Category: Unilever

The choice of a product or service that an entrepreneur wishes to invest in is an important factor to consider before bringing it to the market. Any investment project chosen should produce returns to benefit all stakeholders and other interested parties that the project affects directly or indirectly.

The paper utilizes axe anarchy fragrance for women, a new product that Unilever Company has launched on the market, as a case product in a bid to show the financial implication or consideration that the case company made before investing in the product.

Unilever is a big corporation that deals with production or manufacture of many kinds of household products. Axe anarchy is the latest innovation or rather new product that the company has launched on its market (Unilever PLV, 2012, Para. 3). This product is therefore financed by the company. The company has put in place enough funds that are used to innovate and manufacture new products on the market.

The company is quoted in the securities exchange market as exemplary in terms of the quality of its products. Some of its finances come from the owners of the business who are the shareholders.

Because of the high amount of money the company receives from its shareholders, it is able to carry out various innovations besides venturing in the production of multiple types of products. Unilever PLV therefore generates its funds through the sale of shares to its investors, a process known as equity funding (Unilever PLV, 2011, p. 15).

This form of acquiring fund is advantageous because investors who buy the shares are not entitled to any interest. Bondholders, on the other hand, require that interest be paid to them. Therefore, this method allows the company to access capital for use to produce and market its products. The investors are only entitled to profits and losses in equal measures.

Hence, the method does not have any impact to the company. Another advantage that the company will accrue from this form of financing is that there is no collateral required for this type of investment. Furthermore, the company is only obliged to pay dividends on the earnings that it makes. This therefore protects the company from any court proceedings or accusations when the company fails to make profits on the products.

Therefore, the business is not faced with a threat of collapse, as it can come up with other strategies to ensure survival. Furthermore, investing or financing this project through shared capital makes the company have a full control of the funds. The company is able to keep the funds indefinitely without being asked by the investors (Safania, Nagaraju & Roohi, 2011 p.78).

Furthermore, the company has an opportunity to make decisions on whether to invest in the product or not. The decision is solely based on the management of the company that has been given the responsibility to carry out managerial decisions on the behavior of the shareholders if they help in the growth of the company besides helping further in accruing of more profits for the organization.

Production of new products or services requires the organization to carry out a clear calculation on the total cost of producing the new product or service to ensure that it gets some profits after the product is sold. In this case, Unilever PLC Company will be required to analyze each investment components of producing axe anarchy fragrance for women to the moment it is sold. Therefore, various factors will be put into consideration.

One of the investment components of producing this new product is the cost of producing or purchasing raw materials that are required for the manufacturing of the product. The cost of transportation of raw material to the company for production, as well as distribution to the suppliers and retailers should be factored in the companys marketing strategies.

The cost of paying salaries to the employees who ensure that the product is manufactured or converted from its raw materials to the time it reaches the consumers should also be provided. Logistic costs are also paramount and worth considering such as storage costs and administration costs among other costs. It is also important to consider the costs related to government taxes. Other costs include marketing.

For the product to reach a wide market to attract high sales, the company needs to invest heavily on its marketing strategies. Media must be used to reach a wide audience coverage including television ads, billboards, internet, social media, and traditional forms such as print media among many other mediums.

All these costs should be calculated and the right figure known to help the company in determining its price that should be competitive in the market to enable many customers to use the products. The product should also be of high quality to suit the target audience i.e. Young boys and girls.

By breaking this cost down, the company will also be able to know the amount of money that it has invested in the new product, as this will enable it to have a clear estimate or projection of the profits that it is likely to accrue from the sale of the product.

Furthermore, this analysis is vital is enabling the company to either progress with production of the product or not. For instance, if the cost of production is very high and surpasses the income level of the target audience or customer, it will not be viable for the company to produce such a product.

The company can as well seek an alternative source of funding that costs less. In this case, the best option that the company can source its funds is through debt financing. This refers to borrowing of funds in the form of loans that are repaid over a certain period. The company can decide to borrow funds over a short term-less than one year- or a long-term scheme, which extends to more than one year.

The major sources that the company can seek for these funds are from government agencies or banks that provide loans with a certain percentage of interest. This option of sourcing for finances has a number of benefits. For instance, the interest that is paid on the loan is deductible. Therefore, the company will benefit from tax advantage. In addition, the company will be able to retain its ownership.

The lender of the money, whether financial institution or government agencies, cannot get or receive ownership of the company. Furthermore, lenders cannot claim any future profits or revenues of the company, as the lender will only be given the principle loan plus the interest as agreed between the lender and the party.

It is also easy to raise funds using debt financing because it does not require the company or the borrower to comply with the federal or state securities regulations. Debt financing is also a very good method of sourcing for funds because a company is able to establish good relationships with the lenders. Hence, it can secure future financial assistance of a short and or a long-term financial health in time of need (Mitton, 2008, p.27).

Ensuring that the history of a company is conducive for borrowing, the company is required to ensure that there is balance between the debt and equity ratio. The company must also demonstrate that it can be able to repay the loan within the stipulated duration to time. Furthermore, the company can source its funds from debt financing because it enables the company to have freedom in terms of its financials.

