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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

DISSERTATION REPORT

ON

UNDERSTANDING BRANDS WITH


FOCUS ON BRANDWAR
BETWEEN

"COLGATE AND PEPSODENT"


Submitted to:
MR. N. N. SENGUPTA
H.O.D.(MBA)

Submitted by:
Anand Kumar Singh
Roll No. 0107270009

International Institute of Management & Technology, Meerut 1


Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

ACKNOWLEDGEMENT

I would like to thank Miss Padma Misra (Faculty IIMT), and all other faculty

members of MBA who has helped me to understand the concepts of branding and

advertising better and gave me this opportunity to do this project, which has

clarified many doubts, which baffled me earlier.

ANAND KUMAR SINGH

International Institute of Management & Technology, Meerut 2


Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

Contents

Topic Page No.

Introduction--What is a Brand 4-5

Branding Metamorphosis 6-8

Recent Trends 9-12

Brands -the Mega Assets 13-15

The Flip side 16

Valuing a Brand 17-18

Need for Branding for Indian Corporate 19-20

Segmentation and positioning strategies 21-31

Brand Association 32-36

Brand Wars : An introduction 37

The Brand War between Colgate And Pepsodent 38-60

The War continues 61

Another brand war with Nirma for HLL 62-64

Brand wars 2002-03 65-67

Research Methodology 68-69

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INTRODUCTION: WHAT IS A BRAND?

Brands are a part of the fabric of life said David Ogilvy. A brand must be
something different from a product. Arguably all brands start as undifferentiated
products; their success or failure in the marketplace depends on their functional
quality. A brand, then, has an existence separate from an actual product or service:
it has a life of its own. Thomas Cook means something to us; it carries with it
associations and memories that are generally to do with travel (and with tradition
and reliability perhaps), but which are not necessarily tied exclusively to shops or
traveler's cheques.

Brands can exist in any field. Most of the well- known brands, are from the fast-
moving consumer goods (FMCG) area, but we can also think of Coca Cola,
Singapore Airlines, Club Med, Disney, Caterpillar, and many more.

The analogy with brands is that it is at the margin that disagreement is possible.
Everyone agrees that Coca-Cola, Mars, Pepsi, and so on are brands. The problem
arises with less established or newer entities. The test must surely lie not in the
views of individual commentators, but in the collective opinion of the target
customers and consumers. If they can perceive that a product has a unique identity
that differentiates it from other similar products, and they can describe it and the
unique set of benefits it offers, then it is a brand.

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

Branding is a fundamental strategic process that involves all parts of the firm in its
delivery. It is about marketing, but is not confined to the marketing department.
The brand must always deliver value, and the value must be defined in the
customers terms. It has a continuing relationship with its buyers and users; this
may change over time, but the firm must always work to maintain it. Since
competition is getting fiercer all the time, and because structural changes
undermine the status quo, branding must be continuously adapted so that it is both
efficient and effective.

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

THE BRANDING METAMORPHOSIS

Multinationals dominated the advertising sweepstakes as brand wars gained


prominence

It was the year of the great marketing warfare. Scan the list of top spenders on
television. This medium consists mainly of survivors. They are companies that
spent huge sums in the battle for market share. Especially Anglo-Dutch foods and
toiletries major Hindustan Lever Ltd. (HLL), which aggressively charged into each
of its product categories

Consider the battlefront: HLL Vs Colgate Palmolive, HLL vs Nestle, HLL vs


Procter & Gamble (P&G) and Coca-Cola Vs Pepsi. Little wonder then that HLL
tops the list of big spenders for the seventh consecutive year, and is leagues ahead
of contenders. And a cursory glance at the charts shows that while multinationals
dominated television, Indian companies ruled press advertising

Clearly, the share of Indian companies is gradually decreasing in the RS 5,500


crore (Rs 100 crore = Rs 1 billion) advertising sweepstakes. Seven years ago,
nearly half the number of the top 10 ad spenders were homegrown organizations
like the TATAs, Godrej Soaps, Parle Exports and Bajaj Auto. Today, Dabur is
the only Indian company to figure in the list for television, which accounts for
almost 60 per cent of total ad billings

According to retail audit outfit, ORG-Marg, which has collated the television and
print spends Indian consumer durable and automobile majors have dominated the
print line-up. Only fast moving consumer goods (FMCG) specialists appear to
have patronized television in a big way, especially HLLA company conspicuous

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

by its absence at number two or three is ITC. That is because ORG did not
consider any below the line spends and alternate media like outdoors, radio and
cinema.

The Calcutta-based tobacco multinational spends nearly two-thirds of its budget on


event marketing and below-the-line activity. This is more by compulsion than
choice cigarette advertising on television is banned by the government

Nestle, which was at number four last year, has moved up to second spot after
HLL. The spend came at a time when Best Foods with its Knorr range of soups
was giving Nestles Maggi soups a tough time. At the same time, Maggi sauces
were under threat from HLLs Kissan ketchup. What is more, it had had an
aggressive Cadbury to contend with in chocolates

The debutantes of recent years include American soft drink majors Coke and
Pepsi. The slugfest largely anchored in sporting events exploited television to the
hilt. They also used a fair amount of below-the-line activity. At any given time,
either of the company had a promotion running.

Change is what has made Dabur appear in the list in the last two years. With a new
generation at the helm, its foray into vibrant categories like cosmetics has given it a
complete facelift. Today, Dabur has shed its ayurvedic garb for a contemporary
image with its diversification into high-profile areas like cosmetics, foods and
toiletries

In fact, these categories dominated the limelight last year. In 1998, HLL, which
had Brooke Bond and Ponds in its stable, introduced 20 new products and
relaunched 18. From Pepsodent Power to Elle 18 fragrances to Red Label 2-in-1,
the debutantes were no new brands. They were either line or brand extensions. On
television alone, HLL appears to have almost doubled adspend to a colossal Rs 654

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crore last year. (Here, ORG goes by the rate card supplied by ad agencies and not
the discounts given to companies for bulk bookings)

Almost 30 per cent of this budget is believed to have been spent on foods
promoting the Kissan and Annapurna brands while Kwality Walls has been a bit
low key. Last year alone, HLL is said to have spent Rs 18 crore on Annapurna.
Unable to match this share of voice, Annapurnas then competitor, DCW Home
Products Captain Cook atta and salt were ultimately relegated to the back shelves

Like HLL, most of the multinationals spending run on conservative lines. On an


average, they reserved three-quarters of their ad outlay for television. That is
understandable considering the growth and reach of television. Three years ago, 47
Indian and foreign channels were beaming 749 hours worth of news and
entertainment. Today, there are 55 odd channels beaming roughly 1,300 hours of
programming. This has no doubt segmented the target consumer. And with FMCG
companies stretching their brands every which way, television has become a
dominant concern in their media plan

Now consider press. Except for Unit Trust of India (UTI), ITC and HLL, the rest
of the top 10 players are either consumer durables and electronics manufacturers or
automakers. With competition, both these categories have seen a heavy splurge in
advertising.

Price warrior Kabir Mulchandanis Akai appears to have forced competitors to


spend more. Even Philips, which was at number 13 last year, graduated to number
nine with a Rs 19 crore spend to regain market share

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THE RECENT TRENDS

This scenario is no doubt reflected in the category and brand spends. While
television is dominated by FMCG brands, print is a mix of service players, cars,
two-wheelers, consumer durables and electronics

While UTI leads in print advertising, television has a surprise winner in Ujala
liquid whitener from Jyothy Laboratories. Compared to three last year, it is the
only Indian brand to figure in the list. Based in Mumbai, violet colored Ujala, with
a spend of Rs 46 crore, has redefined the whitener market characterized by liquid
blues

Once again, Coke and Pepsi have made the grade. With both using film stars and
cricketers to endorse their products, the war is not yet over. It is not surprising that
with consumers either downscaling their purchases or buying less, both HLL and
P&G have been pushing their brands with gusto

While P&Gs Pantene shampoo has leapfrogged from fifteenth place to fourth, six
of the top 10 brands belong to chairman Keki Dadiseths company. With both these
companies, along with Nirma, driving ad spends, consumer softs are the widely
advertised categories on television. They are a concoction of toilet soaps,
detergents, shampoos and toothpastes. With cricket fever in full swing last year,
soft drinks, dominated by Coke and Pepsi, moved up from thirteenth place to fifth

The cutthroat competition from more than half-a-dozen liquor manufacturers has
generated enough fizz. With almost all of them introducing Indian made foreign
liquor, all the segments in the bar are high on clutter. While the state-owned
Doordarshan does not carry liquor ads, the satellite channels are choc-a-bloc with
spirits

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Or take corporate advertising. From banks to pharmaceutical companies, image


ads were on many corporate agendas. In a year that saw the most number of
mergers and acquisitions, industry sources claim that pharmaceuticals
conglomerate Novartis ads were the most high-profile in print and television

Now look at toilet soaps, which has been tops for the seventh consecutive year.
The maximum relaunches have taken place here. One reason is the stagnant state
of the category. The premium segment accounts for 15 per cent of the market.
While growth rates were a mere 3-4 per cent last fiscal, they are expected to be flat
this year. The popular segment, which accounts for 35 per cent of the market, is
also flat. As a result, weve had to push more money into advertising to just hold
on to market shares. however, while players had to get users to pick up their
products in the top segments, Ahmedabad-based Karsanbhai Patels Nirma has
been giving them the jitters. Operating largely in the sub-popular segment (Rs 6-
6.50 for a 75 gm cake), this segment has been growing at 20 per cent

Changing consumer habits is what is believed to have pushed textiles from second
place in 1997 to sixth in print advertising. With many brands in the market, the
trend is to move away from fabric to ready-to-wear garments. And with more and
more companies looking at value-addition, textiles are losing share

All these statistics make one thing clear. The top 10 spenders list for the
millennium could see a major reshuffle.

Marketing: Successful brands are money-spinner and an important tradable


asset. So what make a brand tick? Especially the Indian brand

THE lure is irresistible. Customers cannot but caress the exquisitely crafted shirt
which weighs a mere 230 gm. Its logo is sewn by hand to be positioned over the
heart of the wearer and weighs exactly 0.38 gm. The mother of the pearl buttons

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are sourced only from the Pacific Ocean. The yarn is spun so fine that it takes 20
km of the material to produce a single shirt. Before it reaches the store, the fabric is
tested for fastness of color to temperature, light and sweat. Now only one brand is
so fastidious about quality. That's right, Lacoste. Any surprise then that people are
willing to burn their pocket to pick up one?

In addition, you say what's in a name. Think again. ABCL paid Amitabh Bachchan
RS 13 crore for being allowed to use those two valuable words. BPL Telecom will
shell out RS 10 crore to its parent for carrying the company name on its products.
The TATAs have imposed a 'levy' on 90 group companies for the same reason, a
move that is expected to fetch it Rs 50 crore in the first year.

