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CHAPTER ONE BACKGROUND OF THE STUDY
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1.1 Introduction The trade atmosphere today is changing more rapidly than ever before. It is characterized by increasing competition from both domestic and foreign companies, a brandish of mergers and acquisitions, and more sophisticated and demanding customers who have great expectations realted to their consumption experiences. Since services are intangible, heterogeneous, and inseperable, it is difficult to measure service quality objectively. So the companies have focus to so many different aspects in order to make sure their sales. This report deals with meeting up the new challenges that LUX is facing to manage the selling environment. LUX has started so many projects to get a better positions in the market. The objective of the study is to see marketing strategy and mrketing mix of LUX soap.
1.2 Significance of the Study This report is a requirement of the program for MBA program. I have tried our level best to make it as an excellent one. I use all latest data and information. The report can help as the indicator of the marketing strategy of the LUX soap and its marketing mix. It provides the true practice taking palce in the marketing industry, which plays an important role for every student to meet the extreme challenges of the job market. It helps us in gathering knowledge on the modern practices of the marketing programs of LUX and its way to serve its customers. Its data comparison is based on the published information and further analysis.
1.3 Objective of the Study This report is an outcome of an analysis of marketing strategies and marketing mix 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.
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1.4 Methodology of the Study For accessibility and availability of information I 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, I have decided to focus on one of their worldwide 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.
1.5 Scope of the Study It illustrates a study on marketing strategy and the marketing mix of LUX soap. This report will help us to acquire information about the beautification industry in Bangladesh and systematically investigate the marketing strategy and the marketing mix of the LUX soap. This information will improve our knowdledge, which will positively impact our learning experience. This report provides us the opportunity to exchange ideas with our classmates and faculty and learn about different techniques. It is necessary to stay current with new processes, ideas, and methods. By doing this report I got the opportunity to explore the areas of research and bring the new information into my report.
1.6 Limitations The present study was not out of limitations. Some constraints are given below –
The main constraint of the study is inadequate access to information, which has
hampered the scope of analysis required for the study. It was unable to provide some formatted documents data for the study. Due to time limitations, many of the aspects could not be discussed in the present
report. The customers were too busy to provide much time for interview. The customers couldn’t provide proper information about some aspects due to their
lack of knowledge Only few areas of Chittagong City have been considered for the study.
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CHAPTER TWO OVERVIEW OF THE PRODUCT
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2.1 Profile LUX is a global brand developed by Unilever. The range of products includes beauty soaps, shower gels, bath additives, hair shampoos and conditioners. LUX started as “Sunlight Flakes” laundry soap in 1899 in 1924, it became the first mass market toilet soap in the world. It is noted as a brand that pioneered female celebrity endorsements. As of 2005, LUX revenue is estimated at € 1 billion, with market shares spread out to more than 100 countries across the globe. Today LUX is the market leader in several countries Pakistan, Brazil, India, Thailand, and South Africa. Developed by Unilever, LUX (soap) is now headquartered in Singapore. LUX launched the world’s first mass market beauty bar, “made like the costliest French soap.” Since then, LUX has been associated with over 400 of the world’s most glamorous actresses from Hollywood like Elizabeth Taylor, Audrey Hepburn, and Grace Kelly, to Bollywood Royalties such as Aishwarya Rai, and Katrina Kaif.
2.1.1 Origins and History The brand was founded by the Lever Brothers (today known as Unilever) in 1899. The name changed from “Sunlight Flakes” to LUX in 1990, a Latin word for “Light” and suggestive of “Luxury”. LUX toilet soap was launched in the United States in 1925 and in the United Kingdom in 1928. Subsequently, LUX soap has been marketed in several forms, including hand wash, shower gel and cream bath soap.
2.1.2 Early Beginnings LUX’s early advertising campaigns aimed to educate s about its credentials as a laundry product and appeared in magazines such as Ladies Home Journal. By the early 1920s, it was a hugely successful brand and in 1924, the Lever Brothers conducted a content that led them to a very interesting finding women were using LUX as toilet soap.
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2.1.3 Building Beauty Soap Credentials Introduced in the United States in 1924, LUX became the world’ s first mass market toilet soap with the tagline “made as fine as French Soap”. In the first 2 years of launch, LUX concentrated on building its beauty soap credentials. ments offered consumers “beauty soap made in the French method” at an affordable price, with the promise of smooth skin. Made with fine texture, rich in fragrance, and manufactured using a method created in , the first LUX toilet soap was sold for 10 cents apiece.
2.1.4 1928–1940: 9 out of 10 Stars This era saw key launches of LUX in the UK, India, Argentina and Thailand. The brand concentrated on building its association with the increasingly popular movie world, focusing more on movie stars and their roles rather than on the product. In 1929, advertising featured 26 of the biggest female stars of the day , creating a huge impact among the movieloving target audience. This was followed by Hollywood Directors talking about the importance of smooth and youthful skin. This pioneered the trend of celebrity product endorsements. The series of print ads had stars talking about preserving youthful skin.
LUX
also
launched
campaigns featuring interviews with Stars and Close Ups of Stars, bringing to life the ‘9 out of 10’ idea.
2.1.5 40s & 50s: Romancing the Consumer Using movie star as role models, LUX’ s strategy was to build relevance by looking at beauty through the consumer ’ s eyes. While still retaining the star element, the focus shifted to the consumer and the role of the brand in her life. Advertising commercials showed ordinary looking women with direct references to stars, such as Deanna Durbin. Marketing Strategy and The Marketing Mix of LUX Soap
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2.1.6 60s: Romancing the Brand The 60’ s saw a shift in advertising to product stories and the romanticizing of brand through its “sensorial & emotional” dimensions. This was the era of ‘the film star feeling’ and the ‘Golden LUX’, featuring stars such as Sandra Dee, Diana Rigg and Samantha Eggar . The bathing ritual, the ‘fantasy’ element that has been the imagery of LUX was created in this era. The brand also moved forward with launching LUX in the Middle East, entering a more conservative market.
