Discussing Marketing Strategies Of Unilever In The Consumer Goods Industry

Unilever: A Company Overview

Discuss About The Model Engaging Impoverished Market Segments.

The report aims at providing an overview of marketing and management in the context of selected industry, organization and market scenario. The industry selected is the consumer goods whereas the organization selected Unilever with a marketing strategy that helps it in achieving the purpose of ensuring sustainable living and delivering benefit to all the stakeholders. Unilever represents British Dutch transnational consumer good firm with headquarter in Netherlands (unilever.nl 2018). The products of the company include beverages, food, cleaning agents and products of personal care. The report tries to provide an insight into the conditions that leads to the building and sustenance of consumer loyalty. The report commences with a background statement for outlining the industry, market positioning and the unique selling proposition. There report also outlines the marketing audit consisting of the marketing plan, strategies, objectives and the current activities that helps in defining the market attractiveness and the potential for the market growth. The report also put forward a competitor analysis of the three main players of the industry. There is also a critical discussion on how the newer marketing mix actions helps in achieving the gaps between the present marketing strategy of the company and the external environment. 

Unilever belongs to the consumer goods industry that aims at creating and distributing products frequently bought by the consumers. In other words, products belonging to the consumer goods industry undergo quick movement from the retailer shelf to the consumers (unilever.nl 2018). Unilever represents the largest consumer goods company in the world in terms of the revenue. It is also the oldest multinational and holds the seventh position in terms of the ranking of the most valuable company. The company has close to four hundred brands and has a turnover of more than 50 billion Euros. Out of which thirteen brands have sales close to one billion Euros. These include Dove, Axe/Lynx, Omo, Heartbranded Ice creams, Knorr, Lipton, Lux, Hellmann, Rama, Sunsilk, Surf and Rexona. The company has dual listing; Unilever PLC has headquarters in London while Unilever NV is located in Rotterdam, Netherlands. Both the companies operate as single business and share their board of directors. The company has four primary divisions that include home care, personal care, refreshment (ice creams and beverages) and food. The company has research and development facilities in United Kingdom, China, India, United States and Netherlands (unilever.nl 2018).

Marketing Audit

The company emerged during the year 1930 because of merger between the Dutch margarine producer, Margarine Unie and the soap maker from Britain, Lever Brothers. The company diversified during the latter half of 20^th century thereby expanding its operations (unilever.nl 2018). The company undertook various corporate acquisitions that included Lipton, Best Foods, Ben and Jerry, Alberto Culver and Dollar Shave Club. The company also ventured into chemical business. The Unilever PLC has listing on London Stock Exchange and is constituent of FTSE 100 Index while the Unilever NV has listing on Euronext Amsterdam and is constituent of AEX index.

Market positioning refers to the influence of the consumer perception about a product or a brand in relation to perception of the competing products or brands (Menkveld 2013). The aim of market positioning lies in occupying a unique, clear and advantageous position in the minds of the consumer. Unilever ensures the positioning of its soap brand Dove with aspect of differentiation that beauty does not simply imply attraction but it refers to something beyond the things and is about all women and their inner beauty. The concept so well furnished towards the market segment of Dove that is women, where most of them relate their skin with the brand.  Unilever introduced the brand Dove with a newer idea of skin moisturizing which did not exist before. The company developed the product line of Dove through the careful examination of behavior and the traits of the women concerning personal care and beauty (Murray 2013). The product line of the brand has various products ranging from body wash, skincare soaps and hair care products and moisturizing lotions along with the launch of the brand especially for men in the year 2010. Unilever thus reached every individual through the production of varied range of the products as per the requirement of the prospective and current consumers. There are five different classes of products for Dove that includes products of hair care, men care, body wash/beauty bars, lotions and deodorants. Each of the primary categories of Dove has a range of sub products.

For strengthening the market positioning, Unilever adopted a promotional strategy that helped enhancing the fame of the brand in market especially in the personal care category (Glasbergen 2013). The promotion of Dove is done with a focus on the fact that it maintains and enhances the beauty of the women. Unilever makes sure that the brand markets all its products through television commercials, print media, signboards, banners and social media. For grabbing the attention of the buyers, the brand takes advantage of some of the marketing tools like over counter advertising, promotion counters and the previous recommendation from clients. Unilever brand Dove thus adopts a marketing strategy that portrays it is the only brand that not only cares for the skin but also tries to resolve skin problems.

