Project on Surf Excel Pakistan Unilever Product

Submitted By: S. M. Umar Dabir Waqas Mehmood Bs accountancy and finance 2012

ACKNOWLEDGEMENT

First of all I am really thankful to Almighty Allah who gave me the strength to work on the project and complete it in time without any hurdles. I would also like to thank my teacher Mrs. who gave me the confidence and guidance at every step of my research. This project helped me to know more about the Unilever Pakistan and gave me a chance to see there marketing strategies and to study on their product Surf Excel.

Executive Summary Unilever is a multinational consumer product manufacturing giant operating in over hundred countries all around the globe. Unilever Pakistan is the Pakistan chapter of Unilever, where the company holds 60.75% share whereas the Government of Peoples Republic of Pakistan holds 39.25% share. Unilevers one of the most popular brand is Surf Excel. They segments Surf Excels market according to geographical locations. It further differentiates these segments into Socio Economic Cluster (SEC) which takes into account the criteria of education and profession which ultimately measures the financial ability of consumers. The cluster is divided into five parts starting from A to E. Unilever targets the urban and sub urban upper middle class and middle class segment of the population, who falls under A to C of SEC. Tactical marketing tools, 4Ps, are extensively used by the company to market Surf Excel. Though Surf Excel is produced in Pakistan, Unilever Pakistan maintains the same standard all around the globe. The product is available in six different fragrances under three different sizes. Since the demand for beauty soap market is to a great extent oligopolistic, variations in price lead to price war which can eventually break down the companys market share. Thus Unilever cannot provide a better price than its competitors. But the price is affordable by most of the people. Unilever Pakistan has outsourced its distribution channels to third party distributors which allow them to distribute Surf Excel in massive bulks amounting to around ten million pieces. It undertakes the largest promotional activities in the detergent industry. The detergent industry has a few major producers of which Unilever holds market share of slightly less than 50%. Other competing brands like Ariel, Bright and Express and etc have started to have a strong consumer base, but Surf Excels product features distribution and promotional activities have created high brand loyalty for which it is still the market leader.

Introduction ................................................................................................................................. 6 History ......................................................................................................................................... 7 Unilever Pakistan Limited ........................................................................................................... 8 List of Unilever Brands in Pakistan ............................................................................................ 9

Market Segmentation .................................................................. Error! Bookmark not defined.0 Product Category ........................................................................Error! Bookmark not defined. Market Segmentation ................................................................................................................ 10 Target Market .......................................................................................................................... 111 Product Positioning ................................................................................................................. 112

Marketing Tools .......................................................................................................................... 122 Product .................................................................................................................................... 122 Price......................................................................................................................................... 133 Place ........................................................................................................................................ 144 Promotion ................................................................................................................................ 144 Capturing value from Customers in Return .................................................................................. 15 Market Share ............................................................................................................................. 15 Customer loyalty ....................................................................................................................... 15

Corporate Social responsibility ..................................................................................................... 16 Corporate responsibility ............................................................................................................ 16

SWOT ANALYSIS ................................................................................................................... 17

Introduction Unilever is one of the worlds largest and leading multinational companies; Unilever commenced their business activities on a larger scale by setting up their first factory in Netherlands, in the year of 1890. Operating in Pakistan for over the last four decades the company is trying to significantly contribute towards the augmentation of the standard of living by bringing world class high quality products at the door step of their customers. The usage of Unilever products by over 90% of the people in Pakistan stands a testimony to their successful operation. . Their array of products show that they produce household care, fabric cleaning, skin cleansing, skin care, oral care, hair care, personal grooming, and tea based beverage products under worldwide famous brand names Wheel, LUX, Lifebuoy, Fair & Lovely, Pond's, Close Up, Sunsilk, Lipton, Lipton Taaza, Pepsodent, All Clear, Vim, Surf Excel, and Rexona.

History Unilever is one of the largest companies and is a subsidiary of Proctor and Gamble (P&G). Unilever has many consumer products. Some of its popular brands are Surf Excel, Dove, Lux, Knorr, Brooke Bond, Lipton, Fair & Lovely, WALLS, Dalda, and Sun Silk etc. LBPL started its operations in 1948. And presently its headquarters is at Avari Towers Karachi. LBPL was incorporated as an independent Unilever company in 1955. Lever brothers have a sizzling market share of 60% in Pakistan. And their field of business includes Tea, Detergents, Personal hygiene, Edible fats, Consumer products and Ice cream. It is offering total of 46 products in Pakistan out th profitable product. of which 26 are profitable and during the year 2002 Walls was added as the 27
LBPL is committed to provide its customers the quality products and company has never compromised on quality no matter what the cost. This maintenance of consistent quality has given LBPL a competitive edge.

