CHARM 2007 Consumer Voice and Brand Loyalty: Lever, J. Walter Thompson and the Rise of Market Research in Britain, 1918-1939 Stefan Schwarzkopf, Queen Mary College, University of London, UK the market place and redefined the consumer as a pro-active This paper discusses the use of market and consumer partner in the marketing process. research at Lever/Unilever and its advertising agency in The article uses the case study of Lux to show how the UK, J. Walter Thompson (JWT), in the interwar period. Lever and JWT discovered the consumer as a source for Surveys conducted by JWT between 1927 and 1935 helped marketing innovation. Thus, the emergence of market Lever reposition its international soap brand Lux. The case research needs to be understood as a major reorientation in demonstrates that Lever pursued market segmentation mid twentieth-century marketing management. The findings strategies much earlier than usually acknowledged. support Brian Jones (2005), deVries (1994), Fullerton Qualitative consumer research methods were used well (1988), and Hollander (1986), who questioned the idea of a before the arrival of psychographics and allowed marketers lack of marketing orientation in what has often been called to take account of autonomous consumer practices which the “production era” of early twentieth-century industrial limited the scope of management. societies. LEVER/UNILEVER AND J. WALTER The history of market research and international THOMPSON marketing strategy has recently attracted increased attention (Bakker 2003, Miskell 2004, Heinrich and Batchelor 2004, From its outset in the 1880s, Lever had been a Dyer et al. 2004, Fitzgerald 2005, Church and Godley company that defined itself not only through the production 2003). The Lever conglomerate and Lever’s international of consumer goods but also through additional benefits advertising agency J. Walter Thompson (JWT) are two which stood behind those products. William Hesketh Lever prime examples of the surprisingly large role that market (1851-1925), later Lord Leverhulme, realized early on that research played in strategic brand management as early as he was not only in the business of making and selling soap, the 1920s. The case of the relaunch of the soap product Lux but of marketing cleanliness, health and personal – then used for washing clothes – in Britain in 1927-28 attractiveness. Brands such as Sunlight, Lifebuoy, and Lux illustrates how Lever and JWT used market research offered themselves as bundles of attributes and benefits investigations to manage the repositioning of this product in (Levitt 1960). Rather than simply being hard bars of a very competitive and mature market. dehydrogenated palm oil and pot ash, these products were In the late 1920s, Lever’s advertising agency in the United also sold on the idea of what they could do for the Kingdom – JWT – did large-scale and detailed consumer consumers who used them. Lever’s product communication behavior investigations in relation to soap products and since the 1880s was based not only on (rational) USP’s, began to segment the market for cleaning products in order such as the improved lathering characteristics of Sunlight to position Lux in the mind of consumers. Using this case soap that was made from vegetable oils or the reduction of study, I will show that rudimentary segmentation, targeting work involved when using Lux soap flakes. Lever and positioning techniques were being used by marketers advertisements began early to communicate additional far earlier than Tedlow’s models of stages in marketing benefits for consumers. Advertising slogans such as “Why history allows for (Tedlow 1990). Rather than exposing does a woman look older sooner than a man” connected consumers to a purely sales-oriented, mass marketing style Lever’s soap products to the idea of cleanliness, and of of product communication, the market research conducted healthier, younger skin. by JWT and Lever in the 1920s put consumers in a more This outlook on the relationship between products and powerful position. By creating a dialogue with consumers, consumers led Leverhulme to embark on a unique this type of consumer investigation changed the nature of marketing strategy. He was one of the first to actually brand soap – which before had been a generic, unbrandable 180 CHARM 2007 product – and wrap it in distinctive packaging. Having been years later advised Lever Brothers to extend the brand by an astute and first-hand observer of advertising and strategic producing Lux toilet soap. This product was introduced in marketing methods in the United States, Leverhulme the British market in 1928, where JWT had become Lever’s followed an aggressive diversification and merger & only advertising agency in addition to the inhouse service acquisition strategy between 1900 and the 1920s, which led Lintas (Sharpe 1964). him to take on the Co-operative movement and the powerful JWT was the first truly international advertising Daily Mail (Wilson 1954, Jones 2005). In 1926, one year agency. Between 1925 and 1929 alone, it opened more than