Procter & Gamble Co.'s chairman-chief executive told Niall Fitzgerald, Unilever's vice chair- man and detergents coordinator, a year ago the stain-annihilating detergent Unilever was poised to roll out across Europe damaged clothes.
Unilever ignored him. And the new Power brand was a disaster.
Today, Mr. Fitzgerald's promotion planned for May to the elite three-man "special committee" that runs the entire $45 billion Unilever group of detergents, food, and personal care products has been put on hold for a year as he struggles to fix the detergent division.
Unilever's decision to go ahead last spring with the $300 million Power introduction is a cautionary tale highlighting the pressures multinational marketers face to come up with winning products that work internationally-and roll them out faster and faster. With only about half P&G's detergent sales in Europe, Unilever was desperate to parlay its technology breakthrough into a greater market share. P&G was equally determined to stop its rival.
"It's the greatest marketing setback we've seen," Sir Michael Perry, Unilever's chairman, admitted two weeks ago when the company announced 1994 financial results, including a $90 million write-off attributed to the Power brand. Detergents are 22% of Unilever's $45 billion in sales.
Unilever declined to discuss the failure of the brand, marketed under different names in different European markets, including Omo Power and Persil Power.
In opposing the introduction, P&G had a hidden agenda: It was secretly preparing to relaunch its flagship European brand Ariel as Ariel Future, a stain-fighting concentrated detergent.
But Unilever was so enthusiastic about Power and its patented manganese-based catalyst, the Accelerator, that the company skipped formal test marketing in favor of a full-blown rollout.
The marketing blowout included an ad campaign by PPGH/ JWT, Amsterdam, in the Netherlands,and JWT, London, in the U.K., and another by Lintas Worldwide, London, in the rest of Europe. Samples were dropped in tens of millions of European homes. But "P&G was lying in wait for them," said David Lang, an analyst at Henderson Crosthwaite here.
Unilever's problems were compounded by its own efficiency in gearing up for speedy international rollouts in just a few months. "In the old days, it used to take them up to three years to introduce a product into 16 countries in Europe," Mr. Lang said.
But in a restructuring several years ago, Unilever created a highly centralized Brussels-based detergent division called Lever Europe to roll out new brands across the continent in just a few months. With no strong pan-European brand to match P&G's Ariel, Unilever piggybacked the Power name on existing brands.
"Probably they just moved too fast," Mr. Lang said. "They were in such a hurry to get it out ahead of P&G."
Unilever also misjudged the normally reclusive and media-shy P&G, which bombarded journalists across Europe with color photographs of tattered rags washed in Power detergents next to pristine garments laundered with P&G's Ariel. P&G also commissioned lab tests showing Unilever's Power detergent damaged clothes.
P&G didn't confine its attacks to public relations; it also ran page newspaper ads from Ariel agency Saatchi & Saatchi Advertising, London, condemning the Power brand.
Unilever, most of those close to the scene agree, didn't handle the crisis well. Despite the blistering publicity that greeted Persil Power in the U.K. and Omo Power in the Netherlands, Unilever introduced the product in a dozen more countries.
"The company should not have allowed the problem to spread across Europe before it was detected," one advertising executive said.
Traditional marketing tactics failed. In the Netherlands, Unilever cut the price of Omo Power and offered refunds for damaged clothes. In the U.K., the company set up a toll-free phone number to reassure consumers.
In most markets, Unilever splashed new washing instructions on packages and ran ads about laundering clothes in cold water to prevent damage.
After a few months, Unilever slowly retrenched. First, the Power brand was reformulated last June to drastically reduce the manganese-based Accelerator. In January, Unilever admitted Power had been forced into a specialist cleaning niche by P&G's negative campaigning.
Ad support stopped.
In February, Unilever began selling New Generation Persil, a general detergent without the Accelerator, in the U.K. with other markets to follow. A very traditional family oriented detergent commercial by J. Walter Thompson Co., London, features a mother getting her kids' dirty costumes clean for the school play using New Generation Persil.
The Power debacle didn't plunge Unilever into the red or cause a major share loss. A spokesman insisted the company lost less than 1 percentage point of market share. Also, profits and sales for the detergent division overall actually rose slightly. In 1994, operating profit for detergent rose 3% to $773 million on 1% higher sales of $10 billion.
What Unilever lost was the opportunity to increase its share of the detergent market. P&G still dominates with Ariel, a $1.5 billion selling brand annually.
Unilever's two largest brands, Persil and Omo, have European sales of $490 million and $375 million.
Juliana Koranteng and Charles Siler contributed to this story