SNUGGLE THE BEAR Campaign I think this one will help!

Overview The introduction by Lever Brothers Corporation of Snuggle fabric softener in September 1982 startled the laundry detergent industry, especially archrival Procter & Gamble (P&G), maker of the fabric softener market leader, Downy Conventional wisdom, as well as Lever's historical precedent, dictated the much more conservative approach of extending the line of an existing brand, which Lever had in Final Touch fabric softener, instead of launching a whole new brand, which promised to be an expensive, high-risk proposition. But parent corporation Unilever PLC, an Anglo-Dutch packaged goods conglomerate, had installed chairman Michael Angus in New York to jump-start the faltering American division, which had been called "a real ugly duckling" by an industry analyst, according to Rayna Skolnik's 1985 article in Sales & Marketing Management. Angus considered the notion of locating niches that P&G had not yet exploited to be a "ludicrous strategy," and, concluding that there was "no way of outflanking them," he decided that the "only solution [was] to meet them head on." This bold maneuver catapulted Snuggle into second place in the fabric softener market, a development that marked the maturing of Lever Brothers from an "ugly duckling" into a true swan. Just as Unilever exported Angus to shore up Lever Brothers, so too did it export the concept for Snuggle, based on a fabric softener called Cuddle that Unilever marketed in France, Germany, Spain, and Italy. In these European markets, however, Unilever failed to capitalize fully on the connection between Cuddle's product benefitsoft, "cuddly" clothingand the mascot's own attributes as a cuddly bear. In the American market, Lever modified the product name as well as the mascot's personality such that the bear named Snuggle was "the personification of the product," according to Carolyn Hirschklau, executive vice president at Lever's ad agency, SSC&B. In a 1985Adweek article, Merri Rosenberg quoted Hirschklau as saying, "He's the very essence of softness, who also happens to demonstrate the end benefit of the product. The bear sells very hard, but he sells by example." SSC&B incorporated the bear's cuddly example into the campaign's tag line, "Snuggly softness that's really less expensive," simultaneously highlighting another component of Lever's strategy, to undercut Downy's price by 10 to 12 percent. Historical Context

The advent of fabric softeners in the early 1950s responded to laundry detergent improvements that worked too well. Detergents cleansed clothing fibers not only of external dirt but also of natural oils in the fabric, making clothing susceptible to a negative ionic charge, otherwise known as static cling. Fabric softeners counteracted this phenomenon by coating fabric fibers with cationic (or positively charged) fatty compounds, which both reduced static cling and fluffed up clothing. The formula remained unchanged when Lever introduced Snuggle into the test market of Milwaukee in September 1982. Lever continued to roll out Snuggle throughout the Midwest from late 1982 through early 1983, reaching the western United States by late 1983. SSC&B produced six different 30-second commercials for airing during daytime and prime time in support of the initial campaign. The spots helped Snuggle gain a 28 percent market share in these regions, an astonishing achievement for a brand launch. In September 1984, Lever returned to Milwaukee to test-market a Snuggle line extension, fabric softener sheets, which counteracted static electricity at its source in the dryer. P&G's Bounce controlled 47 percent of this market, but that "leaves Lever with the other half of the market," according to a 1984 article by Tom Delaney in Adweek. Snuggle sheets carved out 15 percent of the fabric softener sheet market immediately. Eight years later, Lever introduced Snuggle Singles, individual sheets that offered more convenience than the perforated rolls. "Why didn't they think of this sooner?" was the general reaction reported by a merchandise manager for a major East Coast food chain, whose mid-Atlantic stores sold out of the product in a week, according to John Sinisi's article in Brandweek in 1992. Target Market Snuggle targeted price-conscious women between the ages of 25 and 54. Snuggle advertising appealed to these women directly as well as indirectly through their children, who were enamored with Snuggle the Bear. Rosenberg reported on this phenomenon in Adweek: "In some communities, Lever says, school children ask their mothers to tape the commercials while they're at school." Lever also targeted mothers through their kids by sponsoring Little League baseball with a "welcome pack" that included a Snuggle coupon in 1997. Lever similarly targeted environmentally conscious consumers by cross-promoting the national parks with a 1996 national parks calendar featuring Lever product coupons in exchange for four proofs-of-purchase from selected Lever detergent products. Lever donated __BODY__ to the National Park Foundation for each calendar ordered and donated the equivalent to 2.6 million detergent bottles of recycled plastic to the national parks for use in upkeep projects. "Consumers are eager to support brands that are environmentally responsible," Lever explained to retailers in trade materials describing the promotion. To end the promotion, instead of pulling the rug out from its support,

