Financial Daily from THE HINDU group of publications
Friday, Jun 04, 2004
Sunsilk prices slashed up to 15%
Sindhu J. Bhattacharya
New Delhi , June 3
TAKING the shampoo price wars further, Hindustan Lever on Thursday admitted it had again slashed prices, but this time the price cut has been in the Sunsilk Natural brand. The company has effected price cuts between 7.5 per cent to 15 per cent across pack sizes, while retaining the 40 ml size at Rs 10 and also the sachets at price points of 50 paise, Re 1and Rs 2.
An HLL spokesperson told Business Line that the price cuts follow HLL's realisation that "HLL's initiatives in growing the shampoo market through low unit price single-use sachets have been extremely successful and have played a vital role in building volumes in the segment. The present strategic move is designed to offer a similar consumer value to users of shampoo bottles.''
Thus, the 125 ml pack for Rs 50 has been converted into 100 ml pack at Rs 37; the 250 ml pack at Rs 100 will now be 200 ml at Rs 70. The steepest cut has been effected in the 400 ml pack size which will now cost Rs 25 less at Rs 125.
``We have slashed prices for Sunsilk Natural shampoo and these prices are effective immediately,'' the spokesperson said but declined to attribute an immediate reason for cutting prices for the second time in two months.
Also, he did not comment on whether a similar price slash was being contemplated in the other shampoo brands of HLL - Ayush Dandruff Nashak, Clinic and Clinic All Clear.
In April, the company had slashed prices of its Clinic Plus brand by between 20 and 24 per cent while relaunching the brand in an improved formulation.
A month earlier, it had experimented with offering 50 per cent discount by launching the buy-one-get-one-free offer for shampoos but then withdrew this offer when Sunsilk was relaunched in April.
Also, even as HLL has resorted to cutting shampoo prices to boost sales, the company has decided to focus on economy pack size of Clinic Plus and will provide these pack sizes increased marketing and other support.
The economy pack sizes are 25 ml for Rs 5 in Clinic Plus. This explains why the pack size remains unchanged even after the second round of price correction.
``While delivering outstanding consumer value through such initiatives, the company is confident that with scale economies, appropriate sourcing and leveraging its established skills in supply chain efficiencies, it will be able to neutralise significant part of the cost of this initiative over time while fortifying its market position,'' the spokesperson added.
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