This helps the company to invest in projects or products that it feels can boost its profits. Axe anarchy fragrance for women is such a product. It therefore allows the company the discretion to make its own strategic decisions that can help to promote or stir economic growth of the company.

Therefore, the company can opt for this form of sourcing its fund as an alternative method. The debt equity method of sourcing for funds is one of the cheapest and affordable methods that will enable the company to meet its needs including meeting costs of production and marketing of the products.

In conclusion, finding the right source of funds for the Unilever Company can influence its operation positively when it comes to investing in new products or services. The paper has used axe anarchy fragrance for women as a case product from the company. Therefore, the use of equity financing whereby the company sells its shares is one of the appropriate sources of funds that Unilever used to seek funds and promote this product.

Various investment components are however important in helping business decide whether to invest in a project or not. An alternative source of funds that can be used as an alternative is debt financing because it costs less to the company.

Reference List

Mitton, T. (2008). Why Have Debt Ratios Increased for Firms in Emerging Markets?. European Financial Management 14(1), 127-151.

Safania, S., Nagaraju, B., & Roohi, M. (2011). Relationship between Long Term Debt- to-Equity ratio and Share Price  a study on NSE, INDIA (2007-2010). International Journal of Business Management & Economic Research, 2(4), 278- 283.

Unilever PLV (2011). Financial Statement. Web.

Unilever PLV. (2012). Latest from out brands: Axes launches its first fragrance for women. Web.

The Source of Unilevers Advantages Over Its Competitors

Unilever has a broad channel of distribution compared to its market rivals. It especially makes use of small scale retail outlets. Even though such outlets do not use several freezer cabinets when selling ice cream from Unilever, they have a significant multiplication effect towards the distribution of ice cream from Unilever.

The company has also been retailing its other products using the aforementioned outlets thereby boosting its overall power of distribution. In addition, the company enjoys economies of scale that have been largely generated by a strong brand name in the market. In other words, Unilever is capable of producing in large scale without the fear of inadequate marketing opportunities.

As a result, it readily enjoys the benefits associated with large scale production. Some of these benefits include high volume of sales, improved profitability and large trade discounts from other trading affiliates. Moreover, the strong brand image associated with Unilever has made it possible for the company to implement its strategies both at the national and pan-European levels.

Unilevers Main Strengths and Weaknesses

Unilever has several strengths in the European market in spite of the stiff prevailing competition. Firstly, it has a along reputable history in the production of consumer goods. In other words, it is a well known global brand. This makes it easy for the company to market its products. Besides, it has a ready access to manufacturing resources across the globe. Moreover, the company is strong in terms of its ability to harness synergy of resources.

Unilever works closely with its distribution partners such as small scale retailers. Hence, it has developed a cordial relationship with its various chains of distribution and therefore capable of reaching out the widest market. The company has a strong base and appreciation for intensive research and development. This has led to variety of products in the market that meet the various tastes and preferences of consumers.

On the other hand, the greatest weakness of Unilever especially in its European market is lack of participation in the confectionary market unlike its competitors. Other weaknesses include fall in revenues, reduced expenditure in research and development as well as poor management of brands. These weaknesses can be minimized by revamping brand management skills, boosting research and innovativeness, exploring untapped markets and also developing a confectionary division for it ice cream brand.

Unilever in Launching Pan-European Products

The company should indeed go ahead and launch truly Pan-European products in the market bearing in mind that its competitors have already rolled out such products. The prevailing market competition is quite stiff and therefore the company should fully entrench itself in the European market.

A product such as ice cream is important to Unilever because it cultivates early consumption habit among young consumers ( who are mainly minors). By targeting consumers who are still in their tender ages, the company will not merely be promoting future markets; it will also be improving its brand loyalty. Therefore, it will act as a potential marketing strategy for both the current and future marketing needs of the company.

Introduction

Marketing is a combination of strategies and methods used by companies to identify, build and maintain gratifying relationships with customers therefore, benefiting both the customer and the marketer (Amity Institute of Higher Education, 2011). For a successful marketing strategy, a marketer needs to combine, in a balancing manner, the right elements and processes. This is dependent on the nature of the products, services or ideas that the company wants to market.

It also comprises the decisions the management make in the implementation of the positioning strategy and in line with the achievement of the companys overall objectives. Moreover, a marketing mix will involve the marketing tools the marketer uses to achieve these goals in the target market according to Armstrong & Kotler, (2009). The four marketing elements are product, place, price and promotion.

Elements of marketing

Product

A product simply means what the firm has to offer to its target market. Firms attempt to provide solutions to the problems of their target market, which may be in form of tangible, intangible (or both) product offerings. These products satisfy the needs of the market, help generate income for the firm and profits for the stakeholders.

Non-for-profit organizations such as regulatory authorities get their revenues from the same product. In creating the right market mix, marketers need to come up with the right product features and benefits such as branding, labeling, style, installation, durability, packaging and quality that will satisfy the customers (Amity Institute of Higher Education, 2011).

