LUX Home Work 3

8/8/2019 LUX Home Work 3

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LUX

Lux soap was first launched in 1916 as laundry soap targeted specifically at 'delicates'. Lever

Brothers encouraged women to home launder their clothes without fear of satins and silks being

turned yellow by harsh lyes that were often used in soaps at the time. The flake-type soap

allowed the manufacturer some leeway from lye because it did not need to be shaped into

traditional cake-shaped loaves as other soaps were. The result was a gentler soap that dissolved

more readily and was advertised as suitable for home laundry use.

Lux toilet soap was introduced in 1925 as bathroom soap. The name 'Lux' was chosen as a play

on the word "luxury." Lux has been marketed in several forms, including bar and flake and liquid

(hand wash, shower gel and cream bath soap).

Lux in step with the changing trends and evolving beauty needs of the consumers, offers an

exciting range of soaps and Body Washes with unique elements to make bathing time more

pleasurable. One can choose from a range of skincare benefits like firming, fairness and

moisturising.

Lux stands for the promise of beauty and glamour as one of India's most trusted personal care

brands. Since its launch in India in the year 1929, Lux has offered a range of soaps in different

colours and world class fragrances. Lux is a beauty soap of film stars. Lux recognized the need

for a compelling message about beauty that would resonate with women of today.

From the 1930s right through to the 1970s, Lux soap colours and packaging were altered several

times to reflect fashion trends. In 1958 five colours made up the range: pink, white, blue, green

and yellow. People enjoyed matching their soap with their bathroom colours.

In the early 1990s, Lux responded to the growing trend away from traditional soap bars by

launching its own range of shower gels, liquid soaps and moisturizing bars. Lux beauty facial

wash, Lux beauty bath and Lux beauty shower were launched in 1992.

In 2004, the entire Lux range was re-launched in the UK to include five shower gels, three bath

products and two new soap bars. 2005 saw the launch of three exciting new variants with dreamy

names such as Wine & Roses bath cream, Glowing Touch and Sparkling Morning shower


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gels.

Lux has recently launched its two fruit extract variants New Lux Strawberry & Cream and Lux

Peach & Cream contain a blend of succulent fruits & luscious Chantilly cream. The most recent

addition in the brand is Lux Crystal Shine.

Study of LUX with respect to 4 Ps

a. Product

A product is anything that can be offered to a market to satisfy a need or want. Products that are

marketed include physical goods, services, experiences, events, persons, places, properties,

organizations, information and ideas.

Product Classification

LUX is a Tangible, Non Durable Good on the basis of this classification.

LUX and other soaps fall into the category of Convenience Good

Product Life Cycle

LUX Beauty Bar is in the maturity stage of its life cycle.

Some of the prominent variants

Lux Almond

Lux Orchid


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Lux Fruit

Lux Saffron

Lux Sandalwood

Lux Rose

Lux International

Lux Chocolate

Lux Aromatic Extracts

Lux Oil and Honey Glow

Lux Provocateur

LUX Beauty Soap- Form, Features, Style

With icons of beauty endorsing the brand, the offerings made by Lux have always been superior

and have always led the market, setting benchmarks for competition.

Lux has beauty offerings in two of the four market segments popular and premium, spanning

the needs of varied consumers.

Lux Toilet Soap in the popular segment has in the past years offered its consumers a range of

soaps enriched with the goodness of a variety of nourishing ingredients rose extracts, almond

oil, milk cream, fruit extracts and honey which are known to harbour the secrets of incredibly

perfect skin.

At the upper end of the market is the premium range which continues to offer specialised

skincare to its consumers in the form of International Lux a range of moisturising, deep

cleansing and sunscreen soaps.

To establish the presence of nourishing ingredients in the new Lux, a unique concept,

ingredients you can see in the soap, was born. A novel metallic substrate packaging beautifully

showcased the ingredients and its globally accepted ingredient-linked perfumes heightened the

sensorial experience.


