04-568-89-1

RIN
In early January 1989, Irfan Mustafa, General Manager, Personal Products and Market
Research, Lever Brothers Pakistan Limited, was wondering what action to take regarding the
marketing of the laundry detergent bar RIN, which had been introduced to the Pakistani market
in April 1984. The product was specially formulated and promoted as a fabric washer. Mr
Mustafa felt that sales volumes for RIN had reached reasonably satisfactory levels in 1988.
However, a recent survey confirmed his suspicion that RIN was primarily being used for dish
washing.
COMPANY
Lever Brothers Pakistan Limited (Levers), a subsidiary of Lever Brothers International,
produced and marketed a variety of consumer products in Pakistan. The company's diverse
product line consisted of items such as shampoos, skin and shaving creams, edible oils,
margarine, toilet soaps, scourers, and laundry detergents in powder and solid bar forms. In 1988,
Levers had a profit before tax of Rs 277 million on sales of Rs 3.65 billion.
MARKET
In 1988, the total fabric wash sales of 263,050 tonnes in Pakistan consisted of 247,000 tonnes
of laundry soap, 14,500 tonnes of nonsoap detergent (NSD) powders and 1550 tonnes of NSD
bars. The laundry soap, NSD detergent, and NSD bar markets had grown by 5%, 12% and
29% respectively as compared to 1987. Laundry soaps retailed for Rs 10 to Rs 15 per kilogram
(kg), whereas NSD detergent powders had a wider price range, retailing between Rs 20 to Rs
48 per kg. RIN was the only NSD bar in the market, with the standard 125 grams size selling for
Rs 3.25 in 1988. Levers had no entry in the laundry soap segment, but its two brands of NSD
powders Surf and Sunlight had captured 50% of the NSD powder market.
Total dishwash sales in the country were 60,000 tonnes in 1988. These sales were divided
primarily between hard soaps (88%) and bars (12%). Liquid dishwash sales amounted to only
160 tonnes. Hard soaps for dishwashing retailed between Rs 1 20 and Rs 40 per kg, with sales
growing at an annual rate of 5%. Bars for dishwashing retailed between Rs 25 and Rs 40 per kg,
with sales growing at an annual rate of 3%. Levers did not have any formal product entry in the
1

US $1 = Rs 20.00 in 1988.

This case was written by Professor Wasim Azhar, assisted by Research Associate Nudah Hassan, to serve as
a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative
situation. This material may not be quoted, photocopied or reproduced in any form without prior written
consent of the Lahore University of Management Sciences.

1989 Lahore University of Management Sciences

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04-568-89-1
dishwashing market since late 1987. Levers had introduced Sunlight liquid dishwash in the main
cities of Pakistan in early 1985. However, the brand could not establish itself and was
discontinued in late 1987, after failing to achieve sales of more than 20 tonnes 2 a year. Currently
ZIP dishwashing liquid sold by a competitor had sales of around 100 tonnes a year. ZIP was
marketed in a 600 ml bottle at a retail price of Rs 23.
RIN
RIN was a solid, blue NSD bar that Levers introduced in Pakistan in 1984. Mr Mustafa
described the product as follows:
Rin has superior cleaning efficiency; it gives abundant and instant lather in all
water conditions and prevents redeposition of dirt on clothes because it
contains active detergent and phosphates. RIN also exudes a pleasant
fragrance during wash, and its fluorescence imparts brightness to clothes.
When it was introduced in April 1984, RIN was priced to sell at retail for Rs 2.95 per pack size
of 130 grams. An advertising and promotion budget of Rs 5.7 million supported the introduction
of the product in the market (see Exhibit 1). Media advertising showed RIN being introduced
from the heavens by thunder and lightning bolts. The lightning was intended to emphasise the
brightness attribute of RIN. The key phrase used in the commercial was A little amount of RIN
washes a large lot of clothes. For the first three years sales of RIN were disappointing, never
crossing 700 tonnes per year. In March 1985, the price for the 130 gram packing was raised to
Rs 3.15.
Several consumer promotion schemes were used for RIN but, according to Mustafa, none of
them was successful. A Rs 0.50 price-off campaign from August to December 1984, raised sales
by only 10% against an expected 50% increase. From January to March 1985, a discount of Rs
1.00 was offered to consumers on the purchase of two RIN bars on presentation of a newspaper
coupon. The retailer was required to retain the wrappers and give unwrapped tablets to the
customers availing the offer. The retailer had to submit the wrappers to Levers as proof of the
coupon sales in order to be reimbursed. The promotion was advertised in all the leading Urdu
and English daily newspapers. Very few coupons were redeemed. A Rs 0.70 price-off campaign
from April to July 1985 was expected to increase sales by 50%. However, again only a 10%
increase in sales accrued. No more consumer promotion schemes for RIN were used since
1985. However, some of Mr Mustafas subordinates had suggested introducing different
consumer promotion schemes in 1989.
Levers salespersons delivered free samples of RIN to homes in major cities, and demonstrated
the washing properties of the bar at womens association meetings, girls colleges, Juma Bazars3
and other special gatherings of ladies. Leaflets explaining RINs superiority over soaps were
distributed at these congregations. In addition, promotional shows were arranged in which
prancing horses and decorated elephants were used to promote RIN.

