AXE PROJECT REPORT GROUP 4 PGHR _Final

HUL: Axe deodorant Group 4

[MARKETING 2011 PROJECT HINDUSTAN UNILEVER: AXE DEODORANT] SUBMITTED BY: Anuradha Ghosh 11PGHR11 Urshila Thacker 11PGHR57 Gunjan Kumar 11PGHR20 Peeyush Pasbola 11PGHR37 Sidhesh Kamath 11PGHR22 Tanuj Srivastava 11PGHR56

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EXECUTIVE SUMMARY Hindustan Unilever Limited (HUL) is India's largest fast moving

consumer goods company owned by the European company Unilever. The Anglo-Dutch company Unilever owns a 52% majority stake. HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using Its products. The report deals with our survey on AXE deodorant for men. The first section comprises an introduction of the project and and the methodology adopted. The second section deals with the SWOT and PEST analysis of the product, followed by the application of the Porter’s five forces model to the industry. The third section deals with the positioning strategy of AXE in the Indian market. The SWOT analysis came up with a opportunities that could further build on AXE’s strength. AXE’s nation-wide presence and distribution network, will make it easier to spread awareness about new AXE products in i n different segments of hair gels, shaving foams, shaving gels and after shaves. Threats were also analysed, as most competitive brands are going in for mimetic and normative isomorphism in the advertising for 2


their products. Most advertisements are similar, showing the attraction of the fairer sex. Our survey concluded that this form of advertisement was an attention grabber in villages, small towns but the urban city folk do not get carried away by these advertisements. However, this is a threat because rural India is fast becoming a market for deodorants and has huge potential. Our inference is that AXE body sprays and other products lead the men’s grooming industry. 49% of our respondents favoured AXE over other brands, but surprisingly they did not believe in the AXE effect, which is what the marketers want the people to believe in. 35% of those who favoured AXE, did so because of the persona that AXE exudes, the ruggedness and outdoorsy feel. It makes the men feel and be macho. We have also discussed the positioning strategy of AXE in the India context. A top marketing executive at HUL has described AXE as a product that you grow old with.

AXE is targeted at the younger crowd, but that doesn’t imply that people who have used it all their life will stop using it after they touch 30 or 40. AXE can introduce new products like antiperspirants, which is becoming a craze now, but with respect to AXE 3


deodorant, HUL should just reap the benefits of its marketing strategy and positioning and do nothing about it. AXE still enjoys market majority.

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ACKNOWLEDGEMENT We would like to thank Dr.Kapil Kanwil, our professor for the subject Marketing Planning for helping us gain a deep understanding of the subject and giving us the opportunity to conduct this project on studying and analysing the market strategies of a chosen product . He has been a constant source of inspiration to all of us and has motivated us to perform to the best of our abilities. Without his support and guidance the completion of this project would not have been possible. Also, with tremendous experience he brings to the class, we have been able to develop a solid foundation to our course.

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INDEX

Serial No 1

Topic Introduction

Page No. 6-8

1.1

How levers carved a niche in the market

1.2

SWOT analysis of AXE deodorant

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1.3

PEST analysis of AXE deodorant

12-13

Five Forces Model

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Application of FIVE forces model to INDIAN context for AXE deodorant

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2 2.1 2.2

8-10

18-22

Findings of the survey

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Positioning Strategy of AXE

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3.2

Should there be a change in the positioning strategy in the present context?

3.3

How to make the AXE effect more effective?

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3.1

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Foresights in the future of AXE 4

Conclusion

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References

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SECTION 1 INTRODUCTION Hindustan Unilever Limited (HUL) is India's largest fast moving consumer goods company owned by the European company Unilever. The Anglo-Dutch company Unilever owns a 52% majority stake.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 15,000 employees and contributes to indirect employment of over 52,000 people. The company was renamed in June 2007 as “Hindustan Unilever Limited”. Hindustan Unilever's distribution covers over 1 million retail outlets across India directly and its products are available in over 6.3 million outlets in the country, nearly 80% of all retail outlets in India. The company claims that two out of three Indians use its many home and personal care products, food and beverages.

