Unilever strategic marketing final project

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Unilever strategic marketing final project

  1. 1. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT1A PROJECT OF STRATEGICMARKETING ON“UNILEVER PAKISTAN INC.”
  2. 2. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT2PRESENTED TO:SIR ABDUL QAYYUM QURESHIPRESENTED BY:Mr Muhammad Tayyab 111405Mr Bilal Ahmad 103145Mr Farooq Haider 103119Mr Muhammd Irfan 103125Mr Shahid Aziz 111125
  3. 3. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT3ContentsACKNOWLEDGEMENT........................................................................................5PREFACE ............................................................................................................5Introduction:......................................................................................................7History ...............................................................................................................8Merger With Brooke Bond..............................................................................9Acquisition......................................................................................................9Product Mix ....................................................................................................9Surf Excel........................................................................................................10Fair & Lovely Skin Cream and Lotion.........................................................11Blue Band.......................................................................................................11Pearl Dust.......................................................................................................12Taaza ..............................................................................................................12Vision Of Lever Brothers Pakistan Limited ....................................................13Mission .........................................................................................................13Organization Philosophy..................................................................................14People...........................................................................................................14Customers.....................................................................................................14Suppliers.......................................................................................................14Integrity........................................................................................................14Environment responsibility...........................................................................14Profit.............................................................................................................15Organization Key Value.................................................................................15Critical Success Factor...................................................................................15Concern For Different Stakeholders..............................................................15Form And Sources Of Competitive Advantages.............................................15Objectives of Lever Brothers Pakistan Limited..............................................16These main targets and objectives are:.........................................................17Strategic Management At Lever Brothers Pakistan Limited .............................18
  4. 4. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT4Corporate Level Strategy ..............................................................................18Business Level Strategy.................................................................................19Operational Level Strategy............................................................................20Organizational Structure and Management:....................................................20Five Porter forces, which determines an organization’s structure: ..................22Threat of New Entrants.................................................................................23Threat Of Substitutes....................................................................................23Buyer Power .................................................................................................23Supplier Power .............................................................................................23Competitive Rivalry.......................................................................................23Market Segmentation......................................................................................24Target Market..................................................................................................24Product Positioning:.........................................................................................24Marketing Tools...............................................................................................24Product.........................................................................................................24Price..............................................................................................................25Place .............................................................................................................25Promotion.....................................................................................................26Manufacturing Globally ...................................................................................26Major Selling Products and their market share................................................27Global Competition..........................................................................................27Sales Revenue & Value of Stocks .....................................................................28Value of Stocks: ............................................................................................28SWOT ANALYSIS...............................................................................................28STRENGTH ....................................................................................................29WEAKNESSES ................................................................................................29OPPORTUNITIES............................................................................................29THREATS .......................................................................................................30Conclusion and Recommendation ...................................................................30
  5. 5. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT5Reference .....................................................................................................30ACKNOWLEDGEMENTWe would like to pay our praises and humblest thanks to AL-MIGHTYALLAH, the most Merciful and Beneficiate of all, who bestowed us with theability to complete this project. It gives us immense pleasure and honor toextend our thanks to our kind & cooperative. Sir Abdul Qayyum Qureshi fromFaculty of Institute of Management Sciences, Lahore for his valuable advicesand suggestions throughout our semester, in order to perform well & up tomark..Finally, we pay regards of gratitude to our parents, as they and their prayers forOur success are always been a pillar of strength for us in our life.PREFACEQuality without creativity is meaningless. As changes grow ever moreunpredictable creativity is rapidly becoming recognized a core managementskill.Today’s business environment demands that manager’s posses a wide range ofknowledge skills and competencies, as well as sound understanding ofmanagement process and function. Managers need to be able to make best useof their time, talent and of other people to work with and through others toachieve corporate objectives. They also need to demonstrate their ability notmerely to solve problems, but to transform them and design ways through them.This report concerns needs and changing needs and their satisfaction level,which are the important function in every organization.
