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 be. 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.”
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 years. 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 customers. 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 consumer. 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?.....................
Indian Personal Care Market
The personal care products market in India was estimated to be worth $4 billion, by the end of 2012. Personal hygiene products (including bath and shower products, deodorants, etc.) hair care, skin care, color cosmetics and fragrances are the key segments of the personal care market (Exhibit I). The largest segment of personal hygiene products, largely dominated by bath & shower products, grew at 5% per annum, over the last 5 years since 2012............
Shining Hair and Shining Indian Urban Women
The hair care market consists of the hair conditioners, hair colorants, hair oils, hair shampoo, hair equipment, hair treatment, hair accessories and hair styling (gels, creams) products. Hair care, once an occasion-based activity, has now become an integral part of Indian consumer’s daily beauty regime. The penetration level of the shampoo category (of the entire personal care segment) is gaining ground in the rural and urban markets (Exhibit II).............
TRESemmé: Global Product – Indian Marketing Mix
TRESemmé, Unilever’s globe-trotting hair care product, made its debut in Indian personal care market in 2012. Since its launch and with HUL’s well-crafted market positioning, within a year the brand became a ₹100 crore grosser. Core to its success has been the way marketing mix has been deftly used to deliver superior and unique customer value with HUL’s salonization and premumization route...........
Product
TRESemmé is a brand of hair care products first manufactured by Godefroy Manufacturing Company in St. Louis, Missouri, United States, starting in 1947. The brand name is a phonetic translation of “well-loved” in French, (très-aimé).........
Price
TRESemmé is available between ₹60 and ₹1,000 (a 100 ml Hair Fall Defense Shampoo, for instance, costs ₹64; a 225 ml bottle costs ₹128, while a 600-ml bottle costs ₹249; conditioners and other styling products such as serums, hair sprays, etc., are priced higher) (Exhibit VII)..........
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What Rivals are Doing?
L’Oreal and P&G are the companies competing with HUL in this salonization category. L’Oreal so far has indicated no plans to push its professional range of products onto shop shelves. The company has three lines – Matrix, L’Oreal Professional and Keratase – targeting the mass, mid- and premium salons respectively in
the country..............
The Road Ahead
HUL executives said that the acknowledgement for TRESemmé initially has been good, thanks to a felt need for salon-style products at affordable price points, market experts say that the road ahead is not likely to be easy..............
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. How do you think the SPM (Salonization pitch, Premiumization and Masstige proposition) principles were transformed into unique marketing mix? How were the 4P’s tweaked for TRESemmé to unveil a unique customer value proposition? How did this contribute to product differentiation?
IV. ................
Exhibits
Exhibit I:Segmental Breakup of Personal Care Market in India
Exhibit II: Category Penetration Levels – Rural and Urban
Exhibit III: Comparative Attitudes Towards Beauty in BRIC Countries (Females in the age group18-55)
Exhibit IV: Surge in Indian Individual/Household Spends
Exhibit V: Hair Care Growth Markets
Exhibit VI: BRICS – Beauty Market Penetration Comparison of females aged 18-55
Exhibit VII: TRESemmé Variants – Price
Exhibit VIII: TRESemmé Ad – Featuring International Hairstylist Marcus Francis and Actor, Model Diana Penty
Exhibit IX: TRESemmé DIY Videos on YouTube