Marketing Strategy of a New Product Essay Example

Lux Peach and Cream, Lux Nature Pure, Lux Orchid Touch, Lux Almond Delight, and Lux Aqua Sparkle. These flavors are tailored to different skin types. Additionally, Lux is manufactured in three different sizes (75gm, 100 gm, and 150gm) to cater to the convenience of customers. It is worth mentioning that Lux is produced by Unilever, a multinational consumer product manufacturing giant with a strong worldwide presence. In 1958, Lux introduced a new range of colors for their soap, including pink, white, blue, green, and yellow. Recently, they have also added a purple color option. Each flavor of Lux soap has its own unique fragrance based on various flowers. The company claims that using their soap eliminates the need for additional deodorant.

The Marketing Mix is used to evaluate the success of lux.

3.1 Product refers to both tangible, physical products and services. A product is the combination of goods and services or the services offered to the target market. The customer's demands must be fulfilled and satisfied in order to create value as a product. The products must have distinctive value and benefits compared to competitors' products. Lux, an international brand since 1925, delivers its value and quality to over 100 countries worldwide.

Considering the environment and location, Lux supplies its products in different sizes, flavors, and colors. To meet the market demand, Lux later introduced different flavors of shower gel and hand wash. Currently, Lux has eight different colors and flavors of shower gel. Lux beauty soap is available in six flavors and colors, while its close competitor in Bangladesh, Aromatic beauty soap, only offers four flavors. Lux also offers

three different sizes of soap, whereas its competitor only produces two sizes.

3.2 Price Price refers to the amount of money charged for a product or service, or the value consumers exchange for the benefits of using it (Philip Kotler et al, 2010, p375). Lux soap offers an 8-10 soap family pack that is comparable to other brands. This family pack is priced at $2.99. In comparison, Lux's potential competitor, Palmolive, offers a 4-5 family pack soap for $1.99. When compared to another brand of Unilever, Dove beauty soap, Lux is cheaper. Unilever Bangladesh provides its Lux customers with a high-quality product at a more affordable price. The retail prices for Lux soaps are BDT 15/- for the 75 gm pack, BDT 20/- for the 100 gm pack, and BDT 30/- for the 150 gm pack.

The table below displays a comparison of Lux soap's competitive price and quality in relation to its competitors. It demonstrates that Lux offers high-quality soap at the same price as its competitors.

Fig: The Company has positioned Lux in the market as a daily soap that is affordable for people from different income levels by comparing its price and quality with its existing competitors. In Bangladesh, beauty soap is highly sought after and any changes in price could potentially trigger a price war among competitors, leading to either losses or profits. However, Lux's pricing strategy has created a competitive advantage in the market. Despite its brand image, Lux is considered to be inexpensive in Bangladesh, making it accessible to the majority of customers. Its flexible pricing gives customers the perception that they are using a high-quality

product at an affordable price, ultimately leading to customer satisfaction.

3.3 Place Lux possesses a global network for bulk distribution, spanning 100 countries worldwide. In Australia alone, the company achieves sales revenue surpassing AUD $400 million annually. One of the key advantages enjoyed by the company lies in its proprietary distribution channel, which enables cost and time-efficient supply of its products. Consequently, Lux's offerings can be found in a wide array of retail establishments, ranging from supermarkets to small shops and pharmacies. Additionally, Lux has also ventured into the realm of online shopping, further expanding its reach. Notably, the company boasts an extensive distribution network in Bangladesh, where annual sales exceed 10 million units.

The company has six large warehouses located in each division of Bangladesh. Unilever Bangladesh does not handle transportation of its products themselves, but instead outsources this process to various third-party distributors. These distributors then deliver the products to a wide network of retailers throughout the country. This allows customers to easily purchase Lux soap from both small local retailers near their homes and larger supermarkets. While Lux primarily targets urban and suburban lower, middle, and upper-middle-class individuals, they have expanded distribution nationwide in response to increased demand from various segments of the population.

