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 the 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 1.

MARKET In 1988, the total fabric wash sales of 263,050 tonnes in Pakistan consisted of 247,000 tonnes 2 of laundry soap, 14,500 tonnes of nonsoap detergent (NSD) powders, and 1550 tonnes of NSD 2 bars. The laundry soap, NSD detergent, and NSD bar markets had grown by 5 percent, 12 percent, and 29 percent respectively, as compared to 1987. Laundry soap 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. Lever had no entry in the laundry soap segment, but its two brands of NSD powders Surf and Sunlight had captured 50 percent 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 percent) and bars (12 percent). Liquid dishwash sales amounted to only 160 tonnes. Hard soaps for dishwashing retailed between Rs 20 and Rs 40 per kg, with sales growing at an annual rate of 5 percent. Bars for dishwashing retailed between Rs 25 and Rs 40 per kg, with sales growing at an annual rate of 3 percent. Levers did not have any formal product entry in the dishwashing marketing 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 than20 tonnes a year. As of 1989, 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 condition 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.

1 2

US $1=Rs 20.00 in 1988. 1 tonne = 1000 kg.


50 whereas the 250 grams bar sold for Rs 4.30 for the 250 gram pack in April 1987.25 and Rs 6 for the 125 gram and 250 gram pack respectively. From January to March 1985. Very few coupons were redeemed. Mustafa felt that the old advertising theme confused consumers as they linked thunder and lightning to rain. A Rs 0.When it was introduced in April 1984. according to Mustafa. In addition to the key phrase used in previous commercials. never crossing 700 tonnes per year. Production efficiencies reduced the variable cost of RIN by Rs 1 per kg. An advertising and promotion budget of Rs 5.” For the first three years. The 1987 sales volume was still well short of the 5000 tonnes production capacity of the RIN plant. Mr. and sales crossed the 1000 tonnes mark in 1987 (see Exhibit 3 for targeted and actual sales volumes). The new advertising copy had a comparative theme that directly attacked laundry soaps. raised sales by only 10 percent against an expected 50 percent increase.7 million supported the introduction of the product in the market (see Exhibit 1). A new media communication campaign targeted against laundry soaps was launched in which a well known middle-aged movie star endorsed RIN. and clothes could not be washed outdoors in rainy weather. Levers’ salespersons delivered free samples of RIN to homes in major cities.00 was offered to consumers on the purchase of two RIN bars on presentation of a newspaper coupon. The lightning was intended to emphasize the brightness attribute of RIN. The 130 grams size was discontinued. RIN was priced to sell at retail for Rs 2. none of them was successful. the price for the 130 gram packing was raised to Rs 3. Media advertising showed RIN being introduced from the heavens by thunder and lightning bolts. These trade promotions lasted for 2 to 3 weeks each and were offered 3 “Juma Bazars” were weekly congregations of merchants where products were offered at discount prices to consumers. promotional shows were arranged in which prancing horses and decorated elephants were used to promote RIN. Several consumer promotion schemes were used for RIN but.50 price-off campaign from August to December 1984. endorsed RIN as being a superior fabric washing product as it lathered more profusely and gave a cleaner. No more consumer promotion schemes for RIN had been used since 1985. In March 1985.” and other special gatherings of women. sales of RIN were disappointing. the movie star.15. who had a matronly image. Since RIN was launched.70 price-off campaign from April to July 1985 was expected to increase sales by 50 percent. the prices were further raised to Rs 3. again only a 10 percent increase in sales accrued. In August 1988. and a new 250 grams size was also introduced.75 (see Exhibit 2 for RIN price-weight chronology). However.80 for the 125 gram pack and Rs 5. The retailer was required to retain the wrappers and give unwrapped tablets to the customers availing the offer. “Juma Bazars 3. The 125 grams size sold at retail for Rs 2. and future promotional efforts concentrated on media advertising and trade discounts. The key phrase used in the commercial was “A little amount of RIN washes a large lot of clothes. Mustafa’s subordinates had suggested introducing different consumer promotion schemes in 1989. the movie star asserted that “you get much more out of RIN than you pay for. In June 1986. However. trade promotion for the product was limited to the offer of one free bar for every dozen bars ordered. a discount of Rs 1. RIN’s package size was reduced to 125 grams. some of Mr. Leaflets explaining RIN’s superiority over soaps were distributed at these congregations. In the new theme. The retailer had to submit the wrappers to Levers as proof of the coupon sales in order to be reimbursed. 2 . brighter and more economical wash than soaps. girl colleges.” The relaunch of RIN was successful. The promotion was advertised in all theleading Urdu and English daily newspapers. In addition. and demonstrated the washing properties of the bar at women’s association meetings. Exhibit 4 shows the proportions of RIN sales from the two pack sizes.95 per pack size of 130 grams. A Rs 0. Promotional shows and demonstrations were discontinued. The retail prices were raised to Rs 2.

