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Internship Report On

Submitted To

Mr. Shama E Zaheer Lecturer Institute of Business Administration

Submitted By

Sami Ashraf ZR 46 BBA 8th Batch


June 5, 2004 Institute of Business Administration University of Dhaka

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Competitive Strategy Analysis And Strategic Response For Detergent Brands At Lever Brothers Bangladesh Limited

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June 5, 2004 Mr. Shama E Zaheer Lecturer Institute of Business Administration University of Dhaka Dhaka

I, Sami Ashraf am hereby submitting my internship report. The last 10 weeks has been the most fabulous learning experience for me. Without your guidance and help this learning

I have tried my level best to come up with as well written and informative report as possible. However, because of the confidentiality policy of Lever Brothers Bangladesh Limited it has not been possible to put as many data and information as I would have liked to. Hope you enjoy reading the report just as much I enjoyed writing and working for the

With Regards

Sami Ashraf ZR46 BBA 8th Batch Institute of Business Administration University of Dhaka

report.

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experience would not have been the way it has been.

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Dear Sir,

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Subject: Letter of Transmittal.

Acknowledgements

This report would never have been the way it is without the help and guidance of the following people. I thank Mr. Shama E Zaheer for all his help, guidance and suggestions and above all the precious time that he spared for me on a regular basis.

for guiding me all the way till the end.

A special thanks goes to Mr. Sharaman Jha for providing me with invaluable insights about

I also thank all the countless others who helped me with data, information and analyzing them properly.

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P&G.

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I also thank Mr. Ahmed Zakaria Baig, my supervisor in Lever Brothers Bangladesh Limted

Executive Summary

Lever Brothers Bangladesh Limited is a dominant name in the Household and Personnel Care products market of Bangladesh. It is said that to go to the top is tough but to stay there is even tougher and Lever Brothers Bangladesh Limited has been successfully doing that extremely tough job of staying at the top for a long time now. They always work very hard to identify any threat in the market and find a way to neutralize that threat before it is too late.

Gamble has been posing a great threat with their brand Ariel and is expected to come to Bangladesh market with as much as 25% reduced price. This is learning that Lever Brothers Bangladesh Limited has learned from P&Gs strategies in India and other emerging markets. This will predominantly be a fight between Ariel of P&G and Surf Excel of Unilever. However, logically it will not be easy for P&G to come to this market with such a reduced price as they do not have any production facilities in Bangladesh. If they are to import the left with them will be simply too less. If they still come with a discounted price then they will have to rationalize their advertisement and other promotional expenses, which will make it is currently not being able to supply enough of their flagship detergent brand, Ariel in India for them to export detergent in Bangladesh before they expand their production facility. However, currently they are setting up new production facility in India and is expected to complete work by July after which they might come to Bangladesh with a price cut. Lever Brothers Bangladesh Limited will on the other hand take all necessary steps to if not prevent P&G from coming into Bangladesh at least make it a little tough for them to come in. It is suggested that as a pre-emptive measure, Lever Brothers Bangladesh Limited should cut down the cost of Surf Excel and at the same time do some heavy conventional and untough for them to, sell a detergent, which is not very well known in the market. Also, P&G detergent from India, which they have been doing, then after paying import tax the margin

because of lack of production facilities. In a situation like this, it will be next to impossible

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Recently in the premium segment of detergent powder arch rival of Unilever, Proctor &

conventional media advertising. Also as and when P&G comes in with Ariel, Surf Excel should do certain activities like line filling and other temporary promotional activities which will make it little more difficult for P&G to get a foothold in Bangladesh. Surf Excel also has a high brand equity on the other hand Ariel is a detergent which is almost unknown to the Bangladesh market. This advantage if utilized properly can work for Surf Excel and Ariel can be made to look like a copy Surf Excel brand. Many information used to work out the strategies discussed in this report are highly not actual and have been fabricated intentionally to maintain confidentiality.

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confidential and hence could not be used in the report. Also some data used in this repot are

II

Table of Contents

Description
Report Preliminaries Executive Summary Table of Contents List of Figures Introduction Background of the Report

Page Number

I III VI VII VIII

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Area of the Project Scope Objective Methodology Limitation 1. Organization Part 1.1 Overview of LBBL 1.2 History 1.2.1 Unilever 1.2.2 LBBL 1.3 LBBL at a Glance 1.4 LBBL Credo

VIII IX IX X XI 1 1 2 2 4 7 8 9 10 10 11 11 11 11 11 12 12 12 12 12

1.8 LBBL Code of Business Principles 1.8.1 Standard of Conduct 1.8.2 Obeying the Law 1.8.3 Employees 1.8.4 Consumers 1.8.5 Shareholders 1.8.6 Business Partners 1.8.7 Community Investment 1.8.8 Public Activities 1.8.9 The Environment

1.7 LBBL Goals

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1.6 LBBL Mission

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1.5 Unilever/LBBL Corporate Purpose

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III

1.8.10 Innovation 1.8.11 Competition 1.8.12 Business Integrity 1.8.13 Conflict of Interests 1.9 Current Operations 1.10 Markets served by LBBL 1.11 Distribution Network 1.12 Strategies 1.12.1 Functional Level Strategy 1.12.2 Business Level Strategy 1.12.3 Strategy in Global Level 1.12.4 Corporate Strategy 1.13 Organogram 2. Detergent Market 2.1 Fabric Wash Market 2.1.1 Soap Market 2.1.1.1 Ball Soap Market 2.1.2 Detergent Market

12 13 13 13 14 16 18 21 21 21 22 23 24 26 27 29 29 29 30 30 31 32 33 35 36 38 39 40 41 42 43 44 45 45 45 46

2.1.2.1 Mass Market

2.1.2.3 Premium Tier 2.3 Form Competition 2.4 Existing Strategy

3.1 Categories & Brands 3.2 P&G Billion Dollar Brands 3.3 P&G Strategic Choices 3.4 P&G Core Strategies 3.5 P&G India 3.6 P&G Bangladesh 3.7 Roll Out 3.7.1 Strategy 3.7.1.1P&G Global Strategy 3.7.1.2 P&G Strategy in Emerging Markets

3. Competitor Analysis

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2.2 Target Demographics

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2.1.2.2 The Mid Tier Market

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2.1.1.2 Mechanized Laundry Soap Market

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IV

3.7.1.3 P&G Strategy in India 3.7.2 Timing 3.7.3 Possible Cost After Price Cut 4. Lever Brothers Bangladesh Limited Response 4.1 Pre-emptive Strategy 4.1.1 Price Cut 4.1.1.1 Timing of the Price Cut 4.1.1.2 Surf Excel Cost Post Price Cut 4.1.2 Heavy Mass Media Advertising 4.1.3 Below The Line Campaign 4.1.4 Move into District Towns 4.1.5 The Mass Segment?? 4.2 Pro-active 4.3 Reactive 4.4 Brand Equity 4.4.1 Wheel 4.4.2 Surf Excel 4.4.3 Ariel 4.4.4 Tide 5. Recommendations 6. Conclusion

48 53 55 57 58 58 59 60 61 62 63 64 65 66 67 67 67 67 67 68 70

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List of Figures

Description
Figure 1: Distribution Chain of Command Figure 2: Organogram Up to Director Level Figure 3: Organogram Brands & Development Function Figure 4: Fabric Wash Market Figure 5: Three Tiers of Detergent Market

Page Number
18 24 25 26 28

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Figure 6: P&G Price Cut

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VI

Introduction

Everyday just like we brush our teeth and take a bath, we wash our clothes as well. Lever Brothers Bangladesh Limited has been providing the nation with quality fabric wash products for almost 40 years now. However, high quality products cost higher than ordinary products and with the kind of limited income our mass people has, it has not always been possible for them to use these products. Still the effort goes on to provide mass people with quality fabric wash products at a reasonable price. The latest technology in Fabric Wash is the Enzymatic Detergent Powders from Unilever and Proctor & Gamble. They call this category of detergents, Top Clean category. Unilever has a strong presence in Bangladesh with their Top Clean brand Surf Excel where guess, Top Clean category detergents comes with a Top Price as well which makes it even less accessible to the mass. Recently, both Unilever and P&G has decided not to charge a premium any longer on this category of detergents in the emerging markets of Asia which recent strategic shift has made this market highly competitive and in some regions of Asia Unilever and P&G are having street fights after they both slashed their prices by as much as paper it seems unlikely that the fight will be an even one (Due to nominal presence of P&G P&G. In this paper P&G strategies in different parts of the world are analyzed with special emphasis on their strategy in India. Based on the learnings from these strategies and counter strategies, a detail strategy for Lever Brothers Bangladesh Limited will be suggested. 25%. It is expected that the fight will very soon hit the Bangladesh market. Although in they used to do to offset the huge R&D costs incurred in developing these detergents. This as P&G presence with their Top Clean brand Ariel is not very significant. As one would

in Bangladesh market) still Lever Brothers Bangladesh Limited will not take any chance with

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VII

Background of the Internship Program

As part of Internship requirements, ten weeks organizational attachment with an organization is required. After joining Lever Brothers Bangladesh Limited as a Management Trainee in the Brands and Development function I was assigned to the Fabric Wash Team with particular focus on the premium category detergent which is Surf Excel. My first assignment was to investigate the strategies of P&G globally, in emerging markets and particularly in India. Based on the findings, future strategy of P&G in Bangladesh was sketched out a possible response by Lever Brothers Bangladesh Limited was suggested. This was a very extensive study and this is what this report is on.

It may be mentioned here that, the data and other information used in this study are confidential and hence a lot of them could not be used in this report. Some data used in this the policy of Lever Brothers Bangladesh Limited.

The area of the project has been confined to the Fabric Wash market only with special emphasis on the premium segment. The whole project is on what the strategy of P&G will be regarding their premium brand Ariel which belongs to the premium detergent segment and the response of Lever Brothers Bangladesh Limited with their premium brand Surf Excel. However, the mass detergent market have not been ignored while working out the strategies which will be evident in the report.

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Area of the Project

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report are not actual and have been intentionally fabricated to maintain confidentiality as per

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Scope

The scope of the report is limited to the Fabric Wash market only. While doing the competitor analysis, only Proctor & Gamble have been analyzed with special emphasis on their premium category brand, Ariel. While formulating the response strategies of Lever Brothers Bangladesh Limited, strategies have been worked out only for their premium category brand, Surf Excel. However, their while analyzing the market. mass-market brand Wheel has not been ignored while formulating the response strategy or

Objectives

The objectives of the report are as follows:

5. Formulate Lever Brothers Bangladesh Limited response to these strategies.

4. Predict future P&G strategy in their detergent category in Bangladesh.

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3. Analyze P&G strategies in their detergent category in India.

