Figure 1.1 (S 2013)
As the figure 1.1 outlines, Unilever has more than 400 brands under their wings sold in more than 190 countries with major focus of diversification on health and wellbeing. This company has touched so many people’s life in many different ways, and their brands are used by more than 2 billion people every day worldwide. Unilever produce world-leading brands containing Magnum, OMO, Dove and Lipton as well as alongside trusted local brands including Rexona and streets Ice Cream with a turnover of sales more than €51Billion in 2012 and more than 1,73,000 employees (S 2013).
Does Brands under Unilever align with the company’s overall growth?
In the year 2000 with the motive of discharging resources in order to concentration on core categories, Unilever started Portfolio streamlining. It worked in favour of Unilever, as this strategy managed to gain share across most of its beauty and personal care categories brands.
“It (path to growth strategy) is all about how we can reshape ourselves for faster growth and expected margins.”- Niall FitzGerald, Co-Chairman, Unilever Group, in February 2000 (The Economist 2000).
“Path to growth” In order to keep up with consumer needs and increase operating margins, Unilever consolidated its 1,600 brands to around 400. The main strategy and objective of Unilever for consolidating its brands were; concentrate on stronger and better product innovations, making a world-class supply chain, strengthening marketing efforts, and business processes simplification (Bore & Applegate 2005).
Unilever Market Share and Sales in Beauty and Personal Care
Figure 1.2 (Mohuiddin 2015)
Figure 1.2 demonstrates Unilever’s market share and sales movement in personal care and beauty product categories, against the predictable development for these individual categories between the year 2014 and 2019. The Horizontal axis determines the benefit that Unilever has over the third party leading players in terms of sales share in percentage, while the vertical axis shows growth projections in US$. The green colour bubbles denotes increase of sales share market and orange colour indicates market share losses. While the Sizes of bubbles represent company sales. The huge number of green bubbles evidently illustrates that Unilever has succeeded to gain share across all personal care and beauty product categories with fragrances being in exception list.
Smaller fragmented brands with limited regional focus:
Prior to year 2000 Unilever also had a fragmented brand portfolio but the company decided to get divested in many smaller brands, with a aim to have fewer brands but greater regional presence rather than large number of regionally-focused brands. This strategy has largely benefited Unilever over the years (Mohuiddin 2015).
Diverse brand portfolio in beauty and personal care
Unilever operates a large portfolio of local, regional and global brands in personal care and beauty. Interestingly, eight out of top ten global brands of Unilever outperformed the global BPC (Beauty and personal care) market in CAGR (Compound annual growth rate) terms over the period of 2009-2014. This performance was majorly driven by the brands’ great access to emerging markets, wide geographic range and strong brand support via creative promotion campaigns and innovation (Euromonitor International, 2015).
Figure 1.3 (Euromonitor International, 2015)
Dove: Unilever’s largest beauty and personal care brand
Dove is proved to be Unilever’s best-selling brand, with sales of 7.4 US$ billion in 2014. Unilever promotes Dove as more of a masstige brand. Its brands like Lux are mostly recognized in developing markets by comprising basic products at economic prices.
Dove is primarily a shower and bath brand, but Unilever made sure to extend this brand across various other categories. Its growth impetus was derived from body care and hair care, significant amount of money was spent by Unilever to raise brand’s profile in both categories.
Dove products like conditioner and shampoo are known to be very popular in developed markets and now Unilever tends to push this brand in to men’s skin care as well.
The general purpose body care range by Dove has become very popular across the world, moreover anti-cellulite body care by Dove is popular in Western Europe following a very intense and strong marketing campaign which involves “ordinary” women rather than big celebrity faces (Euromonitor International, 2015).
Broe, C, Applegate, S 2005, ‘CASE STUDY – Unilever Jumpstarts Growth Strategy, Increases Revenues’, tdwi, 13 October, retrieved 11 April 2016, < https://tdwi.org/articles/2005/05/13/unilever-jumpstarts-growth-strategy-increases-revenues.aspx>
The Economist, 2000, ‘Shrinking to grow’, retrieved 15 April 2016, < http://www.economist.com/node/286336>
Euromonitor International, 2015, ‘Unilever Group in Beauty and Personal Care (World)’, Beauty and personal care: Unilever group, pp. 44-45, retrieved 11April 2016, Passport.
Mohuiddin, O 2015, ‘Which Brands Could Procter & Gamble Divest to Inject Growth Elsewhere?’, International supermarket news, 16 April, retrieved 12 April 2016, <http://www.internationalsupermarketnews.com/news/18793>
S, D 2013, ‘UNILEVER LTD’, KNOCK IT TO KNOW MORE, weblog post, 22 May, retrieved 15 April 2016, <http://knockittoknowmore.blogspot.com.au/2013_05_01_archive.html>