35 million cups of PG tips are drunk every day - enough to fill six Olympic-sized swimming pools. One billion Wall's ice creams are eaten every year. Four Pot Noodles are sold every second. Our products are in 612 million shopping baskets every year – that’s one in six.
Growth of new offer on the international male grooming market is a common strategy in the economic crisis, following new launches by Nivea and Unilever. But, as Proctor & Gamble reports recent 20% fall in men’s grooming sales
Sunsilk shampoo is a hair care product primarily targeted at women, it is sold in 69 countries under a variety of different names. The brand is strongest in Asia, latin america and the middle east. And the Number one in Brazil, Argentina, Sri Lanka and Thailand. Like unilevers strategy, Sunsilk has always concentrated on understanding customers’ needs through market research and gained advantage over others. An example can be seen in Sunsilk in Pakistan, when Sunsilk first entered that market, they did not gain a very strong foothold, however they observed that there was a need for a formula designed for oily hair. Similarly, in Africa their research showed that 70% of women straightened their hairs, they came up with a home straightening solution. They have also innovated through packaging, in India, they understand that people don’t have enough money to buy a bottle, so in India, sunsilk is mainly sold in single sachets.
Similarly Surf understood that in India, most people wash their clothes by hand, and due to the scarcity of water suppliers, rinsing wasted a lot of water and time. They devised a formula where surf excel produced less foam, meaning that clothes can be cleaned quicker and with less water. The same brand, sold in Brazil as Omo, is another example of how Unilever target multiple segments, In Brazil there are three tiers of this brand, a powder premium brand, 2 nd powder brand, and a cheap powder brand. Unilever has 81% market share in the detergents, compared to just 15% from proctor and gamble.
Unilever focuses on emerging and devleoping markets as they see a great opportunity this area can offer, this is called ‘bottom of the pyramid’ where they market to low-income consumers. markets such as this are underserved and and have been identified by Unilever as a multi-trillion dollar opportunity that is largely untapped.Building markets and driving penetration
Once they have gained a strong foothold in these markets, the growth of the new consumers, with higher spending power and lstandard of living means that the predicted billions of people will start to uptrade. Which means that these consumers will be buying more of Unilever’s products and for a longer amount of time.
However, Unilever operates in a highly competitive market, with strong competition with other multi-national companies. Whilst currently, Unilever has a strong presence in these emerging markets, others like P&G have also started to realise the potentials. And in India, there are already battles between these two companies in the detergents sector. Economic downturn – trend towards buying private lables as consumers seek to economise on their shopping budget (trading down).local roots. Therefore, Unilever has to narrow their focus on the attractive areas, and their core strengths in competition.
They decide to concentrate on areas where there is high growth, with clear leadership and continue to invest in these brands. such as this includes Dove, which they envisage as a 2 billion-euro brand.
What marketing lessons can be learnt from Unilever? Uniever showed that it in the current competitive market, it is important to be forward thinking and be innovating to meet the constant changing need of society. It is important to look beyond, to recognise areas of growth To continue to engage in product improvement, line extension and product proliferations to form a fortress defense strategy around the brand by protecting its territories Finally, to review products and understanding the need for focus on more profitable areas by forfeiting others. Leaders sometimes have to recognise that is lacks the capabilities to defend the whole product range against competition, by focusing on the core brands. This is known as contraction defense. When decided to concentrate on 400 brands, they also sold off an US detergent company after price wars with us giant proctor and gamble.
As competition rises, and Unilever are beginning to brand themselves and affiliate ‘vitality’ within all their brands to gain competitive advantage, it would be interesting to see how they will overcome some of the successful campaigns from Dove and Lynx that both hold strong marketing messages, yet completely contradicting.
Unilever strategic marketing
“ 150 million times a day, someone somewhere chooses a Unilever product” Annie Kao Suzanne Haffenden
The origins of Unilever <ul><li>Unilever is an Anglo-Dutch multinational corporation that owns consumer products in; </li></ul><ul><li>Food and Beverages </li></ul><ul><li>Cleaning agents </li></ul><ul><li>Personal care </li></ul><ul><li>Created in 1930 from a merger between the British soap maker Lever Brothers and Margarine Unie </li></ul><ul><li>As palm oil was a major raw material for both soaps and margarines </li></ul>
<ul><li>Unileverlisation </li></ul><ul><li>Mergers and acquisitions – grew through repeated mergers of companies who usually retained their names and brands. This encourage strong belief and initiative to de-centralise control </li></ul><ul><li>Conglomerate </li></ul>Operational Style
