Marketing Concepts in Action: HUL and the FMCG Battlefield
One such good example of the application of various marketing strategies to target various customer segments is the case of Hindustan Unilever (HUL). While HUL is a single company, its products are given a distinct brand identity. Each brand occupies its own market niche, depending on who it targets, what it offers to them and its price. The following is an example of a House of Brands strategy.
The distribution depth and rural marketing.
It is not only the products that HUL has to offer which give it competitive advantage, but also its extensive distribution network. Apart from its rural programmes, such as Project Shakti which used rural women as entrepreneurs for selling HUL products in their own villages, its rural initiatives helped increase distribution.
As an example of targeted marketing campaigns, HUL has implemented the Kan Khajura Tesan campaign in the rural population through which it has been able to target consumers who rarely use traditional media. This provides an example of how distribution and promotion can be tailored to fit the local market.
Blue Ocean vs Red Ocean
Red Ocean is a strategy that enables companies to compete in an already established market that has a lot of players vying for the same customers. An example of competition in an existing market for men's grooming is between Gillette and the Bombay Shaving Company.
A Blue Ocean strategy, however, is one that creates or redefines the market rather than competing head-to-head to gain market share. New, unmet customer segments or repositioning of the company can generate new demand through innovation.
Competitive Consequences
Marketing strategies generate competitive reactions, too. The entry of new brands into a well-known category can provoke a reaction from the established brands in terms of price, product development, advertising and/or distribution.
For instance, in the case of Bombay Shaving Company v Gillette, it is seen that the newer company can fight the established company. In the same way, brands like BECO compete with big giants of the FMCG industry like HUL on particular categories, positioning and consumers' preferences.
Product Assortment & Deep Discounting
Product assortment strategy is also applied by companies to provide various products, variants, sizes and price points to appeal to several customer segments. Having a wide variety enables a company to cater to the needs of various consumers without depending on a single product.
Another approach that includes deep discounting is to try and draw in shoppers and boost sales figures. But too much discounting can lead to a price war and impact brand image and profit.
Key Takeaway
The examples demonstrate that marketing is not just about advertising a product. Brand architecture, distribution, rural marketing, competitive strategy, product assortment and pricing all play a role in shaping a company's value creation and capture in the market.