usually evaluated quite favourably.
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1.1.1. FMCG INDUSTRY
A type of goods that is consumed every day by the average consumer, the goods that comprise
this category are ones that need to be replaced frequently, compared to those that are usable for
extended periods of time. While CPGs represent a market that will always have consumers, it is
highly competitive due to high market saturation and low consumer switching costs.
It is alternatively called as CPG (Consumer packaged
goods) industry primarily deals with the production,
distribution and marketing of consumer packaged goods.
The Fast Moving Consumer Goods (FMCG) is those
consumables which are normally consumed by the
consumers at a regular interval. Some of the prime
activities of FMCG industry are selling, marketing,
financing, purchasing, etc. The industry also engaged in
operations, supply chain, production and general
management.
FMCG industry provides a wide range of consumables and accordingly the amount of money
circulated against FMCG products is also very high. The competition among FMCG
manufacturers is also growing and as a result of this, investment in FMCG industry is also
increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector
with total market size of US$13.1 billion. FMCG Sector in India is estimated to grow 60% by
2010. FMCG industry is regarded as the largest sector in New Zealand which accounts for 5% of
Gross Domestic Product (GDP).
Common FMCG products
Some common FMCG product categories include food and dairy products, glassware, paper
products, pharmaceuticals, consumer electronics, packaged food products, plastic goods,printing
and stationery, household products, photography, drinks etc. and some of the examples of FMCG
products are coffee, tea, dry cells, greeting cards, gifts.
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Market Potentiality of FMCG industry
Some of the merits of FMCG industry, which made this industry as a potential one, are low
operational cost, strong distribution networks, presence of renowned FMCG companies.
Population growth is another factor which is responsible behind the success of this industry.
Leading FMCG companies
Some of the well known FMCG companies are Nestl, Emami, Amul, ITC, Marico, Hindustan
Unilever, Procter & Gamble, Coca-Cola, Britannia, Pepsi and Mars etc.
The Indian FMCG sector with a market size of US$13.1 billion is the fourth largest sector in the
economy. A well-established distribution network, intense competition between the organized and
unorganized segments characterizes the sector. FMCG Sector is expected to grow by over 60% by
2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated
that FMCG sector will rise from around Rs 56,500 Crores in 2005 to Rs 92,100 Crores in 2010.
Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery
categories are estimated to be the fastest growing segments, says an HSBC report. Though the
sector witnessed a slower growth in 2002-2004, it has been able to make a fine recovery since
then.
For example, Hindustan Levers Limited (HLL) has shown a healthy growth in the last quarter. An
estimated double-digit growth over the next few years shows that the good times are likely to
continue.
Growth Prospects:
With the presence of 12.2% of the world population in the villages of India, the Indian rural
FMCG market is something no one can overlook. Increased focus on farm sector will boost ruralincomes, hence providing better growth prospects to the FMCG companies. Better infrastructure
facilities will improve their supply chain. FMCG sector is also likely to benefit from growing
demand in the market. Because of the low per capita consumption for almost all the products in
the country, FMCG companies have immense possibilities for growth. And if the companies are
able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded
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products and offer new generation products, they would be able to generate higher growth in the
near future. It is expected that the rural income will rise in 2007, boosting purchasing power in the
countryside. However, the demand in urban areas would be the key growth driver over the long
term. Also, increase in the urban population, along with increase in income levels and the
availability of new categories, would help the urban areas maintain their position in terms of
consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural
India accounting for the remaining 34%. However, rural India accounts for more than 40%
consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In
urban areas, home and personal care category, including skin care, household care and feminine
hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated
that processed foods, bakery, and dairy are long-term growth categories in both rural and urban
areas.
FMCG companies extend brands to boost growth and gain market share.
In a bid to garner higher market share and sustain long-term growth, fast moving consumer goods
(FMCG) companies such as Coca-Cola, Nestle, PepsiCo, Dabur, Marico and Godrej have adopted
a brand extension strategy amid negative factors such as high inflation and the global financial
crisis.
According to marketing research company IMRB, the FMCG companies launched 251 products
(223 variants and 28 brands) in calendar year 2007 as against 191 (173 variants and 18 brands) in
2006. The industry pegs the number of variants and extensions launched this year to be in line
with 2007.
There has been evidence of down trading in the FMCG sector, especially the mid-level brands.
Companies are likely to leverage their strong brands by introducing variants across high-end and
low-end ranges. For instance, Nestle launched a record number of variants this year from its
Maggi Cuppa Mania (the instant cup noodles), Maggi Pichkoo (a tomato ketchup pouch pack) to
Maggi Bhuna Masala (a readymade cooking aid). It also introduced NesVita Pro-Heart, a fat-free
packaged milk product in Delhi/NCR region.
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Other FMCG leading players such as Marico had launched Saffola Functional Food for
diabetics management and Britannia launched Nutri Choice 5 Grain, a biscuit made from five
healthy cereals. Dabur too unveiled a pudina variant of its popular Hajmola brand apart from
extending its Gulabari skin-care range. Beverage Company Coca-Cola India introduced apple
flavour for its Fanta brand as its rival PepsiCo chose to introduce apple flavour for its
Tropicana Twister range. PepsiCos food wing, Frito Lay, extended its Kurkure range with Desi
Beats apart from introducing new flavours for Quaker Oats.
Godrej Consumer Products (GCPL) stretched its Ezee brand as a daily wash liquid detergent
under the new variant, Bright & Soft, and it intends to further extend it to the post-wash category.
Soup was another category which witnessed a lot of action. While HUL launched a range of
Knorr soups targeted at mass markets, Nestle launched a slew of local variants of its Maggi soup.
Rising income and growing aspirations, coupled with lower penetration levels, have fuelled
strong demand for lifestyle and value-added products. Brand extensions provide a more
economical and risk-free approach of sustaining growth in the present economic environment as
against launching a new product for FMCG players. Industry observers also feel that for most of
the brand variants, manufacturers need to marginally tweak the production line to accommodate
the new product as against a new brand which may require more infrastructures.
In terms of categories, brand extensions in personal-care, household-care and processed foods
drove growth in the FMCG sector. Analysts believe that most of the new launches next year will
also happen under these categories. In the processed foods segment, health and wellness has been
the major theme playing out, with most players rolling out products around this platform.
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1.1.2. Brand & Brand Extension
Brand extension or brand stretching is a marketing strategy in which a firm marketing a
product with a well-developed image uses the same brand name in a different product category.
Organizations use this strategy to increase and leverage brand equity (definition: the net worth
and long-term sustainability just from the renowned name).
