Chik wins first round versus Clinic Plus

It seems CavinKare has won the first round versus Hindustan Lever Ltd (HLL).

An interim injunction passed by the Madras High Court recently seeks to restrain HLL from airing ads ‘defaming' CavinKare's Chik shampoo. The court order "restrains HLL, its men, agents, retailers and assignees from resorting to product defamation of Chik shampoo in any manner by printing, publishing, circulating and distributing offending advertising material at the retail outlets or any other point of purchase in the market in any manner pending disposal of the suit."

The Chik-Clinic Plus saga started when "HLL's promotion for Clinic Plus Protein Shampoo resorted to a devious campaign aimed at misleading the consumers in the rural market", states a release by CavinKare. Adds an official spokesperson of CavinKare, "We took the matter to court." While HLL officials could not be contacted, the course of events, as described by CavinKare, took a serious turn about a month back.

It seems in early June CavinKare's field force noticed banners and pamphlets at retail outlets in Andhra Pradesh and Tamil Nadu that "unabashedly" compared the performance of the two brands. These ads showed a woman, visibly dissatisfied with the use of an ‘ordinary' shampoo, switching to Clinic Plus and getting fantastic results. "What is surreptitious is that the ‘ordinary shampoo' is an absolute replica of a Chik shampoo sachet (Jasmine variant in Tamil Nadu and black variant in Andhra Pradesh) with the brand name mischievously replaced by 'Ordinary Shampoo'," states the release.

The Tamil banner shows a woman with tangled hair. Dissatisfied by the use of the 'Ordinary Shampoo' she says, "Yennayai sariyanapadi pokkathathodu, sirandha suthathaiyum tharuvathillai." This, when translated to English means, "Not only does the shampoo not remove oil, it also doesn't clean". The banner also shows the same woman in great relief after using Clinic Plus. She says "Yennaiyai muzhumaiyaga pokkuvathodu, sirandha suthathaiyum tharugiradhu", which translated to English means, "This shampoo not only removes oil completely, it also cleans properly".

"What is even more mischievous is that both the banner and the pamphlet are 'anonymous' and do not mention either the printer or the company name, clearly hinting at a lack of courage and conviction in their claim," states the CavinKare release.

While CavinKare might have gained a temporary breather with the Court's order, the real battle has yet to be fought at the marketplace. "We believe this is desperate attempt by HLL to disparage/defame Chik to salvage a losing Clinic Plus," says a CavinKare official.

According to the ORG-Marg figures quoted by the company, Chik, which is the No 2 shampoo brand in the country, is closer than ever to market leader Clinic Plus. The gap between the two started closing in since April 2001, when Chik Shampoo had a (volume) share of only 15.18 per cent against Clinic Plus' 29.19 per cent. By April 2002, Chik's share stood at 21.1 per cent and Clinic Plus at 22.9 per cent. As CavinKare claims, "Chik is all set to dethrone HLL's Clinic Plus from the top slot."

Also, the market shares in the two southern markets of Andhra Pradesh and Tamil Nadu (for sachets, which have an MRP of below Rs 1.50) for the period January-March 2002, indicate a very healthy growth for CavinKare. According to ORG-Marg figures quoted by CavinKare, Chik has grown (in volume terms in the sachet market) by 17.87 per cent in TN while HLL's brands have a share of 5.42 per cent. In the AP market, Chik has a share of 22.9 per cent (volume terms) as against HLL's brands that have 16.7 per cent. Even the all-India figures reveal the same story. Chik has a share of 16.29 per cent, while HLL's brands have 11.84 per cent share in volume terms.

Of course, the story is reversed when the figures are compared in value terms. According to market sources, HLL's Clinic Plus Protein Shampoo had a 27 per cent market share (in value terms) in April 2002 against Chik's 8.89 per cent. The difference between the value and volume shares can be attributed to the price differential between the two brands. As marketshare figures indicate, the bulk of the growth in the shampoo market has come from the low-priced segment, where CavinKare is most active. This segment has grown from 5 per cent in 2000 to 13 per cent this year, while Chik has jumped from 11 per cent to 20 per cent in the same period.

Now, while HLL's "men, agents, retailers and assignees" are left to grapple with the nuances of the Court order, the two companies are drawing the battlelines to kick off round two. © 2002 agencyfaqs!