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Each of the soaps in the range has milk cream, with the active ingredients of rose extracts, sandal

saffron, almond oil and fruit extracts. These create an experience in pampering indulgence and

luxury designed to bring out the star in every woman. This is the first time in the Indian chapter

of the brand that the beauty bar variant was being differentiated on the basis of its ingredients

rather than its perfume and colours.

Though Lux International, a premium variant of the toilet soap, launched in 1989, is

differentiated on the basis of its ingredients, the popular version, Lux Beauty Bar was always

projected as a pure and mild solution to soft and smooth skin.

Logo

Labelling

The LUX Trade Character or Logo is present prominently on the package. A novel metallic

substrate packaging showcases the ingredients, and a female model is shown on the pack. Also

displayed graphically are the key ingredients.

Packaging

The colors are different for different variants such as saffron for the saffron variant, pink for the

rose extracts etc.The Bars come in package sizes of 100g, 120g, 150 g

Lux has also launched a 45 g variant called Mini Lux priced at Rs. 5.

b. Promotion


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The great Indian brand wagon started nearly four decades ago. Great brands sometimes outlast

their ambassadors as proven by Lux which celebrated its 75th anniversary in India.

The first ambassador, Leela Chitnis featured in a Lux advertisement which flagged off the Lux

wagon. She gave way to a galaxy of stars which includes Madhubala, Nargis, Meena Kumari,

Mala Sinha, Sharmila Tagore, Waheeda Rehman, Saira Banu, Hema Malini, Zeenat Amaan, Juhi

Chawla, Madhuri Dixit, Sridevi, Aishwarya Rai and Kareena Kapoor. The last frontier for most

actors aspiring to stardom is becoming a Lux ambassador. The brand has outlasted many soaps.

From the beginning, Lux became a household name across the country.

Advertising

Advertising is any paid form of non-personal presentation and promotion of ideas, goods and

services by an identified sponsor. Ads can be a cost effective way to disseminate messages,

whether to build a brand preference or to educate people.

LUX ADVERTISEMENTS THROUGH THE AGES

Leela Chitnis in the first Lux print adverstisement featuring an indian actress

Aishwarya Rai in a print advertisement featuring Lux international


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Priyanka Chopra in the latest Lux advertisement

USP or the common thread through all the advertisements is the Presence of Movie Stars

through the ages.

The product has been positioned on the basis of REFERENCE GROUP by using a celebrity

popular at that point in time.

Some amount of attribute positioning by mentioning the various ingredients has also been done.

Lux campaigns have wooed millions of people over the decades. Popularly known as the beauty

soap of film stars, Lux has been an intimate partner of the brightest stars on the silver screen for

decades. An ode to their beauty, an announcer of their stardom, advertising campaigns on Lux

have featured film stars across the nation, promising their beauty and complexion to ordinary

women.

With top movie stars from Madhubala to Madhuri, from Babita to Karisma and Kareena having

endorsed the goodness of Lux over generations, it was natural that the brand has built equity as

the best beauty soap in India.

From the beginning Lux, by using a leading film star of the time, has fulfilled the consumers

aspirations of using beauty soaps via the rationale if its good enough for a film star, its good

for me. This later moved into a transformation role of having a bath with Lux, which transports

the user into a fantasy world of icons, film stars and fairy lands.

Change in communication strategy

However, the communication was slowly seen to be losing relevance, as consumers were

beginning to question if the film star actually used the brand.


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tools, mostly short term, designed to stimulate quicker or greater purchase of particular products

or services by consumers or the trade.

Whereas advertising offers a reason to buy, sales promotion offers an incentive to buy.

Sales promotion includes tools for

Prominent Sales Promotion Schemes Used By LUX

Lux presented 30 gm gold each to the first three winners of the Lux Gold Star offer from Delhi.

According to the promotional offer that Lux unveiled in October 2000, a consumer finding a 22-

carat gold coin in his or her soap bar got an opportunity to win an additional 30 gm gold. The

first 10 callers every week got a 30 gm gold each.