Brand extension is not a new notion in the FMCG industry; rather it is in use for several years. It
has been observed that brand extensions are mostly preferred by FMCG companies due to the low
involvement of the customers and highly competitive market environment which leads the
companies to introduce the product frequently in the market. The present study makes an effort to
study consumer responses towards brand extension in FMCG industry. Because a new brand
involves huge cost and risk, therefore, companies may alternatively resort to extend their brand or
lines as a more feasible growth strategy option. Brand Extension can happen in two ways:
extending the line (line extension) and extending the category (category extension). In Indian
FMCG market, most of the big players are using the line extension rather than brand extension
because in line extension, parent brands give strong recognition to the new brand and some of the
famed and successful examples lines of extension under parent brand are Lux, Dairy Milk, Frito-
Lays, etc. On the other hand, category extension is playing an important role in grabbing the
market share because category extension provides differentiation strategy to attract large number
of consumers and some of the famed names of category extension are HUL soap category, GSK
malted beverages, etc. A brand extension under the parent brand also reduces the goodwill in the
market due to the failure and over success of the extended brand and misconception to some
extent. Brand extension sometimes also results in cannibalization where the extended brands eat
the sales of parent brand. Cannibalization is a very real threat for the vast majority of new product
launches. But there have been little empirical work which quantifies this threat, or which
examines the measures which can be used to define it. Some of the examples of failure of brand
extensions are Ponds toothpaste, Frito-Lay Lemonade, Heinz all natural cleaning vinegar and lot
more. Here, brand reputation plays a very important role because status for a new brand is totally
dependent on the parent brand and its qualities. In brand extension, there is a benefit for
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consumers to reduce risk and to choose new brand which has been launched under the well-
established parent brand, this factor provides dual benefits first for the brand company and second
for the consumer. The risk involvement also varies from extension to extension; in category
extension, risk is more because brand is totally new for the consumer and perceived risk is also
there, but in the line extension, it will be less because brand reputation of parent brand already
exists in consumers mind. In todays scenario, it is very normal and active, due to low
involvement in FMCG industry & these companies are very rigorous about innovation and new
ideas about extensions to attract more and more consumers and to compete in the market.
Therefore, it is imperative to know the consumer understanding of brand extension and whether
they recognize such phenomena or not. Generally a successful parent brand rules the mind of the
customers and gives a sturdy perception to consumer about their new expansion which resulted in
the launch of new product/ innovations under the parent brand through line and categoryextension. Further it has also been observed that consumers are more influenced towards parent
extended brands. The research tries to explore the brand extension concept and duly assess the
impact of extending a brand on the brand from the customer point of view.
The contemporary hypercompetitive market makes it inevitable for the companies to introduce
extensions strategically and efficiently to survive and compete. And more so, in case of FMCG
(Fast Moving Consumer Goods) industry, this is attributed to the low emotional loyalty and lowinvolvement in most of the product categories. Brand extension is not a new notion in the FMCG
industry; rather it is in use for several years. It has been observed that brand extensions are mostly
preferred by FMCG companies due to the low involvement of the customers and highly
competitive market environment which leads the companies to introduced the product frequently
in the market. The present study makes an effort to study consumer responses towards brand
extension in FMCG industry. Because a new brand involves huge cost and risk, therefore,
companies may alternatively resort to extend their brand or lines as a more feasible growth
strategy option. Brand Extension can happen in two ways: expending the line (line extension) and
extending the category (category extension). Indian FMCG market most of the big players are
using the line extension rather than brand extension because in line extension parent brands give
strong recognition to the new brand And some of the famed and successful examples line
extension under parent brand are Lux. Dairy Milk, Frito-Lays, etc. On the other hand, category
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extension is playing an important role in grabbing the market share because category extension
provides differentiation strategy to attract large number of consumers, and some of the famed
names of category extension are HUL soap category, GSK malted beverages, etc. A brand
extension under the parent brand also reduces the goodwill in the market due to the failure and
over success of the extended brand and misconception to some extent. Brand extension sometimes
also results in cannibalization where the extended brands eat the sales of parent brand.
Cannibalization is a very real threat for the vast majority of new product launches. But there have
been little empirical work which quantifies this threat, or which examines the measures which can
be used to define it. Some of the examples of failure of brand extensions are Ponds toothpaste,
Frito-Lay Lemonade, Heinz all natural cleaning vinegar and lot more. Here, brand reputation
plays a very important role because status for a new brand is totally dependent on the parent brand
and its qualities. In brand extension there is benefit for consumers to reduce risk and to choosenew brand which has been launched under the well-established parent brand, this factor provides
dual benefits first for the brand company and second for the consumer. The risk involvement also
varies from extension to extension; in category extension risk is more because brand is totally
new for the consumer and perceived risk is too, but in the line extension it will less because brand
reputation of parent brand already exists in consumers mind. In todays scenario it is very normal
and active, due to low involvement in FMCG industry companies are very rigorous about
innovation and new ideas about extensions to attract more and more consumers and to compete in
the market. Therefore, it is imperative to know the consumer understanding of brand extension
and whether they recognize such phenomena or not. Generally a successful parent brand rules the
mind of the customers and gives a sturdy perception to consumer about their new expansion
which resulted in the launch of new product/ innovations under the parent brand through line and
category extension. Further it has also been observed that consumers are more influenced towards
parent extended brands. The research tries to explore the brand extension concept and duly assess
the impact of extending a brand on the brand from the customer point of view.
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BRAND
BrandBrand is an important part of a product & branding can add value to a product. Branding
has become so strong today that hardly there is anything unbranded. A brand is an identity whichrepresents a promise of value associated with a particular product, service or organization.
A brand is a name, term, sign, symbol, or design or a combination of them, intended to identify
the goods or services of one seller or group of sellers and to differentiate them from those of
competitors.
Examples: Brooke Bond Red Label, Fair & lovely, Dove, etc.
Brands are different from products in a way that brands are what the consumers buy, while
products are what companies make. Brand is an accumulation of emotional and functional
associations. Brand is a promise that the product will perform as per customers expectations. It
shapes customers expectations about the product. Brands usually have a trademark which
protects them from use by others. A brand gives particular information about the organization,
good or service, differentiating it from others in marketplace. Brand carries an assurance about the
characteristics that make the product or service unique. A strong brand is a means of making
people aware of what the company represents and what its offerings are.
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To a consumer, brand means and signifies:
Source of product
Delegating responsibility to the manufacturer of product
Lower risk
Less search cost
Quality symbol
Deal or pact with the product manufacturer
Symbolic device.
Brands simplify consumers purchase decision. Over a period of time, consumers discover the
brands which satisfy their need. If the consumers recognize a particular brand and have
knowledge about it, they make quick purchase decision and save lot of time. Also, they save
search costs for product. Consumers remain committed and loyal to a brand as long as they
believe and have an implicit understanding that the brand will continue meeting their expectations
and perform in the desired manner consistently. As long as the consumers get benefits and
satisfaction from consumption of the product, they will more likely continue to buy that brand.
Brands also play a crucial role in signifying certain product features to consumers.
A brand connects the four crucial elements of an enterprise- customers, employees, management
and shareholders. Brand is nothing but an assortment of memories in customers mind. Brand
represents values, ideas and even personality. It is a set of functional, emotional and rational
associations and benefits which have occupied target markets mind. Associations are nothing but
the images and symbols associated with the brand or brand benefits, such as, The Nike Swoosh,
The Nokia sound, etc. Benefits are the basis for purchase decision.
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BRAND EXTENSION
Brand extension is using the leverage of a well known brand name in one category to launch a
new product in a different category.
Brand Extension is the use of an established brand name in new product categories. This new
category to which the brand is extended can be related or unrelated to the existing product
categories. A renowned/successful brand helps an organization to launch products in new
categories more easily. For instance, Nikes brand core product is shoes. But it is now extended to
sunglasses, soccer balls, basketballs, and golf equipments. An existing brand that gives rise to a
brand extension is referred to as parent brand. If the customers of the new business have values
and aspirations synchronizing/matching those of the core business, and if these values and
aspirations are embodied in the brand, it is likely to be accepted by customers in the new business.
