Unilever launched a new detergent called Persil Power in 1994 that was designed to clean clothes at lower temperatures using a manganese catalyst. However, Unilever failed to adequately test the product under all conditions. They found the catalyst could damage colored clothes at higher temperatures, especially in Southern Europe where clothes are often washed together in hot water. Competitor P&G capitalized on this flaw, forcing Unilever to withdraw Persil Power at a loss of £300 million. This case highlights the importance of fully understanding consumer behavior across geographies before innovating, as Unilever's testing was too narrow and did not account for key regional differences in washing habits. The company now places greater emphasis on cross-

1. The Persil Power
Fiasco
How Unilever failed to research about consumer behavior
Presented by:-
Mutahira Dar
Semester III MBA , Section ‘C’
Presidency Business School

2. Company profile:-
 Anglo- Dutch multinational
company.
 Founded in 1933.
 Headquartered
in London and Rotterdam.
 One of the oldest multinational
companies .
 Its products are available in
around 190 countries.
 Unilever owns over 400 brands.

3. Unilever products

4. Unilever’s main competition was from P&G

5. So, what was Persil Power and why
did it attract so much flak?
 The detergent powder was launched in 1994 across Europe.
 It was the result of a major technological breakthrough (as per Unilever).
 Product development efforts spanned a period of 10 years.
 Unilever spent close to 100 million pounds.
 Intention was to overtake Ariel detergent.

6. What was unique about
Persil power ?
 Product had - manganese catalyst (accelerator )
that could clean clothes even at lower
temperatures.
 Breakthrough
 Unilever protected its innovative efforts by
• This product – result of Unilever’s
research- competitive advantage
• cleaned clothes without damaging
fabric color
• 35 patents
• Test marketing in 60000 households

7. P&G springs into action-
failure of Persil
 After testing, P&G found that under certain
conditions, Persil powder damaged the
clothes.
 The catalyst could damage colored clothes at
high temperatures.
 A big failure for Unilever.
 Negative publicity by P&G.
• lost the legal battle
• forced to withdraw the product
• lost 300 million pounds spent in development
and marketing.

8. So what went wrong?
 Unilever had conducted most of its tests in Dutch
households
 In Northern Europe, people washed their white and
colored clothes separately.
 In Southern Europe, clothes were washed together in
hot water.
 Problem:-
1. Manganese catalyst was fine at low temperatures.
2. But it reacted with certain dyes at hot temperatures.
 So, it was a niche product (cold water ,white
garments)

9. In an interview, Niall Fitzgerald said, “‘Communications
had evolved so fast that within seconds this wasn’t a
brand issue, this was a corporate issue. So even if we
had wanted to ring-fence our product, we couldn’t
have.’
Unilever chairman Sir Michael Perry referred to this
incident as the greatest marketing setback that Unilever
had ever seen.

10. Consequences
 People avoided this product with a thought that
it will destroy their clothes.
 The product was a flop.
 Most retailers quickly took the product from
their shelves.
 Unilever launched a crisis management program
 1995 – Persil power replaced with Persil New
Generation.

11.  Great organizations learn from their failures
instead of carping about it or fixing
accountabilities when the damage is already
done.
 This experience taught Unilever to promote
greater cross-functional co-ordination
between R&D and marketing functions.
 The company institutionalized the process of
setting up dedicated innovation centers
instead of adopting an ethnocentric
approach.
 No brand is an island.
 Products have to be tested under all
conditions.

13. Q1.What are the aspects of consumer behavior that
Unilever missed? How did it affect their business?
 Unilever only focused on one segment of market that
is Northern Europe where people washed clothes
separately and in low temperatures. (NICHE
PRODUCT) but sold product in other geographies.
 Failed to test product in all conditions.
 Lagged behind in research of usage norms in different
geographies.
 Effects on business:-
• product was withdrawn
• negative publicity by P&G
• loss of 300 million pounds

14. Q2.Does this case study highlight the
importance of understanding consumer
behavior before a business decides to
innovate a product?
 Yes, because it helps to understand
Difference in consumer behaviors in different geographies
Varied expectations of consumers
Reasons why consumers buy a product
Likes and dislikes of consumers
Impact of brand failure on corporate reputation

15. The significant risk for Unilever was…
• If one product encounters a problem the image of other products could be
damaged
• Dent in brand reputation
• Loss in customer’s trust and confidence in the brand

16. Thank you…