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Abstract

The case discusses the entry and growth of Hindustan Lever Limited (HLL) in the network marketing segment. It deals with various factors, both internal and external to the company that led to the formation of Hindustan Lever Network (HLN) marketing venture. The traditional distribution channel adopted by HLL spelled success for the company for many decades and was successfully replicated by many competitors. But in the late 1990s and early 2000s, the company began to lose its strong foothold in the Indian market due to the influx of other foreign players and a number of low priced local rivals. This initiated the search for new avenues of growth and led to the formation of HLN. The company wanted to take advantage of the flourishing direct selling market, which was growing at the rate of 25% year on year. Besides, the company hoped that the push strategy that was inherent to this format of marketing would help to boost the sales of many of its ailing brands like Ayush. The case discusses in length the structure, product portfolio, compensation plans and pricing strategies adopted by HLN. In this respect, it also aims to draw comparisons with other MLM (multilevel marketing) brands to study the positioning of HLN vis-a-vis its competitors. The important conclusion that can be drawn is that the success of HLN in network marketing will depend on how it manages the various aspects of this distribution segment, which is unchartered territory for it.

Teaching and learning

This item is suitable for postgraduate courses.
Location:
Industry:
Size:
Large
Other setting(s):
1996-2004

About

Abstract

The case discusses the entry and growth of Hindustan Lever Limited (HLL) in the network marketing segment. It deals with various factors, both internal and external to the company that led to the formation of Hindustan Lever Network (HLN) marketing venture. The traditional distribution channel adopted by HLL spelled success for the company for many decades and was successfully replicated by many competitors. But in the late 1990s and early 2000s, the company began to lose its strong foothold in the Indian market due to the influx of other foreign players and a number of low priced local rivals. This initiated the search for new avenues of growth and led to the formation of HLN. The company wanted to take advantage of the flourishing direct selling market, which was growing at the rate of 25% year on year. Besides, the company hoped that the push strategy that was inherent to this format of marketing would help to boost the sales of many of its ailing brands like Ayush. The case discusses in length the structure, product portfolio, compensation plans and pricing strategies adopted by HLN. In this respect, it also aims to draw comparisons with other MLM (multilevel marketing) brands to study the positioning of HLN vis-a-vis its competitors. The important conclusion that can be drawn is that the success of HLN in network marketing will depend on how it manages the various aspects of this distribution segment, which is unchartered territory for it.

Teaching and learning

This item is suitable for postgraduate courses.

Settings

Location:
Industry:
Size:
Large
Other setting(s):
1996-2004

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