1 tonne = 1000 kg.

Juma Bazars were weekly congregations of merchants where products were offered at discount prices to
consumers.
2
3

04-568-89-1
In June 1986, RINs package size was reduced to 125 grams, and a new 250 grams size was
also introduced. The 130 grams size was discontinued. The 125 grams size sold at retail for Rs
2.50 whereas the 250 grams bar sold for Rs 4.75. See Exhibit 2 for RIN price-weight
chronology. Production efficiencies reduced the variable cost of RIN by Rs 1 per kg.
Promotional shows and demonstrations were discontinued, and future promotional efforts
concentrated on media advertising and trade discounts. A new media communication campaign
targeted against laundry soaps was launched in which a well known middle aged movie star
endorsed RIN. Mr Mustafa felt that the old advertising theme confused consumers as they linked
thunder and lightning to rain, and clothes could not be washed outdoors in rainy weather. The
new advertising copy had a comparative theme that directly attacked laundry soaps. In the new
theme the movie star, who had a matronly image, endorsed RIN as being a superior fabric
washing product as it lathered more profusely and gave a cleaner, brighter and more economical
wash than soaps. In addition to the key phrase used in previous commercials, the movie star
asserted that you get much more out of RIN than you pay for. The relaunch of RIN was
successful, and sales crossed the 1000 tonnes mark in 1987. See Exhibit 3 for targeted and
actual sales volumes. The 1987 sales volume was still well short of the 5000 tonnes production
capacity of the RIN plant. The retail prices were raised to Rs 2.80 for the 125 gram pack and Rs
5.30 for the 250 gram pack in April 1987. In August 1988, the prices were further raised to Rs
3.25 and Rs 6 for the 125 gram and 250 gram pack respectively. Exhibit 4 shows the
proportions of RIN sales from the two pack sizes.
Since RIN was launched, trade promotion for the product was limited to the offer of one free bar
for every dozen bars ordered. These trade promotions lasted fo r 2-3 weeks each and were
offered two to three times a year. The volume of retailer orders for RIN during these promotions
was 40-60% more than orders during regular price periods. Leaflets explaining the superior
fabric wash properties of RIN were given to the distributors and retailers by Levers salesforce.
In a few cities salespersons organised trade meetings to promote the product. RIN was currently
distributed through 315 distributors to 60,000 retail outlets in the country. This represented
almost 100% coverage in retail outlets selling detergents. When RIN was launched in 1984, the
distributors received a margin of 2.91% on the retail selling price. The margin was increased to
3.30% in January 1985. Distributors could also claim reimbursement of travelling expenses upto
0.20% of the retail value of goods ordered. The retailer margin had remained at 7.4% of the
retail price since RIN was introduced to the market.
CURRENT DILEMMA
In September 1988, Mr Mustafa asked the Domestic Research Bureau (DRB) of Levers to
conduct a consumer survey to ascertain consumer perception and usage of RIN. The survey cost
Rs 50,000 and was conducted in 12 sample cities and towns in Pakistan using questionnaires
having the format shown in Exhibit 5. The number of usable completed questionnaires analysed
was 4328. Half of these respondents were on DRBs regular Consumer Panel.

