Hindustan Lever Ltd. (Hll) Had Been Selling

Hindustan Lever Ltd. (HLL) had been selling a cosmetic on the Indian market that was used for lightening skin. In India, light skin is associated with a higher position in society, which is important in a country where classes are very strictly segmented. As a consequence, the positioning of HLL on the market did everything to emphasize this: the advertisements highlighted the fact that lighter skin offered more employment opportunities, the messages promoted the idea that using the HLL cosmetic would result in better societal positioning etc.

This type of marketing strategy and approach brought a number of business and ethical problems. First of all, it devalued women. Second, it promoted a dangerous light vs. dark skin culture, which is racist, even if in India, this is indeed something cultural and in line- with the class division. Third, the TV commercials promoted son preference. Fourth, medical representatives pointed out that such creams actually do little to change skin complexion, given that they only act on the surface of the skin and do not affect melamine production.

These problems had not necessarily reflected on the company and its activity until a competitor appeared on the market, which changed the perception. CavinKare launched the Fairever brand that gained, in two years, as much as 15% of the market share. The focus of this company was not necessarily to emphasize the role of skin color, but the fact that one can be an achiever despite the color of one's skin.

Problem/Opportunity

How should Hindustan Lever Ltd. react to the new competition and how should it position its portfolio of products on the market in order to regain the market share it has lost?

Alternatives

1. Change the positioning of the company on the market, including its marketing strategy and advertising

2. Open up new markets and diversify the product portfolio accordingly, while retaining the skin lightening cosmetics

3. Give up on the market of cosmetics that lighten skin color, given the ethical implications, and launch new products that just make the skin healthier

Alternative Analysis

1. Change the positioning of the company on the market, including its marketing strategy and advertising

PRO: The main advantage of this alternative is that it would allow the company to be more ethical, from all perspectives. As highlighted previously, the use of lightening skin products is not necessarily the most ethical thing. It promotes a biased, racist-based culture. It also has medical implications, given the conclusions that the products do not necessarily change the skin color. Changing the positioning would potentially open up new markets and market niches.

CON: Changing the positioning would make the company too similar to its competitor, CavinKare. As a consequence, the problem of differentiation would likely appear: after all, what differentiates the company now if its message is similar to that of its competitor, pointing out to the empowering factor in detriment of the societal divisions. Another con for this alternative is that, after all, the culture in India is, indeed, based on class differentiation and on class segregation. No matter how bad it may sound, the product that the company is selling and the campaign it is employing is actually perfectly adapted to the Indian market.

2. Open up new markets and diversify the product portfolio accordingly, while retaining the skin lightening cosmetics

PRO: Opening up new markets would generate more revenue for the company. The task would be made easier by the fact that the company has already identified potential areas of action, including the urban areas and the male segment of consumers. Gaining new markets would help better balance risk from the existing market segments and give the company the opportunity to develop new business opportunities.

CON: This type of business development, despite obvious opportunities, still has high costs. At the same time, there are risks associated with it, including the fact that some of the new markets, such as the male segment of the population, could potentially just try out the new products and would, in fact, not be long-term consumers. There is always a risk that, particularly in the first years, the company would lose market share on its core product and not gain enough in the new markets. If this is a long-term thing, it could lead to financial disequilibrium.

3. Give up on the market of cosmetics that lighten skin color, given the ethical implications, and launch new products that just make the skin healthier

PRO: The company would break entirely with what is perceived, at least in the Western culture, as a degrading and racist approach. This could potentially open markets abroad in the future for the company. It could also bring to attention a new category of potential clients from India, namely those who do not look favorably to the idea of class division.