Unilever is one of the biggest company of the world with its products spread all over the world. Present in 150 countries around the world with a wide range of products. The Unilever shares in the world are: Europe | 15bn | 38% Asia/Africa | 12bn | 29% The Americas | 13bn | 33%

Unilever Pakistan Limited The Unilever Pakistan Limited (UPL), formerly Lever Brothers Pakistan Limited was established in Pakistan in 1948. The town of Rahim Yar Khan was the site chosen for setting up a vegetable oil factory. Unilever Pakistan is the largest FMCG Company in Pakistan, as well as one of the largest multinationals operating in the country. Now operating six factories at different locations around the country. The Unilever's Head Office was shifted to Karachi from the Rahim Yar Khan site in the mid 60's. Mission We meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life. "Lever brothers will be the foremost consumer product company in Pakistan with care, skin, ice cream and spread. Already positioned in tea, hair, dental and household care, substantially profitable position in cooking oils and fats our strengths come from our people and from combining the best of our international as well as Pakistan origin. Our commitment is to continuously care for the need of our customers, consumers, employees, suppliers, share holders and the community in which we live." As one of Unilever's leading brands, it has always been Wall's mission to add vitality to your life - while being responsible about good nutrition

List of Unilever Brands in Pakistan

Blue Band Supreme Tea Clear Shampoo Close Up Fair & Lovely Lifebuoy soap & shampoo Lux Surf Excel Walls Lipton Tea Sunsilk Knorr Soup / Nudels Rexona Imperial Pond's

Market Segmentation The company claims that Surf Excel is the highest selling detergent in Pakistan. Moreover some survey reports also reveal the same result. Though Surf Excel is the highest selling detergent in Pakistan, it does not go for traditional mass marketing. Moreover as a detergent Surf Excel does not even segment its market according to gender. Unilever Pakistan Ltd. segments their market according to geographical areas. The population of the country is segmented into three parts which are urban, sub urban and rural area consumers.

Urban Richz Urban and Sub Urban Middle Class Rural Poor

The company further differentiate the geographical segments according to Socio Economic Cluster (SEC) i.e. education and Income.

Socio Economic Clusters A High Income Income B Upper Middle Level Income High Level of Education Education Educated Slightly Less than Cluster A C Mid Level Income Educated Slightly Less than Cluster B Educated Slightly Less than Cluster C Very Low Level of Literacy D Lower Middle Income E Low Income

The SEC divides the population in five segments starting from A to E, where A categorizes the highly educated and high income earners holders the main target market of the Surf Excel, and sequentially in descending order E categorizes the opposite. Target Market A research carried out by Unilever Pakistan reveals that urban rich people are more likely to buy imported and expensive products. Moreover rural poor people tend to buy cheap products even without evaluating its quality. However urban and sub urban upper middle and middle class people tend to buy affordable and quality products.

Surf Excel is not a highly expensive but an affordable product. That is why the company targets urban and sub urban upper middle and middle class people who are the second highest population of segment of the country. From the segmentation of customer according to SEC they target category A, B and C, because they are assumed to be financially well-off and can afford to buy Surf Excel.

Socio Economic Clusters A High Income Income High Level of Education Education B Upper Middle Level Income Educated Slightly Less than Cluster A Educated Slightly Less than Cluster B C Mid Level Income

Surf excel topical targeted the segment which are more conscious about fragrance Surf excel blue targeted those who care about their fabrics Surf excel automatic has low leather formula use in only

Washing machines Surf excel advance targeted the high class Surf excel quick wash targeted hilly areas

Product Positioning:

Unilever Pakistan Ltd obtained a good position in the buyers mind through better product attributes, price and quality, offering the product in a different way than the competitors do. The company offers improved quality of products in the industry at an affordable price with high branding, which ultimately helps to position the product in the buyers mind as the best quality detergent. The market share of the company in the detergent industry is somewhere around 52%.Since in the detergent industry all products are of same price Unilever cannot provide its consumers with better price but it is in a great position in reference with its packaging, fragrances and product designing. It states that though in comparison to its competitors the pricing of Surf Excel is same but consumers rate it as the product which gives them the highest quality. This positioning created a strong customer loyalty for Surf Excel, for which it the market leader in the industry.

Marketing Tools Product Surf Excel is an internationally renowned detergent brand of Unilever. Though manufactured in Pakistan for the local market by Unilever Pakistan Ltd, as an international brand, it maintains an international quality for the product. Formula given by Research and Development departments in foreign countries, Surf Excel is produced in Pakistan from imported raw materials like sodium, glycerol and different extracts according to flavors, coming from Unilever plants situated abroad.