04-568-89-1
Mr Mustafa received the survey results in January 1989. Only 15% of the respondents surveyed
were using RIN solely for fabric washing as compared to 65% using it only for dish washing. The
rest of the respondents were using RIN for both fabric and dish washing. These results confirmed
his suspicion that RIN was being used primarily for dishwashing despite the communications
campaign and package inscription clearly promoting its use for washing fabrics. DRB estimated
that the sales of RIN were divided in roughly the same proportion as the distribution of survey
responses, and hence about 75-80% of RIN sales were for dishwashing. Mr Mustafa felt that the
blue colour of the soap created this confusion as consumers associated this colour with
dishwashing bars. The very first dishwashing bar introduced in Pakistan was blue in colour, and
all the current ones on the market were bluish in colour. Even the packaging of RIN was dark
blue with red and white inscriptions. Levers salespersons informed Mr Mustafa that retailers
shelved RIN with wrapped personal soaps or completely separate, rather than in the laundry
soap section, where most of the soaps were unwrapped and yellow or white in colour.
The R&D department had informed Mr Mustafa that elimination of the special fabric wash
ingredients in RIN would reduce its total variable cost by 33% without affecting its dishwashing
performance. Exhibit 6 provides the 1988 income statement for RIN. Mr Mustafa wanted to
identify and evaluate the various alternatives available to him in order to decide what action to
take regarding the marketing plan for RIN.

04-568-89-1
Exhibit 1
RIN
RIN Advertising Budget
Year

Total Advertising Budget

Rs (000)

1984

5,000

1985

3,700

1986

3,400

1987

3,500

1988

2,700
Budget Allocation

Television

70%

Print

20%

Other

10%

Source: Company Records

5

04-568-89-1
Exhibit 2
RIN
Price/Weight History

1984
1985

1986
1987
1988

April
August
January
March
April
July
June
April
January
August

130 g
Rs 2.95
2.45 4
2.95
3.15
2.45 5
3.15
Discontinued

Source: Company Records

4
5

Operated as a Rs 0.50 price-off consumer promotion.

Operated as a Rs 0.70 price-off consumer promotion.
6

Weight
125 g

250 g

Rs 2.50
Rs 2.80
Rs 3.00
Rs 3.25

Rs 4.75
Rs 5.30
Rs 5.65
Rs 6.00

04-568-89-1
Exhibit 3
RIN
Sales Volumes

Year

Targeted Sales

Actual Sales

Volume

Volume

(Tonnes)

(Tonnes)

1984

1,000

300

1985

1,000

400

1986

1,000

650

1987

1,600

1,200

1988

1,300

1,550

Source: Company Records

04-568-89-1
Exhibit 4
RIN
Packwise Sales Breakdown

Standard Size 6

Large Size 7

(%)

(%)

1984

100

1985

100

1986

82

18

1987

75 8

25

1988

78

22

Source: Company Records

Standard Size Tablet 130 g till June 1986;

125 g from June 1986 onwards.
7
Large Size Tablet 250 g introduced June 1986.
8

The percentages are in terms of number of packs sold (and not in terms of Rupee Sales). For Example, in 1987
the number of standard size packs sold was three times the number of large size packs sold.
8

04-568-89-1
Exhibit 5
RIN
Study on the Use of RIN

Q. 1

Q. 2

Is RIN being used in your household?

Yes

(Verify and continue)

No

(Close interview)

For what purpose is RIN being used in your household?

For Fabric wash only

For Dish wash only

For Both Fabric and Dish wash=

Other (specify details)

=

Source: Company Records

04-568-89-1
Exhibit 6
RIN
1988 Income Statement for RIN
(Rs 000)
Net Proceeds from Sales (NPS)9

31,070

Raw Material and Direct Labour Cost

19,040

Advertising Cost

2,464

Selling and Transportation Cost

896

Fixed Cost10 (20% of NPS)

6,214
28,614

Profit (before Income Tax)

2,456

Source: Company Documents

9

NPS was calculated by subtracting excise and octroi taxes and costs of consumer and trade promotion
schemes (in terms of forgone revenue) from the manufacturer selling price. In 1988, excise and octroi taxes
were 5% of the retail selling price.
10
Fixed costs were apportioned as 20% of NPS, and included factory overhead and machinery depreciation.
10