Unilever is a multinational consumer product manufacturing giant operating in over hundred countries all around the globe. Unilever Bangladesh is the Bangladesh chapter of Unilever, where the company holds 60.75% share whereas the Government of Peoples Republic of Bangladesh holds 39.25% share.
Unilever's one of the most popular brand is LUX. They segments LUX.'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 LUX. Though LUX is produced in Bangladesh , Unilever Bangladesh 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 Bangladesh has outsourced its distribution channels to third party distributors which allow them to distribute LUX in massive bulks amounting to around ten million pieces. It undertakes the largest promotional activities in the beauty soap industry.
The beauty soap industry has a few major producers of which Unilever holds market share of slightly less than 50%. Other competing brands like Tibbet, Aromatic and Keya have started to have a strong consumer base, but LUX.'s product features distribution and promotional activities have created high brand loyalty for which it is still the market leader.Unilever, with the aid of its heavy promotional activities, has been able to penetrate the market. But the other producers in the industry are posing a threat towards Unilever's market share as they have moved towards the rural masses of the population. Therefore, Unilever Bangladesh should undertake further steps such as moving towards the rural and/or poorer segment; attract children (by making a special product for kids) and other innovative promotional activities to retain its command in the industry.
Objective of this Report
This report is an outcome of an analysis of marketing strategies used by Unilever Bangladesh Ltd. The main purpose of the report is to find what strategies the company uses to market its world famous beauty soap, LUX, in Bangladesh; the positive and negative aspects of those strategies. The report further analyzes the position of Unilever Bangladesh Ltd. in the toiletry industry in comparison to its competitors. The report discusses the process of using market segmentation, target marketing, the product, pricing, promotional and distribution strategies and a competitive analysis.
For accessibility and availability of information we have chosen to work on the strategies of Unilever Bangladesh Ltd. As the company operates in the market with a huge number of products in different industries, we have decided to focus on one of their world wide successful brands, LUX. Most of the information used in this report is from primary sources . The main source of information was the focus group discussion. In addition information was also collected from websites
The company claims that LUX is the highest selling beauty soap in Bangladesh . Moreover some survey reports also reveal the same result.Though LUX is the highest selling beauty soap in Bangladesh , it does not go for traditional mass marketing. Moreover as a beauty soap LUX does not even segment its market according to gender.
Using the Tactical Marketing Tools
LUX is an internationally renowned beauty soap brand of Unilever. Though manufactured in Bangladesh for the local market by Unilever Bangladesh Ltd, as an international brand, it maintains an international quality for the product. Formula given by Research and Development departments in foreign countries, LUX is produced in Bangladesh from imported raw materials like sodium soap, glycerol and different extracts according to flavors, coming from Unilever plants situated abroad.
LUX is offered in Bangladesh in six different flavors which are: LUX Energizing Honey, LUX Golden Glow, LUX Nature Pure, LUX Orchid Touch, LUX Almond Delight and LUX Aqua Sparkle. Taking into account the convenience of its customers, the company manufactures all flavors of LUX in three different sizes, 40gm, 80gm and 120gm.
Though Unilever Bangladesh gives its LUX customers a lot in terms of the product itself, it cannot provide a better pricing. This is due to some constraints in the beauty soap industry. Beauty soap is a product with a vulnerable demand in Bangladesh. 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. Table 3.1 (p-10) compares Lux's price with its major 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).
Unilever Bangladesh Ltd. has a huge distribution channel for LUX all over the country as its sales reach more than 10 million pieces a year. The company has six huge warehouses, one in each division of Bangladesh , where the product goes after they are manufactured at Kalurghat factory. Table 3.2 (P-10) shows the location of its six warehouses in Bangladesh.
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 Bangladesh Ltd. These distributors then supply the product all over Bangladesh to a huge number of retailers. Even though LUX targets the urban and sub urban middle and upper middle class people they are distributing their products all over Bangladesh because of a recent increase in demand of its product to all segments of the population.
Unilever Bangladesh undertakes huge promotional activities to promote LUX which has topped the beauty soap industry of Bangladesh . It spends almost 20% to 25% of its Net Proceeds from Sales (NPC) of LUX for promotional activities for LUX 1
It's certain annual promotional campaigns like LUX Channel i Superstar and LUX Channel i Annual Cinema Awards has made the product a part of the glamour world. Since the 1930s, over 400 of the world's most stunning and sensuous women have been proudly associated with Lux advertisements . They do not only promote LUX in Bangladesh for the beauty conscious females, it also promotes the brand for males and the company proved that, by including world famous male celebrity Shahrukh Khan for their advertising campaign.
Unilever Bangladesh Ltd spends a huge amount of money for promoting LUX 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 Zonal Beauty Contests. Till now promotional activities of LUX 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
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 1872. Operating in Bangladesh 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 Bangladesh 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.