Unilevers Personal Care Products

Introduction The purpose of this report is to analyze Unilever’s Personal Care Products, review data with TOWS matrix, PESTLE, and VIRO analysis, competitive analysis using competitive perceptual map, segmentation strategy and buying behaviors for each segment, corporate and marketing strategies to reach target market and discuss product life cycle along with investment strategy and business level strategy for each SBU.Advertising We will write a custom essay sample on Unilever’s Personal Care Products specifically for you for only $16.05 $11/page Learn More Company Background A leading global manufacturer of packaged consumer goods, Unilever started its formal journey in 1930 through the merger of Lever Brothers and Margarine Unie; however, eleven of its brands had annual profits worldwide of more than $1.0 billion (Deighton 1 and Graul 13). According to the annual report 2011 of this company, it has more than 171,000 efficient employees a ll over the world and it has plan to double the size of the company in the near future, which would help the company to implement expansion plan of the company. Graul (14) stated that personal care is one of the segments of Unilever, which competes directly with Procter Gamble; however, the following figure shows that Unilever occupied about 7.8% global personal products industry. Figure 1: Global Personal Products Market Share Source: Graul (35)Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Dove Deighton (1) stated that Dove was the world’s number-one â€Å"cleansing† brand of this company by competing with Procter and Gamble’s Ivory, Kao’s Jergens, and other related products; however, it was launched in 1957 and contained high levels of natural skin moisturizers. According to the annual report 2011 of this company, the management team conducted research and integrated marketing campaign to position this brand in global market and became market leader in personal care sector; therefore, sales of Dove exceeded â‚ ¬3.0 billion in 2011, underlying sales growth was 8.20%, and turnover was more than â‚ ¬15.50 billion. At the same time, Deighton (1) pointed out that Unilever interviewed 3,000 respondents of ten countries to assess their view to develop effective marketing plan and media plan, enhance relationship with customer and conduct IMC campaign. Axe Unilever launched Axe in France in 1983 and expanded business with this brand in more than 60 countries; however, this brand captured about 20% market share of male grooming brand in all continents (Joachimsthaler 16). This brand controlled a whopping 83% share of the $180.0 million market in 2005; On the other hand, the target market of this brand was 18 to 24 years old men and this target group played vital role to become number one brands in the US and European market; However, 3 5% of young men aged eleven to twenty-four used Axe’s summer; According to the annual report 2011, value market shares up overall with strong gains in the US market; Unilever developed new products using brang awareness of Axe, for example, the fragrance variant Essence was created and introduced in 2003 and Touch ‘modern, fresh, watery, woody fragrance’ introduced in the summer of 2004 (Joachimsthaler 21). Rexona Unilever considered Rexona as one of the most prominent and wing brands for this company and the world’s largest deodorant brands; in addition, this company launched Motionsense technology in 2011 with this brand (Unilever 10). Other renowned personal care brands are – Lux: Lux soaps are one of the best selling products of Unilever, which have a wide range of forms, such as flakes, bars, and liquids (all of which are gentle to skin as Unilever conforms to all product safety regulations) Sunsilk: Chiefly intended for females, this is the globe’s foremost brand in hair-conditioning and the second-largest in shampoo market, and is sold in sixty- nine nations globally Close-up: It is also one of the most profitable toothpaste-brands that claims to keep teeth whiter, brighter and stronger; moreover, it is the first gel toothpaste in the world, which was brought in market in 1967 Lifebuoy: It was launched in the UK in 1895, which today has the maximum market-penetration in the soap product group (almost ninety- one percent); moreover, it is reasonable and easily available to assist global communities to develop cleanliness Fair lovely: Karnani (2) stated that Unilever marketed a skin whitening cream ‘Fair Lovely,’ and it is profitable and fast growing brand; however, 90% of Indian women want to use whiteners though it contains harmful chemicals; Clear Shampoo: Unilever launched its hair care product ‘Clear’ and developed this product with unique ingredients to effectively eliminate dand ruff with every wash and it has already sold in 42 countries; TOWS Matrix for Unilever The table below shows the TOWS Matrix for Unilever by scrutinizing its present position and future prospects throughout the global market:Advertising We will write a custom essay sample on Unilever’s Personal Care Products specifically for you for only $16.05 $11/page Learn More TOWS Matrix Strengths – S Weaknesses – W Strong brand image Wide range of services Impressive technological infrastructure Poor association with consumers Incompetent organization of products Plunging profits Opportunities – O SO – Strategies WO – Strategies Increasing demands for healthy products Prospects of entering new markets 1. Making investments to developing healthy products with its strong technological-infrastructure 1. Entering new markets to raise profits Threats – T ST – Strategies WT – Strateg ies 1. Eurozone crisis 2. Increased Competition 1. Further strengthening brand-image by advertisements