RIN DETERGENT: TO POSITION OR REPOSITION

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 billion1.

MARKET
In 1988, the total fabric wash sales of 263,050 tonnes in Pakistan consisted of 247,000 tonnes2 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
US $1=Rs 20.00 in 1988.
2
1 tonne = 1000 kg.
1
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 emphasize 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 percent against an expected 50 percent 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 theleading 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 percent. However, again only a 10
percent increase in sales accrued. No more consumer promotion schemes for RIN had been used
since 1985. However, some of Mr. Mustafa’s 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 women’s association meetings, girl colleges, “Juma Bazars3,”
and other special gatherings of women. Leaflets explaining RIN’s 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.

In June 1986, RIN’s 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 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.
2
two to three times a year. The volume of retailer orders for RIN during these promotions was 40 to
60 percent 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 organized trade meetings to promote the product.
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. When RIN was
launched in
1984, the distributors received a margin of 2.91 percent on the retail selling price. The margin was
increased to 3.30 percent in January 1985. Distributors could also claim reimbursement of
traveling expenses up to 0.20 percent of the retail value of goods ordered. The retailer margin had
remained at 7.4 percent of the retail price since RIN was introduced to the market.

THE COMPANY’S DILEMMA

In September 1988, Mr. Mustafa asked the Domestic Research Bureau (DRB) of Levers toconduct
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 analyzed was
4,328. Half of these respondents were on DRB’s regular Consumer Panel.

Mr. Mustafa received the survey results in January 1989. 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. 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 itsuse 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 to 80 percent of RIN sales were for
dishwashing. Mr. Mustafa felt that the blue color of the soap created this confusion as consumers
associated this color with dishwashing bars. The very first dishwashing bar introduced in Pakistan
was blue in color, and all the current ones on the market were bluish in color. 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 color.
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. However, in India a popular fabric washer was blue in color
and there was no other blue dishwashing bar.

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 percent 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.

3
 Exhibit 1

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 percent
Print 20 percent
Other 10 percent

Source: Information provided by Lever Brothers Pakistan Limited.

Exhibit 2 RIN Price/Weight History

Weight

130 g 125 g 250 g

1984 April Rs 2.95

1984 August 2.454
1985 January 2.95
1985 March 3.15
1985 April 2.455
1985 July 3.15
1986 June Discontinued Rs 2.50 Rs 4.75
1987 April Rs 2.80 Rs 5.30
1988 January Rs 3.00 Rs 5.65
1988 August Rs 3.25 Rs 6.00

Source: Information provided by Lever Brothers Pakistan Limited.

4
Operated as a Rs 0.50 price-off consumer promotion.
5
Operated as a Rs 0.70 price-off consumer promotion.
4
 Exhibit 3

RIN Sales Volume

Targeted Sales Actual Sales

Volume
Year 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: Information provided by Lever Brothers Pakistan Limited.

Exhibit 4

RIN Packwise Sales Breakdown

Standard Size6 Large Size7

Year (%) (%)

1984 100 -

1985 100 -

1986 82 18

1987 758 25

1988 78 22

6
Standard Size Tablet – 130g till June 1986;
125g from June 1986 onwards.
7
Large Size Tablet – 250g introduced June 1986.
8
The percentages are in terms 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.
5
 Exhibit 5
RIN Study on the Use of RIN

Q. 1 – Is RIN being used in your household?

Yes = 1 (verify and continue)

No = 2 (close interview)

Q. 2 – For what purpose is RIN being used in your household?

For fabric wash only = 1

For dish wash only = 2

For both fabric and dish wash = 3

Other (specify details) = 4

Source: Information provided by Lever Brothers Pakistan Limited.

Exhibit 6

RIN 1988 Income Statement

(Rs 000)

Net Proceeds from Sales (NPS9) 31,070

Raw Material and Direct Labor 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

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.
6
 ASSIGNMENT QUESTIONS

1. Evaluate Lever’s marketing planning and implementation regarding RIN from

1984 through 1988. What would you have done?

2. Identify and evaluate the alternatives available to Mr. Mustafa. What would
you do? Why?