Lever phased out support more gradually by offering a $5 refund for buying Lever detergent brands, and in exchange for each request Lever donated 25 cents to the National Park Foundation. Competition Commenting on whether the competition between Snuggle and Downy would create a price war, a financial analyst quoted in a 1984 Fortune article maintained that "the Procters and Levers of the world don't play that game." The analyst seemed not to be watching the playing field closely. When Snuggle entered the $850 million fabric softener market by undercutting Downy's price by 10 percent, Downy responded by matching Snuggle's price. Snuggle again reduced its price as its goal was to remain 10 percent under the leading brand's pricebut Downy again responded by reducing its price by another 12 percent, which Snuggle subsequently undercut. Prices leveled out in 1985 at __BODY__.21 for 33 ounces of Snuggle in Los Angeles, as compared to __BODY__.35 for the same amount of Downy; the New York market maintained a similar differential, with Snuggle entering the market at __BODY__.39 compared to Downy's __BODY__.52 price tag. When Snuggle was sold in 35 percent of the United States in September 1984, it captured a 30 percent share of the fabric softener market in those regions. By June 1985, Snuggle had expanded to 85 percent of the United States, maintaining a 25 percent share of the market in those regions. Lever achieved these results without cannibalizing its other fabric softener, Final Touch, which retained its 14 percent share of the market. Lever managed such impressive success with Snuggle by stretching its 1984 television budget of $2.5 million with efficient advertising. "The cost per 1,000 retained impressions was $12.53 for Snuggle, compared to $14.39 for Downy and $22.18 for Final Touchan extraordinary showing for a new product," reported Rosenberg. Lever products controlled 15 percent of the overall fabric softener market in 1984, up from 10 percent the previous year, while P&G's share fell from 60 to 50 percent during that same time. By 1989, Snuggle entrenched itself in second place in the fabric softener category with a 21 percent share.

They Hung Up
The competition and antagonism between private labels and leading brands became clear to Don Eckers, senior manager of trade operations at Lever Brothers, when he called several private label manufacturers to pitch a joint promotion of bleach, a product Lever did not make, with Snuggle fabric softener. "They hung up," Eckers recalled, as quoted by Carol Fensholt in a 1995 article in Supermarket Business. Eckers persisted, finally hooking up with Shurfine in a mutually beneficial arrangement. In combination Shurfine's private label bleach sold 552,000 bottles through one retailer in a

