Turning the Tide: Lessons from Lux and Coca-Cola

When a brand faces an attack by external factors, it is crucial to respond strategically to protect its reputation and maintain consumer trust. The two cases of Lux vs Aromatic on the Halal-Haram soap controversy and the recent boycott of Coke or pro-Israeli brands provide valuable insights into how such crises can be managed.

In the case of Lux and Aromatic, Aromatic, a new soap company, claimed that their soap was Halal because it was made from vegetable oil. They targeted Unilever's soap brands like Lux, Lifebuoy, and Rexona, which used tallow in their soap blend. By exploiting consumers' religious feelings, Aromatic gained a significant market share, leading to a substantial drop in revenue for Lever (currently known as Unilever) Bangladesh. It was the first time the company had incurred such significant losses since its inception in 1963. Unilever's internal findings revealed that the decline was also due to complacency in product quality, as their dominant market position had led to a lack of innovation and effort.

Unilever responded by declaring a crisis situation and implementing a series of strategic actions. Instead of engaging in the Halal-Haram debate, which was against their corporate policy, they focused on improving product quality. They redesigned their soap manufacturing facilities to use vegetable oil and imported soap noodles from Malaysia to react faster. Despite the time it took to implement these changes, Unilever's focus on quality and a comprehensive product relaunch for Lux and Lifebuoy eventually helped them regain their market position. In Bangladesh, marketing products based on religious sentiments was perceived to be illegal. The company made efforts to lobby at the governmental level, but these efforts proved unsuccessful due to the opposition of a powerful minister, whose reasons for opposition remain speculative. Today, the case of Aromatic remains a case study book.

On the other hand, Coca-Cola recently faced a boycott in Bangladesh for its perceived associations with pro-Israeli or pro-American sentiments. The local brand Mojo capitalized on this sentiment by aligning itself with pro-Palestinian views. Coca-Cola attempted to counter the boycott by challenging the misconceptions directly. However, their efforts backfired and became a global case overnight. A global company like Coca-Cola may consider implementing a comprehensive strategy that includes innovative and large CSR projects, promoting product quality over competition, introducing new health products, or emphasizing local contributions to the Bangladesh economy. Additionally, Coca-Cola could have strengthened their local engagement through local platforms like Coke Studio, which might have helped mitigate the negative impact. It may not have given them an immediate revenue increase, but it could possibly create a strong foundation to regain lost ground gradually.

In comparing these two cases, Unilever handled the crisis more effectively than Coca-Cola. Unilever's approach was strategic and focused on long-term sustainable solutions. By improving product quality and manufacturing processes, they addressed the root cause of consumer dissatisfaction and gradually restored their market position through a well-executed product relaunch. Coca-Cola's response was more reactive and lacked the comprehensive strategic elements that could have reinforced its brand during the boycott. A silent approach to combat the battle could have been more productive for Coke.

When a brand and its products are attacked by external threats triggered by geopolitical or religious issues, it is crucial to respond thoughtfully and strategically. Staying informed and maintaining neutrality is essential to avoid alienating any group, while transparent communication through multiple channels helps address concerns without bias. Monitoring and adapting strategies based on feedback, focusing on long-term relationships with stakeholders, and maintaining a crisis management plan ensure preparedness and resilience. They help in navigating external threats, maintain consumer trust, and protect the brand’s reputation.

The author is the ex-CEO of Robi & founder and Managing Director of BuildCon Consultancies Ltd