Marketing mix and strategies of Unilever
1.0 Company Overview
Unilever N.V and Unilever PLC comprise of Unilever group and both companies have the same directors. In Unilever PLC, their products consist of food, personal care products and other household products that are trusted by customers globally. The top 13 brands are being sold for the account of sales amounting to €23billion and according to statistics their 25 brands represent up to 75% of their sales in the market. It is also a globalized business that has generated more than half of its turnover in developing and other surfacing markets in the regions of central and Eastern Europe, Latin America, Africa and Asia. Its outstanding portfolio includes popular brands such as Dove, Lux, Magnum, Knorr and Lipton, Hellmann and Axe/Lynx. Moreover, Unilever invested in community projects worldwide in the year 2009. (Unilever, 2010)
1.1 Mission Statement:
Unilever’s intention is to globalize on production and to meet each and everyone’s needs and desires every day. They have at least expanded into 75 countries worldwide and 1 out of every 2 consumer products has their branding in them. They strive on committing themselves to the welfare of the consumer market. ‘
Unilever aims to meet a consumer’s needs in terms of nutrition , hygiene and personal care with the products that makes people feel good about it and looking great and getting more from life.
Unilever focused directly on their consumers and customers, the increase in global population and the demands of more basic necessities led them to increase their boundaries over the world. They believed that with high standards of good innovative behavior, winning brands, attractive pricing, community support and continuous improvement, they can contribute fairly and endlessly to their market, especially with the future predicted market of an extra 1 billion customers.
1.2 Financial Situation
Overall summary of Unilever’s profit has been on the average net of 3.8 with their highest in the year 2008. As shown from the graph, their total demand as proven through their Turnover has been gradually rising until the year 2008. The sudden fall in net profit, even though not much can be explained due to stronger competitors and world economy crisis, a rise in inflation and fall in human labor. Net cash flow from operating activities has been gradually rising and this may be due to the fall in lesser labor and a result of higher cash flow.
1.3 Market Share
Unilever’s largest consumer lies in Asia where most of their suppliers are from Asia. Reason being is because labour, transport and inventories are cheapest in Asia and thus much more efficient in Asia compared to Europe and America. Further support thesis is also evident where America and Western Europe is only a Billion in difference, not much when calculated annually in turnover. Unilever being a Australia based company is closest to Asia as well, so an understanding in culture differences and market differences is much less different compared to America and Europe.
2.0 Market Situation (PEST)
When there is a participation of a foreign company in other countries besides Unilever UK. Unilever is subject to the local control of the imports of goods, employment of expatriates and the pricing set and others. This would involve the local investors in participating in the foreign investment. In addition, Unilever do not get involved with sponsoring in any political parties. As of today, it uses their own tactical strategy and experience to gain ground in the political environment. Moreover, Unilever is also a member to many organizations around the globe. Their aim is to achieve an encouraging business environment and in other ways in facilitate corporate reputation in the management. However, there was also fear that the foreign company would leak out the knowledge and would then lead to lose of trademarks. This would definitely be disastrous for Unilever as the controls over the market operations are being reduced.
Unilever has highly competitive market environments that are most likely in Western Europe. Moreover, there are many hindrances in the European market as a result from the European Union free trade policies. The biggest competitor in the European market as seen is Procter & Gamble (P&G) and that would pose as an undesirable effect on Unilever’s profit potentials. As for the Fast Moving Consumer Goods (FMCG) been asking the producers to reduce prices on their products as consumer would not be buying goods or brands that are priced higher as due to the current situation in the economy tide.
In addition, the competition in the EU arena has risen and been strong thus making Unilever having difficulties in country like in France and Netherlands. It has been proven in the years, Unilever has definitely managed to developing countries such as in Asia even though there might be political instability. Fortunately, Unilever has developed company strategies to ensure its profitability drive in sustaining its place.
Social / Cultural
Unilever has been maintaining its social cultural environment as they have been working endlessly to improve in their hygiene and providing better nutrition for the people globally especially to those in Africa , Latin America and Asia. In addition, Unilever helps in creating a confident future for those low self-esteem girls and increasing risk problems such as eating disorder. They have created The Dove Self-Esteem set a five year goal to reach out to as many as 5million of young people by 2010 through activities , online and other resources. Furthermore, Unilever hires close to a 100 or more nationalities. This is to ensure that there is a diversified working environment for employees and consumer alike. The great thing about Unilever is that it continues to build an exclusive culture and promoting the difference and that result to a soaring demand for its product in the developing and other emerging markets in the future.