Megabrands all and they fetch megamoney. Amitabh, BPL, TATAs, Lacoste are
all great brands. Indeed. For many of us, the very word Tata invokes an image of a
robust, responsive and indigenous product. In practical terms, the brand is a seal of
consistency, reliability and character.

Brands are like people actually. Each one has a name and a physical, psychological
and emotional character. Psychologically, a Lacoste shirt owner is "a great
spender, knows to be casual at the right time, and is an expert in his field".
Emotionally, it is a brand for the arrived. The stronger the brand, the stronger its
recall among the public. Remember the health soap? You must have surely thought
of Lifebuoy. Which cigarette has the filter and tobacco perfectly matched? Did
you say Wills? Which is the moisturizing soap? Dove, of course.

The product is different from its brand name. A product is made in the factory, a
brand is what a consumer buys. A product can be copied, a brand is unique.
Brand personality is the discriminator in the marketplace. No one can make
another Lux; not the soap we use physically but the soap we buy. It goes for the
health drink Boost. Most of the other brands are similar: warm, caring, motherly.

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But how do you convince the customers that your nourishes is a better 'energy'
drink than Boost

Branded products have a great advantage over the unbranded ones: they fetch a
higher price. Doesn't Captain Cook atta cost more than the wheat flour from your
neighborhood grocer? Tanishq jewelry from Titan costs 20 per cent more than a
comparable piece at your family jeweler. Branding also means better bargaining
power for the company with the dealers. That's because there is already a 'pull'
for the product; there may not be the need for a great 'push' by the retailers

An established brand also facilitates growth through 'extensions'. Hajmola candies


for a kid, for instance, was launched with an established brand name. Dettol
antiseptic extended to soap, handwash liquid, medicated strips and shaving cream

A powerful brand adds to the company's wealth for generations. Remember


Dalda? Launched in 1959 when Lever Brothers (now Hindustan Lever) set out to
build a truly Indian brand, Dalda did so well that the brand became a generic name
for vanaspati. The clock was recently turned back with the launch of Dalda Feel
Light in Andhra Pradesh and Tamil Nadu. Dalda as a brand is a sleeping giant. The
company wanted to wake it up. Creating another brand with that equity would have
taken years

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BRANDS, THE MEGA ASSET

In 1993, Coca-Cola paid close to Rs 175 crore to buy the Thums Up, Limca,
Citra and Gold Spot brands. It was a coup of sorts. Five years later Ramesh
Chauhan of Parle declined to part with the Bisleri brand. He decided against
renewing the five-year contract with Coke, which would have given the soft drinks
giant the right to use the Bisleri name. For Chauhan, the brand could have turned
out to be his biggest asset, his new launch pad. He planned to take Bisleri sales
from Rs 40 crore at present to Rs 200 crore in a few years.

Brands also provide the competitive advantage. It is the power of the brand that
makes NIIT, Aptech, Bata, DHL, BPL, Videocon and Benetton among the
fastest growing and more profitable companies. The entire franchise operation is
actually built around the brand power. Customers can expect the same quality of
the NIIT course whether they are at Nagercoil or in New Delhi

Most significantly, the brand is increasingly becoming an important tradable asset.


In 1994, Godrej Soaps paid Rs 12 crore to pocket the Rs 67-crore Transelektra
(maker of Goodnight mosquito repellent). In 1995, SmithKline Beecham paid Rs
42 crore to bag the Crocin brand from Duphar Interfan. In 1997, Knoll Pharma
sold Coldarin and Burnol for Rs 34 crore. Ranbaxy paid Rs 80 crore to Gufic
Labs for Mox, Zole, Excel and Suprimox.

In 1997, Hindustan Lever paid Rs 110 crore for Lakme's basket of brands (and
only Rs 29 crore for Lakme's two plants!). Procter and Gamble is reportedly paid
Rs 7 crore for its Medicare anti-lice shampoo. In April, the Gramophone Company
of India acquired Sangeetha, a leading audio producer of classical and devotional
songs in the south.

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Acquiring a brand is a superior option over purchasing the entire operations of the
company. First, the buyer buys only the brand name (and maybe the associated
technology). The brand name could be used to sell anything, which comes under
the established brand personality. For example, the Burnol brand name could be
used to sell an antiseptic like Dettol

Secondly, buying a brand provides a readymade market. Apparently, Ranbaxy


bought Mox because its own brand in the same family, Amoxycillin, was not doing
too well. Thirdly, buying a brand saves a lot of brand-building time and cost.
Drugs companies are known to recoup the cost of buying a brand in less than four
years

Building a strong brand is about occupying a prominent place in the perceptive


space of the targeted customers, edging out the competitive brand images. The
distinctiveness could be derived from just about anything. Coca-Cola, for example,
has a distinctive shape of the bottle, color and script of the can, besides the
youthful messages

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The brand-building exercise begins with understanding and anticipating the


needs of consumers and the key attributes of the product. The physical
properties must match the brand's image. ITC's super-refined groundnuts oil
Crystal had to be "so clear, so pure" that it had to be practically invisible. On the
other hand, Savlon's major problem was that it would not turn water cloudy, as
Dettol did

And then the product is to be packaged with a clear brand image. Both Amul and
Britannia have launched sliced cheese but they projected it differently. The
smartest thing Britannia has done is to position its cheese as a milk product." Each
slice is worth a glass of milk, says its advertisement

If the brand image gets diluted, sales suffer. The conflicting brand image is
reported to be the cause of Onida's fall from its 1996 CTV marketshare of 23 per
cent to about 14 per cent in 1997. Onida was at the top end of the brand image
bracket but when it entered the volume game in 1997 it lost its premium image and
sales

The value of an established brand is in part due to the realization that it is more
difficult to build brands today than a decade ago. The cost of advertising and
distribution has been much higher in recent times. The bestseller Competing for
the Future says "It takes in the order of $1 billion of advertising to build a
significant share of mind with consumers across North America, Asia and
Europe".

As the consumer and markets change, so too the brand images. The Dove beauty
bar was introduced with the accent on a softer skin because it contained "one
quarter cleansing cream". When sales of cleansing cream products declined, Dove
was promoted as "one quarter moisturizing cream". The brand zoomed past its
competitor
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THE FLIP SIDE

Despite the obvious value of a brand, the brand-building process is eroding,


loyalty levels are falling, and price is becoming the more salient feature of a
product. Expect people to buy branded products but do not expect them to be loyal to
a particular brand for long. It is not the consumer's fault. With the proliferation of
brands, the difference is becoming marginal for products in similar categories.

However, this is in some ways a sign of a maturing market. Companies will have to
find ways to be innovative at both physical and brand personality levels. Watch the
ongoing color TV price war: companies like Videocon, Onida and BPL dominated for
long, but Akai has swept the market almost overnight because there was not much
difference at the physical level and the price it offered was very attractive for the
customers.

Effective branding thus is the pursuit of inequality. It is about creating a different


perception about a product. Of course, there has to be quality too. Initially a product
is bought on the esteem level of its brand. However, in the long run, the product must
perform up to the expectations.

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VALUING A BRAND

Companies like BPL, Infosys and Aptech have their brands valued. The Aptech
brand, for instance, was valued at Rs 271 crore. In other words, that's the money you
will have to shell out to own the six-letter word, Aptech. The essence of brand
valuation is calculating the price premium earned by a brand over the years into the
future (till the brand is expected to yield the price premium). The principal methods
of brand valuation are:

Price premium generated by the brand name

What are the price levels of comparable automobiles? The value of the car brand X in
a given year would be the price differential between cars X, Y or Z (where the cars
are comparable in their specifications) multiplied by the number of cars sold during
the year. Then the same is added for the number of years the brand is expected to
'live'.

Opportunity cost of not owning the brand

Another method of valuing a brand is the additional cost of establishing the product
without the advantage of the loyalty of the established brand name.

Market perception

The market price of the share reflects the brand strength. Higher the difference
between the book value and the market value higher the value of the brand.

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Present value method

This is similar to the first method except that the future premiums are calculated at
today's value

For example, the present value of Rs 100 to be earned two years down the line is Rs
83.25 (at an interest rate of 10 per cent per annum).

The Top Ten

According to a survey by A&M magazine the top ten Indian brands is: Vicks,
Colgate, Dettol, Rin, Close Up, Ponds, Bata, Iodex, Doordarshan and Horlicks.
Except for Doordarshan, all are brands owned by MNCs. The top ten brands owned
by wholly Indian companies are Doordarshan, Nirma, VIP luggage, Dalda (though
owned by Hindustan Lever, it is not sold anywhere else in the world by its affiliates),
Tata, HMT, Usha, SBI, Godrej and Dabur.

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NEED FOR BRANDING FOR THE INDIAN


CORPORATES

Indian companies need to focus on brand building to survive in a liberalized


economy.

There is a huge potential for Indian products to become global brands. Unfortunately,
there has been no concerted effort made by an Indian company to make a brand tick
abroad.

70 per cent of the brandable commodities in our country is exported in an unbranded


form. While branded exports earn 40 per cent profit, non-branded exports earn just
two to three per cent.

There is a need to develop a national identity and entrepreneurs should have a long-
term vision. These issues have to be addressed before India can be sold as a brand.
The first task is the utilization of funds parked with the India Brand Equity Fund. The
idea is to promote India as a country, the products will then take care of themselves.

In order to highlight the fact that a brand should be relevant to popular culture we
can think of Annu Kapur who, through Antakshari, was closer to the audience than
Derek O Brien of Cadbury's Bournvita quiz. Other principles that could be
highlighted are the maintenance of sanctity of the brand's core values even while
extending it - like Prannoy Roy has done with his election analysis in The World this
Week and now Star News channel.

Brands are evolving organically rather than on their own, like Asha Bhosle has
evolved. Aamir Khan came up for discussion as a brand whose image is such that he
is seen as being different and discerning in account of his selectivity while signing
movies. This was for a brand which has reached a stage where it stops talking about

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what it does and talks about what it stands for Brand repositioning was undertaken by
companies to increase market share as "a well established position is not necessarily
the ideal position. The position in itself may be restricting or may not be achieving
the desired rate of success. Cadbury's Dairy Milk had successfully extended
chocolates from a "kiddy category" to a product consumed also by adults.

The real taste of life campaign worked. It broke the adult guilt barrier to chocolate
consumption.

The chocolate market, which was growing marginally, saw a jump. The overall
market grew by 43 per cent in '95 and 18.7 per cent in '96 while the brand growth was
52 per cent and 27.9 per cent during the same period. Establishing the twin elements
that go into gaining and retaining customers viz., psychographic understanding of the
consumer and product promotion at the relevant places.

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

SEGMENTATION AND POSITIONING - A PERPETUAL


PROCESS

SEGMENTING, targeting and positioning (STP) is the core aspect of any marketing
strategy. Primarily, the strategic value addition associated with the approach of any
company is associated with STP planning. As competitive activity is getting vigorous
in terms of total offering (product plus) and as the differentiation aspects become
insignificant, there is a need to closely monitor and fine-tune segmenting and
positioning strategies. These enable a brand to recognize the diverse needs of
consumers, pre-empt competition by entering into specific niches, maintain a
contemporary image (by addressing emerging segments), and retain existing
segments (perception of existing users may be influenced by competitive brands and
hence there is a need to either modify the positioning or in some cases introduce a
line variant). In the toothpaste market, the mother brand Colgate has a huge chunk
of the market though it has been around for several decades. The company introduced
a mint variant for the first time in the Indian context (variant of the mother brand).

