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HUL’s Tresemmé: Creating Customer Value through Premiumization and Salonization

CASE STUDY, MARKETING MANAGEMENT
ET Cases, 10 pages

Case Preview

HUL’S TRESemme’: Creating Customer Value through Premiumization and Salonization

 

The year 2010 was the inflection point, for Hindustan Unilever Limited (HUL) in India, as the company’s market share across segments tanked and regional players were challenging its longstanding supremacy in various categories. While competitors’ profits were multi-folding, HUL was trudging along in single digits and was blamed for being complacent. HUL’s top brass admitted that they were not connected as they could be1. Taking this as a clarion call, HUL started to redefine its business strategy themed on –‘Winning Today, Winning Tomorrow’, commenting on the efficacy on this, the then HUL’s CEO and MD, Nitin Paranjpe (Paranjpe) said, “The strategy has been to future proof the organisation, understand the changing aspirations of consumers and offer them products that are relevant.”2

Having recognized the products and categories of the future, HUL’s strategy since 2010 has been built on two key pillars — brand extensions and premiumizing its portfolio. Identifying the aspirational needs in personal care to upgrade consumers, it had been premiumizing its products for the last 2 years3. Traditionally, priced high in India, salon-style products have always been perceived to be efficacious by consumers; HUL saw an opportunity in this segment and introduced TRESemmé in October 2012 for the salon frequenting customers4. It hit the markets with a DIY proposition for Indian women to help them create their own style while ensuring the ‘just-out-of-salon’ feeling at home, every day at an affordable price! To drive home the brand’s association with style and fashion, actor and model Diana Penty along with international hair stylist Marcus Francis were roped in for the ads, backed with an aggressive digital marketing push in a bid to tap the urban consumer5. Since its launch, TRESemmé struck a chord with the consumers and became a 100 crore brand within a year. How would (if at all) HUL make TRESemmé either a 500 crore brand or 100 crore brand over the next 5 years? How would HUL’s direct competitors (for this category – L’Oreal and P&G) and indirect competitors (Salons, Spas, Skin Clinics, etc.) respond to HUL’s Tresemme’s launch success? How would this define Indian personal care market?.....................

 



  • 1 Ajita Shashidhar, “Not New, But Improved”, http://www.outlookbusiness.com/ARTICLE_V3.ASPX?ARTID=283625, January 19th 2013
  • 2 Ibid.
  • 3 Ibid.
  • 4 Viveat Susan Pinto, “Salon-ready pitch makes TRESemmé a Rs 100-crore brand”, http://www.business-standard.com/article/management/salon-ready-pitch-makes-tresemme-a-rs-100-crore-brand-114071501266_1.html, July 15th 2014
  • 5 Ibid.

Teaching Note Preview

HUL’S TRESemme’: Creating Customer Value through Premiumization and Salonization

 

Synopsis

This case study enables a discussion on how customer value can be created through premiumization of an existing category (hair care) through offering a differentiated product, so that customers would uptrade. TRESemmé was introduced in India in 2012, targeting the salon frequenting customers, with a DIY proposition, claiming ‘salon inspired hairstyle at home, every day’ at affordable price. TRESEemme’ struck a chord with the consumers and within a year it became a 100 crore brand, giving tough competition to the existing players P&G and L’Oreal.

Any woman or a girl in her teens, who steps out from the salon with a hair treatment wishes for nothing more than her hair to stay - lustrous, smooth, soft to the touch, or at least be able to afford salon treatments more often. Unfortunately, the latter is a luxury few can afford even though the former stays a life-long aspiration. HUL wanted to offer that luxury at an affordable price for the mass segments with its premiumized product TRESemmé – shampoo and conditioner. Offering unique value proposition to the consumers, with its salonization pitch and deep ‘masstige’ (upper mass) positioning, TRESemmé took the Indian hair care market by storm and by 2013, it joined HUL’s 100 crore brand club. This case study analyzes, how TRESemmé would bridge the gap between the ‘Premium’ and ‘Mass’ segment, in the shampoo market, creating a new customer category that wants to uptrade. How long would TRESemmé’s winning streak continue, if the salon inspiration strategy wouldn’t trickle down to the mass segments? Would premiumization help ensure, TRESemmé to build a unique brand in India?

Prerequisite Conceptual Understanding/Before the Classroom Discussion

This case study presupposes a conceptual understanding of the following. A working knowledge along with the business implications of the following concepts would enable an effective discussion leading to more practical solutions than a mere intellectual exercise............

Expected Learning Outcomes

  • • How a mass segment can be tweaked to offer a Premiumized product
  • • How salonization pitch made TRESemmé to create new consumer segment between Mass and Prestige segments
  • • Role of HUL’s unique product/promotional mix to project TRESemmé as a premiumized product, devised exclusively for salon frequenting customers
  • • Measures that TRESemmé should undertake to increase and sustain its market position

 

Assignment Questions

  • I. What’s your assessment of the growth and potential of Indian personal care market in general and hair care market in particular?
  • II. What do you understand by HUL’s – business strategy theme – ‘Winning Today, Winning Tomorrow’? What were the contributing factors which became the shot in the arm for the introduction of TRESemmé and its success eventually?
  • III. ..................

 

Case Analysis

The classroom discussion and analysis for this case study could be summarized through the Board Plan [Exhibit (TN)-I]. However, the classroom discussion was facilitated under three broad sections as explained below [Exhibit (TN)-II]...............

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Abstract


TRESemme the premium hair care brand, from Hindustan Unilever Limited (HUL), launched in India in October 2012 became a ₹100 crore brand within a year. With its premiumization approach and focused target on urban women, Tresemme positioned itself for salon-frequenting consumers, currently available within a price range of ₹60 - ₹1000, aiming to penetrate the market through masstige products. Sold through high-end beauty stores and modern trade outlets, Tresemme's success in India seems to prove that a differentiated product (with a clear and focused customer value) can garner sufficient traction. Promoted by actor and model Diana Penty, along with international hair stylist Marcus Francis, Tresemme's association with style and fashion intentions are abundantly clear. Would the rivals (especially L'Oreal and P&G) savor Tresemme's success? How would Tresemme gear up for the imminent rivalry in this category? What would it take for Tresemme to become a ₹500 crore brand or a ₹1000 crore brand?



Pedagogical Objectives

  • To understand how HUL's women hair care brand Tresemme could become a ₹100 crore brand within a year of its launch
  • To discuss and debate on the way Tresemme's value proposition has been structured to create a better customer value
  • To examine whether Tresemme's premiumization (through salonization) would enable the brand to grow to be a ₹500 crore or ₹1000 crore brand club within HUL's brand stable



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