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.

Unilever’s one of the most popular brand is Surf Excel. They segments Surf Excel’s 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, 4P’s, 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 company’s 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 Excel’s product features distribution and

promotional activities have created high brand loyalty for which it is still the market leader.

Introduction

History

Unilever Pakistan Limited

List of Unilever Brands in Pakistan

Market Segmentation 0

Product Category

Market Segmentation

Target Market 1

Product Positioning 2

Marketing Tools 2

Product 2

Price 3

Place 4

Promotion 4

Capturing value from Customers in Return

Market Share

Customer loyalty

Corporate Social responsibility

Corporate responsibility

SWOT ANALYSIS

Introduction

Unilever is one of the world’s 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, WALL’S, 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 of which 26 are profitable and during the year 2002 Wall’s was added as the 27th profitable product. 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 LimitedThe 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

Wall’s

Lipton Tea

Sunsilk

Knorr Soup / Nudels

Rexona

Imperial

Pond's

Market SegmentationThe 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 B C D E

Income

High Income Upper

Middle Level

Income

Mid

Level

Income

Lower Middle

Income

Low Income

Education

High Level of

Education

Educated

Slightly Less

than Cluster A

Educated

Slightly

Less than

Cluster B

Educated

Slightly Less

than Cluster C

Very Low

Level of

Literacy

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 MarketA 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 B C

Income

High Income Upper Middle Level

Income

Mid Level Income

Education

High Level of Education Educated Slightly Less than

Cluster A

Educated Slightly Less than

Cluster B

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

ProductSurf 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

PriceThough 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 1kg 500g 100g 60g 25g

Rs405 Rs210 Rs115 Rs20 Rs10 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 ShareThe 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%.

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 responsibilityThe Surf Excel has been always the one to be against child labor and also being a part of some

societal work around Pakistan

Surf Excel43%

Ariel13%

Bright11%

Express9%

Others.24%

Sales

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

PositioningPositioning 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 ANALYSISSWOT 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.