Business Strategies at the Unilever Company

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Abstract

Unilever Company is operated by two parent companies which are Netherlands-based Unilever N.V. and UK-based Unilever PLC. It is one of the largest makers of consumer based goods. The product strategy, distribution strategy, communication strategy and pricing strategy that the company has applied over the years has been the main driving force towards its success. In addition, the company has majorly concentrated on the products preferred by consumers.

Its entry in to developing markets has also fanned its growth and success. The reception in such markets was enormous thus any attempt to oust unilever from these markets has not been fruitful. It still dominates the developing markets and some of developed markets.

Unilever Company profile

Unilever Company is a top manufacturer of packaged consumer goods globally. Its products vend in more than 170 countries through out Western Europe, Latin America, Africa, Middle East, North America and Asia. The company offers several categories of products. The paramount sellers include mayonnaise, tea, soaps and antiperspirants. Unilever is the working arm of Unilever PLC and Unilever N.V.

Mission statement

‘Meeting the everyday needs of people everywhere’

Product strategy

Unilever is going by the inexpensive pricing strategy of Hindustan unilever limited in markets with recession such as the US. It offers products through dollar stores to consumers.

This is a fraction of a recent Unilever strategy to increase its earnings from recession-hit emerging markets such as China, India and Brazil which have been growing more rapidly. Product strategy is considered a management process (McGrath, 2001).

Distribution strategy

Unilever has established plants in the 170 countries where their products are vended. The company distributes its products using the plant names in the market. For example in India, the distributor is Hindustan Unilever Limited. In UK, the distributor is Unilever PLC.

Anonymity conceals the company’s significance. Unilever trades using brand names. Everyone knows its brand names. Distribution strategy must always be considered before marketing process (Rolnicki, 1998).

Pricing strategy

Unilever Thai Holdings Ltd, a large consumer products maker, have taken up a new pricing strategy, offering customers up to 20 per cent discount the usual prices of its products, and setting the phase for ferocious competition in this sector.

The firm has reduced its marketing and advertising expenses to hold up the new strategy as more customers have less expenditure ability and confidence, as they are affected by the decrepit economy (Baker, 2010, et al.).

Global business environment and the countries selected market

Currently emerging and already existing companies that produce similar products as unilever are restrategizing and entering the market. These companies have majorly concentrated in developed countries. This includes the whole of Europe, parts of Asia, South America and Australia.

Although unilever vends its products globally, it has mainly conquered the markets in developing countries. These include Africa, Latin America and parts of Asia. It has divided its products to meet market specification. In these developing countries, the competition is low thus unilever enjoys the market dominance.

Competitive environment

As a result, of the competition in most countries unilever vends products in appropriate markets. Unilever manufactures consumer packaged products used mainly at home.

The stiff competition present in the 170 countries that unilever operates makes the company to perform selective vending. For example, the ice cream and dressings are not vended in developing countries like Africa, as there are low sales and are not considered basic requirements.

Instead, they are retailed in Europe and some parts of Asia where there are more sales. The same applies to products like Omo, dove, Lux and Rexona which are majorly vended in developing countries. This is because they are considered basic requirements; as a result, there is a ready market.

Target market

Unilever has got a wide target market which includes both domestic and general utilities. These markets include drinks and domestic products. In each market, there are specific products that are retailed. The products include soaps, drinks, spreads (blue band) and ice cream (Kurtz, 2009, et al.).

Communication strategy

Unilever communicates with its customers by use of media and bill boards for advertisement. This is a strategy most companies employ. As a result, Unilever wants to use the Internet in order to perk up brand communication, advertising and on-line selling.

It will also simplify business-to-business connections a long the distribution chain. Unilever has lately awarded an Indian firm an IT contract. Unilever has made contact with several software developers to facilitate this project. The use of visual and audio communication means is widely employed by many companies (Jones, 2008).

Impact of culture

Culture has played a big role in dragging and speeding the prosperity of Unilever Company. When the company first entered the markets in undeveloped countries, for example, Africa, it faced many challenges. The personal care and home care products that are vended in Africa took long to be accepted in the market.

This is so because the communities were still conversant with their traditional modes of personal and home based care. Once these products were accepted, the presence of new products from other companies faced massive rejection. This resulted to their withdrawal. Thus, unilever products still dominated.

Key management issues

Changes were recently made in the company’s top administration. It has started selling off any subordinate companies that are earning less profit, and ‘decentralized’ control of subsidiaries. The Head Quarter in Europe just scrutinizes profit margins and making sure they are maximized. This resulted in cutting of expenditure like reducing workers pay.

References

McGrath, M. (2001). Product strategy for high technology companies: accelerating your business to web speed. New York: McGraw-Hill Professional.

Rolnicki, K. (1998). Managing channels of distribution. New York: AMACOM Division of American Management Association.

Baker, W. Marn, M. & Zawada, C. (2010). The Price Advantage. New Jersey: John Wiley and Sons.

Kurtz, D. Mackenzie, H & Snow, K. (2009). Contemporary Marketing. Toronto: Cengage Learning.

Jones, P. (2008). Communicating Strategy. Gower Publishing limited.

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