Competitor Analysis

The unique selling proposition of a brand is something that its competitor is unable to deliver. The proposition involves differentiating a product from the competitors in a manner that the customer can instantly notice such difference (Ashley and Tuten 2015). Unilever not only believes in a profitable growth but also a responsible one. The approach is a part of business model driven by the concept of sustainable living. It also guides the approach on how the company does business and is able to meet increasing consumer demand in the world that has finite resources. The business model of Unilever focuses on the consumer insight and informs about the brand innovation for creation of the products through marketing and advertisement across range of the distribution channels. Unilever adopts the unique selling proposition by adoption of good planning for advertisement and by offering inexpensive products thereby targeting the middle and upper class consumers. For instance, the company provides a better option in the form of Dove shampoo a better option for the maintenance and repair of the hair at lower prices. The soaps manufactured by the company undergo similar packaging as the other brands that also help in keeping the cost lower. Unilever thus adopts a pricing strategy by considering the brand image and the sustainable growth that helps the company in gaining of competitive advantage.

Unilever follows a mission of adding vitality to the life. The company tries in meeting the everyday nutrition, hygiene and personal care needs with the brands that help the people in feeling and looking good (unilever.nl 2018) The company tries to meet the growing needs of the consumers concerning healthy lifestyle, indulgence and convenience. Indulgence in terms of the product refers to more sensuality, variety and enjoyment.

Unilever has a distinct purpose and their operational expertise helps in realizing the vision in growing the business while decoupling the environmental footprint from the growth and thereby enhancing the positive social impact that is captured in the sustainable living plan of Unilever (unilever.nl 2018). The company also combines the multinational expertise with the deep roots in the diverse cultures and continues in providing range of the products that suits the customer wealth. The company also holds the objective in strengthening the stronger relationships in emerging markets that would lead to significant amount of growth in the future. In addition, by leveraging the global reach and inspiring the people in taking smaller actions on daily basis, the company tries to make a bigger difference in the world.

Marketing Mix Actions

The company invests in long-term strategy of brands and categories that helps in delivering growth for benefitting all the stakeholders. These long-term strategies include (unilever.nl 2018):

1. Choice of the portfolio: It includes choice of categories, active portfolio management and building of prestigious business
2. Innovation and Brands: This involves a focused approach towards innovation, driving margins, efficiency, and more investment in the digital marketing
3. Development of the market: This involves consideration of the routes to the market, emerging markets and the e –commerce
4. Considering Agility and Cost: This involves the manufacture of the overheads and the base, zero-based budgeting and the leveraging of the scale
5. Taking into Account the People: This involves attraction of the talent their development and their empowerment

The intensive strategies of the company include(Theiben, Spinler and Huchzermeier 2014):

1. Market Penetration: Unilever’s brand Dove adopts a specific strategy for improving the market penetration. This particular brand adopts the sampling technique by sending its representatives to the different segments of the market and assigning them task for identifying the wants and needs of the various segments of the market.
2. Market Development: The Company extends the strategy of market development through stimulation of product research and innovation. Unilever also focuses on the aspects of expansion, partnership and acquisition through the strategy of market development
3. Product Development: Unilever resorted to the process of product development through the development of a newer formula of laundry detergent that involved more concentration and less packaging thereby fitting then needs of the mobile and eco friendly customers.

The Dove brand of Unilever provides higher quality of products. The categories of products under the brand include skin care, bathing and washing, hair care and deodorants. The soap positions itself as not only a soap but also beauty bar (globalcosmeticsnews.com 2018). The hair care products of Dove find recommendations by the dermatologists. The brand regularly introduces newer products like the advanced hair series and dry spray deodorant on a global scale. The brand has also forayed into various baby care products that included baby lotion, moisturizer, wipes and diaper creams.

