This article is written by Shilpa Patil pursuing Diploma in Labour, Employment and Industrial Laws (including POSH) for HR Managers from LawSikho. The article has been edited by Zigishu Singh (Associate, LawSikho) and Smriti Katiyar (Associate, LawSikho).
The company and products
Hindustan Unilever Limited (HUL) is India’s largest fast-moving consumer goods company divided into four business segments such as home care, personal care, foods and refreshments. Personal products include skincare (excluding soaps), oral care, hair care. Beverages include tea, coffee. The Food products include staples (atta, salt, bread). Culinary products include (tomato based, fruit-based products), Others include chemicals and water business. HUL is a leader in the soap category and owns popular brands like Dove, Lux, Lifebuoy, Pears, Hamam, Liril and Rexona.
Sebamed is a global premium skincare brand from Germany, best known for its pioneering pH5.5 products. The brand has been exclusively licensed to USV Pvt Ltd for marketing their baby and adult care range of products in India. USV Pvt Ltd, a leading healthcare company in India, has appointed Lowe Lintas as a creative agency for its consumer business including Sebamed range of products.
Sebamed’s range of products are superior in quality and are clinically proven to provide the best protection for babies from day one. Association with Lowe Lintas was done because of their intuitive understanding and strategic approach towards developing a brand. Also, they are known for creating a challenging brand and disrupting the marketplace. Sebamed wanted an advertisement that promotes “evidence-based advertising”.
The placement of advertisement was done accordingly, wherein an authoritative figure like a doctor was introduced, to bring awareness on the concept of pH level. Girls in ancient attire, to emphasize the pH level of famous soap brands. Sebamed highlighted the name of competitor soap and the litmus test showcased the harshness of soaps, using taglines such as “Film stars ki nahi, Science ki suno” [Don’t listen to filmstars, listen to the scientific evidence].
The conflict was triggered by the advertisement of Sebamed. It was related to competitive advertising and the main issue was what the consumers think about the particular brand. This act easily diverted the mindset of the consumers. The advertisement focused on the soap from Sebamed and discussed the pH level of soap. Sebamed claimed that the pH level of their soap is “safe” for sensitive skin when compared to the soaps manufactured by HUL.
The soap category at present is extremely competitive and the major market share is consumed by HUL’s brands. In this situation, it was difficult for any new soap brand to enter the market and make a mark. Soap is a loyalty driven segment when it comes to brands like Dove. Consumers do not change the brand unless it is “extremely necessary”. Hence this became the objective of Sebamed, to highlight that Sebamed soap contains the perfect “pH level” that’s needed for sensitive skin. Their strategy was based on two pointers:
(1) Sebamed soap has the perfect pH level for sensitive skin,
(2) Other “sensitive soaps” do not have the perfect pH level.
Sebamed has been in the market for a while, but the main idea was to obtain a space in “prescribed products”. For this challenging step, there should be ample data and research to back the claims that have been made in the commercial. By doing comparative advertising, Sebamed has managed to grab the attention of consumers.
The legal battle
The legal duel erupted between the two companies after Sebamed released advertisements targeting HUL Brands, such as Lux, Dove, Rin and Pears. Through Strategic advertising, USV compared the pH level of soaps. There were publicly displayed hoardings showing the comparison of pH levels of these soaps on a scale, pointing to the products that are safe for human skin. HUL filed a lawsuit against the German brand, without any prior notice to Sebamed.
In the lawsuit, HUL said that the ad campaigns intended to create apprehensions in consumers’ minds by disparaging and denigrating its products and infringing its registered trademarks. HUL alleged that the comparison was only on the basis of pH level which cannot be the sole factor for judging the mildness and harshness of soap on human skin. In response, USV argued that it is a scientific fact that a higher pH level means more acidic and it is harsh on skin acidity level.