month, and Snuggle's sales increased by 33,000 cases, or 2 to 2.5 percent. The combination proved to be symbiotic. "Today we don't view private label as a threat. We think we can use it to gain efficiencies. Private label has low penetration in many of our categorieslike fabric softener. Bleach, by contrast, has high private label penetrationbut we don't make it," Eckers explained. He continued, "We think there are great opportunities for crossmerchandising our brands with private label, without either impinging on the other." Marketing Strategy "When you introduce a new product in a category that's so well established, you want to present the product in a different way," said SSC&B's Hirschklau in Rosenberg's Adweek article. Snuggle set itself apart from other brands with its mascot. Snuggle the Bear's seemingly simple appeal actually coincided with several other elements of the campaign that worked holistically "The packaging idea, the advertising property idea and the message are one: softness, embodied in this cute little bear," stated SSC&B creative director Frank DeVito in a 1986 article by Anthony Vagnoni in Back Stage. Director Gary Young explained the connection between character and advertising strategy in less technical terms. "Snuggle is in his own world. He never appears to other characters, but only appears when everyone else is gone. It's part of this magical quality that gets the clothes soft," he was quoted as saying in Rosenberg's article. Unlike most laundry detergent advertising that focused solely on the practical benefits of the product, Snuggle ventured into fantasyland (the first commercial commenced with "Once upon a time") while maintaining a focus on Snuggle's product benefits. While Snuggle the mascot promoted fantasy, Snuggle the product promoted environmentally safe formulation and packaging as a means of attracting consumers. As consumers became more environmentally conscious, they demanded products that were more environmentally friendly. But Lever had to weigh consumers stated ideals against their actual buying habits, lest Snuggle lose market share or profits. For example, Lever first responded in 1989 by packaging Snuggle in recyclable paperboard cartons, but it stopped short of filling the package with concentrated detergent (the most cost-effective method, which was being used by competitors) because Lever gauged resistance in consumers to the idea of diluting detergents themselves. The next year Lever switched to three-layered bottles made from recycled plastic sandwiched between virgin plastic to guard against product contamination. Most consumers did not realize the machinations manufacturers had to go through to produce environmentally friendly products and packaging. For detergent bottles to be recycled properly, they had to be sorted by type and color, and mixing bottles colored differently resulted in gray plastics unsuitable for flashy packaging.

Nevertheless, by 1991 Lever had committed itself to using 25 to 35 percent recycled plastic in its packaging. Outcome Rosenberg reported in her 1985 Adweek article, a "Special Report" on "America's Favorite Campaigns," that Video Storyboard Tests ranked Snuggle's advertising 24th of its top 25 campaigns for 1984, an impressive showing for a brand that had not yet reached national distribution. More impressive, the Snuggle campaign won one gold and two silver Effies, given to recognize particularly effective overall advertising campaigns. In a 1989 Business Week article, Walecia Konrad attributed the turnaround by Lever Brothers in the 1980s to the success of Snuggle, among other factors. But as Snuggle led Lever forward into the black, the company had a considerable amount of red ink to counteract, for between 1978 and 1982 Lever had lost $90 million. Lever posted profits in 1983 and 1984, the period coinciding with Snuggle's introduction. While the brand did not turn these profits on its own, Snugglea high-profile, high-risk product launch that turned out successfully paved the way for the company's turnaround.

Further Reading
Donohue, Janet, "Lever's Hockey Talks about Changes in Household Products and Emphasizes Company's New Product Successes," Soap-Cosmetics-Chemical Specialties, August, 1987, p. 46. Profiles the rebuilding of Lever Brothers by interviewing John A. Hockey, vice president of technical development, Household Products Division. Rosenberg, Merri, "Snuggle: A Hard Sell in a Cuddly Package," Adweek, April 1, 1985. Discusses Snuggle advertising in-depth as one of America's favorite campaigns. Skolnik, Rayna, "Lever and P&G Wage a Good, Clean Fight," Sales & Marketing Management, June 3, 1985, p. 47.
WILLIAM D. BAUE

Company History: Lever Brothers Company is one of the largest manufacturers of soaps and detergents in the United States. It is well known for such famous brands as Sunlight dish detergents; Wisk, Surf, and "all" laundry detergents; and Caress, Dove, Lifebuoy, and Lever 2000 soaps. Lever Brothers is a subsidiary of the Anglo-Dutch Unilever group, which includes more than 500 companies and has sales of more than $43 billion annually.