Packaging refers to the production and designing of the wrapper or a container for the products (Shah, Ahmad and Ahmad 2013). This aspect is necessary for the product as nowadays it helps in determining sales. Unilever’s brand Dove also considers the importance of packaging and hence designs its soap bar in a unique carved shaped with simple and elegant color of the packaging around the bird logo. This not only helped in easier distinction and recognition of the brand within customer minds. This helped in establishing the uniqueness of the soap brand of Dove.

The target market of the company represents beauty and health conscious people both the female and the male group since the company established positioning in terms of the beauty and health care products (Tolstikova 2013). The Unilever brands are quite popular across the world and hence remain shelved like most routine grocery items due to their huge demand.

The five stages of buying behavior of consumer that includes recognition of the problem, information search, alternative evaluation, purchase decision and the post purchase behavior(Solomon et al. 2014). This also holds true for the buying behavior of the consumers for the Dove brand. Since Dove is portrayed as beauty products, so look conscious recognizes its needs. The marketing campaign undertaken by the Unilever brand through advertisement and other means instills sufficient awareness amongst the people. The consumer then undertakes a comparative analysis of the other brands before making a purchase decision. However, uniqueness of the brand helps the consumers in making a purchase decision from the outlets (Oliver 2014).

The competitors of Unilever that are worth mentioning include:

• Procter and Gamble
• Nestle
• Kraft

SWOT Analysis

Market Positioning and Unique Selling Proposition of Dove

Strength

• The contribution of Unilever to home and personal care has a net sales worth of 72.9 percent.
• The selling expenses and the marketing rose by around 12.5 percent
• Unilever has stronger brand portfolio and a diverse range of products
• The company has a total turnover close to 27 percent
• The company operates in close to 190 countries across the world and has global footprint in combination with top brands recalled by most consumers across the world.
• Unilever has unique competitive advantage over its competitors due to flexible pricing and the expertise in the distribution channels that helps in reaching every corner of globe.

Weakness

• The weakness of Unilever lies in the fact that the company operates under a competitive market with presence of other global giants like Nestle and P&G (Santos and Laczniak 2015). There are also host of local players that challenges the dominance of the company thereby raising its stakes in close to trillions
• The weakness also lays in the availability of the substitute products of the company especially in emerging where the rural consumers can use the natural and alternative product to the one’s marketed by Unilever

Opportunities

• Unilever has tremendous opportunity in its diverse range of products which its competitors also do not have
• The company also has the  opportunity in leveraging  a growing and huge customer base in the emerging  markets
• Unilever keeps up with the product innovation on the basis of the customer expectations
• The company through its products also ensures a higher level of customer satisfaction
• The company also portrays social and environmental responsibility with emergence of ethical consumers who believes in buying brands that are not only sustainably complete but also responsibly made (Hasan 2015).

Threats

• The global economic crisis has influenced the profitability of the Unilever. The shrinkage in the disposable income of the global consumer causes less buying(Grant 2016). This implies the reduction in the revenue with an increase in the cost.
• Unilever also faces the threat of local and the alternative products that seems to provide greater value for lesser amount of money, especially in the emerging markets.
• The government regulations and laws are also quite challenging for the company
• The new breed and the new age competition from the various conglomerates also act as a threat for Unilever.

PESTEL Analysis                                                                           

Political

A better intra-governmental relationships acts as opportunity for a global company like Unilever that has many competitors (Kew and Stredwick 2017). Several policies of the government pertaining to population health that acts threat factors for the company. Better economies does not act as a hindrance to the business of the company while the opportunities in the third world countries are halted for reasons unknown.

Economic

Unilever always focuses on the realm of the product need that helps the company in maintenance of stability and its worth. Therefore, the company performance remains directly proportional to economic stability of state in which it works. Similarly, in the region where countries remain developed there exist more opportunistic avenues for the company.

Social

The social factors represent the lifestyle and beliefs of people and more importantly the persisting regional culture (Brun and Castelli 2013). In present times, increasing number of people wants to lead a good lifestyle that led to the creation of the luxury products put forward by Unilever that acts as an opportunity for the company. The population that is more conscious about local products like Maxims can act as a threat for Unilever.