Pricing

The marketer has to make decisions on pricing as an element of marketing mix. Price refers to what must be surrendered by one party in order to receive something from another one in a transaction. However, it may mean different things to the parties that are doing the transaction.

To the buyer a price is what he/she has to part with in order to obtain benefits or gain access to a good or service. This may not always be in monetary terms since in barter trade no money is involved. To the seller, price is the earnings he/she gets from each product and therefore important to the profits he gets (Armstrong & Kotler, 2009).

Apart from a profit factor to a marketer or a firm, price also acts as a marketing tool. In marketing mix, pricing decisions are very important and marketers should pay a keen interest. This is because, pricing, is the most flexible element in the mix and can be changed rapidly if need be; the other elements may take months to change. Setting the right price for products means the company generates satisfactory revenue and therefore adequate research, analysis and strategic review are important.

The price of a product also creates the first impression on the customer even though the final decision is based on other considerations. Finally, pricing is an important tool for sales promotion. Price features of a product such as discounts, price variations, trade-in terms, price discrimination and payment terms are decisions that are made in pricing to create the right price for a product (Amity Institute of Higher Education, 2011). Promotion

Promotion is described by Nielsen, (2011) as channels of communication through which firms use to reach a target audience with a specific message in order to reach their goals. These channels may range from celebrity endorsement of a companys product to a small retailer handing out fliers on the street about his product offerings. A promotion strategy should have in account all other aspects of the products such as pricing, distribution and the market targeted and also should be aligned with the overall goals of the firm.

In addition, promotion techniques of a firm should be coordinated in what is known as Integrated Marketing Communication, which includes liaising with other functions of the company. This is important in order to carry a consistent message across all promotion campaigns. A promotional mix could include advertising, direct marketing, public relations, sales promotion and sponsorship (Amity Institute of Higher Education, 2011).

Place

The place element of marketing mix simply means that, target customer needs to have the products at the right place and at the right time. The marketers job is to ensure that goods are where they are needed when they are needed. This means decisions on the distribution of goods focus on creating a system that, without much hustle, allows customers to get access to products and purchase them. Since this is not as simple as it appears, a marketer should ensure that the system that he/she chooses is effective and efficient.

This means that products are delivered where they are needed and in the right amount and condition and also at the right time and for the right cost. Decisions involved in this element include choice of channels and outlets, markets coverage, dealers support, logistics and channel variety among others (Amity Institute of Higher Education, 2011).

Marketing mix changes as a product moves through the life cycle and therefore strategies in regard to the mix should also change. Also, each product should have its own marketing mix developed for it which puts into mind the target market (Armstrong & Kotler, 2009).

Unilever

Unilever is a complex integrated network of companies, brands, products and components that are in the consumer goods industry. The corporation has around 400 brands which are mixed in two categories; global brands and local jewels which are tailored to appeal to a global market and others to specific geographical areas to meet particular local tastes and habits. Everyday, around 150 million people in the world use Unilever products that are made in three global divisions; foods, home care and personal care (Nielsen, 2011).

In the foods division, the largest brand is Knorr with products ranging from soups, sauces, noodles, and complete meals. Branded cooking oil and fats is another category in this division and also ice cream and tea all of which are branded. In homecare and personal care divisions, cleansing and hygiene products are produced with global brands like OMO being the most popular. In the personal care market, skin, cleansing, deodorants and antidepressants products are marketed (Nielsen, 2011).

In the detergent market, Unilever produces global brands such as OMO and Persil and local jewels that are targeted to particular markets in a region. One of these is Surf Excel which is very popular in the Pakistan market (Pacheco & Chandon, 2007).

Surf Excel marketing mix

Surf Excel washing powder is offered in two varieties in the Pakistan market; Surf Excel and Surf Excel Matic. It is very popular in this market since its introduction four decades ago and has continually been improved in order to meet the changing needs of consumers.

The Surf Excel as a brand is regarded in the market as a brand for peoples beliefs and values as it participates in activities relating to these aspects. It has also been used for sponsoring children academically and carries the message that encourages people to allow children to explore and discover without minding the dirt. It also comes in many sizes; 25g, 50g, 115g, 500g, 1kg and 2 kg packs (Ahmed, 2010).

In terms of price, Surf Excel sets competitive prices in the market through the following ways

• Price to distributors where all are equally treated,
• Unilever also gives price margins to distributors for wholesale prices so that all retailers get the products at fixed prices, and
• The company is also in control of the retail prices so that consumers get the products at fixed prices.

Discounts are another feature of Surf Excel where distributors and wholesalers who buy in large volumes get a 1% discount on sales exceeding Rs 600. A trade discount is also offered by Unilever on functional basis such as storing and book keeping (Ahmed, 2010).

Distribution of Surf Excel is through indirect marketing channels where the products move from the company to distributors then to retailers and finally to the consumer. Surf Excel Unilever covers all regions of the country irrespective of the economic classes. You will find these products in departmental stores such as Akbari Stores, Al Fatah and Decent Departmental Stores as well as retail shops and small kiosks where it is convenient for the target consumer.