2.1.7 70s: Dimensionalizing Beauty Reflecting the shift in beauty trends in the 70s, the LUX stars stepped down from their pedestals and were portrayed as multifaceted women with natural, wholesome beauty that the ordinary consumer could relate and aspire to. The executions were more of ‘a day in the life’ of the stars with focus on their ‘natural beauty’. Stars included Brigitte Bardot and Natalie Wood.
2.1.8 80s: Owning the Category Space Establishing itself as THE beauty soap for stars and beautiful women, the 80s emphasized the importance of skin care – the first step to beauty . LUX was launched in China at this time. Sophia Loren, Raquel Welch and Cheryl Ladd were some famous celebrities used during this time. In India actresses Hema Malini, Parveen Babi, Madhuri Dixit, endorsed LUX soap.
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2.1.9 90s – Early 2000s: Advanced Skin Benefits In the 90s, LUX moved from generic beauty benefits to focus on specific benefits and transformation. More emphasis on functionality and variant associations with different skin types as well as mention of ingredients. The communication was far more regional specific and localized, using stars like Malu Mader and Debora Bloch. This period launched product brand extensions Shower Cream and Gels and LUX Super Rich Shampoo in Japan and China.
2.1.10 2000s: Beyond Movie Stars In early 2000, the focus shifted from specific skin benefits to a stronger emotional space. The brand provided the link between the aspirational role models and real life with the campaign, ‘LUX’ brings out the star in you’. The benefit was now more than just beauty, it was also about the confidence that comes from beautiful skin. In 2005, LUX encouraged women to celebrate and indulge their femininity with the “Play with Beauty” philosophy , with stars like Aishwarya Rai. The brand also connected with consumers to take a more ‘active’ stance on beauty . From 2008, building off the brand’ s root strengths, focus has shifted to beauty (vs. Femininity), appealing to consumers’ fantasies and aspirations. LUX believes that ‘beauty is a female instinct that shouldn’t be denied’ and showcases the pleasure that every woman enjoys from using her beauty , encapsulating that idea in a simple phrase: Declare your beauty . Today, LUX products are manufactured at 71 locations with more than 2000 suppliers and associates providing the raw materials. It has key markets in Pakistan, Brazil, China, Bangladesh and South Africa, and is a market leader in India (for soap bars), Pakistan, Brazil, Saudi Arabia (for soap bars), Bangladesh, Thailand and Vietnam.
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2.2 Vision, Mission, Goals and Objectives LUX began its story in 1924 as the first mass marketed beauty soap. Now sold in over 100 countries, it is the most recognizable soap brand in the world – bringing a combination of fun, pleasure and comforts to women’ s beauty routines the world over. Since its start in 1924 as the first mass marketed beauty soap, LUX has made its way to over 100 countries across the globe and is now the most recognizable soap brand in the world. During this long journey , some of the world’ s most talented and beautiful women have become a part of LUX’ s history as brand ambassadors. LUX combines exquisite fragrances with the most exotic ingredients to give a truly unique bathing experience.
2.2.1 Vision It is the vision of LUX to give women that million dollar feelings every time they use a LUX product, be it one of their fragrant beauty soaps or refreshing body washes. LUX believes beauty doesn’t have to be a chore and brings a combination of fun, pleasure and comfort to women’s beauty routines all over the world.
2.2.2 Mission The mission of LUX is to embrace consumers’ new expectation, to maintain good governance, product quality and long experience of working with communities. Their vitality mission will focus brands on meeting consumer needs arising from the biggest issues around the world today – ageing populations, urbanization, changing diets and lifestyles. They see growing consumer need for: A healthy lifestyle More variety, quality, taste and enjoyment Marketing Strategy and The Marketing Mix of LUX Soap
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Time, as an increasingly precious commodity Helping people to feel good, look good and get more out of life will enable us to meet these needs and expand our business.
2.2.3 Goals The goals of LUX are
To maintain strong science capability.
Ensuring the quality of the raw materials and the ingredients needed to make products.
To manufacture high standard products.
Promoting products to the highest extent.
Producing large volume to achieve production cost economies.
Enabling quality products to be sold out at obtainable product. * Maintaining healthy relationship with the customers.
2.2.4 Objectives The objectives of LUX are Always working with integrity: Conducting operations with integrity and with respect for the many people, organizations and environments. Positive impact: LUX aim to make a positive impact in many ways: through the brands, commercial operations and relationships, through voluntary contributions, and through the various other ways in which they engage with society . Continuous commitment: They’re
also
environmental
committed impacts
to
and
continuously
improving
the
way
they
manage
the
are working towards the longerterm goal of developing a
sustainable business. Setting out our aspirations: Their corporate objective sets out their aspirations in running business. It’ s underpinned by the code of Business Principles which describes the operational standards that everyone at Unilever Marketing Strategy and The Marketing Mix of LUX Soap
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follows, wherever they are in the world. The code also s their approach to governance and corporate responsibility . Working with others: They want to work with suppliers who have values similar to them and work to the same standards as they do.
2.3 LUX Range LUX Peach & Cream blends juicy peach and moisturizing cream extracts to give you velvety , soft skin. LUX Fresh Splash is crafted with the icy freshness of cooling mint and the invigorating power of sea minerals to transform your skin from dull to vibrant in an instant. LUX Sandal & Cream uses extracts of alluring sandalwood and a unique consistency of moisturizing cream to give your skin a captivating and mesmerizing glow . LUX Purple Lotus & Cream is infused with fragrant moisturizing and beauty oils, leaving your skin silky smooth.
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CHAPTER THREE MARKETING STRATEGY OF LUX SOAP
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3.1 Environmental Analysis PEST Analysis PEST analysis is valuable while analyzing external environment where business is conducted or where an organization is planning to start a new business (Henry, 2008). This section studies the environmental factors that have an impact on operation of LUX Soap.
3.1.1 Political Factors
Politically there is no much of a problem for the LUX Soap and will create an impact
that will not affect our product. Government banned the import of tallow, a soap making raw material (which was requiring a very little processing to make soap). It then followed an incidence of adulteration of vanaspati by unscrupulous manufacture.