Technological

The improvement in the system of knowledge management through technological advancement acts as an opportunity. The uprising trend in the automation of the business strategies certainly acts as a greater opportunity for the business expansion of the companies like Unilever.

Environmental

The environmental factors involve the higher expectations and standards on the policies of the waste disposal (Hahn et al. 2014). These factors stress the focus on the sustainability factor of the firm carrying out the business. The factor of climate change sometimes acts as opportunities and sometimes as threat for Unilever.

Legal

The presence of the legal elements binds the competitors of Unilever. For instance, regulations involving the health safety act as good opportunities for the manufacturing industry of Unilever. Various reforms undertaken by the governmental has a direct impact on Unilever. There are certain legalities that act as bindings while the others act as hurdle in the way of company expansion.

Profitability: 

The consumer goods company made higher profit of 8.15 billion Euros compared to the previous year (Yahya et al. 2013). The turnover of the brands like the Hellmann’s mayonnaise, Ben &Jerry ice cream and the Dove soap rose to 53.70 billion Euros from 52.71 billion Euros. However, for the margarine and the spread business, the turnover of the company rose to 2.2 percent that was close to 50.70 billion Euros.

Promotional Strategy of Dove

Price:

The products of Unilever do not have a specific price and they keep changing and vary from one product to another. The price of any product brand is decided by taking into account the strategies of the competitors.

Place:

The company has its service based in close to 100 countries and is further planning for extending it to additional 50 countries. The company includes three segments of the business involved in the process of planning for the success of the future.

Promotion

The company undertakes promotion of the product by means of advertisements in the print and the electronic media. In addition, the company puts forward schemes like the sales and the premium packs for attracting the customers.

Staff Performance

Unilever follows the organizational culture based on the performance that also emphasizes the significance of the output of the employees (Anstey, Riggar and Walker 2017). The corporate culture of the company points the importance of the measures or the criteria used for determining the necessary output. The organizational culture of Unilever focus on the performance, the quality and efficiency of the work attained through the technology and the other tools. 

The success of Unilever depends on the leaders’ ability in supporting a culture of quality and performance (Chepkoech and Noor  2014). For instance, the leaders of the firm uses result based and market based approaches in managing the business and driving higher performance. The market-based management uses the market data in making the changes of the management tactics while the management based on the results focuses on achieving the desired outcomes. Such tactics helps in facilitating the organizational performance and human resource productivity for achieving the desired outcomes. Thus, the managerial approaches and leadership of Unilever help in maintaining the organizational culture.

Unilever went into a deal with Accenture for the creation of a single system for its marketing and trade operations (Lakkis 2016). The new system allows Unilever in integration of its mobile apps thereby ensuring the sync between the back and the front office information. The Cloud Trade Promotion Management (TPM) and the Cloud Retail Executions (RE) solutions of Accenture are built using the Salesforce CRM platform. The platform helps in combining the consumer good expertise with the Salesforce’s Cloud, social, mobile, artificial intelligence capabilities and the data science. Thus, the implementation of the Accenture Cloud helps Unilever in closing the loop existing between the executions and planning for driving the sales and improving the loyalty of the customers thereby bringing down the cost of the information technology.

Unilever’s Mission and Purpose

Accenture provides NewsPage solution that helps Unilever in building a single system for managing the distributor network of the third party (Hillebrand, Driessen and Koll 2015). The software will help Unilever in improving the productivity, streamlining the inventory and get the reliable and accurate data on the sales through the distributers belonging to third party. In present times, the consumers are not only better informed but also connected but are also perceptive, thereby making them prone to switching and difficult to impress. Hence, there arises a necessity for the packaged consumer goods companies in closely working with the customers in driving growth. Thus, through using the evolving demands and the knowledge of the consumer preferences Unilever not only adapted itself to the changing market but positioned itself in maintaining a leading position

Unilever announced reorganization for driving the further growth of the company. The company not only announced changes to the categories but also the structure for supporting the growth plan with focus on fast business development in emerging markets (Sako 2015). The company accounts for over half the turnover in emerging market where previously growth was close to the double digits. These provide the company with an opportunity for better supporting the business footprint, keeping stronger momentum and adopt a globally aligned category and country organization. The newer structures will undergo implementation during third quarter and will not become operational until the year-end.

