Changing consumer tastes force the century-old brand to take a hard look at itself

The hard-sellers of Hindustan Lever Limited (HLL) are at it again. This time it’s the toilet soap Lifebuoy that has come under the scalpel. Last week, when the Rs 10,604-crore fast moving consumer goods behemoth announced the relaunch of its Rs 500-crore soap brand, it decided to do away with Lifebuoy’s carbolic soap form.

It’s a radical move, given that the soap’s carbolic nature has been Lifebuoy’s claim to fame for more than a century. Says Sanjay Dube, category head, mass market, detergents profit centre, HLL, “The brand was re-engineered to achieve dramatic growth. As consumers evolved there was an increasing need to make Lifebuoy more relevant.” What prompted a shift away from a winning formula? Well, simply that it’s stopped winning market share for Lifebuoy.

For years, the Indian soap industry was familiar with only three categories — premium, popular and carbolic. Premium brands constituted products like the glycerine soap Pears, sandal soap brands like Mysore Sandalwood, others like Lux International, Cinthol International and the rest, which were priced at Rs 11 and above.

Popular brands like Margo, Hamam, Lux Beauty Bar, Cinthol and others fell in the price range of Rs 7 to Rs 11. Carbolic soaps like Lifebuoy and Nirma Bath came at the lower end with a price point below Rs 6.

In the mid-1990s, this structure altered a bit when vegetable oil prices slid 40 to 50 per cent, giving manufacturers a huge cost advantage. The result of this was the creation of the “discount segment”, which offered soaps 10 to 15 per cent cheaper than the popular segment.

Positioned in between the popular and carbolic categories with brands like HLL’s Breeze, Godrej’s No 1 and others, the discount segment provided some froth to a stagnating market.

One unintended side effect, however, was that the discount segment grew at the cost of the popular and the carbolic categories. As the ORG figures show in 2000, the premium and popular segments attained a volume growth of 3 per cent and 1 per cent over 1999. And while the carbolic segment declined by 5 per cent in volumes, the discount category was growing at a pace of 15 per cent in the same period.

By the end of 2001, when the entire soap industry declined by 10.8 per cent in volumes (premium, popular and carbolic have declined by 14.1, 11.4 and 25.4 per cent respectively), the “sub-popular” category has managed to stand out with a growth rate of 5 per cent. HLL executives claim that one of their discount category brands, Breeze grew at a rate of 40 per cent in 2001.

With consumers opting for softer looking soaps which lathered better (which the discount soaps offered), the hard and chunky Lifebuoy, which made up 95 per cent of the carbolic soap category, lost its buoyancy. Market shares (value) started sliding from 15.4 per cent in January-December 1997, to 12.5 per cent by December 2001.

By then, consumer preference had shifted way beyond Lifebuoy. According to HLL, in the past consumers were less aware of soaps, had limited needs like a basic cleaning soap and had fewer choices to make in the marketplace.

This was even more true in rural areas which contributed to more than 70 per cent of Lifebuoy’s sales. Importantly, it was the man in the household who took the decisions with respect to the purchase of toilet soap.

With television advertising highlighting the array of choices that was available from the mid-nineties onwards, the demand for soaps became more sophisticated. No one just wanted a value-for-money cleansing agent any longer, they wanted fragrance too.

Naturally, the cresylic-perfumed Lifebuoy found itself out of favour. To add to this, women had begun to assert their choice in toilet soaps, so the masculine imagery which Lifebuoy had projected thus far was destined to stay out of favour.

From the affordable option that it was always seen as, Lifebuoy soon found itself side-stepped as a one-of-the-many and not-for-me brand. But for the company, Lifebuoy was one of its most coveted brands, not least because of the huge equity it enjoyed in rural India.

To leverage this large equity of the brand, HLL went down the research route 18 months ago. It tested new product formulations, perfumes and packaging options among 6,000 consumers, evenly divided between rural and urban consumers.

For instance, six options of fragrances were tried out. Finally the combination that stood out among both the core consumers and the source of growth customers (who would come from the discount soap category) was launched in the form of a new product.

At the press briefing during the re-launch, Dube said, “The significant change in formulation have registered a clear consumer preference and attributes like the new perfume have been selected after one of the largest perfume tests in the industry.”

Today Lifebuoy has shed its crude looks of a red brick to a gentler look and feel that is similar to the contemporary soaps. Even the manufacturing process has moved from the hard soap — where the oil was reacted through alkalis and then cast — to a milled soap (the oil is now broken into fatty acids which is converted into soap).

And the total fatty matter (TFM) content of the new version of Lifebuoy has been increased from 41 per cent to 72 per cent (soaps with 80 per cent TFM are known as full TFM soaps).

HLL executives also point out that the new formulation will not dissolve easily. For instance, a 150 gm carbolic soap lasted only for 19 baths. The new 125 gm milled soap offering, which is priced at Rs 9, claims to offer the same number of baths.

The communication of the brand also transcends television commercials of the past — a keenly-contested game of football, which evoked the “only-for-strong-men feeling”, to a family setting.

Says Dube, “We have made a deliberate shift from the male and his victorious concept of health, to a more versatile benefit for the entire family. This will strengthen Lifebuoy’s benefits of health among larger sections of consumers.”

The relaunch is backed by four television commercials. One deals with a sleepy town where change is a rarity — till the “changed” Lifebuoy comes along. With a line Lifebuoy badal gaya hai, the commercial ends with the familiar Lifebuoy hai jahan, tandurusti hai wahan. Three more commercials, all set in small towns, focus on Lifebuoy’s health benefits in order to appeal to mothers and feature a doctor as the protagonist.

Will the new milled soap with a health fragrance and in two versions, Lifebuoy Active Red and Lifebuoy Active Orange, clash with the company’s existing Lifebuoy extensions, Lifebuoy Plus and Lifebuoy Gold? HLL executives are quick to point out that the extensions, which were relaunched in September 2001 under the International platform (a strategy similar to the company’s other soap brand, Lux), cater to an urban audience and offer specific benefits.

In the case of Lux, its beauty bar offering at Rs 11.50 for 100 gm targets the popular segment buyers, while Lux International at Rs 26 for 125 gm attacks the premium segment. Similarly, the Lifebuoy International options are priced at Rs 16 for 150 gm and look at the popular segment, while the base Lifebuoy is aimed squarely at the discount segment.

Lifebuoy’s options satisfy different needs says another executive. “Plus offers protection against body odour, Gold protects against acne and pimples, while the base Lifebuoy offers superior germ protection,” he says.

The company plans a major rural marketing initiative by April 2002 to promote the new Lifebuoy. But it refuses to divulge details at the moment. Will the brand, which originated from the residue of Sunlight detergent, re-live its old glory?