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3.1.2 Economic Factors
Soaps in Bangladesh cost very high in Bangladesh as compared to other countries like Indonesia. This is primarily attributed to the high cost of imports due to high import
duties. Since Bangladesh is now a WTO member so that Bangladesh will have to bring down the import duty rates to as much as 20% from 35%. Also the excise rate at 16% forms
formidable portion of the cost. For toilet soap, the average expenditure per household for low-income households are Tk. 300, while itis Tk. 1000 for high-income groups.
3.1.3 Social Factors
With the rising education and disposable income levels, the need for hygiene and
personal / skin care becomes important. soaps are thus targeted at the audience to change their habits by raising their
aspiration levels. Fragmented approach of govt. and NGO’s towards inefficient PHC-primary health
center also aggravates the problem. The growing reach of advertising Medias like satellite and cable TV too is expected to give a boost to the market penetration initiatives of the industry players.
3.1.4 Technological Factors
The industry though capital intensive is not very technology intensive. soap manufacturing though compared with other soaps manufacturing relies to an extent on technology (especially in the finishing stage). The more important is logistics management where marketing and distribution play a pivotal role. Here technology
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like (SCM) Supply Chain Management and (E-CRM) Electronic Customer Relationship Management will play a pivotal role. Companies like UBL are working
very hard towards such a system to rope up the entire small stores and retailers. The results of a survey done by National Council of Applied Research (NCAER) suggest that Indian FMCG space is all set to enter a new growth phase, sample this: the study says that the lower income group is expected to shrink from over 60 percent (1996) to 20 per cent by 2007 and the higher income group is expected to rise by more than 100 per cent. It looks; the industry is all set for a fast-paced race ahead.
3.2 Customer Analysis CSTP Analysis Product Category, Market Segmentation, Target Marketing and Positioning: This chapter describes the category of the selected product. The chapter is organized into four sections. Section 1 states under which category the product falls. Section 2 describes how Unilever Bangladesh Ltd. differentiates the population and categorizes them into different segments. Section 3 analyzes which segment the company targets and why they target that specific segment. Finally section 4 describes the process through which the company tries to capture a place in the buyers mind i.e. the product positioning method
3.2.1 Product Category LUX falls under the category of toiletry product as a beauty soap.
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3.2.2 Market Segmentation 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. Unilever Bangladesh 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. The company further differentiate the geographical segments according to Socio Economic Cluster (SEC) i.e. education and 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, and sequentially in descending order E categorizes the opposite.
3.2.3 Market Targeting Urban and sub urban middle class, and rural poor people are the largest part of Bangladesh population. A research carried out by Unilever Bangladesh 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. LUX 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 LUX.
3.2.4 Product Positioning Unilever Bangladesh 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. Marketing Strategy and The Marketing Mix of LUX Soap
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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 beauty soap. The market share of the company in the beauty soap industry is somewhere around 43%.Since in the beauty soap 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 deg. A positioning map of the company is to describe LUX’s position in the consumers mind on two dimensions, price and quality. Information gathered by conducting a consumer survey. It states that though in comparison to its competitors the pricing of LUX is same but consumers rate it as the product which gives them the highest quality. This positioning created a strong customer loyalty for LUX, for which it the market leader in the industry.
3.3 Competitive Analysis SWOT Analysis The SWOT analysis for LUX helps identify the internal environment, its strengths and weaknesses as well as the external environment faced by it, and the opportunity and threats that it presents:
3.3.1 Strengths
LUX possesses a very strong network of market research. LUX has a very wide range of products to offer. The parent company of LUX has helped in establishing a strong supply and distribution network. Besides, it also has access to the resources of the parent
company of Unilever. LUX possesses a very strong brand image in the market. The focus of LUX is going strong on beauty segment. LUX is a dynamic brand and is undergoes changes as per the changes in demand and trend.
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The brand has innovative sates promotion tactics that spread across different forms of
media – print, electronic, and social. The brand is known to deliver value for money in the eyes of the consumers. It has a broad market presence and mass appeal, being the market leader in so many
countries. AS per the BCG matrix developed by the Boston Consulting Group, LUX can be put into the STAR category for high market growth and high market share.
3.3.2 Weaknesses
LUX lacks a unisex appeal as it has essentially been portrayed as a women’s beauty
soap and has a lot of feminine appeal. The wear rate of the soap is very high. It gets dissolved pretty fast and gets mushy and
soggy quickly. Certain variants of the soap, like the Haute Pink, Sunscreen, etc. did not do so well in
the market as some of its other variants have. The stock replenishment in semi-urban areas and rural areas is quite long, despite
having such a wide distributor network. This leads to stock out in these areas. Some of its ments have been quite controversial. It includes too much base which makes the skin dry.
3.3.3 Opportunities
The industry today is growing at a rate of more than 10% per annum. LUX can yield great benefits by reinforcing itself in the beauty segment. Promotions strategies like trade fare, price offs, sample distributions, etc. are essential
with competitors. The soap is in the maturity stage of its life cycle, so it is essential that a retentive strategy be adopted so that this can be sustained.
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Ayurvedic of LUX could have a big scope in the market. So far only variant of LUX that has somewhat come close to Ayurveda, though not actually is the festive glow variant, which had the goodness of haldi and chandan ubatan. This could cater to a
new segment in the market. LUX kids’ special soap would also help the brand greatly, as this segment has been
running dry for quite some time now. In this way brand loyalty could be young. The brand extension products of LUX – the body washes with its new range launched recently, is in the growth stage of its life cycle. They can pick up fast pace is positioned and marketed properly. Active marketing of these body washes is going on
in the social media. It can also launch face wash as it is in great demand to today’s women.
3.3.4 Threats
Number of competitors is rising - ITC, P&G, etc are fast catching up. High internal competition also exists for the soap like Dove. LUX seems overly relied on the beauty segment, so in case the consumer trends or
preferences change, then LUX stand to be highly vulnerable. More focus needs to be put on the newer technology. If constant reinvention is not there, then LUX can slip down from the maturity stage it currently is in and get into a declining phase.
