HLL:Segmenting the consumer
Tea market
Submitted By
Ahemed Mujthaba
Hindustan Lever limited
• Hindustan Lever Limited (HLL) is India's
largest Fast moving consumer goods company.
• HLL touches the lives of two out of three Indians
with over 20 distinct categories in home &
personal care products and food & beverages.
• HLL,a company with a scale of combined volumes
of about 4 million tonnes and sales of over Rs.
13,000 crores.
• HUL is also one of the country's largest exporters;
it has been recognised as a Golden Super Star
Trading House by the Government of India.
History
• HLL 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 for indirect employment of over
52,000 people.
• The company was renamed in June 2007 to
“Hindustan Unilever Limited”.
The case study explains how HLL
understood the primary position in the
Indian market where they got the strong
base in the beverage category.
• In 1998, HLL recorded sales of Rs.1,565
crores in the beverages category, where HLL
was the market leader in both tea and
coffee businesses.
• In 1999, HLL’s revenues from tea sales
dropped sharply to Rs.1,310 crores.
• This prompted the company to understand
the tea market more closely and study the
customer preferences.
Target Groups Of HLL
Popular Segmant Economy Segmant
Premium Segment
Popular brands:
- A1
- Tiger
Economy Brands:
- Brooke Bond Red Label
- Lipton Taaza
High End brands:
- Brook Bond Taj Mahal
- Lipton Yellow label
• Indian Market Research Bureau (IMRB)
conducted a study to evaluate the tea
consumption patterns of customers.
• That study found that tea drinking varied to
3 status of social class.
• The low income class, Middle class,
Upper income group
• The lower income group drank tea to get
energy.
• The middle class income group drank tea for
relaxation.
• The upper class income group consume tea
for social reasons.
HLL used the finding to refocus its brand to
suit the needs of each segment.
o A1 and tiger were repositioned with strong flavor so
that It would provide energy.
o Lipton taaza was relaunched in a new nitrogen
flushed pack which retains the freshness of tea
power for a long period. Taaza was also
repositioned as a product that provides relaxation.
o In the premium segment, to attract the upper-
class income group customer company roped in
leading tabla player zakir hussain to endorse Taj
Mahal brand
• HLL found nearly 30% of tea business
comes from out-of-the-home consumption
which was an untapped market for brand
players.
• Roadside tea stalls and vending machines
play a major role in the tee consumption.
• HLL found that tea shop vendors had
different needs than the end consumer.
They demand for tea which have strong
flavor and gives more number of cups
• HLL supplied quality tea to the vendor on
daily basis. HLL created a unique
distribution channel by 800-1000 cycles
deliver to the stalls.
• The company set up “Good Life” club. the
vendors who join will get incentives and
freebies for every purchase. Hence the
buyer has an incentive to purchase more of
the product.
• HLL focused on the vending machine
business.
• The company increased the number of
vending machines from the present20,000
units that are located at airports, offices,
railway stations across the country, to
25,000 units by the end of the year 2000
and 75,000 units by the end of the year
2003
• HLL tapped the growing youth market
through vending machines, by adding new
variants to plain tea and coffee like flavored
tea, cold coffee, and espresso coffee.
• Apart from these, the company introduced
Lipton iced tea which competes directly
with Coke and pepsi.
• To promote that brand, company started
sponsoring music shows and other such
youth-related events to attract youngsters.
Thank you!