Unilever has been improving its business by enhancing its web existence in order to improve their brands communications and market as well as making transaction much more convenient along chain. Currently, Unilever is also minimizing the cost through the IT efficiencies at a global level. Besides that, Unilever technology collaborated with Unilever R&D in meeting customers’ needs. In 2003, Unilever assigned Bitto Storage System Ltd, a UK based company that has been here since 1845 and owned by Fritz-August bittmann as their main inventory supplier for their entire processing unit. Bitto invented machines that were specifically for storage such as pallet racking, boltless shelving, plastic bins, containers, wide span and heave load shelving, cantilever racking, multi-tier shelving systems. all these were specially made to cater to frozen products as Unilever has non-adaptable products as well. The integral history and accomplishment of Bitto was the only reason that they were given the task.
Procter & Gamble (P&G) is one their competitor that supplies the almost the same products ranging from hair care, food and household items similar to Unilever.
Quality of the products having its reputation.
Great contacts with other major markets.
Strong promotional and marketing strategy.
Creative strategies are provided by the organization.
A well established organization that has good distribution network globally.
Decentralized decision making as it does not only confine to a few top executives, it involves managers at various level in decision making.
Slow in sales growth as being compared to the other competitors.
Due to remote areas in European resulting in higher transporting fees.
Higher cost would therefore limit promotions in the organization.
Competitors might be offering better alternative products.
Restructuring of cost is high.
Objectives – SMART
Dove has covered almost 30% in market share worldwide in 2009.
Unilever intends to increase total sales by 15% in 2010 and this will involve heavy marketing promotions as well as reducing environmental impact.
With continuously strong marketing promotions, brands innovation and continuous improvement, the goal is achievable and sustainable.
With an estimated increase demand of 1.bil consumer, the goal is 100% possible and results will be better than expected.
Unilever will set to increase its sales and consumer base every year by 10% per annum. Brand awareness would take a specific time.
Unilever has forecasted a strong growth of consumers in the coming year with an estimated increase of 1 billion customers. Assuming next years’ global economy to be rising with a boom in the second quarter, businesses in Asia and Europe will rise steadily in comparison with America’s economy fluctuations. Whilst taking into consideration of Value Exchange, Market demand, fluctuations in raw materials and competitor activities, Unilever might be boosting sales and inventory turnover in the first 3 quarters, and slowing down at the last quarter. These will decrease the risk of loss in foreign exchange. Assumptions will be based nearest to the activity of the current year and last year combined to give an overall picture of future growth or loss depending on market activities.
Dove is a one of the leading brand in Malaysia in terms of soap and shampoo. With their fragrant smell, attractive logo and powerful marketing strategies, many women are using their products for a softer and smoother skin. Dove products come in various shapes and sizes, there are Dove Pink Soap, Dove Shampoo, Dove Deep Moisture hydrating body wash, Dove ® Energizing Products, Dove’s special all day Formula, Dove Damage Therapy Range, Straight and Silky, Anti Dandruff, Deoderant and Dove Edible Products ( Dove Almonds, Dove Candies, Dove Chocolate, Dove Dark Chocolate, Dove Tea and etc.). Dove has been known in its story as a ‘beauty bar’ where unlike similar soap bars which leaves your skin dry and flaky, they moisturizes the skin and leaves a fragrant smell after the showers. In 1979, a Pennsylvania studies showed that Dove dried and irritated skin less than regular soap, and through this, Unilever went into a strong marketing promotion and now occupied 24% share of the whole market by 2003.
Dove purports to be "an agent of change to educate and inspire girls on a wider definition of beauty and to make them feel more confident about themselves (http://www.articlesbase.com/gifts-articles/the-dove-product-949435.html#ixzz17qhX9IzM)
Unilevers market is based on every single individual in the market. These consumers can be from babies to the elderly where everyone can benefit from their products. Almost 1 in every 2 products in households are Unilevers and they are expanding their marketing wider to cover more consumers. In UK, the population is divided into 6 categories, Poor, Average, Rich, Children, Adults and Elderly and Unilever products is applicable, Usable and accessible from everyone. Positioning products and stores around the world, and displaying their names on products is very important. Their largest consuming market is AsiaThis reminds Users of the quality and reassurance of products whenever they purchase such products. Unilever plans to venture into Deodorants, Savory, Dressings, tea, Ice Cream, Spread, and Mass Skin.