Extending a brand outside its core product category can be beneficial in a sense that it helps
evaluating product category opportunities, identifies resource requirements, and lowers risk, and
measures brands relevance and appeal. Brand extension may be successful or unsuccessful.
In the 1990s, 81% of new products used brand extension to introduce new brands and to create
sales. Launching a new product is not only time consuming but also needs a big budget to create
awareness and to promote a product's benefits. Brand extension is one of the new product
development strategies which can reduce financial risk by using the parent brand name to enhance
consumers' perception due to the core brand equity.
While there can be significant benefits in brand extension strategies, there can also be significant
risks, resulting in a diluted or severely damaged brand image. Poor choices for brand extension
may dilute and deteriorate the core brand and damage the brand equity. Most of the literaturefocuses on the consumer evaluation and positive impact on parent brand. In practical cases, the
failures of brand extension are at higher rate than the successes. Some studies show that negative
impact may dilute brand image and equity. In spite of the positive impact of brand extension,
negative association and wrong communication strategy do harm to the parent brand even brand
family.
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ADVANTAGES OF BRAND EXTENSION
Brand Extension has following advantages:
1. It makes acceptance of new product easy.
2. It increases brand image.
3. The risk perceived by the customer reduces.
4. The likelihood of gaining distribution and trial increases. An established brand name
increases consumers interest and willingness to try new product having the established
brand.
5. The efficiency of promotional expenditure increases. Advertising, selling and promotional
cost are reduced. There are economies of scale as advertising for core brand and its
extension reinforces each other.
6. Cost of developing new brand is saved.
7. Consumers can now seek for a variety.
8. There are packaging and labelling efficiencies.
9. The expense of introductory and follow up marketing programs is reduced.
10. There are feedback benefits to the parent brand and the organization.
11. The image of parent brand is enhanced.
12. It revives the brand.
13. It allows the subsequent extensions.
14. Brand image is clarified.
15. It increases market coverage as it brings new customers into brand franchise.
16. Customers associate original brand to new product, hence they also have quality
associations.
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DISADVANTAGES OF BRAND EXTENSION
1. Brand extension in unrelated markets may lead to loss of reliability if a brand name is
extended too far. An organization must research the product categories in which the
established brand will work.
2. There is risk that the new product may generate implications that damage the image of the
core brand.
3. There are chances of less awareness and trial because the management may not provide
enough investment for the introduction of new product assuming that the spin-off effect
from the original brand name will compensate.
4. If the brand extension has no advantage over competitive brands in the new categories,
then it will fail.
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1.2. BRIEF INTRODUCTION ABOUT HUL
Hindustan Unilever Limited
Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company,
touching the lives of two out of three Indians with over 20 distinct categories in home & personal
care products and food & beverages. They endow the company with a scale of combined volumes
of about 4 million tones and sales of over Rs. 13,000 Crores. HUL
is also one of the country's largest exporters; it has been
recognized as a Golden Super Star Trading House by the
Government of India.
Hindustan Unilever Limited (HUL) is India's largest fast moving
consumer goods company owned by the European company
Unilever. The Anglo-Dutch company Unilever owns a 52%
majority stake.
In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing Company,
followed by Lever Brothers India Limited (1933) and United Traders Limited (1935). These three
companies merged to form HUL in November 1956; HUL offered 10% of its equity to the Indian
public, being the first among the foreign subsidiaries to do so. Unilever now holds 52.10% equity
in the company. The rest of the shareholding is distributed among about 360,675 individual
shareholders and financial institutions. It is headquartered in Mumbai, India and has employee
strength of over 15,000 employees and contributes to indirect employment of over 52,000 people.
The company was renamed in June 2007 as Hindustan Unilever Limited.
Hindustan Unilever's distribution covers over 1 million retail outlets across India directly and its
products are available in over 6.3 million outlets in the country, nearly 80% of all retail outlets in
India. The company claims that two out of three Indians use its many home and personal care
products, food and beverages.
http://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Anglohttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Fast_moving_consumer_goodshttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Anglohttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Unileverhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/India -
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In the early 2000s, as HUL struggled to generate growth, brand extension became an important
strategic option. HUL extended its popular brands into the premium segment to increase its
profits. By early 2003, HUL had launched a number of brand extensions with varying degrees of
success.
In January 2000, in a historic step, the government decided to award 74 per cent equity in Modern
Foods to HUL, thereby beginning the divestment of government equity in public sector
undertakings (PSU) to private sector partners. HUL's entry into Bread is a strategic extension of
the company's wheat business. In 2002, HUL acquired the government's remaining stake in
Modern Foods.
HUL launched a slew of new business initiatives in the early part of 2000s. Project Shakti was
started in 2001. It is a rural initiative that targets small villages populated by less than 5000
individuals. It is a unique win-win initiative that catalyses rural affluence even as it benefits
business. Currently, there are over 45,000 Shakti entrepreneurs covering over 100,000 villages
across 15 states and reaching to over 3 million homes.
In 2002, HUL made its foray into Ayurvedic health & beauty centre category with the Ayush
product range and Ayush Therapy Centres. Hindustan Unilever Network, Direct to home businesswas launched in 2003 and this was followed by the launch of Pureit water purifier in 2004.
In 2003, in what seemed to be in response to intensifying competition in several segments, HUL
decided to strengthen its already overwhelming presence in the talcum powder category where its
brand, Ponds Dream flower, was already the market leader. HUL also extended Lifebuoy,
Vaseline and Fair & Lovely to Talc category. Senior HUL executives wondered if these brand
extensions would yield the benefits they promised.
In 2005, Hindustan Lever Limited (HLL), the Indian subsidiary of Unilever, was the country's
largest fast moving consumer goods (FMCG) company. HLL's portfolio of brands included Lux,
Lifebuoy, Liril, Surf, Ponds Vaseline, Vim, Clinic All Clear and Axe. Most of these brands had
been market leaders for several years in their respective product categories. Over the years, HLL
had extended many of its popular brands with varying degree of success.
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Some extensions like Clinic All Clear anti-dandruff shampoo to hair oil category had been
successful, while others like Ponds Toothpaste had been a dismal failure.
In 2007, Hindustan Unilever was rated as the most respected company in India for the past 25
years by Business world, one of Indias leading business magazines. HUL is the market leader in
Indian consumer products with presence in over 20 consumer categories such as soaps, tea,
detergents and shampoos amongst others with over 700 million Indian consumers using its
products. It has over 35 brands. Sixteen of HULs brands featured in the ACNielsen Brand Equity
list of 100 Most Trusted Brands Annual Survey (2008). HUL has the largest number of brands in
the Most Trusted Brands List. Its a company that has consistently had the largest number of
brands in the Top 50 and in the Top 10 (with 4 brands).HUL was one of the eight Indiancompanies to be featured on the Forbes list of Worlds Most Reputed companies in 2007.
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1.2.1. HUL BRANDS
HUL products are a household name in India. Its brands across categories touch lives of over 700
million Indian consumers every day. That means roughly two-third of Indian population uses
HUL products. The two biggest strengths of HUL are: its leading brands and extensive
distribution network.
a) Brands: HUL has around 35 major brands most which are leaders in their individual
categories. In the year 2008 AC Nielsen-Brand Equity list of 100 Most Trusted Brands Annual
Survey featured 16 HUL brands. HUL consistently has highest number of brands in top 50 or top
10 Indian brands list.
b) Distribution Channel: HUL products are manufactured in over 40 factories across India.
