Sun Silk

INSTITUTE OF BUSINESS AND TECHNOLOGY (BIZTEK)

REPORT ON SUNSILK

SUBMITTED BY: UMAIR SULTAN SHAZAD KHAN NAMEER KHAN

BB-1410 BB-1495 BB-1414

SUBMITTED TO: MISS DURIA HASSAN 10-4-2008

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ACKNOWLEDGMENT My first and foremost humble and gratitude to “ALLAH” the Almighty for giving me the valor to remain dedicated to make this term report. This underlying term report is based on the analysis of different marketing functions of Unilever Brothers Pakistan Limited. Applied on “Sunsilk”. In making this term report, we collected the whole data from publications, internet and various international business magazines.

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TABLE OF CONTENTS CONTENTS

PAGE #

1. Unilever Brothers Pakistan Limited. 03

2. Company Objectives.

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3. Sunsilk Mission Statement. 05 4. Product

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5. Price

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6. Promotion

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7. Distribution 15

8. S.W.O.T Analysis 16

9. Recommendations

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UNILEVER PAKISTAN LIMITED Unilever Pakistan limited formerly “lever brother Pakistan”, the largest consumer goods producing company in Pakistan, was incorporated here in 1948 and started building their factory at Rahim Yar Khan. This factory was inaugurated formally in 1951 by the then Governor General of Pakistan. 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 Rahimyar Khan site in the mid 60's. UPL moved into the personal care product business in 1981. It has gained a major market share due to the introduction of quality brands like Sunsilk, Lifebuoy, Lux and Fair & Lovely. Unilever was the recipient of Management Association of Pakistan (MAP) and Karachi Stock Exchange awards in recognition of its performance. For the purpose of MAP award, it was judged the best among the companies that have performed well in the areas of Financial Discipline, Management practices such as Risk Management, Corporate Governance, Social Responsibility and Research & Development. Unilever is committed to investment and modern production facilities thereby contributing to economic growth and employment opportunities.

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In June 2007, Unilever Overseas Holding Limited, a wholly-owned subsidiary of Unilever PLC, UK, the ultimate parent company, purchased all the shares held by the Punjab government.

COMPANY OBJECTIVES Neither our own nor our major competitors’ objectives are simple or obvious. There are many choices between short term and long-term profit, between growth and cash flow, between growth in assets and growth in earnings, between proportions of earnings paid to share holders as dividends or reinvested. It is reasonable to assume that these different objectives of different competitors predetermine some of their strategies and tactical behavior. • Assess the concept of product acceptability, credibility and perceived benefits. • Examine consumer’s assessment of the product, in terms of product performance and related benefits. • Explore consumers’ reaction towards packaging. • Understand consumers’ perception of quality advertisement in terms of its impact.

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MISSION STATEMENT The New Sunsilk Shampoo aims at fulfilling the needs of its target market by offering a high quality, assessment of the concept in terms of its acceptability, credibility and perceived benefits, that it offers a healthy choice shampoo alternative to the targeted consumer. The theme of the product shall be anchored around the motto:

“Softness, shine and manageability of Hair”

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INTRODUCTION OF THE PRODUCT Product History: Sunsilk was introduced in 1989 in Pakistan with three variants related to hair types. Endorsement of a hair stylist was the first step in building the image of the brand as a hair care expert. With the competition from local and multinational companies due to rationalization of excise duties, Sunsilk has not been able to gain the desired share in the market. To strengthen the brand, UPL decided to re-launch Sunsilk with a premium range consisting of four variants in January 2000. In 2001, due to the constant research of their affiliated hair

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care institutes, the need of a shampoo for oily hair was observed and they launched a new variant of Sunsilk having citrus extracts. All Sunsilk variants have been formulated especially keeping in view the Pakistani consumer hair composition and hair care needs so as to provide the consumer with a complete range for all hair types.

Target Market: Their main target market is females between the age group 16-40 belonging to the two upper income classes. But in their promotional activities, they cover the whole market irrespective of these classes.

Competitors’ Review: The major competitor of Sunsilk in the rural areas is Bio Amla while in the urban areas; Sunsilk faces cutthroat competition with P&G. The main advantage of Bio Amla is its Herbal composition and low price, which attract the rural market, but in terms of quality, they are far behind Sunsilk. In urban areas, Sunsilk is acting as a market challenger against P&G. Sunsilk has got the advantage of keeping their prices lower than P&G shampoos but P&G has captured a bigger share of the market due to its intense promotional activities.