Segmenting products according to population is one of Unilever advantage over their competitors. With over 130 years of experience, Unilever is able to know what products and populations’ best corresponds to each other. They establish good consumer base and has one of the best culturally diverse companies. In UK where most food products are milk based, Unilever has expanded their focus on dairy based products such as margarine, milk, cooking butter and other milk based products. They will concentrate their products with healthier choices with more usage in a product.
Unilever will position their products in almost every shelve there is so that they can cover a higher percentage of the overall market. By establishing a wider consumer base, they can not only gain higher net profit but also information on how population taste, expectations, needs and wants changes from time to time. They penetrate these markets with the help of their partners like Tesco, Wal-mart, Carrefour and Ahold, all large supermarkets that can cater to their desired market growth.
Through critics and huge debate, Dove shampoo has been classified as a very cheap method for good hair maintenance and beauty driven product. Their soap, which is very similar to other regular soap comes in white and pink, with their logo imprinted into the middle. As their packaging is very similar to ordinary soap, it keeps the cost low. To add to their advantage of having better pricing, Dove has a community outreach/affiliate group where customers get free products if they introduced friends and relatives to purchase this product. Before setting out on the market, Dove has always analyzed on competitors pricing strategies and hence, develops new pricing strategies which suits the market most but at the same time, maintain the brands interest and companies profit. Their competitors such as Proctor and Gamble are one of their strongest competitors and produce similar goods such as Pantene. They have to, however, keep at a marginal price for all products so how they procure their prices in the long run determines their competitiveness and profit.
Dove has a very strong share in the overall market up to date. With countless products that ranges from anti Dandruff, Anti Tangle to Dove For Men, they capitalized on every individual in the market and focused their goals into finding out what most expects in a shower and after shower. In UK where weather is very dry and cold, the users there mostly purchase goods that moisturizes and soften the skin to prevent breakouts and dry skin, and also enough vitamins and smell to add value to its product line. From current statistics, UK’s population consist of more female to male and age statistics shows that there is an equal level between the elderly and babies. With these, Unilever can also segment their focus more on the population that demands on their products. Products such as Anti-tangle and Deep Moisturizer can suit better on UK’s demographic statistics.
Dove has developed strong marketing strategies throughout the internet and also through public relations. Their promotions offers great bargain where sometimes purchasers could buy in bulk and pay for only a quarter of the price, or sometimes be offered free showering products such as body mash, napkins, Dove imprinted containers and etc. Dove’s promotional strategy is one of the strongest in the market because customers are easily bought by through their smell and price alone. Promotion booths, Advertising columns and copies of past customer’s testimonials all are marketing tools to attract more buyers. Their strongest promotion strategy also involves heavy TV and magazine advertising. Their advertisements shows how skin can be soft, white and smooth, creating a vivid picture of comfort and smell in the users mind. Celebrities and popular slogans are used as well to promote their products better.
IN the EU, where trade is free around Germany, Poland, England, France and etc, Dove is being used and exported around. With an estimated EU14 billion profit every year, logistics, storage, inventories and etc is very important. Most Dove products will be sold via large supermarkets in rows and also in smaller retail outlets such as 7Eleven, Coles and etc. Some Dove products are sold through direct marketing where agents introduce and demonstrate the benefits and usage of Dove and how they can affect everyday life. These agents earn through commission and their market coverage is much wider compared to permanent stores.
Forecast and Implications
Overall, Unilever will seek to improve their customer base and strongly focus on the changes in the upcoming years ahead. With new inventories and business partners, Unilever will soon capitalise in other segments of products to broaden their customer base. They seek to improve their R&D and customer knowledge over the years, exploring new technologies and scientific breakthrough to improve their products, healthier, user friendly and longer lasting products to give a satisfying feel to existing clients and possibly new clients.
Research & development in Unilever ranges from looking at emerging technologies, exploring possible applications and collaborating with external experts to projects lasting around six to nine months that adapt products for local markets
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