Over 2000 suppliers and associates are involved in its operations. The giant HUL distribution
network comprises of around 4000 redistribution stockists and 6.3 million retailer outlets. The
wide-spread distribution network reaches almost entire urban India and around 250 million rural
consumers. With the introduction of Hindustan Unilever Network in 2003 HUL is trying its
hand at Network Marketing. Lately, HULs Shakti program, which supports rural women to
become entrepreneurs and sell HUL products in villages increases the reach of HUL and provides
it a unique capability to tap the still unexplored bottom-of-the-pyramid opportunities. Of late,
HUL is trying to reduce the inventory requirements by unbundling the distributors. As per the
pilot project in Mumbai, number of distributors has decreased drastically from 22 in 2007 to only
5 in 2008.
As a responsible corporation of the country, HUL has adopted the triple bottom-line approach to
address environmental and social concerns. Following are the three key pillars in this approach:
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HUL is the proud owner of around 35 major Indian brands. HUL has divided its products into
following categories: Home and Personal Care, Food and Water Purifier. In the Home and
Personal care category, HUL has maximum number of brands. It is again subdivided into eight
sub-categories:
The individual brands within these sub-categories are listed next:
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The Food port folio of the company comprises of following brands:
Examples:
Lifebuoy
Since its launch in 1895, Lifebuoy had been synonymous with health and hygiene. The brick red
carbolic soap with its famous jingle 'Lifebuoy hain jahan, tandurusti hain wahan' (Where there is
Lifebuoy, there is health) had become the largest selling soap in India, with two million soaps
being sold every day in the early 1990s.
With consumers shifting to softer soaps that gave more lather, Lifebuoy's market share slid from
15.4% in 1997 to 12.5% in 2001. Initially, Lifebuoy decided not to tinker with the core brand...
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Lux
Launched in 1905, Lux was one of HLL's biggest soap brands. Positioned as the filmstar's choice,
Lux had been endorsed by popular filmstars like Leela Chitnis in the 1940s, Shri Devi in the
1990s, and Karishma Kapoor and Rani Mukherji in recent times. Lux came in three variants, LuxPink, Lux White and Lux Black. HLL introduced Lux International in India in 2002, after a
successful launch in the US, Europe and South East Asia. Variants included moisturizing,
sunscreen and deep cleansing soaps and face washes.
Ponds
Pond's Cold Cream was launched in India in 1947. In 1956, the brand was
extended to talcum powder category with the launch of Dreamflower Talc,
which effectively became a 'generic' product in the Indian talcum powder
market.
Vaseline
The other well-known brand from the Pond's stable was Vaseline, which was
synonymous with petroleum jelly. The Vaseline petroleum jelly was perceived
as an effective, though sticky protection from dry skin problems experienced
in winters.
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HLL retained the formulation, but began to sell Vaseline lip guard in tubes and small plastic jars.
An instant success, the brand name was extended to Vaseline body lotion, a thick, milky, non-
sticky body lotion that provided effective protection from winter dryness.
Sunsilk
Launched in 1964, Sunsilk was the largest beauty shampoo brand in the
country. Positioned as the 'Hair Expert,' Sunsilk identified different hair needs
and offered specific variants to the consumer. In 1999, HLL introduced six hair
specific variants of Sunsilk. In 2000, Sunsilk toyed with extending the brand to
'ceramide hot oil treatment' and test marketed it. In 2001, HLL extended Sunsilk's association
with hair care by launching Sunsilk Pro-Colour, a range of seven hair colours (Natural Black,
Natural Dark Brown, Dark Brown with Purple tint, Dark Reddish Brown, Light Brown with Gold
tint and Copper with Red Tint) specially suited for the dark Indian hair and skin tones...
Clinic Plus
Clinic Plus was the largest shampoo brand with a market share of 31%. Clinic Plus was launched
in 1987 as a new variant of Clinic Special, a 30 year old brand. Clinic Plus was advertised as a
family shampoo with the positioning of 'protein nourishment for the scalp'. Clinic Special was
positioned as a hard-core anti-dandruff treatment shampoo. The communication for Clinic Plus
emphasized the mother-daughter bond. The packaging showed a family with healthy hair.
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Consumers: Making a difference through HUL brands
Making a difference through HUL brands..
Despite advances in science and increasing prosperity, millions of people still lack access to basic
sanitation, nutrition and healthcare. The HUL, as an organization believe that their brands can
grow by addressing some of the most important social and environmental challenges facing the
country today.
In 2005, the company started to
embed the sustainability agenda into
their brands by using a process called
Brand Imprint. It is a rigorous,
diagnostic process that analyses the
social and economic value, as well as
the negative impacts of a brand.
This process has been carried out
across all their key categories. Social
and environmental considerations are
now integrated with innovation plans
for their major brands.
They believe that they can make a
difference through their brands and
behaviour change campaigns in the space of nutrition and hygiene, and by providing consumers,
from all income groups, access to a better life.
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Two pillars - strong brand equity and a wide distribution network, characterize the fast moving
consumer goods business. Brand equities are built over a period of time by technological
innovations, consistent high quality, aggressive advertisement and marketing. Availability near
the consumer through a wide distribution network is another crucial success factor, as products
are of small value, frequently purchased daily use items. HUL is strong on both these fronts with
110 brands and a 1mn strong direct retail reach.
Competitive Position:
HUL is the market leader in the detergent and soap industry. Nirma is a close competitor in
detergents and has been slowly gaining ground in toilet soaps too. The other significant
competitor in detergents is P&G. Despite being the global leader in this segment, has been unable
to achieve a critical mass in India due to premium pricing strategy. In oral care segment, HUL has
emerged as a strong No 2 player, giving stiff competition to the market leader Colgate. In the hair
care segment, HUL dominates the shampoo market and is the No 2 player in hair oils. In the skin
care market, besides competition from leading global players, HUL has also been losing share to
south based player Cavincare Ltd. In the foods business, Tata Tea in packet tea, Nestle in coffee
and culinary products, GCMMF (Amul) in ice creams, and Godrej Pillsbury in staple food are the
main competitors.
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Society: Creating a Positive Impact
Creating a positive impact..
They believe that the true worth of an organization comprises more than just its business
achievements. The service it renders to society bestows great value on the organization itself.
HUL has committed to create a responsible leadership that has a positive impact on society, and
helps solve its most challenging issues.
In 2009, HUL contributed INR 30 crores towards community related initiatives. Their
contribution in 2009 went either to long-term community investment partnerships or to
commercial initiatives, with mutual benefits for both their business and their partners.
The United Nations reports that people need a minimum of 50 litres of water a day for drinking
and other basic needs. In India, more than 50%of the population lives on less than 10 litres of
water a day. Approximately 70% of the total water is consumed by the agriculture sector. India is
an agri-economy, and as its population grows, there will be an increase in water consumption by
the agriculture sector. These issues are likely to be exacerbated by climate change, making access
to water an issue for farmers and society.
What they do?
HUL have identified water conservation as an issue they would like to focus their energies on.
They are working in close partnership with their stakeholders to conserve precious drops of water.
Water management has been a key area of focus for HUL across the entire value chain.
They are also engaged in community projects to conserve water. They aim to conserve more than
20 billion litres of water by 2015.
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1.2.2. Awards & Recognition
These are some highlights of recognition that HUL have received from external bodies on their
social, economic and environmental performance during 2009 and 2010..