  6. 6. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT6
  7. 7. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT7Introduction:Unilever is one of the world’s largest and leading multinational companies; Unilevercommenced their business activities on a larger scale by setting up their first factory inNetherlands, in the year of 1890. Operating in Pakistan for over the last four decades thecompany is trying to significantly contribute towards the augmentation of the standard ofliving by bringing world class high quality products at the door step of their customers. Theusage of Unilever products by over 90% of the people in Pakistan stands a testimony to theirsuccessful operation. . Their array of products show that they produce household care, fabriccleaning, skin cleansing, skin care, oral care, hair care, personal grooming, and tea basedbeverage products under worldwide famous brand names Wheel, LUX, Lifebuoy, Fair &Lovely, Ponds, Close Up, Sunsilk, Lipton, Lipton Taaza, Pepsodent, All Clear, Vim, SurfExcel, and Rexona.
  8. 8. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT8HistoryLever Brothers Pakistan Limited is a multinational organization. Unilever PLC London is itsparent company. Unilever is a European based company with headquarters in London, andtheir shares are quoted at the stock exchange of several European countries. They deal in allkinds of products from animal foodstuff to foods and detergents plus other personal andconsumer products. Unilever has its subsidiaries in over 80 countries of the world, to which itspreads its vast knowledge and resources.William Lever (its originator) commences business in England as a grocer. He establishedLever Brothers in 1827 in England Sunlight was the first product of Lever Brothers, whichmakes the beginning of the marketing of branded products at the same time Margarine Uniwas established in Nether Land by Simon Van Berg and Anton Jurgens. These twocompanies in term of:Buying raw materialSelling finished goodsConsequently both the companies loosing out money in term of profit. These problems led tothink of the mergers in 1930. These two companies merged together and renamed thebusiness as Unilever PLC / the word UNI is taken from margarine Uni and Lever is takenfrom Lever Brothers. Its head quarter was established in England and Rotter Dam.Unilever has 500 operating companies in 80 countries. It has 0.3 million employees andturnover of sales in 23000 million pounds. The global business proportion is 60% in Europe20% in North America and 20% in rest of the world. An identified board of directors controlthe activities of subsidiary companies throughout the world. Lever Brothers Pakistan Limitedstarted its operations in 1948. A merger of Sadiq Vegetable Oils and Allied Industries existedin Rahim Yar Khan was taken place with Lever Brothers and HVM company based atKarachi. As a result of merger Lever Brothers Pakistan Limited was incorporated as anindependent Unilever operating company in 1955. The company is quoted on the Karachi,Lahore and Islamabad Stock Exchanges. Lever Brothers Pakistan Limited has around 1900employees in Pakistan.
  9. 9. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT9Lever Brothers Pakistan Limited played a dynamic role in boosting consumer productsmarket. It stand at a unique position due to its honesty and integrity. Lever Brothers PakistanLimited’s main divisions of business are:Merger With Brooke BondBrooke Bond Pakistan Limited was incorporated in 1948. Company’s 40% shares are held byUnilever, 21% by financial institutions, 24% by individuals, and 10% by insurancecompanies. The company is quoted on Karachi and Lahore Stock Exchange market. Thecompany is manually engaged in the blending, packaging and marketing of tea. It also has asmall business in the sale of packing apices. And has three manufacturing locations situatedin Karachi and Khanewal. It also have three regional sales offices. The head office of thecompany is located in Karachi.After the amalgamation of Lever and Brooke Bond, Unilever will have a majorityshareholding in the combined company and it will provide a comparable level of technical,management and financial resources. The proposed merger will benefit the consumer in termof price and quality.AcquisitionLever Brothers Pakistan Limited acquire the shares of Pakistan Industrial Promoters Limited,Mehran International Limited and Ambrosia International Limited, which is known as PolkaGroup of Ice Cream Companies.Product MixAt present Lever Brothers Pakistan Limited is engaged in marketing of diversified varietiesand classes of products and playing a dynamic role in boosting consumer product market. Itstand at a unique position due to its honesty and integrity. Lever Brothers Pakistan Limitedhas both product length and depth i.e. it has by length a largest of product lines available andunder each product line there are lots of variants like different weights, 100mg, 500mg,1000mg, sache pack, family pack or in case of ice creams different brands have lots of flavoravailable which determines its product depth. So different no of product lines are calledproduct length and no of products in each product line are called depth of product line. LeverBrothers Pakistan Limited’s main product groups are listed below:
  10. 10. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT10Home And Personal CarePersonal Wash (PW)Toilet SoapsLifebuoy (Carbolic Soap)Lifebuoy PlusLifebuoy GoldLux (in 4 varieties)Rexona (in 2 varieties)LirilHammanFair & Lovely SoapFabrics And Home CareFabric WashSurf ExcelPower SurfSunlight Washing PowderSoap WheelHome CareVim Dish Washer / ScourersVim NSD Bard (in 2 varieties)Vim Powder Poly Bag
  11. 11. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT11Personal ProductHair CareSunsilk Shampoo (in 7 varieties)Harmony SoapLifebuoy ShampooSkin CareFair & Lovely Skin Cream and LotionDental CareClose-up Tooth PastePepsodentOil And Dairy Based FoodsBanaspatiDaldaCooking OilDalda Cooking Oil(Soya Bean)Dalda Sunflower OilPlantaMargarineBlue BandIndustrial FatsA whole range of product for bakery and oils for the industry.BeveragesLeaf Teas
  12. 12. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT12Yellow LabelYellow Label – DanedarRichbruTop StarTaaza LeafSupremeBrooke BondDust TeasPearl DustRuby DustLaojeeMixture TeaTaazaIce CreamCornetto (in 3 varieties)Feast (in2 varieties)Feast SticklessTop TenStar Cup (in 4 varieties)Sundae ( 2 variant)Chocu BarMinimill
  13. 13. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT13SolaJet SpotIce LollyWall’s KulfiPandaPop Corng ThreeVision Of Lever Brothers Pakistan LimitedThe vision of Lever Brothers Pakistan Limited is driven by is the commitment to excel andwe are here to sell aspiration not brand. So, the core vision is integrating and that is to excelin every field whatever Lever Brothers do to provide customer delight and value. The LeverBrothers have been able to follow the track set by their vision and to achieve the standards setby their customers.Mission“We meet everyday needs for nutrition, hygiene and personal care with brands that helppeople feel good, look good and get more out of life”."Lever brothers will be the foremost consumer product company in Pakistan with care, skin,ice cream and spread. Already positioned in tea, hair, dental and household care, substantiallyprofitable position in cooking oils and fats our strengths come from our people and fromcombining the best of our international as well as Pakistan origin. Our commitment is tocontinuously care for the need of our customers, consumers, employees, suppliers, shareholders and the community in which we live."As one of Unilevers leading brands, it has always been Walls mission to add vitality to yourlife - while being responsible about good nutrition
  14. 14. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT14Organization PhilosophyPeoplePeoples are key to strengths of Lever Brothers Pakistan Limited. The development of theirpotential is core to Lever Brothers Pakistan Limited business.So they provide extensive attention to developing human resources.CustomersLever Brothers Pakistan Limited is the customers focus organization. They do delightcustomers with their products and service. Their brands always deliver the high quality asthey premise. Lever Brothers Pakistan Limited pays extra attention to the complaints ofconsumers. e.g. if the consumer complaints that detergent harmed any cloth or skin they sendthe sample for lab test a team analyzes that customer complaint is right or not and then theysend the detailed response to customer along with gift of their products. With a questionnairefor suggestion for further improvement on the top of which is written “WE CARE ABOUTYOU”.SuppliersSuppliers are considered the partners of Lever Brothers Pakistan Limited and Lever BrothersPakistan Limited maintain mutually beneficial relationship with them.IntegrityLever Brothers Pakistan Limited never compromise on integrity management adhere to highstandards in all they do.Environment responsibilityManagement adhere to all national and Unilever standards to ensure health, safety andprotection of the environment in which they live and work.