It also targets shelf spacing in departmental stores where it is separated from other brands in stores such as Al Fatah where the corporation paid 2 million Rupees in 2008 to get a 40% share of the area reserved for detergents (Ahmed, 2010).

Unilever Pakistan Limited uses the media and trade incentives to distributors and wholesalers to promote their products. Surf Excel advertises through radio, TV, Billboards and newspapers nationally. The company has established a scheme where wholesalers gain points on their purchases beyond 200 Rupees of Surf Excel of different sizes. The company has also set a store display model and uses sales officers to make sure retailers follow this model and hangers used to do this are from the company.

Sales promotion is done through incentives to buy such as 1kg mango for each 1kg Surf Excel bought and free samples. Further, sales promotion through order takers and stalls in exhibitions are implemented. Moreover, public relations through events involving children and the Surf Excel game must event that is held regularly (Ahmed, 2010 and Pacheco & Chandon, 2007).

References

Ahmed, H. (2010, November 29). Report on Marketing Strategy of Surf Excel. Web.

Amity Institute of Higher Education. (2011, n.d n.d). Principles of Marketing Tutorials. Retrieved from KnowThis.com: https://www.knowthis.com/

Armstrong, G., & Kotler, P. (2009). Customer-Driven Marketing Strategy: Creating Value for Target Customers. In G. Armstrong, & P. Kotler, Marketing: An introduction (pp. 165-195). United States of America: Prentice Hall.

Nielsen. (2011). Nielsen Insights in Action: Informing Decision-making Through ROI. United States of America: Nielsen.

Pacheco, P., & Chandon, P. (2007). Unilever in Brazil (1997-2007): Marketing Starategies for Low-Income Consumers. Brazil: INSEAD.

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 companys 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 companys 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.

Introduction

Empowered by the internet and the digital media, todays consumer is very well informed. Internet has enabled consumers to connect and share ideas with peers all over the world.

The current consumer has become more skeptical, raise many questions about marketed brands and draw on more intellectual ways to work out the facade of marketing actions.

As a result, new trends in marketing are emerging where online tools are widely applied. Unilever has adopted online tools for marketing research to draw information useful in brand and product development (Deighton, 2008).

The aspect of consumer attitude that Dove attempted to influence in its marketing campaign

In nearly all instances, the female beauty has been perpetuated and portrayed by popular culture as slender blond. This aspect of beauty can not be attained by any normal standards. This worldwide concern informed Unilever search for consumer insight and understanding of the issue.

In Particular, how women perceive and understand beauty (Deighton, 2008). The result indicated that beauty has ever been depicted inaccurately. Women try as much as possible to attain what has been portrayed but find themselves below expectations.

As a result, most women have not taken pleasure in their natural beauty (Deighton, 2008). Dove brand marketers also came to realize that this inaccurate portrayal of beauty have impacted negatively on the womens well being and happiness (Deighton, 2008).

Further, it has been hypothesized that womens attitude towards beauty changes to be negative or positive depending on how they feel about themselves and what is being portrayed. It is these stereotypes about beauty that Dove campaigners wanted to change.

How research helped guide the development of advertising objectives

The goals of Unilevers Dove promotion strategy and market research are to set up Dove as all encompassing brand. In addition, the promotion strategy was to enhance the sales of various Dove beauty products by laying bare the stereotyped characterization of beauty by the society (Deighton, 2008).

The study explored in-depth understanding of beauty and well-being of women around the globe. Secondly, the study provided data concerning perceptions of women on beauty and the way they feel about themselves.

This important information was found to be vital in developing advertising campaign portraying real and attainable beauty in women (Deighton, 2008).

The development of integrated marketing communication plan

In its integrated marketing strategy, the element of public relations was the centerpiece. The integrated approach to marketing planning involved combining the marketing tools such as consumer promotions, customers marketing, advertising and media planning.

The public relations strategy was developed around the globe to generate brand awareness and establish emotional connection with women (Deighton, 2008). The major aim of the strategy was to create a buzz of controversy that would draw interest of the majority particularly the target market.

Though the plan succeeded and much of it fed into the digital media, this only attracted the internet users (Deighton, 2008). The advocacy was also to target other forms of media in order to extend its global coverage.

SWOT analysis

Strengths

• The company global presence.
• Exceptional strategies in marketing.
• Free publicity especially through the use of personal selling and the internet.
• Application of promotions that has emotional appeal.
• The use of social responsibility, Dove campaigners set up self-esteem endowment fund which was used to conduct self-esteem workshops in conjunction with Girl Scouts in order to advance girls self-esteem.
• The use of the Doves established brand loyalty, the brand is best known for its purposeful pre-eminence.

Weaknesses

• The major weakness is the difficulties in changing the attitudes and perceptions of the people.
• Another weakness is the financial capability to sustain the campaign in the long-run.

Opportunities

• The company has the opportunity to develop beauty products best suiting other target clientele, for instance, male users.
• The company has the capability of globally communicating one advertisement message.
• The marketing campaign comprises of 90 percent of the target market which is largely ignored by other companies.

Threats

• In case the message is not properly passed on, Dove may possibly turn out to be the brand of huge people.
• The adverts could easily be copied by the company competitors.
• The promotion also faces the threat of disproportionate media criticism.