3.4 Promotion: Promotion encompasses all the advertising and publicity efforts aimed at informing people about the product. In the case of new products, promotion plays a vital role. A well-known TV advertisement in Bangladesh features the dialogue "Lux, the secret of my beauty." Unilever Bangladesh employs various promotional activities, such as this, to promote Lux. These activities have contributed to Lux's prominent position

in the beauty soap industry in Bangladesh. Lux advertisements proudly feature renowned actresses and models from Bangladesh and India to support Lux's promotion in Bangladesh.

Female customers are encouraged to use Lux soap because they believe it is used by top stars such as Aishwarya Rai, Katrina Kaif, and Bangladeshi film star Popi. This creates a sense of achievement for the customers. Lux also promotes the brand to male customers by featuring world-famous male celebrity Shahrukh Khan in their advertisement campaign. This type of promotion highlights that Lux is not just for women, but also caters to men's beauty needs. Unilever organizes various promotional campaigns each year, such as Lux Channel i Superstar (Star search) and Lux Channel i Annual Cinema Awards, which associate the product with the glamorous world. These promotional activities contribute greatly to Lux's popularity.

The competitors nowadays are also adopting similar strategies, but Lux is considered the market leader when it comes to innovative ideas. Additionally, Lux has the advantage of being an international brand and can hire international celebrities, a chance that its competitors do not have. Unilever promotes Lux through newspaper advertisements and billboards. To target young people, Lux also organizes small promotional campaigns at various educational institutions with different types of quiz contests. These promotional activities significantly impact the customers' perception and value of the brand.

The fourth aspect of marketing is market segmentation.

Lux is widely popular in several Asian countries, including Bangladesh, as confirmed by various surveys conducted by the company. Market segmentation involves dividing the market into distinct groups based on the needs, characteristics, or behaviors of consumers. There are four

ways to carry out segmentation: Geographic segmentation, Demographic segmentation, Psychographic segmentation, and behavioral approach (Kotler, P., 2007, p345-346). Despite being the top-selling beauty soap in Bangladesh, Lux does not follow traditional mass marketing methods. Instead, Lux in Bangladesh segments its market based on geographical area and socio-economic cluster (SEC), rather than gender.

4.1 Geographical segmentation: Unilever Lux in Bangladesh divides its target market based on their geographical location. The accompanying figure demonstrates that the company classifies its customers into three categories - urban, sub-urban, and rural individuals. Lux focuses primarily on the middle-class group residing in urban and sub-urban areas. (Unilever 2010)

The Socio-economic cluster (SEC) segmentation is based on the income and education levels of customers. It categorizes customers into four parts: A to D. Category A consists of highly educated and high-income earning individuals, while category D represents those who have low earnings and are illiterate. Category B includes people with upper middle-level incomes and average education, while category C includes individuals with lower middle-income levels and limited education. Unilever primarily targets categories A and B, as they are considered potential buyers for their products. This is because individuals in categories C and D have limited ability to afford such items and may not prioritize beauty products.

ABCD Income: High, Upper middle level, Lower middle, and Low income. Education: High level of education, Educated slightly less than cluster A, Educated slightly less than cluster B, Very low level of literacy. Fig: Socio economic cluster segmentation.

4.3 Evaluation of geographical segmentation: A company investigation revealed that urban wealthy individuals typically purchase expensive or imported products that are known for their

high quality. Additionally, middle-class consumers in urban and suburban areas prefer to buy quality products at a reasonable price. Conversely, rural residents tend to favor inexpensive products over considering the product's quality. When it comes to pricing, Lux is not a costly product compared to similar options in the market. Given that Unilever is an international company, Lux guarantees international quality.

The product is appealing to the urban and sub-urban middle class, as they value both price and quality. However, this target market only includes a small portion of the population in developing countries like Bangladesh, such as the urban rich and sub-urban middle class. It is important to note that this segment does not include the rural population, which makes up a significant part of the overall population. Therefore, this segmentation is moderately narrow and not extensive enough.

4.4 Assessment of socioeconomic cluster (SEC): In Bangladesh, a country with a large population, a significant portion of the population falls below the standard income threshold. Therefore, when a company focuses solely on customers from the upper and middle income groups, they automatically exclude over 40% of the total population. Additionally, the literacy rate in the country is not very high. Lux in Bangladesh only targets customers in categories A and B. Consequently, it can be inferred that a significant portion of the population is outside of the target market, rendering the SEC segmentation too narrow.

