Unilever’s Lifebuoy in India: Implementing the

Sustainability Plan
A Case Analysis

Group 4 (19PGPIM082 – 19PGPIM88)

Table of Contents

Company History…………………………………………………………………………………….. .2
Vision, mission and Strategic Objectives of the Organization………………….…………………2
Timeline.................................................................................................................................. 3
SWOT Analysis of Lifebuoy .................................................................................................... 4
Marketing Mix of Lifebuoy ....................................................................................................... 6
Lifebuoy’s Macro Environment ............................................................................................... 7
Lifebuoy’s Micro Environment ................................................................................................. 8
Major Problems Faced by Lifebuoy(and Unilever) since its inception ..................................... 8
Current Situation .................................................................................................................... 9
Reviewing the alternatives available within the company ........................................................ 9
Plan of Action ........................................................................................................................11
Mind Map ..............................................................................................................................12

1
Company History

In northern England, Lever & Co, begin producing a new soap containing copra or pine kernel oil, to
help it lather more easily than traditional soaps made of animal fats. It was “to make cleanliness
commonplace; to lessen work for women; to foster health and contribute to personal attractiveness,
that life may be more enjoyable and rewarding for the people who use our products.'' Unusually for
the time, William Lever sold it wrapped in distinctive packs with a brand name – Sunlight. In the
year that the Lever Brothers become a limited company, sales of Sunlight soap have boomed to
nearly 40,000 tons a year. As a result, the business starts expanding into Europe, America and the
British colonies with factories, export businesses and plantations.

With a growing interest in public health and personal hygiene, Lever Brothers create a new product
called Lifebuoy Soap in 1894.. It uses carbolic acid to combat germs but remains affordable to
everyone. But with supplies of oils and fats struggling to meet the demand created by fast-growing
soap, Lever Brothers focused on securing stable sources of raw materials.

Between 1906 and 1907 the Dutch margarine industry sees its competitive strength weaken as
increased supply of butter lowers the value of margarine. during the 1920s the margarine market
suffers as butter becomes more affordable. In 1930, seeking sourcing economies for their common
raw material of palm oil, Lever Brothers and the Dutch margarine producer Margarine Unie merged
to create Unilever.

Vision, Mission and Strategic objectives of the organization

Unilever’s corporate vision is “to make sustainable living commonplace. We believe this is the
best long-term way for our business to grow.” This vision statement puts emphasis on
sustainability, especially among consumers. Commonplace sustainable living is a core component in
Unilever’s corporate vision statement. Unilever understands the importance of sustainability and
other market trends shaping the industry. Moreover, the vision statement reflects the company’s
view of sustainability as a way to maintain business growth. This vision statement aligns with
Unilever’s corporate social responsibility strategy to address business stakeholders in the
consumer goods industry.

Unilever’s corporate mission is “to add vitality to life. We meet everyday needs for nutrition,
hygiene and personal care with brands that help people feel good, look good and get more out
of life.” This mission statement underscores how the company satisfies customers in various
aspects of their lives.

2
Timeline

1894- Customer need to fight the disease rampant in British urban centers was met by the
product based on carbolic acid Lifebuoy and was positioned as life-saving soap Targeting the
working population by setting an appropriate Price when soap was considered a luxury.

1894-2000- Product grew as the most familiar brand and country’s leading health soap in the
country.

2000- Indian economy stalled (Macro-economic Factor) leading to reduction in soap market by
9.3%. Stiff competition and preferences of people (Micro-economic factor) made Lifebuoy look
like a cheap soap and thereby resulting in reduction of sales by 20% during 2000-09. But, the
company saw huge potential (Star) for growth in rural India as 70% of sales of the brand are from
villages and the current reach to villages was just 46%. So they tried to increase the revenues by
improving Placement by an innovative solution called Shakti Ammas. Though distribution
improved the sales didn’t soar.

2001- Lifebuoy for the first time since inception Re-Positioned itself as a Family soap and
Promotion was aimed at women as opposed to their early strategy and the bar was now a milled
toilet bar that promised a Contemporary health fragrance and better germ protection but at the
same price.

2002-2005- Swasthya Chetna (SC) was launched with the aim to increase Placement and also to
reduce a major public health problem (This relates to their core value, doing well by doing
good). The program tried to inculcate Habit of hand washing which would help in reducing the
chance of getting infected through programs and tools like Glo-Germ. These customer
engagement measures along with the promise of value addition (Better germ protection) helped
in Value addition to company which reflected in the sales of consecutive years and lifebuoy
gained a total market share of 18.4%. But as they didn’t change the pricing based on Macro-
Economic factors (As the demand was inelastic, an increase in the price would have helped them
in gaining higher profits) their profits declined.