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2. Analyze P&G strategies in their detergent category in the Emerging Markets of Asia.

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1. Analyze P&G strategies in their detergent category Globally.

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Methodology

All the analyses are done based on secondary information. The sources of information used to analyze P&G strategies are: 1. Unilever archive 2. Lever Brothers Bangladesh Limited Archive. 3. Market Research Information from Bangladesh. 5. Market Intelligence from Bangladesh. 6. Market Intelligence from India. 7. The Internet. 8. Past experience of Unilever. 4. Market Research Information from India.

1. Past strategies from Unilever archive.

2. Past strategies from Lever Brothers Bangladesh Limited archive. 4. Market Intelligence Information. 6. Sales information of Surf Excel.

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5. Production information of Surf Excel.

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3. Market Research Information.

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The sources of information used to formulate strategies for Lever Brothers Bangladesh are:

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Limitations

The only limitation faced is, Lever Brothers Bangladesh Limited is not a listed company in any stock market of Bangladesh as a result of which, they do not disclose ANY financial information to the public. This has compelled to exclude the financial analysis section from this report. Also this being a conservative organization, do not allow any other information or data organization.

production or sales data to anyone outside the organization or even inside the organization who do not have proper authorization. Because of this policy it has not been possible to strategies for Surf Excel and Lever Brothers Bangladesh Limited in this report. Most of the data used in the report are not actual and have been fabricated to maintain confidentiality as per the policy of Lever Brothers Bangladesh Limited. Any inconvenience is regretted.

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include the data and other information used to analyze different strategies and work out

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By policy, Lever Brothers Bangladesh Limited do not disclose any financial, research,

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belonging to Lever Brothers Bangladesh Limited to be disclosed to anyone outside this

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1. Organization Part

1.1 Overview of Lever Brothers Bangladesh Limited

Lever Brothers Bangladesh Limited is a subsidiary of Unilever, worlds one of the largest Household and Personnel Care and Foods Manufacturer with an annul turnover of 47Billion leading Household and Personnel Care producer in Bangladesh with 15 brands and numerous sub-brands. They have been here in this country for the last forty years and have a production facilities. Its offices are located in:
Registered Office

Lever Brothers Bangladesh Limited

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Corporate Office

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51 Kalurghat Heavy Industrial Area P. O. Box # 125 Chittagong 4000 Bangladesh

Lever Brothers Bangladesh Limited ZN Tower Plot No. 2, SW (1) Road No. 8 Gulshan 1 Dhaka 1212 Bangladesh

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huge manufacturing facility in Kalurghat, Chittagong aside from six other third party

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Euro or approximately 3,20,000 Crore Taka. Lever Brothers Bangladesh Limited is the

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1.2 History

1.2.1 Unilever Unilever is one of the largest fast moving consumer goods companies in the world. Its roots go back more than a century! Margarine was first produced commercially in the Netherlands in the 1870s and by 1927 two

Brothers, in 1885 and soon established soap factories around the world. In 1917, he began to Group came together in 1930 through the merger of Margarine Unie and Lever Brothers.

truly multi-local multinational company. With deep roots into the local cultures in which it operates. Unilever offers brands suited to local tastes. Every day 150 million people choose our brands to feed their families, groom themselves and clean their homes!

Some Facts about Unilever

Worldwide turnover in 2003 was 47,700 million Euros Employed 247,000 people, with 90% of managers locally recruited and trained. Over half of Unilever's sales are generated by its foods division brands. In many parts of the world Unilever leads the home care market with brands such as Brilhante, Comfort, Skip and Omo.

1. Organization Part

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today operates in more than 100 countries across the world. Unilever is, in every sense, a

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With a portfolio comprising of Home and Personal Care and Foods products, Unilever

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Since then Unilever has operated as one.

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diversify into foods, ice cream, acquiring fish, and canned food businesses. The Unilever

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Margarine Unie. Meanwhile, in the UK, William Hesketh Lever founded his company, Lever

early manufacturers, Jurgens and Van den Bergh, decided to merge their operations to form

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Unilever's top personal care brands include Lux, Ponds, Sunsilk, Rexona, Axe, and Dove In 2002 Unilever spent 1,166 million Euros on research and development - about 2.4% of its turnover. Unilever spent 69 million Euros on community programs in 2002. Unilever aims to source all fish from certified, sustainable fisheries by 2005. Unilever has 111 sites certified to the international environmental management standard ISO 14001.

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1.2.2

Lever Brothers Bangladesh Limited

The year 1964 marked a new beginning for Kalurghat in Chittagong. It was in this year that Lever Brothers Pakistan Ltd a subsidiary of Unilever, the Anglo Dutch Consumer goods Company, decided to establish a manufacturing unit in Kalurghat. Lever Brothers started its quest to contribute to enhance the quality of human life, not confining its mission to produce quality branded products, but also providing opportunities of employment, developing ancillary industries, protecting the environment, and propagating community development through social contributions. In 1964, Lever Brothers started producing mechanized soaps, thus ushering industrialization in the area. Productions started off with Sunlight soap and Lifebuoy soap. Back in those days shipped to Pakistan. However, the political scenario was deteriorating and after a ravaging war in 1971, Bangladesh became an independent country. It was after independence that Government of Bangladesh owning the remaining 39.25% shares. Post liberation period evidenced accelerated growth for the company. Demand started rising introducing Lux - the beauty soap and Wheel. Launched in 1972 Wheel entered the consumers with unique care benefits for hand and fabric, a generic weakness in cottage soaps. It gradually became the secret ally of Bangladeshi women by extending the caring hand to ease her daily laundry chores. The early eighties witnessed expansion of Lever Brothers Bangladesh Ltd through diversification! Calibrating direction, the mission now included enhancing quality of life through other personal products aspiring aestheticism like sparkling white teeth, fresh breath, beautiful hair, and glowing skin. A Personal Product Plant was established to manufacture shampoo, toothpaste, and skin care creams. the average weekly capacity was 50 to 60 tons. After meeting the local demands, surplus was

1. Organization Part

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mechanised laundry category, traditionally dominated by cottage soaps. It appealed to the

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and the company continued its mission to meet consumer needs by producing quality soaps,

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Lever Brothers Bangladesh Ltd was constituted with Unilever owning 60.75% shares and the

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In the early 90's Lever Brothers entered the tea-based beverage market introducing Lipton Taaza, Lever's flagship packet tea brand, with the objective to be the most preferred tea of the Bangladeshi consumers. The appetite to innovate and grow was insatiable. New products such as fabric washing powders were manufactured for the first time with formulations technically suitable for conditions in Bangladesh at an affordable price. Such washing powders led the country to witnessing a revolutionary change in washing habits moving from direct application to significantly convenient solution wash. Product formulations were of international standard and by tapping into the vast know-how base of the parent Company - Unilever, Lever Brothers was able to make the products ample employment opportunities both direct and secondary with attendant fillip to the economy of the country. available to the consumers at an affordable price. The growth of the company provided

journey to grow and the quest for excellence continue unabated! Brief History of Brand Launches by Year:

1964 1972 1982 1987 1987 1989 1988 1990 1991

1964

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Focused on meeting and responding to the needs of our consumers in Bangladesh, the

Lifebuoy Lux Wheel Laundry Soap Sunsilk Close Up Vim Clear Fair & Lovely Lipton Yellow Label Ponds'
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1991 1992 1993 1997 2002 2002

Pepsodent Taaza Surf Excel Wheel Washing Powder Clinic Rexona

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1.3 Lever Brothers Bangladesh Limited at a Glance

Constitution Operations Product Categories

: Unilever - 60.75% shares, Government of Bangladesh - 39.25% : Home and Personal Care, Foods : Household Care, Fabric Cleaning, Skin Cleansing, Skin Care, Oral Care, Hair Care, Personal Grooming, Tea based Beverages

Manufacturing Facility

: We have a Soap Manufacturing factory and a Besides these, there is a tea packaging operation in

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Employees

: Over 4000 people are provided direct employment through our factories, distributors, and exclusive manufacturers.

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Chittagong and five manufacturing units in Dhaka, which are exclusively dedicated to Lever Brothers.

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Personal Products Factory located in Chittagong.

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Close Up, Sunsilk, Lipton Taaza

Top Brands

: Wheel, Lux, Lifebuoy, Fair & Lovely, Pond's,

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1.4 Lever Brothers Bangladesh Limited Credo

Several product categories. Various brands. Numerous variants and pack sizes The choices are endless. We provide wide ranging options to fulfill diverse aspirations and tastes. We tailor our products to satisfy our consumers with

of outlets.

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individuals have different needs.

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realization of the simple universal fact different

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The wide range of products and brands we offer are a

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We span the country covering hundreds of thousands

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different needs and means.

1.5 Unilever/ Lever Brothers Bangladesh Limited Corporate Purpose:

Unilevers purpose is to meet the everyday needs of people everywhere. To anticipate the aspirations of their consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life. Their deep roots in local cultures and markets around the world are their unparalleled inheritance and the foundation of their future growth. They bring their wealth of knowledge and international expertise to the service of local customers a truly multi-local

Their long-term success requires a total commitment to exceptional standards of embrace new ideas and learn continuously.

They believe that to succeed requires the highest standards of corporate behavior towards

This is Unilevers road to sustainable, profitable, growth for their business and long-term value creation for their shareholders and employees.

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their employees, consumers and the societies and world in which we live.

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performance and productivity, to working together effectively and to a willingness to

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multinational.

1.6 Lever Brothers Bangladesh Limited Mission

The mission of Lever Brothers Bangladesh Limited is:

Continuous effort to meet the everyday needs of people everywhere

1.7 Lever Brothers Bangladesh Limited Goals:

1. To manufacture high-standard products. 2. Promoting products to the highest extent

3. Producing large volume to achieve production cost economies.

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4. Enabling quality products to be sold out at obtainable prices.