Lever Brothers Company has its roots with William Hesketh Lever, an English grocer. Beginning in 1874, Lever's wholesale grocery business had been marketing a soap made specially for them called Lever's Pure Honey. By the 1880s, Lever had concluded that he had expanded the grocery business as much as he could, and he looked for another enterprise. He decided to market soap. As a child, his first job in his father's grocery store had been to cut and wrap soap. He knew the importance of a brand name that he could register for exclusive use and chose the name "Sunlight." At first he contracted with various soapmakers to manufacture "Sunlight," which he then packaged and marketed. In the mid-1880s, raw materials were cheap and workers plentiful, and Lever decided to set up his own soapmaking plant. Arranging a loan to start the factory as a branch of his family's wholesale grocery business, William and his brother James began production. By January 1886, the plant was producing twenty tons of soap a week using the "recipe" for Sunlight soap (made from oils rather than tallow) that the Lever Brothers had perfected. Two years later, the plant had a capacity of 450 tons a week. Glycerine was a lucrative byproduct of the soapmaking process, and by the end of 1886, Lever Brothers also had a glycerine factory. At first Lever was selling locally, then its market branched out to include Scotland, Holland, Belgium, South Africa, and Canada. In 1888, with the success of Sunlight, William Lever went looking for a new site for his company, which had been operating from leased facilities. He bought land on the banks of the Mersey River where he built Port Sunlight. Over a period of years, he bought almost 330 acres. At first Lever manufactured only Sunlight soap. In 1894, though, he introduced Lifebuoy soap, a household soap with carbolic acid as a disinfectant. The new product also used up the residual oils left over from production of Sunlight. In 1899, Lever's company also began producing "Lux" soap flakes. Lever opened a small office in New York in 1895 to handle U.S. sales of Sunlight and Lifebuoy soaps. In 1898, Lever acquired a small soap factory in Cambridge, Massachusetts, the company's first manufacturing operations in the United States. A few years later, the company acquired a factory in Philadelphia. The Cambridge plant did business throughout New England, and the Philadelphia plant distributed to the rest of the country. During the early years in America, neither Lifebuoy nor Sunlight sold well. Americans preferred large bars of soap because they seemed like a better value than the small tablets of Sunlight. Lever was more successful with its sales of "Welcome" soap, which satisfied Americans with its larger size. Sales of Lifebuoy soap and Lux finally started to take off, but Sunlight never did catch on in the United States. Sales of Lever products in America were growing largely due to the management of Francis A. Countway, who headed U.S. operations for Lever Brothers. Beginning in 1912, he guided Lever Brothers American business for more than 25 years. He understood American marketing and Americans' peculiar preferences, and gradually he persuaded the British owners that selling soap to Americans was very different than selling to Europeans. In 1919, Countway reorganized the company. Recognizing that the markets outside of New England needed to be tapped, he divided the United States into ten sales territories. He gave up on Sunlight ever being a success in the United States and successfully promoted Lux, Rinso, and Lifebuoy as the mainstays of the company until 1925, when Countway launched Lux toilet soap. Lever had not been very successful selling directly to retailers, so Countway also brought the wholesaler or jobber into the marketing process. Between 1920 and 1925, sales rose from 21,000 tons to more than 40,000 tons. Lever's American concern was finally becoming a success. By 1929, it had become the third-largest soap and glycerine manufacturer in the United States. Competition was strong among the top three soap manufacturers: Procter & Gamble, Colgate-Palmolive-Peet, and Lever Brothers. Lever Brothers had given up on Sunlight, but Lifebuoy and Welcome were selling well due to heavy promotions which included gifts, special displays, demonstrations, and even door-to-door visits. But it was Lux that became its greatest success. Lux had been touted as a soap suitable for washing woolen fabrics. But newer, more delicate fabrics were becoming available at low prices by 1913, and Countway began advertising Lux as a high quality soap that was suitable for even the most delicate fabrics. By 1919, Lever was selling a million and a half cases of Lux; its 1913 sales had been 3,000 cases. The introduction of Rinso soap powder was also successful, with sales rising from 64,000 cases in 1919 to 800,000 cases four years later. Lifebuoy sales had soared from 84,000 cases in 1913 to 550,000 cases in 1923. Meanwhile, the parent company in England was in the midst of negotiations that would soon make Lever Brothers of America a subsidiary of a newly formed partnership. In 1929, after years of talks, Lever Brothers Ltd. and Holland's Margarine Unie finalized a deal to become Unilever. They remained two companies with two sets of shareholders and two headquarters but one board of

