Home Uncategorized [Rejoinder] Global Products, Package Local Designs (part 1)

[Rejoinder] Global Products, Package Local Designs (part 1)

Hello readers, I have written many articles over the years and gotten many personal emails on my posts. But this one is simply different. I asked the person that sent it for the right to share with you. The author, C. Idahosa, is very experienced. I thank him for the insights. Nothing serious – it is more of space in HBR. I wrote in details on this in my doctoral dissertation in finance while in the banking industry in Nigeria and conducted research on this as an EMBA student in UNICAL. Of course, I have to cut some details for a piece in HBR. Specifically, I presented my work in June of 2001 in a workshop in Airport Hotel, Ikeja.

 

Hi Mr. Ndubuisi Ekekwe,

 

Within the last week or so, I read came across your interesting narrative on Global Products, Package Local Designs published in BusinessDay on Monday, May 23, 2011 as part of the Harvard Business Review series. In the absence of a direct mailing address, I gambled on reaching you via the website of African Institution of Technology just to make a few observations, particularly on the entry of Procter & Gamble into the local space for detergent powders, and the meat processor that ran into a storm up north

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With all due respect, while your account is correct in context, it is sort of off track in some aspects. To the extent that the intention is to instruct on serious strategic marketing, I reasoned it might help to take a closer look at some of the issues.

 

To begin with, you are right on the money about some retailers decanting detergent powders into nylon materials   – a phenomenon that has deepened over time and somewhat disruptive in the supply chain of some products. In the days of “essenco” (essential commodities), people were wont to buy and share large quantities of foodstuff and other household consumables. Also true and still in common practice is people banding together to buy live cows and share the slaughtered meat. However, what I cannot recall is when it was an established trend for economically pressured families to club together, buying and splitting detergent powders so as to get round the issue of large expensive carton packs the producers were shifting. If that ever occurred, it must have been as isolated and insignificant as two buddies occasionally sharing a bottle of lager beer. I do not think such a practice would be settled enough to warrant the interest of the makers of booze.

 

Further still, I do hope someone has not gone around suggesting (be it in some marketing literature or company records) that P&G (Ariel) was first to market or brought a new game to town with flexo-packaging in the relevant market space. It has to be said though that their marketing initiatives indeed caused some lethargic competitors in different product categories, including Cadbury’s Tom Tom, to sit up and be more driven. Nonetheless, it was in female sanitary pad/towel and baby diapers that they dramatically changed the ground norms. P&G’s Always sanitary pad practically walked past the major brands, Simple, Tampax and LadySept, to grab market leadership. I know so because yours truly saw successive Indian managers of Pharco Products Ltd, makers of Simple, dismiss suggestions for audacious marketing support when theirs was #1 in the market. Their argument was that sanitary towel is not a product type that lends itself to robust TV presence, billboard display and street-level consumer bugging.   .

 

Truth be told, it could be argued that as far as flex packaging goes, Ariel’s market entry was auspicious in timing because it keyed into a market situation that was fast taking shape. So, what happened? To address the query, a little bit of history might help.

 

Through the late 1970s and early 80s, Unilever/Lever Brothers Nigeria (Omo and Surf), PZ (Elephant), and Nasco Marketing (Brytex), three majors who competed across the broad spectrum of consumer products and every so often behaved like a cartel were already offering their powders in different carton-pack SKUs, ranging across (I think) 100grams 175/200grams and way up to 1 or 1.5kilograms. Not all the companies offered the different sizes. Other marketing nuances included Unilever having a male model on the pack sold in the northern markets to reflect the preponderance of male shopping in that region. Sunlight and Premier soaps were beginning to be proposed as multi-purpose washing soaps. While further down the scale the likes of Key and Canoe laundry bars. With such varied offerings and price points, marketers went a long way to meet the needs of different income levels. However, by the mid-1980s, consumer resistance, as a measure of the straitened times, was becoming obvious. The IMF-inspired Structural Adjustment Programme was biting.

 

About that time LBN was mulling the retrenchment of (white-coloured) Surf detergent powder from ythe local scene and word was coming in from Indian’s Hindustan-Lever – acting in some sense as Unilever’s laboratory and lead market for developing economies – that fresh thinking was required in soaps and detergents to rein in spiraling cost and hold on to large segments of consumers. They were looking to flex package as the way forward.

 

Procuring that class of packaging material was a distant cry from the off-the-cuff offering it was to become a few years later. Bodpak division of UAC of Nigeria, which met much of the carton packaging, label and photogravure printing needs of all Unilever-related companies – UACN/A.J. Seward, Lever Brothers, Nigerian Breweries and Guinness – was not geared to do that kind of stuff. There was only one proper flex packaging company (Indian-owned InterPlas Nigeria Limited) with operations largely hinged on wrappers for candies and other confectionery products. Another in the printing/packaging sector was Colodense, with focus more on flow-wrapping, a format  that was yet to become popular for packing low-end personal and laundry wash bars/tablets. Poly Products Ltd was majorly a maker of plastic containers, nylon bread wrappers and shopping bags. The current leader in that packaging space, Messrs Vee Pee/Arvee Industries, through its sister company, Gee Pee Ltd, was in the main a producer of water storage tanks bearing the name, Gee Pee tanks. That was what the packaging business looked like.    .

 

To make progress, recourse was made to Indian suppliers to enable Blue Omo to be test-marketed in flex packaging. Shelf off take was sluggish, to say the least. Consumer engagements results shared with advertising agencies as standard practice in Unilever’s playbook, had mainstream Omo users saying, inter alia, (1) they couldn’t fathom their “premium” Blue Omo in a cheap polythene bag, and (2) if it is Omo, which had become the default name for powdered detergent, it had to blue coloured. By and large, it did not count for much that affluent consumers had accepted mostly white-coloured imports. In the main, consumer resistance was the major reason Omo did not go full blast into flexo-packaging when first introduced in Nigeria. On the sideline, not a few brand people wondered whether there was indeed a convergence of understanding between the Omo’s pitch as premium offering in its class and the consumer’s appreciation of that.

 


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