  15. 15. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT15ProfitIt is considered to be the ultimate measure of Lever Brothers Pakistan Limited’s performanceand it is required to maintain and grow their business.Organization Key ValueIt defines that what do they want. They people of organization to be good at or how do theywant them to behave and this very clearly stated in mission statement as always stayresponsive to change, go for innovation, employee commitment to organizational objectivesand mission and creating value for customers. So, if we check the mission statement throughthis aspect then we can easily state that they have clearly stated what should be theorganizational key values and how to reinforce them.Critical Success FactorThe central issue of this factor is that what do they have to be good at to succeed in thismarket or industry. The mission statement outlines this as “adopting a broad view of ourmarket, by seeking the new opportunities in the core categories and by staying closer to allconsumers than competitors and understanding their evolving needs and focusing on constantdelivery of superior value for our brands through innovation”.So far them critical success factor is consumer connectivity and commitment to excel and toprovide superior value to customers and products of superior quality and value.Concern For Different StakeholdersMission statement describes that what are the obligations to different stakeholders i.e.stockholders, employees, suppliers, customers and community at large. Lever BrothersPakistan Limited’s mission statement contains concerns about all stakeholders. First beforemost consumers and then other stakeholders and describes it as: “Through itscommitment to high level of core and safety for its employees, its consumers andenvironment. Lever Brothers Pakistan Limited will be exemplary and will participate in thedissemination of such practices in Pakistan”.Form And Sources Of Competitive Advantages
  16. 16. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT16Mission statement of Lever Brothers Pakistan Limited completely describes the form andsources of competitive advantage as:“Competitive advantage will be developed by driving down relentlessly on relative costpositions and outpacing competitor’s in operational efficiency improvements and throughbuilding strong network of distributors and by developing a strategically focused organizationand by motivating its personnel to use its full potential of creativity and commitment and bymaintaining the higher standards of operational control”.They are going for unique combination of cost reduction and superior value to customers sothey entirely provide the form and source of competitive advantage that what they wanted toachieve and how they will achieve it.Objectives of Lever Brothers Pakistan Limited1. Their main objective is to have a double-digit growth and resultant cash flows willbe utilized in improving the product quality and contents to enhance the valueto customer and final users.2. Lever Brothers Pakistan Limited has an objective to have a responsive supply chainand technological based processes.3. They want to have consumer connectivity, i.e. they want to know what they eat,drink, how they spend their lives, what are their preferences. So in this waythey wan to be very close to customer, to know their real insight and desires sothey can develop new strategy for product design and can implement theirstrategy in better manner i.e. avoidance of hit and trial approach and hitting theright target with right strategy at right time in right and accurate manner.4. They want to be cost efficient i.e. they want to reduce in their cost of production,cost of transportation, distribution and packaging cost and finally reducing allthe human cost to offer a competitive price to customer maintain the highstandards of quality.5. To have a partnership with their suppliers to enable them to provide high qualitylow cost material.6.Have entered and will be aggressively developing new markets.
  17. 17. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT177.Be exciting to their customers with stream of innovative products.8.To be no in all their existing markets.These main targets and objectives are:1.Profits2.Consumerism3.Welfare of consumerThe first objective of Lever Brothers Pakistan Limited is to earn maximum profit but keepingin view the customer demands as well company deals in those products which are profitable.If there are any indication that any item is not good from profit point of view, it will try tofind out the reasons. Will soon what steps should be taken to overcome these reasons.Company will introduce different marketing strategies if there are problems in marketing.Here I would like to code two very famous examples, 1stof Sunlight soap and Sunlightwashing powder of Lever Brothers Pakistan Limited.Lever Brothers Pakistan Limited initially developed a sense of consumer to use washingpowder other than washing soap, consumer switched s a result towards Sunlight washingpowder, i.e. popular segment of washing powder and than the market share for Sunlight soapdeclined with passage of time, now the consumer who realized the convenience of washingpowder started using it, but at the same time, as a result marketing strategy of Lever BrothersPakistan Limited awareness of people, people switched to surf and wheel i.e. premiumsegment detergents. Finally due to the decrease in the market shares and sales volume ofSunlight soap and was light powder Lever Brothers Pakistan Limited management finallydecided to stop the production of this very product i.e. it is now obsolete.Second example is related to the change of brand name of Surf to Surf Excel. The reasonbehind was introduction of competitor’s brands like Arial by P&G which had brightnessfeatures, which caused the people to switch from Surf to Arial, Lever Brothers PakistanLimited realized the fact due to disturbance in sale volume of Surf and introduced new brandname “Surf Excel” with extra brightness power.