2005-07- Though SC’s were able to bring changes in the short run, they were not able to inculcate
a Habit. Buoyed by the sales boost, the brand repositioned itself with Life without fear campaign.
Though the ads were Engaging and connected to the customers they failed to communicate the
value proportion being offered. This resulted in the drop of market share from 18.4% to 17.6% by
the end of 2007. The Micro Economic Factors like competition & steep cost increases added
further to the misery.

2007-09- HUL relaunched the product based on the data based on clinical trial which established
that handwashing improved the attendance of school going kids. But this notion was difficult to

3
communicate to the rural population where the product was targeted at. This resulted in further
reduction of market share to 15.5% by the end of 2009.

2009-12- Death toll by swine flu made health life officials stress the importance of hand
washing (demographic factor) and the masses switched to health soaps and with the lifebuoy’s
promise of germ protection helped in creating an inelastic demand (Economic Factor). These
factors coupled with the new handwash’s promise of germ protection in 10s (Innovation) in a
futuristic package led to immediate success in 2010 due to Value addition it did to the lives of
consumers. Also new Management made the company stick to its core values and formulated USLP
program based on its long term strategy, “do well by doing good”. Promotion was planned during
defined hotspots (like khumbamela, monsoon etc) where infection risk was high. In addition,
through innovation Products like clinicare 10 & colour changing hand wash the revenues went up
by17% p.a and gross profit by 22% p.a (Capturing Value from Consumers)

SWOT Analysis of Lifebuoy

Strengths
 Brand Credibility
 Medicinal Approach
 Affordable
 Strong Distribution
 Product line Extension
 Awareness Campaigns with
social message
Weakness
 Perception as an inferior
product
 Lower market penetration in
urban market
 Initially positioned as
masculine soap which was
eventually turned into family
soap

Opportunities Threats
 Increasing disposable  Intense Competition from
income products such as Dettol,
 Promote Lifebuoy with Savlon etc.
message  Increasing awareness of
 Less penetration of soaps herbal product.
among rural residents  Competitors like Patanjali
capturing market share.
 Lifebuoy is a chemical
based product

4
Strengths in the SWOT Analysis of Lifebuoy:
1. Brand Credibility: Lifebuoy has been successful in gaining the trust of its customers and
have been in the market for over 100 years. Its health-centric approach and communication
have helped it gain credibility and a loyal set of customers.
2. Medicinal approach: Lifebuoy has positioned itself as a product with a medicinal approach
which could combat germs and provide a healthy disinfectant bathing soap.
3. Affordable: Lifebuoy has been priced at a range in order to be affordable to all kinds of
markets especially rural markets.
4. Strong Distribution: Lifebuoy has a strong distribution channel worldwide which makes
the product available in the farthest corner of various countries. Lifebuoy has made special
efforts to be present in the rural markets where the demand for the product is really high.
5. Product Line Extension: Lifebuoy has been successfully able to extend its product line by
bringing out successful products like hand wash, body wash and hand sanitizer. This has
helped Lifebuoy increase its revenues.
6. Awareness campaigns with a social message: Lifebuoy has come out with various
awareness campaigns while also giving a social message.

Weaknesses in the SWOT Analysis of Lifebuoy:

1. Perception of a male centric brand: Lifebuoy is perceived to be a male centric brand and
even after many efforts by Lifebuoy to project the brand as a family brand.
2. Not popular in urban markets: While the brand has priced the product in order to be
available for all especially rural markets, its urban market penetration is relatively low.
3. Perception as an inferior product: Due to its low prices and an image of “not being beauty
soap”, Lifebuoy is considered as an inferior product.

Opportunities in the SWOT Analysis of Lifebuoy:

1. Increasing disposable income: Disposable incomes of people around the world are
increasing and thus it is also expected that consumption in the FMCG industry is going to
increase which will eventually increase sales.
2. Promote Lifebuoy with a message: Unilever has concentrated in providing social
messages by promoting its products. Lifebuoy has also been one of the many products
which have been promoted with a social message. To add to this Lifebuoy should take up on
missions to fight global epidemics. There is an increase in health awareness globally which
can provide Lifebuoy an advantage considering its disinfectant composition.