Mustafa asked the Domestic Research Bureau (DRB) of Levers toconduct a consumer survey to ascertain consumer perception and usage of RIN. The margin was increased to 3.4 percent of the retail price since RIN was introduced to the market. However. The number of usable completed questionnaires analyzed was 4. Half of these respondents were on DRB’s regular Consumer Panel. the distributors received a margin of 2. The survey cost Rs 50. fabric wash affecting its Mr. Mr.000 and was conducted in 12 sample cities and towns in Pakistan using questionnaires having the format shown in Exhibit 5.91 percent on the retail selling price. wanted to identify and evaluate the various alternatives available to him in order to action to take regarding the marketing plan for RIN. Mr. and hence about 75 to 80 percent of RIN sales were for dishwashing. The R&D department had informed Mr. salespersons organized trade meetings to promote the product. The volume of retailer orders for RIN during these promotions was 40 to 60 percent more than orders during regular price periods. These results confirmed his suspicion that RIN was being used primarily for dishwashing despite the communications campaign and package inscription clearly promoting itsuse for washing fabrics. rather than in the laundry soap section where most of the soaps were unwrapped and yellow or white in color. Only 15 percent of the respondents surveyed were using RIN solely for fabric washing as compared to 65 percent that were using it only for dish washing. and all the current ones on the market were bluish in color. Mustafa received the survey results in January 1989. Mr. Mustafa decide what 3 . When RIN was launched in 1984. The very first dishwashing bar introduced in Pakistan was blue in color. Mustafa felt that the blue color of the soap created this confusion as consumers associated this color with dishwashing bars.30 percent in January 1985. DRB estimated that the sales of RIN were divided in roughly the same proportion as the distribution of survey responses. RIN was distributed through 315 distributors to 60. in India a popular fabric washer was blue in color and there was no other blue dishwashing bar. In a few cities. Mustafa that elimination of the special ingredients in RIN would reduce its total variable cost by 33 percent without dishwashing performance. THE COMPANY’S DILEMMA In September 1988.000 retail outlets in the country. Mustafa that retailers shelved RIN with wrapped personal soaps or completely separate. Hindustani Levers in India had been successfully marketing RIN as a fabric washing bar for the last eight years and Levers Pakistan had positioned it similarly under the assumption that customers and market structures were similar. Leaflets explaining the superior fabric wash properties of RIN were given to the distributors and retailers by Levers’salesforce.20 percent of the retail value of goods ordered. Exhibit 6 provides the 1988 income statement for RIN. Distributors could also claim reimbursement of traveling expenses up to 0.328. The rest of the respondents were using RIN for both fabric and dish washing.two to three times a year. This represented almost 100 percent coverage in retail outlets selling detergents. Levers salespersons informed Mr. The retailer margin had remained at 7. Even the packaging of RIN was dark blue with red and white inscriptions.

400 3. Operated as a Rs 0.000 3.Exhibit 1 RIN Advertising Budget Year Total Advertising Budget Rs (000) 1984 1985 1986 1987 1988 5. 4 5 Operated as a Rs 0.25 Rs Rs Rs Rs 4.75 5.700 3.70 price-off consumer promotion. 4 .15 2.30 5.95 2.50 2.45 5 3. Exhibit 2 RIN Price/Weight History Weight 130 g 125 g 250 g 1984 1984 1985 1985 1985 1985 1986 1987 1988 1988 April August January March April July June April January August Rs 2.700 Budget Allocation Television Print Other 70 percent 20 percent 10 percent Source: Information provided by Lever Brothers Pakistan Limited.00 Source: Information provided by Lever Brothers Pakistan Limited.15 Discontinued Rs Rs Rs Rs 2.65 6.500 2.45 4 2.50 price-off consumer promotion.95 3.80 3.00 3.

8 The percentages are in terms of packs sold (and not in terms of Rupee Sales). 5 .Exhibit 3 RIN Sales Volume Targeted Sales Volume Year 1984 1985 1986 1987 1988 Volume (Tonnes) 1.000 1.300 Actual Sales (Tonnes) 300 400 650 1. Exhibit 4 RIN Packwise Sales Breakdown Standard Size 6 Large Size 7 Year 1984 1985 1986 1987 1988 (%) 100 100 82 75 8 78 18 25 22 (%) 6 Standard Size Tablet – 130g till June 1986.200 1. 7 Large Size Tablet – 250g introduced June 1986.000 1.550 Source: Information provided by Lever Brothers Pakistan Limited. in 1987 the number of standard size packs sold was three times the number of large size packs sold. For example.000 1.600 1. 125g from June 1986 onwards.

In 1988.214 --------28. 6 .464 896 6. = = = = 1 2 3 4 Exhibit 6 RIN 1988 Income Statement (Rs 000) Net Proceeds from Sales (NPS 9) Raw Material and Direct Labor Cost Advertising Cost Selling and Transportation Cost Fixed Cost 10 (20% of NPS) 31.Exhibit 5 RIN Study on the Use of RIN Q.070 19. 10 fixed costs were apportioned as 20% of NPS.614 2. excise and octroi taxes were 5% of the retail selling price.456 Profit (before income tax) 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. 2 – 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: Information provided by Lever Brothers Pakistan Limited. 1 – Is RIN being used in your household? Yes No = = 1 (verify and continue) 2 (close interview) Q.040 2. and included factory overhead and machinery depreciation.

Evaluate Lever’s marketing planning and implementation regarding RIN from 1984 through 1988. Mustafa. What would you do? Why? 7 .ASSIGNMENT QUESTIONS 1. Identify and evaluate the alternatives available to Mr. What would you have done? 2.

Sign up to vote on this title
UsefulNot useful