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Reckitt Benckiser (RB) Humayun Farooq is the new brand manager for Veet, a hair removing cream targeting females in Pakistan. Although introduced in Pakistan in 1999, Veet suffers from low brand awareness and market share. Reckitt Benckiser’s management is concerned about the brand’s performance; it is convinced that the product, given its superior quality, could take the company to new heights. A conservative society where women do not feel comfortable buying hair removing creams, Pakistan is a difficult market to operate in. Farooq’s mandate in 2009, is to identify a local execution of the global positioning campaign, such that it builds brand equity and also resonates with the target market. Reckitt Benckiser (RB) Headquartered in Slough, United Kingdom, RB has operations in over 60 countries with its products being sold in almost 200 countries around the world. These countries are categorized into various regions or clusters. With a German and British heritage, RB’s history spans over 150 years of continuous innovation for consumers all over the world (see Exhibit 1). Due to an ageing population in US and the European markets, there is an increased emphasis placed by the RB management on white spaces1. These white spaces pose peculiar challenges to new marketers, such as, underdeveloped infrastructure, low purchasing power and diverse set of customers. Local cultural values and norms further complicate the task of introducing global brands. Moreover, RB divides its operations into three types of markets, namely: 1. Developed market 1 Developing countries like China, India, Pakistan and African countries represent white spaces and new customers for RB. 2. Developing market 3. Underdeveloped market This categorization is based on RB’s own movement into a particular country or market. Thus Japan for RB is a developing market as the company’s entry into the Japanese market is recent. RB’s core values include achievement, entrepreneurship, team spirit and ownership. A global consumer goods leader in health, hygiene and home, RB is driven by innovation. The company heavily focuses on markets with significant growth potential. For example, RB believes in investing heavily in the relatively new Automatic Dishwashing category rather than in the congested Laundry Detergent category. The company believes that by seeking out fast growing categories where there is real consumer demand, it can maximize both its returns and its growth2. Since 2000, RB’s strategy has been to focus on the Powerbrands3 and the company follows the global marketing model. The world is seen as one market and an overall standardized marketing strategy is developed for entire set of country markets; only marketing mix elements are adapted wherever necessary. A number of RB’s products are aimed at the female head of households. The company divides its products into five categories: fabric care, surface care, dishwashing, home care, and health and personal care (and two non-strategic businesses: food and Pharmaceuticals). For each category, there is global alignment to bring harmonization into the marketing programs carried out in various countries of the world (see Exhibit 2 for marketing organogram). The Global Marketing Manager (GBMM) develops and maintains global success 2 www.rb.com 3 Powerbrands at RB are defined as those that have Gross Margins above 40%, contribute approximately 20% in value share and are widely available in a cluster. models (GSMs) and local success models (LSMs). GSMs include global best practices which are disseminated amongst local marketing teams (LMTs) present in different countries to study as guidelines. LSMs on the other hand are developed by the LMTs, are transferrable to other countries in a cluster. These LSMs are shared with the GBMM and may eventually be added to the GSMs. RB Operations in Pakistan Pakistan is classified as an underdeveloped market for RB; posing some unique opportunities as well as challenges. According to the RB website: “Diversity characterizes our operations across Africa and in the Middle East”. Product marketed by RB Pakistan include Dettol, Strepsils, Veet, Harpic, Mortein, Moov, Krack, Dispirin, Cherry Blossom and Robin Blue Pakistan Located between Middle East, India, China and Central Asia, Pakistan is a country of multiple cultures and ethnicities. It is the sixth largest nation of the world. More than one third of Pakistan’s population resides in urban areas, making Pakistan the most urbanized nation in South Asia. The population of Pakistan is generally skewed towards bigger cities and bigger villages. Top twelve towns account for 3/5th of the urban population and approximately 2/3rd of the rural population resides in the relatively larger 9000 villages of the country. Out of the Metros which include Karachi, Lahore and Islamabad (KLI) are the largest cities and are easier to target both in terms of advertising and distribution. Developing at a considerable pace, one