| Banga: Keeping it short-n-sweet
Mumbai, June 13: A Rs 10,000-crore company expects a tenth of its money to come from just five brands.
Called power brands because of their potential to set the cash-registers ringing, Lifebuoy, Lux, Rin, Wheel and Fair & Lovely are the fly-wheels of the Hindustan Lever sales machine. Now, they will generate sales of Rs 1,000 crore in the near future, if all goes well.
“Brand scale enables us to get a larger share of the consumer’s mind as well as a larger share of the retail shelves,” Banga said at the annual general meeting here today.
The fabulous five are part of the 30 power brands that have roared in a muted market, an indication that Lever’s strategy of focusing on performers is paying off. A measure of their significance: power brands put together account for 93 per cent of Lever’s sales in the domestic market; just the top five bring in Rs 3,000 crore.
“We will compete with price-cutting competitors by playing to our strengths in strong brands backed by superior technology and the lowest-cost supply chain,” Banga said.
The five brands in the spotlight are also among the top 10 most advertised brands in India, helping Lever derive advantages of scale from its media spend. For a company that claims to touch two in three Indians across over 20 consumer categories, the amount is awesome.
Banga conceded it might be difficult to maintain sales growth this year at rates notched up in the past. “We are quite clear that we will be able to sustain growth in the face of competition, like we have done in the past.”
Banga singled out Wheel, Lever’s largest money-spinning brand that has stolen a march over its cheaper rivals. “In a laundry market crowded with over a thousand local players, Wheel is the clear leader.”
Personal wash business was also one of the few segments to have racked up double-digit growth rates last year, accomplished in the face of aggressive price competition.
Explaining the concept of liberating brands, Banga said: “Historically, brands originated and stayed within a category product format. We, however, see our power brands as being able to occupy a unique position in the consumer’s mind and, therefore, being able to stretch into other product formats or categories.”
He cited Fair & Lovely Soap, Lifebuoy Talc and Max ice-cream as brands that have been stretched into new product categories. “All these extensions have had a promising start, and there are more to come soon.”