The offer could be availed only on 100 gm and 150 gm packs of Lux soap.

Lux Star Bano, Aish Karo contest: All one needed to do was buy a special promotional pack of

Lux soap. The pack comes with a special scratch card. The 50 lucky winners and their spouses

were flown down to Mumbai to live a day like Aishwarya Rai would. They could also be given

gift vouchers worth Rs 50,000 from Shoppers' Stop along with an exclusively designed Neeta

Lulla sari and a beauty makeover by Michelle Tung, Aishwarya's preferred designer and stylist.

The pice de rsistance was a dinner date with Aishwarya Rai herself.

Lux celebrated 75 years of stardom with the Har Star Lucky Star activity.

All wrappers of Lux had a star printed inside them. If the consumer found written inside the star,

any number from 1 to 5, she would get an equivalent discount (in rupees) on her purchase

from her shopkeeper. If the consumer found 75 years written inside the star, she will get a

years supply of Lux free.

Online contests:

Play the supercharged version of the hit puzzle game, Bejeweled. Create rows of 3 or more

identical stones and you could win a trip for two to a five-star Resort in Goa.


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Public Relations:

Not only must the company relate constructively to customers, suppliers and dealers, it must also

relate to a large number of interested publics. A public is any group that has an actual or

potential interest in or impact on a companys ability to achieve its objectives. PR involves a

variety of programs designed to promote or protect a companys image or its individual products.

LUX PR Activities

Press relations:

Lux has been maintaining constant communicating with its customers and potential customers,

of the various developments taking place in the brand by using press relations.

Events:

Lux celebrated 75 years of existence in a grand way by unveiling Shahrukh Khan as their latest

brand ambassador. Kareena Kapoor, Juhi Chawla, Sridevi and Hema Malini graced the event and

made it special. All the stars have endorsed Lux in the past. The event was held at the grand

Intercontinental in Mumbai.

Limited edition:

Coming up with limited edition of the brand is also a way of attracting attention towards the

brand. It creates a buzz and a feeling of urgency to try out the product and helps in promotion of

the brand. This strategy was also implemented by Lux by bringing out limited editions like

Chocolate Seduction, Aromatic Glow, Festive Glow and Haute Pink.

c. Price

If price is too high then a company may never sell a single item of it. If price is too low then one

can lose money on every sale once all of costs of doing business are considered. Therefore the

key is to price it in such way that it appears attractive to the customer as well as profitable to the

company. HUL seems to have mastered this idea. Prices of HUL are considered the most

competitive in Indian market. The main fact for this huge success story is the strategic pricing


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decision the company has adopted from time to time.

HUL always gives value for money to their consumers. It is known for its competitive pricing. It

has the advantage of quoting a reasonable price due to its economies of scale. HUL also can

quote a very competitive price due to its superior technology and optimum utilization of

inventory. It has the product range that meets the needs of all classes of consumers. It has the

products that are categorized as premium and mass products. HUL matches its prices with the

competitor who is operating in the same category. HUL also gives price offs on its products to

reward consumers who are using it for a long time and also to attract new consumers.

The price of the premium segment products is twice that of economy segment products. The

economy and popular segments are 4/5ths of the entire soaps market.

Price segments of toilet soaps

Segment Price/weight

Premium > Rs. 15 / 75 gms

Popular Rs. 8-15/75 gms

Economy < Rs. 8 /75 gms

However, recently HUL has been forced to hike its price by one rupee, to Rs17 (for 100 gm),

giving in to the pressures of inflation. This paves the way for competing soap makers like Godrej

Consumer Products (GCPL) to take price increases.