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3.4 Porters Five Forces Analysis Lux is a very popular brand in soap category of Unilever. Unilever earns a large share of revenue by selling Lux. Here we are going to discuss Porter’s Five Forces in connection with LUX soap:
3.4.1 Degree of Rivalry (HIGH): The brand LUX has got huge market share especially in India and Bangladesh. If we focus on the other brands in soap category in India, we can see that there are lots of strong brands present in the market. Vivel soap, Cinthol and Pears lead to the decline in their profit level. And that is how its competition level becomes even tougher. However, LUX is constantly fighting to retain its market share and to increase its market growth rate in India. Now let’s take a look at the perspective of LUX in Bangladeshi market. We can also see competition for LUX in Bangladeshi market as here are lots of other soap brands like Keya, Kohinoor, Dettol etc. available in the market. Needless to say that LUX is the market leader in Bangladesh, however Dettol and other competitors lead to a little bit decline in LUX’s profit level. But still in my opinion, degree of rivalry between LUX and other brands in Bangladesh is pretty much low. However, LUX is earning revenue and doing business in a lot of countries around the world. So if we generalize it from every aspect, LUX’s degree of rivalry is really high.
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3.4.2 Bargaining Power of Buyers (HIGH): Consumers always want to buy quality products at a cheaper rate. Since the price level of LUX is a bit high, some consumers do not feel interested in buying LUX as other brands also offer good quality product in soap category at a cheaper rate. So buyers have high bargaining power which somehow causes Unilever to lose some market share.
3.4.3 Bargaining power of suppliers (LOW): There are plenty of suppliers in the market to supply raw materials to soap producing companies and they compete among each other. As a result of which LUX enjoys the facility to get suppliers providing good quality raw materials at a cheaper rate. So the lucid analysis of the situation says that bargaining power of suppliers is very low.
3.4.4 Threat of substitutes (HIGH): There are direct and indirect substitutes for LUX available in the market. Among them Facewash and Body wash are two major threats for LUX as substitutes. As people are getting more conscious of their skin and health, they are focusing on most appropriate things that they should be using and this is posing LUX a huge threat in of revenue and also compromising its market share. Another threat is the adoption of soaps from other brands due to price that LUX charges on its consumers.
3.4.5 Threat of new entrants (HIGH): Marketing Strategy and The Marketing Mix of LUX Soap
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The main raw material to produce soap is palm oil which is relatively high in price in India. However palm oil is way cheaper in China and Malaysia. So there is always a chance for a new company to get raw materials at a cheaper rate and serving a specific market segment profitably offering their products in soap category at lower prices while causing decline to LUX’s market share. So it creates vulnerability for LUX to the threats of new entrants.
CHAPTER FOUR THE MARKETING MIX OF LUX SOAP
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4.1 The Marketing Mix The marketing mix is a business tool used in marketing and by marketing professionals. The marketing mix is often crucial when determining a product or brand’s offering, and is often synonymous with the four Ps: product, price, place and promotion, in service marketing however, the four Ps have been expanded to the Seven Ps or eight Ps to address the different nature of services. In recent times, the concept of four Cs has been introduced as a more customer-driven replacement of four Ps. And there are two four Cs theories today. One is Lauterborn’s four Cs (consumer, cost, communication, convenience), another is Shimizu’s four Cs (commodity, cost, communication, channel).
This chapter describes the way Unilever Bangladesh Ltd. use the tactical marketing tools for marketing LUX in Bangladesh. The chapter comprises of four sections. Section 3.1.1 discusses the product attributes of LUX. Section 3.1.2 visualizes the price of LUX according Marketing Strategy and The Marketing Mix of LUX Soap
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to different size. Section 3.1.3 conceptualizes the distribution channel of Unilever Bangladesh Ltd. This section includes a table that shows the location of the company’s warehouses all around the country. Finally section 3.1.4 discusses the promotional activities that the company undertakes for LUX.
4.1.1 Product 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 the convenience of its customers, the company manufactures all flavors of LUX in three different sizes, 40gm, 80gm and 120gm.
4.1.2 Price Though Unilever Bangladesh gives its LUX customers a lot in 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. Company carries out research on competitors’ price and brand loyalty when it feels extreme necessity of changing price.
4.1.3 Place 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. Marketing Strategy and The Marketing Mix of LUX Soap
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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.
4.1.4 Promotion 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. 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 ments. 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 ments 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.
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CHAPTER FIVE FINDINGS & RECOMMENDATION
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5.1 Findings
They are more focused about their Promotional activities; The proportion of Alkali is too much high and makes skin rough; They are not so focused about the quality improvement; Most of the people uses LUX because of its unique fragrance no one uses LUX for
skin care; Dove is the strongest internal competitor of LUX and Sandelina is the external
strongest competitor in Bangladesh; Some people expect that LUX will introduce more products of LUX like Face was
and body powder; As every class of people use LUX, respondents think that the price of LUX should be
reduced; Sandal and Cream is the most used fragrance of LUX in Bangladesh; Most people get information about LUX from TV ment; People are satisfied with size of LUX soap.
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5.2 Recommendation
Most of the respondents suggested that they would like to see more Fragrance of LUX
soap; In order to increase more sales LUX should concentrate on appropriate reduction of
cost which will directly lead to gain leadership in price, By hiring famous stars LUX is investing huge amount to promote their products; My suggestion will be now LUX should discontinue spending huge amount in
promotional activities; LUX will also have to do product development for the product line extension; As this soap makes skin rough enough, we think LUX should invest more to improve the quality of LUX rather than promotional activities, or else it can lose its market at
any time because there are many strong competitors in soap market; LUX can introduce more products like Face Wash, Body Powder etc. as this product cover a huge and different market segment.
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Conclusion LUX has been operates its business for many years in Bangladesh where cash and every person knows brand quality and different product of it and consumers are also aware about the different strategies which are used to attract more consumers to buy the product but still it has lacking to survive in the market. From the above analysis it’s been conclude that Bangladesh Unilever Limited facing competition from the other companies. Thus to keep its market share for the growth in their business it should focus on equality management and improvement to achieve its objective. However LUX soap should penetrate the market in order to survive in this competitive world and also introduce some new product with the reasonable activity should also be consider throughout which will result in gaining competitive advantage from its competitors.