STP aspects could be viewed as two distinct aspects from the viewpoint of monitoring
and updating strategies.

Image-related aspects which are concerned with the perception of consumers about
existing brands which have generally been in the market for several years

Product-related aspects which require specific introduction of products at the


appropriate time to enable a brand to sustain its competitive position. These are
associated with the changed set of needs regarding the usage of products.

The image of the brand is associated with the perception of consumers. How does an
image undergo a change? The image may be affected if a brand does not actively or
intensely attempt to spread the usage of a concept when it is introduced. Brylcreem, a

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brand of hair cream, which has been in the market for several years, has not grown in
a significant manner (considering the growth in the haircare, skincare or beauty care
markets). Hair cream can be positioned for the ``well groomed'' look on the
convenience plank. It is essential to increase the frequency of usage in the target
segment and find ways to expand the target segment through appropriate positioning
strategies over a period of time (may be from the travel segment to the corporate
executives segment). As the product category is old, these strategies are vital for
market growth especially before other brands enter the market or substitutes like hair
oil brands start positioning themselves strongly (currently, Parachute and Nihar are
attempting these strategies). Repositioning any brand in a product category with a
sluggish growth may not get the brand much attention.

The image may change because of lifestyle changes, which influence the target
market. Bru, which has the core proposition of being equivalent to filter coffee, has
maintained the proposition while changing the visuals from time to time to maintain
the contemporary image of the brand. The current TV commercial depicts the ``son-
mother'' relationship, with the mother endorsing the core proposition of the brand.

Nescafe for a long time was using the ``come alive....'' commercial in the cinema
halls. This commercial was associated with the strength of a brand attribute
(refreshing quality of the brand). Later, in its TV spots, the brand projected itself as an
international favorite by projecting various international consumers who were
endorsing the brand.

There may be a need to reposition a brand because of competitive positioning


strategies. The brand may be a leader in a specific category but may have covered
specific ``niches'' in the minds of consumers. New brands which might have come up
later may make use of these ``unusual niches'' and gain a stronghold in the market.
Iodex, Amrutanjan and Vicks were leading players in the balms market. Iodex, until
recently, was positioning itself as a `sprain reliever' and Amrutanjan, until recently,

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was perceived as a general remedy balm. Moov, a brand which entered the market in
the mid-eighties positioned itself as a `backache reliever'. It has made rapid strides in
the recent times and Iodex itself is attempting to position itself as a ``pain-reliever.'' A
brand, which has managed to capture the market during the initial stages of
development of the product concept (balm for pains in this context), should develop
flanker brands to prevent competition from making a dent into its market share. This
involves managing the brand image through appropriate targeting and positioning
(this may also involve development of new product items in the line).

The image associated with a product category because of the positioning of the early
pioneering brand may inhibit the growth of the product category itself. Liquid
detergent brand Genteel was introduced during the fifties but liquid detergents form
just one per cent of the total detergents market. These detergents (Ezee is another
national brand) have been positioned as detergents for special clothes and the
frequency of usage has been limited. As the detergents market grew, volumes were
required for this kind of detergents and it could not be achieved because of the `niche'
positioning. These brands over a period, could have also positioned themselves as
`value for money' detergents to target a wider target segment.

Raymond is an interesting case for analyzing the image management over a period of
time. After positioning itself strongly as the ``guide for a well-dressed male'' for
years, the brand provides a sophisticated backdrop (TV spots) to position itself as a
suiting for a ``the complete man'' who is very down- to-earth. This emotional
differentiator is good enough to ensure that the consumer perceives the brand in a
distinguished manner. The brand has also been positioning its retail outlets on the
exclusivity platform to maintain a symbolic aura around the brand. The initial
readymade-wear of the company Double Bull and Legwear did not make any
significant impact during the early eighties. But, Park Avenue with its American

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connotation, dovetailed well with the `foreign readymade association' at a time when
the readymade market is picking up.

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Product-related aspects

Going back to the Iodex example, there is a clear need for a non- staining and non-
greasy balm in the market. This is perhaps the reason why Iodex started promoting
the spray variant. But due to packaging costs, the spray variant cannot substitute the
original version. There is a need to develop a new product version, which would be in
tune with the emerging needs of consumers. The competitive brand Moov is making
an attempt to reposition its competitor by making a reference to the staining
characteristic of Iodex in its recent positioning spots (an executive who returns from
his tour has a stained shirt as a result of applying `a brand' of pain balm). This kind of
positioning is likely to have a powerful impact on the consumers (Aspro was
repositioned in a similar manner by Tylenol in the West and it is still one of the largest
selling analgesic in many markets). Fair and Lovely which has about 35 per cent of
the skincare market has developed the same formulation with cold cream and
vanishing cream base to cater to niche markets which have seasonal demand.

In a move to expand its market, the brand is currently targeting married women (TV
spots). It may be recalled that Vicco, the natural cream for complexion, which entered
the market well before Fair and Lovely, used the occasion-based segmentation and
positioning (which is being continued to this day). This in a way might not have
appealed to consumers who needed a skin cream for continuous use (not just for
enhancing the complexion for an occasion).

Surf successfully launched the `Lalithaji' campaign through the eighties which
established the brand on the `value for money' platform (though it was threatened by
Nirma till Wheel was launched by the same company).

When Ariel was launched by the competitor in the higher end, Surf came out with
Surf Ultra. Upgrading consumers from Surf (a cross-section of them at least), would
have been one of the objectives of Surf Ultra which came out with the `anti-stain'

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positioning. The typical Surf consumer was probably used to using a small quantity of
detergent and this may have created similar expectations from Surf Ultra. Surf Excel
was launched and was positioned with the typical `slice of life' commercial where the
`user' (a common consumer in the TV spot) highlighted the product benefits. The
company felt there was a distinct need in the market to create a brand between Surf
and Surf Ultra. This is to ensure consumers who required a detergent brand better
than Surf will be in a position to upgrade themselves with a brand that was not as
expensive as Surf Ultra. The company launched Surf Excel Power with a positioning
that is significantly different from Surf and Surf Ultra (the packaging is also very
different). This would also enable certain consumers of Surf to buy a better brand
more frequently because of the lesser price.

Another interesting aspect of upgrading consumers to a better product is that there


may be a transition time involved before these consumers become regular users of the
updated brand. Sachets were introduced both by Ariel and by Surf Excel to initiate
trials, which is the first step in the process of upgradation. 30 to 35 per cent of volume
of Ariel comes from sachets. Consumers may be buying these sachets for special
wash purposes. It would take some more time before these consumers start buying the
brand for more frequent uses. Even in the shampoo category, sachets account for
about 50 per cent of the market.

Monitoring segments and positioning strategies in a product category will enable a


company to sustain its brands; it will also enable the brand to prepare itself for
emerging niches.

Re-niching brands

Positioning is creating a niche in the minds of target segment consumers. Over a


period, due to changes in the environment and competition, there is a need to shift the
brand in the perception of consumers. Re-niching or repositioning predominantly

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involves marketing communication and packaging associated with the brand which is
to be repositioned (it could also involve the product). Typically, the exercise does not
involve a change in the brandname (though there are rare occasions when this
strategy is adopted - Cadbury's Drinking Chocolate changed to "Choco Cheer" in the
eighties).

In today's context, repositioning (especially for established brands) is becoming


almost a prerequisite to "keep" the brand on top of the consumer's mind.

The following are some of the advantages of repositioning:

i. It gives the brand a contemporary perception

ii. It helps to correct the perception of consumers after the brand is launched.
There are instances where this strategy may have worked (this is different from
altering the proposition of the brand when it is doing well in the market).

Close-up repositioned the brand (launched in the seventies) by altering the marketing
communication "moving" the perception of the consumers from exclusive "boy-girl"
association to "boy-girl" association in the background of a group. The brand also
introduced variants over a period. The relaunch of this brand was accomplished over
a period of several years.

Another example, in which a shorter period was involved, is the case of Park Avenue.
The company (Raymond's) had dropped Double Bull and Menswear brands before
making a success of Park Avenue. As stated earlier, this is not a typical repositioning
strategy as it involves a change in branding. Nevertheless, it did achieve the
company's purpose of repositioning its ready-made wear.

iii. Brand extensions make it possible for the brand to retain consumers who would
have otherwise switched brands (Pond's Dreamflower Magic, Hero Honda Sleek

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and Surf Excel are examples). Though these extensions are variants of the original
brand, they "place" the brand in a different perceptional field because

a. The original brandname has an "add on" indicating the "newness" of the offering;

b. The offering itself is different from the original one. The original brandname
provides the reassurance to back up the new offering. A conceptual remark: If
brand extension is useful in retaining the existing base, it is repositioning.)

iv. Repositioning helps the brand to clearly convey a new benefit (even without the
brandname being changed or suffixed with an ``add on"). "New', "improved"
versions of brands are examples.

v. Repositioning sometimes may be required to reposition the product category itself.


Some examples are given later in the article.

vi. Repositioning provides the brand a "reprieve" situation, though this approach is
rarely successful. A Soya-based tetra- pack soft-drink brand (a decade back) was
positioned as a lunch substitute for busy executives and this was quickly followed
by campaigns which highlighted the popularity of Soya-based, nutrition-packed
soya drinks consumed in several markets abroad (The Close-up example stated
earlier, can also be considered under this approach. It is unusual to find brands,
which have been relaunched with the perseverance behind the success of Close-
up). Mofa, the moped that was initially positioned as a motorized vehicle, which
required a license (launched in the eighties) launched other campaigns which
positioned the brand to specific segments. Zero-B, after attacking the concept of
boiling water in its initial positioning strategy, quickly modified its positioning to
convey the utility of the product without directly attacking the practice of boiling
water.

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Application of repositioning strategies

There are a number of ways in which repositioning strategies could be applied.

i. Repositioning the product category: This approach could be applied if there are
only a few brands in the product category. Savlon attempted to reposition the
category of antiseptic lotion (Dettol is the leader in this category) by stressing the
proposition ``it (Savlon) does not sting or burn'' - the qualities that consumers
probably associated with antiseptic lotion. In this context, the category itself is `re-
niched' in the minds of consumers and the brand which takes the initiative gets
high visibility among consumers.

Doy, a brand of soap for children, has followed the ``category repositioning'' route.
`Kids' was launched by Johnson & Johnson for the children's segment. The
proposition of the brand was the fruit flavored variants of the soap (orange, apple
etc). Doy has positioned the brand as an anti-bacterial brand (bacti-shield) and as one,
which offers an enjoyable bathing experience. (TV commercial shows animation
characters playing with the child).

