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CASE STUDY

RIN IN PAKISTAN

Submitted by
Ruchika Sinha (179278001)
Ronak Kamdar (179278002)
Reila Chakraborty (179278003)
Kshitij (179278069)
Parag Zade (17928074)
Sanya Takhtani (179278080)

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1. Evaluate Lever’s marketing planning and implementation regarding RIN
from 1984 through 1988. What would you have done?

RIN entered in the market in 1984 in Pakistan as the only NSD bar in the market.
It was solid blue NSD bar introduce in market in 1984. Media advertised it as
thundering and lighting bolt. Sales of RIN for the first 3 years never crossed 700
ton. Its sales were not as expected and did not follow the pattern that was
observed in India. The current situation insights were obtained by the analysis
of market mix - Product, Price, Place and Promotion.

Product:

The product was introduced as a NSD bar of weight 130gms initially. Since all
the dishwashing bars existing in the market in Pakistan were blue in colour, the
colour blue was mistaken to be a dishwashing bar. This was done similar to the
blue RIN soap in India launched by Hindustan Unilever which was having
considerable good response as NSD bar. Lever applied similar strategy
considering that the cultures of both the countries are similar.

The major change brought was introduction of smaller 125gms and a larger
250gms bar on replacement of the 130gms size which increased the number of
SKUs for the company, this also reduced the fixed cost by ensuring its spread
over a larger quantity of soap. This also ensured that RIN cut costs and could
advertise using a celebrity directly highlighted the RIN’s better features as
laundry soaps. This was encouraged by the consumers and there was rise of
consumption of 250g bars. The growth rate of NSD bar segment is 29% in 1988.

Price:

Sales of RIN BAR


2000
1500
1000
500
0
1984 1985 1986 1987 1988
Target Sales volume Actual Sales Volume

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There were changes made in the price. The price has gone up possibly due to
rise in cost of raw materials. There were large discounts as an attempt to attract
the customers by improving the Customer Perceived Value. When it was realized
that discounts were not working, it was stopped. From the above-mentioned
graph, it is reflected that the target sales volume was higher than the actual sales
for first four years. This is majorly because of the wrong positioning of the RIN.
Later in 1988, after improvement in promotion strategy the actual sales improved
compared to targeted sales.

Place (Distribution):

The distribution strategy used were trade meetings, 100% coverage in retail
outlets – 315 distributors to 60,000 retail outlets. Initially, RIN was not trying all
out to get new distributors and retailers, the retailers size was large but the
retailers did not have enough incentive to promote the brand, later giving good
incentive for distributors like increase in margin from 2.91% to 3.33%.

A) Current Scenario

Current Retail Price Rs 26.00 /kg


Retailer Margin 2.08 (8% of Retail Price)
Retailer Cost Price Rs 23.92
Wholesaler Margin 1.17 (4.5% of Retailer Price)
Wholesaler Cost Price Rs 22.75
Manufacturer Selling Price Rs 20.05
Octroi and Excise tax Rs 2.60 (10% of Retail Price, 11.4%
of MSP)

B) If 33% content is removed, the Variable cost will decrease and


profitability will increase

NPS Rs 20.05
Total Valuable Cost (TVC) Rs 14.45 (72%)
Margin Rs. 10.37 / kg (52%)
Extra Margin Available Rs 4.77/kg OR Rs 4,770 / tonne
(14.45 - 9.68)

Promotion:

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Expensive and flashy advertisements confused people about the usage of the
product and delivered wrong message to the customers. They were not able to
relate lightning and thunder with laundry detergents. Funds were improperly
utilized and should have been diverted to other forms of advertisements like
media advertisements and bulk discounts. Thus, we need proper forms of
advertisements that deliver correct message in correct form.
The reasons behind failure of the product were improper positioning and
advertisements. Also, lack of market research and ability to have emotional
connect with customers were missing despite high quality and features of
product. Focus was on demonstrations instead of digital advertisements.
Certain methodologies that could have been adopted are as follows:

· Conducting proper market research and survey. This will help in identifying
desirable characteristics and target groups which will help in proper positioning
of the products.

· Designing proper advertisements will help to position the product well.


Advertisements like thunder and lightning don’t associate well with fabrics, and
hence should be avoided. This will establish emotional connect with brand.

· Also, funds should be effectively managed by investing in digital media


advertisements, trade discounts and surveys rather than demonstrations and
related expenses.

· Much more optimized and effective advertisements and awareness campaigns


should be created to make people aware of the difference and harmful effects of
negligent behaviour.

2. Identify and evaluate the alternatives available to Mr. Mustafa. What


would you do? Why?

The different alternatives available to Mr. Mustafa are mentioned below:


1. Discontinue Rin as a NSD bar and relaunch it as a dishwashing bar
This strategy can be the easy way out to continue without much extra expense
as strategy can help Mr. Mustafa with the problem of the positioning of the
product. Launching it as a dishwashing bar can also lead to cost savings by
eliminating of the special fabric wash ingredients in RIN would reduce its total
variable cost by 33% without affecting its dishwashing performance. The
company would also save on the expense of creating the brand perception as
majority of the market already believed it to be an amazing dishwashing bar but
the customers who used Rin as a detergent would be left confused and would
lead to bad mouth-to-mouth publicity as well as loss of those customers.
2. Relaunch Rin
This strategy would involve many changes in the product, the way it is marketed
and the way it is placed in the market place. Firstly, the colour of the bar must
be changed so that the consumers do not perceive it to be a dishwashing bar.

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Secondly, the packaging must also be changed so that there is no resemblance
with any existing dishwashing soaps in the market. Thirdly, an advertising
campaign must be introduced such that it showcases the product attributes
describing it as a detergent rather than a dishwashing bar. This strategy would
involve major changes in the production of Rin and it would also be a long-term
project as it would require to change the existing mindset of its customers.
3. Launch an Awareness Campaign
An awareness campaign can be launched in selected places where the product
is mainly being used as a dishwashing bar. The campaign would not only involve
the end consumers but would also involve educating the retailers so that they
can place the product properly in the store as well as help the customer while
they are shopping. The campaign can include distribution of small SKUs of the
product along with demonstration in public places. This strategy would be time
consuming and would require a lot of manpower in the field.
4. Launch Rin detergent and Rin dishwashing bar
The company can launch a Rin dishwashing bar similar to the current product
and change the Rin detergent bar in certain aspects such as colour and
packaging as described above. This way the company would not be losing on the
customers that used Rin for dishwashing and it would also encourage these
customers to try Rin deteregent as they already trust the brand. The production
facility can be shared as only elimination of one ingredient from the existing
product can help in cost reduction and not affect the dishwashing quality of Rin.
Both the products can share the brand name but the packaging and promotion
of both the products can be done very differently and the promotion must be
focused specifically on the product usage.

After reviewing all the alternatives the fourth alternative of launching Rin
detergent and Rin dishwashing bar both seems to be the best one because this
alternative can attract most customers without loss of any existing customers.
This alternative is also economical compared to other options because it saves
on the production facility and customers already trust the brand for one product
which can be leveraged to encourage them to buy the detergent.

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