HLL cuts price of Clinic Plus shampoo by 20%

Withdraws buy-one-get-one-free offer

Hindustan Lever (HLL), the market leader in the Rs 1,000 crore shampoo market, has slashed the price of its best seller brand Clinic Plus by 20 per cent.

Following the new pricing strategy, it is withdrawing the promotional offer of buy-one-get-one-free on both Clinic Plus and Sunsilk shampoo bottles.

Though HLL is yet to announce a new pricing for Sunsilk, it is learnt that the company will soon follow suit.

Hindustan Lever has relaunched Clinic Plus shampoo, with a five hair-health benefit formulation. The relaunched bottles were priced at Rs 30 (Rs 37.50) for 100 ml, Rs 55 (Rs 70) for 200 ml and Rs 90 for 300 ml (117).

In response to HLL's promotional offer, arch rival Procter & Gamble cut the price of Pantene shampoo bottles by 15-20 per cent.

In mid-March, HLL announced its scheme, essentially a 50 per cent cut in its shampoo bottle prices. Sunsilk is priced at Rs 55 for a 125 ml bottle, Rs 100 for 250 ml and Rs 150 for 400 ml. P&G has not undertaken any price correction on Head & Shoulders and Rejoice.

Clinic Plus is positioned against P&G's Rejoice. Rejoice is priced at Rs 39 for a 100 ml bottle. While Head & Shoulders is positioned against Lever's Clinic All Clear.

Though the price cut is good news for consumers, it is to be seen which brand gains/lose share in the market. However, the ongoing price battle is expected to shore up shampoo volumes while taking a hit on margins.

According to sources, HLL had received an overwhelming response to its promotional offer and the company found it expensive to sustain the offer. Lever executives said, "We are not putting any fresh stocks for Sunsilk and Clinic Plus in the market towards the promotional offer."

Launched in 1988, Clinic Plus has a 25 per cent share, while Sunsilk has a market share of 15 per cent. Arch rival Procter & Gamble has a market share of over 15 per cent in value terms with its brands Pantene, Head & Shoulders and the newly launched Rejoice.

Of the Rs 1,000 crore shampoo market, sachets account for over 70 per cent. The per capita consumption of shampoos in India is estimated at 38 ml, a very low level compared with the global consumption pattern.