Rin detergent positing or repositioning free essay sample

Case describes the introduction of Rin laundry detergent bar of lever Brothers Pakistan Limited. In initial days (1984) the sales of the detergent bar was far below the expectation regardless of many promotional activity of the product. General Manager Mustafa anticipated that it may be because of the vague advertisement and blue color associated with the bar. The problem may be the advertisement of Rin which portrays it as better than laundry soap so customer relates Rin from dish wash (which is considered superior product in the market). Then in June 1986 Rin was re-launched to focus on the target group where in a new advertisement campaign was started and resizing of the product was done. Mr. Mustafa now realized that despite of achieving the satisfactory sale in 1988 Rin was primarily perceived among the customer as dish washing soap not as a laundry detergent bar. Research Bureau of Lever in 1988 had shown that approximately 65 % of the respondents (half of them were regular Rin customer) used the product for dish wash instead of laundry. We will write a custom essay sample on Rin detergent positing or repositioning or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The decision problem before the Manager Mustafa was how to position Rin in the Pakistani market to build long term brand loyalty as well as a profitable business for the Levers. Rin was a non-soap detergent bar and a fabric washer that gives consumers a superior cleaning power with much less effort than other laundry bars in the market. But the main sales are coming from dish wash segment which shows that dish wash segment is easy to penetrate. Customer in this segment could be attracted towards a good product if the product delivers requisite value at appropriate price. Establish Rin as fabric washer and launch other variant of Rin bar in the dish washing segment is the best option as it will allow levers to enter in niche segment (NSD bar) and in long term will certainly give the advantage of early bird. This segment have small base now but is growing at rate of 29% and Rin is the only brand selling in this segment, so it must adhere to the this market and make its stronghold in due course with little change in the look of the wrapper and advertisement of the product . On the same time the market now can be captured through dish washing segment. Rin already tried to enter this segment with liquid wash but failed. The market is not yet very matured of the liquid wash. It is good that Rin discontinued liquid wash because launching two niche products can put extreme constrain on the finances of the company. So now Rin should launch the dish washing bar which will cost less than Rs 25(after reduction of 33% variable cost) to penetrate the market and make a stronghold of the brand in the mind of people of Pakistan. Such strategy will require the restructuring of the product line but will result in better market penetration and creating value for the customer. Hence in long term Rin with fabric as well as dish wash will lead to the creation of loyal customer. Situation Analysis: In initial days (1984) the sales of the detergent bar was far below the expectation regardless of many promotional activity of the product. General Manager Mustafa anticipated that it may be because of the vague advertisement and blue color associated with the bar. The problem may be the advertisement of Rin which portrays it as better than laundry soap so customer relates Rin from dish wash (which is considered superior product in the market). Then in June 1986 Rin was re-launched to focus on the target group where in a new advertisement campaign was started and resizing of the product was done. Mr. Mustafa now realized that despite of achieving the satisfactory sale in 1988 Rin was primarily perceived among the customer as dish washing soap not as a laundry detergent bar. Research Bureau of Lever in 1988 had shown that approximately 65 % of the respondents (half of them were regular Rin customer) used the product for dish wash instead of laundry. In Pakistan market non shop detergent bar was a niche product and Rin was the only NSD bar in the market in 1988. This segment was growing at the rate of 29% which is phenomenal growth rate for a niche product. The target segment in this case is the fabric wash market and point of difference is the non detergent bar quality of Rin. Main competitor in this segment is laundry soap which covers 93. 9% of the market. In non soap detergent segment lever has two products namely Surf and Sunlight which covers the 50% of NSD powder but in laundry soap market it does not have any offering. On the other hand in dish wash segment where the Rin is selling unintentionally is dominated by hard soaps. Bars consist of only 12% of the dish wash market. Due to its blue color and price, Rin was perceived by customers as the dish washer. Priced at around Rs 22. 5 to 24. 2 Rin is considered as low price product in dish washer segment . This is the indication that Rin has potential opportunity of launching product in this segment. Decision problem: The decision problem before the Manager Mustafa was how to position Rin in the Pakistani market to create demand for the niche product Rin, NSD bar and build long term brand loyalty as well as a profitable business for the Levers. Alternatives available to Rin. Rin as fabric washer and launch other variant of Rin bar in the dish washing segment: Since Rin is an international brand of Lever so positioning it as a dish washer in Pakistan will not create a good brand image in long term. Hence Rin should focus on building its image as a non detergent bar in fabric market. At the same time it must tap the potential of the dish washing market by introducing a variant of Rin with some modification.   