BUS 504

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[Year]

Report

On

Deliverin customer value

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1. Introduction

Unilever is one of the leading global companies in the current market. It has a very large range of

product lines and the availability of its products is everywhere. We have chosen “Lux” because it

is very much popular and available in the UK market. The product was first launched at UK in

1899. At that time Unilever’s name was known as Lever Brothers Company. The name “Lux”

was taken from a Latin word which means “Light”. We have tried to discuss the marketing

policy or mix of the “Lux” briefly but specifically and we have also tried to highlight the “STP”

process and also the Value chain of “LUX”.

2. Company overview

We have mentioned earlier that Unilever is a very popular brand throughout the globe and they

have achieved the popularity by managing strong branding, marketing and other crucial

activities. Unilever has started its first journey in 1872 at Netherland. Unilever now considered

as the world’s biggest and largest multinational company. It has expanded its operation in almost

five continents (Allan, 2013).

The company has always got the inspiration of its founders and thus it has reached into the top

floor through new inventions, generation new ideas and dedication to the company. Unilever hastouched almost every sector of consumer goods like soap, cleaning, household goods, skin

cleansing, oral care, personal grooming and many other areas. In every sector it has got very

popular brands and also its many products are counted as the market leader and challenger.

Unilever is producing innovative product and delivering them to the hand of consumers and thus

simply upgrading the standard of living of general people. Day by day people are using more

innovative and sophisticated product by the help of the company.

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3. Situation Analysis

This is a very crucial task to every organization. Before launching any product into the market

Unilever tries to carefully analyze the external and internal situation (Brown, 2013).

Political Factors: There always remain some political factors to interrupt the business. To

enter into a new market our prescribed “LUX” will face the following political situations,

a. Stability of the Government: If the government is not stable then it will be very

much difficult for Unilever to implement new product plan. Every now and then

government changes tax plan and the company has to change or reduce the asked

price. So it’s terrible to start everything from the beginning.

b. Budget Plan: New government brings new budget plans. Frequent changes in the

plan cause harm to the industry.

Economic Factors: In UK soap cost is pretty much high than compared to the Asian

countries. So, this creates a false impression to the people about the pricing of the product.

Moreover, the per capita income of people is increasing and as a result they are bound to expense

a lot than before. Increasing population creates much more demand.

Socio-Cultural Factors: Buying habit of consumers changes very frequently. As a resultUnilever faces problems as they also have to change the product like package, fragrance, colour,

price etc. By doing business in UK Unilever is somehow polluting the environment. So they

have to recycle the wastage as it is a part of their Corporate Social Responsibility. So this whole

thing increases the total cost which is bound to reduce profit (Unilever.co.uk, 2013).

Technological Factors: It is true that soap companies don’t require very high technology

but this statement is proving false now a day. Through the use of modern sophisticated

technology companies can create more soap within an hour and also can ensure maximumquality.

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4. Marketing Mix of “LUX”

“LUX” is in the Soap category. So it requires a perfect mix, perfect blend of some elements that

will make the product acceptable, affordable and available to the new market.

4.1 Product

Unilever has own their personal and very big plant to produce products instantly. (Dorothy

Leonard-Barton, 2001) The product “LUX” is known worldwide for its utility. This means it is a

successful product of Unilever. Unilever uses some ingredients that are common like sodium

soap, different useful fragrance and also glycerol. But they use some other material which is not

still available to many soap industries. As most of the people in UK can tends to purchase big

amount of soap at a time so Unilever should concentrate on producing “LUX” above 250 gm.

Now we are going develop a new product under “LUX” brand. We would like to name it “Lux

Creamy sandal”. Here all the ingredients will remain same but we will add something extra. We

will combine the fragrance of sandal soap which is very much popular for its fragrance and will

make it feel like creamy. These total things will make the soap very much attractive and

acceptable to the general people. This will be a premium product for the elite class and this will

certainly meet their desired need as we have taken a survey on this segment of people

(Fmcg.com, 2013).

Width of the product

Width of the product means the total number of product lines Unilever has brought to the market.

Here we are talking about only “LUX”. So here we barely get the chance to describe the width of

“LUX”.

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Length of the product

Our prescribed product is “lux”. Here length of the product means the number of products

available under “LUX” banner.

a. Lux energizing honey

b. Lux almond delight

c. Lux orchid touch

d. Lux aqua sparkle

e. Lux nature pure

f. Lux golden glow

g. Lux sandalwood

h. Lux fruit

i.

