Fairness Wars

Details

Themes : Marketing Mix
Period : 1999-2001
Organization : Cavin Care Ltd, HLL
Pub Date : 2001
Countries : India
Industry : FMCG

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Case Code : MKTG009
Case Length : 7 Pages
Price: Rs. 200;

Tools

"The saffron and milk combination in Fairever clicked with the people because they were familiar with the goodness of the products. And we changed the rules by introducing saffron which had never been used in fairness creams in the past."

- C.K. Ranganathan, CEO & MD, CavinKare Ltd

"Fair & Lovely continues to grow in a healthy manner. Only two out of ten Indians use face creams. That means strong growth prospects for all brands."

- A HLL Spokesperson

Fairness Wars: Who's The Fairest of Them All?

In June 1999, the FMCG major Hindustan Lever Ltd. (HLL)¹ announced that it would offer 50% extra volume on its Fair & Lovely (F&L) fairness cream at the same price to the consumers.² This ve was seen by industry analysts as a combative initiative to prevent CavinKare's³ Fairever from gaining popularity in retail markets. HLL's scheme led to increased sales of F&L and encouraged consumers to stay with F&L and not shift to the rival brand. In December 1999, Godrej Soaps⁴ created a new product category - fairness soaps - by launching its FairGlow Fairness Soap.

The product was successful and reported sales of more than Rs. 700 million in the first year of its launch. Godrej extended the brand to fairness cream by launching FairGlow Fairness Cream in July 2000. By 2001, CavinKare's Fairever fairness cream, with the USP of 'a fairness cream with saffron' acquired a 15% share, and F&L's share fell from 93% (in 1998) to 76%. Within a year of its launch, Godrej's FairGlow cream became the third largest fairness cream brand, with a 4% share in the Rs. 6 billion fairness cream market in India.

The other players, including J.L. Morrison's Nivea Visage fairness cream and Emami Group's Emami Naturally Fair cream, had the remaining 5% share. Clearly, the fairness cream and soaps market was witnessing a fierce battle among the three major players - HLL, CavinKare, and Godrej - each trying to woo the consumer with their attractive schemes.

Background

In 1975, HLL launched its first fairness cream under the F&L brand. With the launch of F&L, the market, which was dominated by Ponds (Vanishing Cream and Cold Cream) and Lakme (Sunscreen Lotion), lost their dominant position. The dominance of HLL's F&L continued till 1998, when CavinKare launched its Fairever cream in direct competition with F&L.

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1] HLL, a 51.6% subsidiary of Unilever Plc, was the largest FMCG company in India, with a turnover of Rs114 billion in 2000. The company's business ranged from personal and household care products to foods, beverages, specialty chemicals and animal feeds.
2] Initially HLL offered Rs. 5 off on F&L. This was followed by 20% extra volume for the same price, which was later increased to 50% extra volume.
3] In 1983, C.K. Ranganathan (Ranganathan) established Chik India, with an investment of Rs.15000. Chik India was later renamed Beauty Cosmetics, and then went public in 1991. In 1998, the company was renamed CavinKare Ltd.
4] Godrej Soaps' major product lines were toilet soaps and detergents, industrial chemicals, cosmetics and men's toiletries. It had interests in several other businesses such as real estate, agro produce, etc through its subsidiaries. In April 2001, the consumer goods business of Godrej Soaps was demerged into a new company. The chemicals division remained with Godrej Soaps, with the new name, Godrej Industries.