Awarded top Indian company in the 'FMCG' sector for the third consecutive year at Dun
& Bradstreet-Rolta Corporate Awards, 2009
HUL ranked fourth in the Top Companies for Leaders, 2009' (Asia Pacific region) and
10th place in the global rankings in a survey carried out by Hewitt Associates
HUL received the Award for Excellence in HR in 2010 from Confederation of Indian
Industry (CII). This is a rigorous fact-based assessment which is conducted by a team of
external assessors. HUL has won this award for the third consecutive year.
Awarded Customer and Brand Loyalty Award by Business India & Business Standard in
2009
Awarded for Best Corporate Social Responsibility Practice at the Social & Corporate
Governance Awards 08-09 by BSE, Nasscom Foundation and Times Foundation
Awarded in the Category 'FMCG Manufacturing Supply Chain Excellence' at the Third
Express, Logistics & Supply Chain Awards by APL Logistics, Indiatimes, Mindscape,
Business India Group in 2009
Our Orai unit received the Gold Excellence award and the Khalilabad unit received the
Silver Excellence award in the environment category by Greentech Foundation in 2009
HUL's Goa factory won a Gold Trophy at the Greentech Awards in 2009 the
manufacturing sector category for their outstanding work in Safety Management
Project Shakti won the Silver Trophy at the EMPI-Indian Express Indian Innovation
Awards, 2009
Kwality Wall's Swirl's awarded 'The Franchisor of the year' for the Ice-cream parlour
category by Franchise India in 2009
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HUL brands have topped Brand Equity's Indias Most Trusted Brands Survey rankings
for 2010. Six HUL brands (Lux, Lifebuoy, Clinic Plus, Pond's, Fair & Lovely and
Pepsodent) feature in the top 10 and eight in the top 20. All together there are 17 HUL
brands among the 100 most trusted brands in the 2010 survey. Additionally, five HUL
brands (Fair & Lovely, Lifebuoy, Lux, Pepsodent and Ponds) featured in the list of ten
Hall of Fame brands. This recognition was accorded to brands which consistently ranked
high in the survey over the last 10 years since its inception. In 2009, three HUL brands
featured in the top ten, and seven in the top twenty.
Received CNBC AWAAZ Consumer Awards in six categories for 2010:
- Green Company of the Year
- Value for Money Brand of the Year
- Ad Effectiveness Award
- Marketer of the Year award across all categories
- Most Preferred Personal Care Company in FMCG category
(for the third consecutive year)
- Most Preferred Home care Company in FMCG category
(for the third consecutive year)
HUL was felicitated for receiving the highest number of patents in the year 2009 at
Annual Intellectual Property Awards 2010. The award was instituted by Confederation of
Indian Industry (CII) in association with Department of Industrial Policy & Promotion
(DIIP) and Intellectual Property India (IPI) in New Delhi.
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HUL has discovered the best way to maintain its Success Story through the use of BRAND
EXTENSION as a tool, throughout the network.....
CHAPTER 2
REVIEW OF LITERATURE
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Thomas J. Delong (2010) illustrate HULs conflict resolution and people development policies
using leading from the middle approach.
Marketing Mastermind (2003) HULs rural marketing initiatives have given the perspectives in
which HUL has approached towards rural marketing.
Research International (2004) Micro test found three keys for preference by companies to launch
extensions:
The innovations are not distinctive enough to be able to stand on their own. Thus it makes
sense to launch them as extensions.
The products themselves are not good enough, and it is hoped that the strength of the
mother brand will aide in overcoming the shortfall.
There is not enough marketing budget for effective launch & continued support of stand-
alone new brand.
Branding strategy of HUL reveals that brand ambassadors plays an important role. And it needs
special promotion and language.
According to Ries and Trout (1986) cannibalization is a very real threat for the vast majority of
the new product launches. But there have been little empirical work which quantifies this threat,
or which examines the measures which can be used to define it.
Kim and John (2008) defines that consumers evaluate brand extensions on the basis of their
perceived fit with the parent brand.
Martinez and Pina (2003) argued that line extension decreases the risk of failure of new
products, because consumers initially are more willing to accept products marketed under known
brands.
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Martinez and Pina (2003) defines that this strategy is not free from risks, since it is not
convenient for all the brands, and moreover it may have negative effects on the image of the
extended brand.
According to Leif E. Hem (2001) brands with higher perceived reputation should provide
consumers with greater risk and so encourage more positive evaluations than brands of lower
reputation, this notion should be true for FMCG.
According to Montoya-Weiss and Calantone (1994), more than 30-35% of all new products
fail.
According to keller (1993), consumer attitudes and responses depend upon many factors like
physical characteristics, product features, product class and many things, so this concept shows
that consumer response related to brand extensions not only depended
Broniarczyk & Alba (1994) explain that a brand can be associated with a salient attribute,
but this association is per se not strongly associated with competing brands or the product
class as a whole.
Aaker and Keller (1992) asserted that in brand extensions stronger brands provides more
leverage as compared to the weaker brands. Reputation of a parent brand is an essential factor for
consumers to analyze and choose a new brand.
According to Boush & Loken, (1991) if the attributes or beliefs are consistent with the parent
brand image, an extension is considered to be acceptable or perceived to fit the category.
Loken & John, (1993) propose when a new brand extension is launched, a set of attributes or
beliefs in addition to the already existing family or parent brand image is introduced.
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Loken & John (1993) reveal that an inconsistent brand extension can have a negative impact
on the parent brand by diluting specific attribute beliefs that consumers have come to hold
about an established brand name, rather than diluting the global affect associated with the
established brand name.
Aaker and Keller (1990) propose a relation between perceived quality of parent brand and
consumers attitude toward the extensions in unrelated product categories. As the perceived
quality (termed Quality) of the parent brand is higher, the transfer of positive attitudes toward the
extension is also higher.
Loken and John (1993) reveal that unsuccessful brand extensions can dilute brand names by
diminishing the favorable attitudes t hat consumers have learned to associate with the family brand
name.
Broniarczyk and Alba (1994) reveal that the boundaries for the appropriateness of a certain brand
extension were determined by knowledge about the incumbent brand.
Broniarczyk and Alba (1994) explain that brand-specific associations moderate the role of
product category similarity in brand extension judgments; a brand extension is more
preferred in an unrelated category that valued its association than in a similar category that
does not value its associations.
According to Broniarczyk and Alba (1994) a perceived lack of fit between the product
category of the parent brand and the proposed extension lack of fit between the product
category of the parent brand and the proposes category can be overcome if key parent
brand associations are salient and relevant in the extension category.
According to Broniarczyk & Alba (1994) higher degrees of knowledge about the parent
brand are associated with more favourable attitudes toward the consumer brand extension.
According to Kapferer (1994) a brand extension strategy can be beneficial because it reduces the
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product introduction cost and also increases the chances of success.
Bottomley and Holden (1996) explain that the brand concept consistency is a better facilitator of
brand extension acceptance than product related similarity.
The findings of Keller and Aaker (1997) suggest that corporate marketing efforts can be
beneficial as it improves perceptions and evaluations of a corporate brand extension.
Kapferer (1997) suggest that the brand extension that is intended to boost sales should be
distinguished from new product that carries brand image and exist to fuel the brand.
Keller (1997) explains that the possibility of acceptance of brand extension and parent brand is
higher.