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HUL: Axe deodorant Group 4 HUL is the market leader in Indian consumer products with presence in over 20 consumer categories such as soaps, tea, detergents and shampoos amongst others with over 700 million Indian consumers using its products. Sixteen of HUL’s brands featured in the ACNielsen Brand Equity list of 100 Most Trusted Brands Annual Survey (2008).According to Brand Equity, HUL has the largest number of brands in the Most Trusted Brands List. It has consistently had the largest number of brands in the Top 50, and in the Top 10 (with 4 brands). The company has a distribution channel of 6.3 million outlets and owns 35 major Indian brands. Its brands include: •

Kwality Wall's ice cream

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Knorr soups & meal makers

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Lifebuoy

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Lux

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Pears,

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Breeze,

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Liril,

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Rexona,

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Hamam and

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Moti soaps,

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Pureit water purifier,

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Lipton tea,

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Brooke Bond (3 Roses, TajMahal, Taaza, Red Label) tea,

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Bru coffee,

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Pepsodent and

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Close Up toothpaste and brushes, and

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Surf, Rin and Wheel laundry detergents,

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Kissan squashes and jams,

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Annapurna salt and atta,

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Pond'stalcs and creams,

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Vaseline lotions,

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Fair and Lovely creams,

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Lakmé beauty products,

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Clear, Clinic Plus, Clinic All Clear,

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Sunsilk and Dove shampoos,

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Vimdishwash,

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Ala bleach,

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Domex disinfectant, 8


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Modern Bread,

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Axedeosprays and

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Comfort fabric softeners.

Our chosen product for survey and analysis is AXE DEODORANT for men.

Competitive Landscape of Deodorant Market In India Deodorant sales are led by Hindustan Unilever Ltd, with the Axe brand; Paras Pharmaceuticals Ltd, with Set Wet; and McNroe Chemicals Pvt Ltd, with Wild Stone. These three manufacturers held a combined value share of over 49% in 2010. The leading brand is Axe, with 25% of value in 2010, followed by Set Wet and Wild Stone with 10% and 9%, respectively. Axe is a well-established and widely distributed brand, and is heavily supported by advertising across India.

HISTORY OF AXE

Axe was launched in France in 1983 by Unilever. It was inspired by another of Unilever's brands, Impulse. Unilever were keen to capitalize on Axe's French success and the rest of Europe from 1985 onwards, later introducing the other products in the range. Unilever were unable to use the name Axe in the United Kingdom and Ireland due to trademark problems so it was launched as Lynx.[1] The European launch of the deodorant was followed by success in Latin America and moderate impact in Asia and Africa. In the new millennium, the brand has launched with great success in the United States and Canada. The company has also consolidated its deodorant portfolio by migrating other overlapping male deodorants into the Axe brand such as South Africa's Ego brand

INTRODUCTION TO AXE AS A PRODUCT

Axe (or Lynx in the UK, Ireland, New Zealand, Australia & China) is a brand of male grooming products, owned by the British/Dutch company Unilever and marketed towards young males. The scents range from popular scents to the least common scent called lemon-lime. Although Axe's lead product is the fragranced aerosol deodorant body spray, other formats of the brand exist. Within underarm care the following are available: deodorant aerosol body spray, deodorant stick, deodorant roll-on, anti-

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HUL: Axe deodorant Group 4 perspirant aerosol spray (called Axe Dry), and anti-perspirant stick (also called Axe Dry). From its launch, the yearly fragrance variant has played a key part in the success of the brand by offering something new each year. The type of fragrance variants have evolved over time. From 1983 until about 1989, the variant names were descriptions of the fragrances and included Musk , Spice, Amber , Marine, and Oriental. From 1990 until 1996, geographic names for fragrances were used, such as Africa, Alaska, Java, Nevada, and Inca. From 1996 to 2002, Axe took inspiration from Calvin Klein fragrances (also owned by Unilever at that time), using the same fragrance consultant, Ann Gottlieb, to develop the scents to launch variants, such as Dimension, Apollo, Dark Temptation, Gravity , and Phoenix . In 2009, the brand launched an 8-centimeter container called the Axe Bullet. The brand has also extended into other areas such as shower gels,aftershaves, and colognes, skin care, shampoo, and hairstyling products. Failed extensions include Barbershop [3] and razors. Most scent names usually have a shower gel to companion them and sometimes an antiperspirant/deodorant stick. The 2009 frame has a mint scent. The Axe Shampoos come in two different sizes, the regular and most seen 12 floz size and the travel or sample size of 1.7 floz that has a different top, 22oz bottles were introduced recently. Axe also ships a shower scrub tool called the Axe Detailer.