  18. 18. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT18Company also takes into consideration the welfare of the consumer. It takes into mind thetaste and habits of the customer. They pay much attention on the customers’ complaints. Italso works for the welfare and interest of Pakistan, as it is an environment friendlyorganization.Strategic Management At Lever BrothersPakistan LimitedNow we will proceed with strategies being pursued by the Lever Brothers Pakistan Limited atdifferent organizational level. First we will discuss the corporate level strategy.Corporate Level StrategyAt corporate Lever Brothers Pakistan Limited is pursuing the strategy of verticaldiversification i.e. driving away from the previously adopted strategy of vertical integrationi.e. now they don’t want to perform more than one step of the processes involved inconverting raw materials into a product delivered and ready for consumption. Lever BrothersPakistan Limited’s operations are so complexed and involves 200 brands in Pakistan so nowthey wanted to reduce the operational complexity and going for strategic alliances with theirsuppliers, instead of producing themselves and going into complex operations now they wanttheir suppliers to produce for them.The outsourcing the production so that they don’t have to invest heavily in the production andto reduce the capacity problems, they now going for the third party contracting to producethemselves and now they want them to be restricted to marketing and distribution ofproducts.Diversification strategy is being pursued by the Lever Brothers Pakistan Limited but theymainly go for related diversification as against unrelated diversification for conglomerates,they are diversified into number of businesses as mentioned earlier but they are all related toconsumer products. Through vertical diversification they will be able to eliminate theoperational complexity and costs of buying and selling i.e. the transactional costs. Now theymainly wanted to step away from operations and want to focus more on customers.
  19. 19. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT19As means of diversification which are being utilized by the Lever Brothers Pakistan Limitedas all the time, been acquisition, neither joint ventures i.e. strategic alliances nor the internaldevelopment. Here we can take the example of the acquisition of Brooke Bond and Polka forexample which have Brother acquired through a hostile takeover. And to step away fromoperational complexities now they go for subcontracting with the suppliers and want them toproduce for Lever Brothers Pakistan Limited as in case of oil and ghee and soap and with thepassage of time will also be implemented in other categories as well.Business Level StrategyAt business level Lever Brothers Pakistan Limited is adopting a very unique and interestingset of strategies. First and foremost strategy they want to follow is the cost leadership. Theywanted to control cost as much as possible and want to reduce cost by every mean.First cost efficiency is achieved through outsourcing operations and stop producingthemselves and go for cost efficient subcontracting.Second they want to achieve cost efficiency through responsive and cost efficient supplychain, want to be in touch with suppliers all the time and for that they have connectedthemselves with the suppliers and to their suppliers as well to minimize cost related toforecasting now they want better forecasting through computer networks so to get the realtime information about the inventory, stock, demand and supply. They are now reducing theinventory as well as average carrying the inventory of only 3 days and getting closer to theconcept of just in time except for those products for which they have to brought in rawmaterials from far flung areas like tea and moreover routings of logistics as well like airrouting or ship routing to curtail the costs other than cost efficiency, they have adopted thestrategy of consumer connectivity i.e. want to stay closer to consumers rather to operationsand want to focus all alternations to consumers through more research and customer profilesand demographics and wants to explore new customers and usage of products.To get customer connectivity they do the market research to check the trends of theircustomers. The do pre-launch, post-launch research, e.g. their did before and after lunchingwhile antidandruff Sunsilk. The response was quite encouraging. Hence basically customerand market research and customer feedback, free samples distribution before and afterlaunching new product / brand/ variant is aiming their basic strategy to implement andachieve the customer connectivity and to fulfill their customer demand.