Lux has versions in all the three price segments:

Recent pricing of Lux (100 g)

Lux Crystal Shine Rs 17

Lux Festive Glow Rs 15

Mini Lux Rs 5


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d. Place

Cutting-edge distribution network

HULs distribution network is recognized as one of its key strengths -- that which helps reach out

its products across the length and breadth of this vast country. The need for a strong distribution

network is imperative, since HULs corporate purpose is to meet the everyday needs of people

everywhere.

At Hindustan Unilever Limited, distribution network is one of the key strengths that help them

reach their products across the length and breadth of this vast country. It has 2000+ suppliers and

associates 7,000 stockists and direct coverage in over 1 million retail outlets across India.

To meet the ever-changing needs of the consumer, HUL has set up a distribution network that

ensures availability of all their products, in all outlets, at all times. This includes, maintaining

favourable trade relations, providing innovative incentives to retailers and organizing demand

generation activities among a host of other things. HUL boasts of placing a product across the

country in less than 72 hrs.

The first phase of the HUL distribution network had wholesalers placing bulk orders directly

with the company. Large retailers also placed direct orders, which comprised almost 30 per cent

of the total orders collected.

Today, the goods are transferred from the factory to the company warehouses and are sent to the

distributor from there on a daily basis. From the distributor, the stock reaches the market through

daily sales. Typically, these include the salesman registering the order of a retail outlet and

delivering the goods the next day.

Recently HUL has changed its traditional way distribution and came out with a new strategy of

distribution. Its because of the change in buying pattern of the consumer due to more disposable

income. There are different channels of distribution like Modern Trade, which covers all chains

of super markets like Food World, who get the stocks directly from the company. Wholesalers

and second leg of big retail outlets called Super Value stores come under the surveillance of the

distributor along with the mass retail outlets. There is also this new concept in the HUL


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distribution channel called Kiosk. Kiosk is a small shop that sells only sachets and low priced

items (below Rs.10/-). Kiosk also does not come under the surveillance of the distributor.

In addition to the ongoing commitment to the traditional grocery trade, HUL is building a special

relationship with the small but fast emerging modern trade. HUL's scale enables it to provide

superior customer service including daily servicing, improving their range availability whilst

reducing inventories. HUL is using the opportunity of interfacing more directly with consumers

in this retail environment through specially designed communication and promotions. This is

building traffic into the stores while yielding high growth for the business.

RSNet

An IT-powered system has been implemented to supply stocks to redistribution stockists on a

continuous replenishment basis. The objective is to catalyse HULs growth by ensuring that the

right product is available at the right place in right quantities, in the most cost-effective manner.

For this, stockists have been connected with the company through an Internet-based network,

called RSNet, for online interaction on orders, dispatches, information sharing and monitoring.

RS Net covers about 80% of the company's turnover. Today, the sales system gets to know every

day what HUL stockists have sold to almost a million outlets across the country. RS Net is part

of Project Leap, HUL's end-to-end supply chain, which also includes a back-end system

connecting suppliers, all company sites and stretching right up to stockists. Powered by the IT

tools it has improved customer service, while ensuring superior availability and impactful

visibility at retail points.

For rural India, HUL has established a single distribution channel by consolidating categories. In

a significant move, with long-term benefits, HUL has mounted an initiative, Project Streamline,

to further increase its rural reach with the help of rural sub-stockists. As a result, the distribution

network directly covers about 50,000 villages, reaching about 250 million consumers.

Distribution will acquire a further edge with Project Shakti, HUL's partnership with Self Help

Groups of rural women. The project, started in 2001, already covers over 5000 villages in 52


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districts of Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is being progressively

extended. The vision is to reach over 100,000 villages, thereby touching about 100 million

consumers. The SHGs have chosen to adopt distribution of HUL's products as a business

venture, armed with training from HLL and support from government agencies concerned and

NGOs. A typical Shakti entrepreneur conducts business of around Rs.15000 per month, which

gives her an income in excess of Rs.1000 per month on a sustainable basis. As most of these

women are from below the poverty line, and live in extremely small villages (less than 2000

population), this earning is very significant, and is almost double of their past household income.