1.1 How Levers carved itself a niche in the deodorant market? No one could have imagined that deodorants would become a 1000 tonne market in India by the millennium. Not because the need was not strong, but because it has always been a monumental marketing task, converting people from an old to a new way to meet a primary human need. In this case the need was to smell good. India being a high-perspiration market and one where body odour (BO) sensibilities have always been sharp, Camouflage products has always done well and for several decades a ritualised Indian existence included the usage of a perfumed soap and talcum powder combination. So when Hindustan UniLever (HUL, previously Hindustan Lever) decided to create a market for specialised deodorants with the launch of Rexona in the mid 90’s, there was much scepticism. However, the marketing pundits were proved wrong when the market itself grew from nearly nothing in 1995 to 308 tonnes in 1997 and was 616 tonnes in 1998. Other brands joined in, but the market creator’s share stood at 57% in the initial years.

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HUL: Axe deodorant Group 4 HLL understood the Indian market. It had a gut-level understanding of the precise coordinates of the target consumer on a two variable map (conservativeliberal scale on one axis, monetary tightfistedness on the other). They also had a feel of how quickly this was changing, how the transformation could be hastened and what could play the catalyst. That they had the marketing acumen, no one doubted, because back in the mid 90’s Rexona was not the first deo to be launched. Baccorose was selling its Copper for men, with sensual ads that went ‘Before you get close, get Copper.’ This was an aerosol spray deo, priced at Rs 200 for a 150 ml can. Fa, aimed at women, was the other brand in the fray. Neither of these had made a splash. HLL realised that Copper and Fa were aiming for those who understood the deodorant as being distinct from a perfume, and also the product’s advantage over the old soap-talc combination. Those who already knew the function of a deo. They aimed the product at a market which already knew that that a deo delivers lasting BO freedom (all through the day) because it doesn’t merely mask BO, but it actually prevents it. But the majority of Indian consumers couldn’t guess it at the time, and that was why the two pioneers remained insignificant, even as the Indian talcum powder market stood firm at a huge 24,764 tonnes. HUL understood that selling a deo would require market creation and it was important to disseminate information. So HUL’s market approach was different. Research had shown that only 10 per cent of the target population had any awareness of deodorants, and a few felt that BO was their own private business! HLL understood that pitching a deo on a high-sensuality platform at this stage could botch up its chances for a wide consumption base. And that was what the company wanted: to enter the bathroom cabinet of the relatively conservative Indian household. So that was why the advertising had a good, clean, family setting – to sell the primary benefit. They knew that the time to do a ‘close-up’ of the product benefits would come only later, once it had achieved a multi-generation approval. HUL was keen on ‘step-up ladder pricing’. It wanted to attract people beyond the Indian elite. The latter in any case were already tuned in to using products like Old Spice, Denim, and other foreign brands. Thus it was the uninitiated Indian consumer that HLL wanted to target, a consumer who was contentedly using the soap/talc combination, a consumer who used perfume only occasionally. Fragrance sensitivity was an important factor as this was often a matter of consensus between the husband and wife. That was why it chose the brand: Rexona. Rexona was known in India as a soap although globally it was an antiper spirant brand. Actually that was what HUL wanted to launch firs the Rexona anti-perspirant. But they realised that an anti-perspirant would baffle people even more than a deo. Besides, an anti-perspirant doesn’t really stop all perspiration, and in a hot sweaty environment that India had, there was a risk that it would be labelled as a non-performer. The pitch: a deo that lasts long is worth more per application than talc. 11


1.2 SWOT Analysis of AXE Deodorant •

STRENGTHS

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High Brand Equity – the ‘AXE effect’ is a well known phrase amongst men

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As compared to other imported Deodorants and Perfumes, AXE enjoys the strong distribution of Hindustan Unilever in India

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In India, the Marketing team doesn’t have the added responsibility of making commercials, hence can focus on other aspects.