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Packaging: The packaging design for the New Sunsilk range is extremely exciting and has been developed by Brown Inc. UK. The packaging makes the brand look expert and modern. This packaging makes the brand look more contemporary and hi-tech. It ensures more emphasis on the variants that have already been a part of the product but never been communicated to the customer that well. This new packaging has clearly identified that there is a separate product for each hair type.

Currently, the main range consists of:

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SunSilk Softening Anti-Dandruff Shampoo: SunSilk Softening Anti-Dandruff Shampoo is a unique pearlized formulation with Chamomile & Vitanol to drive out dandruff and nourish your hair back to its natural beauty.

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SunSilk Black Shine Shampoo:

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SunSilk Black Shine Shampoo with Henna & Cocoa naturally blackens and smoothens your hair, so it reflects shine all day everyday.

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SunSilk Long & Strong Shampoo: SunSilk Long & Strong Shampoo with ginseng protein nourishes and strengthens your hair. By reinforcing the whole strand, your hair will grow beautifully strong and long.

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SunSilk Soft Touch Shampoo: SunSilk Soft Touch will do just that, With rich almond oil & cream nutrients, it nourishes deep inside each hair strand to bring out softness you can really feel. Soft hair loves to be touch.

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SunSilk Damage Repair Shampoo: SunSilk Damage Repair Shampoo with Olive Oil Serum helps rebuild your hair's natural cellular structure and seals it with a natural conditioning blanket. So your hair's all ready for the next big style.

Customer Review of Product Usage: 10

36.36%

12.12%

Green

30.30%

12.12%

Black

Orange

9.09%

white

Pink

Pricing Objectives: Unilever claims to practice value-based pricing in which the customers’ perception of the product’s price provides a starting point for developing the marketing mix of the product. The research department determines this price usually by using focus groups. The price of RS 3 for Sunsilk shampoo sachets shows how the price also reflects a concern to make the purchase more convenient, since the rupee is denomated in this value. The primary importance of this value-based pricing is that the product demand will be much higher if its price is in line with the customer’s perception of its value. One crucial concern for value-based pricing is strict management of cost in order to be able to make a profit at the value-based price.

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After the initial price is determined, Unilever then uses target costing in order to achieve the required profits. With the marketing plan now being termed as ‘Annual Contract’ the importance of meeting the profit margin requirements has increased. Target costing thus provides an essential tool to manage cost effectively. The characteristic of monopolistic competition typifying the market sets the threshold for pricing. This market consists of many buyers and sellers trading over a range of prices. The key element is differentiation, which allows the seller to gain market share in contrast to competitors. Given this market condition, Unilever differentiates its products and also sells them in different price ranges to cover at least a large portion of the market. Also this makes Unilever more sensitive to price changes of competitors’ products. Last year P&G revised their prices which has increased the prices of their shampoos considerably but Sunsilk has maintained its prices and their prices are much lower than P&Gs’, which is a major blow to P&G because being a poor country people go for products which are within the range of Rs.100. 200ml bottle 6ml Sachet

Rs.120 Rs.3

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Promotion objectives:  Build top of the line consumers’ awareness.  Creating a personality of the brand. Besides having these general objectives, the advertising objectives are set avoiding to the advertising strategy for each product, e.g. Sunsilk advertising objectives since it was being re-launched were:    

To increase the usage. Conditioning benefits. Makes the hair appear clean and shiny. Imparts a feeling of freshness-due to fragrance.

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 Easy to manage, silky, soft hair.  Unique shampoo for every hair type.  Effectively communicate brand promise.

Advertisement objectives: The advertisement of a product should follow the smile approach that is: S - Simple M - Memorable I - Interesting with relevant information L - Linked to the brand E - Emotionally involved and liked. The advertisement should be in line with the past ad (if any). The ad should have a good advertising idea.     

Advertising should meet the brief Message clearly communicated Advertising should fit the brands personality An add is usually changed after 18 months TARP(Target Audience Rating Points)

Advertising strategy: A product’s particular advertising strategy also depends on the level of competition involved with each product. For example shampoo ads previously used to provide emotional benefits but when P&G entered the shampoo market with it’s shampoo Pantene, it revamped the whole situation, Pantene ads promoted the shampoo’s functional benefits, which greatly appealed the consumers. Unilever s seeing this trend changed its advertising strategy for Sunsilk so that Sunsilk advertisements also promoted the shampoo’s functional benefits. 14

Thus Unilever evaluates the product’s present position in the market, the promotion objectives it wants to achieve and the level of competition involved while setting the advertising strategy for a product. Elida Hair Institute does a lot of research and they come up with innovation in the product. Elida provides credibility that Sunsilk is not locally made but it is based on a lot of research by internationally accredited institutions.