after Leverhulme’s death, the company launched its “Clean 20 new local dependencies in twenty-five countries around Hands Campaign”, again based on the conviction that Lever the globe ( JWT News Bulletin 1928, de Grazia 2005). Apart sold cleanliness rather than simply soap. from Lever, JWT serviced other international clients such This consistent branding and differentiation policy was as General Motors, Pond’s, Gillette, Kellogg’s, Wrigley, the backdrop to Lever’s interest both in the vastness of the Frigidaire, Sun-Maid Raisins and Libby’s. Offering unique American market and in the then No. 1 American organizational capabilities, it was well-placed to accompany advertising agency J. Walter Thompson, which began to the various trans-Atlantic market introductions and line work for Lever’s American subsidiary in 1916 by extensions which the Lux brand experienced between 1925 advertising Lux. In the United States, Lever used several and the mid-1930s. Unlike its rivals, the JWT agency local advertising agencies in addition to its own global followed a different business model whereby it focused on advertising service Lintas. This strategy had the advantage servicing a selected number of very large clients whose of allowing Lever’s various products to become or remain advertising expenditure was well above market average and stand-alone brands and to compete in their respective who would be interested in buying a number of lucrative market segments. In addition, this strategy created a healthy extra services, such as planning, market research, media competition among Lever’s various advertising service production etc. Following this model, JWT soon gained a agencies (Marchand 1985). During the 1930s, for example, unique position among American advertising agencies for Rinso and Lifebuoy soap were advertised on the American its planned, academic, at times even “high-brow” approach market by the young, upstart agency Ruthrauff & Ryan, who to all advertising services it delivered (West 1988, Silva created the concept of body odour (“BO”) for Lever’s 1996, Merron 1999). Lifebuoy soap. The remarkable success of this up-and- JWT re-opened its London office in 1919, from where coming agency kept the No. 1 in the market, JWT, on its it mainly serviced the advertising account of Libby’s, the toes as it feared to loose the attractive and remunerative Chicago producer of canned fruit and tinned milk. By the Lux account to its rival (JWT Representatives Meetings, late 1920s, JWT had established itself on the British market Advertising and Selling 1930). as one of the top three advertising agencies as regards Lever’s approach to international marketing allowed its turnover (advertising billings) and had acquired a unique subsidiaries in individual countries high levels of capability to conduct large-scale market research surveys. It independence in deciding on the creative execution of brand is important to remember that JWT was not the first or only messages. The low level of centralization and integration advertising agency on the British market which offered such allowed local decision-makers to make use of their local services (Redmayne and Weeks 1931, Lyall 1933, Harrison expertise and develop “social embeddedness” – a strategy 1936, Blythe 2005, Schwarzkopf forthcoming). But its various multinational corporations, including Unilever, organizational culture, its conceptualization of the market today appreciate again (London and Hart 2004, London and and the consumer, and its sheer size allowed JWT to be the Hart 2005, Prahalad 2004, Gayatri Devi 2004, Guimaraes first advertising agency in Britain in the mid-1920s that was and Chandon 2004). This strategy of keeping different able to offer market research techniques as a regular part of advertising accounts in the hands of different local agencies its campaign planning. was the outcome both of Lever’s history and its global strategy before the 1970s. At the time of its merger with MARKET AND CONSUMER RESEARCH IN Margarine Unie in 1930, Lever itself had been a tangled THE INTERWAR ERA web of various firms that were added to the Lever Empire since the 1910s (Wubs 2006, Jones 2005, Reader 1960, These market research techniques - readership surveys, Wilson 1954). These firms and their brands were allowed to consumer investigations into the uses of products, panel a large extend to define their own marketing strategy. In surveys on consumer habits and beliefs, etc. - became the accordance with this skepticism about centralization, Lever working basis of JWT’s account planning. In its first years worked with different advertising agencies and pursued in London, JWT only serviced American clients and hardly different brand extension strategies in its various local engaged with rest of the British advertising industry. But markets. Lux soap flakes, for example, were advertised by even though it had to rely on the relatively small advertising Lever’s in-house advertising department and introduced to budgets of its US clients that did not match the expenditure the United States in 1906.