Strategic Style <ul><li>Research and Innovation </li></ul><ul><li>Localisation </li></ul><ul><li>Diversification into a broad category </li></ul><ul><li>Multiple segment specialisation - developing products to target every segment. Serving multiple markets whilst differentiating products in a way that meets needs of each segment </li></ul><ul><li>Developing in emerging markets </li></ul>
<ul><ul><li>Brand Expansion </li></ul></ul><ul><ul><li>“ The Beauty Soap of Film Stars” </li></ul></ul><ul><ul><li>Icon Brand </li></ul></ul>
. <ul><li>Research and Innovation </li></ul><ul><li>Different needs for different hair types </li></ul>
<ul><li>Concentrating on emerging markets </li></ul><ul><li>Understanding different consumer needs </li></ul><ul><li>Offering products at different price points </li></ul>
Developing and Emerging Market Opportunity <ul><li>Bottom of the Pyramid </li></ul><ul><li>Multi-trillion dollar opportunity </li></ul><ul><li>Billions of people out of poverty in the next 10 years </li></ul>
Competitive environment <ul><li>Key Competitors </li></ul><ul><ul><li>Proctor and Gamble </li></ul></ul><ul><ul><li>Nestle </li></ul></ul><ul><ul><li>Colegate-palmolive </li></ul></ul><ul><ul><li>Kraft </li></ul></ul><ul><ul><li>Supermarket private lables </li></ul></ul><ul><li>The management of the smaller brands slowed down its growth. </li></ul><ul><li>Whilst their competitors concentrated on global development and economies of scale. </li></ul>
Current Strategies <ul><li>Downsizing brand portfolio –stream line the business portfolio to reflect vitality concept </li></ul><ul><li>1,500 – 400 master brands </li></ul><ul><li>Also, acquisition of high profile food brands </li></ul>
Simon Clift <ul><li>First chief marketing officer for Unilever </li></ul><ul><li>“ Unilever was effectively a holding company – a conglomerate. That led to a very complex brand portfolio, with thousands of formulations, positionings, and ways of developing advertising.” </li></ul><ul><li>(Marketing Week) </li></ul><ul><li>Centralised marketing culture </li></ul><ul><li>Concentrates on building the brands </li></ul><ul><li>New Unilever brand identity </li></ul>
Marketing Lessons learnt <ul><li>Be forward thinking and with constant innovation – looking beyond organisation’s walls. </li></ul><ul><li>Defend its territory through growth and diversification </li></ul><ul><li>Bigger is not always better. </li></ul><ul><li>companies need to contract and recognise its weaknesses. </li></ul>
Future Prospects <ul><li>How will Vitality be brought amongst all their brands? </li></ul><ul><li>How will they overcome two contradicting values? </li></ul>
References <ul><li>Renewing Unilever: transformation and traditionAuthor Geoffrey JonesEdition illustratedPublisher Oxford University Press, 2005 </li></ul><ul><li>International business and national war interests: Unilever between Reich and empire, 1939-45Volume 13 of Routledge international studies in business historyAuthor Ben WubsEdition illustratedPublisher Taylor & Francis, 2008 </li></ul><ul><li>Strategic Marketing PlanningAuthors Colin Gilligan, Richard M. S. WilsonEdition 2, illustratedPublisher Butterworth-Heinemann, 2009 </li></ul><ul><li>Global strategy: creating and sustaining advantage across bordersStrategic management seriesOxford scholarship onlineAuthors Andrew C. Inkpen, Kannan RamaswamyEdition illustratedPublisher Oxford University Press US, 2006 </li></ul><ul><li>Corporate responsibility: a critical introductionAuthors Michael Blowfield, Alan MurrayEdition illustratedPublisher Oxford University Press, 2008 </li></ul><ul><li>Fieldhouse, D. K. (1978). Unilever Overseas: The Anatomy of a Multinational. California: Hoover Institution Press </li></ul><ul><li>Reader, W. J. (1980). Fifty Years of Unilever. London: Heinemann </li></ul><ul><li>Brownsell, A. (2009). Can Unilever's brand be applied to all? Marketing News [online] http://www.marketingmagazine.co.uk/news/874428/Unilevers-brand-applied-all/ [accessed 16 th April 2010] </li></ul><ul><li>Frost, R. (2005). Should Global Brands Trash Local Favorites. Brandchannel [online] http://www.brandchannel.com/features_effect.asp?pf_id=253 [accessed 16 th April 2010] </li></ul><ul><li>Boze, B. V. & Patton, C. R. (1995). 'The future of consumer branding as seen from the picture today'. Journal of consumer marketing . 12 (4), pp. 20-41 </li></ul><ul><li>Mesure, S. (2002). Nestle steps up ice-cream war with Unilever by buying Dreyer's. The Independent. [online] http://www.independent.co.uk/news/business/news/nestlatildecopy-steps-up-icecream-war-with-unilever-by-buying-dreyers-645661.html [accessed 16 th April 2010] </li></ul><ul><li>Anon. (2010). One for all: Unity and growth at Unilever. Emerald Group Publishing. 26 (4), pp.25-27 </li></ul><ul><li>Schwarzkopf, S. (2009). 'Discovering the Consumer: Market Research, Product Innovation, and the Creation of Brand Loyalty in Britain and the United States in the Interwar Years' . J ournal of Macromarketing . 29 (1), pp.8-20 </li></ul><ul><li>Jones, G. & Miskell, P. (2007). 'Acquisitions and Firm Growth: Creating Unilever's Ice Cream and Tea Business'. Business History. 49 (1), pp.8-28 </li></ul><ul><li>Anon, (2005). 'Can Unilever create a masterpiece: Competition challenge to a consumer-goods leader'. Emerald Group Publishing. 21 (5), pp.11-14 </li></ul><ul><li>Anon. (2009) 'The changing face of Unilever: Out with the old and in with the new' . Emerald Group Publishing Limited. 25 (5), pp.24-27 </li></ul><ul><li>Jones, G. (2005). Renewing Unilever: Transformation and Tradition. Oxford: OUP </li></ul>