Case Study Unilever

5/21/2018 Case Study Unilever

1/19

Strategic MarketingCase Study Unilever

page 1

UnileversQuestGrowth by Shedding Brands

Stefanie Bayer

Marlen HaverkampHeike Tieben

Len Zenteno Tovar

19.05.2010

Strategic Marketing


2/19


page 2

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


4/19


page 4

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


5/19


page 5

Question 1

What were the advantages to Unilever of reducing the size of its brand portfolio?

What were the risks?


6/19


page 6

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.


7/19Strategic MarketingCase Study Unilever

page 7

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



page 8

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



page 9

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?



page 10

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


11/19Strategic Marketing

Case Study Unilever

page 11

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)



Case Study Unilever

page 12

Question 3

What are the attractions to small companies of buying marginal Unilever brands?

What are the dangers of doing so?



Case Study Unilever

page 13

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



Case Study Unilever

page 14

Question 4

Comment on Unileversapproach to the global marketing of its brands.



Case Study Unilever

page 15

The global marketing approach

Brand Building

Team Germany

Brand Building

Team France

Brand Building

Team UK

Brand Building

Team NL

Brand Development

Team HQ

.



Case Study Unilever

page 16

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



Case Study Unilever

page 17

Question 5

Why did the sale of BirdsEye and its North American detergent business make

strategic sense for Unilever?



Case Study Unilever

page 18

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)


19/19


19

http://www.unilever.com/

Questions?

Case Study Unilever

Documents

Transcript of Case Study Unilever