Unilever is considered a leader in the market of the consumer goods. Therefore, the leader always has the risk of attack by the challengers. However, the strategies of Unilever helped it in defending its market share through premium servicing, efficient and extensive system of dealership, full line strategy and a good system of financing. The three main industry players that provide a tough competition to Unilever include Proctar & Gamble Ltd (P&G), Kraft Heinz Company and Nestle  (nestle.nl 2018). The analysis is as follows:

	Unilever	P&G	Kraft  Heinz	Nestle
Segment	Consumer Food	Consumer Care	Food	Food
CEO	A. Burgmans	A.G. Lafley	R. Deromedi	P. Letmathe
Brand	Dove	Tide	Mac & Cheese	Kit Kat
Growth	15.58%	9.25%	8.2%	11.23%
Stock Per Share	$66.03	$53.76	$30.70	$ 66.90
Business Segments	3	5	5	6
Revenue	$ 42,942 M	$ 28.2B	$ 31,010 M	$ 69B
Revenue Growth	-11.93%	19%	4.3%	-1.93%
Employees	234000	110000	10600	253000

Unilever represents a well-structured organization whose every department functions efficiently. Each department works through a process of implementation and accomplishment of the marketing plan. Top-level executives for putting them into action initially approve the plan. The marketing action undertaken by the concerned department involves identification of the product, setting its price and undertaking the necessary promotional activities. The administered brand manager does the branding of the product.

However, in addition to the existing marketing function of product, price and promotion businesses like Unilever should aim at building exciting and intimate relations with the customers by means of both customer and company led engagement. This is achieved through the newer 4C that includes communication, creation, community and care (Baker 2014).

Unilever’s Long-Term Strategies

The existing gaps between the present marketing strategy and external environment involves higher price, unavailability of suitable purchase location, insufficiency in the awareness of the products and no segmentation. The adoption of the newer marketing mix actions will enable the company in creation of an initiative that helps in reducing the price. In addition, it will also help Unilever in understanding that not all class of people has the same affordability. The newer strategies would also encourage the company in increasing the distribution. The communication aspect of the newer marketing mix actions also encourages the company in undertaking awareness of people through sales promotion, advertising and public relations. Through the adoption of the newer strategy, the company would also be motivated to undertake segmentation of its products. For instance, production of flavored hair gels for the males like the mint and vanilla.

Conclusion:  

The report ends by portraying the necessary conditions for building and sustaining customer loyalty in the context of a chosen consumer good company Unilever. The company has however remained in business with a focus on the customer fulfillment. The company through the technique of mass market positioning ensured leveraging the value of its key brands through extensions of the brand on a cross-sectoral basis thereby taking advantage of the brand loyalty and recognition amongst the consumers leading to the creation of the marketing efficiencies. The company focuses highly on the population demography and offers a varied range of products for a particular brand. The company focuses on quality, innovation, research, and development that give the company a competitive edge over the others in the industry. In addition, the company also tries to implement a diversification strategy that helps the company in sustaining a market leadership. Thus, Unilever has been a paragon of quality and excellence in Fast Moving Consumer Goods (FMCG) sector and it derives the competitive advantage from the global footprint thereby enhancing the value of the consumers across the world.

References:

Anstey, E., Riggar, T.F. and Walker, J., 2017. Staff appraisal and development. Routledge.

Ashley, C. and Tuten, T., 2015. Creative strategies in social media marketing: An exploratory study of branded social content and consumer engagement. Psychology & Marketing, 32(1), pp.15-27.        

Baker, M.J., 2014. Marketing strategy and management. Palgrave Macmillan.

Brun, A. and Castelli, C., 2013. The nature of luxury: a consumer perspective. International Journal of Retail & Distribution Management, 41(11/12), pp.823-847.

Chepkoech, S. and Noor, I., 2014. Effects of enterprise resource planning implementation on supply chain performance in manufacturing sector in Kenya: A case of Unilever Limited. International Journal of Social Sciences and Entrepreneurship, 1(13), pp.475-494.