Porters five forces analysis

Unilevers Dove brand merely had a single product before the year 2000. That was the beauty bar shop. The major factor that determined the brand name was functionality benefits that accrued to the beauty bar (Deighton, 2008).

For instance, the first beauty bars capitalized on moisturizing benefits. After the year 2000, the company embarked on producing and introducing various forms of beauty care products (Deighton, 2008).

These products were to be introduced into the market under the Doves umbrella through brand extension.

Threat of new entry

Developing and marketing the new products would not be very expensive as the company is already established. The overhead costs of advertising will be distributed to various cost centers.

In addition, the company targeted over two million Dove users. This has been achieved using the least cost integrated marketing communication tools.

The investments in the marketing campaigns are expected to benefit the company in the long-run. However, the advertising campaign that the company applied can easily be copied by its competitors in the market.

Competitive rivalry

Dove is facing competition from numerous products manufactured within the beauty industry. Therefore, there is need for a strong brand and enhanced marketing campaign. However, the company can easily develop new products that could be marketed using the brand name.

Besides, the company is also enjoying increased brand loyalty around the globe. Brand loyalty is a competitive advantage that the company enjoys.

The suppliers power

Being a market leader, the suppliers have little chances of driving up the cost of inputs. In addition, the company can easily change suppliers with little or no cost. Therefore, the cost of inputs would not likely to change.

However, being a global company, it would be difficult to have control of all the suppliers around the globe. In most instances, the inputs would be neutral or averaged in many places globally.

The buyers power

Dove products can easily be substituted with products from other companies. In other words, other companies can produce almost similar products, use similar marketing campaigns to outperform dove products from the market.

Therefore, the company should be sensitive to product differentiation and pricing in order to survive in the market for a long time

Threat of substitution

Dove products could easily be substituted with similar products from other companies. Any price reduction on the substitute can easily cause downward pressure on the prices of Dove products.

Even though the company is the market leader, it is operating in quite difficult industry. Therefore, the marketing communication strategies should be focus on building the brand loyalty.

Reference

Deighton, J 2008, Dove: evolution of brand, Harvard Business School, vol.508 no.14, pp.1-13.

Unilever is a global company that sells its products in almost every country in the world and has dozens of brands. Despite some shortcomings, the new CEO Paul Polman has achieved significant results in the company, demonstrating his understanding of the companys strengths and weaknesses in an international environment. This paper will analyze Polmans decisions, in particular the Unilever Sustainable Living Plan (USLP), by using SWOT and PESTEL analysis to assess their suitability.

Polmans achievements are controversial as despite meeting primary USLP targets, the company has also experienced partial declines in earnings. However, the SWOT analysis shows that Polman took into account the specifics of the companys activities. Unilevers strengths are the scale of its operations, a strong market presence, product diversity, and reliable brands, as well as a focus on innovation and strong supply chains. These features allow Unilever to withstand competition from other companies, as well as satisfy a variety of customer interests. The focus on innovation has also become the basis for USLP implementation, since the company has taken many successful steps in changing both the requirements for suppliers and retails. This trait has also strengthened its brands position because many of them have become sustainable living brands and made significant contributions to the companys social responsibility (Bartlett, 2015, p. 10). Thus, Polman took into account the companys strengths for creating strategy and only enchased them in its implementation.

The disadvantages of Unilever are dependence on retails and suppliers, a specificity of brands, and the availability of substitutes for their products. For example, Bartlett (2015) notes that the Axe, whose brand is based on masculinity, cannot change its strategy to a more socially responsible one, while some other brands can. This same feature also applies to suppliers who cannot significantly change their manufacturing strategy to reduce emission or water use. This fact partially contributed to the fact that Unilevers environmental goals were not achieved. At the same time, many companies on the market manufacture the same products as Unilever; thus, customers could switch their preferences without difficulties.

Opportunities and threats for the company arise from the results of the strategy implementation. Opportunities are the further implementation of the USLP to transform the remaining Unilever brands into sustainable living brands, which will enhance the companys image and customer love, and generate profit. Bartlett (2015) notes that brands already in this category accounted for half of the companys growth and had at twice the rate compared to other brands (p.11). At the same time, such changes require significant investment and time, which threatens to lose profits, as happened in 2014 (Bartlett, 2015). Given the competition from other large companies, as well as the scale of Unilevers work, such a decline could negatively affect the work of the entire company and cause concerns among stakeholders.

The PESTEL analysis also demonstrates that it has taken into account most of the features of the environment in which Unilever operates. The main difficulty in the political, economic, socio-cultural, technological, environmental, and legal environment is its diversity due to the global representation. However, most of the goals of the USLP are universal and can be implemented in different countries. For example, policies to reduce waste and water use and help sustainable social development are global goals, so both buyers and suppliers, as well as government, support them.

