Lever Brothers Pakistan Limited is a Pakistani conglomerate dealing in a vast assortment of products like edible oils, toilet paper, shampoos, solid bars, and more. One of its products, RIN Detergent, is a solid blue NSD fabric washer launched in 1984. It was priced at 2.95 per 130gm pack. The company's General Manager, Personal Products and Market Research, Irfan Mustafa, is in a quandary after learning that the detergent, which was launched as a fabric washer, is being used mostly as a dishwasher.
Harvard Business Review (M313A-PDF-ENG)
February 07, 2008
Case questions answered:
- What are the problems confronting Lever Brothers Pakistan Limited regarding RIN Detergent?
- What are the alternatives available with RIN?
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Case answers for RIN Detergent: To Position or Reposition
Introduction – RIN Detergent
Lever Brothers Pakistan Limited is a Pakistani conglomerate dealing in a vast assortment of products like edible oils, toilet paper, shampoos, solid bars, and more. One of its products, RIN Detergent, is a solid blue NSD fabric washer launched in 1984. It was priced at 2.95 per 130gm pack. The product was supported by an introductory promotion and advertising budget of Rs 5 million. Even with substantial marketing efforts, the sales figures were disappointing.
An analysis of the EBIT from RIN Detergent showed that it was 2.5 Million in1988. There was an increase in the market share in 1988 as compared to 1987.
- Laundry Soap- 5%
- NSD detergent-12%
- NSD bar-29%
Relaunch of RIN Detergent
At one point, the 130-gram packaging for the detergent was discontinued. Instead, 250 gms and 125 gms packs were introduced at 4.75 and 2.5, respectively. The variable cost per kg was reduced due to production efficiencies.
Demonstrations and trade shows were no longer held. Instead, the advertising and sales discounts were used as a promotional strategy. A new celebrity endorsement was also done. RIN Detergent was endorsed as a superior fabric washer rather than just a laundry soap. The relaunch stood victorious, and sales shot to 1000 tonnes in 1987. The price of the bars were then increased in April 1987 and in August 1988.
The management Management had a suspicion that RIN was being used as a dishwasher. In September 1988, Irfan Mustafa, General Manager, Personal Products, and Market Research of Lever, proposed a survey which was conducted by the domestic research bureau of the company in 12 cities. It revealed that the customers do not perceive the product in the same sense that the company wished it to be recognized. Though RIN Detergent was introduced as a fabric washer, 65% of the population surveyed used it as a dishwasher.
Here’s what all went wrong.