The Bombay High Court in its interim order restrained Sebamed from running the ad campaign. But the Final court order allowed Sebamed to use the ads without mentioning Rin (being a detergent bar) since it is a detergent soap. Whereas the advertisement showing the comparison of Sebamed to Dove soap is concerned, the defendant (Sebamed) is permitted to air the advertisement in its current form. The court also reinforced the settled law on disparagement and its essential elements, which are as follows –
(1) The intent of the advertisement,
(2) The manner of the advertisement,
(3) The storyline of the advertisement and the message it seeks to convey.
The court also held that the advertisements in the present case are targeted at the regular consumer who is unaware of the ingredients and effects of chemicals on the human body. In view of this, one must apply these tests viewing it from the eyes of a common man with average intelligence. Court emphasized that the companies dealing in this segment should bring in more clarity on the ingredient of the product.
USV accomplished its strategy to the uproar in the market through this campaign and this initiative worked in their favour. HUL’s branding team will have to come up with a reply in response to these pH campaigns.
Sebamed’s win-win situation
Sebamed played a smart gambit by precipitating a competitive war with HUL, by making consumers aware of the acidity in soaps. As a new entrant and marginal player, they dared to challenge the known brand and forced them to respond. This helped them build huge awareness overnight wherein they could have taken years if they had not resorted to this competitive strategy. Sebamed products are priced at a much higher level than their competitor’s products, whereas for few consumers it may still be a challenge of affordability. The purchase is based on price – value proposition. Sebamed has just established its value proposition of being low on the acidity scale and has not proved that HUL’s products are inferior.
In a highly saturated market with large established brands, leveraging and claiming genuine product superiority backed by scientifically proven data seemed to be an audacious yet smart move, to attract the attention of all the consumers. Sebamed could have targeted soaps in their pricing range, that would be conventional marketing wisdom. But they aimed high and won, at least in terms of significant awareness. Sebamed focused on the mind of the consumers, brand purpose, which cannot be treated as regular exercise, rather gave importance to its consumers by highlighting the authenticity and bringing in transparency in their work. Good brands are always successful in maintaining an emotional attachment with the customers. The same can be achieved through the product experience and quality. Tactical marketing cannot do anything with trust and wealth of experience.
Challenge for HUL
The real battleground here is the consumer’s mind and the weapon of choice i.e balance of science and brand experience. Since Sebamed invested all its energy in gathering the scientific facts of skincare and brand promotion. Which is a small proportion, made giants such as HUL, run from pillar to post, to prove the genuineness of their skincare products, especially soaps.
Under these circumstances, HUL can continue to build on its huge legacy of consumer trust and its portfolio of value-for-money products, while continuing to establish the value proposition of its various brands in the personal hygiene segment. HUL’s significant distribution advantage and products cross-price segments – is also a big factor that will help overcome any short term image loss.
This kind of strategic comparative advertising is not a new tactic; it is used here to increase the search for a particular brand. The Pepsi challenge triggered the cola wars, Mac versus PC, BMW versus Mercedes, even HUL has used similar tactics as a part of their ad campaigns in the past. Brand owners resort to such campaigns to increase sales either by suggesting that their product is of the same or better quality than that of the compared product or by denigrating the quality of the compared product. While it may reap some immediate benefits in terms of increased brand visibility or a spike in sales, there are medium and long term effects of such advertising that must be considered too. There is no specific legislative mechanism regulating comparative advertising and that is the concern in such cases. A comprehensive legislative mechanism to address such emerging issues and guidelines or comparative advertisements would be extremely useful in the circumstances. With new brands emerging in the market on a daily basis, various challenges faced by the branding teams, a fine balance is required between the competing interests of advertisers and consumers.
The trust, preference, choice of the customer is completely dependent on their attachment towards a brand. It is also a big lesson for companies involved in competitive advertising, as they should always stay focused on their core value proposition. It is equally important to be 100% factual and not mislead consumers. Being competitive is good but being truthful and anchored in your value proposition is paramount.
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