The legal environment regarding these issues is also relatively homogeneous, as Unilever does not address controversial matters that can be prohibited in the country. Example of changes in a legal environment is the working conditions of employees; however, in this case, Unilever also complies with the law and, in doing so, contributes to the workers around the world. For example, the minimum but above-average wage for workers in Vietnam demonstrates the participation of Unilever in this socially significant issue (Bartlett, 2015). A diverse socio-cultural environment is also a feature that Unilever takes into account in its strategy, and its multi-brand structure contributes to the realization of goals. Each brand can independently adapt its approach to the companys tasks and the cultural environment of the countries, and Unilever only controls this process.

However, the barriers are the environmental conditions, economic, and technical environment, since countries are at different stages of development. For example, implementing new environmental-friendly manufacturing is difficult if the supplier does not have the technological resources. This feature also applies to transportation costs in countries with severe geographic conditions. Environment and economic diversity is an advantage and disadvantage for Unilever at the same time, since the company needs to adjust the prices of their products, but they can realize the goals of social development. For example, the supply of clean drinking water, hygiene products, and healthcare education in remote areas of Africa are the goals of the USLP, but it requires investments that are not profitable (Bartlett, 2015). However, since Unilever has a complex and broad structure, supply and transportation problems are solved at the local level, and the availability of investment opportunities develops the technical capabilities. Therefore, despite the difficulties associated with the diversity of characteristics of countries, Unilever can achieve its goals due to its financial capabilities and strong interaction structure.

In conclusion, the results of Unilevers activities, SWOT and PESTEL analysis demonstrate that Polmans solutions and strategies were appropriate, although the company did not manage to overcome all the shortcomings of the environment. However, Polman took into account the main nuances, making it possible to achieve some of the strategic objectives. At the same time, the ideas and goals of the USLP are challenging to reach, and they require significant time and investment. Hence, the decline in profits noted in the case study is not decisive for evaluating the companys strategy in general.

Reference

Bartlett, C.A. (2015). Unilevers new global strategy: Competing through sustainability. Harvard Business School.

Introduction

Due to the current issue of climate change, many organizations tend to come up with solutions intended to remove uncertainty and recognize the need to attain stability and focus on economic and environmental benefits. Unilevers history shows that the company was interested in sustainable well-being from its founding date, with some of the major milestones being achieved during the 2010s. For instance, the deployment of the Sustainable Living Plan became a turning point for numerous individuals and organizations since Unilever attained growth and predicted the areas where the environmental impact would be the strongest (Grayson, 2017). In a sense, the organization went beyond its eco-friendly initiatives and also positively affected society. Unilevers ambitions allowed it to create an international network of actors interested in achieving sustainability.

When the Sustainable Living Plan was first launched in 2010, the organization planned to deploy a sustainable business model where individuals were going to become the ones contributing to their well-being and health. Following Abubakari and Thuranira (2021), this was one of the ways to strengthen existing supply chains and ensure that the organization is going to evolve together with the plan. In 2016, the Zero Waste initiative was developed and launched by Unilever to limit the amount of waste in landfills and find alternative means of reducing pollution (Grayson, 2017). Alternative uses were quickly discovered by the organization, making it safe for Unilever to convert waste into sustainable materials and contribute to human well-being worldwide.

Implementing Sustainability at Unilever

When implementing its sustainability strategy, Unilever expects to engage in specific climate action to ensure that the company protects the environment in the first place. For instance, one of the initiatives launched by Unilever required the organization to become an industry leader in terms of reducing waste (Lawrence et al., 2019). That strategy allowed the company to limit the amount of waste sent to landfills in all of the countries of operation, including numerous facilities, such as distribution centers, factories, and warehouses. As soon as Unilever implemented sustainable operations, it began investing in waste streams that were safe and harmless. This alternative route of development required the company to follow the 4R strategy: Reuse, Reduce, Recycle, and Recover (Grayson, 2017). Thus, alternative ways of using crucial resources allowed Unilever to protect nature and transform ambitions into real-life results without engaging in practices that could be bad for the environment.

Over the past decade, Unilever achieved a higher level of sustainability due to a relentless willingness to increase transparency and ensure that all of its operations are non-hazardous. While leveraging technology and focusing on environmental safety, the organization was able to increase its income while also securing equity in a variety of spheres of human lives (Lawrence et al., 2019). A sustainable livelihood was one of the primary targets for Unilever because the number of ecological emergencies to be addressed grows daily. Compared to other similar organizations, Unilever seems to be much more fixated on the development of a waste-free world where a circular economy is implemented in an attempt to reduce the waste footprint (Abubakari & Thuranira, 2021). From factory operations to plastic and packaging waste, Unilever expects to expand its corporate responsibilities to come up with even stronger values and standards to protect the environment.

Unilever Sustainability Assessment

Unilever is one of the essential world leaders in terms of attaining and exploring sustainability and all the opportunities linked to this notion. The company is known to advocate for sustainable business and ensure that its multinational organizational network recognizes the importance of the environmental impact of corporate operations. This was one of the main reasons why the Unilever Sustainable Living Plan was developed, with the administration expecting to find the best ways to improve the companys environmental performance (Lawrence et al., 2019). It was also intended to inform the companys strategy and aid employees in terms of finding the most lucrative opportunities for promoting sustainability. Over time, methods of data analysis became more complex because Unilever had to monitor sustainability performance even more closer and consolidate all the knowledge. Thus, the number of metrics increased quickly because the volumes of people and performance data also grew in a geometric progression.