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1.8 Code of Business Principles

The following Unilevers business principals are also applicable for Lever Brothers Bangladesh Limited. 1.8.1 Standard Of Conduct They conduct their operations with honesty, integrity and openness, and with respect for the human rights and interests for their employees. They will similarly respect the legitimate

1.8.2 Obeying The Law: regulations of the countries in which they operate. 1.8.3 Employees:

company. They will recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed. They are committed to safe compulsory or child labor. They are committed to working with employees to develop and and the right of employees to freedom of association. They maintain good communications with employees through company based information and consultation procedures. 1.8.4 Consumers: Unilever is committed to providing branded products and services which consistently offer value in terms of price and quality, and which are safe for their intended use. Products and services are accurately and properly labeled, advertised, and communicated. and healthy working conditions for all employees. They will not use any form of forced, enhance each individuals skills and capabilities. They respect the dignity of the individual

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respect and where everyone feels responsible for the performance and reputation of their

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Unilever is committed to diversity in a working environment where there is mutual trust and

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Unilever companies and their employees are required to comply with the laws and

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interests of those with whom they have relationships.

1.8.5 Shareholders: Unilever conducts its operations in accordance with internationally accepted principles of good corporate governance. They provide timely, regular and reliable information on our activities, structure, financial situation and performance to all shareholders. 1.8.6 Business Partners: Unilever is committed to establishing mutually beneficial relations with our suppliers, customers and business partners. In their business dealings they expect their business partners to adhere to business principles consistent with their own. 1.8.7 Community Involvement:

Unilever strives to be a trusted corporate citizen and, as an integral part of society, to fulfill

1.8.8 Public Activities:

through bodies such as trade associations, in the development of proposed legislation and other regulations, which may affect legitimate business interests. They neither support promote party interests. political parties nor contribute to the funds of groups whose activities are calculated to

Unilever is committed to making continuous improvements in the management of their environmental impact and to the longer-term goal of developing a sustainable business. They work in partnership with others to promote environmental care, increase understanding of environmental issues and disseminate good practice. 1.8.10 Innovation: In their scientific innovation to meet consumer needs they respect the concerns of their consumers and society. They work on the basis of sound science applying rigorous standards of product safety.
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1.8.9 The Environment:

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interests. They co-operate with governments and other organizations, both directly and

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our responsibilities to the societies and communities in which they operate.

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1.8.11 Competition: Unilever believes in vigorous yet fair competition and supports the development of appropriate competition laws. They conduct their operations in accordance with the principals of fair competition and all applicable regulations. 1.8.12 Business Integrity: Unilever does not give or receive whether directly or indirectly bribes or other improper advantages for business or financial gain. No employee may offer give or receive any gift or bribe must be rejected immediately and reported to management. Their accounting records and supporting documents must accurately describe and reflect the nature of the underlying maintained. 1.8.13 Conflicts Of Interests: transactions. No undisclosed or unrecorded account, fund or asset will be established or payment, which is, or maybe construed as being, a bribe. Any demand for, or offer of, a

which could conflict with their responsibilities to the company. They must not seek gain for themselves or others through misuse of their positions.

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All Unilever employees are expected to avoid personal activities and financial interests,

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1.9 Current Operations:

Existing Products Home Care

Laundry
1. Wheel Laundry Soap 2. Wheel Washing Powder

Household care
1. Vim Scourer 2. Vim Bar 3. Vim Liquid Personal Care

1. New International Lux 2. Lux Body Wash

Skin Care
1. Fair & Lovely 2. Fair & Lovely Body Fairness Milk 3. Fair & Lovely Ayurvedic 4. Fair & Lovely Cold Cream 5. Ponds Snow

1. Organization Part

5. Life Buoy Gold 6. Life Buoy Liquid Gold

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4. Life Buoy Neem

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3. Life Buoy Extra Strong

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Skin Cleansing

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3. Surf Excel

6. Ponds Cold Cream 7. Ponds Vanishing Cream 8. Ponds Dream Flower Lotion 9. Ponds Dream Flower Talc

Hair Care
1. New Sun Silk Shampoo 2. All Clear Shampoo 3. Clinic Plus Shampoo

1. Close-up Gel Toothpaste 2. Pepsodent Toothpaste 3. Pepsodent Toothpowder

2. Rexona Roll-on. 3. Rexona Tube Deo Foods

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2. Lipton Taaza 3. Lipton Taaza Tea Bag

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1. Lipton Yellow Label Tea Bag

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1. Rexona Deo Spray

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Deo

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Oral Care

1.10 Markets Served by Lever Brothers Bangladesh Limited

Lever Brothers Bangladesh Limited serves all kinds of markets. Its product mix actually caters for almost all types of markets. Following is a detail of the types of markets served. Broadly speaking, the distribution network of Lever Brothers Bangladesh Limited is vast and reaches all sorts of markets on at least twice a week basis. They serve markets in:

3. Rural markets.

Limited reaches more than one third of them directly at least twice a week. The other half rural areas like Chittagong hill tracks and unrelated retail outlets like clothes stores etc. So it is evident that there is not much scope for Lever Brothers Bangladesh Limited to expand its direct coverage as almost all related and economically viable outlets are already covered. The types of outlets that are covered directly are: 1. Grocer stores. 2. Wholesalers. 3. General stores. 4. Tea stalls. 5. Cosmetic stores. 6. Super stores.

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that is not covered directly are predominantly, small tea shops, small retailers in the deep

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AcNielsen Bangladesh Limited by a census conducted last year) Lever Brothers Bangladesh

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Out of the total number of retailers in Bangladesh (the total number has been provided by

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2. Sub-urban areas (small towns).

1. Urban areas.

The few retailers who sell Lever Brothers Bangladesh Limited products but are not served directly are served by the wholesalers which make this channel very important. The company also gives considerable importance to the wholesalers and from time to time special trade promotional activities are done specifically for the wholesalers. One suck kind of activity is known as Dosti Program. However, the detail of Dosti program is outside the scope of this report and hence is not elaborated further. This is basically a summary of the markets served by Lever Brothers Bangladesh Limited.

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1.11 Distribution Network

Distribution of Lever Brothers Bangladesh Limited products is done by the Customer Management Department. It is a huge network with thousands of field workers working six days a week. It is through their relentless effort that the goods reach the end consumers. The basic structure of distribution is as follows:

Regional Manager

Area Manager

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Delivery Man

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Territory Manager

Distributor

Sales Supervisor

Distributors Sales Representative

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Cashier
Figure 1: Distribution Chain of Command
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Director Customer Management

The Customer Management Director is the head of the sales or Customer Management team. Apart from others, the regional managers reports directly to him. The whole of Bangladesh has been divided into five regions based on geography and sales volume. The regions are, 1. Central Metro Region (Dhaka). 2. Central Outer Region (Dhaka). 3. Eastern Region (Chittagong and Sylhet division). 4. Northern Region (Rajshahi Division). 5. Southern Region (Khulna and Barisal Division).

Each or these regions have two or more areas headed by the area manager who reports to territory manager who reports to the area manager. The territory manager has his office in the distribution house of the area (in case of multiple distribution house in one territory he representatives, cashiers and delivery men.

The Territory Manager is an employee of Lever Brothers Bangladesh Limited but below him distributor of a certain territory, it has to sign a contract where it says that the distributor will number of people in each trade will be advised by the territory manager of that particular territory. The day to day work plan of these people will also be set by the territory manager although they will be supervised by the sales supervisor who will report to the distributor and Territory manager. This contract also says that there will be a room in the distribution house to be used by Lever Brothers Bangladesh Limited employees, primarily by the Territory Manager. In every distribution house there is an issue of dual authority. The problem is the distributors sales representatives, cashiers and delivery men reports to both the distributor and territory manager which can potentially create problems. However, Lever Brothers Bangladesh
1. Organization Part Page 30 of 84

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have to employ certain number of people in each trade (i.e. cashier, supervisor etc.) and the

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the distributor and others are simply distributors employees. When a company becomes

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Limited do not consider their distributors as just a company or person working for them rather they consider the distributors as partners in business where both have the same goal; achieving greater sales volume. By doing this, now there are no issues regarding dual authority and all the territories are running smoothly. It may be mentioned here that, the distributors sales representative (DSR), cashier and delivery man is one group. The DSR takes the orders from the markets, the cashiers collect the payment as per order and based on orders and payment, the delivery man delivers the goods to the intended retailers. This distribution network is very vast and can reach literally any corner of the country any day of the week.

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1.12 Strategies

1.12.1 Functional Level Strategies: Lever Brothers Bangladesh Ltd follows different functional level strategies to gain competitive advantages and sustain it in the long run in the matured industries. They increase their efficiency through exploiting economies of scale and learning effects. For example, 808,720 bars of soaps, 1,023,810 packets of detergent powders, 154,

one day in Bangladesh by Lever Brothers.

easy to manufacture. As a result, they can provide quality products at cheaper rate. They have higher customer responsiveness rate. They carry out extensive research to innovate new products and modify the existing products to better satisfy the consumers. They continuously innovate products, promotional activities, packaging and

Lever Brothers strategic managers adopt different business level strategies to use the companies resources and distinctive competencies to gain competitive advantage over its rivals. These are discussed below: They follow cost-leadership strategy as they have intermittent over capacity and the ability to gain economies of scale. This way they can produce cost effective products and yet be profitable. Moreover, most of the LBBL products are designed for the mass. For

1. Organization Part

1.12.2 Business-Level Strategies:

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distribution. This way they can respond quickly to customer demands.

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through training and perform research and development function to design products that are

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They adopt flexible manufacturing technologies, upgrade the skills of employees

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jars, bottles and sachets of creams and lotions, and 35, 000 packets of tea are produced in

430 toothpaste tubes and sachets, 329, 530 bottles and sachets of shampoo, 156, 910 tubes,

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example, Wheel, Vim. As a result they go for mass production and marketing, therefore achieve cost leadership. They also follow differentiation strategy for some products to meet the needs of the consumers in a unique way. For example, for Sun Silk Shampoo they have different ingredients for different hair types. They also target different market segments with different products to have broad product line. By product proliferation they reduce the threat of entry and expand the range snow, cold cream, vanishing cream, dream flower lotion, daily face wash and dream flower magic talc and classic talc. 1.12.3 Strategy In The Global Environment: of products they make to fill a wide variety of niches. For example, the Ponds brand has

Lever Brothers Bangladesh Ltd. is a multi national company. The main company is Unilever. personal care items are mainly sold in Bangladesh market. It follows some generalized strategies and principals of Unilever. However, they also modify different strategies based on the national conditions. The different strategies that they follow in the global environment

quality, innovation, or customer responsiveness. Moreover, they have long-term experience for running this business. The different policies and strategies Unilever follows and their experience is transferred to Lever Brothers Bangladesh Ltd. For example, Unilevers worldwide supply chain network helps LBBL to get supplies at cheaper rate as most of the raw materials are bought from foreign countries. These transferred distinctive competencies gain LBBL competitive advantage.