directors. Unilever Public Limited Company (PLC) was based in London and Unilever NV (Naamloze Vennootschap, meaning limited-liability company) was based in Rotterdam. Although legally distinct, they operated as one company. Lever Brothers Company in the United States continued to fight for market share. While sales of Lux had surged in the 1920s, its growth had slowed down in the 1930s. But Lifebuoy was going strong, and Rinso powder sales rose from two million cases in 1929 to more than six million a decade later because of its suitability for use in the new electric washers that were being installed in many American homes. Procter & Gamble was enjoying great success with its Crisco shortening; that product brought in nearly half of the company's profits in the early 1930s. Countway thought Lever Brothers could take advantage of the lard substitute market as well. Delaying direct sales to consumers, Countway entered the market with artificial lard sold to bakeries. When the Depression brought low prices for lard and butter, the market for lard substitutes dropped. It was not until 1936, when the country was in the midst of a serious shortage of real lard, that Lever Brothers brought out its Spry shortening in the United States. By 1939, after a massive cross-country campaign to demonstrate uses of Spry, the new product had reached sales of 50,000 tons. In three years, Spry sales had reached about 75 percent of the sales of Crisco, which had been on the market since 1910. Lever Brothers sales increased between 1929 and 1934, despite the Depression. This may have been due to Americans' high regard for cleanliness, making soap a necessity rather than a luxury. Between 1929 and 1939, U.S. sales for Lever Brothers increased from $39 million to more than $91 million, and profits more than doubled, from $3 million to more than $7 million. During the 1940s, the company diversified further than soaps and lard substitutes. In 1944, Lever entered the oral hygiene market when it acquired the large Pepsodent Company, manufacturer of toothbrushes and tooth-cleaning products. In 1948, it acquired the John F. Jelke Company, a manufacturer of margarine. Synthetic detergents were gradually taking over markets for soap products in almost all but the toilet soap segment, where it was difficult to develop a synthetic that did not leave a ring around the bathtub. Lever's Dove, a synthetic toilet soap, finally met with success when it was introduced in the 1950s, but it was a costly product. Synthetic soaps caused an environmental problem because they formed huge collections of foam in rivers and sewer systems. Lever Brothers, like other soap manufacturers, worked to overcome this problem, finally developing more biodegradable detergents. In 1957, Lever Brothers acquired the Monsanto Chemical Company's line of "all" detergents, which included Concentrated "all," Liquid "all" and Dishwasher "all." This transaction resulted in an antitrust suit by the U.S. Department of Justice which charged Lever Brothers with restricting competition by acquiring that piece of Monsanto which manufactured low-suds synthetic detergent, a product similar to one that Lever already made. Lever Brothers won the suit, arguing that rather than restricting competition, it was protecting it since both Lever's and Monsanto's products were losing money due to competition with "larger rivals" like Procter & Gamble. Lever Brothers Company successfully argued that if the businesses remained separate, eventually the larger rival would wipe both of them out, and that the acquisition of Monsanto's detergents was actually helping to preserve a competitive marketplace. Advertising dollars tended to spell the difference among several like products that essentially differed only by scent or color. Procter & Gamble spent massive amounts of money on advertising and promotion and controlled 45 percent to 50 percent of the household products market. Competition from Lever Brothers remained weak until the 1980s. Outside the United States, however, Lever's parent organization, Unilever, was the leading manufacturer of detergents and margarine. Low profitability was what had plagued Lever Brothers through the 1970s, according to Michael Angus, then Unilever PLC's vice-chairman and head of Unilever's North American operations. He was sent to the States to turn Lever Brothers around. He toldFortune magazine in 1986 that Lever Brothers "was in a vicious cycle caused by low profitability." Low profits caused managers to cut costs, such as advertising, which produced lower market shares, lower volumes, and higher production costs. In addition, research and development resources had been reduced as management tried desperately to stay profitable. Angus kept only the "best" corporate officers at Lever Brothers, letting many others go. He tackled the margarine business first, which was losing vast amounts on Imperial and Promise brands. He shut down outmoded plants and, for a time, contracted with Beatrice Co. to manufacture margarine for Lever. With the savings from shutting down plants and warehouses, Angus was able to begin updating Lever's margarine factories and promoting other products more aggressively. With