Lux chocolate j. Lux saffron

Depth of the product

Depth of the product means types or variants in the prescribed product line. Here we have

selected “LUX creamy sandal”. We will produce three different fragrances under this line.

Example: If the selected product will come into three formulation then the depth of the product

line will be (3*3) =9.

4.2 Price

Our selected product “LUX creamy Sandal” is a premium product for the elite groups as we have

mentioned earlier. So its asking price will be high. We have figured out only one size of this soap

initially. The price will be 3 pound for 250 gm. And this will not bother the customers as they

don’t usually bother with price against the quality.

This price is a bit high than other existing competitors but we have mentioned earlier that we

have a bunch of loyal customers who badly needs this sort of product and they don’t bargain.

4.3 Place

Normally Unilever produce their products at their designated plants and then distribute the

products. They don’t have own transportation to distribute the products to the shopping mall. So

they hire third party to reduce the cost of transport. This is a part of their supply chain plan.

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Unilever may use exclusive distribution to deliver the product to the market. Products will be

available on large shopping mall, super shop etc.

Product dist r i but ion: Unilever may use the following distribution process,

Manufacturer

Distributer

Retailer

Consumer

Source: www.Unilever.co.uk

4.4 Promotion

Now as we know this a new and different productUnilever may us advertisement, sales promotion,

public relation and point of purchase type promotions

to boost up the sales.

Po in t of pur chase : Unilever can take the

advantage of this promotion to promote their

new products. It can teach the salespeople to

create attractive decorations and display the

products nicel y which ma y certai nly at tract the

customers.

Adver ti sing: Here comes the most important

promoti on st rategy. By se lect in g di fferen t types

of media Unilever can transfer or deliver the

message to the audience.

a. Television

b. Print media

c. Magazines

d. Outdoor advertising(billboards)

e. Newspapers

f. Internet

g. Brochures

Publ ic Re la tion: Unilever has established loyal

and profitable relations with the customers over

the years. They have also built a department

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which is known as consumer department takes complain from the consumers and

solve them as early as possible.

Sales promotion: Unilever provides sales promotion to boost up sales for a short

per iod of time. Sal es promoti ons li ke ,

a. Launch event: Unilever can organize an event for launching the new product with the

help of media coverage. As soon as the product gets media Coverage Company gets

the benefit.

b. Consumer promotion: This is another strategy of the company where consumers are

encouraged to buy more products as there is something given with the product that is

complementary in type (Kotler and Armstrong, 2010, pp. 400-410).

5. LUX Segmentation, Targeting & Positioning

Lux soap was first launched and introduced as bathroom beauty soap in the UK market in 1928.

Before that LUX was launched at first as Sunlight soap – flaked version. Afterwards, LUX soap

has been introduced and marketed in several forms with brand extensions including shower gel,

cream bath soap and hand wash liquid. The brand name “LUX” came from Latin word “light”

and it was chosen as the suggestive of “LUX”.

5.1 Product Category

LUX is a beauty soap which is classified under the category of toiletry product.

5.2 Market segmentation

According to company market research report, Unilever UK claims that LUX is one of the

highest selling products in UK. Unilever doesn’t go for traditional mass marketing, rather they

have targeted market segment with brand image and emotional attachment. Unilever UK can

segments their market according to the combination of geographical areas and demographic

segments in order to expand their current LUX market share. As LUX brand image has already

created as delicacy, it will be helpful to promote new incremental product LUX Creamy Sandal

soap which is premium product in new market segment.

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The population of the UK market is segmented into three above parts which are Urban, Sub-

urban and Exurban area consumers. As LUX Creamy Sandal soap is a premium product,

Unilever UK is supposed to target urban market segment for better positioning according to

incremental product type. The company may further differentiate the product market segment in

demographic segments to create niche market for better image positioning and emotional

attachment. The demographic market segmentation of LUX Creamy Sandal is briefly mentioned

below:

Gender: Female

Age: 16-40

Income: Higher & middle income group

Expensive: Affordable

5.3 Market Targeting

Urban and sub urban areas are highly dense population including elite class and higher-middle

income group. Company research indicates that urban rich and higher middle income group aremore likely to buy quality and aesthetic toiletry products that represents as delicacy. The new

product LUX Creamy Sandal is a premium product development that is very suitable and

beneficial for skin, prevents skin irritation with sandal delicate fragrance. This new incremental

premium product can be successful, higher selling product in the targeted urban and sub urban -

elite and higher middle income group people.

Urban

Sub urban

Ex urban

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Though LUX Creamy Sandal soap is a premium product with little expensive but it is an

affordable product for middle class income group too. That is why, the company may target

urban and sub urban upper middle class people for higher sales volume of premium product with

justified price.