to gain advantage over competitors 1. Reorganising product-portfolio to cope with crisis Table 6: TOWS Matrix of Unilever Source: Self generated PESTLE analysis Political Factors Unilever concentrates on political factors (unstable political position, hostile government attitude, tax policy, etc.) and set a standard or tactical way of handling political issues to create favorable business environment to sustain national and international market, for instance, it uses experience and goodwill to bargain with government to change policy towards foreign companies, new entrants, tax exemption and so on. Economic Factors The main economic concerns are the purchasing power of the customer falls significantly all over the world, customers reluctant to buy expensive product, the personal care business environment becomes extremely competitive in European market for EU free trade policy , and uncertainty about duties due to inflation and fluctuation of currency. Socio-cultural factors The company is very much committed to ensure conformity with its corporate social responsibility guidelines that highly focuses on endorsing social and cultural factors in its operational areas; for example, it is working to improve hygiene and better nutrition to people in Asia, Africa and Latin America, and recruiting about 100 nationalities to ensure diversity in workplace. Technological factors The company is investing more on its IT infrastructure to enhance its business particularly in e-business; moreover, the company is also trying to diminish cost through IT-efficiencies at international level; additionally, Unilever Technology Venture works in partnership with Unilever RD group to meet consumers’ demands in areas of genomics, advanced bioscience, advanced materials science and nanotechnology Legal factors According to the annual report, the company is bound to follow the provincial and international laws, especially legislation regarding product-safety, product-claims, patents, competition, corporate governance, employment and so on, as inability to conform to these can expose Unilever to lawsuits leading to damages, fines, and criminal-sanctions with potential harm to its commercial statusAdvertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Environmental factors The company is extremely cautious to ensure environmentally friendly production process by focusing on sustainable solutions. The following figure shows the company’s sustainable drives from 1995 to 2010: Figure 5: Eco-friendly activities from 1995 to 2010 Source: Generated from Unilever (2) The following figure demonstrates the company’s greenhouse gas footprint: Figure 5: Greenhouse gas footprint of Unilever Source: Generated from Unilever (19) The chart below illustrates the company’s water footprint: Figure 5: Water footprint of Unilever Source: Unilever (23) VIRO Analysis Unilever has raised its value over the rivals, but its resources are imitable and the competencies are rare; however, the following table evaluates its position: Valuable: Imitable: Rare: Organized: Competitive inference: Economic-performance Strong/ Weak Unilever is capable of utilizing opportunities and defusing threats with the resources and competencies It is easy to imitate the resources and competencies The resources and competencies are in the control of few people Unilever is organized to some extent in utilizing the resources Short- term competitive advantage Above usual standard Strong and unique proficiency Table 6: VIRO framework for Unilever Source: Self generated Competitive Perceptual Map Mullins, Orville and Harper (325) stated that customers may have limited knowledge the necessary physical attributes of the brands, but they6 can purchase or using considering competitive offerings; in addition, perceptual positioning is important factor since many customers may not bother with brand’s physical characteristics. Mullins, Orville and Harper (325) further addressed that it gives a visual representation of the positions of various products or brands that show the differences and similarities in perceptions; however, it is essential for the companies to find out determinant attributes to prepare poisoning map to help the customers to evaluate competing brands. Most of the time, Unilever collects data about customer’s perceptions for goods and uses value along with quality of the products as determinant attributes so far customers can select right one; however, the following figure shows perceptual mapping for personal care products – Figure 1: Perceptual Mapping for personal care products Source: Self generated BCG’s Market Growth Share Matrix The following figure illustrates growth share matrix of Unilever and identifies key competitiveness including brand image, innovation, technologies, and large market share of national and international market (Cescau and Richard 7). Figure 1: Growth Share Matrix of Unilever Source: Cescau and Richard (7) Segmentation Strategy and Buying Behaviours for Each Segment The graph below illustrates the buying behaviour of the customers through the operating margin in particular segments. In personal care segment, there is a fixed customer base providing sound buying behaviour, in home care segment, there is random buying tendency with declining drift in 2010 and 2011, in foods segment, there is a variable customer base with highest sales in 2008, and in refreshment segment, there is an irregular buying behaviour with better sales than 2004. Figure 5: Buying behaviour Source: Unilever (4) Segments Buying Behaviours Segmentation Strategy Personal Care Stable customer base ensuring steady buying behaviour Segmenting the market based on gender; for example, different soaps or deodorants for men and