One stubborn stain on Unilever’s reputation In the mid-1990s, the total UK market for soaps and detergents was worth £1.42 billion (US $2.6 billion), and the largest sector was fabric washing, worth £960 million and 67.5% of the total sector. The competition between the two leading companies within the sector, Unilever and Procter & Gamble, was intense and led to a quest for more and more and more innovative brand offerings.
When Unilever’s star brand Persil announced the launch of a powerful new formula, aptly called Persil Power, many consumers got excited by the product’s apparent ability to fight any stain. However, when the product hit the market place in May 1994, it proved so powerful that under certain conditions it didn’t only destroy stains, it destroyed clothes as well.
For the first few weeks though, Persil Power proved successful. Indeed, for a brief period, the product overtook its main rival Ariel. Indeed, Unilever stated that Persil Power represented a ‘revolutionary’ breakthrough in detergents, and was ‘the most significant thing we’ve ever done.’
The only problem was, the brand’s key asset – a patented manganese component called an ‘accelerator’ which was put in the powder – also proved to be its fatal flaw. As soon as stories of disintegrated clothes started to emerge, Procter & Gamble ploughed their resources into an accusation-laden publicity campaign which not only damaged Persil Power, but also had implications for Unilever itself. Consumers soon understood that the product could damage materials at high temperatures, and that if they bought Persil Power they risked destroying their clothes.
Niall Fitzgerald, who introduced Persil Power (and is now Unilever’s chairman) explained the brand damage to the whole Anglo-Dutch company in an interview with The Sunday Times. ‘Communications had evolved so fast that within seconds this wasn’t a brand issue, this was a corporate issue,’ he said. ‘So even if we had wanted to ring-fence our product, we couldn’t have.’
Most retailers quickly took the product from their shelves, and Unilever embarked on a massive crisis management programmer, together with a complete overhaul of the company procedures that had resulted in the product emerging on the market.
At the start of 1995 Unilever replaced Persil Power with Persil New Generation. The overall cost was estimated at more than £200 million. Now, however, the whole episode is almost forgotten in the UK customer’s mind, and Unilever has bounced back with its launch of detergent tablets.
Indeed, the Persil brand has now regained leadership from Procter & Gamble’s top brand Ariel.
Ultimately, Unilever has been preserved by its heritage. After all, this is the company which produced the world’s first packaged, branded laundry soap, Sunlight, over 100 years ago. Its brands may come and go, but Unilever itself has stayed strong.
Whether this will always be the case is another matter. In 2002, the company announced that it was considering branding some of its products, such as Persil, under its own name. In other words, the product would be branded as ‘Persil from Unilever’, instead of simply ‘Persil’. In an article in the Guardian journalist Julia Day explained the logic behind the move:
The idea is to create consumer-friendly brand values – such as a commitment to the environment – for Unilever to use when marketing its products.
Niall Fitzgerald, the chief executive of Unilever, said the company believed the time may be right to develop Unilever as an ‘umbrella brand’ for its individual products.
The company has avoided taking this route in the past because of the high risk involved. If one product encounters a problem the image of other products could be damaged.
But the advantages for Unilever are that it could develop Unilever as a brand with ‘values’ that could be applied to all brands.
One example Niall Fitzgerald gives in the article was establishing Unilever’s environmental credentials. ‘The cost of doing that for individual brands is immense,’ he said.
As the Persil Power episode illustrates, this is a risky move. If, in 1994, the new brand had been branded clearly as ‘Persil Power from Unilever’, it would have tarnished all Unilever brands, and the damage would have been even greater.
Lessons from Persil Power
Don’t fuel your competitor’s publicity. Procter & Gamble’s negative campaign against Persil Power helped to boost its Ariel brand of detergent.
Test products in all conditions. Products need to be tested in every environment or context they are likely to be used. If Unilever had been able to spot the fundamental flaw with the product it would have prevented what the then Unilever chairman Sir Michael Perry referred to as ‘The greatest marketing setback we have seen.’
Accept that no brand is an island. ‘Even if we had wanted to ring-fence our product, we couldn’t have,’ admitted Unilever chief executive Niall Fitzgerald.