Subject category:
Marketing
Published by:
IBS Research Center
Length: 14 pages
Data source: Published sources
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Abstract
This is a Spanish translation of the case '505-122-1'. Hindustan Lever Ltd, (HLL) Unilever's subsidiary was one of the main detergent players in India. By launching a price war, HLL overcame the competition from a host of local players like Nirma. But in 1991, HLL had to face tough competition from Procter & Gamble (P&G), which adopted price cuts as a strategy to improve sales. The price cuts initiated by P&G saw HLL follow suit. As a result of the price cut, P&G recorded an increase in both value and volume shares whereas HLL could increase its volume share only. However, HLL's margins were eroded significantly and it reported a drop in profits. This price war of 2004 was significant in the timeline of the Indian detergent industry. The case, while outlining the strategies adopted by HLL and P&G in the detergent market, provides a scope for discussion on the effectiveness of the price cutting strategy.
Location:
Industry:
Size:
Sales INR10,000 crores
Other setting(s):
1970-2005
About
Abstract
This is a Spanish translation of the case '505-122-1'. Hindustan Lever Ltd, (HLL) Unilever's subsidiary was one of the main detergent players in India. By launching a price war, HLL overcame the competition from a host of local players like Nirma. But in 1991, HLL had to face tough competition from Procter & Gamble (P&G), which adopted price cuts as a strategy to improve sales. The price cuts initiated by P&G saw HLL follow suit. As a result of the price cut, P&G recorded an increase in both value and volume shares whereas HLL could increase its volume share only. However, HLL's margins were eroded significantly and it reported a drop in profits. This price war of 2004 was significant in the timeline of the Indian detergent industry. The case, while outlining the strategies adopted by HLL and P&G in the detergent market, provides a scope for discussion on the effectiveness of the price cutting strategy.
Settings
Location:
Industry:
Size:
Sales INR10,000 crores
Other setting(s):
1970-2005