  20. 20. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT20Here Lever Brothers Pakistan Limited has used the strategy of product development i.e. bymodifying and improving their Sunsilk it into Sunsilk antidandruff (white), they haveincreased their sales. They are applying “Market and Development Strategy” as well in whichby introducing present product (Sunsilk) into a new demographic area i.e. dandruff consciousmarket segment with the launch of only new variant i.e. Sunsilk antidandruff white. Theyhave added conditioner in it as initially the conditioner was missing in all shampoos ofSunsilk. While it is available in competing brands of P&G.Other than these two strategies another very important strategy is being followed by tgeLever Brothers Pakistan Limited i.e. focusing on core brands or want to have a very focusedon brand portfolio in which they wanted to get rid of the slow moving brands like in Surfyou will get number of further variants like Surf Ultra, Surf Micro, Power Surf etc. and inSunsilk number of variants, Black, Green, Pink, etc. to name a few and how they havecurtailed all these slow moving brands like focusing attention to Surf Excel only and in caseof Sunsilk Black and White (antidandruff) and discarding slow moving items like SunsilkPink and Green etc.So, to avoid cannibalization effect now instead of number of brands to flood in the marketonly few better and improved brands, cash generating and more focused towards customers.Operational Level StrategyAt operational level, Lever Brothers Pakistan Limited has always adopted the strategy ofTQM only never went for CPR i.e. they have not come up with a new brand in last few years.Only the improvements or new variants in existing brands or using the same old brand nameto introduce a new product like Lifebuoy Shampoo or Fair & Lovely Soap. So it can easily besaid that they believe more in adopting changes rather generative ones or go for single looplearning only because according to them its very very expensive to introduce a new brandname.Organizational Structure and Management:Lever Brothers Pakistan Limited restructure the organization after the merger with BrookeBond Pakistan Limited. The chairman is the executive officer of Lever Brothers PakistanLimited. He leads the seven members management committee, which is the top of decisionmaking. The management is responsible for corporate strategy of Lever Brothers Pakistan
  21. 21. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT21Limited and for initiating policies and overall planning as well as their general managementduties. Management committee members are each responsible for specific function.Reporting to the management committee members are departmental heads who areresponsible for advising the management committee for planning and implementation ofpolicies for ensuring that targets are reached. The committee includes:Mr. Lain Strachan Sangster (Chairman & Chief Executive)Mr. Mashkoor Alam (Vice Chairman)Mr. Mujib-ur-Rehman (Technical & Logistics Director)Mr. Perwaiz Hassan Khan (Director Personnel)Mr. J. A. Lee (Director Sales)Mr. A. D. Bandaranayake (Director Commercial)Mr. N. I. Khockhar (Business Unit manager ODF)Mr. Clive David Welland (Director Food Business)Board Of DirectorsThe board of directors control the whole operation of the organization it includes thefollowing personalities:Mr. Lain Strachan SangsterMr. Syed Babar AliMr. Fateh Ali W. VellaniMr. Mujib-ur-RehmanMr. Perwaiz Hassan KhanMr. J. A. Lee
  22. 22. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT22Mr. Clive David WellandMr. Dr. A. D. BandaranayakeMr. S. N. PatelMr. M. Asadullah SheikhMr. Abdul GhaniBachaniMr. Azim Azmat OsmanAs we can notice that the management of the company is composed of a mix of internationaland Pakistanis business professionalists. The management of the company includes SyedBabar Ali as director, who is also involved in many other organizations i.e. Packages andother industries. It includes in its board meetings one member from each province i.e. Punjab,Sindh, NWFP and Baluchistan. The top management of the company is fully professionalspecially marketing department which is headed by Mr. Jeff Lee who have world wideexperience in this field.HierarchyBranch structureAll over Pakistan 6 branches of Lever Brothers Pakistan Limited are working. Its head officeis located in Karachi at Avari Towers. The chairman and management committee as well asthe most of the department heads have their offices there.Five Porter forces, which determines an organization’sstructure:1.Threat of new entrants2.Threat of substitutes3.Buyer power
  23. 23. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT234.Supplier power5.Competitive rivalry.Threat of New EntrantsThis potential threat always exist in every organization. But an organization like LeverBrothers Pakistan Limited this threat is very minimum because you need a giant to competewith another giant like Lever Brothers Pakistan Limited and in a relatively small market likePakistan, they are enjoying the highest market shares in most of their product categories likeghee, oil, soaps, spread, fabric care, etc. so, they face no threat of any new entrant.Threat Of SubstitutesSame as in the case of new entrant no as such threat they are facing.Buyer PowerTo determine buyer power one condition is always necessary i.e. the buyers are few so theyexert power over an organization. But this condition is not present in case of Lever BrothersPakistan Limited, they have very diversified product categories and within each category theyhave brands targeted at almost each and every segment of the market so they don’t face thebuyers power as such but still “customer is king” and they do have to pay a lot of attention tobuyers being a consumer product company.Supplier PowerSuppliers don’t exert any power over Lever Brothers Pakistan Limited rather Lever BrothersPakistan Limited provides buyer’s power in this case, no body would like to loose a buyerlike Lever Brothers Pakistan Limited so, they don’t face any significant supplier power.Competitive RivalryCompetition is intense but not cut throat competition and all of them avoid frontal assault ordirect attack. So, situation of healthy competition exist. Competitive rivalry would bediscussed more in detail in the section “competitor analysis”.