1. Organization Part

brands. They have unique strengths that allow a company to achieve superior efficiency,

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Unilever is a world wide famous company comprising internationally renowned

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are stated below:

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They import the raw materials from the places where it is less costly, thus achieve location economy. For example, they import the Fair & Lovely Fairness body milks cap from France because it is cost effective. They are locally responsive. They are always ready to improve and modify their products to meet the needs of the local customers. For example, Sun Silk Mehendi is especially designed for the local consumers, as there is demand for it. LBBL follows a multi domestic strategy where the companies extensively customize

1.12.4 Corporate Strategy: LBBL carries out the following corporate level strategies:

materials. For example, a French supplier on contract basis supplies the Fair & Lovely body milk lotions cap. The similar case happens for distributors as well. They have a diversified business. LBBL has both related and unrelated diversification. They compete in nine different industries with various products from home care, personal share the same manufacturing facilities, inputs and specially the distribution channels.

1. Organization Part

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care and even food products. They have economies of scope as most of the products can

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both their product offering and marketing strategy to different national conditions.

1.13 Organogram

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Figure 2: Organogram upto director level

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Director Brands & Development

Director Customer Management

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Director Supply Chain

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Chairman & Managing Director

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Director Human Resources

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Director Brands & Development

SBM Hair Care Product Development Manager Packaging Development Manager Asst. Pkg. Development Manager Rural Activation Manager Outdoor Activation Manager Events Activation Manager Dental Services Manager SBM Rexona

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Development Manager

Activation Manager

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Marketing Manager (Body & Fabric Wash)

Media Manager

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Market Research Manager Asst. Market Research Manager SBM Lifebuoy & Vim SBM Wheel & SXL Management Trainee SXL

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SBM Tea SBM Oral Care Figure 3: Organogram Brands & Development Function

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SBM Fair & Lovely SBM Ponds

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2. Detergent Market

There has been a market for detergent in Bangladesh for decades but it is only recently that this market has started to evolve towards a mature and prospective market. The whole market is called fabric wash market which has two major divisions in it; the soap market and the detergent market. The diagram below will explain it better.

Fabric Wash Market

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Figure 4: The Fabric Wash Market

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Ball Soap Market

Mechanized Laundry Soap (MLS) Market

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Mass Detergent Market

Soap Market

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Detergent Market

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Premium Detergent Market Page 37 of 84

2.1 Fabric Wash Market

It is needless to say that this market has been there since the dawn of times. History says people used to wash their clothes using certain home made detergents which changed with new innovations and with time. Not too long ago the only thing people used to use to wash their clothes is Ball Soaps. This was easy to make, a low technology product which many people were able to make in their backyards and it was cheap. The raw materials required to make this product was also readily available in the nature. It was only in the mid 60s that a Mechanized Laundry Soap was first introduced in Bangladesh predominant Ball Soap market. Then with time many other MLSs came into the market wash product hit the market called Jet Detergent Powder. This was a government owned venture which did not do much marketing activities and still was able to capture a decent amount of the market primarily because it was something different and the market looked at it as a up-market product. However till 1997 this was the only detergent in the market but things were about to change very soon. Lever Brothers Bangladesh Limited after doing some test marketing with a few Tongi and the primary target was to become the number one detergent in the market. Detergent Powder. Wheel became the number one detergent in the market surpassing the decades old heritage brand Jet in just less than a year (in terms of volume). And there started a fairytale journey for Wheel Washing Powder (WWP). Today WWP is more than ten times bigger than its nearest competitor, Jet. In the mean time seeing fairytale success of WWP numerous other detergent brands entered into the market which are yet to topple Jet Detergent Powder let alone WWP. A few years later inspired by the success of Wheel Washing Powder, Lever Brothers Bangladesh Limited decided to create a new category in the detergent segment mainly to counter the imported detergent powders. There Lever Brothers Bangladesh Limited introduced Surf Excel, its premium washing powder with break through formulation in a
2. Detergent Market

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The only major competitor for Wheel Washing Powder was the heritage brand Jet

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detergents decided to enter the detergent in grand style. A factory was established in

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and posed a challenge to the ball soaps. During this period another new form of fabric

in a mass scale. This was called Wheel and the first major challenger of the

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new platform; stain removal. Shortly after Surf Excel was introduced it also became the leader in its category. This category was clearly distinguished from the existing other categories in terms of pricing and the benefits offered. However, in terms of pricing the current detergent market can be divided into three categories as follows:

Tk. 160+/Kg (Surf Excel)

Premium Segment

Mid-price Segment

Figure 5: Three tires of Detergent Market

2. Detergent Market

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Mass Market Segment

Tk. 35-45/Kg (Wheel, Square, Keya, Aromatic etc.)

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Tk. 60-80/Kg (Primarily only Jet)

2.1.1 Soap Market The soap market is the bigger market of the two ie. soap and detergent market. The soap market have been there for ages and people are habituated in washing their clothes by scrubbing it with soap. People have a common perception that the clothes do not clean unless soap is scrubbed with considerable physical power and then the cloth is rinsed against something hard. This is the main reason why still today there is such a big market for soap. Another perception people have is that after soaking the cloth in detergent solution extra soap needs to be put as top-ups in areas of tough stain such as the collar of the shirt. 2.1.1.1 Ball soap market More than two third of the soap market is ball soap market. Ball soaps are easy to make Laundry Soaps, people have a perception that this soap cleans tougher stains better. In the market there is no single dominant ball soap producer. Ball soaps are mainly not have much perfume in them and have some basic detergency properties. They are cheap, they sell a lot. Their volume share and value share are significantly and value share is less than half the market. One kg of ball soap can cost as less as Tk.15 and cheap. Also as they are very hard compared to their counterpart, Mechanized

Mechanized laundry soap or MLS is a superior product than ball soaps. These soaps are costly, have much higher detergency properties which means less soap is required, does significantly less harm to clothes and hands than ball soaps, and as they are produced mechanically, they are consistent in quality. These soaps also has perfume in them, nice attractive packaging, most significantly, they come from known producers which assures high quality products. The main draw back of these soaps is the price of the soap. As mentioned earlier, MLSs costs around Tk. 55-65/kg as opposed to Tk. 15-20/kg for ball soaps. People in general know that MLS is a superior quality product than ball soaps but in most cases cannot afford MLS. When a person cannot eat twice a day, quality clean for their clothes is never a priority.
2. Detergent Market

2.1.1.2 Mechanized Laundry Soap Market

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produced locally and sold at a very cheap price without much packaging. These soaps do

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2.1.2 Detergent Market The detergent market is very big in Bangladesh although smaller than the ball soap market. As mentioned earlier, this is a three tier market with the lowest tier known as the mass market tier being the biggest and the top tier being the smallest in terms of volume. However in terms of value, the middle tier is the smallest. Below is a more detail look into the three tiers. 2.1.2.1 The Mass Market Wheel Washing Powder is the dominant leader in this market with market shares more than all the other players combined. The total market size in terms of volume is extraordinary and over the last few years the volume growth in this market has platued. the markets of Bangladesh a single detergent powder had monopoly business. The detergent powder is called Jet Powder. Jet almost became a generic name for detergent future in it. The rise of this market is a fairytale story which started in the mid nineties. For ages in

During the early nineties, Lever Brothers Bangladesh Limited started marketing their Brothers Bangladesh Limited finally decided to launch a mass market detergent powder Washing Powder. The name Wheel was used to leverage from the already well

The initial target was to sell more than Jet Powder in three years time and to do so, the people needs to be educated first. So they launched their new detergent powder and at the same time spent humongous amount to educate the market or what is known as market development. The result was mind boggling. In the very first year Wheel sold more that Jet Powder in terms of volume and for six consecutive years Wheel grew at more than 100%. Today, if Wheel is a hay stack then Jet is a pin in the hay stack. What happened at the same time is seeing the incredible growth of Wheel, numerous other detergent brands came into the market. Making detergent powder is not a very complicated technology and it seemed like everyone was now making detergent
2. Detergent Market

established Wheel Laundry Soap.

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priced at half of what Jet Powder costs, and they named their detergent powder, Wheel

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premium brand Surf on a test basis. After carefully evaluating the market, Lever

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powder. Very few others ever ventured into this market. It seemed like a market with no

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everywhere. These brands became Me Too brands beside Wheel. None of them could till date pose any significant challenge to Wheel although, all these brands combined takes up a big chunk of the detergent market which is a concern for Wheel today. This market is extremely price sensitive and most of the people are not soles detergent powder users. They use either ball soap or laundry soap as a top-up on detergent. This means, they first soak the clothes in detergent solution and while washing, they scrub some parts of the clothes with a ball soap or a laundry soap and finally rinse the clothes. Many of these people would like to upgrade to a better detergent like Surf Excel but due to their monitory constrains they refrain from upgrading. However, occasionally some of these consumers buy sachet of Surf Excel to be used on special clothes or during special occasion. 2.1.2.2 The Mid Tier Market

Bangladesh. The market size of Jet has shrunk significantly and is today barely surviving. decades now and as they do not have too many complains, they are extremely reluctant intimidated into trying something better provided they are not required to pay too much

everyday passing, their visibility in the market place is also decreasing. There will be a day when that loyal consumer group to Jet will find it difficult to find Jet in the marketplace. This will ultimately lead to these people trying out other brands and this is a fact that, there are better brands than Jet Powder in the market. Also, the bigger competitors of Jet from other categories will one day squeeze Jet Powder out of the market. What happens to Jet in the future is yet to be seen but this is certain that future do not look very rosy for Jet Powder.

