Detergent Wars in India


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Case Details:

Case Code : MKTA007
Case Length : 21 Pages
Period : 1970-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Hindustan Lever Limited (HLL), Unilever, Procter & Gamble (P&G), Nirma
Industry : Fast moving Consumer Goods, FMCG
Countries : India

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The Indian Detergent Market Contd...

Washing powders were categorized into four segments - economy (selling at less than Rs.25 per kg), mid-priced (Rs.25 - Rs. 90 per kg), premium (Rs. 90 - Rs. 120 per kg) and compact (selling at over Rs. 120 per kg). The compact, premium and medium priced segments together accounted for 20% of the volume share and 35% of the value share. The economy segment made up the remaining lion's share of the market. The fabric wash industry in India was characterized by low per capita consumption, especially in rural markets. The major players in the Indian detergent market were HLL, P&G, Nirma and Henkel (through its joint venture with SPIC, a leading petrochemical company based in the south Indian city of Chennai).

Evolution of the Indian detergent market

The first companies to manufacture detergents in India were HLL and Swastik. HLL test marketed Surf between 1956 and 1958 and began manufacturing it from 1959. Swastik launched Det, a white detergent powder, in 1957.

By 1960, Det had made rapid inroads in eastern India. Surf, a blue detergent powder, became the national market leader with dominant positions in the west, north and south.

In the early 1960s, the total volume of detergents manufactured in India grew from around 1600 tonnes to 8000 tonnes. HLL dominated the market with a share of almost 70 % compared to Det's 25%. In 1966, another player entered the fray. Tata Oil Mills Company (TOMCO)2 launched its detergent powder 'Magic'.

In 1973, TOMCO introduced 'Tata's Tej' in the low-priced segment. TOMCO unveiled another economy detergent powder called OK in 1977.3...

 Excerpts >>


2] In April 1993, HLL's largest competitor, TOMCO, merged with HLL.

3] Charlotte Butler and Sumantra Ghoshal, "Hindustan Lever Limited - Levers for change," World Class in India.

 

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