A contrarian launch strategy

Venkatachari Jagannathan
10 May 2004

Chennai: Price cuts for detergents are no longer news. Launching a new detergent brand at a higher price point is news.

At a time when the detergent powder sector is witnessing price wars and a merger between the compact and premium segments, fast moving consumer goods (FMCG) marketing start up India Household & Healthcare Limited, is resuscitating the compact segment.

The sole Indian licencee of the Korean company LG Household & Healthcare Limited, is launching Super Enz a super premium detergent powder priced at a hefty Rs99 for a half kg pack and Rs150 for one kg — a marked departure from the Korean strategy of introducing predatory pricing strategy in consumer goods from automobiles to home electronics.

Interestingly, competing multi-national brands like Ariel from Procter & Gamble Home Products Limited, Henko Stain Champion from Henkel Spic India Limited and Surf from Hindustan Lever Limited are now priced substantially lower. Only last week, Henkel Spic slashed the price of its premium brand to Rs.75 per kg from Rs 90.

Similarly the 130gm Korean toothpaste Cliden is priced at Rs47 while competition offers 200g toothpaste at Rs.45.

“Our products are priced slightly higher than the competition only to signify their premium quality,“ says Vijay R Singh, managing director, India Household & Healthcare Limited. According to him the company will soon launch a slightly cheaper brand.