The distinguishing aspect of ``category repositioning'' is that a new brand takes on an


established brand in the category (which has dominated the market for a long time in
most cases of ``category repositioning''). Consumers form a different kind of
perception about the category because the new brand offers a proposition, which is
not associated with the established brand. As a number of brands start entering the
category, different propositions create different segments with very little opportunity
for brands to reposition the category. Brands create segments with specific
propositions and reposition themselves at an appropriate time. ``Category
repositioning'' is most appropriate when the category does not have too many brands.

ii. Repositioning could convey a change in brand proposition: 5- Star, which was
initially positioned as a ``togetherness'' bar, shifted its proposition to ``energy''.

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The interesting aspect is that though repositioning involved the change of


proposition, the demographics and psychographics of the target segment were not
altered.

iii. Repositioning could convey a change in the target segment. Cadbury's Dairy
Milk chocolate has positioned itself to the adult segment. The initial positioning
(TV commercial) showed adults from different occupations enjoying the brand
and this was followed by the expression of spontaneous joy (reflected by the
cricket dance TV commercial). In order to emphasize the repositioning, the brand
has launched a sub-brand Cadbury-Gold. The TV commercial for this brand
underscores the repositioning theme of the mould type of Cadbury Milk
chocolate - focus on adults. This approach also reflects the usage of sub-brand as
a repositioning tool in a specific context.

Another interesting example is the case of Fair & Lovely fairness cream. After
decades of positioning on the fairness platform for a younger age group, the brand is
currently targeting middle-aged married women. The TV commercial amplifies the
usage of the brand by a married woman and not so much the brand benefit (which has
been hammered out for years). This approach also shows how a benefit could be
extended to different segments at different times, especially when the original target
segment may be getting exposed to different brands (it is happening in the facial
cream category). Fairness, as a benefit, is being extended to the married women
segment at a time when awareness on personal grooming is gaining importance
among consumers.

iv. Repositioning could be used to convey the same benefit with a different visual.

Margo soap some years back brought out a TV commercial to convey the benefit of
neem to modern women. As a part of the repositioning exercise, a modern lady was
shown getting nostalgic, about the goodness of neem too. Recently, the brand has

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launched a commercial, which directly conveys the benefit of neem (as projected by a
group of women). Though the visual format has changed, the message of the visual is
the same - a case of perhaps fine tuning the repositioning of the brand rather than a
typical repositioning exercise.

As new brands keep entering the `mindspace' of consumers, repositioning strategies


will become a pre-requisite for established brands. This would enable these brands to
sustain the relationship with the respective target segment.

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BRAND ASSOCIATIONS - IMPLICATIONS AND


STRATEGIES

Celebrity Association

Celebrity usage in communications is almost creating a clutter today. What does the
celebrity offer a brand? He or she transfers his or her image (as perceived by the
followers) to the brand. If Amitabh Bachchan is perceived as a charismatic good
Samaritan who is capable of rising to the "situation" (whatever the "situation" may
be), it is assumed that the perceived image would provide an aura of credibility
around a brand and this, in turn, could persuade consumers to decide in favor of the
brand. BPL uses him in their ethnocentric campaign in which the credibility of the
Indian brand (BPL) are endorsed by the celebrity.

It is important to note the context in which BPL used the celebrity - the products of
the company have been in the market for more than a decade; it has created a niche
for itself in some product categories; it has a huge base of consumers and is also
introducing new products in several product categories. In this situation, consumers
may already have a brand image associating the brand with some aspect - it could be
quality, technological leadership, etc. The association of the celebrity with the brand
just adds to the existing image, probably providing the charismatic bonding with the
consumer who is already in favor of the brand in terms of its intrinsic worth. There
won't be too many consumers who might rush to the retail outlet to buy a durable just
because of the celebrity association of the brand. It is to be noted that the celebrity (in
the campaign mentioned) endorses the brand BPL more than any specific product of
the brand. This, in the current situation, will have a ``rub-off'' on several products of
the brand, which is really an umbrella brand covering the full range of the company's
products.

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The same celebrity appears in a soft drink advertisement (Miranda lime). Given the
clutter in the advertisements of soft drinks, marketers would want to ensure the
``attention getting'' power of the commercial which, by itself, is the difficult task
(persuading consumers is the other aspect). In recent times, brands in this category
have been associating themselves with sports and film celebrities. Fanta has taken the
humor route. Given this context, a new flavor of a familiar brand (Miranda) has to
generate a reasonable degree of recall. There is also another dimension to this
situation - the cloudy Mirinda lime has to compete with the established Limca, both
of which have a ``nimbu'' orientation. As ``nimbu'' is a drink which is accepted as a
part of the culture, the target segment for the drink has to be wider than other aerated
drinks like cola and orange (in terms of the market size, the lime segment is small,
though brands have been continuously making an effort to expand the segment).

A celebrity like Amitabh will be familiar with the target audience comprising middle-
aged, young, urban, semi-rural and even rural clusters. Besides, it would not
straitjacket the brand into any specific target-segment (for example, like the younger
generation or the followers of cricket). The followers of the celebrity may try the
brand (as it is a low involvement product unlike a durable). There may even be trials
from consumers who are habitually cola or orange drinkers, predominantly because
of the celebrity association of the brand. Brand recall and triggering brand trials seem
to be the major objectives of creating the celebrity association. It is to be noted that
Teem, a brand from the same company used a cricket celebrity some years ago. A
film celebrity may have broader appeal.

The Lux brand of soap has been using film celebrities for a different purpose, to
convey the product benefit of good complexion. It has been using film celebrities for
decades, changing the celebrities to ensure that current celebrities get associated with
the brand.

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David Aaker projects the limitations of using celebrities - they may age with time,
lose their following or just become irrelevant in a changing environment. He suggests
the development of fictional characters to ensure a permanent association and recall.
MRF's ``muscle man'' and Air India's ``maharaja'' certainly lend substance to this
point of view.

Users

There are two ways to make use of this dimension - targeting specific users in a
category and making use of user imagery. Targeting specific users in a category could
be effectively used in certain categories like soft drinks and packaged butter. Amul
Lite was introduced a few years ago, but did not seem to have made significant
progress among the users of packaged butter. Instead of targeting users of butter, the
brand could target heavy users of butter who would be more prepared to change over
to a product, which has fewer calories. The world ``lite'' would have found a
spontaneous association in the `heavy user' segment.

FoodWorld has cultivated a value association with the buyers of commodities,


provisions, packaged products and vegetables. While supermarkets in the Indian
context have always developed an association with the upper strata of consumers, this
chain makes an attempt to establish an association with the middle class consumers
by offering merchandise that would be of interest to them. These are buyers who are
used to retail shops where quality of goods may be inconsistent over a period of time.
Besides, an ambience where consumers could shop with comfort and ease also adds
value, making shopping a pleasurable outing.

The user imagery association is extremely useful in conveying the image of the target
segment, which is of interest to the marketer. Charms cigarettes conveyed the target
segment (young, urban, non-conformist kind of approach) by effectively projecting its

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visuals. Elle 18 (TV commercial) uses a very similar visual to appeal to its target
segment.

Close-Up has developed a very strong imagery. The `group orientation' is


maintained in the brand's communication (for all variants). Even with the inclusion of
celebrities, the visuals quickly show three persons. The target segment imagery
indicates the brand's consumers - young, energetic fun loving and very outgoing. It is
very interesting to note that a brand of soap (Jai) has a similar approach, as it is
probably aiming for the same target segment. The `group-orientation' imagery, very
much associated with the gel category of toothpaste, is new to soap.

Using the `user imagery' has its own limitations. The brand may find it difficult to
expand its target segment after it becomes successful. The `child-mother' imagery of
Vicks perhaps inhibited consumers (adults) from trying out Vicks Vaporub plus,
targeted at adults. The brand attempted to expand it target segments.

Johnson & Johnson's association with the children's segment was so strong that it had
to build a brand for its prickly heat powder for adults - Shower to Shower. If different
segments are addressed by the with appropriate imagery that would appeal to
different target segments, the positioning may become weak as no segment will
identify itself strongly with the imagery. HMT's ``watch its happening'' TV
commercial addressed several segments during the mid-eighties. Horlicks also
attempted a similar route around the same period.

Though it may be difficult to draw specific conclusions about the success of these
`imagery' exercises, it is evident that these brands no longer address such diverse
segments through such imagery creation.

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Leader as a reference point

Comparative advertising in which the sponsoring brand compares itself with a


competitive brand (either by explicit or implicit reference) could involve the leading
brand as a reference point. This enables a brand to get ``slotted with the leader''. This
``differentiates'' the brand from other brands. This could be attempted in product
categories where a number of brands are on the same plane (in terms of marketshare)
but are following the leading brand. In the category of quartz watches, a brand which
holds a second position could start positioning itself by comparing itself with the
leader in the category. This association is helpful in creating a ``differentiation'' from
a number of other brands, which may enter the market.

Creating brand association involves positioning the brand in the mindset of


consumers. The concept of unique selling proposition (USP) advocated by Reeves
(when he worked for Bates agency) helps marketers in positioning brands. What was
traditionally a one- time marketing effort (formulating the USP) is today a very
complex strategic exercise because of intense competition. Long term implications of
brand association should be considered when marketers evolve brand propositions

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BRAND WARS : AN INTRODUCTION

Admen love a scrap, and in 1997 they had plenty. The traditional rivals, HLL and
P&G, HLL and Colgate, Coke and Pepsi carried on the game of marketing warfare
some time through advertising and some time in the corridors of MRTPC. But
probably the most significant events were related to mergers and acquisitions, which
have changed the dynamics of the advertising industry.

Colgate was sitting tight all these years. Hindustan Lever finally turned on the heat.
Pepsodent started comparative advertising and went for the jugular. Colgate felt
rattled. `Foul', cried the American personal product giant and went to MRTPC. Battles
were fought: HLL withdrew the ad, but the war is far from over. The court will decide
in a few months on the validity of the rivals' claim. The sidelight was even more
interesting. Two much-venerated public relations men put up a charade that had the
rest of the industry in splits. The HLL PR man said his long-time friend -- who
incidentally handled the Colgate account since 1991 -- attended a Pepsodent strategy
session without informing the HLL people.

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THE BRAND WAR BETWEEN COLGATE AND


PEPSODENT

"Foaming at the mouth"

Colgate-Palmolive (India) Ltd. has launched mega offers such as -- buy one, get one
free -- to boost its market share. Hindustan Lever has also followed suit with an "On
Approval" scheme for promoting its Pepsodent brand.

The offers from each of the warring side has been aimed at avoiding dilution in
marketshare as a result of the ongoing dispute between the two. Such offers, in the
past, enabled companies to boost volumes and thus the market share till the scheme
lasted.

Further in an advertisement, Colgate-Palmolive announced the one-for-one scheme


for all its 100 gm toothpaste brands -- Colgate Dental, Colgate Fresh Mint, Colgate
Gel Blue/Red, Colgate Fresh Stripe Gel, Colgate Calciguard and its premium
brand Colgate Total.