For HUL, the project is bringing new villages under direct distribution coverage. Plans are being

drawn up to cover more states, and provide products/services in agriculture, health, insurance

and education. This will both catalyse holistic rural development and also help the SHGs

generate even more income. This model creates a symbiotic partnership between HUL and its

consumers, some of whom will also draw on the company for their livelihood, and helps build a

self-sustaining cycle of growth.

SWOT ANALYSIS

SWOT analysis is a basic, straightforward model that provides direction and serves as a basis for

the development of marketing plans. It accomplishes this by assessing an organizations strengths

(what an organization can do) and weaknesses (what an organization cannot do) in addition to

opportunities (potential favorable conditions for an organization) and threats (potential

unfavorable conditions for an organization). The role of SWOT analysis is to take the

information from the environmental analysis and separate it into internal issues (strengths and

weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT

analysis determines if the information indicates something that will assist the firm in

accomplishing its objectives (a strength or opportunity), or if it indicates an obstacle that must be

overcome or minimized to achieve desired results (weakness or threat) (Marketing Strategy,

1998).

The SWOT analysis summarizes the external environmental factors as a list of opportunities and


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threats.

SWOT PROFILE OF LUX

STRENGTHS

1.Strong Market Research (door to door sampling is done once a year in Urban and Rural areas)

2.Many variants (Almond Oil, Orchid Extracts, Milk Cream, Fruit Extracts, Saffron, Sandalwood

Oil, and Honey to name a few)

3.Strong sales and distribution network backed by HLL

4.Strong brand image

5.Positioning focuses on the attractive beauty segment

6.Dynamically continuous innovation of the product and brand rejuvenation new variants

(Aromatic Glow and Chocolate Seduction and Lux White Spa body wash) and innovative

promotions (22 carat gold coin promotion Chance Hai)

7.Perceived to have high value for money (strong brand promotion but relatively lower price

which is a winning combination in the popular segment)

8.Though it is in popular segment, it is having mass appeal/market presence across all segments

(15% of the soap market captured by Lux (sales / volume)

9.Unique advantage of having access to resources and assets of HLL

WEAKNESSES

1.Lux is mainly positioned as beauty soap targeted towards women, hence it lacks unisex appeal

2.Usage rate/ wear rate is high and is generally mushy and soggy

3.Some variants like the sunscreen, International variant did not do well in the market

4.Certain advertisements like the recent one with Shah Rukh Khan resulted in controversial

interpretations of the message of the advertisement and lead to some loss of focus (of message of

the advertisements)

5.Stock out problems - replenishment time is high in semi-urban/rural areas

6.Earlier positioning as the soap of the stars has somewhat alienated the brand from a portion


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of the consumers especially in rural areas.

OPPORTUNITIES

1. Soap industry growing by 10% in India

2. Beauty segments Compounded Annual Growth Rate (CAGR) is very high. An indication of

this is that Fair and Lovelys segment is increasing at a fast rate - Lux must reinforce its presence

in the beauty segment

3. More promotions like price-offs and samples

4. Retentive strategy required as the soap segment is in the mature stage of its product life cycle

5. Line extension probably with more variants catering to the beauty segment like natural,

herbal soap etc

6. Liquid body wash is currently in the growth stage Lux should come out with more variants

in this segment

7. Level of servicing is high during sales promotion schemes this could be brought down

8. It has a large market share and hence has a strong hold over the market

THREATS

1. New entrants/local competitors/MNCs would increase the competition (Camay, P&G)

2. High internal competition Pears also catering the beauty segment (also from HLL stable)

3. Excessive dependence on beauty segment makes Lux vulnerable to changing customer tastes

4. Technological change makes the existing products obsolete Lux should focus on

technological innovations like Body Wash

5. Its in the maturity stage in the Product Life Cycle and has a threat of slipping down to decline

stage if constant reinvention of the brand is not carried out.