women Home Care Fluctuating buying behaviour with falling trend Segmenting the market by focusing on people ageing 25 or above; for example, by formulating advertisements for home care products by only targeting adults Foods Variable buying pattern with increasing trend Unilever should try to segment the market by income levels; for example, by offering diversely priced food items Refreshment Irregular customer bas e This market should be segmented by age, with especial focus on promotions targeted at children Table 6: Segmentation strategy and buying behaviours Source: Self generated Corporate and Marketing Strategies to Reach Target Market in a Segment To reach the target market in the personal care segment, Unilever follows the corporate strategies of targeting a mass-market (by attracting a wide variety of customers in numerous demographic groups) and being a cost leader (by offering lower prices than that of the competitors). The marketing strategies to reach the target market includes bringing out new-products, spreading out circulation and product supply, entering into new foreign-markets, and spending more on promotional activities. Origin of Need for New Product/Service Based On PESTLE The origin of need for new product is the demand of consumers in the areas of genomics, advanced-bioscience, advanced-materials-science, and nanotechnology; moreover, as suggested in the technologica l factors of the PESTLE-analysis, Unilever-Technology-Venture works in partnership with Unilever research and development group to meet consumers’ demands in those areas; this has led the company to bring out innovations like Men+Care. Most importantly, Unilever (4) pointed out that the new product range under the Men+ Care has raised the turnover above thirty percent Product Portfolio Analysis Personal Care: According to the annual report 2011 of this company, personal care consists of skin care (Dove, Lux, Fair Lovely) and daily hair care products (Clear, Sunsilk, etc.), deodorants (Axe, Rexona) and oral care products, Personal Care 2011 ($ million) 2010 ($ million) % change Turnover 15,471 13,767 12.4 Operating profit 2,536 2,296 10.5 Operating margin (%) 18.0 18.0 – Sales growth (%) 8.2 6.4 Volume growth (%) 4.2 7.9 Effect of price changes (%) 3.8 (1.4) Table 1: Financial overview of Personal Care segment Source: Unilever 23 Home Care: Dish w ash (VIM), Fabric softeners, Fabric wash, Household cleaner, and Mosquito coil Foods: Beverages, Margarine, Snack, Seasoning, and Other products Refreshment: Ice cream and drinks brands, weight-management products, and tea-based beverages, for instance, Lipton is one of the world’s great refreshment brands Product life cycle Unilever possesses a huge number of personal care products, but the leading products are Lux, Dove, Sunsilk, Lifebuoy, Clear, Axe, Men+Care, Rexona and Close- up; moreover, according to Management Paradise (1), Lux and Dove is in the maturity stage of the lifecycle. Although Sunsilk was heading towards the maturity stage, introduction of fresh fragrances and new packaging together with new features has raised the sales, putting it in the growth stage (Unilever, 8). In addition, Lifebuoy, Clear, Axe, Rexona, and Close- up all are in the maturity stage, with the highest profits generated from Axe; however, Men+Care, being a new product range, is in the int roduction stage. SBU Analysis investment strategy Figure 1: growth priorities into investment plans Source: Cescau and Richard (12) Business level strategy for each SBU With 12 brands that each goes above 1b Euro yearly sales, Unilever’s growth has sustained because its cost leadership strategy in all of its SBUs; in addition, in each SBU Unilever maintains adequate differentiation; moreover, Unilever is the leader in five of six food-segments and two of six segments in Home and Personal Care, and it holds the second position in two of the six Home and Personal Care segments Works Cited Cescau, Patrick and Richard Rivers. Unilever’s Growth Strategy. 2010. Web. http://www.unilever.com/images/ir_1.2_growth_strategy_slides_rivers_1303_ppt_tcm13-86707.pdf. Deighton, John. 2008. Dove: Evolution of a Brand. PDF file. http://www.hbsp.harvard.edu.. Graul, Lee Ann. 2006. Procter Gamble, Unilever and the Personal Products Industry. 2006. PDF file. http://info.umuc.edu/mba/ep/P resentation/EP_Olp/data/GSA.pdf. Joachimsthaler, Erich. 2012. Formulating a Strategic Blueprint for Action. PDF file. www.harvardbusiness.org/press. Karnani, Aneel. 2007. Case Study: ‘Fair Lovely’ Whitening Cream. PDF file. http://www.un.org/esa/coordination/DWDG.Fair.Lovely.SMJ.pdf. Management Paradise. Lux- A Comprehensive Study. 2009. Web. http://www.managementparadise.com/forums/marketing-management/139305-lux-comprehensive-study.html Mullins, John. Orville Walker. Harper Boyd. Marketing. PDF file. http://www.burgesscompany.com/mba/h17mkcoursetext.pdf. Scribd. Strategic Marketing Planning. 2010. Web. http://www.scribd.com/doc/29438236/21739056-Strategic-Marketing-Planning. Uhmhoabhi, Fredrick Albert. Pestle analysis: a report on Unilever. PDF file. http://www.codewit.info/articles/Uhmhoabhi20172045.pdf. Unilever. 2011. Annual report 2011 of Unilever. PDF file. http://www.unilever.com/images/uslp-Unilever_Sustainable_Living_Plan_Progress_Report_2011_tcm13-284779.p df. Unilever. 2011. Unilever Charts 2011. PDF file. http://www.unilever.com/images/Unilever_AR11_tcm13-282960.pdf. Unilever. 2011. Unilever Sustainable Living Plan. PDF file. http://www.unilever.com/images/uslp-Unilever_Sustainable_Living_Plan_Progress_Report_2011_tcm13-284779.pdf. This essay on Unilever’s Personal Care Products was written and submitted by user GhostRider to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.