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Bibliography www.google.com.bd www.unilever.com.bd www.unilever.com/brands inaction www.lux.com www.hul.co.in www.luxnaturals.com www.wikipedia.org
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1.1 Introduction The trade atmosphere today is changing more rapidly than ever before. It is characterized by increasing competition from both domestic and foreign companies, a brandish of mergers and acquisitions, and more sophisticated and demanding customers who have great expectations realted to their consumption experiences. Since services are intangible, heterogeneous, and inseperable, it is difficult to measure service quality objectively. So the companies have focus to so many different aspects in order to make sure their sales. This report deals with meeting up the new challenges that LUX is facing to manage the selling environment. LUX has started so many projects to get a better positions in the market. The objective of the study is to see marketing strategy and mrketing mix of LUX soap.
1.2 Significance of the Study This report is a requirement of the program for MBA program. I have tried our level best to make it as an excellent one. I use all latest data and information. The report can help as the indicator of the marketing strategy of the LUX soap and its marketing mix. It provides the true practice taking palce in the marketing industry, which plays an important role for every student to meet the extreme challenges of the job market. It helps us in gathering knowledge on the modern practices of the marketing programs of LUX and its way to serve its customers. Its data comparison is based on the published information and further analysis.
1.3 Objective of the Study This report is an outcome of an analysis of marketing strategies and marketing mix 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.
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1.4 Methodology of the Study For accessibility and availability of information I 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, I have decided to focus on one of their worldwide 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.
1.5 Scope of the Study It illustrates a study on marketing strategy and the marketing mix of LUX soap. This report will help us to acquire information about the beautification industry in Bangladesh and systematically investigate the marketing strategy and the marketing mix of the LUX soap. This information will improve our knowdledge, which will positively impact our learning experience. This report provides us the opportunity to exchange ideas with our classmates and faculty and learn about different techniques. It is necessary to stay current with new processes, ideas, and methods. By doing this report I got the opportunity to explore the areas of research and bring the new information into my report.
1.6 Limitations The present study was not out of limitations. Some constraints are given below –
The main constraint of the study is inadequate access to information, which has
hampered the scope of analysis required for the study. It was unable to provide some formatted documents data for the study. Due to time limitations, many of the aspects could not be discussed in the present
report. The customers were too busy to provide much time for interview. The customers couldn’t provide proper information about some aspects due to their
lack of knowledge Only few areas of Chittagong City have been considered for the study.
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CHAPTER TWO OVERVIEW OF THE PRODUCT
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2.1 Profile LUX is a global brand developed by Unilever. The range of products includes beauty soaps, shower gels, bath additives, hair shampoos and conditioners. LUX started as “Sunlight Flakes” laundry soap in 1899 in 1924, it became the first mass market toilet soap in the world. It is noted as a brand that pioneered female celebrity endorsements. As of 2005, LUX revenue is estimated at € 1 billion, with market shares spread out to more than 100 countries across the globe. Today LUX is the market leader in several countries Pakistan, Brazil, India, Thailand, and South Africa. Developed by Unilever, LUX (soap) is now headquartered in Singapore. LUX launched the world’s first mass market beauty bar, “made like the costliest French soap.” Since then, LUX has been associated with over 400 of the world’s most glamorous actresses from Hollywood like Elizabeth Taylor, Audrey Hepburn, and Grace Kelly, to Bollywood Royalties such as Aishwarya Rai, and Katrina Kaif.
2.1.1 Origins and History The brand was founded by the Lever Brothers (today known as Unilever) in 1899. The name changed from “Sunlight Flakes” to LUX in 1990, a Latin word for “Light” and suggestive of “Luxury”. LUX toilet soap was launched in the United States in 1925 and in the United Kingdom in 1928. Subsequently, LUX soap has been marketed in several forms, including hand wash, shower gel and cream bath soap.
2.1.2 Early Beginnings LUX’s early advertising campaigns aimed to educate s about its credentials as a laundry product and appeared in magazines such as Ladies Home Journal. By the early 1920s, it was a hugely successful brand and in 1924, the Lever Brothers conducted a content that led them to a very interesting finding women were using LUX as toilet soap.
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2.1.3 Building Beauty Soap Credentials Introduced in the United States in 1924, LUX became the world’ s first mass market toilet soap with the tagline “made as fine as French Soap”. In the first 2 years of launch, LUX concentrated on building its beauty soap credentials. ments offered consumers “beauty soap made in the French method” at an affordable price, with the promise of smooth skin. Made with fine texture, rich in fragrance, and manufactured using a method created in , the first LUX toilet soap was sold for 10 cents apiece.
2.1.4 1928–1940: 9 out of 10 Stars This era saw key launches of LUX in the UK, India, Argentina and Thailand. The brand concentrated on building its association with the increasingly popular movie world, focusing more on movie stars and their roles rather than on the product. In 1929, advertising featured 26 of the biggest female stars of the day , creating a huge impact among the movieloving target audience. This was followed by Hollywood Directors talking about the importance of smooth and youthful skin. This pioneered the trend of celebrity product endorsements. The series of print ads had stars talking about preserving youthful skin.
LUX
also
launched
campaigns featuring interviews with Stars and Close Ups of Stars, bringing to life the ‘9 out of 10’ idea.
2.1.5 40s & 50s: Romancing the Consumer Using movie star as role models, LUX’ s strategy was to build relevance by looking at beauty through the consumer ’ s eyes. While still retaining the star element, the focus shifted to the consumer and the role of the brand in her life. Advertising commercials showed ordinary looking women with direct references to stars, such as Deanna Durbin. Marketing Strategy and The Marketing Mix of LUX Soap
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2.1.6 60s: Romancing the Brand The 60’ s saw a shift in advertising to product stories and the romanticizing of brand through its “sensorial & emotional” dimensions. This was the era of ‘the film star feeling’ and the ‘Golden LUX’, featuring stars such as Sandra Dee, Diana Rigg and Samantha Eggar . The bathing ritual, the ‘fantasy’ element that has been the imagery of LUX was created in this era. The brand also moved forward with launching LUX in the Middle East, entering a more conservative market.