  24. 24. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT24Market SegmentationUnilever Pakistan Ltd. segments their market according to geographical areas. Thepopulation of the country is segmented into three parts which are urban, sub urban and ruralarea consumers.• Urban Richz• Urban and Sub Urban Middle Class• Rural PoorTarget MarketA research carried out by Unilever Pakistan reveals that urban rich people are more likely tobuy imported and expensive products. Moreover rural poor people tend to buy cheap productseven without evaluating its quality. However urban and sub urban upper middle and middleclass people tend to buy affordable and quality products.Product Positioning:Unilever Pakistan Ltd obtained a good position in the buyers’ mind through better productattributes, price and quality, offering the product in a different way than the competitors do.The company offers improved quality of products in the industry at an affordable price withhigh branding, which ultimately helps to position the product in the buyers’ mind as the bestquality detergent.Marketing ToolsProductThough manufactured in Pakistan for the local market by Unilever Pakistan Ltd, as aninternational brand, it maintains an international quality for the product. Formula given byResearch and Development departments in foreign countriesSURF EXCELAdvance
  25. 25. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT25TropicalSmall & mightyAutomaticBlue detergentQuick washPriceThough Unilever Pakistan gives its Surf Excel customers a lot in terms of the product itself, itcannot provide a better pricing. This is due to some constraints in the detergent industry.Detergent is a product with a vulnerable demand in Pakistan. A change in price has a highrisk of creating price war among the rivals which will eventually cause a loss of profit. Itsprices are almost equal to its competitor. Company carries out research on competitors’ priceand brand loyalty when it feels extreme necessaity of chaging price. The brand loyalty test isan exploratory research which is known as Brand Health Check-Up (BHCU).2kg 1kg 500g 100g 60g 25gRs405 Rs210 Rs115 Rs20 Rs10 Rs05PlaceUnilever Pakistan Ltd. has a huge distribution channel for Surf Excel all over the country asits sales reach more than 10 million bags/pieces a year. The company has six hugewarehouses, one in each division of Pakistan.The company does not use its own fleet of transport for distributing its product. However, ithas outsourced its distribution process to various third party distributors, exclusivelydedicated to Unilever Pakistan Ltd. These distributors then supply the product all overPakistan to a huge number of retailers. Even though Surf Excel targets the urban and suburban middle and upper middle class people they are distributing their products all overPakistan because of a recent increase in demand of its product to all segments of thepopulation.
  26. 26. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT26PromotionUnilever Pakistan undertakes huge promotional activities to promote Surf Excel which hastopped the detergent industry of Pakistan. It spends almost 20% to 25% of its Net Proceedsfrom Sales (NPC) of Surf Excel for promotional activities for Surf Excel.Unilever Pakistan Ltd spends a huge amount of money for promoting Surf Excel through TVcommercials, newspaper advertisements and billboards. Moreover it also undertakes smallpromotional campaigns at different schools, colleges, universities and recreational parks withwinners of its different Contests. Till now promotional activities of Surf Excel has alwaysbeen successful which has made it a household common name and helped it reach almost onebillion taka sale value in the year 2004.Surf Excel has been widely advertised in Pakistan ever since the brand was introduced. SurfExcel remains the leading detergent brand in Pakistan, representing the clean and stylish classof Pakistan. Things started with a TV show called Lux Style Ki Duniya where Surf Excel isalso promoted but at a low rate.Manufacturing GloballyUnilever now owns more than 400 brands, many of them local that can only be found incertain countries. Unilever markets its products to 150 countries. Unilever has a portfolio ofbrands that are popular across the globe - as well as regional products and local varieties offamous-name goods. This diversity comes from two of their key strengths: Strong roots in local markets and first-hand knowledge of the local culture. World-class business expertise applied internationally to serve consumerseverywhere.The brands fall almost entirely into three categories: Food & Beverages, Home Personal Care