5.4 Market Positioning

Unilever UK Ltd. has created a good positioning of LUX brand in the consumers’ mind through

better product attributes, price and quality, and also serving the product in a different way than

the competitors personal care product that helps to build a good emotional attachment with

consumers. The new incremental premium product LUX Creamy Sandal can be positioned as

“Aesthetic & Delicacy” as personal care product that is more suitable for skin care. This LUX

brand’s position in the consumers mind can be on two dimensions: Price & Quality. Though, this

is a premium product and price is a bit higher than other regular Lux soap, quality is much higher

than the price. So, in spite of higher price, the LUX Creamy Sandal soap will be affordable product for target market segment in comparison to its competitors. This “Higher quality,

Aesthetic & Delicacy” positioning will build up a strong customer loyalty and brand image for

LUX consistently. Thus, LUX Creamy Sandal brand will claim market leader in the personal

care and toiletry industry. (Unilever.com, 2013)

6. Value chain Analysis

Unilever is a multinational organization that incorporates the functions to value creating

processes. In order to satisfy customer needs and wants, Unilever maintains both international

and local operations efficiently that make a difference in comparison with the market

competitors. Unilever value chain integration keeps the company profitability and market share

ahead in the business industry. Unilever brands are treated in terms of operations and

productivity through creating value in the path of growth.

The value chain analysis framework is the one of the significant tools of strategic planning and

operations research that implies an effective leadership integrated model in the organizational

business activities. (Saha, A., 2011)

According to Michael Porter value chain analysis framework, Unilever value creating processes

can be classified into two phases which are-

Primary activities including –

product &

market related activities

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In primary activities, Unilever UK Ltd. performs all the functions related to product design,

product development, new product research, market research, market penetration strategies,

market product offering and support activities that add value to the services in achieving the

organization goal in the pathways of growth and profitability.

(Source: www.managementexchange.com)

Support activities including –

Human Resource Management

Technology management

Infrastructure

Procurement

In support activities part of the company’s value chain, Unilever maintain, monitor and perform

all those activities related to the operational procurement, intensive uses of technological

management, managing workforce for effective and efficient output, infrastructural support thatintegrates in the whole business operations.

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7. Conclusion

Unilever UK Ltd. has been market leader in the industry in years with LUX soap brand. Now,

Unilever has become the world’s largest company now. It operates their business function in all

five continents with an annual turnover around 84 billion dollars including 340 operating

companies, 714 factories in 81 countries and more than 721000 employees over the world. The

company indebted its current status to the to the pioneering sprightliness inherited from its

founders which continuously empowering the activities and functions in new ways of satisfying

people’s various needs and wants creatively.

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8. References

1. Allan, J. 2013. Marketing_Project_Lux Ppt Presentation. [online] Available at:

<http://www.authorstream.com/Presentation/meenakshijha-1235584-marketing-

project-lux/> [Accessed: 13 Dec 2013].

2. Brown, M. 2013. Lux Soap. [online] Available at:

<http://www.slideshare.net/anandganpaa/lux-soap> [Accessed: 13 Dec 2013].

3. Dorothy Leonard-Barton, 2001 “Core Capabilities and Core Rigidities: A

Paradox in Managing New Product Development,” Strategic Management

Journal (summer, 1992).

4. Fmcg.com. 2013. First Manhattan Consulting Group - Home. [online] Available

at: <http://www.fmcg.com/index.asp> [Accessed: 13 Dec 2013].

5. Kotler, P. and Armstrong, G. 2010. Principles of Marketing . 13th ed. London:

Pearson.

6. Kotler, 2004. Marketing Management . 12th

ed.

7. Saha, A., 2011. Untitled. [blog] Available at:

<http://www.managementexchange.com/hack/mapping-porter%E2%80%99s-

value-chain-activities-business-functional-units>

8. Unilever.co.uk. 2013. Unilever UK & Ireland | UK & Ireland . [online] Available

at: <http://www.unilever.co.uk/> [Accessed: 13 Dec 2013].

9. Unknown. 2013. [online] Available at:

<http://www.gfk.be/ProductsAndServices/ConsumerDiagnosticTools/SpecialAnal

yses/BrandHealthCheckUp> [Accessed: 13 Dec 2013].

10. Unilever.com. 2013. Lux | Brands in action | Unilever Global. [online] Available

at: <http://www.unilever.com/brands-in-action/detail/Lux/292092/> [Accessed:

13 Dec 2013].

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