The offer was expected to garner good volumes for the company, which is engaged in
a fight against arch rival Hindustan Lever (HLL), on the latter's claim of "102 per
cent superiority".

Even while the war between the two MNCs, in the Monopolies and Restrictive Trade
Practices court, expected to drag on for a long time, both have been launching fresh
attacks at the retail-end to increase their respective market share through such
offers and massive advertising promotions.

For Colgate-Palmolive, market share of its leading brand Colgate Dental Cream
(CDC), dwindled by 8 per cent in September 1997 to 41.9 per cent from 49.8 per cent
in the second quarter of 1997, as per ORG all India figures. In fact, it had lost a

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substantial 2.4 per cent share in a single month from August to September that year,
after the New Pepsodent ad was launched.

IT IS 102 per cent better than the leading toothpaste, screamed HLL's Pepsodent
advertisement which appeared in the media. This hurt Colgate's sentiments, leading
to a face-off before the Monopolies and Restrictive Trade Practices Commission
(MRTPC). The Pepsodent advertisement, which claimed anti-bacterial superiority
over the leading toothpaste, was subjected to an Unfair Trade Practice inquiry by
MRTPC under the provisions of the Monopolies and Restrictive Trade Practices Act,
1969.

On a preliminary reading, the temporary injunction granted by the Commission in


favour of Colgate appeared to be right. But a holistic analysis revealed the
shortcomings of the order and the law in this area. The Commission identified the ad
as violating the law relating to unfair trade practices. But the unfair trade practices
law is meant to protect the consumer and not the competitor.

The fact that the Chapter dealing with unfair trade practices rivets attention on the
consumer is proved by the recommendations of the Sachar Committee, which was the
basis for the introduction of the provisions relating to Unfair Trade Practices in 1984.
The Sachar Committee had clearly stressed the fact that the Unfair Trade Practices
law was meant to protect the consumer from the unscrupulous trader. The
Commission did take note of this but since Colgate and an individual consumer
jointly filed the complaint, it went on to invoke the law of Unfair Trade Practice.

On a plain reading of the case, the outcome has been fair enough, but the
advertisement itself raises complex issues of law relating to comparative advertising
which need to be seriously debated. After all, why did HLL's ad cause so much
heartburn in the Colgate camp? The reasons are not very hard to find - HLL was
achieving quite a few objectives through its 102 per cent ad.

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First, it was staking claim to a certain quality, that of possessing a superior anti-
bacterial character which, by itself, may not directly hurt Colgate. Second, and more
important, it was gnawing into Colgate's market base by claiming that it was superior
to the leading toothpaste, which is Colgate. In its view, HLL was comparing
Pepsodent with Colgate in the ad and thereby creating a place for itself in the
consumer's mind as a product better than Colgate. In effect, it was riding on Colgate's
goodwill and brand power and making an effort to capture Colgate's market share.
HLL's aim to become the market leader would become easier this way if the ads
worked. HLL was advertising Pepsodent not on its own strength but by
comparing it with Colgate. It was indulging in comparative advertising.

The phrase comparative advertising is self- explanatory. It refers to advertisements by


a trader to promote his goods wherein his goods are compared with his competitor's
goods. The comparison could be concerning price, technical features, services
rendered and so on. Or it could merely refer to the competitor's ads to score a point.
Needless to say, this is a powerful promotional weapon in the hands of traders. There
are various advantages of comparative advertising for a trader:

It not only informs the consumer about his product but also tells him what better
features his product has.

Saves the trader's promotional cost a lot.

Helps a new trader capture the market by free- riding on the established product's
reputation. This is particularly helpful in the case of a new entrant to the market.

This leads to questions not only in competition law but also in intellectual property
law. The competition law issues are how to prevent the free-rider problem and how to
regulate the comparison while the questions that arise in intellectual property law
relate to copyright and trademark. Every ad has copyright protection and reference to
the competitor's ads in your own ad (by modification) could lead to infringement.
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The trademark law raises far more important questions - whether the competitor can
use the rival's trademark (for e.g., the ting sound of Colgate used in the Pepsodent
ad) in his ad, thereby making a statement that his goods are comparable or superior to
the more prominent goods. None of these issues were either raised by the parties or
addressed by the Commission in the Pepsodent case.

However, these issues need to be addressed in an economy where comparative


advertising is fast increasing. With competition becoming more acute in the consumer
goods area, comparative advertising is a dangerous tool, which could cause serious
damage to market leaders. It could also lead to a misinformation campaign by traders,
thereby affecting the consumers.

It could also burden traders with enormous costs as is evidenced by the Pepsi-Coke
ad war where both enterprises are signing on sports and movie personalities
everyday to beat the other. And these issues cannot be tackled by resorting to the
Unfair Trade Practice law as in the Pepsodent case.

The Unfair Trade Practice law is only the tip of the iceberg in relation to comparative
advertising. A competitor can indulge in comparative advertising even without
disparaging another product as in the Pepsi-Coke war where each ad is in response to
the competitor's ad. A competitor can simply give a comparative price list which itself
is a strong statement. How does one regulate all this? Where does one draw the line
between legality and illegality? Obviously, one needs a flexible rule of reason to be
applied to each case. And for this, the interests of both the competitors and the effect
on the consumer should be considered, as opposed to only the interests of the
consumer as is being done now.

The need of the hour is a multi-disciplinary approach to comparative advertising


encompassing the law of Unfair Trade Practices, intellectual property law and the
competition law issues. Only then can comparative advertising be of benefit to both

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the honest trader and the consumer. Also needed are institutions that understand the
mechanics of competition better than the present onsumer-oriented commission. But
all this can happen only when there is a new look at the issue of competition itself and
the various tools that go into making competition more vibrant and fair, one of which
is comparative advertising.

In a virtual `creeping acquisition' of market share, Hindustan Lever Ltd. (HLL) has
taken over leadership position in the north zone urban toothpaste market segment,
albeit in terms of value, in the month of January 1999, displacing all-time leader
Colgate-Palmolive (India) Ltd.

According to ORG-retail audit data for the urban north zone market, HLL's value
market share in toothpaste has increased to 43.6 per cent in January from 41 per cent
in December 1998, while Colgate's share has dropped to 43.1 per cent from 45.6 per
cent during the period.

However, in terms of volume, Colgate still reigns high with a share of 45 per cent vis-
a-vis 41 per cent for HLL in January. Analysts said that given the fact that the
realization per tonne for Levers is higher as compared to Colgate, HLL's share in
value is higher and this has enabled the multinational to reach leadership position in
value terms faster.

The maximum contribution of around 75 per cent to HLL's sales break-up comes
from Close-Up, the silica based toothpaste, which gives a higher realization per use as
against a chalk paste (all white pastes are chalk pastes). In the case of Colgate, white
pastes contribute maximum to the sales, and thus the company has higher volumes.

The HLL's portfolio consists of brands like Close Up and Pepsodent, and their
variants. Colgate's basket includes the Cibaca brand of toothpaste in addition to
Colgate Total, Colgate Gels, Colgate Double Protection and Colgate Dental cream.
Products of the two companies are comparable in terms of pricing.
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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

The north zone consists of markets like Delhi, Punjab, Haryana, Himachal Pradesh,
Rajasthan, Uttar Pradesh and Jammu & Kashmir. The All India toothpaste market in
the month of January was valued at Rs 93 crore, and the north zone contributed
around 29 per cent to this.

The development comes as a small victory for HLL which has been `on the prowl'
for market share in this segment. The toothpaste market has seen heavy activity
on the advertising and marketing fronts from both sides. This is clearly visible
from the market place skirmishes between the two multinationals.

HLL's strategy in the toothpaste market was two-pronged:

The first being the launch of Close-Up which created a disruption in the market place
and the brand has, as of today, notched up a share of close to 20 per cent.

The second step was to back Close Up with another strong brand and build this
equity to hit out directly at the leader's flagship brand. Thus was born Pepsodent to
take on Colgate Dental Cream head-on.

Today, HLL's share in the overall market stands at 32 per cent while Colgate is still
the clear leader with a share of around 56 per cent. Besides the North zone, HLL is
said to have won similar battles in toothpaste in other spots like Bihar and Tamil
Nadu.

The company is perceived to have taken a decision to consolidate its energies in


those areas where the company was strong in the toothpaste market since the
beginning. These are the areas where Close Up had been well received and the
company decided to consolidate its efforts in these growth-led markets to increase its
share of the pie bit-by-bit.

It is a war that is bound to make anyone froth at the mouth and has shades of the
United States-Europe rivalry. The current war between the two dental care giants,
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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

Hindustan Lever Limited (a subsidiary of Anglo-Dutch multinational company


Unilever) and Colgate-Palmolive (the Indian subsidiary of the American giant), has
all the ingredients of a Hindi potboiler that will make even a veteran producer like G
P Sippy go green with envy.

The fracas between the two, one of the many long-running battles to gain
ascendancyin the Rs 12 billion dental care market, erupted when Hindustan Lever
launched another toothpaste from their stable. The new toothpaste, New Pepsodent, a
relaunch of the old Pepsodent G and Pepsodent 2-in-1 promised consumers
throughout the length and breadth of the country to do something which the other
toothpaste brands could not do, namely clean more than any other toothpaste.

It were the advertisements that Hindustan Lever Limited launched that got the goat
of its rival, Colgate-Palmolive: the advertisement promised consumers that it would
get protection form tooth decay at 102 per cent more than any other leading brand in
the country. Given that the country's consumers are often swayed by advertisements
and press campaigns, the wording and the claims caused an immediate uproar.
Colgate-Palmolive saw red at the Hindustan Lever attitude that "my toothpaste is
better than yours" and geared itself up for a long and intense legal battle.

Crying foul, it initiated proceedings with the Monopoly and Restrictive Trade
Practices Commission claiming that the offending advertisement by Hindustan Lever
was misleading the consumers. The advertisements are a blatant attempt to gain
leadership through any means. The MRTPC had issued an interim injunction to
Hindustan Lever, restricting it from comparing its product with other toothpastes.

The situation took a turn for the worse after HLL countered by issuing press releases
on the MRTPC injunction and still holding forth the superiority of its product.
Colgate filed two contempt pleas in the MRTPC against HLL pointing out that the
Lever releases deliberately distorted the MRTPC's injunction besides advertising its

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

product. Colgate has sought appropriate MRTPC action against HLL, its officers,
employees, and advertising agents for the contempt committed.

Acting on the Colgate plea, the MRTPC directed HLL to file a reply within three
weeks. HLL was also directed to file its reply to another injunction application filed
by Colgate-Palmolive. The Colgate plea said: "It is submitted that millions of
consumers are being misled into believing the distorted version of the order passed by
this hon'ble Commission and that such unfair trade practice needs to be injected
forthwith."

According to the Colgate-Palmolive lawyers, the claims made by Hindustan Lever on


the research done by the latter to prove its product's superiority was done in a petri
dish -- using a limited amount of sample taken from six people mouths after using the
toothpaste. The lawyers say the sample taken by Hindustan Lever to determine the
level of efficiency of the toothpaste was an extremely small one and only a few germs
could be detected, thus invalidating the test.