the acquisition of the Beatrice operations Shedd's Food Products Company in 1984 and J. H. Filbert in 1986, Lever became the leading margarine company in the United States, ahead of Nabisco and Kraft. The acquisitions added production, food service, and private label operations. In 1985 Unilever spent $50 million to expand the laboratories and research staff at its Edgewater, New Jersey, research center. Lever Brothers launched a string of new products in the mid-1980s. Both Sunlight automatic dishwashing detergent and Snuggle fabric softener managed to win 15 to 20 percent of U.S. markets. Lever also expanded its marketing of Surf powder detergent to compete with Procter & Gamble's Tide. Lever Brother's revenues shot up to $2.1 billion, a 55 percent increase over three years. With the company becoming more diversified in the 1980s, Unilever reorganized Lever Brothers, forming three separate divisions: Household Products Division, Foods Division, and Personal Products Division. Following the acquisition of Chesebrough-Pond's Inc. by Unilever, Lever's Personal Products Division was transferred to this company. Lever's Foods Division was spun off into its own operating unit, called Van den Bergh Foods, in 1989. Following these changes, Lever Brothers became solely a soap and detergent company. Lever was now in a position to face Procter & Gamble more confidently in the household products division. Lever already had a winner with Wisk, first in the heavy-duty liquid laundry detergent market. Introduced in the 1950s, Wisk was largely unchallenged until Procter & Gamble marketed Liquid Tide in the mid-1980s. In 1990 Lever Brothers introduced some innovative products, including Lever 2000--an "all-in-one" deodorant and moisturizing soap for the whole family--and Wisk Power Scoop, a superconcentrated laundry detergent. According to company literature, an ingredient in the detergant called lipase "unlocks the fatty matter that 'glues' dirt to fibers, making dirt linger in clothes." Lever also brought out a liquid Dove and "all" Free: Clear, which contained no perfumes or dyes. In 1990 the company also began using recycled plastic in its packaging, publicly committing to use 25 to 35 percent post-consumer recycled resins in half the bottles it sold in the United States. It also touted its Wisk Power Scoop as a step in the right environmental direction since it used less packaging per load than ordinary detergents. Lever announced that its new Packaging Development Center in Owings Mills, Maryland, was actively pursuing packaging that supported its environmental policy. Lever Brothers pulled ahead of Procter & Gamble in the toilet soap category in 1991 with Lever 2000. This was the first time Lever had ever overtaken Procter & Gamble in a product category. Lever spent more than $25 million for advertising that year to make Lever 2000 the market leader. Lever Brothers' winning position in the toilet soap market convinced the company that it could dominate other market segments too. But Procter & Gamble, Dial, and other soap makers began to develop new products or reposition existing ones to capitalize on the market for "all-in-one" soaps. Soap makers collectively spent more than $183 million on advertising in 1991.

ADDITIONAL POINTS: y Need to improve asset optimization and streamline its supply chain to support its quest for growth.

Solution Develop and implement a plan that improves business processes and optimizes the effectiveness of Unilever s workforce through a common enterprise platform one that supports industry best practices and provides measurable improvements in operational and customer performance.
Unilever is entering the $250 million fabric-softener market this month in Mexico, the world's third-largest, with the launch of Snuggle, backed by a TV, magazine and outdoor campaign by Interpublic's Lowe, Snuggle's global agency, and promotions from local agency MPI (see related story, P. 6). The launch kicked off with kids in teddy bear costumes who hugged passersby on the street and appeared on TV.

Also we can use 360 degree approach to launc snuggles in eastern region...we studied about it in 4th trimester.