Dove Brand: A Product Line of Unilever

Glasbergen, P., 2013. Legitimation of certifying partnerships in the global market place. Environmental Policy and Governance, 23(6), pp.354-367.

globalcosmeticsnews.com 2018. [online] Available at: https://globalcosmeticsnews.com/dove-company-profile/ [Accessed 17 May 2018].

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Hahn, T., Preuss, L., Pinkse, J. and Figge, F., 2014. Cognitive frames in corporate sustainability: Managerial sensemaking with paradoxical and business case frames. Academy of Management Review, 39(4), pp.463-487.

Hasan, M.M., 2015. Marketing Analysis of Unilever. Total Quality Management, 11, p.13.

Hillebrand, B., Driessen, P.H. and Koll, O., 2015. Stakeholder marketing: theoretical foundations and required capabilities. Journal of the Academy of Marketing Science, 43(4), pp.411-428.

Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan Page Publishers.

Kim, W.C. and Mauborgne, R.A., 2014. Blue ocean strategy, expanded edition: How to create uncontested market space and make the competition irrelevant. Harvard business review Press. 

Lakkis, J.M., 2016. Encapsulation and controlled release technologies in food systems. John Wiley & Sons.

Leonidou, C.N., Katsikeas, C.S. and Morgan, N.A., 2013. “Greening” the marketing mix: do firms do it and does it pay off?. Journal of the Academy of Marketing Science, 41(2), pp.151-170.

Menkveld, A.J., 2013. High frequency trading and the new market makers. Journal of Financial Markets, 16(4), pp.712-740.

Murray, D.P., 2013. Branding “real” social change in Dove’s Campaign for Real Beauty. Feminist Media Studies, 13(1), pp.83-101.

nestle.nl (2018). [online] Available at: https://www.nestle.nl [Accessed 17 May]

Oliver, R.L., 2014. Satisfaction: A behavioral perspective on the consumer. Routledge.

Sako, M., 2015. Competing in emerging markets. Communications of the ACM, 58(4), pp.27-29.

Santos, N. and Laczniak, G., 2015. Marketing to the poor: A SWOT analysis of the Market Construction Model for engaging impoverished market segments. Social Business, 5(2).

Shah, S., Ahmad, A. and Ahmad, N., 2013. Role of packaging in consumer buying behavior. International Review of Basic and Applied Sciences, 1(2), pp.35-41.

Solomon, M.R., Dahl, D.W., White, K., Zaichkowsky, J.L. and Polegato, R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Pearson.

Theiben, S., Spinler, S. and Huchzermeier, A., 2014. Reducing the Carbon Footprint within Fast?Moving Consumer Goods Supply Chains through Collaboration: The Manufacturers’ Perspective. Journal of Supply Chain Management, 50(4), pp.44-61.

Tolstikova, N., 2013. Dove in russia: The role of culture in advertising success. In Marketing Management (pp. 116-130). Routledge.

unilever.nl 2018. [online] Available at: https://www./about/who-we-are/introduction-to-unilever/unilever-wereldwijd/ [Accessed 17 May 2018].

unilever.nl 2018. [online] Available at: https://www.unilever.nl/about/who-we-are/introduction-to-unilever/unilever-nederland/ [Accessed 17 May 2018].

unilever.nl 2018. [online] Available at: https://www.unilever.nl/about/who-we-are/our-history/ [Accessed 17 May 2018].

unilever.nl 2018. [online] Available at: https://www.unilever.nl/about/innovatie/onze-rd-vestigingen/ [Accessed 17 May 2018].

unilever.nl 2018. [online] Available at: https://www.unilever.nl/about/who-we-are/our-vision/ [Accessed 17 May 2018].

unilever.nl 2018. [online] Available at: https://www.unilever.nl/about/who-we-are/purpose-and-principles/ [Accessed 17 May 2018].

unilever.nl 2018. [online] Available at: https://www.unilever.nl/about/who-we-are/our-strategy/ [Accessed 17 May 2018].

Yahya, F., Ali, S.A., Mir, Z., Yaqoob, M. and Khan, U.A., 2013. Significant Analysis for Financial Statements: An Empirical Study of National and Unilever Foods. Research Journal of Finance and Accounting, 4(1), pp.26-34.