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Innovative marketing strategy for instance “Call me Campaign”

WEAKNESSES –

Clichéd advertisement concepts – the target segment is composed of educated people who are not swayed over the concept of attracting many women by using AXE

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Priced on the higher side, AXE is considered as more of a luxury than an item of daily use.

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Based on the customer analysis “The Axe Effect does not exist

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Chauvinistic Publicity

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Old designing in packaging

OPPORTUNITIES –

Men’s grooming industry is a large market – around $2.5 billion

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AXE has a strong brand identity to tap into other product lines such as Hair gel, shaving gel, creams etc. targeted at men

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AXE can look to launch smaller SKU’s or products like shaving gel for mass market.

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AXE’s women brand – LYNX, has a huge potential in India.

THREATS –

Other players like Set Wet,Zatak, Wild Stone and other imported deodorants and perfumes along with local brands.

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Dilution of Brand Identity since every competitor has similar concept advertisements.

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Prices are sensitive to trade policies.

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1.3 PEST Analysis of AXE Deodorant •

POLITICAL Considerations: • Stability of political environment. • Government policies on trade (custom duties etc.) • Government stand on marketing ethics • Government policy on economy • Government view on culture and religion • Government involvement in any trade agreements

For AXE: –

Government policy on trade. •

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Government stand on advertising •

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The custom duty on imported perfume is around 27%

The pattern for almost all deodorant advertisements is based on sexual innuendo – girl attraction to boy spraying deodorant AXE advertisements are built on this theme. (Axe especially generally imports its ads and doesn’t do indigenous commercials). ASCI may not allow such advertisements to be aired sometimes.

ECONOMICAL Considerations: • Interest rates. • The level of inflation. (this directly affects purchase as well as profit margins as costs increase and then companies have to decide whether to pass this cost to the consumer or suffer a drop in margin) • General state of the economy – a well to do economy is a good place to have demand based/luxury products. For AXE: – AXE is not a need based product but is luxury product. – When economy goes down (inflation rises) then people cut down consumption of luxury products first. – Priced at around Rs 135 for a 150 ml bottle.

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HUL: Axe deodorant Group 4 –

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Inflation in India is around 9%

SOCIAL Considerations: • Dominant religion. • Attitudes towards foreign products and services. • Roles of men and women within society. • Social Norms. For AXE: – AXE is basically a deodorant – the hot and humid climate of most of India makes the use of a deodorant socially acceptable. However Axe is positioned as a product aiding courtship, or boys being more attractive to women. The television commercials that convey this message also sometimes tend towards the unacceptable side. – Indian Culture is fairly conservative, however since the product is targeted towards the younger generation which is more progressive and more ‘westernized’ , the product and the message that it conveys is accepted – Male grooming is an industry booming in India, and the concept of male grooming is becoming more and more acceptable with products like fairness creams for men no longer a stigma.

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TECHNOLOGICAL Considerations: • Does technology allow for products and services to be made more cheaply and to a better standard of quality? • Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc? • How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc? • Does technology offer companies a new way to communicate with consumers? For AXE: – –

One of the most relevant aspects of technology is Communication. Internet is one of the biggest platform via which AXE communicates to the consumers. 15

HUL: Axe deodorant Group 4 –

Social network AXE page has over 1.5 million fans on Facebook. The AXE angels club has around 1.8 million fans Technology (internet) is harnessed to create virtual engagement of the product with the consumer. •

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SECTION 2 FIVE FORCES MODEL

Porter’s 5 forces model is one of the most recognized frameworks for the analysis of business strategy. Porter, the guru of modern day business strategy, used theoretical frameworks derived from Industrial Organization (IO) economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. This theoretical framework, based on 5 forces, describes the attributes of an attractive industry and thus suggests when opportunities will be greater, and threats less, in these of industries. Attractiveness in this context refers to the overall industry profitability and also reflects upon the profitability of the firm under analysis. An “unattractive” industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching “pure competition”, from the perspective of pure industrial economics theory. Despite its limitations in the technology enabled business era, Porter’s 5 forces model is still the leading framework for the analysis of industry attractiveness. The limitations of the Porter’s 5 forces model induced the introduction of the 6th Force, namely the Complementors. This model comprises of an analysis dependent on 4 entities external to the firm and the fifth force: the Industry structure. These forces are defined as follows: 1. The threat of the entry of new competitors 2. The intensity of competitive rivalry 3. The threat of substitute products or services 4. The bargaining power of customers 5. The bargaining power of suppliers

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The 5 forces model has been developed as a response to the SWOT analysis of competitiveness of firms, and has continued to remain the most popular framework in business strategy.