Threats in the SWOT Analysis of Lifebuoy:

1. Intense competition: Lifebuoy is subjected to intense competition from various local as

well as global products such as Dettol and Savlon etc. Intense competition impacts market
share.
2. Increasing awareness of Herbal products: Awareness of herbal based products is
increasing globally. This can affect Lifebuoy’s market which is essentially a chemical based
product.

5
Marketing Mix of Lifebuoy

Product

Lifebuoy is the leading brand of soap from Unilever and is available in several variants with better
effectiveness, fragrance, and feel. It takes care of family’s health and hygiene needs by offering
protection against germs and infection. Its product range includes bar soaps, Lifebuoy Handwash,
Lifebuoy Body wash, Lifebuoy Sanitizer, Lifebuoy Shower Gel, Lifebuoy Family Talcum Powder and
Lifebuoy Clini-care
Price

Lifebuoy is one of the most popular and used soap brands in India. A 125gm lifebuoy soap costs
about Rs. 26. Bodywash costs around Rs. 175. Lifebuoy keeps its product prices relatively lower
than the prices of its competition. Hence the pricing strategy in its marketing mix is mostly driven
by competition. This has been an advantage for the brand and has led to making it one of the most
popular choices among Indians.

Promotion

The promotional and advertising strategy in the Lifebuoy marketing strategy is as follows:
● Lifebuoy uses aggressive and creative marketing and promotional concept to capture the
market. It uses advertisements, taglines, and promotional campaigns. Some of its successful
campaigns are:
● Swasthya Chetna: It means heath awakening. Lifebuoy soaps were distributed in rural areas
and washing hands regularly was promoted in this campaign.
● It has also started the practice of Global Handwash Day on October 15 to bring awareness
about the benefits of washing hands with soap regularly in rural areas.
● To promote Lifebuoy in rural areas, HUL has approached and collaborated with rural bodies
like gram panchayat, swasthya Parishad and spread awareness about good practices to
follow for being clean and tidy. Programmes like Krishi Darshan, Aap ka swasthya have
attracted a large number of people.
● Apart from these, Lifebuoy has also launched an inspirational campaign “Help a Child Reach
5” which promotes hand washing to save a life.
Lifebuoy has adopted several extensive marketing plans to promote its products in global markets.
It has launched ad campaigns on television, radio, magazines, newspapers, billboards and online
media. This completes the marketing mix of Lifebuoy.

Place

The strategy of Lifebuoy is to make products available urban areas and remote villages. Lifebuoy
has used HUL distribution network to spread its products via a chain of wholesalers, dealers, and
retailers. It has collaborated with 6000 suppliers, 4000 stockists and has already reached more

6
than 80,000 villages. Due to its strong network, it has been able to penetrate even into rural areas.
The products are sold in Kirana stores, convenience stores, and supermarkets.

Lifebuoy’s Macro Environment

1. Demographic forces

Changing Family System - The soap which was primarily launched as a male oriented soap had
repositioned itself as a family soap. It went on from being a milled toilet bar to a soap that promised
contemporary health fragrance with better germ protection.

Population in Rural India - Rural areas accounted for 70% of Lifebuoy sales. Most of the decline in
sales appeared in rural areas. It was a difficult task to educate the rural communities as they were
largely illiterate. Furthermore, they had limited access to schools, telephones, electricity, or media.

2. Economic Forces

Lifebuoy was still positioned as a cheap soap in the market available at the price of Rs 6. Input cost
of goods (e.g. palm oil price) had also increased. A lot of money was spent in the repositioning and
rebranding of Lifebuoy with huge costs incurred in advertising and packaging. But it only had a
small impact on the profit margin of the company. As a result, from 2005 to 2007, market share
dropped from
18.4% to 17.6%.

7
Lifebuoy’s Micro Environment

The Company’s Micro Economic Environment

1. Customers

Preferences of customers had changed from using a germ protection bar earlier to the use of beauty
bars and health soap. Based on the clinical research done by Lifebuoy (assurance of germ
protection makes the customers insensitive to price) and WHO research that handwashing reduces
diseases had again shifted the customer preferences to using a health soap rather than a beauty bar.
Although the advertisements were engaging, it was unable to inculcate the habit of handwashing in
the people.

2. Competitors

A lot of competitors have emerged who had successfully conveyed the product value to the
customers and had developed a stronghold in the market. This had resulted in the loss of market
share for Lifebuoy. As a result, from 2005 to 2007, market share dropped from 18.4% to 17.6%.

Market research that people wash only for 10s and. Lifebuoy team discovered that when people
were assured of germ protection, they became price insensitive. So they brought liquid soap, 10s
color changing formula. On the other hand cost of inputs were increasing (palm oil) which had
impacted the bottom line.