Morrin (1999) propose that consumer exposure to brand extensions will increase parent
brand awareness in terms of recognition and recall.
Urde (1999) suggest that the main objective of brand extension is to leverage the intangible
qualities of a brand since the functional benefits can generally be imitated.
Bottomley and Holden (2001) propose that the quality of the parent brand and the fit
between the parent brand and the brand extension are key determinants of consumer
evaluations of brand extensions.
Bottomley and Holden (2001) reveal that cultural differences influence how brand extensions are
evaluated with respect to relative measurement factors.
Bottomley and Holden (2001) propose consumers brand extension evaluations are also
determined by (a) the dimensions of fit (i.e. the complementarily and transferability of
assets and skills between the parent brand and the brand extension, and (b) to what extent
consumers perceive the brand extension is difficult to produce.
Klink & Smith (2001) explain that the success of a brand extension is largely determined by how
customers evaluate the extension.
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Keller (2003) argues that the brand extensions allow consumers to draw conclusions and
form expectations about the potential performance of a new product (i.e., the brand extension)
based on their existing knowledge about the brand.
Keller (2003) reveals that firstly extensions can clarify the brand meaning to consumers and
define the boundaries of the domain in which it competes.
Keller (2003) propose that a new or rejuvenated product can be a mean to renew interest
and improve attitude towards the parent brand.
According to Keller (2003) the image of the parent brand can be hurt irrespective of the success
or failure of the extension.
Balachander and Ghose (2003) reveal that forward spill over effects from advertising of a parent
brand on choice of a brand extension are limited.
The findings of Mortimer (2003) suggest that brand extension makes economical sense to try to
deliver the same emotional benefits in a different market.
According to Mortimer (2003) companies should do the brand extension to a large extent.
According to Keller (2003) new product introduction are crucial for a firm to sustain its long-
term competition.
Kim and John (2008) defines that consumers evaluate brand extensions on the basis of their
perceived fit with the parent brand.
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CHAPTER 3
OBJECTIVE OF THE STUDY
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Every task is undertaken with an objective. Without any objective, a task is rendered meaningless.
The main objectives for undertaking this research project are:
Primary Objective:
The study intends to understand the consumers perception towards HUL brands.
Secondary Objective:
1 To understand the conceptuality of HUL brands.
2 To know impact on the parent brand, brand loyalty and goodwill of the company has also
been duly undertaken.
3 To know the change in consumers perception towards HULs brand extension.
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CHAPTER 4
RESEARCH
METHODOLOGY
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4.1. THE STUDY
Duration of Study:
The study was carried out for a period of three months.
4.2. METHOD OF DATA COLLECTION
Data collection
Tools used for data collection are:
Primary data
Data was collected from primary source based on field survey where self-administered
questionnaire was used.
Secondary data
This data was collected by common sources:
Books
Research Papers
Published Documents
Journals
Websites.
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4.3. SAMPLE SIZE
The sample of present study consists of 100 respondents. Indore region has been selected for
primary data collection. Random sampling technique was used for data collection. The research
was carried out through survey method with the help of self-developed structured, non-disguised
questionnaire on 5 point Likerts Scale on which the respondents were ask to indicate the
degree of agreement or disagreement. The Close-Ended Questionnaire was helpful to get a clear
idea about respondents perception.
4.4. TOOLS FOR DATA ANALYSIS
Percentage analysis tool is used for data analysis.
Data has been presented & analyzed with the help of pie chart.
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CHAPTER 5
DATA PRESENTATION, ANALYSIS
AND
INTERPRETATIONS
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Q1. Do you agree on that the HUL Products serve the best to their customer needs in
comparison with the other market players?
Inference: Since 30 percent respondents are strongly agree, 42 percent respondents are agree, 12
percent respondents are disagree, 6 percent respondents are strongly disagree and 10 percent
respondents are not familiar with the statement. So it can conclude that success or failure of the
product affects the sales of parent brand.
Q2. Do you think that to launch a product under any existing brand is beneficial to the
HUL?
Inference: Since 47 per cent respondents are strongly agree, 31 per cent respondents are agree, 8
percent respondents are disagree, 9 percent respondents are strongly disagree and 5 percent
respondents dont know about the statement. So we can conclude that most of the respondents
support the statement.
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Q3. Do you think that HUL brand extension adds value to the parent brand?
Inference: Since 14 percent respondents are strongly agree, 63 percent respondents are agree, 11
percent respondents are disagree, 7 percent respondents are strongly disagree and 5 percent
respondents are not familiar with the statement. So we can conclude that most of the respondents
are agree with the statement.
Q4. HUL Brand extension affects the loyalty of the consumers?
Inference: As 21 percent respondents are strongly agree, 43 percent respondents are agree, 17
percent respondents are disagree, 7 percent respondents are strongly disagree and 12 percent
respondents are not aware about the statement. So we can conclude that most of the respondents
are agree with the statement.
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Q5. Do you think that brand extension fulfils the requirements of the consumers in addition
to the parent brand?
Inference: Since 21 percent respondents are strongly agree, 47 percent respondents are agree, 10
percent respondents are disagree, 4 percent respondents are strongly disagree and 18 percent
respondents are not familiar with the statement. So we can conclude that most of the respondents
are agree with the statement.
Q6. Brand extension affects the goodwill of the company?
Inference:
Since 14
percent
respondents
are strongly
agree, 46
percent
respondents are agree, 18 percent respondents are disagree, 7 percent respondents are strongly
disagree and 15 percent respondents are not familiar with the statement. So we can conclude that
most of the respondents are agree with the statement.
14%
46%15%
18%
7%Strongly Agree
Agree
Neutral
Disagree
StronglyDisagree
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Q7. Do you think that the attributes of the extended product is better than previous one?
Inference: Since 15 percent respondents are strongly agree, 28 percent respondents are agree, 20
percent respondents are disagree, 12 percent respondents are strongly disagree and25 percent
respondents are not familiar with the statement. So it is conclude that respondents are not exactly
support the statement.
Q8. Do you think the quality of the extended product is always better than the parent
brand?
Inference: 15 percent respondents are strongly agree, 30 percent respondents are agree, 26
percent respondents are disagree, 11 percent respondents are strongly disagree and 18 percent
respondents are not familiar with the statement. Since agreed and disagreed respondents are
almost same in numbers, it can say that quality of the extended product is not always better than
the parent brand.
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Q9. Do you think the extension can satisfy consumers desire by providing a wide variety of
goods under a single brand of HUL?
Inference: Since 15 percent respondents are strongly agree, 45 percent respondents are agree, 17
percent respondents are disagree, 7 percent respondents are strongly disagree and 16 percent
respondents are not familiar with the statement. More than 50 percent respondents are agreeing
with the statement. It means consumers like to buy different products of the same brand.
Q10. Do you think that the extensions are often used as a short term competitive weapon to
increase a HUL brands image?
Inference: 17 percent respondents are strongly agree, 42 percent respondents are agree, 14
percent respondents are disagree, 10 percent respondents are strongly disagree and 17 percent
respondents dont know about the statement. As most of the respondents are agree with the
statement so it can be say that the brand extension can be used as a tool to enhance the brand
image.
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Q11. Do you think the extension is the HULs best adopted way to introduce the new
product into the market?