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2.1 FIVE FORCES MODEL APPLICATION TO AXE DEODORANT Threat from new entrants (High)

Axe products face stiff competition from new entrants such as Zatak, Denver, Park Avenue, Old Spice and others. The other brands have come up with strategies that exhibit mimetic isomorphism. In the 350 crore market of Deodorant industry Axe has, while Hindustan Unilever leads the pack with Axe (25 per cent market share), other large players in the market place are Henkel (Fa 8.5 per cent) and CavinKare (Spinz and Hi5, 7.4 per cent). Then there is the long tail: Paras Pharmaceutical’s Set Wet Zatak, Mankind Pharma’s Addiction, TTK Healthcare’s Eva, Godrej’s Cinthol, Reebok, Adidas, Nivea and a host of others. You could call them the armpit warriors.

Threat of Substitutes (Low) Deodorant industry is booming and is currently a 350 crore market.

AXE is creating value for itself as an aspirational product in the male grooming segment. Customers have been signing up for wake up calls. Also contrary to popular opinion, not just the urban male, but even in rural areas, there are takers for the same. Smelling good is totally profitable. AXE has established itself as a youth icon, right from the packaging to the substance. Substitutes like Talcum Powders (leave residues), perfumed soaps (dries up skin and makes bathing mandatory) have low demand. Bargaining power of Suppliers (low)

Unilever is a very big and strong business entity, which cannot be easily influenced or forced in its decisions by suppliers, as it is not dependent on one supplier. As stated in the case Unilever has no problem with supply of raw materials as is able to operate in 100 markets with a variety of products without run short of raw materials. Bargaining power of Buyers (High)

Indian men have increasingly become conscious about their looks and how they smell, thus there is a continuous demand from them for different fragrance they use. Therefore Axe has been coming up with different fragrances which are differentially prices thus catering to the demands from its customers. 18

HUL: Axe deodorant Group 4 Competition (High)

Competition is strong in the deodorant segment, because of each brand establishing a sort of niche market for itself. Research and development in each company, combined with changing customer preferences are often influenced by external factors and provide a strong base for the industry. Masculine fragrances, after all, account for 70 per cent of total deodorant sales in the country. That explains the flurry of high-voltage campaigns by companies such as Godrej Consumer Products (GCPL), Henkel, Nivea and Elder Pharma. The Rs 350crore male deodorant market is growing at over 50 per cent per annum. The reason for this heady growth is that they have become aspirational products, says GCPL’s Chief Operating Officer R K Sinha. GCPL, which has roped in HrithikRoshan to endorse its male deodorant range, has cornered over 5 per cent market share in a short period. The company is now eyeing the No 2 slot, which is currently occupied by SetWetZatak at 9.1 per cent. There are other suitors too for that slot. Nivea Men’s deodorant, which entered the market at the end of 2007, has already overtaken Park Avenue with close to 9 per cent market share. The growth prompted two other players to enter this segment earlier this month. While Henkel launched FaMen’s Extreme with film actor BipashaBasu as its brand ambassador, Elder Health Care along with VLCC launched Fuel for Men. The choice of Basu as Fa’s most visible face is best explained by VenkatesanDeenadayalan, branch head, Mudra Chennai, the agency behind the FaMen’s Extreme campaign. “Apart from personal care/protection etc, young men now use deodorants to attract the opposite sex,” he says. CavinKare is also set to join hands with Paris-based $3.5 billion fragrance products maker, Coty, to establish Adidas brand personal care products in India. The market for male deodorants at an average price of Rs 140 per bottle is roughly 21.4 million cans per annum. And contrary to conventional wisdom, the target audience is not just the urban male. “It’s moving beyond the metros down the pop strata rapidly,” says Priya Nair, category head, oral care and deodorants, HUL, the makers of Axe. Smelling good, it seems, has never been so profitable.