Hindustan Lever, however, claimed that its tests were carried out by the University of
Leeds and University of Bristol, United Kingdom, and the University of Pittsburgh,
United States, which proved the efficacy of the toothpaste and thereby confirming its
claim that the New Pepsodent was indeed superior to other leading brands in the
market.

There was undoubtedly much more than product superiority at stake. HLL was
pulling out all stops to ensure that it becomes the number one player in the market. It
had already tasted blood and was not going to stop in its endeavors. What has spurred
Lever's thrust is the fact that its market share in the dental care market has grown
from a mere five per cent in 1979 to an impressive 36 per cent today, whereas
Colgate-Palmolive has been seen its market share decline from a dominating 75 per
cent to a struggling 56 per cent.

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

One of the factors behind the stupendous rise of Hindustan Lever has been the
company's ability to constantly innovate its products and continuously introduce new
products, practically every week. Due to the constant new releases by the company,
the other companies feel threatened and that is why they probably resort to other
measures.

Another aspect was that Hindustan Lever's market offering, New Pepsodent, was a
direct attack on Colgate-Palmolives main brand, Colgate Dental Cream. The New
Pepsodent from Hindustan lever was priced at an attractive Rs 17.50 and contained a
chemical called tricolsan, a well-known germ fighter. On the other hand, the Colgate-
Palmolive brand containing a similar chemical agent was the Colgate Total
toothpaste, which was priced at an expensive Rs 32, practically double New
Pepsodent's price.

Therefore, by keeping the pricing of New Pepsodent so low in the extremely price
conscious Indian market, Hindustan Levers has been trying to take on Colgate-
Palmolives flagship brand, Colgate Dental Care, which contributes 45 per cent to
Colgate-Palmolive's entire sales portfolio.

While Colgate officials readily have been admitting that Hindustan Levers product is
a superior product, it is the use of the "102 per cent" claim that had raised the hackles
of the entire Colgate-Palmolive management team, and which saw the debate being
dragged to the MRTPC courts, with both sides claim and disclaiming that their tests
were superior.

The claim is also causing confusion in the entire marketing community. How did
Hindustan Lever arrive at the 102 per cent figure? What did they use or is it just a
figment of their imagination? However, it can be clearly seen that Hindustan Lever's
lack of explanation showed their desperation to sell a product they were not sure
about.

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

If the Rs 978-crore leader is to fight its arch-rival, Levers, in the oral-care


market, Colgate-Palmolive must change its old habits of strategy -- quickly.

Colgate's Ring Of Protection is being squeezed. Colgate is under siege in the one
market it had considered itself invincible: the Rs 1,200-crore oral-care market. After
all, Colgate's marketshare has shriveled under the onslaught launched by the Rs
8,343-crore Hindustan Lever (Levers) from 65 per cent in 1995 to 60.70 per cent in
1997. And even its flagship, Colgate Dental Cream, lost 3.80 points of marketshare in
this period, dropping from 52.70 per cent in 1995 to 48.90 per cent in 1997.

With Levers' marketshare rising from 22.20 per cent to 26.90 per cent, Colgate has
been left with a less-than-tangy taste in its mouth. Worse, the Anglo-Dutch
transnational has also launched a successful attack on Colgate's advertising for
Colgate Dental Cream, forcing an interim injunction from the Monopolies &
Restrictive Trade Practices Commission forbidding the use of the phrase Suraksha
Chakra -- Ring Of Protection -- in the brand's commercials. Colgate has over the
years aggressively pursued a two-pronged strategy of giving the consumer relevant
quality products, and satisfying oral-health needs.

Actually, Colgate hasn't really uncapped a new strategy in the marketplace anywhere
near as fresh as the feeling it promises to generate. The signals are clear: in Bihar,
Levers leads Colgate by 10 percentage points. And in urban markets like Delhi,
Levers is breathing down Colgate's neck. 'To increase their sales volumes in
toothpaste is HLL's objective. They have been looking at share-point gains too.

No wonder the pressure to brush up Colgate's act is mounting. At a high-powered


meeting in March, 1998, four senior managers from the New York-based $9.10-
billion Colgate-Palmolive -- which holds a 51 per cent stake in its Indian subsidiary --
made it clear to the local marketing team that quick responses and results were
required. And the middle- and long-term targets are formidable too: Building a

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

consumer-base of 500 million people for oral-care products by 2000, up from 212
million today. Establishing sustainable marketshares in personal hygiene and surface-
care products. Doubling turnover by March 2001.

Can Colgate cope? Deep down, however, what Colgate is a victim of is not merely
competition, but complacency too.

For, even as it continues marketing its oral-care products to consumers on the


platform of habit, Colgate has shown symptoms of being a prisoner of habit itself: the
habits of pursuing the same selling-pitch, the same advertising, the same marketing
tricks. Until now, no competitor could shake Colgate from its marketing inertia. It
shows. All leaders tend to become fat and complacent. It becomes easy for a new
player to come from behind, and challenge them. That is probably what has happened
with Colgate.

Now that Levers has done just that, Colgate must shake off the shackles imposed by
the force of leadership. It is caught in a time-trap, with the complacency of
yesterday's successful strategies leaving it bereft of a vision for tomorrow's growth.
Change is, indeed, what marks the company's future plans even though they defend
their past strategies.

Curing the Conversion Habit

THE SYMPTONS. Its traditional strategy of targeting non-users in rural India, and
converting them into consumers of toothpaste has been one of Colgate's strong points.
Colgate spends Rs 4 crore every year to preach the value of using branded oral-care
products to villagers, using 72 vans, each of which covers an average of three villages
every day. Or 78,000 villages per annum. Using a 30-minute film as its
communication vehicle, the company distributes for free an average of 7 million
toothbrushes every year to initiate toothpaste-usage. And Colgate has also launched
toothpaste and toothpowder in sachets -- Rs 2 for 15-gm, and Rs 1.25 for 10-gm,
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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

respectively -- as well as a special 30-gm tube priced at Rs 9 -- with a free toothbrush


thrown in -- to offer an entry pricing-point for the low-spending customer.

This thrust has brought Colgate Dental Cream a distribution reach of 46 per cent in
rural markets versus Close-Up's 20 per cent and Pepsodent's 12 per cent. Colgate has
single-handedly increased the number of people using modern dentrifice creams from
25 million in 1975 to 212 million today.

The zeal for the oral care market may land it in trouble.

Analyze the Rs 7,244.64-crore Hindustan Lever Ltd's (HLL's) recent run-ins with its
rivals--and one message comes across: HLL no longer minds carrying the battle to its
rivals' camps. Seen thus, the ad war over HLL's oral-care product, New Pepsodent, is
only one of the several controversies that have besieged the consumer products giant
with litigation in the last 12 months.

The evidence

When HLL's Sunsilk Ceramides shampoo campaign in November, 1996, claimed that
the product not just repaired, but also "rebuilt" damaged hair, the Monopolies &
Restrictive Trade Practices (MRTP) Commission ruled that HLL would have to drop
the "back to life" phrase from its advertisements.

On the other hand, the Advertising Standards Council of India rejected complaints by
consumers that HLL's Clinic All Clear Challenge campaign in February 1997, were
misleading.

But HLL was restrained by the MRTP Commission from airing its Kissan Annapurna
salt commercials, which suggested that it contained that amount of iodine which
would help the mental development of children. But HLL has submitted research
findings--including those of the GOI and the World Health Organisation--to back its
claims.
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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

And HLL itself lodged a complaint against the Rs 503.16-crore Marico Industries'
campaign that HLL's Clinic Plus coconut hair oil was not fit for use since it contained
liquid paraffin. Subsequently, the MRTP Commission stopped the airing of that
campaign and, according to an HLL spokesperson, Marico then launched a coconut
hair oil, Parachute Lite, which too contains liquid paraffin.

Why has the once-strait-laced HLL--a market leader in 70 per cent of its product
categories--turn distinctly, and suddenly, bellicose? The company has decided that
will not settle for anything but the top spot in any segment that HLL operates in. As
the market leader, its trust is on innovation in every aspect of every business. Other
companies are yet to get into this mode. Their reaction has usually been to challenge
HLL's claims, but, ultimately, they try to imitate them on finding that their products
meet consumer needs best.

Oral care, however, is one segment where HLL has had to settle for second spot for
over a decade, primarily because the toothpaste market is segmented into two: dental
creams and gel. While HLL's Close-Up leads the gels segment with an 18 per cent
share--versus Colgate Gel's 9 per cent--the 51 per cent marketshare that Colgate
Dental Cream enjoys in the other segment makes it the market leader. In oral care,
HLL is playing two roles: that of the attacker as well as the defender.So, in its
campaign for New Pepsodent, which has resulted in another probe by the MRTP
Commission, HLL clearly implied that its outperformed Colgate Dental Cream.

HLL is trying to attain market leadership the easy way: by making tall claims. By the
time they are contested and disproved, the damage is done. The New Pepsodent ad
did not directly name Colgate. HLL's campaign strictly followed all the well-accepted
norms of comparative advertising.

If HLL's strategy leads to any change in the leader's marketshare, it will only add to
its own.

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

Which is exactly what happened: Colgate Dental Cream lost 2.40 per cent of its
marketshare in a month, translating into gains for New Pepsodent. At the end of the
day, a truthful, long-term relationship with the customer will be at stake. While that
may be mere wishful thinking, the fact remains that HLL can ill-afford to antagonize
its customers. Should it root out the controversy that is setting into its marketing
tooth?

In order to prevent HLL from propagating its claims till they were proved and "also
for the purpose of protecting consumers' interest", the MRTPC had issued an order of
interim injunction restraining HLL from ``referring to any Colgate toothpaste brands
in any manner in its TV commercials or advertisements or hoardings by comparison
of its New Pepsodent

So far as prejudice to public interest is concerned, the MRTPC think that consumers
need not be permitted to be swayed only by the statistical anti-bacterial superiority of
102 per cent of New Pepsodent over `the famous/renowned toothpaste or `the leading
toothpaste.''

The commission has decided that it is necessary at this stage to injunct the respondent
from directly or indirectly making any reference to Colgate in its TV commercials or
newspaper advertisements or hoardings for claiming anti-bacteria superiority of its
toothpaste products.

It was also necessary to injunct the respondent from referring to any specific quantum
of anti-bacterial superiority in terms of any specific percentage figures of its product
over any other product till its claim of such anti-bacterial superiority is fully
established. This would be also for the purpose of protecting consumers' interest."

HLL had launched the "New Pepsodent-102 per cent more effective than the leading
tooth-paste brand''. Pepsodent's print advertisements show two photographs of views

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

of germs in a sample taken from the mouth hours after brushing with the leading
toothpaste and with New Pepsodent.

This "schematic representation'' of a technical test has been cited as "Proof that
Pepsodent is 102 per cent better than the leading toothpaste.''