Inference: 18 percent respondents are strongly agree, 41 percent respondents are agree, 19
percent respondents are disagree, 11 percent respondents are strongly disagree and 11 percent
respondents are not aware of the statement. As most of the respondents are agree with the
statement so it inferred that companies should adopt this strategy to launch a new product.
Q12. Do you think brand extension is a risky step?
Inference: Since 8 percent respondents are strongly agree, 51 percent respondents are agree, 20
percent respondents are disagree, 9 percent respondents are strongly disagree and 12 percent
respondents are not familiar with the statement. So we can conclude that brand extension is a
highly risky step.
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Q13. Do you think a rejuvenated product can be mean to renew interest and improve
attitude towards the parent brand?
Inference: Since 20 percent respondents are strongly agree, 40 percent respondents are agree, 11
percent respondents are disagree, 9 percent respondents are strongly disagree and 20 percent
respondents are not familiar with the statement. So we can conclude that most of the respondents
support the statement but some are not aware of the statement.
Q14. Do you think the success of an extended product can affect the sales of parent brand?
Inference: Since 30 percent respondents are strongly agree, 42 percent respondents are agree, 12
percent respondents are disagree, 6 percent respondents are strongly disagree and 10 percent
respondents are not familiar with the statement. So it can conclude that success or failure of the
product affects the sales of parent brand.
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Q15. Do you think brand extension stops consumers to switch over to some other brand?
Inference: Since 16 percent respondents are strongly agree, 34 percent respondents are agree, 30
percent respondents are disagree, 8 percent respondents are strongly disagree and 12 percent
respondents are not familiar with the statement. So it can conclude that brand extension not
necessarily makes consumers loyal of the brand.
Q16. Do you think brand extension enables a company to enter new categories at
significantly lower cost?
Inference: Since 14 percent respondents are strongly agree, 48 percent respondents are agree, 16
percent respondents are disagree, 14 percent respondents are strongly disagree and 8 percent
respondents are not familiar with the statement. From the analysis it is conclude that companies
can enter into new categories at lower cost.
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Q17. Do you think that HULs brand extension reduces the risk of failure of new product
by already established awareness and trust?
Inference: Since 20 percent respondents are strongly agree, 44 percent respondents are agree, 13
percent respondents are disagree, 10 percent respondents are strongly disagree and 13 percent
respondents are not familiar with the statement. So it can be said that awareness and trust about
the brand is a strong factor to reduce the risk of failure of new product.
Q18. Brand extension must be a logical fit with consumers expectations.
Inference: Since 18 percent respondents are strongly agree, 36 percent respondents are agree, 19
percent respondents are disagree, 12 percent respondents are strongly disagree and 19 percent
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respondents are not familiar with the statement. So we can conclude that extension should be
according to the expectation of the consumers.
Q19. Brands should not be extended unless they are well-known, have high awareness and a
good reputation among the new target market.
Inference: Since 26percent respondents are strongly agree, 36 percent respondents are agree, 11
percent respondents are disagree, 12 percent respondents are strongly disagree and 15 percent
respondents are not familiar with the statement. So we can conclude that awareness and reputation
are the major factor in the success of brand extension.
Q20.HULsbrand extension allows consumers to draw conclusions and form expectations
about the potential performance of a new product.
Inference: Since 10 percent respondents are strongly agree, 35 percent respondents are agree, 15
percent respondents are disagree, 11 percent respondents are strongly disagree and 29 percent
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respondents are not familiar with the statement. So we can conclude that consumers can form
their own perceptions about the brand extension but some of the respondents are not think so.
CHAPTER 6
FINDINGS
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According to the research, it is found that HUL believe in Product innovations, as they use their
knowledge and imagination to translate science into products that meet a range of consumers
needs.
Brand extension enables the HUL to introduce new products at significantly lower cost.
According to the research, to launch a product under any existing brand is beneficial to the
company.
On the basis of research survey, it is proven that HUL serve the best to all the customers
categories & market segments according to their needs, tastes, desires & pocket capacities
as well.
The reputation of the HULs parent brand is a crucial factor that influencing the likelihood
of successful brand extensions.
It was found that the brand extension stops consumers to switch over to some other brand.
The success and the failure of the brand extension highly affect the goodwill of the
companys parent brand.
The success of the extended brand affects the sales of the parent brand.
Most of the respondents are agree with the point that the brand extension is a risky step.
Extension provides a wide variety of goods under a single brand.
It was found that the extension adds value to the parent brand.
It was found that the quality of the extended product is not always better than the previous
one.
It was found that HUL is often uses extensions as a short term competitive weapon to
increase a brands image
The awareness and trust about the brand is a strong factor for HUL to reduce the risk of
failure of new product.
It was found that the extension should be according to the expectation of the customers.
It was found that brand extension affects the loyalty of the consumers.
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CHAPTER 7
CONCLUSION, SUGGESTIONS ANDLIMITATIONS
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CONCLUSION
HUL products are a household name in India. Its brands across categories touch lives of over 700
million Indian consumers every day. That means, roughly two-third of Indian population uses
HUL products. These fact figures are as the evidences about Consumers Perception towards
HUL Brands, that upto which extent HUL brands have succeeded in FMCG industry. The two
biggest strengths of HUL are: its leading brands and extensive distribution network.
On the basis of this research, it is concluded that people know that new product which has
launched under the same parent brand on which they trust. And they also trust on new one as the
previous one. But they actually dont know that the process is called brand extension. Overall,
it is concluded that the awareness regarding brand extension among the consumers is very high.
Brand extension is very important tool for HUL to expand its business; on the other hand, it is
concluded that some of the consumers dont know the extension. They just buy the products
according to circumstances. They need the knowledge of extension. During the survey, it is
observed that customers evaluate extension as trustworthy. Brand plays important role for the
organizations. People buy those products on which they have faith or they are well known with
them. And extension cements their trust in the parent brand. It is also concluded that the failure of
extension affects the goodwill of the company as well as parent brand.
The concept of brand extension is the life line of HUL for succeeding in the battle of dynamic
competition. This study advances knowledge of brand extensions in several ways. We found that
brand extension is one of the crucial factors in enhancing the equity of the parent brand. The
study shows that consumers have an idea about the brand extension and they are comfortable
about it as it provides an ease of selecting a brand for consumption, especially, the young and
middle-age group consumers. Building a favourable reputation for a parent brand is an important
contributor to the success of brand extensions. By and large, consumers have showed very
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positive approach towards brand extension for HUL products as it helps in fulfilling their needs
and wants.
Brand extension is very important for making a brand successful and building trust, so the
company should follow the strategy which includes a specific extension related to the product
image in the market and its content. And HUL includes endless product categories and in every
product category, consumers have different perception, approach and attitude. So this particular
study will help the Hindustan Unilever Ltd. to understand consumers response towards their own
brands & brand extension as well and provides an overview of the company from customers
point of view.
HUL has discovered the best way to maintain its Success Story through the use of BRAND
EXTENSION as a tool, throughout the network.....
Because, compared to launch a new product under a new brand name, brand extensions can
increase the efficiency of promotional efforts, improve access to distribution channels, and reduce
consumers' perceived risk of purchasing a product or service.
The success or failure of brand extensions is vastly dependent on how the customers evaluate thebrand extensions (Klink and Smith, 2001).
HUL is taking hard steps to improve the success rate of brand extensions. Theoretical and
managerial understanding of how a consumer evaluates the brand extensions is given substantial
importance. In order to improve the success rate of brand extensions, it is imperative to
understand the parameters or factors affecting the brand extensions evaluations. Moreover, HUL
& any company need to understand the significance of these factors and their relative importance
to develop a right brand extensions strategy.