2. Detergent Market

The main problem for Jet is, as they are increasingly becoming a smaller brand with

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to tryout other brands. Nevertheless, even then, there are some people who can be

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This market predominantly belongs to Jet Powder, the heritage detergent brand of

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2.1.2.3 Premium Tier The premium tier is the smallest tier in terms of volume but the second biggest in terms of value. This is the tier which has premium and state of the art technology detergents like Surf Excel and Ariel. Detergents in this tier costs Tk160 per kg and above. This tier is dominated by Surf Excel with only a nominal share going to Ariel and the other imported detergent brands. Without a doubt the best detergents belongs to this category. The problem is, good things do not come cheap and these detergents costs four times or more than the mass market detergents. This tier is mostly un-accessible by the mass people although everyone is aware of Surf Excel if not the other brands. People aspire to buy these detergents but price has always been the main barrier. However, with Surf Excel sachet priced at Tk. 3, many people can now buy these detergents although at a smaller scale. The beauty of these detergents is the quality of clean they give. Unilever and P&G color of the cloth. Also with new innovations these detergents are getting better

2. Detergent Market

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brands in this tier are Enzymatic detergents which removes stains without harming the

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2.2 Target Demographics

Everyone washes their clothes and hence everyone needs detergent of some form or the other. The only difference is in the form of detergent people uses ie. Ball soaps, Mechanized Laundry soaps, mass market detergents or premium detergents. The type of detergent selection usually has a relationship with, habits, perceived cleaning capability and income to say the least. The target demographics if the two Lever Brothers Bangladesh Limited detergent brands are described below. a. Wheel: Wheel has perhaps one of the biggest consumer base in the country belonging to all Socio-Economic Class (SEC) in all geographic locations of primarily mean people belonging to SEC B & C.

In Bangladesh not long ago the only form of detergent was Ball soap with a mainly developed the market for detergents by educating the people about detergent powder and eventually upgrading them to detergent from ball soap sound people upgraded quicker than the rest but eventually a substantial dual users of detergent powder and some form of soap (ball soap or MLS). They prefer using soap on top of detergent to get the best clean although scientifically this is not the best practice. Most of the Wheel users are habituated to cleaning clothes using their muscle power and have a perception of getting good clean only when the cloth is scrubbed with soap. Not to forget, these people not long ago solely used ball soap or MLS to clean their clothes. These people belong to SEC B & C and have limited family income. Family size is around 4.5 members per household and the husband makes the buying decision more than the wife does it. Family income has a great influence on the type of detergent to be bought.
2. Detergent Market

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number of people upgraded to washing powders although most people are

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and mechanized laundry soap. The more educated and economically more

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very in-significant market for detergent powder. Over the years Wheel has

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Bangladesh use Wheel. However when we talk about Wheel users we will

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among all known brands irrelevant of category. This also means that people

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Many of these consumers during days of economic hardship switches to ball soap and use detergent powders only on special occasions. They perceive detergent powder to be something modern and premium hence have a high level of aspiration to use detergent powder. Awareness level of detergent powder among SEC D is low and their main constrain is ability to spend for detergent. b. SXL: Priced four times higher than Wheel Detergent, Surf Excel is definitely not for everyone. This powder is for only the very evolved detergent users who can afford to spend such premium. Surf Excel is the latest technology in detergent having Enzymes in it and definitely good things does not come substantial family income. However, occasional users of Surf Excel can be found in other SECs as well and does not necessarily have a very high family uses it on occasion and when there is a tough stain. Surf Excel users are predominantly urban people with bulk belonging to the cheap. The regular users of Surf Excel belongs to SEC A & B with

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income. They buy Surf Excel Sachets priced at Tk.3 (Pack size 20gm) and

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2.3 Form Competition

In the start of the chapter the fabric wash market has been divided into two broad categories but however, when the question of competition comes, the two categories are indirectly fighting with each other. In general terms the more evolved consumers in the fabric wash market uses detergent powder. This means ball soap users and MLS users at one point usually upgrades into a detergent powder user. In order to increase penetration the soap users needs to be upgraded and to increase consumption the existing users will have to be made to use more. In case of Surf Excel however, the current mass market powder users are the ones users are the target audience.

It is a known fact that scope to grow for Wheel and in particular Surf Excel is immense. There is a huge market who are not using and detergent and most of market is not using into detergent users or regular Surf Excel users then growth can be achieved substantially. Hence form competition is more important for Surf Excel and Wheel than premium detergent primarily because of price barrier. If this market can be transformed

2. Detergent Market

is very important. This is where all the brands are basically fighting out with each other.

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needed to be upgraded to increase penetration and to increase consumption the existing

2.4 Existing Strategy

In this section scope of discussion will be limited to Surf Excel as that is the main focus of this paper. Lever Brothers Bangladesh Limited in general markets only mass market brands. However Surf Excel might look to be an exception but at a closer look it is actually not. The formulation of Surf Excel is state of the art and it is promoted as the detergent of tomorrow. This is the future of detergents but high costs are currently the barrier to making it affordable to the mass. Unilever and its major competitor P&G is however now working on cutting down the costs and making this formulation affordable with two companies in the world currently, Unilever and P&G. Hence the major for the mass. It may be mentioned here that this type of formulation is only available competitor of Surf Excel is premium detergent brands from P&G.

Surf Excel Strategy: The different marketing strategies of Surf Excel are described in detail below.

the market, the strategy is as simple as that. Surf Excel is a detergent having a breakthrough state of the art technology and new technology is in general talking about the competition with the same technology (Premium detergent Currently Surf Excel and Ariel from P&G are the two detergents in this category with performance being at parity and the only differentiating factor being the perfume. Place Strategy: Surf Excel is distributed through the normal distribution channels of Leer Brothers Bangladesh Limited, which means it, can be distributed directly to literally any part of the country. Even if any remote rural pocket of the country has demand for Surf Excel, that demand will be met. In general however, major distribution emphasis is given in the urban areas.

2. Detergent Market

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suppose to be better in terms of performance than the earlier technologies. When

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Product Strategy: The product has to out-perform all the existing detergents in

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Promotion Strategy: Surf Excel does both above the line (ATL) and below the line (BTL) promotional activities. In ATL the use all conventional media with the main strategy being increasing consumption and also brand maintenance. With BTL activities Surf Excel mainly drives penetration. In ATL the main focus is on the value that Surf Excel gives to the consumers. For example, it cleans better than any other detergent and it costs reasonable as the quantity of Surf Excel needed to clean clothes is half the amount needed by ordinary detergent. In BTL activities the current theme is Dirt is Good. The modality if this proposition is no matter how much dirty your children make their clothes, there is nothing to worry, as Surf Excel will take care of the cleaning part. Last year Surf Excel did a massive painting carnival through out the country where the proposition was, if children are to learn painting, they will get their clothes dirty. And no matter how dirty the clothes become, Surf Excel will take care of the dirt.

Pricing Strategy: Currently Surf Excel has a premium pricing strategy as has its days to justify the huge Research & Development Investment that has gone into consumers perceived price for Surf Excel has been tried to keep at par with its premium product priced the way it is expected to be. So the pricing strategy is

2. Detergent Market

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3. Competitor Analysis

As mentioned earlier the only competition for Surf Excel comes from P&G i.e. Ariel. However, Unilever has multiple brands in their premium category globally although in one country not more than one of these premium brands is present. In case of Bangladesh and this Sub-continent it is Surf Excel. In the proceeding parts of the report scope of discussion will be limited mainly within Surf Excel and Ariel. By competitor it will mean Ariel of P&G. Before knowing about Ariel it is necessary to know about its company, P&G.

earning per share grew by 14% and gave a dividend of 11% for the 48th consecutive year. P&G is also into food business with brands like Pringles but that accounts for less than The mission statement is:

Two billion times a day, P&G Brands touch the lives of people around the world. We have one of Always, Whisper, Pantene, Bounty, Pringles, Folgers, Lenor, Lams, Crest, Clairol, Nice n Easy, P&G Brands live upto their promise to make everyday life just a little better.

Actonel, Olay. Nearly 98000 people, working in almost 80 countries world wide, make sure that

3. Competitor Analysis

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the largest and strongest portfolios of trusted quality brands including Pampers, Tide, Ariel,

TOUCHING LIVES, IMPROVING LIFE

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10% of their sales. The mission statement of P&G tells a lot about them in a nutshell.

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2003. Their turnover has been grew at 8% and net profit grew by 19% last year. P&Gs

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P&G: P&G is the worlds largest household and personal care manufacturer with annual

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3.1 Categories and Brands

P&G operates in a wide range of categories with numerous brands. The following is a list of their main categories and brarnds:

Cologne: Deo: Cosmetics: Feminine Protection: Hair Care: Personal Cleansing: Fragrances: Household Cleansing: Oral Care:

Old Spice Secret, Old Spice, Sure Covergirl, Max Factor Whisper, Always, Tampex Wella, Clairol, Pantene, H&S, PertPlus, Olay, Zest, Ivory, Noexema, Camay Hugo Boss Vidal Sassoon, Rejoice, Balsum.

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Swiffer, Mr Clean Crest, Fixodent

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3.2 P&G Billion Dollar Brands

P&G has 12 billion dollar brands which forms the heart of their business. These Brands are:

.Olay Folgers Pringles Dawry IAMS Tide Crest .Pampers Pantene Always/Whisper Bounty Ariel A total of 12 Billion dollar brands These 12 brands account for $24 Billion in Revenues could be in Fortune 70 by itself A company with these 12 brands

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3.3 P&G Strategic Choices

P&G strategies (Global Strategies) are as follows: 1. Build existing core business and leading brands into stronger leaders. (4 Key Categories) Fabric Care, Hair Care, Baby Care, Feminine Care. 50% Sales from these categories and greater profits. 2. Grow faster with leading customers In 5 years, share in US 30% - 55% Higher in Europe, Joint business plan with key customers.

Grow via leading portfolios and new innovations.

P & G, in US, is a leader in 23 categories.

5. Build P&G leadership in fast growing developing countries. Emphasis in China, Growth in cons prod business = Fx((population growth, household formation, household income growth)

3. Competitor Analysis

Expecting higher growth in these two categories.

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Strengthening P&G leadership into health care and beauty care.

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Develop and Invest in faster moving, higher margin business.

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80% of the sales coming from 10 countries, 11% Growth

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Grow in Big Countries

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Understanding of the shoppers and partnering with retailers.

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3.4 P&G Core Strengths

The core strengths of P&G are as follows: 1. Branding: 3 off top 10 new non food product introduced in US, are from P&G. In past 8 yrs P&G has had #1or #2 positions in non food products. 7,500 Ph. D. / 20 Technical Centers / 4 continents 2. Global Scale: shopper study.