Competitor analysis

Internal competitors


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Lifebuoy:

Born: 1895

History: Owned by Unilever Plc., the parent company of Hindustan Unilever Ltd.

Status: Has 18% market share in the bathing soaps category, worth Rs6,000 crore

Lifebuoy landed on Indian shores in 1895, when the country was in the grip of a plague

epidemic. With its positioning as a powerful germicidal and disinfectant, and with a strong

carbolic smell, it was what the nation was looking for. But the health advantage waned over time

as competitors came out with soaps that promised both health and beauty.

It was around 2002 that the product moved from being a hard soap to a mild soap that delivered a

significantly superior bathing experience. The new soap had a refreshing fragrance and its

overall positioning changed, painting its promise of health in softer, more versatile and

responsible huesfor the entire family. The packaging was also changed: The rugged looking

packs were soon replaced with a softer pinkish cover. This was followed by a series of ads

highlighting the soaps germ-fighting benefits.

Lifebuoy had become a family soap with hygiene as its core promise. Right from the early days,

the brand has preferred effective communication to celebrities. An exception is its recent, limited

exposure campaign with cricketer Yuvraj Singh.

External Competitors

Santoor:

Santoor is the flagship brand in the Wipro Consumer Care & Lighting stable and the 2nd largest

brand of soap in India in the popular segment of the category. The brand enjoys two decades of

trust since its launch in 1986 and has grown to be counted amongst the top brands in the Country

in an intensively competitive market. Millions of women across the country have discovered the

secret of younger looking skin with Santoor. It is a truly unique soap that combines the goodness

of natural ingredients - Sandal, Turmeric and natural Skin Softeners. Sandal provides a cooling

and soothing effect that softens skin, while turmeric controls formation of skin darkening

pigments like melanin, to give skin a radiant glow. Natural Skin Softeners make skin soft and

supple. The end result, skin that is so healthy and beautiful, it lies about your actual age!


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Amongst the first brands in the Country to launch an offering with the twin ingredient benefits of

Sandal and Turmeric, Santoor has over the years moved from a purely natural ingredient based

appeal, to one of the most preferred beauty soaps of the day. Today, Santoor is one of the fastest

growing soap brands in India. Santoor is available in three variants Santoor (Sandal &

Turmeric), Santoor White (Sandal & Almond milk) and Santoor Chandan which is a premium

soap manufactured with extracts of Sandalwood oil a favourite of discerning consumers.

Cinthol:

Cinthol the popular and much-loved brand of Godrej Consumer Products Limited (GCPL)have

been a favourite of people for many years. All different soaps in its range are having feel-fresh

fragrance and high TFM index. Cinthols range covers an economic Lime-fresh, the medium

deo-soaps (spice, lime,cologne and the new sport) and a slightly expensive Cinthol-Original.

For decades, Cinthol-Original is one of the best soaps made in India. It had a simple red-cover

which attracts none! But was still able to sustain itself in the market . Godrej has now launched

the improved Cinthol range. Cinthol now offers a deo-range of soaps, talc and deo-sprays in

three exciting fragrances - Classic, Cologne and Sport in a trendy new packaging. It also offers

Cinthol fresh soap and Cinthol Regular soap with new exciting packaging. The eye-catching and

vibrant packaging symbolizes a sense of adventure, zest and action. The new Cinthol range

brings 24-Hour Confidence through Active Deo Formula, which controls body odour, Powerful

DryShield that absorbs sweat, UltraScent Technology for long lasting fragrance and Freshness

that revitalises you 24x7.The new range will be available across the country at modern retail and

other outlets and will be supported by high-impact advertising on television, print, out-door, on-

line and radio.

Vivel and Superia:

The Vivel Di Wills range is available in two variants. Its unique carton pack has been developed

by ITC's design team to provide a novel consumer experience. Vivel Di Wills Sheer Radiance is

enriched with Olive Oil, to provide skin lustre to make it radiant. Vivel Di Wills Sheer Crme is

enriched with Shea Butter, to moisturize skin to make it soft and supple.