Annual collect and report sessions drastically affect Unilever since they highlight the best and the worst solutions explored by the company. All kinds of social and environmental data represent the key to ensuring Unilevers sustainability because there are numerous areas where the organizations performance has to be evaluated almost daily (Grayson, 2017). For example, it could be crucial for the company to gain more insight into home sustainability and define the possible approaches to packaging and waste reduction based on gas emissions and water use. The Sustainable Living Plan is also an opportunity for the organization to create a healthier society through community investments and setting nutrition targets on a countrywide or even a global scale (Abubakari & Thuranira, 2021). Different elements of safety have to be explored to support Unilevers vision and implement all performance assessment measures in line with the original plan.

References

Abubakari, M., & Thuranira, B. (2021). The consumer goods sector and the sustainability agenda in Ghana: A review of sustainability commitments. Discover Sustainability, 2(1), 1-17. Web.

Grayson, D. (2017). Overview of embedding corporate sustainability. In Cranfield on Corporate Sustainability (pp. 7-26). Routledge. Web.

Lawrence, J., Rasche, A., & Kenny, K. (2019). Sustainability as opportunity: Unilevers sustainable living plan. In Managing Sustainable Business (pp. 435-455). Springer. Web.

Companies being irresponsible in their promise of caring for minorities, socially disadvantaged people, and the environment are becoming a global problem in the present day. Reading the article by Reckmann (2022), which Schooley contributed to, makes an impression that the authors arguments are valid. The article is well-structured, defining what the authors understood by CSR and what its functions are. It contains many sources, including quotes by qualified specialists such as Cooney. The key part of the article is the list of types of CSR. Generally, the article uses enough evidence and examples of its possible utilization in practice to be trusted. The authors seem genuine in their belief in the purpose as well.

For this paper, the Global Order/Policies form of CSR and, correspondingly, Blue Washing are chosen. The company discussed will be Unilever, which is a British chemical manufacturer. On its site, the company has released numerous statements that it is taking action on the issues affecting our world (Unilever Global, 2022). An option in the site menu is named Planet & Society and lists numerous environmental and social problems such as climate, human rights, and responsible business. These pledges do not seem genuine due to pretentious choice of words and lack of specifics.

At the same time, when certain problems of Unilever have been uncovered, namely, poor and even dangerous work conditions in its tea manufacturing facilities, the company limited itself to a vague statement. It promised to address the issues without stating a plan to do any measures to improve the situation (Macellari et al., 2021). Thus, Unilever fails at keeping its promises to both the UN and its customers, making their pledge bluewashing. The source of information, the article by Macellari et al., is an academic paper published in a respected journal and is therefore credible. Just as with the article by Reckmann, articles based on extensive research are usually trustworthy unless proven otherwise.

The experience of writing the paper did not provide any pivotal discovery on how companies operate. It is common knowledge that, just as new progressive practices become widespread, many corporations pledge themselves to their principles; however, they do not always follow them. The reasons for it may be various, such as not being serious about the statement originally or being unable to follow it despite a genuine intent to. Thus, Unilevers case does not stand out of common practice.

References

Macellari, M., Yuriev, A., Testa, F., & Boiral, O. (2021). Exploring bluewashing practices of alleged sustainability leaders through a counter-accounting analysis. Environmental Impact Assessment Review, 86, 106489.

Reckmann, N. (2022). What is corporate social responsibility? Business News Daily.

Unilever Global: Making sustainable living commonplace. (2022). Unilever.

Solvency and debt ratios

Solvency ratios measure the ability of the company to meet the interest obligations that arise from debts payable by the company. A commonly used solvency ratio is the interest coverage ratio. It is arrived at by dividing earnings before interest expenses and income and interest expense. The table below shows the interest coverage ratio for Unilever Group for three years

From the table, it is evident that the interest coverage ratio increased from 9.96 times in 2009 to 12.91 times in 2010. Thereafter, it declined to 11.91 times in 2011. The trend in the interest coverage ratio can be attributed to a declined in interest expense from ¬504 million to ¬491 million and an increase to ¬540 million. Interest coverage ratio of the company is relatively high (Unilever Group 2013a). The interest coverage ratio for Unilever is lower than that of Nestel (13.3 times). The trend in finance cost is attributed to changes in the amount of debt (ABC News Network 2013). The graph below shows the trend of the ratios.

Leverage

A companys leverage is explained by the amount of debt financing it holds. The ratios are vital since they show the investor the extent of exposure of equity financing. A commonly used ratio is the debt to equity ratio. A high leverage ratio is not favorable since it scares away capital providers. It is because high ratios imply an increase in interest expense. This reduces the amount of income attributable to shareholders. On the other hand, very low ratios are not favorable since it shows that the management of the company are not willing to exploit the potentials of the company. A commonly used ratio is the debt to equity ratio.

