Question 1: What is Mustufa’s problem?

Problem Statement:
In the Year 1988, fabric wash sales was 263,050 Tonnes in Pakistan, while dishwash sales
in the country were 60,000 Tonnes. The problem faced by Mr. Mustafa was, that RIN
although being a NSD bar was being used for Dishwash which had smaller sales capacity as
against the Fabric Wash sales capacity. Hence, Mr. Mustafa is looking to reestablish the
RIN bar in the fabric wash category, and increase sales.

Two major evaluations of the problem are:

1. Even when RIN was the only NSD bar in the market it could not generate effective
sales in the laundry wash category, as people preferred to go mostly with laundry
soap.
The NSD bars cost Rs 25 per kg while the laundry soap costs Rs 10 to 15 per kg. Being
the cheapest (50% cheaper than NSD Bars) among the Fabric Wash category,
Laundry Soap had the biggest market share of 94% while NSD Bars had only 1%
market share, so consumers were more inclined to use laundry soap for fabric wash
than NSD bars.

Capacity in
Category Tonnes % Share Growth Price range
Total fabric wash
sales 263050 100% - -
Laundry Soap 247000 94% 5 10 to 15 per Kg
NSD Powders 14500 6% 12 20 to 48 Kg
Rs 3.25 per 125
gm or Rs 26 per
NSD Bars 1550 1% 29 Kg

2. Secondly, among the dishwash category products also, dishwashing bars sales was
growing only at an annual rate of 3 percent and Dishwash bars had only 12% of the
dishwash sales market share. Thus, RIN was in a category that was becoming
stagnant in terms of growth and had low future prospects.
Also, with a price of Rs 3.25 per 125 gm or Rs 26 per kg, it appealed to consumers
since other dishwash bars were priced between 25 to 40 per Kg. The price sensitive
consumers chose RIN for dishwash because of the cheaper price and its smaller pack
size.

Capacity in RIN
Category Tonnes % Share Growth Price range
Dishwash Sales 60000 100% - -
20 to 40 per
Hard Soaps 52800 88% 5 kg
 Rs 3.25 per
25 to 40 per 125 Gm or
Bars 7200 12% 3 Kg Rs 26 per Kg
Liquid Dishwash 160 - - -

Question 2: What would you do?

Solution:

1. Realignment of Marketing Campaigns: The marketing campaigns through

advertisements have been trying to convey that RIN bar is a superior washing bar.

People did not understand the difference between a fabric NSD bar and a
dishwashing soap. The correct message is not being conveyed to the customers. The
advertisements in reference to the era mentioned should focus on why they are two
different soaps.
The advertisements should also convey the ill effects of Using a Laundry Soap since
Lever had no entity in the laundry soap segment.
(Eg: In India, people in smaller cities predominantly used the same soap for washing
clothes and bathing, before 90’s)

2. Increase Retailer Margins:

RIN was distributed through 315 distributors to 60,000 retail outlets in the country.
This represented almost 100 percent coverage in retail outlets selling detergents.
Since retailers directly interacted to the consumers, increasing retailer margins will
help as they will willingly sell more and educate consumers on the use of NSD bars
over laundry soaps.

3. Introduce a New product:

The company must introduce a new Bar in dishwashing market at similar/little lower
price, with a changed color, and removing special fabric wash ingredients in RIN
reducing its total variable cost by 33 percent. This will create an anchoring effect and
would lead the consumers into thinking that this new product is a specific Bar for
dishwashing. This will increase the margins on the soap and also help people create
distinction between products. This if implemented with better marketing campaigns
can help RIN move from dishwashing to fabric wash.