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The Vivel range of soaps is available in four variants:-

Vivel Young Glow is enriched with Vitamin E and Fruit Infusions which help in providing

youthful glow to the skin.

Vivel Satin Soft is enriched with Vitamin E and Aloe Vera which help the skin feel beautifully

soft.

Vivel Sandal Sparkle is enriched with Sandalwood Oil and Active Clay which helps in providing

clear skin.

Vivel Ayurveda Essence is enriched with multiple Ayurvedic Ingredients which help protect skin

from germs and harsh environment, keeping it healthy and beautiful.

In the popular segment, ITC has launched a range of soaps and shampoos under the brand name

Superia. Superia Soaps enriched with natural ingredients give radiant glowing skin. Superia

Soaps are available in four variants :

1. Fragrant Flower: with the fragrance of Rose & Lavender Oil

2. Soft Sandal: with the fragrance of Sandal & Almond Oil

3. Natural Glow: with Neem & Coconut Oils

4. Healthy Glow: with Orange Oil

Market Segmentation

One cannot be everything to everyone, but can be everything to a selected few. This is the

basis for segmentation. The definition of segmentation is market segmentation is a process of

dividing a heterogeneous market into homogeneous sub units. Market segmentation is the

identification of portions of the market that are different from one another. Segmentation allows

the firm to better satisfy the needs of its potential customers.

A good market segmentation will result in segment members that are internally homogenous and

externally heterogeneous; that is, as similar as possible within the segment, and as different as

possible between segments.

Market segmentation of Lux

As mentioned above, market segmentation is done so as to satisfy the customers more efficiently.

For a brand like Lux, which has a broad customer base, this factor becomes absolutely critical.


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The segmentations are done basically on the basis of factors like:

Lux soap concentrates in the beauty soap category. A brief description of the various factors Lux

considers are:

Gender :

Lux has been, since its introduction seen as a soap for women. Lux as a brand symbolises beauty.

The Lux ads has hosted a bevy of film stars such as from Madhubala, Babita, Hema, Karisma to

Kareena all endorsing the goodness of Lux over generations. This was done in order to attract

women who wanted to look and feel like the stars they idolised.

Age :

Lux is seen to mainly attract customers that fall within the age group of 16 to 35. In order to

cater them, Lux comes up with new and interesting variants. One of the latest entrants, Lux

Crystal Shine is mainly targeted at the youth . So is the Black Provocateur which symbolises

boldness . Another example is the chocolate variant lux which was a novel idea. All these are

introduced to catch the attention of the youth.

Income :

One of the essential characteristic of an FMCG product is an affordable price which is very

important for its fast sales. Its the meeting point of demand for a product and its price that decide

whether the product will sell or not. And the demand for a product is highly dependant on the

income of the customer. Lux is not a very costly toilet soap. Its price varies from Rs.15 to

rs.20.Therefore its target market starts from the middle income group.

Positioning

Luxderived from the word luxury was launched in 1899 as a laundry soap in the UK. In

1925, the brand was extended to the toilet soap category. It was positioned as a beauty soap in


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India, and HUL has since used successful film actors of the timesuch as Leela Chitnis,

Madhubala, Hema Malini and Kareena Kapoorto endorse the product.

Luxs secret of longevity has been its consistent evolutionbe it the soap colour, packaging or

new variants, the brand has banked on innovation to keep its youthful image intact. Extending

the soap cake to a range of shower gels, liquid soaps and moisturizing bars has helped the brand

keep consumers excited and the competition at bay.

What has not changed is the consistency in its communication and its positioning. Its tag lines

if its good enough for a film star, then its good for you too to Play with beautyhave conveyed

the same message over the years. It taps into an emotion very close to humanitys basic need

social interaction. The brand has always hired celebrities when they have reached a certain

height rather than using them at the start of their careers. This has helped the customers to relate

to their idols on screen.