A prominent `Colgate Total' advertisement issued today calls it the "world's


mostadvanced toothpaste which protects teeth and gums between brushings.'' Though
it makes no references to other toothpaste brands, it stresses on `long-lasting
protection' and that `no ordinary toothpaste will ever do'.

Another bout between the two multinationals -- Colgate-Palmolive India and


Hindustan Lever -- has begun with both vying for front-page advertisements in
leading dailies.

The two are currently engaged in a superiority war for their respective products,
Colgate Dental Cream and New Pepsodent, which was sparked off with HLL's `102%
superior' ad for Pepsodent. The war, which finally landed them in the MRTPC net,
seems to be far from over.

While Colgate splashed its ads in leading dailies asserting its stand and the initial
success over its ace rival, other newspapers carried a HLL counter attack, which
clearly and in a typical hard-hitting style, delivered "Indisputable facts about New
Pepsodent".

Not only did the HLL ad stress upon the brand's superiority, but even went on to
belittle Colgate's brand, CDC, stating that it did not contain any proven anti-bacterial
agent.

On behalf of Colgate-Palmolive its agencies Burson Marsteller Roger Pereira and


Rediffusion had been calling up newspaper offices requesting them to stop carrying
HLL ads as it might amount to contempt of the MRTPC court ruling.
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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

However, it was seen that leading dailies went ahead with the advertisements driven
by the fact that Hindustan Lever had been given a week's time to withdraw its ads.

The string of advertisements from both the warring camps will continue but who
finally wins the bout remains to be seen.

Year 1996-97

India's leading dental care Product Company Colgate-Palmolive has lost ground,
though marginally, in the urban market while Hindustan Lever (HLL) continues its
upward march.

At the end of 1996, Colgate's share in the dental care market dropped to 58.9 per cent
(urban volumes) from 61.6 per cent the previous year while HLL had improved from
24.3 per cent to 27.2 per cent.

Colgate, however, continued to lead in value terms with a share of over 63 per cent
against HLL's estimated 30 per cent. According to analysts, since there was no major
price increase in 1996, Colgate's share in terms of value would have dropped
marginally with a fall in volumes.

The total size of the market was 56,000 tonnes of which Colgate-Palmolive and HLL
together held 86 per cent. The balance was divided among smaller players like Vicco,
Balsara's Babool and Promise. These brands with their low prices had marginal shares
in value terms.

In toothpaste gels, while HLL's Close Up led with 18.9 per cent in 1996 (18.4 per
cent), Colgate gel managed to garner 10.2 per cent in four years. HLL's Pepsodent,
backed by major promotions and retail-end schemes over the past few years, had
picked up 8.3 per cent from 5.9 per cent in 1995.Cibaca, which was acquired by
Colgate few years back, had a nominal share of 2.8 per cent in volumes in the urban
market. It was a small player which was mainly dominant in the north.
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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

Other Colgate brands like Total and Calciguard had marginal shares of 1 per cent and
0.8 per cent in value.

Retailers in Mumbai had rated Colgate as the fastest moving brand in the toothpaste
segment. According to them, consumers try out new brands when companies offer
rebates or other incentives. This, retailers felt, could be one of the reasons why HLL
brands were gaining ground in the market.

Colgate, hinges on its positioning as a world leader in oral care. The dental care
market, estimated at Rs 1,100 crore, has been growing at 7 per cent annually over the
last few years. It could grow even more rapidly, up to 12 per cent, with the cuts in
excise duty.

While the urban market has been recording a growth close to 2 per cent, rural India is
buoyant at around 12 per cent, according to estimates.

The industry has grown rapidly at 12 per cent in the first quarter of the current fiscal.
While penetration of modern dentifrices like toothpaste and toothpowder in the urban
areas is 81 per cent, it is 38 per cent in the rural region.

Retailers have rated Close-Up (red) as the best running brand in the market after
Colgate Dental Cream. The third slot has been given to Pepsodent. New brand
extensions like Close-Up Renew and Colgate Fresh Stripes are still in the nascent
stage with promotional activities in full swing.

Close Up (150 gm) is cheaper at Rs 29.20 as against Colgate Gel's Rs 31.15.


Pepsodent and Colgate dental prices are almost at the same level of around Rs 33 for
a 200 gm tube.

Volumes in the toothpowder market have been estimated at 23,000 tonnes in which
Colgate leads with a 49 per cent share. Pepsodent toothpowder, according to retailers,
has yet to pick up speed.
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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

Colgate-Palmolive (India) and Hindustan Lever Ltd (HLL) have been engaged
in another round of advertising battle to gain supremacy in the toothpaste
segment.

While the latest Colgate ad on Double Protection screams "two-and-a-half times


better than the ordinary toothpaste," the Pepsodent ad in a leading daily goes "get
double protection you can actually see".

Colgate Double Protection is the latest oral-healthcare product, which, combines two
ingredients, Xylitol and Troclosan, to effectively fight germs.

A Colgate-Palmolive's claim of "two-and-a-half times better" is backed by clinicals of


in-vivo tests. So a possible challenge from the competition is not going to affect the
company's claim. So was the case with HLL's 102 per cent superiority claim where
clinical tests were conducted, and the ad had to be modified

The ordinary toothpaste referred to in its ads is any toothpaste, which is not
therapeutic. HLL was evaluating Colgate's Double Protection claim before arriving at
a conclusion.

The old battle between the two rivals, which had been simmering for almost 10-
months now, has been reactivated with HLL firing a new salvo with the Pepsodent 2-
in-1 ad taking on Colgate's `double protection' claim. This has sparked off a no-holds-
barred battle between the warring factions. The Pepsodent ad hits hard as it says,
"Blind faith is a thing of the past."

It may be recalled that Colgate-Palmolive had challenged HLL's `102 per cent
superiority' ad on Pepsodent in the Monopolies and Restrictive Trade Practices
Commission (MRTPC) court following which HLL was asked to modify the
advertisement. The commission had further suggested the setting up of an expert
committee to look into the matter.

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

Later, HLL dragged Colgate's claim of having incorporated a germ fighter in Colgate
Dental Cream (CDC) to court saying it did not possess any germi check properties.
While the cases are still dragging, lines have already been drawn for a second battle.
Colgate-Palmolive's aggressiveness lies in its concern regarding the market share of
its flagship brand CDC which had slipped by almost 8 per cent in September 1997 to
41.9 per cent from 49.8 per cent in the second quarter of 1997.

This was being referred to because of a direct impact of HLL's massive `102 per cent'
campaign which belittled the ordinary toothpaste (CDC).

The din of the toothpaste battle swelled to a new pitch all over again as Hindustan
Lever, firing the next salvo against MNC rival Colgate, furnished endorsements by
leading international experts of the superiority of its toothpaste brand Pepsodent HLL
had reiterated its claims of superiority over the leading brand of Colgate-Palmolive,
Colgate Dental Cream. The endorsements for New Pepsodent are from leading
institutes like the University of Pittsburgh, Kings College of Medicine & Dentistry,
London and Leeds Dental Institute.

HLL clarified that these endorsements were hurried up as Colgate-Palmolive had


already filed the case in the MRTPC court against the "102% superiority" claims. In
fact, the Colgate-Palmolive consultant, Addy , too had ratified HLL's claims.

Levers aired its modified New Pepsodent which stressed on its superiority over
ordinary toothpastes, without the mention of "102% superior". The Hindustan Lever
102 per cent-ad had sparked off a no-holds-barred battle between the personal
products majors.

Ever since the issue broke lose, both the MNCs have gone hammer and tongs against
each other, claiming superiority over the other, and holding press meets to assert their
stand. Colgate Palmolive followed a whole set of in-depth view into the HLL
Research Centre (albeit on the video) which elucidated the company's tests conducted
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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

on a set of individuals for New Pepsodent vis-a-vis Colgate Dental Cream to prove its
superiority.

The quantity of 0.2 per cent of triclosan (active ingredient used in Pepsodent) was
inactive on the germ site, HLL had furnished published views by Colgate-Palmolive
which stated that the efficacy of triclosan in quantity ranges between 0.1 per cent and
0.3 per cent.

However, the authenticity of either of the claims would have been clear only after the
expert committee was formed (comprising nominees from each of the warring
factions and one from MRPTC) and had drawn its conclusion.

The tooth-and-nail fight of the MNCs, which have made huge investments in
advertising their claims in leading dailies, has been more for the shares in the
competitive Rs 1,500 crore dental care market which is largely driven by hard hitting
advertising and promotion at the retail end.

Even as the Hindustan Lever-Colgate battle raged, a little war was beating the big
one in hiss and fury. The public relations men on either side had gone public with
differences, and the toothpaste situation reeks of bad breath. Suggestive media
musings and leaked letters had begun doing the rounds. First the long-standing public
relations chief of Hindustan Lever, alleged sotto voce to several journalists covering
the Pepsodent-versus-Colgate Dental Cream controversy that Roger Pereira, the chief
of Burston-Marsteller Roger Pereira who handles PR for Colgate, had sneaked into
Levers' strategy meetings.

It was fast appearing that the public relations battle was turning personal, with smoke
billowing from a fire that may be difficult to put out. Whichever way the controversy
ends, it will extremely doubtful whether the prime combatants will remain unsinged.

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Understanding brands with focus on Brand War Between "Colgate And Pepsodent"

Hindustan Lever Ltd (HLL) launched an "On Approval" scheme for promoting New
Pepsodent, in order to prevent any dent in its market share as a fallout of the on going
"102 per cent superiority" dispute with rival Colgate-Palmolive. Under the scheme, a
50 gm Pepsodent toothpaste (market retail price: Rs 10.25) was offered free to
consumers who spot the respective newspaper advertisement.

The scheme and the advertisement were mainly to promote the brand in the current
scenario where a war of sorts is on between market leader Colgate-Palmolive and
HLL.

The scheme which was offering a product free for the first time to consumers, had
been launched for obvious reasons and would boost sales.

The Pepsodent toothpaste comes in three volumes of 50 gm, 100 gm and 200 gm with
the maximum retail price (MRP) at Rs 10.25, Rs 19.75 and Rs 31.80 respectively.

It is not a new game for HLL which has always adopted the marketing tools of
discounting and consumer offers to boost sales. This was unlike other multinational
companies like Procter & Gamble, which do not believe in offering discounts to
promote their products. Meanwhile, Colgate-Palmolive also beefed up its marketing
activities to keep pace with rival promotions.

Another toothpaste battle between multinationals Colgate-Palmolive and


Hindustan Lever (HLL). No, it was not something to do with the presence of the
anti-bacterial agent "triclosan" in the toothpaste or how many times the respective
products are better than the other. This time it was something cosmetic -- whose
brand whitens more.

Colgate-Palmolive, which has shed its complacent attitude and become more
aggressive with brands, had fired a new salvo by launching its international product

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"Colgate Sensational Whitening", a direct hit at Levers' Close-Up Renew Ultra


Whitening. Both brands were meant for whitening the teeth.