SURF EXCEL Advance Tropical Small & mighty Automatic Blue detergent Quick wash

Price Though Unilever Pakistan gives its Surf Excel customers a lot in terms of the product itself, it cannot provide a better pricing. This is due to some constraints in the detergent industry. Detergent is a product with a vulnerable demand in Pakistan. A change in price has a high risk of creating price war among the rivals which will eventually cause a loss of profit. Its prices are almost equal to its competitor. Company carries out research on competitors price and brand loyalty when it feels extreme necessaity of chaging price. The brand loyalty test is an exploratory research which is known as Brand Health Check-Up (BHCU).

2kg Rs405

1kg Rs210

500g Rs115

100g Rs20

60g Rs10

25g Rs05

Place Unilever Pakistan Ltd. has a huge distribution channel for Surf Excel all over the country as its sales reach more than 10 million bags/pieces a year. The company has six huge warehouses, one in each division of Pakistan.

The company does not use its own fleet of transport for distributing its product. However, it has outsourced its distribution process to various third party distributors, exclusively dedicated to Unilever Pakistan Ltd. These distributors then supply the product all over Pakistan to a huge number of retailers. Even though Surf Excel targets the urban and sub urban middle and upper middle class people they are distributing their products all over Pakistan because of a recent increase in demand of its product to all segments of the population.

Promotion Unilever Pakistan undertakes huge promotional activities to promote Surf Excel which has topped the detergent industry of Pakistan. It spends almost 20% to 25% of its Net Proceeds from Sales (NPC) of Surf Excel for promotional activities for Surf Excel.

Unilever Pakistan Ltd spends a huge amount of money for promoting Surf Excel through TV commercials, newspaper advertisements and billboards. Moreover it also undertakes small promotional campaigns at different schools, colleges, universities and recreational parks with winners of its different Contests. Till now promotional activities of Surf Excel has always been successful which has made it a household common name and helped it reach almost one billion taka sale value in the year 2004.

Surf Excel has been widely advertised in Pakistan ever since the brand was introduced. Surf Excel remains the leading detergent brand in Pakistan, representing the clean and stylish class of Pakistan. Things started with a TV show called Lux Style Ki Duniya where Surf Excel is also promoted but at a low rate.

Capturing value from Customers in Return Market Share The detergent industry in Pakistan consists of only seven major producers. Unilever Pakistan Ltd is operating in the industry with its world famous brand Surf Excel. Out of these giant companies Unilever Pakistan Ltd is the market leader with a share of around 43%.

Sales

Others. 24% Express 9% Bright 11%

Surf Excel 43%

Ariel 13%

Figure shows the market share of all the companies in the sector. Unilever Pakistan Ltd is leading the market. The other competitors are very competitive among themselves but they cannot put a intense competition with Unilever Pakistan Ltd, as they have market share much less than Unilever Pakistan Ltd. Customer loyalty We all want to be pampered, to look and feel great, to enjoy that moment when anything seems possible. And that's just what Surf Excel offers you on a daily basis at a price you can afford.

Corporate responsibility The Surf Excel has been always the one to be against child labor and also being a part of some societal work around Pakistan

Surf Excel believes to succeed we also requires, we believe, the highest standards of corporate Behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact a. Eco-efficiency reducing the impacts of our operations b. Eco-innovation reducing the impacts of our products c. Sustainability programmers in agriculture and water d. Our Code of Business Principles e. Supporting local communities

Positioning Positioning of surf excel is due to: Brand name High quality Attractive packing Removes stains 10/10 Dirt is good(every child has the right to play and discover his own world)

SWOT ANALYSIS SWOT analysis is done to know what the strength and weaknesses of the brand are and what are the opportunities and threats that company has to face from the environment.

STRENGTH Unilever is a big multinational company. Sound and experienced management. Excellent marketing department assisted by a highly regarded marketing research unit. R&D and financial support from parent company i.e. lever brothers. Management of product is familiar with the psychographics and demographic of the consumers. Strong brand image and brand awareness of Surf Excel. Market leader as it has a 43% share. Large sales force. Strong and healthy relationships with distributors and retailers.

WEAKNESSES Low market share in N.W.F.P. Loss of market share to some of its own products, i.e. Rexona against LUX.

OPPORTUNITIES High rate of population growth. Rising literacy. Market opportunity for Surf Excel to penetrate in the new segments and market by the style and hygiene consciousness of the people. THREATS Possible increase of market share of Ariel and Bright. Rising inflation, which reduces personal disposable income of consumers? Profit margin is exposed to rupee devaluation.