From being a soap for the stars, Lux has recently started positioning itself in such a way that the

ordinary woman can relate to the brand. The advertisements show not the star, but the actress in

the character of an ordinary girl or woman, which any woman can identify with. This positioning

has helped the brand in striking a chord with the target consumers.

BCG Matrix

BCG matrix method is a portfolio management tool developed by Boston Consulting Group .It is

a method based on the product life cycle theory that can be used to know what priorities should

be given in the product portfolio of a business unit.To ensure value creation ,a company should

have a portfolio of products that contains both high growth products in need of cash inputs and

low growth products that generate a lot of cash.There are 2 dimensions : market share and

market growth.Placing products in the BCG matrix results in four categories in a portfolio of a

company:

Star : High market growth and high market share

Cash cows : Low market growth and high market share

Question marks :High market growth and low market share


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Dogs :Low market growth and low market share

Innovation seems to be the main theme of the Indian soap industry in 2008. With the entry of

ITC, the stage is all set for a major tussle between the new entrant and existing players in the Rs

6,500-crore branded toilet soaps sector in India. The soap industry is seen to have a market

growth rate of about 10%. This shows that industry has a high growth rate. HUL is a market

leader in the industry and its soap Lux enjoys a market share of 17 % in India. So according to

the concept of BCG matrix any product which has high market growth and market share is

classified as STARS. The major objective of products coming in Stars is to maintain their high

market share. HUL comes up with various variants in LUX quite frequently in order to maintain

their position.


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Ansoff model for Lux:

The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth

strategy. Ansoffs product/market growth matrix suggests that a business attempts to grow

depend on whether it markets new or existing products in new or existing markets.

Current Product New Product

Current Market Market Penetration Strategy

Attract users : Gold coin offer

Gold coins hidden in soaps selectively

100 gm contained 3-gm gold coin

150 gm contained 5-gm gold coin

Product Development Strategy

Product Reformulation: Introduced variants with different ingredients Honey, chocolate,

strawberry, etc

Product feature addition:Lux Crystal shine (with sparkles)

Product line extension : addition of small size (Rs 5/-,45 gms)

New

Market Market development Strategy

A new variant called Lux Nalangu pindi was introduced in Andhra Pradesh.

Diversification Strategy

Related Diversification : Introduction of body wash

Lux has been in this industry for more than 75 years. It has constantly applied various strategies

to survive and succeed in the industry. Some of the recent ones are mentioned in the above


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model.

Recommendations

Lux has been following a trend of constant product development and improvement since its

inception. This has always proved to be successful for the brand. Therefore a similar strategy can

be followed in the future: Lux can go for a high end Ayurvedic variant. Lux has been associated

with beauty and feminine grace till now. In the present day consumers are into naturopathy and

believe in natural treatments like the Ayurveda. Keeping with this trend, Lux can foray into

Ayurvedic variant. HUL already has Hamam soap in this category. But it is a low priced soap

whose target audience is quite different from Lux. This new variant can provide the current

customers of Lux with a blend of both class and natural goodness.

Todays children are tomorrows customers. Children have a major share in the decision making

process of consumers. Therefore it will be a viable decision to launch Lux Kids Special soap. By

doing this Lux can catch them young and get a loyal customer base from them. This variant

can be in vibrant colours as opposed to the soft colours used currently. The fragrances can also

be made more fun and vibrant.

Lux has high penetration in the urban and semi urban areas. However, it has only 19.8%

penetration in the rural areas. The rural market has great untapped potential, which HUL has not

concentrated on till now. Consumers are becoming more and more aware and undergoing a surge

in disposable income. This huge opportunity can be explored by Lux. HUL already has a strong

distribution channel in almost all regions. What is needed here is a change in the communication

strategy to reach out to the rural customers. The various channels of communication should be

made more appealing to this rural segment of customers

LUX Home Work 3

Documents

Transcript of LUX Home Work 3