The gloves are off, and it seems a bare-knuckle fight between consumer product majors Hindustan Unilever and Procter & Gamble is inevitable in the market. HUL has landed the first punch on Cincinnati-headquartered P&G on air, in front of millions of viewers on primetime television.In the first move of its kind by HUL, the latest on-air communication of homecare brand Rin has openly taken on rival P&G’s Tide, without the typical airbrushing or pixellation to hide the rival brand name on TV. The Rin washing powder commercial, which went on air on Friday, Feb 26,2010, claims to be a better quality product in comparison to Tide. The visual clearly shows a variant of Tide, Tide Naturals, shown against Rin with the audio saying ‘Tide se kahin behatar safedi de Rin’ (Rin gives better whiteness than Tide).
HUL is currently under sever pressure from it's aggressive competitor who are eating into market share of it's product.Market share of HUL products came down drastically for last 2 years. Company loose market share of it's power brand like LUX, Lifebuoy, Close-up and many more.The brands are facing pressure at all price point. Last year company tried to restructure it's brand portfolio and increases it's ad spend very much. Company spend more than Rs. 1,500 crore on advertisement and also practice ROADBLOCK for better brand communication. HUL slipped to number 2 company(profit wise)behind ITC Ltd.(though sale wise HUL is still number company). Reason behind slipping to number 2 was huge spending in restructuring the brands, launching new brands as well as increased advertisement spend throughout year(HUL was biggest advertiser in year 2009).
HUL is worried about the Tide variant eating Rin's share riding on superior attributes. P&G offering same kind of detergent at comparatively lower price and most importantly, Tide is neutralizing the USP(UNIQUE SELLING PROPOSITION: the point of difference)of RIN that is "whiteness" very slowly. so HUL is trying to communicate it's USP to it's consumer through this ad because what they think that consumer is in dilemma what to choose and because of low price tide is gaining market power.
Reaction-
till now, P&G has only file a case against HUL regarding new advertisement and spokeperson said that P&G will continue to gain market share by incraesing customer base through new varients and product innovation.
But in history,such advertisement has been shown only once by Horlicks. Horlicks started the direct comparative ad and got a very very aggressive reply from Complan. The current status is that Horlicks stopped the comparative ad and Complan is continuing its aggression against Horlicks. It was an unnecessary move from Horlicks which woke up a laid-back competitor like Complan. I think that in that ad war, Complan won over Horlicks ( not in sales terms but in share of noise ).
The same thing is going to happen with Rin. It is going to lose this war primarily because there was no need for a direct comparison with Tide atleast in the ads. . If you observe the ad, 22 seconds of the 30 second ad is dedicated to Tide alone. That means in around 75% of the time, the ad talks about Tide. Interestingly the ad even mentions the USP of Tide as " It has fragrance and has whitening property". Then the rest of the 8 seconds talks about Rin. So if HUL has blasted some 30 lakh in the current promo, 22.5 lakh of it was spent on promoting Tide. Why should you ever mention your competitor in your ads ???
HUL benefit-
HUL May have to withdraw ad, but they have won a war.because Madras High court has ordered P&G to reconstruct it's tide natural advertisement which says that it contains natural ingredients.P&G admitted that it's entry level detergent powder contains only natural flavors(lemon and chandan), but no natural ingredients.One of the features of ‘Tide Naturals’ is the addition of synthetic compounds to bring out the fresh smell of lime and sandal.
Fair game--
I think HUL should not think of any such movement in future. first of all they are voilating all rules. this is not allowed in india to show comparative ad.
again, HUL has seen an increase of 150 basis points in volume share of its laundry portfolio in the six-month period from August 2009 to January 2010. It touched 28.9 per cent in January 2010 from 27.4 per cent in August. Washing powder, on the other hand, grew by 160 basis points, touching 33 per cent in January 2010 from 31.4 per cent in August 2009.But P&G’s laundry business has been growing, too. For the October-December 2009 period, for instance, the volume share of its laundry business touched 16.5 per cent from 11.6 per cent in the April-June period.
market for laundry products worth Rs. 11,000 crore, in which market share of rin is 4.4% while market share of tide is just double, i.e. 8.8%.
whatever the investment has been done in developing such advertisement and airing then on tv, that can be better utilized by company by having more POP's or discount to customer. You can not win the game by showing others down. HUL has strong distribution network and rural reach, they must utilize their power brands as well as their deep distribution network to increase sale. HUL will be hit more if P&G will air any such advertisement showing Ariel and Surf Excel. they might do this very soon. so HUL need to be very vigilant and careful.
Let's hope that ASCI will take any strict action against this ad and in future no one will try to do so.
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