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Unilever
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5/21/2018 Case Study Unilever
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Strategic MarketingCase Study Unilever
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UnileversQuestGrowth by Shedding Brands
Stefanie Bayer
Marlen HaverkampHeike Tieben
Len Zenteno Tovar
19.05.2010
Strategic Marketing
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Agenda
| Company profile
| Case Study
| Q1: Advantages / Risks of reducing the size of product portfolio
| Q2: BCG Growth-Share Matrix and General Electric Market Attractiveness-
Competitive Position model (FitzGerald era)
| Q3: Attractions / Dangers for small companies of buying marginal Unileverbrands
| Q4: Unileversapproach to global marketing of its brands
| Q5: Sale of BirdsEye and its North American detergent business from a
strategic perspective
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| Unilever was formed in 1930 from two companies
Margarine Unie (Netherlands) and Lever Brothers (UK)
| 400 brands in 170 countries
| Home care products
| Personal care products
| Food products
| 163,000 employees (2009)
| 3.7 bn Revenue (2009)
| Marketing of brands but not of Unilever
itself
Company Profile
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One Unilever
with Patrick Cescau CEO, Antony Burgmans
non-executive chairman
Selling of Cosmetics and
Fragrances arm
Timeline of the Case Study
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Niall FitzGerald Path to Growth
strategy (from 1600 to 400 brands)
Goals achieved
Departure of Niall FitzGerald
Below
expectations
Selling of BirdsEye
Selling of NA detergent
business
Mr. Ceseau retires, Paul
Polman becomes CEO
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Question 1
What were the advantages to Unilever of reducing the size of its brand portfolio?
What were the risks?
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The brand clearing
Regional and local brands are up for sale immediately or over a period of time
Source: H. Sattler, F. Vlckner (2001). Markenpolitik. Stuttgart.
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Advantages of the path to growth
| Get rid off unprofitable brands, factories, locations
| Cost reduction (brand development, advertising, storage, transportation,management )
| Reduction of overlapping segments / bundling
| Avoid intervening of Antitrust Office (commitment to sale)
| Strengthen and promote the remaining brands
| Reallocation of resources (elimination of redundancies)
| Focusing on Core brands, exploitation in new markets
| Opportunities to brand extension to serve a whole segment
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The path to growth as a risk?
| Loosing (local) market share (end customer)
| Shedding brands that could be successful in other markets| Inadequate change management
| Strengthen your competitors
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Question 2
To what extent does it appear that Unilever followed
| (i) the BCG Growth-Share Matrix, and| (ii) the General Electric Market Attractivenes-Competitive Position model
approaches
to portfolio planning during the FitzGerald era?
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Market
attractiveness
high
medium
low
lowmediumhigh
Competitive strength
100%
0%
0%
100%
54
1
2
3
The two portfolio planning approaches
| BCG Growth share matrix
2 dimensions:
- Market growth
- Relative market share
4 Cluster provide strategy guidance
| General Electric Market
Attractiveness Competitive Position
model
2 dimensions:
- Market attractiveness:market size,
growth rate, rivals, entry barriers,
- Competitive strength:market
share, reputation, cost advantage,service quality,
5 zones provide strategy guidance
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Measures Portfolio effects and examples
Critical product selection based on current
market share (> 2 top sellers)
Concentration on high-growth brands
Cut off poor dogs and question marks
Timotei shampoo, Brut deodorant
Savings used to increase brand
expendituresfor strong brands
Strengthen stars to maintain statusice
cream brand alignment (heart-shaped logo)
Boost sales ofcashcows to skim themarketMagnum, Dove
Selective aquisition to enter new markets Addition of premium brandsBen & Jerry
Penetrate existing markets Promote development of starsSlim
fast
BCG growth share matrix orientation
Unilevers portfolio measures (20002004)
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Question 3
What are the attractions to small companies of buying marginal Unilever brands?
What are the dangers of doing so?
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Attractions / dangers for small companies acquiring Unilever brands
| Attractions
Marginal brands for Unilever could represent the acquisition of a well known productto a small company in order to increase its revenues
Increase of market share if it continues to launch the brand
Decrease competition if it discontinues the brand
Attractive cost of acquiring a brand maximizing cost-benefit
Get introduced into a new market with a positioned brand Some brands were well position in local markets, small companies in that market
could benefit itself
| Dangers
Image of some brands might be bad and will never increase acceptance of customers
Brand name might be strong related to Unilevers portfolio
Selling a brand as unwanted might impact on the customers taste in the same way
A brand transfer from one company to other doesnt mean transfer of same number
of customer
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Question 4
Comment on Unileversapproach to the global marketing of its brands.
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The global marketing approach
Brand Building
Team Germany
Brand Building
Team France
Brand Building
Team UK
Brand Building
Team NL
Brand Development
Team HQ
.
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Comments on the global marketing approach
+ Financial Synergies
Human Resources Economies of scale (marketing material)
+ Improvement of customer recognition
Standard packaging
Same advertising campaigns
Same logo (e.g. Ice cream Heartbrands, margarine Becel and Flora) or alsosame brand names (Lipton, Rexona)
+ Concentration on the strongest brands
+ Same approach for all products makes it easier to launch products in new
markets (marketing package)
Taking away power from local teams (motivation)
Working on marketing package only with key countries
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Question 5
Why did the sale of BirdsEye and its North American detergent business make
strategic sense for Unilever?
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Sale of BirdsEye, Detergent (laundry) business
| Focus on core / large brandsdispose noncore brands
Detergent Business: Brands All, Snuggle, Wisk, Surf (sales of $1 bn in 2007) BirdsEye: Brands Iglo, BirdsEye, Findus (sales of $1,2 bn in 2005)
| Focus on emerging markets / faster-growing sectors (higher growth rates and
larger sales revenue)
Detergent Business: NA, Canada, Puerto Rico
BirdsEye: 11 European countries
| Focus on core categories food, cleaning, personal care (sold cosmetics and
fragrances arm)
BirdsEye: frozen food
Also:
| Trend towards health an well-being - consumer prefer fresh food (in case of
BirdsEye)
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http://www.unilever.com/
Questions?