Rin as Fabric and Dish washer – Focus on main segment and let the revenue come from secondary segment that is dish washing segment. Rin as Dish washer –Since it is easy to penetrate the dish washing segment and Rin has made significant hold by the amount of sales in dish washing segment. So reposition Rin as dish washer. Rin as fabric washer – Position the brand in fabric segment only. Take the necessary steps in terms of advertisement for the market penetration of the product. Marketing plan for implementation of alternatives. Rin as fabric washer and launch other variant of Rin bar in the dish washing segment: Positioning: Introduce two variants of Rin in the market one as NSD bar for fabric and second as dish washer. Target segment will be two different sections of the market and consumers are not left in confusion. Advertisement: Both the product should be easily differentiated in color and looks. The dish washer should be wrapped in the blue color wrapper while fabric soap should be wrapped yellow color rapper with a slight tint of blue. Even the advertisement plan for both should be different. For dish washer it should target the better quality, low price and can wash more number of dirty dishes than hard soap and other bars. On the other hand for fabric washer it should target the fact that it gives consumers a superior cleaning power with much less effort than other laundry bars in the market. The advertisement must be endorsed with some well known female personality. Finance: For fabric cleaning NSD bar it must not reduce the price. As NSD detergent is selling between Rs 20-48 per kg and have grabbed 5. 5% of the market share and growing at 12 % rate similarly NSD bar will also gain its hold in the market in due time. For dish washer it should remove the wash ingredient which will reduce the variable cost by 33% thereby reducing the price of the final product. By the time fabric wash is not attaining the required popularity the revenue will come from the dish washer. Additional costs will born by the company in retailing both variant and packaging for both variants. Heavy increase in expenditure in the form of advertisements and sales promotional campaigns is required if Rin will go for launching two different product. Distribution: During the trade promotional offers when distributers get additional 8% of margin (by getting 1 bar free on purchase of 12 bars) sale of Rin rises to 40 to 60 % while such increase in not registered in giving discount to the consumer directly. So Rin should target to give more margins to the distributer than its competitor. Rin should incentivize the distributors to promote its product by keeping it appropriately. 2. Not do anything and let Rin sell as a fabric as well as dish washer – Positioning: This will help in increasing the customer base without doing much alteration in the product. This will increase the sale and make a point of difference as Rin will be a universal washer may be fabric or dish washer. So this will cater to the primary need of the company to penetrate the market as fabric washer and secondary need to address the sale issue which will come mainly from dish washing segment. Finance: The actual sale in 1988 increased from the targeted sale by 19% which is generating 8% PBT (profit before tax). Additional cost will be incurred in more rigorous advertisement, other promotional activity and giving more incentive to distributers. Distribution: Same as in option 1 3. Rin as Dish washer Positioning: Reposition Rin as a dish washer and not as a fabric washer. Target the ‘actual’ customer, instead of the intended one. Advertisement: Five years of promotional activities failed to make much impact on the public so launching the new add where Rin is portrayed as a dish washer and compared with the hard soaps and bars will be launched. Finance: All the cost expanded till yet on promotion of Rin will become sunk cost and launching of new product will be undertaken. The cost of bar will be less as the fabric washing ingredient will be removed which will decrease the variable cost by 33%. Additional cost on new packaging and advertisement will be incurred. Distributer: Since the product will cheapest in category so the present margin will be sufficient enough for the required sale. The money instead should be invested on the advertisement of the product to make Rin a household name. 4. Rin as fabric washer Positioning: Positioning the product as a fabric washer only. Since it is a niche product it will take time to penetrate the market. Rin should stick to the aim of selling only the fabric wash and in the way the secondary selling will take place at its own pace. Advertisement: The message of Rin as a new and block blustered product should be properly conveyed to the customer. †You get much more out of Rin than you pay for† leaves customer in doldrums as it is a fabric washer or a dish washer. The look of the product must be changed with yellow cover so that it must not be confused as dish washer. Finance: The product will be same so some additional expenditure on packaging is required and more clear advertisement to target the customer will be mandatory. Distribution: The distributer margin must be increased than all other competitor in the fabric wash segment. The retailers must be sensitized to keep the product in the appropriate shelves with the other fabric washers. Establish Rin as fabric washer and launch other variant of Rin bar in the dish washing segment is the best option as it will lead to enter Rin in niche segment and in long term will certainly give the advantage of early bird. This segment have small base now but is growing at rate of 29% and Rin is the only brand selling in this segment, so it must adhere to the this market and make its stronghold in due course with little change in the look of the wrapper and advertisement of the product which is shown in the exhibit. On the same time the market now can be captured through dish washing segment. Rin already tried to enter this segment with liquid wash but failed. The market is not yet very matured of the liquid wash. It is good that Rin discontinued liquid wash because launching two niche products can put extreme constrain on the finances of the company. So now Rin should launch the dish washing bar which will cost less than Rs 25(after reduction of 33% variable cost) to penetrate the market and make a stronghold of the brand in the mind of people of Pakistan.