can see the country opening up to new ideas and embracing new technological products. Pakistan is amongst the fastest growing nations in terms of broadband internet and mobile penetration. A major force behind such exponential growth is the young population of Pakistan. Every two out of five Pakistanis are below 15 years of age and more than half the population of Pakistan is under 20 years in age. The average household size in Pakistan stands at 6. The literacy rate in Pakistan is slowly growing standing at approximately 54%. As a result of all these changes, one sees a number of developments taking place in urban Pakistan. There is a growing restaurant and coffee culture – eating out with friends and family has become a trend in the top three cities of Pakistan. There is growth in the local fashion industry, gaining recognition in international markets. Local pop music has flourished and a number of bands have become famous not only nationally but also internationally. Urban women in Pakistan are entering workforce, getting educated and empowered. Hair Removing Solutions available in Pakistan Hair removal can be primarily divided into two methods; temporary and permanent. Usage & Attitude study commissioned by Farooq in 2009, indicated that approximately 2 percent of the SEC4 A female customers in Pakistan opted for permanent methods (see Exhibit 3 for complete description of SECs in Pakistan). Firstly, it was perceived to be a luxury that only a few could afford and secondly, there were very few licenced practitioners available5. Hence, more popular methods of hair removal were temporary. Temporary hair removal was classified into two broad categories: depilation and epilation. The former is the removal of hair from the surface of the 4 SEC stands for Socio Economic Classification 5 Research conducted by RB in 2009 skin, whereas the latter is the removal of the entire hair including the part under the skin6. Veet products available in Pakistan were a part of the depilatory solutions available in the market. Findings from the Usage & Attitude study with respect to various hair removing solutions available in the market were as follows: 1. Razor blades: although most women found this to be easy and convenient, they were reluctant to admit that they ever used a razor. Razors were perceived to be a male product and therefore females felt embarrassed admitting that they also used it. Additionally, women who believed that using razor lead to thicker hair did not prefer this method at all. 2. Electric shavers: these were considered to be a better and safer solution than simple razor blades as the chance of cutting the skin while shaving was well reduced. Although buying an electric shaver was an expensive proposition, yet it was perceived as a one-time expense. 3. Depilatories: Using depilatories was considered to be a more flexible and pain free option. However, customers with sensitive skin needed to patch test a depilatory before committing to long term usage. Depilatories in the cream and lotion format were likely to cause skin irritation and pigmentation of certain parts of the skin. Every 25gm packet needed to be replaced once a month if used on a weekly basis. 6 From wikipedia 4. Epilators: Since these pluck the hair out from the root, they were believed to leave the skin smoother for several weeks. However, they could only be used for legs and forearms. 5. Waxing7: although an inexpensive solution, customers believed it was a painful and tricky process. Females usually went to the beauty salons for waxing, however, there were complains of allergic reactions to waxing. 6. Laser treatments8: Laser hair removal was perceived to be a very expensive solution. In order for visible results, multiple laser treatments were required; the treatment was also thought to be a cause of skin discoloration and scarring. Although these methods were available, the hair removal market in Pakistan could be approximated to waxing, shaving and depilation9. Some of the characteristics around which hair removal techniques were compared included functionality, affordability, pain and flexibility (see Exhibit 4). Veet Hair Removal Products Veet is a premium depilatory solution for hair removal. It was first marketed in 1901 in Canada under the brand name Neet. Neet was the first company to develop a cream for removing unwanted body hair. 30 years after its formation, Neet was acquired by a British company DAE Health and the brand name was changed to Veet. In 1960, RB purchased Veet and the brand 7 this is a technique of applying a layer of heated or soft wax strips onto the skin and then pulling it to remove the hair. 8 this is a permanent method of hair removal whereby using heat, the hair follicles are destroyed. 9 According to Humayun Farooq, Veet’s Brand Manager name was retained because the product had by then gained significant popularity all over Europe, and was perceived as an effective hair removal cream.
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