2.1.7 70s: Dimensionalizing Beauty Reflecting the shift in beauty trends in the 70s, the LUX stars stepped down from their pedestals and were portrayed as multifaceted women with natural, wholesome beauty that the ordinary consumer could relate and aspire to. The executions were more of ‘a day in the life’ of the stars with focus on their ‘natural beauty’. Stars included Brigitte Bardot and Natalie Wood.
2.1.8 80s: Owning the Category Space Establishing itself as THE beauty soap for stars and beautiful women, the 80s emphasized the importance of skin care – the first step to beauty . LUX was launched in China at this time. Sophia Loren, Raquel Welch and Cheryl Ladd were some famous celebrities used during this time. In India actresses Hema Malini, Parveen Babi, Madhuri Dixit, endorsed LUX soap.
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2.1.9 90s – Early 2000s: Advanced Skin Benefits In the 90s, LUX moved from generic beauty benefits to focus on specific benefits and transformation. More emphasis on functionality and variant associations with different skin types as well as mention of ingredients. The communication was far more regional specific and localized, using stars like Malu Mader and Debora Bloch. This period launched product brand extensions Shower Cream and Gels and LUX Super Rich Shampoo in Japan and China.
2.1.10 2000s: Beyond Movie Stars In early 2000, the focus shifted from specific skin benefits to a stronger emotional space. The brand provided the link between the aspirational role models and real life with the campaign, ‘LUX’ brings out the star in you’. The benefit was now more than just beauty, it was also about the confidence that comes from beautiful skin. In 2005, LUX encouraged women to celebrate and indulge their femininity with the “Play with Beauty” philosophy , with stars like Aishwarya Rai. The brand also connected with consumers to take a more ‘active’ stance on beauty . From 2008, building off the brand’ s root strengths, focus has shifted to beauty (vs. Femininity), appealing to consumers’ fantasies and aspirations. LUX believes that ‘beauty is a female instinct that shouldn’t be denied’ and showcases the pleasure that every woman enjoys from using her beauty , encapsulating that idea in a simple phrase: Declare your beauty . Today, LUX products are manufactured at 71 locations with more than 2000 suppliers and associates providing the raw materials. It has key markets in Pakistan, Brazil, China, Bangladesh and South Africa, and is a market leader in India (for soap bars), Pakistan, Brazil, Saudi Arabia (for soap bars), Bangladesh, Thailand and Vietnam.
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2.2 Vision, Mission, Goals and Objectives LUX began its story in 1924 as the first mass marketed beauty soap. Now sold in over 100 countries, it is the most recognizable soap brand in the world – bringing a combination of fun, pleasure and comforts to women’ s beauty routines the world over. Since its start in 1924 as the first mass marketed beauty soap, LUX has made its way to over 100 countries across the globe and is now the most recognizable soap brand in the world. During this long journey , some of the world’ s most talented and beautiful women have become a part of LUX’ s history as brand ambassadors. LUX combines exquisite fragrances with the most exotic ingredients to give a truly unique bathing experience.
2.2.1 Vision It is the vision of LUX to give women that million dollar feelings every time they use a LUX product, be it one of their fragrant beauty soaps or refreshing body washes. LUX believes beauty doesn’t have to be a chore and brings a combination of fun, pleasure and comfort to women’s beauty routines all over the world.
2.2.2 Mission The mission of LUX is to embrace consumers’ new expectation, to maintain good governance, product quality and long experience of working with communities. Their vitality mission will focus brands on meeting consumer needs arising from the biggest issues around the world today – ageing populations, urbanization, changing diets and lifestyles. They see growing consumer need for: A healthy lifestyle More variety, quality, taste and enjoyment Marketing Strategy and The Marketing Mix of LUX Soap
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Time, as an increasingly precious commodity Helping people to feel good, look good and get more out of life will enable us to meet these needs and expand our business.
2.2.3 Goals The goals of LUX are
To maintain strong science capability.
Ensuring the quality of the raw materials and the ingredients needed to make products.
To manufacture high standard products.
Promoting products to the highest extent.
Producing large volume to achieve production cost economies.
Enabling quality products to be sold out at obtainable product. * Maintaining healthy relationship with the customers.
2.2.4 Objectives The objectives of LUX are Always working with integrity: Conducting operations with integrity and with respect for the many people, organizations and environments. Positive impact: LUX aim to make a positive impact in many ways: through the brands, commercial operations and relationships, through voluntary contributions, and through the various other ways in which they engage with society . Continuous commitment: They’re
also
environmental
committed impacts
to
and
continuously
improving
the
way
they
manage
the
are working towards the longerterm goal of developing a
sustainable business. Setting out our aspirations: Their corporate objective sets out their aspirations in running business. It’ s underpinned by the code of Business Principles which describes the operational standards that everyone at Unilever Marketing Strategy and The Marketing Mix of LUX Soap
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follows, wherever they are in the world. The code also s their approach to governance and corporate responsibility . Working with others: They want to work with suppliers who have values similar to them and work to the same standards as they do.
2.3 LUX Range LUX Peach & Cream blends juicy peach and moisturizing cream extracts to give you velvety , soft skin. LUX Fresh Splash is crafted with the icy freshness of cooling mint and the invigorating power of sea minerals to transform your skin from dull to vibrant in an instant. LUX Sandal & Cream uses extracts of alluring sandalwood and a unique consistency of moisturizing cream to give your skin a captivating and mesmerizing glow . LUX Purple Lotus & Cream is infused with fragrant moisturizing and beauty oils, leaving your skin silky smooth.
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CHAPTER THREE MARKETING STRATEGY OF LUX SOAP
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3.1 Environmental Analysis PEST Analysis PEST analysis is valuable while analyzing external environment where business is conducted or where an organization is planning to start a new business (Henry, 2008). This section studies the environmental factors that have an impact on operation of LUX Soap.
3.1.1 Political Factors
Politically there is no much of a problem for the LUX Soap and will create an impact
that will not affect our product. Government banned the import of tallow, a soap making raw material (which was requiring a very little processing to make soap). It then followed an incidence of adulteration of vanaspati by unscrupulous manufacture.
