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Comparative advertising: NIR and tide fight

Comparative advertising: the NIR and pulling the tide

  April 10, 2010

My last article on the genius of advertising for Vodafone has created a classic example of a product oligopoly. In contrast with the former, this article provides the evils of oligopoly price wars do not take the form of comparative advertising.

Comparative advertising is in advertising a particular brand in direct comparison with the mark of a competitor look more attractive to consumers.

The recent announcement Rhine against the tide is a classic example of comparative advertising has been the advertising industry in India has a different level. PUH ad controversial claim that Rin was much higher that of the tide in the "money" aspect has been released on television in late February and created a stir among the industrial fraternity, media communication and consumers as well. PUH said the announcement was in retaliation for P & G Tide calls "natural" brand was natural ingredients. Direct competitors, with reason, lashing out at each other, in this case does not produce evils resulting from fierce competition and price wars were unsuccessful in an oligopoly market structure.

Consequences of price war

Hindustan Unilever and Procter & Gamble, the two giants were consumer products compete for market share recently. With the arrival of the tide in India in 1998 as a newcomer to the Indian market, had a small market share in the detergent market, but in 2004 underwent a reorganization. P & G changed the focus to middle segment, pointing to a specific clientele. Reduced the price of its Tide brand for a considerably larger market share of detergents. Initially tide behind the Rhine, but since 2007, returned sales, and its market share rose is a threat to HUL whose participation began to decline. Tide P & G introduced its 'natural' brand aimed at the segment rural, with its historical price. The 200-gram package is priced at Rs 10 400 g for R20 and the promotional offer is 250 gm Pack for just 10 rupees. This pricing strategy has proved a great success and has greatly helped the company to penetrate the Indian market and consolidate. While HUL erosion control market share, the results Quarterly company completed in December 2009 showed a decline in revenue in the segment of soaps and detergents. PUH revenue growth was reduced by 2.4% share market, Cruz was kidnapped by a competitor of P & G. It is therefore evident that Hindustan Lever, to maintain its market position detergents that comparative advertising (Mechanism of non-war prices) to outwit his rivals P & G.

But if the segment-wise revenue PUH discussed in recent years, it was found that no significant loss of revenue in the segment of detergents in terms of% of total revenues. Below is segment revenues of detergents in% of total revenues.

Detergents revenues (% of total revenue):

1999-1941

2000-40

2001-40

2002-45

2003-44

2004-45

2005-45

2006-47

2007-47

2008-49

The above statistics do not show a decline in sales in the detergents segment, except for the years 2000 and 2003.

PUH sued against P & G in the Madras High Court, while P & G's case against HUL in the Calcutta High Court. Whatever the outcome of legal proceedings, the question that arises is what effect these ads confuse consumers? A commoner who have a preference for a specific brand is doubtful loyalties or continue shopping shift. market values, secondly, the actions companies are largely affected by market sentiment and disputes such prices certainly affect actions. As we saw in March, following the announcement, the market price of HUL fell 8.75% on March 11 and 12, while most brokerage also reduced the HUL shares.

Global comparative advertising

Comparative advertising has been prevalent in countries like the U.S., where, in general, caution on disclosure of the marks of this nature was done. United States of comparative advertising is permitted, but under strict control. As in "Statistical Research, Millward Brown, there are some countries where comparative advertising is more common than others. Among them are the United States, India and the Philippines, with a 7%, while Australia, Taiwan and Brazil, with only 4%. Europe has the lowest comparative ads than any other nation. In every country, culture plays a important role in determining the mass acceptance and responses to comparative advertising

Comparative advertising – France

India has been very liberal in that the laws of advertising is concerned. There was a lot of leeway in the rules of advertising. Any company that advertises its brand must respect ASCI standards. ASCI rules indicate that compared to the competing brand must be supported by factual data and test results and must in any case of consumer deceived by comparison. Thirdly competing products can not be broken explicitly or implicitly. Of these three aspects, it seems ambiguous to PUH get a clean bill. With the two companies presented their cases against each other in their respective jurisdictions, we must wait and see the outcome of legal proceedings.

Rashmi Ponkshe

Email: @ gmail.com rash.ponkshe

About the Author

Rashmi Ponkshe

email: rash.ponkshe@gmail.com

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