Rin Detergent Case

Section 1        I would suggest that Levers introduce two variants of RIN detergent in the market, the first as an NSD bar for fabric washing, and the second as a bar for dish washing. There will be two sections of target segments, one of which will be an existing customer group who might continue to consume RIN as fabric detergent, and the other will be a customer group who is now using RIN as dishwasher detergent because of either its lower price or misconception about its use. With this strategy, Levers will be able not only to enhance its revenue by sustaining its existing market and penetrating a new one, but also to accumulate solid brand equity by not leaving consumers in confusion.

Section 2        Why Lever should maintain to aim the fabric washer market

• Non-Soap Detergent (NSD) bar for the fabric market has a small volume of 1,550 tonnes now but is growing at rate of 29 percent. Also, RIN is the only NSD bar selling in this segment. So, staying in this niche segment will let them enjoy a monopolistic benefit and give them the advantage of being an early bird in the long-term.
• Lever already has a strong brand equity in the NSD market. Its NSD powders, Surf and Sunlight, have captured 50 percent of the market. Moreover, through a number of advertisement campaigns and promotions, RIN is well known as the laundry detergent that provides a superior cleaning efficiency to its competitors. To be specific, while the competitors use standard soap, RIN’s ingredients contain active detergents, phosphates, and exude pleasant fragrances throughout the process of the wash.

Why Lever should establish a variant of RIN bar in the dish washer market

Although the NSD bar sector is rapidly growing market, dishwashing bar sector is much larger than NSD bar sector so far (1,550 tonnes vs. 7,200 tonnes.) Given its size, Lever would get more market potential in this sector.

• According to the result of a survey and research, RIN bar has been used as a dishwashing detergent by a majority of customers (65% of all customers were using it only for dishwashing and only 15% of them were using it for laundry.) I guess that there are two reasons for this. The first one is that consumers and retailers have misunderstood the use of the product because of its blue color (A blue bar is generally known as a dishwashing detergent in Pakistan.) The other one is that RIN bar is cheaper than other bars for dishwashing – RIN’s current price is Rs 25, and other bars’ prices are between Rs 25 and 40 (the average is Rs 32.5). In either case, it is a good opportunity for RIN to enter the dishwashing market successfully with relatively little effort.
• RIN for dishwasher will cost less than Rs 25 per kg after a reduction of 33% variable cost. Since competitor bars for dishwashing are retailed at between Rs 25 and Rs 40 per kg, it is sufficiently possible to penetrate the market and make a stronghold of the brand in the mind of customers in Pakistan.
• A key to the success for a product in the consumer goods industry is to position the product in a way that customers can clearly identify the useful benefits and traits.  However, educating consumers and retailers to correct their misconception of the product could cost a lot. So, I believe that using their misconceptions is a much more efficient way than pursuing them.

Section 3        Downside of staying and positioning only in fabric bar market

• Limited market size (1,550 tonnes vs. 7,200 tonnes)
• Since its major consumers are using it as a dishwashing bar, its promotional efforts that advertise its benefit and advantage as a fabric detergent would be useless.
• In addition, to position firmly in current market would incur fairly much expenses, because it needs to change product color and packaging, and to educate the retailers and consumers.
• The growth of RIN’s revenue in NSD bar market could cause a cannibalization, because Lever’s NSD powders, Surf and Sunlight, are dominant products in their market and RIN could be their substitute.

Downside of repositioning only in dishwashing bar market