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3.1.2 Economic Factors
Soaps in Bangladesh cost very high in Bangladesh as compared to other countries like Indonesia. This is primarily attributed to the high cost of imports due to high import
duties. Since Bangladesh is now a WTO member so that Bangladesh will have to bring down the import duty rates to as much as 20% from 35%. Also the excise rate at 16% forms
formidable portion of the cost. For toilet soap, the average expenditure per household for low-income households are Tk. 300, while itis Tk. 1000 for high-income groups.
3.1.3 Social Factors
With the rising education and disposable income levels, the need for hygiene and
personal / skin care becomes important. soaps are thus targeted at the audience to change their habits by raising their
aspiration levels. Fragmented approach of govt. and NGO’s towards inefficient PHC-primary health
center also aggravates the problem. The growing reach of advertising Medias like satellite and cable TV too is expected to give a boost to the market penetration initiatives of the industry players.
3.1.4 Technological Factors
The industry though capital intensive is not very technology intensive. soap manufacturing though compared with other soaps manufacturing relies to an extent on technology (especially in the finishing stage). The more important is logistics management where marketing and distribution play a pivotal role. Here technology
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like (SCM) Supply Chain Management and (E-CRM) Electronic Customer Relationship Management will play a pivotal role. Companies like UBL are working
very hard towards such a system to rope up the entire small stores and retailers. The results of a survey done by National Council of Applied Research (NCAER) suggest that Indian FMCG space is all set to enter a new growth phase, sample this: the study says that the lower income group is expected to shrink from over 60 percent (1996) to 20 per cent by 2007 and the higher income group is expected to rise by more than 100 per cent. It looks; the industry is all set for a fast-paced race ahead.
3.2 Customer Analysis CSTP Analysis Product Category, Market Segmentation, Target Marketing and Positioning: This chapter describes the category of the selected product. The chapter is organized into four sections. Section 1 states under which category the product falls. Section 2 describes how Unilever Bangladesh Ltd. differentiates the population and categorizes them into different segments. Section 3 analyzes which segment the company targets and why they target that specific segment. Finally section 4 describes the process through which the company tries to capture a place in the buyers mind i.e. the product positioning method
3.2.1 Product Category LUX falls under the category of toiletry product as a beauty soap.
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3.2.2 Market Segmentation 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. Unilever Bangladesh 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. The company further differentiate the geographical segments according to Socio Economic Cluster (SEC) i.e. education and 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, and sequentially in descending order E categorizes the opposite.
3.2.3 Market Targeting Urban and sub urban middle class, and rural poor people are the largest part of Bangladesh population. A research carried out by Unilever Bangladesh 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. LUX 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 LUX.
3.2.4 Product Positioning Unilever Bangladesh 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. Marketing Strategy and The Marketing Mix of LUX Soap
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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 beauty soap. The market share of the company in the beauty soap industry is somewhere around 43%.Since in the beauty soap 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 deg. A positioning map of the company is to describe LUX’s position in the consumers mind on two dimensions, price and quality. Information gathered by conducting a consumer survey. It states that though in comparison to its competitors the pricing of LUX is same but consumers rate it as the product which gives them the highest quality. This positioning created a strong customer loyalty for LUX, for which it the market leader in the industry.
3.3 Competitive Analysis SWOT Analysis The SWOT analysis for LUX helps identify the internal environment, its strengths and weaknesses as well as the external environment faced by it, and the opportunity and threats that it presents:
3.3.1 Strengths
LUX possesses a very strong network of market research. LUX has a very wide range of products to offer. The parent company of LUX has helped in establishing a strong supply and distribution network. Besides, it also has access to the resources of the parent
company of Unilever. LUX possesses a very strong brand image in the market. The focus of LUX is going strong on beauty segment. LUX is a dynamic brand and is undergoes changes as per the changes in demand and trend.
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The brand has innovative sates promotion tactics that spread across different forms of
media – print, electronic, and social. The brand is known to deliver value for money in the eyes of the consumers. It has a broad market presence and mass appeal, being the market leader in so many
countries. AS per the BCG matrix developed by the Boston Consulting Group, LUX can be put into the STAR category for high market growth and high market share.
3.3.2 Weaknesses
LUX lacks a unisex appeal as it has essentially been portrayed as a women’s beauty
soap and has a lot of feminine appeal. The wear rate of the soap is very high. It gets dissolved pretty fast and gets mushy and
soggy quickly. Certain variants of the soap, like the Haute Pink, Sunscreen, etc. did not do so well in
the market as some of its other variants have. The stock replenishment in semi-urban areas and rural areas is quite long, despite
having such a wide distributor network. This leads to stock out in these areas. Some of its ments have been quite controversial. It includes too much base which makes the skin dry.
3.3.3 Opportunities
The industry today is growing at a rate of more than 10% per annum. LUX can yield great benefits by reinforcing itself in the beauty segment. Promotions strategies like trade fare, price offs, sample distributions, etc. are essential
with competitors. The soap is in the maturity stage of its life cycle, so it is essential that a retentive strategy be adopted so that this can be sustained.
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Ayurvedic of LUX could have a big scope in the market. So far only variant of LUX that has somewhat come close to Ayurveda, though not actually is the festive glow variant, which had the goodness of haldi and chandan ubatan. This could cater to a
new segment in the market. LUX kids’ special soap would also help the brand greatly, as this segment has been
running dry for quite some time now. In this way brand loyalty could be young. The brand extension products of LUX – the body washes with its new range launched recently, is in the growth stage of its life cycle. They can pick up fast pace is positioned and marketed properly. Active marketing of these body washes is going on
in the social media. It can also launch face wash as it is in great demand to today’s women.
3.3.4 Threats
Number of competitors is rising - ITC, P&G, etc are fast catching up. High internal competition also exists for the soap like Dove. LUX seems overly relied on the beauty segment, so in case the consumer trends or
preferences change, then LUX stand to be highly vulnerable. More focus needs to be put on the newer technology. If constant reinvention is not there, then LUX can slip down from the maturity stage it currently is in and get into a declining phase.
