HUL, the leading FMCG gaint in
extended its Lux brand to deo. In recent
times, one can observe huge brand activity in deo market, with new brands being
launched, which witness growing market along with competition. The deo market
is estimated to be around 1300 crores growing at 40%. Growth in this segment
can be attributed to growing population and increasing spending on personal
care products among youth.
HUL is a pioneer in creating deo segment with its Axe brand and still want to main its leadership. It has also got anti perspiration deo Sure and Dove. Lux brand has soaps and shampoos, bodywash. Despite of that why HUL extends Lux to deo.
The main reason could be to avert competition by launching its product and to retain its market share. Moreover, HUL might be worrying about the deo launches by its competitors in this category. HUL might be of the view that LUX huge equity will help boost the sales of the new brand. But it has to remember that its previous experiences of brand extension to deos are not successful. Instead of diluting brand equity of existing brands, the company can focus on launching new brands.