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SUGGESTIONS
Brand extension is very important for making a brand successful and building trust so:
HUL should adopt various marketing strategies for its number of products, to measure the
differential change in output due to the changing marketing strategies.
HUL must follow different & effective promotional strategies for its various product
categories which would ensure its long run success.
HUL should follow the strategy which includes a specific extension related to the product
image in the market and its content.
The extended brand should have compatibility with the nature of parent brand, and also
highlight the same expertise.
Extension should match the perception of the consumers which would make them more
efficient, clear and excited towards the brand.
When brand managers decide to grow their brands using brand extension strategies, they
are advised to consider the potential effects of unrelated brand extension.
Brand managers are advised to evaluate their brands with the factors, emotions and
feelings and not based just on consumers cognitive evaluation of the brand.
Company should initiate loyalty programs like emotional loyalty.
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LIMITATIONS
During the survey, it is found that few of the persons were not so responsive.
There may be possibility of errors in data collection because many of investors may have
not given actual answers of my questionnaire.
Sample size is limited to 100 respondents of Indore region.
The sample size may not adequately represent the whole market.
Few respondents were reluctant to divulge personal information which can affect the
validity of all responses.
The research is confined to a certain part of Indore.
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CHAPTER 8
IMPLICATIONS OF THE STUDY
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A big boom has been witnessed in FMCG industry in recent time. A large number of new player
have entered the market and trying to gain market share in this rapid improving market. The
above research would facilitate the Hindustan Unilever Ltd. to incorporate the fine tuned results
in their marketing strategy.
Brand extension with respect to HUL is a very vast concept. HUL includes endless product
categories and in every product category, consumers have different perception, approach and
attitude. This particular study provides an overview of the extension in FMCG industry through
the platform of HUL products from the customers point of view. Therefore, an extensive and
focused research can be undertaken to understand the consumer response for extension.
The research would provide a framework for HUL to understand the buying behaviour of the
consumers with respect to brand extension in FMCG industry.
This project report may help the company to make further planning and strategy.
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BIBLIOGRAPHY
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Tauber, E. M. (1981),Brand Franchise Extension: New Product Benefits from Existing
Brand Names.
Nijssen, E.J.; Hartman, D. (1994) Consumer Evaluations of Brand Extensions.
Keller, Kevin Lane (1993), Conceptualizing. Measuring, and Managing Customer Based
Brand Equity. Journal of Marketing
Keller, Kevin Lane and Aaker, David A. (1992), The Effect of Sequential Introduction of
Brand Extensions. Journal of Marketing Research.
Kim, Hakkyum and John, Deborah Roedder (2008) Consumer response to Brand
Extension: Construal Level as a Moderator of the Importance of perceived Fit. Journal of
Consumer Psychology.
Martinez and Pina, (2003) The Negative Impact of Brand Extension on Parent Brand
Image, Journal of Product and Brand Management.
McWilliam, G. (1993), The Effect of Brand Typology on Brand Extension Fit:
Commercial and academic research finds, European Advances in Marketing Research.
Montoya-Weiss, Mitzi M. and Calantone, Roger (1994)Determination of New Product
Performance: A Review and Meta- Analysis, Journal of Product Innovation
Management.
Smith, Daniel C. and Park, C. Whan (1992), The Effect of Brand Extension on Market
Share and Advertising Efficiency, Journal of Marketing Research.
Park, C.W.; Milberg, S.; Lawson, R. (1991) Evaluation of Brand Extensions: The Role of
Product Feature Similarity and Brand Concept Consistency, Journal of Consumer
Research.
http://www.hdfcsec.com/Research/FResearch.aspx?
Heading=FundamentalResearch&FP_Code=HINDUNILVR&View=FRHistory.ascx
http://www.brandchannel.com/images/papers/Factorsinfluce.pdf
http://www.brandchannel.com/images/papers/Factorsinfluce.pdfhttp://www.brandchannel.com/images/papers/Factorsinfluce.pdf -
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QUESTIONNAIRE
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A Study of Consumers Perception towards HUL Brands
Customer Name:
Age: 16-25 26-35 36-45 45-55 Above 55
Sex: Male Female
Income:
Up to 1 Lakh 1 2 2 3 3 5 above 5 Lakh
Designation: Student Professional Govt. Employee
Pvt. Employee Other
Educational Qualification:
Address:
.
.
.
Contact No:
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1. Do you agree on that the HUL Products serve the best to their customer needs in
comparison with the other market players?
Strongly Agree Agree Neutral Disagree Strongly Disagree
2. Do you think that to launch a product under any existing brand is beneficial to the HUL?
Strongly Agree Agree Neutral Disagree Strongly Disagree
3. Do you think that HUL brand extension adds value to the parent brand?
Strongly Agree Agree Neutral Disagree Strongly Disagree
4. HUL brand extension affects the loyalty of the consumers?
Strongly Agree Agree Neutral Disagree Strongly Disagree
5. Do you think that brand extension fulfils the requirements of the consumers in addition to
the parent brand?
Strongly Agree Agree Neutral Disagree Strongly Disagree
6. Brand extension affects the goodwill of the company?
Strongly Agree Agree Neutral Disagree Strongly Disagree
7. Do you think that the attributes of the extended product is better than previous one?
Strongly Agree Agree Neutral Disagree Strongly Disagree
8. Do you think the quality of the extended product is always better than the parent brand?
Strongly Agree Agree Neutral Disagree Strongly Disagree
9. Do you think extension can satisfy consumers desire by providing a wide variety of goods
under a single brand of HUL?
Strongly Agree Agree Neutral Disagree Strongly Disagree
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10. Do you think that extensions are often used as a short term competitive weapon to
increase a HUL brands image?
Strongly Agree Agree Neutral Disagree Strongly Disagree
11. Do you think the extension is the HULs best adopted way to introduce the new
product into the market?
Strongly Agree Agree Neutral Disagree Strongly Disagree
12. Do you think brand extension is a risky step?
Strongly Agree Agree Neutral Disagree Strongly Disagree
13. Do you think a rejuvenated product can be mean to renew interest and improve
attitude towards the parent brand?
Strongly Agree Agree Neutral Disagree Strongly Disagree
14. Do you think the success of an extended product can affect the sales of parent brand?
Strongly Agree Agree Neutral Disagree Strongly Disagree
15. Do you think brand extension stops consumers to switch over to some other brand?
Strongly Agree Agree Neutral Disagree Strongly Disagree
16. Do you think brand extension enables a company to enter new categories at
significantly lower cost?
Strongly Agree Agree Neutral Disagree Strongly Disagree
17. Do you think that HULs brand extension reduces the risk of failure of new product
by already established awareness and trust?
Strongly Agree Agree Neutral Disagree Strongly Disagree
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18. Brand extension must be a logical fit with consumers expectations.
Strongly Agree Agree Neutral Disagree Strongly Disagree
19. Brands should not be extended unless they are well-known, have high awareness and
a good reputation among the new target market.
Strongly Agree Agree Neutral Disagree Strongly Disagree
20. HULsbrand extension allows consumers to draw conclusions and form expectations
about the potential performance of a new product.
Strongly Agree Agree Neutral Disagree Strongly Disagree
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APPENDIX
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