Incidentally, a few weeks back HLL had intensified the advertising of Close-Up
Renew Ultra Whitening. The move was now being seen by industry observers as one
to combat the proposed launch of Colgate Sensational Whitening.

Further, even in terms of pricing, Colgate Sensational Whitening has been priced at
par with Close-Up Renew Ultra Whitening. A 150 gm tube of the Colgate brand is
priced at Rs 37.50, which is the same as the competitor brand from the Levers stable.

Colgate had gone a step ahead to introduce two other sizes of Sensational Whitening
in 100 gm priced at Rs 27 and a 50 gm tube priced at Rs 15. While Close-Up Renew
existed only in one size of 150 gm, the company was planning to introduce two other
varieties in the sizes of 100 gm and 50 gm. It was believed that the price of the Close-
Up product will be the same as that of Colgate Sensational Whitening. HLL also
undertook a price hike in Renew from the previous levels of Rs 35 for 150 gm.

Colgate Sensational Whitening was the third major new product which the company
has introduced in the financial year 1998-99. After having launched Colgate Double
Protection, which had already garnered a 4 per cent share in the Rs 1,000 crore
market, and Colgate Total, Colgate Palmolive had rolled out Colgate Sensational
Whitening in select cities including Mumbai. The product was eventually launched
nationally.

With the battle lines having been drawn in a new brand war, the advertising tactics for
Colgate Sensational Whitening were unleashed within two weeks.

Analysts, who are bullish on Colgate-Palmolive, had termed the recent moves by the
company as "aggressive". While it was not believed that Colgate would launch a
product like Sensational Whitening as it would be concentrating on its other main

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brands like Double Protection and Colgate Dental Cream, the company proved it
otherwise.

Colgate's flagship brand Colgate Dental Cream had taken a beating in the last few
years with the launch of HLL's Pepsodent brand. HLL, the number two player in the
dental care market, had garnered a commendable 32 per cent market share. Colgate-
Palmolive had a share of 56 per cent.

Conclusion

There is no doubt that the wrangling between the two dental care market leaders
is far from over. The question now is when will the next salvo be fired by
Colgate-Palmolive, clearly perceived at the receiving end of Hindustan Lever
aggressive marketing strategy and which is waiting eagerly in the wings to
retaliate.

Till then, the entire country can enjoy the lull before another the next storm
breaks out.

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BRAND WARS CONTINUED......

This is the latest story in advertising industry. Coke vs Pepsi. When they are not
fighting over bottlers, they are fighting over cricket. Now it's not just players but
officials too. If Pepsi had stuck a deal with IS Bindra, Coke has done it with
Jagmohan Dalmiya. And now, it's teenage heart-throbs Rahul Dravid, Sachin
Tendulkar, Ajit Agarkar and Zaheer Khan of Pepsi versus Srinath, Saurav Ganguly,
Virendra Sehwag and Sunil Gavaskar of Coke. There's more: the replay controversy
and counter ads. It's an endless saga that shows no signs of flagging. The funny part is
that while the two giants are looking over each other's shoulders to look what the next
move will be, Cadbury Schweppes is quietly building up base.

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ANOTHER BRAND WAR WITH NIRMA FOR HLL

Nirma plans strategy to rinse out rivals

Nirma LTD is finally opening to the concept of breaking the traditional shackles of an
umbrella-branding concept. Nirma is all set to launch an alternative brand strategy to
counter competitors, a diversion from the existing methodology of an umbrella-
branding concept, which it has so far leveraged its strengths upon.

The alternate brands will be used in localized markets to fight regional competitors or
rival brands that have been launched purely to capture a local market or a particular
narrow segment. They will not be launched nationally, to ensure that the equity of the
umbrella brand `Nirma' is not diluted.

It will not be stretching beyond a limit, although at no point will they dilute the Nirma
brand equity.

So far, Nirma has always been on the defensive. The company is now changing tracks
to become more aggressive in competitive onslaughts.

The company has learnt some lessons from past experiences - for instance, the
Levers' strategy to launch a lime variant in Jai soap to counter the launch of
Nirma Lime.

Nirma will be using alternate brand strategies (without eroding the Nirma brand
equity) to put a roadblock, wherever possible, en route to accomplishing a leadership
position in its new ventures.

The module prepared for the Nirma brand consists of three spheres:

The core area consisting of its existing products in soaps and detergents which
come under the umbrella brand.

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The peripheral area, which consists of, related products - most of which fall under
the umbrella brand.

The unrelated area where the company would create a new brand right from
scratch.

The umbrella-branding concept, which has at times aroused criticism, has made
Nirma a household name in India. This brand is rated as one of the most successful
umbrella brands in the Indian FMCG market.

Its use, along with its various extensions, has resulted in optimizing the return on ad-
spend (at roughly 2 per cent of the turnover). Besides, the umbrella branding
approach has resulted in better acceptance of Nirma products across all segments.

A number of companies, like Godrej, Phillips, Sony, BPL, Pond's and Lakme, have
successfully adopted the concept of umbrella branding, realizing better returns, some
of which have survived for almost a 100 years.

As part of its strategy, Nirma is planning to penetrate the compact detergents segment,
which is dominated by multinationals like Procter & Gamble (Ariel Microshine) and
Hindustan Lever (International Surf Excel).

The new compact detergent product from Nirma will be launched next year.

It has already attempted to penetrate the premium segment of the market in soaps and
detergents, in which it has tasted initial success.

Besides, Nirma's presence in the cosmetics industry will be felt in a year's time.

Nirma's talks with Henkel-Spic for a joint venture in cosmetics have fallen through.
Even as Nirma held some preliminary talks with Henkel, the talks did not proceed

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beyond a certain point. The company is currently negotiating with some parties for a
joint venture in this area.

Over the years, the firm has grown into a multi-product company. In addition to
detergents and soaps, the company recently launched Nirma beauty shampoo and is
currently test-marketing toothpaste also. A leader in detergents with around 35 per
cent market share, Nirma has acquired around 15 per cent share in the soaps market
this year.

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BRAND WARS 2002

Satyamonline Vs Mantraonline Vs VSNL. ICICI Vs HSBC, AirTel Vs Hutchison.


Rediff Vs Indiatimes. Musicworld Vs Planet M.

The combatants are easy to identify. Prominent absentees from the real brand-wars
will be the classic adversaries from the soaps, detergents, and other FMCG markets.
For, the fight for the customer's attention in 2002 will mostly be about service-in
areas ranging from ISPs to phone services, from portals to hotel chains, from mega-
retailers to music.'The emerging area is that of service brands. It's going to be the year
of fast-moving marketing services.' Packaged and sold like consumer products, these
branded services will wage bitter war with one another, using lower price, more
freebies, and-most important-high-decibel advertising as their weapons. Since many
of them will be new, 2002 will be the year for gaining marketshare, not profits. So,
value, and not margins, will be the cornerstone of their offerings. The parameters of
success? Acceptance, affordability, and availability.

But what of BPL Vs LG. Vs Samsung? Ford Ikon Vs Fiat Siena Vs Opel Corsa.

Consumer product brands will slog it out, too, especially in the field of durables.
However, even here the focus will be more on the service component-spanning
information, delivery, and after-sales support-than on the primary products. 'Open
markets are ensuring product parity in most areas. The only scope for innovation is in
service. That's what the brand wars will mean in 2002. In addition these will be
fought not in the strategy rooms, but in the trenches-real and virtual.

The Return of the Big Spenders

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As the new millennium unfolds, there's more hope than hype in India's advertising
industry. After 2 years of sluggish growth, the silver lining is finally visible. Still, it's
excessively early to celebrate. According to projections, the RS 7,687-crore industry
is expected to grow by 17 per cent in 2002. After all, thanks to the heady mid-1990s,
they have been used to growth rates more in the 20-25 per cent range. However, the
past 2 years have been humbling. With the economy in the grips of a terrible
recession, clients slashed their ad budgets. In 1999, total adspend grew by just 13 per
cent-down from 19 per cent in 1998.

Now, it looks like the beginning of a bounce-back. It may be too early to tell, but on
India's Madison Avenue, the mood is certainly upbeat. 'The current indicators all
point to a good year. While you have newer industries that need to advertise, there are
also segments like automobiles, which will continue with its intensified spends. The
dot-com sector will bring in new advertising business. The primary market is also
opening up. Over and above that FMCG, spending is going to continue growing.''

New sectors like hyperactive dot-com businesses will certainly be contributing to this
increased spend. As will the newly opened up insurance and healthcare industries.
Carmakers and financial services firms are also expected to shell out more on
advertising-thanks to the growing competition in their businesses. In addition, of
course, with the economic upswing, existing players will maintain-if not increase-
their ad budgets.

In fact, the good times started rolling towards the end of 1999. The fact that the
Bharatiya Janata Party-led coalition government was perceived as a stable one helped
in no small measure. The political stability has led to the stock market booming and
real estate prices picking up. Clients sitting on the fence are thinking of spending
now.

With many sectors coming out of the recession, bottomlines are expected to improve.

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These are forecasts just for above-the-line advertising. A lot of money will go into
below-the-line promotions too. Companies are also going to look at how to stretch
the advertising rupee by focusing on untapped tools of communications. Marketers
will consider spending more on customer relationship management, corporate
communications, public relations, and promotions more seriously. According to
market-researchers done by ORG-MARG, below the line spends will grow between
22 and 28 per cent in 2002.

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Research Methodology

The success of any event heavily depends upon the way chosen for its
execution. This includes ensures of some basic questions to the specific focus on
constraints as well. In other words we can call the methodology as the backbone of
any research. It also includes research or study methods. Thus when we talk of
methodology we not only talk of methodology we not only talk of methods but also
consider the logic behind the methods we use in the context of our study objective
and explain why use are using them so that study results are capable of being
evaluated logically.

Any research is based on some facts which aim to bring about


some fundamental insights in the field which have never been earlier presented in the same form
.We tend to carry out the process of inquiry with a careful and critical examination, diligent
investigation of the subject matter.The collection of information from various sources help us to
generate a generalized conclusion. There has to be a sophisticated framework within which such
studies are carried out, that framework is known as methodology.

The methodology of this particular project work can be


understood in the following steps:

1. Formulation of Objective Stateme


2. Research Design
3. Data Collection
4. Conclusions

This particular study is a library research exercise in which I


have collected data through various news papers, magazines,trade juournals and various web
sites .

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In the light of the subject matter of this study we can briefly discuss some of the
points of its methodology mentioned above.
1. Objective Statement :To understand the brand war between major
companies operating in India

2. Expected Outcome :a) Advantages of branding a product


b) What celebrities can do for a company
c) Brand awareness among the consumer

3.. Research Design : Research design is the complete guideline


towards the execution of the research. In this
we have to determine the answers to some
basic questions which help us out in carrying
out the project.

a) This is the study about brand war between


major companies operating in India

4 Tools for data collection:


a) Reference of available literature
I. Magzines
II. Journal
III. News papers
b) web sites
1- www.google.com

2- www.colgatepalmolive india.com

3- www.pepsodentindia.com

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