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2.2 FINDINGS FROM OUR SURVEY

The survey that we conducted came up with some very fascinating results. The demographics of the people who took the survey was: When questioned how often they use a deo:

And if they have a favourite brand:

Or if advertisements had any bearing on their purchase:

When quizzed about their deo preferences: A whopping 49% of the respondents chose AXE over other brands. 20

HUL: Axe deodorant Group 4 They were also quizzed about the visibility of AXE brands. 61% were aware of AXE due to TV advertisements and most respondents feel that AXE is rightly priced at Rs135 for 150ml.

This naturally took us to the next query: “ DID THEY BELIEVE IN THE AXE EFFECT?”

And we saw that 49% did not believe in the AXE effect. So what motivates them to buy AXE? How do they identify with the product?

The excitement and ruggedness, the persona of AXE attracts the customers to it. Also 54% of our survey population, considered AXE as a cool iconic brand.

And 68% of them will recommend it to a friend!!

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SECTION 3 POSITIONING STRATEGY •

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Hindustan Unilever created the deodorant market in India from scratch in 1999 when it launched Axe. At a time when conservatives still ruled the roost, Axe was positioned as an instant babe magnet. The brand proposition was cheeky: Dude, wear Axe and women will begin to fall over you. The brand is targeted at male aged 16-25. Internationally this brand targets male aged 15-25. The brand has its brand values of Cool, Fashionable and Stylish and world over, the brand sticks to its core values. The biggest strength of AXE is the underlying message or the DNA , which is that the brand users are High on Confidence. It emphasizes the fact that for all AXE users it is the “Girls Who Make the First Move”. Axe’s biggest competitive advantage of is its complete monopoly over its brand proposition. All its campaigns revolve round the central theme of Seduction where Girl make the first move.Thus AXE has effectively positioned itself as a brand that is cool and fashionable and wearing it makes you irresistibly attractive. The brand has always ensured that its customers are constantly engaged with new fragrances and campaigns. In 2005, Axe had a high profile launch of its new fragrance CLICK and before that there was Axe Land campaign and followed by Axe-Academy then Axe Voodoo and the latest one Phenomenon. Axe is one of the rare brands that have embraced new media to the maximum extent. The brand has started its Internet based marketing initiative in India with Axe Land which involved a virtual trip to the Axe world. It is effectively targeting the youth sites like Facebook , Twitter and YouTube for its marketing and to position itself as a youth icon. Thus AXE with the changing times is trying out new avenues to position itself as the “Coolest brand to wear”

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3.1 Should there be a change in the positioning strategy in t he present context

Unfortunately for AXE there are a bevy of deodorants in the market which are challenging its dominance. The competitors have already been discussed above. So where does this leave Axe? Rivals say they have chipped away its dominance in the last few years. There have endless discussions on should AXE change its position strategy. Many have positioned their brand along similar lines — the babe magnet. To add to the confusion, all deodorants are priced between Rs 100 and Rs 150. In the last two years, another flank has opened up for Axe: Antiperspirants. Discerning buyers will, sooner or later, move towards antiperspirants. •

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Hindustan Unilever Category Head (deodorants & oral care) SrinandanSundaram is not too perturbed with the bevy of deodorants in the market. The company will not reposition or redefine what Axe represents. Axe will continue to position itself as the ‘cool iconic youth brand’, and the young male (18-25 year olds) will remain the target for Axe. According to Sundaram, AXE should always be talked in the same line as other young and trendy products. When that fails then the positioning strategy might have to be changed. The company believes that just by targeting the younger generation does not mean the older people won’t use it at all. “ Compare Axe to a pair of Levis jeans — we have grown up wearing it and even when we are 30 or 40 years old, we continue to use it,” says Sundaram. Thus AXE does not need to modify its positioning strategy and its loyal customer will continue to use AXE irrespective of their age as aptly elucidated by the Levis example quoted by Sundaram. In the Indian family structure targeting the youth makes sense. Youth today form a source of knowledge in large families, and the use of novel products might trickle down to other age groups. In addition, several families often share products; so even though a young guy might buy a deodorant, the product is often used by other members in the family.