In a glimpse that was P&G globally. However, for Surf Excel it is more important to look into P&G production facilities are in India and the marketing is also done from India. However, how P&G works

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in Bangladesh will be discussed a little later.

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Roll out new products in 18 months, globally.

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Create greater value through total supply chain.

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Resources to interact with retailers on finance, logistics, marketing and

3.5 P&G India

P&G have a strong presence in India although one would guess, they would have liked the presence to be stronger. Below is P&G India at a glance: A history spanning from 1951, Vicks Launched in 1952 Chairman: Sales: Growth: Operating Profit: Growth: Bharat V Patel Rs. 438.2 Crore 7% 11% 89.3 Crore

Vicks Action 500+ :

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Whisper Ultra: Rs 550 million Menezes Cosmetics: Licensed in Dec 1, 2002 to manufacture, Distribute & market Old Spice in India Bangladesh & Sri Lanka

3. Competitor Analysis

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R&D in India, Launched in 1978, SOM 44.7 % Vicks Started in 1952 (Vicks VapoRub) Completed 50 years in India. Exports of VapoRub to ASEAN, Australia & Japan

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Cold Tablets,

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Today. (Was No.2 in 2001 & 2002)

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2003:P&G rated the best employer in India by Hewitt Associates + Business

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3.6 P&G Bangladesh

P&G do not have any operation as such in Bangladesh. They have only one Marketing Manager who is the sole employee of P&G in this country and distributes their products through MGH, a local business group. MGH is the sole distributor for Kodak and Gillette apart from all P&G products in Bangladesh. However, their main business is shipping in terms of revenue generation. For P&G India, the Indian market gets the priority and not Bangladesh because of the small size of the market and the fact that they are not directly present in this market. Another fact for P&G to not come into Bangladesh in a big scale as yet is the fact that Unilever/ Lever Brothers Bangladesh Limited has a very strong presence in this country and for a long time. Also the brands of P&G are not affordable by the mass market of

always the most ideal for markets like Bangladesh.

P&G presence in Bangladesh is very insignificant till date. Their presence in India even is business over 15 times bigger than that. In Bangladesh P&G has around 1% market share in the detergent market and again a single digit market share in the hair care worlds largest household and personnel care products manufacturer and they are capable competitor to be taken lightly under any circumstances. They are always a very serious threat even if they are not currently present in the market.

3. Competitor Analysis

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of coming from behind and give Unilever a run for their money. P&G is not the

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market. Never the less, this is no ordinary company being talked about this is P&G,

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not the strongest with sales of only over 800 crore Ruees where as Unilever in India has

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costly as Wheel making it less affordable for the mass market. This means, P&Gs product range is not

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affordable by the mass market but Wheel is. In case of P&G, their lower detergent, Tide is twice as

like Bangladesh. One type is not affordable by all but the other type is. For example, Surf Excel is not

Bangladesh. It may be worthwhile mentioning here that, Unilever has two types of brands in countries

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3.7 Roll Out

First it is needed to understand thoroughly as for how P&G works and what their strategies have been globally and in the regions around Bangladesh. by understanding that it will be easier to understand how and when they are likely to come to Bangladesh. 3.7.1 Strategy P&G strategy will be discussed in a few segments. First P&G Global strategy. 3.7.1.1 P&G Global Strategy

the mass people in the developing countries although they might be in the developed countries. Brands like Penteen, Head & Shoulder, Whisper, Old Spice, Hugo Boss etc. are there in all the markets but not necessarily the most affordable of brands. Recently changes. It may be mentioned here that under Mr. A G Lafleys predecessor P&G did not have the best of times. They actually had negative growth. Among the major from those markets. And also they were putting more and more emphasis on the key about their billion dollar brands). Also now P&G was desperately trying to find a foothold in the emerging markets of South and South East Asia where their presence was minimal. the CEO of P&G changed and their new CEO Mr. A G Lafley brought in some policy

3. Competitor Analysis

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brands that contributes the most of their business (it has previously been mentioned

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strategies they had strategies like building their key markets and earn the most revenue

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3.7.1.2 P&G Strategy in Emerging Markets The markets of the Western and European countries have opportunity to grow but no booming opportunity is there. The booming opportunities lie in the countries of South and South East Asia apart from in Africa and South America. The problem in these markets with P&G was that the mass cannot afford their brands unlike the brands of Unilever, Colgate or Nestle. So they had to reduce their prices if they were to put up any fight in these markets. The other problem was that the three global giants, Unilever, Colgate and Nestle have a very strong presence in these markets for a long time. P&G can reduce the prices of their products temporarily but to sustain with that kind of reduced prices they needed to reduce their production and raw material prices as well which was not the easiest of tasks on hand. However, they have some competitive edge enough. P&G has been looking for cheaper sources of raw materials (which includes substitute products) so has been their competitors but it is not known if they actually P&G secret and secrecy has been maintained P&G Style. P&G now did a small calculation. Their operations in these countries are very limited. little amount of everything but making very handsome profit in percentage. One of the developing these products. First P&G decided they do not need any R&D return form nominal in any case. Next they thought, rather than making Tk. 30 profit per unit and selling only 1000 units it is better to make a profit of Tk. 10 per unit and selling 3000 units. The next strategy was not to increase the number of P&G managers in these countries with the increase in their volume. This way they would be making more net profit in percentage terms. For example, currently if their salaries and wages accounts for 15% of revenue which comes to 120 crore Taka then it should not increase proportionately with revenue increase. It should stay at 120 crore Taka even if the revenue doubles which will
3. Competitor Analysis

these emerging markets as the return they were getting inn absolute terms was very

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reason for this high profit margin was to offset the huge R&D costs they incur in

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by having the same kind of packaging and formulation Globally but even that was not

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lead to salaries and wages becoming only 7.5% of revenue in other terms what this means is huge cost savings. This strategy was basically all about cutting down the costs in percentage terms which will lead to more net profit in percentage terms and if they could gain their desired volume then with this policy it will mean making more profit in absolute terms as well. The following table will explain this strategy a little better. Current Situation Taka Sales Volume Unit price Total revenue RM Costs Advertising Costs Salaries & Wages Other Expenditures Net Profit
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New Strategy Taka 3000 Units 50.00 % of Revenue

% of Revenue

1000 Units 70.00 20,000.00 10,000.00 5,000.00 5,000.00 30,000.00 28.57% 14.2% 7.14% 7.14% 42.85% 70,000.00

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150,000.00 60,000.00 21,300.00 5,000.00 10,710.00 52,990.00 40% 14.2% 3.33% 7.14% 35.33%

This calculation looks like a good enough reason for any company to cut their prices but no matter how flowery they look, there is a devil hidden inside. One will have to actually Considering the image, perceived value and brand equity of P&G brands like Panteen how to increase the volume one more fold and triple it? The P&G managers took the challenge and they focused on their Hair care and Detergent categories to implement this price cut strategy. They first went on with a massive price cut strategy in these two categories in China followed by Philippines and finally India. Their India strategy is elaborated further as India is the country from where P&G controls their Bangladesh operations.

All the numbers in the table are fictitious and do not necessarily have any resemblance with the actual numbers of P&G. 2 However simple the calculations looks like in the table, the actual calculations are way complicated. 3. Competitor Analysis Page 58 of 84

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and Ariel, a cost cut like this might automatically double their volume but the challenge is

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increase their sales volume three times which is not a matter to be taken lightly.

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3.7.1.3 P&G Strategy in India P&G strategy in India is very closely monitored by Bangladesh as they run their show in Bangladesh from India. In this part of the report only the detergent strategy of P&G in India will be discussed. It may be mentioned that in India they had the same sort of strategy for their detergent and hair care categories. Their strategy was the same as in China and Philippines, massive price cut and making their expensive brands affordable to the mass people or at the least making it more affordable. After getting reasonably satisfactory results from price cut strategy in these two countries it was time to roll it out in India. India had a three tire detergent market which after price cut became a two tire market. The market before and after the price cut looked like this:

Before Price Cut Rs. 140+/kg (Surf Excel, Ariel etc.) Rs. 70-80/kg (Rin, Tide etc) Rs. 30-40/kg (Wheel etc.)

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Price Cut

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After Price Cut Rs. 100+/kg (Surf Excel, Ariel etc.) Rs. 30-45/kg (Rin, Tide, Wheel etc.) Unilever brands. What the price cut effectively attempted to do was upgraded the mid segment detergent users to the upper segment and at the same time made the mid segment detergents available to the mass market. One reason was that, the mass market was almost 20 times bigger than the two upper segment markets combined and P&G was not present in that market. Unilever was doing huge business with Wheel. Both Ariel and Tide has high perceived value and by cutting down the costs they were now available at a lower price which means it was offering more value to the consumers. In theory mostly Wheel users were now expected to upgrade to tide and Rin and on the other hand Rin and Tide users were expected to upgrade to Surf Excel and Ariel. The
3. Competitor Analysis

Ariel and Tide are P&G brands while the others mentioned in the table above are

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theoretical number of consumers expected to upgrade was extraordinary. In reality what happened was as follows:

Error!

Pre-Price Cut

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Premium Segment

Mid Segment

Mass Segment

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Premium Segment Mass Segment Post-Price Cut

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What effectively happened is the post price cut premium segment is more or less the size of the pre price cut mid segment. A huge loyal customer base of Tide and Rin actually did not upgrade to Ariel and Surf Excel rather they are still using Tide and Rin spending less than what they used to. In terms of total volume of the market the current scenario is like this:

3. Competitor Analysis

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Figure 6: P&G Price Cut

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Pre-Price Cut (Tons) Premium Segment Mid Segment Mass Segment Total
3

Post-Price Cut (Tons) 15 30 Premium Segment Mass Segment Total 30 410 440

400 445

The actual total detergent market size has shrunk primarily because many people wash the same quantity of clothes the amount of Tide, Rin, Ariel or Surf Excel needed is value of the market. The total value of the market is as follows:

Pre-Price Cut (Rs.) Premium Segment Mid Segment Mass Segment Total
4

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2,100 2,100

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Premium Segment Mass Segment Total

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Post-Price Cut (Rs.)

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half of that of Wheel. However, a better picture can be obtained by looking at the total

upgraded from the previous mass market detergents to Tide and Rin. Please note that to

3,000 16,400 19,400

The total value of the market have actually gone down although not very significantly. However insignificant the total difference looks like, Wheel and the other mass market detergents took a major hit. The following table will give a better understanding in terms of what happened to different brands.