  27. 27. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT27Major Selling Products and their market shareOne of the largest consumer goods firms in the world, Unilever produces numerous brandname foods, personal care items, and home care products.About 54 percent of revenues are generated in the foods sector, which includes such brandsas Knorr soup mixes, bouillons, and seasonings; Amora, Calvé, Hellmanns, and Wish-Bonedressings; Bertolli olive oil and other Italian foodstuffs; Rama, Blue Band, and CountryCrock margarines; Becel and Flora heart-healthy foods; Heartbrand, Ben & Jerrys, andBreyers ice cream; Lipton tea; and Slim-Fast weight-management products.Approximately 28 percent of sales come from the personal care area. Brands include the Luxfemale beauty line, Dove and Lifebuoy soap, Ponds skin care products, Rexona deodorants,Suave and Sunsilk hair care items, Signal and Close Up oral care products, and the Axe malegrooming line, as well as such miscellaneous brands as Q-Tips and VaselineUnilevers third major sector is that of home care products, which is responsible for about 18percent of turnover; brands include Omo, Skip, Wisk, Surf, and All laundry detergents,Comfort and Snuggle fabric conditioners and softeners, Sunlight dish detergents, and Cif andDomestos household cleaners. Unilever maintains more than 300 production facilities aroundthe world and has operations in more than 100 countries. About 34 percent of revenuesoriginate in Western Europe, 22 percent in North America, 18 percent in the Asia-Pacificregion, 13 percent in Latin America, 9 percent in Africa, the Middle East, and Turkey, and 4percent in central Europe/Russia.Global CompetitionTop Unilever Competitors:Company LocationProctor & Gamble Cincinnati,OHKraft Foods Northfield, ILNestle Vevey, Switzerland
  28. 28. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT28Sales Revenue & Value of StocksUnilever’s mission is to add vitality to life. It is estimated that people around the world in 150countries uses Unilever products 150 times a day. The 2006 sales revenue was 39.6 billionpounds. Which came from the Americas 13.8 billion (36%), from Europe 15.0 (38%) billionand from Asia/Africa 10.9 billion pounds (27%). Unilever has approximately 206,000employees working all over the world.By 2010, Unilever plans to improve its financial standard by: Ungearearing free cash flow in the period 2005-2010 of €25-30 billion improvement in Return on Invested Capital Underlying sales growth of 3-5% p.a. Operating margin of over 15% by 2010 after normal restructuring Improving capital and tax efficiencyValue of Stocks:Unilever PLC ordinary shares are listed on the London Stock Exchange and as AmericanDepositary Receipts in New York. Each ADR represents 1 underlying ordinary PLC share.There are 1 714 727 700 NV ordinary shares in issue, each with a nominal value of €0.16.There are 1 310 156 361 PLC ordinary shares in issue, each with a nominal value of 31/9pence. The equalization agreement between NV and PLC is such that each NV ordinary sharehas the same rights and benefits as each PLC ordinary share (Unilever NV ordinary sharesare listed on the stock exchanges in Amsterdam and as New York shares on the New YorkStock Exchange).SWOT ANALYSISSWOT analysis is done to know what the strength and weaknesses of the brand are and whatare the opportunities and threats that company has to face from the environment.
  29. 29. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT29STRENGTH Unilever is a big multinational company. Sound and experienced management. Excellent marketing department assisted by a highly regarded marketing researchunit. R&D and financial support from parent company i.e. lever brothers. Management of product is familiar with the psychographics and demographic of theconsumers. Strong brand image and brand awareness. Market leader as it has a 43% share. Large sales force. Strong and healthy relationships with distributors and retailers.WEAKNESSES Low market share in N.W.F.P. Loss of market share to some of its own products, i.e. Rexona against LUX.OPPORTUNITIES High rate of population growth. Rising literacy.
  30. 30. [STRATEGIC MARKETING] UNILEVER PROJECT REPORT30 Market opportunity to penetrate in the new segments and market by the style andhygiene consciousness of the people.THREATS Possible increase of market share of P&G and Nestle Rising inflation, which reduces personal disposable income of consumers? Profit margin is exposed to rupee devaluation.Conclusion and RecommendationUnilever Pakistan take best part in social activities for welfare programmeThey are market leader to give more value to their customersTheir strong positioning strategy to attract more customers in the FMCG marketIn emerging market they have more customers then competitor.They take training program about awareness of brand and also activities in urban andrural areas to promote product.They take spot sale in rural as promotion sales.They have market opportunities to penetrate in the new segments and market by thestyle and hygiene.Referencewww.unileverpakistan.comwww.unilever.comwww.slideshare.comwww.google.comwww.vickipedia.com/uniliverwww.financialanalysis.com/uniliverThank you!

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