Major Problems faced by Lifebuoy (and Unilever) since its inception

● Unilever was a big organization where decision making was difficult and a slow process.
It had developed an internally focused and self-serving culture after years of
restructuring

8
 ● Continual reinvention, repositioning and relaunches failed. Though ads were engaging
but they couldn’t communicate the value prospect i.e they failed to communicate product
advantages or to motivate customers to buy. These rebranding, repositioning and relaunch
programs did have an impressive social and economic impact during 2003-2004. But this
was not accompanied by price increase which resulted in a decline in profit margins

● Market sentiment changed from cheap bar to health soap/beauty bar

In 2000, new competitors entered the market offering attractive beauty soaps, which led to
Lifebuoy being seen as a cheap, old-fashioned soap. Analysis of the sales revealed that most
of the decline occurred in rural areas. The population was largely illiterate, and only 20% of
them were using a soap for bathing occasions. In the market expansion grid, this is an
example of Existing Product - New market. So Lifebuoy implemented activities in order to
develop market in the rural areas by an innovative solution called Shakti Ammas. But this
initiative did not yield the expected results and Lifebuoy decided to relaunch the traditional
brick soap to a millet toilet bar.Through this new product development, along with
intensive advertising aimed at women, Lifebuoy was repositioned.

Current Situation
In 2013, the new CEO launched Unilever Sustainable Living Plan. Below were targets:

● To improve the health of a billion people worldwide by 2015

● To half the company’s environmental footprint of its products
● To source 100% of its products sustainably
The case study poses a challenge to make Lifebuoy the standard-bearer of first target while
simultaneously doubling sales and meeting ambitious profit objectives. There were three behaviour
change projects that were selected for reviewing

Reviewing the Alternatives available with the company

1. Khushiyon Ki Doli (KKD) Rural Outreach Initiative

About Program
● Collaborated outreach program for remote villages with all products by different brands
(Lifebuoy, Surf, Close Up, Sunsilk, Vim)
● “Glo-germ” demonstration and focus on housewives
● Campaign supported by videos, games and prizes
● Product placement at village shops, coupons and offers with door-to-door reach

Impact
Impacted 25 million people in 70000 villages by increasing the soap consumption by 8%. Lifebuoys
market share increased from 13.9% to 15.6%.

9
Drawbacks of the Program
● As KKD moved to smaller, more remote villages, the cost effectiveness of the program was
decreasing
● Demonstrating to housewives were not resulting in sustainable behaviour change
● Long payback time of 8.6 years to break even on the investments

2. Madhya Pradesh Partnership Initiative

About Program
● Aimed at building habits in school children to make a behavioral change using a proven 21
days intervention model
● Pilot program was launched in Madhya Pradesh with four key phases of behavioral change:
awareness, commitment, reinforcement, and reward – all applied over a 21 day program,
the fifth element.

Drawbacks of this Program

● Time consuming and Long Payback
● Estimated reach was 900,000 children which was a relatively low figure. But these kids
could indirectly change the family behaviour of 4.5 million people

3. Urban schools liquids initiative

About Program
● Aimed at inculcating the habit among urban school children for the lifebuoy liquid
handwash product
● The “School of five” educational program was adapted by employing interactive games,
songs, dances and the classic “Glo-germ” demonstration
● School children found the use of pump to be more fun, so they washed their hands more
frequently
Impact
25 cities were targeted with a population of 1 million or more. Liquid soap achieved 7% to 10%
penetration.
Pros
● Less Payback period of 3.5 years
● Earlier demonstrations showed that use of pump for children was more fun band they
washed their hands more frequently.
● The lessons were taken home and behaviour of whole household was influenced.
● The market of liquid hand wash was growing up at 40% annually

10
Cons
The education was valuable to urban population but liquids were too expensive for the poor rural
mass market
● The program was only expected to real 1.5 million population

Plan of Action
Keeping in view the pros and cons of various programs, sustainability goals & financial goals of the
company, the Urban Schools Liquid Initiative is the most viable option that can be adopted due to
the following reasons:
1. The expectation of penetration of habit into the family made in the second model where the
kids are to inculcate habits into the family would help the brand in reaching the USLP goals.
2. Shorter payback period, rapid growth in markets, higher margins etc. help in reaching the
financial goals.
So as a brand manager focus should be on allocating budget to this program and see to the
implementation of the program and measure its effectiveness in terms of ability to inculcate habit
of handwashing, sustainability and financial growth as planned periodically.

11
MindMap

12