These are not the actual numbers and are intended to only show the direction in which the market is going. 4 These are not the actual numbers and are intended to only show the direction in which the market is going. 3. Competitor Analysis Page 61 of 84

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16,000

20,200

Pre-Price Cut Volume Surf Excel Ariel Others Rin Tide Others Wheel Others Total Unilever P&G Others
5

Post-Price Cut Value Value Surf Volume Value Gain

13 1 1 20 5 5 300 100 445 333 6 106

1820 140 140 1400 350 350 12000 4000 20200 15220 490 4490

Excel Ariel Others

20 2.5 7.5

2000 250 750

10% 79% 436%

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260 88 440 330 14.5 95.5

Tide Wheel Others

12

Rin

50

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2000 480 10400 3520 19400 14400 730 4270

43% 37% -13% -12%

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-4% -5% 49% -5%

Unilever P&G Others

This clearly shows how badly Wheel and the other mass market detergents were hit. Unilever as a whole also was hit and loosing 5% value share is much bigger than what it looks like. On the other hand P&G did not as yet been able to gain their intended market share in terms of value or volume although they have seen an extraordinary growth. It is now time to see the supply situation of P&G. Their sales volume has grown to such an extent that they are finding it very difficult to keep up their supplies with the demand. The P&G factories are working overtime and yet not being able to meet the demands.
5 5

These are not the actual numbers and are intended to only show the direction in which the market is going. 3. Competitor Analysis Page 62 of 84

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On the other hand, Unilever factories are being able to keep up with the demand as their total volume has actually declined although very insignificantly. Media Expenditure of P&G is also on the rise alongside their volume. According to MR findings, their media expenditure has doubled over the last few months. Till date the only real cost savings that P&G has been able to do is by not increasing their size of the operation in terms of manpower. However, it is to be seen if they can actually sustain with their current manpower in the long run.

3. Competitor Analysis

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3.7.2 Timing The question is not IF P&G will come to Bangladesh or not rather WHEN will they come. There are a few things that will be under consideration before P&G comes in. These are as follows: 1. P&G do not send supplies to Bangladesh regularly rather they send stocks in bulks and the last bulk was sent just before they went for the price cut in India. This last bulk was a reasonably big one and the next supply will not come before this bulk is exhausted as it is obvious that the next bulk will come with a price cut. According to Lever Brothers Bangladesh Limited analysis, it will not be before July this year if not later. This has been calculated considering their sales, usual bulk size and market reports.

due to some legal complications like price declaration. However, reports suggests, which means they are waiting the lot to get exhausted and get a new bulk supply

Bangladesh at a reduced rate then they will have to ensure adequate will ultimately be taken away by Lever Brothers Bangladesh Limited. So here they have two problems as follows: a. Initial Supply b. Future Replenishment a. Initial Supply: The initial supply that P&G will be looking forward to send to Bangladesh will have to be at least a 50 tons bulk otherwise it will not be possible to create any impact in the market. It is estimated that to produce 50tons of Ariel alone will take P&G about 15 days which means they will not have enough supplies for India for those 15 days. This is true irrelevant of whether they
3. Competitor Analysis

replenishment supplies for the future otherwise all the demand created by P&G

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being able to meet their demands in India so it will be a little on the tough side to

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3. The other problem is with the supply. As said earlier, P&G is right now not

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2. They cannot re-price their current stocks as they have paid higher taxes and

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produce these 50 tons in one go or build up their stocks over a period of may be 2 months or so. Also if they build up their stocks over 2 months then their inventory costs will go up tremendously which they can ill afford at this point after price cut. Also by selling 50 tons of Ariel in India they will be able to make more profit than by selling it in Bangladesh as there is an import tax involved for Bangladesh. This means in simple terms, the opportunity cost of selling 50 tons of Ariel in Bangladesh is very high. Reports suggest, P&G is setting-up a new factory in India and after it is commissioned they will be able to easily supply to Bangladesh. b. Future Replenishment: Some experts suggests, the only reason P&G has not rather because their replenishment is not confirmed as yet. If they fail to replenish in due time then the demand created by reduced priced Ariel will be price as and when Ariel does.

Considering all the facts discussed above it is highly unlikely that P&G will cut time by which their new factory should be operational. This gives Lever Brothers implement it to tackle the eventual price cut by P&G.

3. Competitor Analysis

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Bangladesh Limited some reasonable time to come up with a strategy and

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down their costs in Bangladesh before possibly late July or August as that is the

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yet come to Bangladesh with a price cut is not because of their previous stock

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3.7.3 Possible cost of Ariel after price cut A simple calculation below gives us an idea about what could be the possible cost of Ariel if they come to Bangladesh with a price cut and why. Possible Ariel Price in Bangladesh (Tk.) Unit selling price in India Gross Profit Transfer Price (Unit price - Gross Profit) Tax (40%) Landed Cost in Bangladesh Mark-up Selling Price in Bangladesh 39 54.6 10.4 15.6 60 35%

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includes the distribution and storage costs of the goods which actually leaves a very

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can only sustain with this price in the long run in two ways: 1. If they can reduce their Raw material and manufacturing costs. 2. If they can produce Ariel in Bangladesh. However, both these options are very stiff asks. First because, finding a cheaper raw material or substitute cheaper raw material is very difficult and all the other Global companies are also trying hard to do so. However, eventually someone will find a cheaper source but sustaining till that day will not be the easiest task.

3. Competitor Analysis

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price in Bangladesh? Only time can give the answer but according to expert analysis, they

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nominal profit margin for Ariel. This raises the obvious question; can they sustain this

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This is the least price at which they can come in Bangladesh. The very nominal mark-up

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The second option of setting a factory in Bangladesh is not feasible for P&G at the moment with their very nominal sales volumes. From experience Lever Brothers Bangladesh Limited knows, to sustain a production facility in Bangladesh the amount of sales volume P&G will have to gain is phenomenal. In simple words P&G is not likely to be able to gain that kind of volume in the next 5-7 years even if they can achieve 100% growth for these years. Finally the question remains, will P&G come into Bangladesh with a reduced price? And only time can give us the answer to this question. Nevertheless, P&G is expected to come with a price cut and when they do, they are expected to have some surprises for all. P&G is simply too big and experienced a company to let something go easily. No matter what our analysis says, it is always advised to stay prepared for an all out assault from P&G any day any time.

3. Competitor Analysis

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4. Lever Brothers Bangladesh Limited Response

In paper P&G presence in Bangladesh looks very nominal and do not look like a possible threat to Lever Brothers Bangladesh Limited. However, as mentioned earlier, P&G is the worlds largest Household and Personnel Care products manufacturer with a long history. This makes them too big a giant to be taken lightly under any circumstances. P&G even in places where their presence is absolutely nil cannot be written off from potential competitor list. Even in markets where all calculations and analysis says P&G will not be able to compete, they have competed and created formidable impact. They well. have made apparent impossible, possible in the past and they will do it in the future as

P&G lightly. Lever Brothers Bangladesh Limited is always prepared for an all out assault from P&G in Bangladesh and no matter whether they actually ever come here with a little more difficult should they come in. The following are some of the strategies that have been worked out for Lever Brothers Bangladesh Limited. It is mentionable here

4. Lever Brothers Bangladesh Limited Response

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business are combined and are simply too experienced to make a mistake like taking

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4.1 Pre-emptive Strategy

A few pre-emptive strategies are suggested for Lever Brothers Bangladesh Limited to take no matter Ariel comes into Bangladesh with a price cut or not. By doing the activities suggested they will not loose anything even if Ariel never comes in as these activities will at the end of the day build the brand and make it even stronger leading to increased brand equity.

1. The current detergent market of Bangladesh has three tires with Lever Brothers Bangladesh Limited present in the top and bottom tire and only volumes but still there is a consumer base in that level who would like to upgrade to a better detergent but is not prepared to spend as high as Surf Excel costs, Tk upgrade these consumers to surf Excel which will lead to higher volume and predominantly Jet Detergent present in the mid tire. Jet is not selling great

2. Most of the current users of Surf Excel are Sachet users and research has showed enough reason for Lever Brothers Bangladesh Limited to try and upgrade these consumers into 500gm pack users. By reducing the price of the 500gm packs it will be possible to upgrade a portion of these sachet users into 500gm pack users which will eventually lead to increased loyalty and volume sales. 3. The perceived value of Surf Excel is at parity with its price and the awareness level of Surf Excel is very high. By reducing the price it will be possible to communicate that Surf Excel is now offering substantial more value for money
4. Lever Brothers Bangladesh Limited Response

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value sales.

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160/Kg. By reducing the price of Serf Excel substantially it will be possible to

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Bangladesh. This is necessary for a number of reasons as follows:

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price cut with their Surf Excel. This will be the perfect platform to welcome P&G into

As a pre-emptive strategy Lever Brothers Bangladesh Limited should go for a temporary

4.1.1 Price Cut

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and research has shown there are enough people who has the monitory capability to use Surf Excel but is still using mass market detergents. Some of these people are likely to upgrade to Surf Excel. 4. The awareness level among people regarding Ariel is very low and if Surf Excel can come with the price cut earlier than Ariel then Ariel will never be able to create any great impact with their price cut strategy. On the other hand, as analyzed earlier, Ariel will not have enough money to launch a massive awareness campaign in Bangladesh if they are to reduce their price substantially. 5. It has earlier been analyzed that it is likely that Ariel will price their detergent at Tk.65/500gm. Surf Excel should try and reduce their price as much as possible temporary period. This way it will make no sense for Ariel to come to the market at Tk 65 with their awareness level so low. They will be forced in this way to and somehow price their product at lower than Tk.65/500gm even if it is for a

4.1.1.1 Timing of the Price Cut

ordinary people are not absolutely sure as to who came first although some people are. In create any serious impact if they come with the price cut well ahead of Lever Brothers Bangladesh Limited. On the other hand if Lever Brothers Bangladesh Limited comes with the price cut even a week or two earlier then primarily because of lack of awareness about Ariel, the price cut of Ariel will never be able to gain momentum. More importantly, Ariel will in this way go down to the consumers mind as a brand that has cut down their price following Surf Excel price cut. In other words, people will perceive Ariel as a Copy Surf Excel brand. The main reason for this being people are not well aware of this brand.

