Rin Detergent: To Position or Reposition

RIN DETERGENT
TO POSITION OR REPOSITION
BACK GROND
Problem Definition:
 What: RIN NSD Bar used as dishwasher
 Where: In Pakistan
 When: Since April 1984
 Who: Consumers
 How Many:
 80% Consumers were using this product as Dishwasher
 Current Contribution Margin: 28% (Profit – Rs. 2456000)
PROBLEM STATEMENT
Should Lever Brothers Reposition RIN or not?
COMPANY
 LBPL a subsidiary of Lever Brothers International, produced and marketed a
variety of consumer products in Pakistan.
 Product line consisted of items such as:
• Shampoos
• Skin and shaving creams
• Edible oils
• Margarine
• Toilet soaps
• 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 Analysis – DETERGENTS 1988
Category Sales Vol (Tons) Vol Count % Growth compared to Price Per
1987 KG
Laundry Soap 247,000 93.9% 5% 10 - 15
Non Soap Detergent 14,500 5.5% 12% 20 - 48

powder
NSD Bar 1,550 0.6% 29% 24 - 25
Sales of total Fabric Wash in 1988 (Tons)= 263,050
 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.
Market Analysis – Dish Wash 1988
Category Sales Vol (Tons) Vol Count % Growth Price Per
KG
Hard Soap 52,800 88% 5% 20 - 40
Bar Soap 7200 12% 3% 25 - 40
Sales of total Dish wash in 1988 (Tons)= 60,000
• Levers did not have any formal product entry in the dishwashing marketing since late 1987
• Levers had introduced Sunlight liquid dish wash in early 1985
• It couldn't establish itself and was discontinued in late 1987, after failing to achieve sales of more than
20 tones a year
• In1989, ZIP dishwashing liquid sold by a competitor had sales of around 100 tones a year.
• ZIP was marketed in a 600 ml bottle at a retail price of rs.23.
RIN
 RIN was a solid, blue Non Soap Detergent bar introduced in 1984
 Its qualities were marketed as;
 Superior cleaning efficiency
 Abundant and instant lather in all water condition
 Prevents deposition of dirt on clothes because it contains active detergent and
phosphates
 Exudes a pleasant fragrance during wash
 Its fluorescence imparts brightness to clothes.
 It was priced to sell at retail for 2.95 per pack of 130 gm.
Discussion Questions
1. Trace out the Various Marketing Activities of RIN in Pakistan

2. After Conducting The Survey what alternative choices were
available to the company? Discuss the Pros. and Cons. Of all
alternative choices.
Alternative Choices Available to the Company
Market RIN
as both
Available
Options
Market RIN
Market RIN
as
as NSD
Dishwasher
Market RIN as Dishwasher
 Solution: Continue marketing RIN as Dishwasher
 Pros:
 Increased Contribution Margin
 Capacity Utilization (5000 Tons)
 Cons:
 Risk of losing Consumer Trust
 Perception of Adulteration of Product quality
 Losing Consumers using product as NSD
 Market Growth rate is 3% as compared to 29% of NSD
 Marketing investment require to change product segment
 Strategy:
 Product: Labeling Change
 Price: With the involvement of R & D reduce Variable Cost by 33%
 Placement: Change perception as Dishwasher
 Promotion: Media communication campaign to be carried out explaining the use as Dishwasher in order to
minimize loss of NSD consumers.
Market RIN as NSD
 Solution: Continue marketing RIN as NSD
 Pros:
 RIN is already selling as a product and they have started generating revenue
 As 65% of people are sing RIN as Dishwasher, leaving it to people’s perception will incur no
additional marketing cost
 Market growth is 29%
 Cons:
 Dishwasher costs lesser than NSD, So in long term it will incur more cost
 Current NSD market size is < 1% compared to overall Market
 Production capacity of 5000 will always remain under utilized. Contribution margin will remain <
30%
 Strategy:
 Lever should continue operating as it is
Market RIN as Both
 Solution: Continue marketing RIN as Both
 Pros:
 Market retention in both the segments
 It will attract more consumers as market will open to 80% segment.
 Capacity utilization of 5000 Tons. They will require more capacity at later stage.
 Cons:
 Risk of losing Consumer Trust
 It will incur much more marketing cost to market as dishwasher and NSD
 It might lose market share by 15% (NSD Consumers).
 Strategy:
 Product: Introduction of a new product in dish wash segment
 Price: With the involvement of R & D reduce Variable Cost by 33%
 Promotion: introduction of a new marketing strategy including a new advertisement which will
explain its multi purpose use
13 Our Recommendations
• Fabric + Dish washer
• Allows us to target entire customer base of Pakistan
• Plant is already underutilized, 2-in-1 use might revamp sales scenario
1 • Also, positioning as a ‘fabric washer’ only hasn’t yielded desired results
• Fabric washer only

• Looks at only part of the entire market
2 • Changes in product promotion and features can yield desired outcome
• Dish washer only

• Minimum cost implications
• However, leaves the potential fabric washer market untouched
3 • Demand of NSD bar in dish washer market is only 12%

Rin Detergent: To Position or Reposition

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RIN DETERGENT

Non Soap Detergent 14,500 5.5% 12% 20 - 48

Sales of total Fabric Wash in 1988 (Tons)= 263,050

Bar Soap 7200 12% 3% 25 - 40

Sales of total Dish wash in 1988 (Tons)= 60,000

1. Trace out the Various Marketing Activities of RIN in Pakistan

• Fabric washer only

2 • Changes in product promotion and features can yield desired outcome

• Dish washer only

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