Unilever Bangladesh is missing out on the opportunity to increase their profits by utilizing the SEC segmentation strategy. Lux in Bangladesh has proven to be successful, occupying 43% of the beauty soap market, as they specifically target

potential buyers who have the financial capability to afford it. However, it can be argued that this segmentation strategy is flawed as it fails to consider gender. Additionally, it is common for the higher income group in Bangladesh to be more attracted to imported expensive products rather than domestic ones like Lux. Therefore, the SEC segmentation strategy is not viable when considering these factors. 5. New ideas

The beauty soap industry in Bangladesh is highly prospective and competitive due to the large size of its population, offering companies the opportunity to be innovative in order to survive in the market. Here are four ideas to enhance the value of the company for both internal and external stakeholders:

5.1 Show friendliness towards the environment.

The environment is a significant concern in today's world, with many consumers prioritizing a sustainable and healthy environment when making purchasing decisions. As a result, it plays a crucial role in the consumer decision-making process. To meet this demand, several multinational companies are addressing the global need for organic products. This trend aligns with certain marketing theories, such as the belief that organic products can contribute to environmental conservation and improve people's health (Allen & Kovach, 2000). Ideally, the selection of organic products would include certified organic labeling to establish credibility (Park & Lohr, 1996).

According to Hughner, McDonagh, prothero, Shultz & Stanton (2007), the majority of consumers who purchase organic products are typically female and have children in their household. Unilever has the opportunity to cater to this large market in Bangladesh by producing organic beauty soap. By doing so, Unilever can not only meet the demand

of this specific consumer group, but also add value to their company by aligning with their goal of increasing sales and improving their environmental impact. Furthermore, Unilever can attract environmentally conscious consumers by using eco-friendly transportation methods and reducing carbon emissions in their factory.

5.2. The company has successfully segmented the demographic and socio-economic clusters, but these segments are considered narrow as they do not include the large population of rural, illiterate, and low-income individuals in Bangladesh. The demand for certain products, such as beauty soap, is not dependent on literacy. In today's technological era, even people in rural areas are exposed to different media platforms, regardless of their literacy and income levels. This has encouraged them to use beauty soap, making them a potential market for Lux according to our group's opinion. Targeting this rural, illiterate, and low-income customer segment will greatly benefit the company by increasing sales and annual turnover.

5.3. Unilever is experiencing a lack of promotional activity in rural areas, despite their extensive efforts in urban areas. This is concerning because the rural market holds great potential that has not yet been tapped into. Unlike urban areas, rural people do not always have access to electronic media such as the internet and television channels due to limited technology availability. To effectively promote Lux beauty soap in rural areas, Unilever must explore new avenues of promotional activity. These could include conducting campaigns in village markets and schools, setting up eye-catching billboards and posters in public gathering places. Unilever may also consider offering discounted prices specifically for these areas for a certain period of time. By implementing these strategies, the company

can increase its market share for beauty soap and further solidify its position as a market leader.

The company claims that Lux soap is a unisex beauty soap. However, the fact that the models and brand ambassador of Lux soap are usually females has created an image that it is only made for women. This perception has caused Unilever to lose a large number of male customers. It is important to note that the skin types of males and females are different, and nowadays males are becoming more conscious about their skin. Given Lux's reputation as a quality product, it is likely that it would also be popular among males. To promote Lux soap to the male segment, the company can hire male celebrities and change the packaging to have a more masculine design. Unilever currently does not offer any soap specifically for males, so introducing one would require creativity and potentially incur higher costs. However, this move would ultimately benefit the company by satisfying a large market segment and positively affecting its annual turnover.

6. In conclusion, our report focused on analyzing the market of Lux, a highly selling product of Unilever in Bangladesh. Bangladesh is a potential market with a high population density and intense competition. To maintain its current market share, the company must effectively evaluate its marketing tools, including product, price, place, and promotion. Additionally, an rational assessment of the target market is necessary for the company to fully utilize its capacity. The company should also evaluate its segmentation strategy for the target market. We have provided recommendations that we believe will add value to the organization, such

as introducing environmentally friendly products like organics, targeting rural, uneducated, and low-income segments, implementing innovative promotional activities, and creating a new product line for male segments.