4. Lever Brothers Bangladesh Limited Response

Bangladesh as not too many people are aware of P&G and Ariel, they will only be able to

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up with the price cut and within just 48 hours Unilever came with a similar price cut. The

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cut at least two weeks if not more before P&G does. In India, P&G is the one who came

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It is absolutely necessary for Lever Brothers Bangladesh Limited to come with the price

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4.1.1.2 Surf Excel Cost after Price Cut Surf Excel cost after price cut should be as low as Lever Brothers Bangladesh Limited can afford. Under any circumstances however, the cost after price cut should not exceed Tk. 65/500gm. The motto of the price cut should be to make less profit in percentage terms but make more profit in absolute terms eventually.

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4.1.2 Heavy Mass Media Advertising Heavy mass media or above the line (ATL) advertising should be done to better establish the brand. These ads should be thematic ads of Surf Excel communicating the extra value one would be getting by using this brand. For example, one of the way could be based on the claim that Surf Excel removes stains, not colors, or may be on the theme, dirt is good. The brands team should decide which way to go and not necessarily they will have to choose only one rout. They can have one communication for three months and then another for the next three months or so. However, initially they should communicate the extra value Surf Excel is giving by reducing its price drastically and at the same time should communicate that even though Surf Excel has reduced the price, its quality remains the same. The latter part of the the quality must have deteriorated. The main goal of this above the line advertising should be the build the brand stronger. communication is important as the first impression people will have after price cut is that

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4.1.3 Below The Line Campaign The beauty of companies like Unilever is that, its subsidiaries are present literally all over the world and one can learn from the other and can even copy a full campaign from another subsidiary. A year back, in Brazil Unilever Brazil, did a very successful campaign for their Top Clean detergent, OMO. OMO is a sister of Surf Excel with effectively the same formulation, same claims and same type of theme. The detail of that campaign is confidential but it was done on a theme called, Modern Parenting. They did some activation programs like bike competition, creativity competition (which promoted getting as dirty as possible without worrying about the dirt as OMO is there to clean it up), painting carnival for kids and adults etc. these campaign worked for Brazil and might work for Bangladesh as well. One reason for that is, the disposable income of the mass people of these two countries are similar although the two societies are poles apart. Some However, the option of coming up with absolutely new campaigns are always welcomed. If Bangladesh could come up with campaigns for Wheel which have proved to be highly Excel as well. campaigns can be picked up from there carefully and implemented in Bangladesh.

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successful then it is only obvious that they can also come up with campaigns for Surf

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4.1.4 Move into District Towns Surf Excel is predominantly an urban brand with major presence in big cities only. It will be a good strategic move to go into smaller cities where there are people who can afford to use Surf Excel. This is true that those who can afford Surf Excel are found more in cities like Dhaka, Chittagong, Khulna, Sylhet, Rangpur etc but it is also true that in the smaller district towns there are people although may be not in great numbers, who can afford Surf Excel. Surf Excel needs to go to these towns and first educate these people on the usage of this detergent. These kind of educating activities is nothing new for Lever Brothers Bangladesh Limited as they did similar activities for Wheel in the past. More over, with the huge activation resources available to Lever Brothers Bangladesh Limited this should be possible to do. Also, new below the line advertising ideas should be implemented for Surf Excel. The team and activation team.

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exact nature of activities are not suggested and that should be decided by the brands

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4.1.5 The Mass Segment?? Tide is a detergent which even fewer people knows in Bangladesh. From what P&G has done in India, if they plan to bring in Tide as well then they will price it with parity to the mass market brands in Bangladesh and will predominantly fight it out with Wheel. This will not be easy in Bangladesh as Wheel as a brand has the highest brand equity in Bangladesh where as Tide is absolutely an unknown brand in the mass market. Also the distribution of MGH, the distributors of P&G products in Bangladesh is not well penetrated enough to fight with Wheel. No logic actually supports the idea of launching Tide in Bangladesh to fight with Wheel Washing Powder. Nevertheless, as mentioned earlier, P&G has made impossible, possible in the past and will do so in the future as well, it will be wise for Wheel to do some brand building activities just as a pre-emptive measure to fight out Tide if it comes in.

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4.2 Pro-active

Line Filling is the only proactive measure that is suggested for Lever Brothers Bangladesh Limited. Eyes and ears should be kept open and the moment P&G starts their campaign, Lever Brothers Bangladesh Limited should go all out to fill the retailers with Surf Excel and Wheel. Certain trade incentives are recommended during this period. As for keeping eyes and ears open, the detergents will have to imported through Benapol land port and at least around 50 tons of detergent will come in at one go. It should not of days after the detergent enters the country, Lever Brothers Bangladesh Limited should exactly P&G will be starting their campaign. Also, line filling is important only in the urban areas, predominantly Dhaka and Chittagong as P&G products sells only in these areas. be too tough to keep a track on when the detergent is being actually imported. A couple go for line filling. Also different market intelligence sources should be able to tell when

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4.3 Reactive

A reactive strategy should be kept as a back-up in this case. This strategy should be taken up only when the other strategies have not worked very well. Just in case P&G still manages to come to Bangladesh and make a significant impact then Surf Excel should go for a re-launch with even improved formulation. However, work on this should start right away as this is a time consuming task and not the easiest. Lever Brothers Bangladesh Limited should be absolutely prepared to be able to re-launch Surf Excel any day with an improved formulation.

4. Lever Brothers Bangladesh Limited Response

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4.4 Brand Equity

All brand mangers thrives to see the brand equity of their brand to be the highest among the competitors. Following is the brand equity in Bangladesh for the four brands in question through out the report. 4.4.1 Wheel Individually Wheel has the highest brand equity in Bangladesh as a brand. It is perceived as a product for everyone, affordable, easy to use, performs and something that belongs people are very emotionally attached with this brand. 4.4.2 SXL to Bangladesh. Wheel is predominantly seen as a Bangladeshi brand and in the rural areas

The best thing available in the market but definitely not for me. However, I would have liked it to be for me or my detergent to perform like it. Surf Excel is perceived as simply too costly making it out of reach. It is seen as a foreign brand and quality is the best in Surf Excel but the price barrier is something they have not been able to get over as yet. the market. Awareness level is very high even in certain rural areas. People aspire to use

satellite channels etc. 4.4.4 Tide Tide is a brand that even fewer people actually know about. Interestingly, there are two types of Tide available in the market. One that is imported by P&G from India and the other is imported informally from the Middle East and other parts of the world as a result the second one cost more. Some people actually perceives Tide as even more expensive than Ariel. Again this confusion is predominantly because of the lack of brand building and awareness campaign. Tide does not have any reasonable brand equity in Bangladesh.
4. Lever Brothers Bangladesh Limited Response

brand equity is very nominal. Only some people have come to know about it through

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Chittagong mainly. This brand was never properly built in this country as a result its

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Only a handful of people actually know about Ariel and that to be in Dhaka and

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4.4.3 Ariel

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5. Recommendations

The following are some of the recommendations for Lever Brothers Bangladesh Limited. 1. No matter how slim the chances are for P&G to come into Bangladesh with a price cut, do not take them lightly and prepare for an all out assault by P&G in the detergent market. 2. The brand equity of Surf Excel and Wheel, the two detergent brands of Lever Brothers Bangladesh Limited is extremely high and should be used in countering any

make P&Gs Ariel look like a Copy Surf Excel brand. This will be possible

4. No matter how high the brand equity of Surf Excel is in Bangladesh, there is always activities in both conventional and un-conventional media to further build the brand equity of Surf Excel. Even if Ariel never comes into Bangladesh these activities will

the end of the day, Wheel will generate much more profit than Surf Excel. At least currently this is the scenario and is not expected to change very soon. 6. When and if P&G comes in with a price cut for Ariel, Lever Brothers Bangladesh Limited with its strong distribution network should do some line filling activities. They should fill up as many retailers as possible with as much detergent powder as possible to prevent Ariel from getting into the shelves in huge quantity. 7. Some merchandising activities and trade promotional activities can also be done by Lever Brothers Bangladesh Limited to prevent P&G from getting into the shelves.

5. Recommendation

just to let people know that Wheel is still there and going strong. The reason being, at

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matter how much noise Surf Excel is making, Wheel should also do some activities

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5. Wheel is the main detergent brand of Lever Brothers Bangladesh Limited and no

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never be a waist. It will pay off in the future.

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scope for improvement. Lever Brothers Bangladesh Limited should do some

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particularly because Ariel is almost unknown in Bangladesh.

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done before P&G does the price cut. By doing so before P&G, it will be possible to

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3. As a pre-emptive measure Surf Excel should go for a price cut and this should be

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aggression by P&G with their almost unknown brand Ariel.

8. One of the advantages that Lever Brothers Bangladesh Limited has by being a subsidiary of Unilever is that they can adopt successful promotional activities from other countries. This advantage can be used and some really innovative and different promotional activities can be done in Bangladesh. Not to undermine the local creativity, some activities can be planned locally and implemented as well. These activities should be aimed at increasing the brand equity of Surf Excel. These are the few recommendations for Lever Brothers Bangladesh Limited and if implemented, they should be able to better fight it out with P&Gs Ariel.

5. Recommendation

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6. Conclusion

Lever Brothers Bangladesh Limited or for that matter Unilever and Proctor & Gamble are both too big organizations and extremely experienced particularly in fighting against each other in different parts of the world in different times. They know each other too well and can predict the move of the other party very well. In preparing strategies against each other, they usually prefer to take the strategy that the the blue and more often than not these strategies cannot be justified by any marketing rule. Then again, these are the companies who set the rules of marketing and sets examples of how to implement different strategies. In any marketing book it is one of the easiest task to find out an example where Unilever of P&G is referred.

It is therefore hard to say from this point as to what will be the strategies of P&G or what will actually be the strategies for Unilever to counter P&G. They might decide not to come even distribute 100 tons of Ariel and Tide as free samples something which is extremely hard to justify form marketing point of view. Only time will give us the correct answer to what actually will happen. to Bangladesh at all or might come in with heavy subsidies on Ariel and Tide. They might

similar or Unilever might do something which will compel P&G to do something crazy. Anything is possible with these two companies involved. After all, Lever Brothers Bangladesh Limited believes There are no impossible dreams Only limited perception to what we can achieve

6. Conclusion

If P&G does something out of the ordinary then Unilever will also reply with something

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other party will be least expecting. So usually they come up with strategies absolutely out of

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