Harvard Case - Should Unilever Launch Shampoo Hair Color in India?
"Should Unilever Launch Shampoo Hair Color in India?" Harvard business case study is written by Shraddha Puri, Sandeep Puri, Siddhant Puri. It deals with the challenges in the field of General Management. The case study is 10 page(s) long and it was first published on : Jan 25, 2024
At Fern Fort University, we recommend Unilever proceed with caution in launching a shampoo hair color product in India. While the market opportunity is significant, a comprehensive and strategic approach is crucial to ensure success. This includes a deep understanding of the Indian consumer, a robust marketing strategy, and a commitment to responsible innovation that aligns with Unilever's sustainability goals.
2. Background
Unilever, a global consumer goods giant, is considering launching a shampoo hair color product in India, a rapidly growing market with a large and diverse population. This decision comes at a time when the Indian hair color market is experiencing significant growth, driven by increasing disposable incomes, rising awareness of personal care, and a growing preference for convenient and affordable solutions.
The case study focuses on Unilever's internal debate, highlighting the potential benefits and risks associated with entering this market. The main protagonists are the two senior executives, one advocating for a cautious approach due to the complexities of the Indian market, while the other champions the opportunity for growth and expansion.
3. Analysis of the Case Study
To analyze the case, we can utilize a SWOT analysis to understand Unilever's internal strengths and weaknesses, as well as the external opportunities and threats presented by the Indian market.
Strengths:
- Strong brand recognition: Unilever boasts a portfolio of trusted and well-established brands in India, such as Sunsilk and Dove.
- Extensive distribution network: Unilever has a well-developed distribution network across India, ensuring wide reach and accessibility.
- Experience in emerging markets: Unilever has a proven track record of successfully navigating emerging markets, leveraging its global expertise.
Weaknesses:
- Limited experience in hair color: While Unilever has a strong presence in personal care, its experience in hair color is limited, requiring significant investment in product development and manufacturing.
- Potential cultural sensitivities: India has a diverse cultural landscape, and hair color preferences can vary significantly across regions. Unilever needs to carefully consider these nuances.
Opportunities:
- Growing demand for hair color: The Indian hair color market is experiencing rapid growth, driven by increasing disposable incomes and changing consumer preferences.
- Potential for innovation: Unilever can leverage its expertise in product development to create innovative and convenient hair color solutions tailored to the Indian market.
Threats:
- Intense competition: The Indian hair color market is highly competitive, with established local and international players vying for market share.
- Regulatory landscape: India has strict regulations regarding cosmetics and personal care products, requiring careful compliance.
Additionally, we can apply Porter's Five Forces framework to assess the competitive landscape:
- Threat of new entrants: The market is relatively easy to enter, posing a threat from new players.
- Bargaining power of buyers: Consumers have numerous choices, giving them significant bargaining power.
- Bargaining power of suppliers: The market is dominated by a few large raw material suppliers, potentially limiting Unilever's negotiating leverage.
- Threat of substitutes: Natural hair color products and traditional methods offer alternative solutions, posing a threat to Unilever's market share.
- Rivalry among existing competitors: Intense competition among established players creates pressure on pricing and innovation.
4. Recommendations
Unilever should proceed with launching a shampoo hair color product in India, but with a strategic approach that considers the following:
- Targeted Market Research: Conduct extensive market research to understand specific consumer needs, preferences, and cultural sensitivities related to hair color in different regions of India.
- Product Development: Develop a range of products tailored to the Indian market, considering factors like hair type, color preferences, and affordability.
- Marketing Strategy: Develop a multi-channel marketing strategy that leverages digital platforms, traditional media, and influencer marketing to reach the target audience.
- Pricing Strategy: Develop a pricing strategy that balances affordability with profitability, considering the competitive landscape and consumer expectations.
- Sustainability Focus: Ensure the product is developed and manufactured with a focus on environmental sustainability, aligning with Unilever's commitment to responsible innovation.
- Strong Distribution Network: Leverage Unilever's existing distribution network and explore partnerships with local retailers to ensure wide reach and accessibility.
- Local Expertise: Build a team with local expertise and knowledge of the Indian market, including cultural nuances and regulatory requirements.
5. Basis of Recommendations
These recommendations consider:
- Core competencies and consistency with mission: The launch aligns with Unilever's core competencies in personal care and its mission to provide sustainable and affordable products.
- External customers and internal clients: The recommendations prioritize understanding the needs of Indian consumers and ensuring a smooth launch process for internal stakeholders.
- Competitors: The recommendations acknowledge the competitive landscape and emphasize the need for differentiation through innovation and targeted marketing.
- Attractiveness: The recommendations consider the potential for significant growth and profitability, recognizing the vast market potential.
Assumptions:
- The Indian hair color market will continue to grow at a steady pace.
- Unilever can successfully develop and launch a product that meets the specific needs of Indian consumers.
- Unilever can effectively manage the challenges of a competitive market and regulatory environment.
6. Conclusion
While the Indian hair color market presents a significant opportunity for Unilever, the company must proceed with caution and implement a strategic approach that addresses the unique challenges and opportunities of this market. By conducting thorough market research, developing innovative products, and leveraging its existing strengths, Unilever can successfully launch a shampoo hair color product in India and capture a significant share of this growing market.
7. Discussion
Alternative options:
- Delaying the launch: This would allow Unilever to gather more data and refine its strategy, but it could also result in losing market share to competitors.
- Focusing on a niche market: This would allow Unilever to target a specific segment of the market, but it could limit growth potential.
Risks:
- Failure to understand consumer needs: Misunderstanding the specific needs and preferences of Indian consumers could lead to product failure.
- Intense competition: The competitive landscape could make it difficult for Unilever to gain market share and profitability.
- Regulatory challenges: Navigating the complex regulatory environment could delay the launch or lead to costly compliance issues.
Key assumptions:
- The Indian hair color market will continue to grow at a steady pace.
- Unilever can successfully develop and launch a product that meets the specific needs of Indian consumers.
- Unilever can effectively manage the challenges of a competitive market and regulatory environment.
8. Next Steps
- Conduct extensive market research: Within the next 3 months, Unilever should conduct thorough market research to understand consumer needs, preferences, and cultural sensitivities in different regions of India.
- Develop product prototypes: Within 6 months, Unilever should develop and test prototypes of shampoo hair color products tailored to the Indian market.
- Refine marketing strategy: Within 9 months, Unilever should finalize its marketing strategy, including digital, traditional, and influencer marketing campaigns.
- Pilot launch: Within 12 months, Unilever should conduct a pilot launch in a select region of India to test the product and marketing strategy.
- Full-scale launch: Based on the pilot launch results, Unilever can then proceed with a full-scale launch across India.
By following this strategic approach, Unilever can increase its chances of success in the Indian hair color market while remaining committed to its sustainability goals and responsible innovation.
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Case Description
In 2023, Hindustan Unilever Limited (HUL) faced a pivotal choice: whether or not to enter India's expanding shampoo hair colour market, which was valued at US$82.72 million and projected annual growth exceeding 17 per cent until fiscal year 2026. HUL's assistant brand manager, Sabhayata Singh, grappled with the absence of a hair colour offering in HUL's portfolio. The dynamic market landscape, coupled with the absence of this product, intensified the decision-making process. HUL faced the strategic dilemma of extending existing brands or creating a new one to meet consumer demands. Pricing strategies became crucial in a market where most products were priced under half a dollar. The decision not only influenced HUL's local market position but also carried implications for potential international expansion.
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