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3.2 How to Make “THE AXE EFFECT” more Effective? •

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Presently AXE is positioned as a product which is used to attract the opposite sex. HUL should focus on making its consumers wear AXE daily. Recent studies have shown that in Metros the youth uses deodorants on a daily basis and deodorants are no longer products used for special occasions. Thus AXE product for daily application is a big opportunity to give it that competitive edge in the market and also to boost its sales and profit margins. For AXE its mainstay has always been advertisements but now almost all its competitors are promoting their products on the same lines. Thus AXE needs to come up with advertisements which are unique and radically different than its competitors. In HUL discussions have been rampant on introducing an element of humor in AXE advertisements to connect it with the youth of the nation. HUL has also proposed to increase the advertisement budget for AXE products. All of these proposals should be implemented to help AXE maintain its numero uno position. Since the competition has now become a fight for the best and for the most innovative fragrance, AXE should educate i ts customers on different and new fragrances. This will also accelerate market penetration .This can be done by making advertisements which make consumers connect to the fragrance to something they relate in their daily life. AXE should focus more on the digital media. Though AXE has already started using the digital media like internet and mobile for their promotions, it can use these media for creating more brand value and creating loyal customers.

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AXE’s competitors like Godrej Consumer Products and others have brought in celebrities as their brand ambassadors thus making the consumers to follow the steps of their role models. Though this is against AXE’s marketing strategy (which is that AXE does wonders to a normal average men)it should be ready to face competition from such marketing and brand valuing. To counter such advertisements they can come up with innovativemarketing strategies which directly involve their customers.

3.3 Foresights In The Future of AXE •

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With the introduction of entire range of AXE products in India which includes men grooming cosmetics like hair gels ,hair shower gels and others, it can get way ahead its competitors which are presently threatening its dominance in the market. With the growing cosmetic industry in India and especially the booming male grooming industry AXE might innovate on its products and may introduce a total makeover range for men. AXE might have to do some serious price cutting as the other products in the markets might come up with less expensive products thus turning the deodorant market competition into a price war. As there have been a number of controversies in relation to the AXE advertisements, which have been labeled as too obscene and have been forced to be taken off air, AXE might come up with an advertisement strategy catering to the Indian industries and yet maintaining its youth icon.

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CONCLUSION

Axe has a success story that is immensely difficult to emulate. One can only marvel and enjoy at the market strategies adopted by HUL for making a success in a conservative society like India. It has got everything perfect for its success; it got its segments correct, with exemplary targeting and a positioning strategy which has helped it maintain in dominance for the past 12 years. The marketing strategies of AXE are very novel and unique. The SWOT and PEST analysis of AXE gave us an insight into how AXE created its brand value and what are the threats it faces in the current booming male cosmetics industry. The 5 Forces model further confirmed that the dominance of AXE as number one is indeed threatened. Though AXE has several advantages of a strong distribution channels of HUL, its competitors are leaving no stones unturned. The present market of male deodorant has a penetration rate of 2-3%, and this has attracted a dozen of deodorants in the market, compelling AXE to introduce innovative marketing strategies to fight off the competition. Finally we studied the positioning strategy of AXE and in spite of the competition HUL has no plans to reposition it in the market. As for now AXE does not has much to fear but how the future unfolds is yet to be seen.

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REFERENCES •

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Marketing Management by Philip Kotler, Kevin Keller, Abraham Koshy, Mithileshwar Jha. http://en.wikipedia.org/wiki/Axe_%28grooming_product%29 http://www.hul.co.in/brands/personalcarebrands/Axe.aspx http://drypen.in/case-studies/axe-deodorants-axe-call-me-campaign-and-strategiccommunication-challenges.html http://www.slideshare.net/anafts/plan-marketing-axe http://www.business-standard.com/india/news/can-axe-retain-its-effect/415654/ http://articles.economictimes.indiatimes.com/2008-05-28/news/27728088_1_unilever-harishmanwani-vindi-banga

http://marketingpractice.blogspot.com/2007/07/axe-axe-effect.html

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AXE PROJECT REPORT GROUP 4 PGHR _Final

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