Unilever believes that messages about product delivered by credible sources can be very persuasive. Hence Nabila who is an hair care expert endorses Sunsilk and more value is added to the brand. Consumers relate to products itself, they can relate to a human being who consumers believe is an expert so if Nabila is an expert so is Sunsilk. Nabila a recognized and highly qualified hair stylist is used by Sunsilk in its ads because they want to bring out an expert’s image. Sunsilk has come up with a new promotional campaign GOOD HAIR DAYS in six major cities in collaboration with famous hair stylists of the country.

Advertising Evaluation: Unilever also carriers out on extensive evaluation process. Target audience rating points are used to evaluate a product. Households are monitored in various cites to get consumers response and feedback. R-Lintas carriers out in own evaluation proceeds for its advertisement. Weekly figures are presented by research department. Regarding sales which have been carried out by

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extensive surveys. Products manager themselves have to visit the

Consumers’ View of Sunsilk Advertisements

54.55%

33.33%

12.12%

Attractive

Average

Cheap

Distribution Objective: “To reach as many towns and villages as we can” Unilever has 150 distributors whose function is to sell to wholesalers directly. There are different distributors for different areas. They are carefully selected and their performance is constantly evaluated.

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They appear extremely satisfied with their channel systems and have a good rapport with them. We feel that this is essential since these are not too many levels, thereby preventing channel complexity and allowing Unilever greater control. Unilever’s statements were verified by our consumer survey, which revealed that the retailers were very satisfied with Unilever’s distribution system, which allowed wellstocked shelves. This is an added advantage, since the consumers undergo habitual buying behavior. Sunsilk has a very good distribution network all over the country. They have struggled hard to adopt such channels that guarantee the perfect results regarding the placement of their product. These distributors are given clear instructions regarding the selection of the retailer and to make sure that the retailer;  Knows about the significant characteristics of the product.  Places the product along with its major competitors like P&G.  Displays the sachets distinctly. They give off and on offers as trade promotion incentives to their distributors. The distributors contribute to the promotion of Sunsilk by word of mouth.

STRENGTHS  Unilever Brothers Pakistan Limited is one of the largest

organizations in Pakistan.  Company has advanced technology and well skilled professionals. 17

 The New Sunsilk Shampoo is a high quality product in terms of hair protection.  The target market is educated, professionals and belongs to premium and middle class.  Company totally owned, systematic distribution network, transparent communication system.  Participative management style  Very good distribution network all over Pakistan, in all major and small cities.

WEAKNESSES  Competitor has strong promotional activities.  Imported brands also available in the market.  Customers are offered better alternatives by the competition.

OPPORTUNITIES  Population expanding at a rapid rate.  Consumers are becoming more quality conscious

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 Current capacity utilization is 80%, which can be further broadened with the increase in demand.  Customer base is increasing with effective marketing.  Baby shampoo is another area where Unilever Brothers can make huge gains.  Shampoo plus conditioner and anti-dandruff shampoos are another area where Unilever brothers can earn huge profits.  Rural areas are a large prospective market where they can introduce Sunsilk.

THREATS Political and Economic factors. Partial Government policies. High rate of competition. Local and Foreign competition. Smuggling via Afghan Trade Transit is one of the big hurdles faced by Sunsilk.  Supplies from Indonesia and Thailand is another important issue.     

RECOMMENDATIONS  Unilever, Pakistan realizes the huge potential of the

rural markets, i.e. 72% of the total population, but has not yet developed a successful strategy to penetrate

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this market. The success of Unilevers Hindustan should be emulated, which has successfully captured the rural market by two key strategies; firstly, by developing a strong distribution infrastructure and secondly, by adapting the packaging and pricing to this market.  Unilever should increase the buying of raw materials

from local markets so that it does not have to suffer excessively from devaluation and continuous increase in tariff rates. This would also negate the adverse affect on sales volume due to smuggled foreign product.  Unilever should introduce a smaller (100 ml) pack of

Sunsilk shampoo in order to capture the lower income segment.  Unilever should enter into WEB Marketing.  The Legacy Soccer Foundation sponsored mainly by

Unilevers, should be emulated by Unilevers Pakistan in the area of cricket since it is the most popular sport in Pakistan.  Unilevers could also provide consumers with a hot line

number where they can call in to complain or to ask specific questions about Unilver’s products. These hot line numbers can also advise consumers about their hair type and other hair related queries. Such a strategy would highlight Unilevers concern for the public as well as helping it to gain market share.  They should increase the frequency of advertisements on electronic and print media.

their

 They should introduce 2 in 1 composition, i.e. shampoo plus conditioner which is the demand of a huge potential market.

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