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3.4 Porters Five Forces Analysis Lux is a very popular brand in soap category of Unilever. Unilever earns a large share of revenue by selling Lux. Here we are going to discuss Porter’s Five Forces in connection with LUX soap:
3.4.1 Degree of Rivalry (HIGH): The brand LUX has got huge market share especially in India and Bangladesh. If we focus on the other brands in soap category in India, we can see that there are lots of strong brands present in the market. Vivel soap, Cinthol and Pears lead to the decline in their profit level. And that is how its competition level becomes even tougher. However, LUX is constantly fighting to retain its market share and to increase its market growth rate in India. Now let’s take a look at the perspective of LUX in Bangladeshi market. We can also see competition for LUX in Bangladeshi market as here are lots of other soap brands like Keya, Kohinoor, Dettol etc. available in the market. Needless to say that LUX is the market leader in Bangladesh, however Dettol and other competitors lead to a little bit decline in LUX’s profit level. But still in my opinion, degree of rivalry between LUX and other brands in Bangladesh is pretty much low. However, LUX is earning revenue and doing business in a lot of countries around the world. So if we generalize it from every aspect, LUX’s degree of rivalry is really high.
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3.4.2 Bargaining Power of Buyers (HIGH): Consumers always want to buy quality products at a cheaper rate. Since the price level of LUX is a bit high, some consumers do not feel interested in buying LUX as other brands also offer good quality product in soap category at a cheaper rate. So buyers have high bargaining power which somehow causes Unilever to lose some market share.
3.4.3 Bargaining power of suppliers (LOW): There are plenty of suppliers in the market to supply raw materials to soap producing companies and they compete among each other. As a result of which LUX enjoys the facility to get suppliers providing good quality raw materials at a cheaper rate. So the lucid analysis of the situation says that bargaining power of suppliers is very low.
3.4.4 Threat of substitutes (HIGH): There are direct and indirect substitutes for LUX available in the market. Among them Facewash and Body wash are two major threats for LUX as substitutes. As people are getting more conscious of their skin and health, they are focusing on most appropriate things that they should be using and this is posing LUX a huge threat in of revenue and also compromising its market share. Another threat is the adoption of soaps from other brands due to price that LUX charges on its consumers.
3.4.5 Threat of new entrants (HIGH): Marketing Strategy and The Marketing Mix of LUX Soap
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The main raw material to produce soap is palm oil which is relatively high in price in India. However palm oil is way cheaper in China and Malaysia. So there is always a chance for a new company to get raw materials at a cheaper rate and serving a specific market segment profitably offering their products in soap category at lower prices while causing decline to LUX’s market share. So it creates vulnerability for LUX to the threats of new entrants.
CHAPTER FOUR THE MARKETING MIX OF LUX SOAP
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4.1 The Marketing Mix The marketing mix is a business tool used in marketing and by marketing professionals. The marketing mix is often crucial when determining a product or brand’s offering, and is often synonymous with the four Ps: product, price, place and promotion, in service marketing however, the four Ps have been expanded to the Seven Ps or eight Ps to address the different nature of services. In recent times, the concept of four Cs has been introduced as a more customer-driven replacement of four Ps. And there are two four Cs theories today. One is Lauterborn’s four Cs (consumer, cost, communication, convenience), another is Shimizu’s four Cs (commodity, cost, communication, channel).
This chapter describes the way Unilever Bangladesh Ltd. use the tactical marketing tools for marketing LUX in Bangladesh. The chapter comprises of four sections. Section 3.1.1 discusses the product attributes of LUX. Section 3.1.2 visualizes the price of LUX according Marketing Strategy and The Marketing Mix of LUX Soap
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to different size. Section 3.1.3 conceptualizes the distribution channel of Unilever Bangladesh Ltd. This section includes a table that shows the location of the company’s warehouses all around the country. Finally section 3.1.4 discusses the promotional activities that the company undertakes for LUX.
4.1.1 Product 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 the convenience of its customers, the company manufactures all flavors of LUX in three different sizes, 40gm, 80gm and 120gm.
4.1.2 Price Though Unilever Bangladesh gives its LUX customers a lot in 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. Company carries out research on competitors’ price and brand loyalty when it feels extreme necessity of changing price.
4.1.3 Place 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. Marketing Strategy and The Marketing Mix of LUX Soap
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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.
4.1.4 Promotion 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. 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 ments. 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 ments 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.
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CHAPTER FIVE FINDINGS & RECOMMENDATION
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5.1 Findings
They are more focused about their Promotional activities; The proportion of Alkali is too much high and makes skin rough; They are not so focused about the quality improvement; Most of the people uses LUX because of its unique fragrance no one uses LUX for
skin care; Dove is the strongest internal competitor of LUX and Sandelina is the external
strongest competitor in Bangladesh; Some people expect that LUX will introduce more products of LUX like Face was
and body powder; As every class of people use LUX, respondents think that the price of LUX should be
reduced; Sandal and Cream is the most used fragrance of LUX in Bangladesh; Most people get information about LUX from TV ment; People are satisfied with size of LUX soap.
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5.2 Recommendation
Most of the respondents suggested that they would like to see more Fragrance of LUX
soap; In order to increase more sales LUX should concentrate on appropriate reduction of
cost which will directly lead to gain leadership in price, By hiring famous stars LUX is investing huge amount to promote their products; My suggestion will be now LUX should discontinue spending huge amount in
promotional activities; LUX will also have to do product development for the product line extension; As this soap makes skin rough enough, we think LUX should invest more to improve the quality of LUX rather than promotional activities, or else it can lose its market at
any time because there are many strong competitors in soap market; LUX can introduce more products like Face Wash, Body Powder etc. as this product cover a huge and different market segment.
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Conclusion LUX has been operates its business for many years in Bangladesh where cash and every person knows brand quality and different product of it and consumers are also aware about the different strategies which are used to attract more consumers to buy the product but still it has lacking to survive in the market. From the above analysis it’s been conclude that Bangladesh Unilever Limited facing competition from the other companies. Thus to keep its market share for the growth in their business it should focus on equality management and improvement to achieve its objective. However LUX soap should penetrate the market in order to survive in this competitive world and also introduce some new product with the reasonable activity should also be consider throughout which will result in gaining competitive advantage from its competitors.
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Bibliography www.google.com.bd www.unilever.com.bd www.unilever.com/brands inaction www.lux.com www.hul.co.in www.luxnaturals.com www.wikipedia.org
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