It all comes out in the wash

As Unilever is hung out to dry, Clifford German looks at the technology and advertising that fuel the soap wars How could a business that spends so much money on development and testing make such a cataclysmic mistake?
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There hasn't been a marketing fiasco as big as this one since Coca-Cola tampered with its magic formula 10 years ago. This week, executives at Unilever were totting up the cost of "Persil Power", the washing powder brand that rival manufacturers c laimedwashed so much whiter that the clothes disintegrated.

At least two years of concentrated effort and as much as £200m went into the campaign to develop the product's disastrous secret ingredient - the manganese accelerator - to bring it to market, and to promote it when it was launched.

Tesco's decision this week to drop the product, which its detractors argue rots some dyes and turns some clothes into clean tatters, heralds the final defeat of Unilever in what is sure to go down in the annals of marketing and advertising as "the Great Soap Wars". Unilever is stubbornly standing behind the technology in Persil Power, but Sainsbury and Waitrose have already followed Tesco's lead.

The cost cannot be measured in terms of financial loss alone. The damage done to clothes has actually been minimal, but the harm done to consumer confidence is serious. The accelerator has caused enormous confusion among buyers, who have been encouraged by generations of advertising copywriters to rely implicitly on the ability of their chosen favourite to cope with the trickiest of washing conundrums. Unilever is now being hung out to dry.

Persil Power's share of the £1bn UK home laundry market has halved since last June, and now stands at just 2.3 per cent. It will still be marketed as a specialist detergent suitable for heavily stained whites and coloureds washed in cool water. But starved of the oxygen of advertising spending and promotion, it is likely to lie down quietly and die, an ignominious end to a product hailed as the biggest technical breakthrough in the past 15 years.

In the UK market alone, Unilever's total share has fallen from 32.6 per cent nine months ago to 31 per cent in December. Meanwhile, P&G Unilever's main rival, has forged further ahead, from 50.6 per cent last April to 52.8 per cent in December. More important still, Unilever's long-running campaign to wrest back the leadership of the European detergent market that it lost in the Seventies has been set back at least two, maybe three years.

The industry and the consumer are left wondering how a business that spends so much on product development and testing as well as advertising and promotion could have made such a cataclysmic mistake. P&G may be forgiven for crowing. Last March, Ed Artzt,the P&G chairman, paid a personal visit to Unilever's headquarters to warn Unilever that its own research had shown manganese could seriously damage certain fibres. P&G had already abandoned its own efforts to incorporate it in its own products.

Perhaps Unilever's top brass suspected an attempt to talk them out of a commanding lead in the detergent market which they hoped Persil Power would give them. At any rate, they chose to ignore the warnings. They even rejected the offer of joint-testing and launched Persil Power with great fanfare on the UK market at the end of April. P&G responded with an open attack that broke a long-standing convention of gentlemanly behaviour in the industry.

Unilever is still bitter. "Negative marketing which attacks a competitor's product, rather than promoting one's own, has now been made established practice," a spokesman claims, although he is careful to stay that Persil has no plans to retaliate in kind. "We couldn't believe the reaction from P&G. Instead of playing Manchester United, it was like playing Wimbledon every week," another executive claims.

The media gleefully fuelled the flames. Unilever defended its product, and actively considered a counter-attack on P&G products. But P&G stepped up the assault until, last September, Unilever's Dutch co-chairman, Morris Tabaksblat, came clean on a visit to Peking and admitted the defect did exist. Part of the problem is that in their search for new and ever-more efficient detergents, manufacturers have been drawn into producing ever more specialised products, targeted at specific washing problems, from delicate fabrics and non-fast dyes to difficult stains. In the process, they have been drawn farther away from the all-purpose product that most customers really want, something that will do all their laundry in a single wash and save them the time, the effort and the electricity needed to do separate washes with specialised products for different fabrics.

Unilever launched Persil Power as just such a detergent, capable of coping with the whole wash rather than as a specialist detergent to cope with heavily stained whites, a task for which it is genuinely suited. It seems it was aware of the damage the miracle ingredient could do in certain circumstances, but decided it was a price well worth paying to achieve the genuine advance in cleaning power that the new ingredient promised, instead of the barely detectable "miracles" revealed to ecstatic housewivesto which the consumer had become increasingly resistant. "We knew it had to be something very different, not just in the laboratory but also to the consumer. Mrs Jones had to notice and say, "This really is different," a Unilever spokesman admits.

They were encouraged by the reaction of consumers who, in tests in the Netherlands late in 1993. gave the new powder an enthusiastic welcome. Even after the UK launch, when P&G began an unprecedentedly hostile, direct and sustained attack on the product,Unilever gritted its teeth and pressed on, compounding the costs and eventual losses. It reduced the concentration of the accelerator by 80 per cent to reduce its effects, but in the face of a sustained attack from P&G backed up by independent testing, demand has slumped, and Tesco's decision is the coup de grace.

Much now depends on how skilfully Unilever can market and promote New Generation, a new "across-the-wash" replacement, which, providentially, it has been developing in parallel with Persil Power, using much the same technology without the controversial

accelerator. It has promised consumer groups that the new product has been tested three or four times as long as the standard practice, washing clothes up to 60 times in an effort to detect long-term damage, and has built up a database of 10 million customers to whom it can send samples and information, to supplement its conventional promotion and advertising campaigns.

With this sort of back-up it seems unlikely that Unilever will repeat the manganese mistake. It must be praying that consumer confidence will return as the public memory fades. And more than ever before, perhaps, Unilever's fortunes rest on the shouldersof the marketing men.