The debt to equity ratio declined from 79.54% in 2009 to 63.23% in 2010. This further increased to 91.94% in 2011. This was as a result of an increase in the total amount of debt of ¬7,255 million in 2010 to ¬10,502 million in 2011. It is evident that the leverage level of the company is higher than the leverage of the competitor which is 44.46%. The leverage of the company is quite high. The trend is shown in the graph below.

Profitability

Profitability ratios give an indication of the earning capacity of an entity. The ratios measure the effectiveness of a company in meeting the profit objectives both in the long run and short run. The ratios show how well a company employs its resources to generate returns. Commonly used profitability ratios comprise of gross profit margin, operating profit margin, net profit margin, return on asset, and return on equity (Holmes & Sugden 2005). The table below summarizes profitability ratios for the company.

The operating profit margin and net profit margin for Unilever Group increased from 2009 to 2010. Thereafter, it declined in 2011. The two ratios for Unilever are lower than those of Nestle. This could be an indication that the management of the company is not efficient in managing the cost of running the business. Return on assets and return on equity for Unilever Group was higher than those of Nestle Group (Unilever Group 2013b). It is an indication that management of Unilever is efficient in managing the resources of the company so as to generate sales and net income. The trend of the ratios is shown below.

Working capital management

Efficiency ratios focus on the internal operations of the company. These ratios show the level of activity in a company, that is, how well a company manages resources to generate sales. Commonly used turnover ratios are asset turnover ratios, stock turnover ratios, debtor collection period, and creditor payment period (Holmes & Sugden 2005). A summary of the turnover ratios is shown in the table below.

The accounts payable and accounts receivable for Unilever Group were increasing over the years. The total asset turnover for the company remained fairly stable during the three year period. Further, stock turnover and debtor collection period increased through the three year period. The efficiency ratios for Unilever Group were higher than the ratios for Nestle. This implies that the efficiency of Unilever Group is higher than the efficiency of Nestle (ABC News Network 2013).

Based on the profitability and efficiency ratios, the financial position of Unilever Group is better than that of its key competitor Nestle. However, Unilever is highly levered and there is the need to reduce the leverage level of the Group.

References

ABC News Network 2013, Unilever NV (UN), Web.

Holmes, G & Sugden, A 2005 Interpreting Company Reports, McGraw-Hill, New York.

Unilever Group 2013a, 2011 Annual Report, Web.

Unilever Group 2013b, 2010 Annual Report, Web.

Accessibility

This is a vital factor in segmentation. Although the broader geographic segments have been widely targeted by internet traffic, it is usually necessary to market or promote goods and services to the targeted market in the most effective way. In other words, a business enterprise requires economic marketing of its products. For example, geographic segments may be targeted by a local business (Simkin, 2008). The latter can be carried out beyond an immediate targeted market. When it comes to accessibility, the distribution of goods and services across various marketplaces may affect segmentation greatly. Therefore, accessibility can only be feasible when adequate and effective product promotions are carried out.

Needless to say, there can be no need to carry out segmentation if the targeted market is unreachable. It is essential to mention that communication planning should include the nature and the target market needs and business objectives. A business entity should not just select the channels of communication since there is a need to analyze the political, economic, social, cultural and legal environment which the market develops. This will help to structure an effective promotion strategy and consequently reach out to more customers.

Advertising

The above stands out as one of the most robust means of reaching out to the wider market and targeted consumers. Ads in magazines, newspapers, banners on websites, search engines, emails, television, radio, outdoor, airport media, posters, direct mail, gifts, alternative media, among many other existing forms of advertising can be used to improve the accessibility of products into the market. Unless the products being sold are adequately promoted, customers may equally fail to access them (Simkin, 2008) Advertising is the main tool used by Unilever to provide the marketing needs of the company. When it comes to advertising, it is almost inevitable to associate the idea to an advertising agency. Accessibility of goods and services to the market requires serious planning which should consider the nature and needs of the market at any given time. It is essential to mention that all communication planning should include the nature and target market needs and business objectives. It is not enough to just select the channels of communication to use when making sure that products are accessible to consumers. As it stands now, Unilever regularly analyzes the political, economic, social, cultural and legal environment in which it operates. This assists in restructuring an effective promotion strategy for the company (Liu, Ram, Lusch & Brusco, 2010).

Public relations involve all related activities with business stakeholders (customers, employees, media, suppliers, government, representatives and so on), conflict resolution with these groups, crisis management, and business image projection. When the latter is attained, it elevates the presence of products into the target market. Other vital tools include press relations, social responsibility actions, events, corporate communications, relationship programs with customer relationship programs with employees (Liu et al., 2010).

Personal selling is also another promotional strategy that attempts to make products accessible to the market. It refers to face to face selling involving the consumer and seller (Hassan & Craft, 2012). Unilever does not employ personal selling in most of its marketing processes. Personal selling t is one of the oldest ways of selling a product or service and covers a live relationship bearing in mind that it is immediate and interactive and allows the seller to create a lasting and productive relationship with the customer. This type of promotional strategy does not exist in the virtual buying process (Hassan & Craft, 2012). Therefore, the online marketplace for Unilever cannot benefit from face to face promotional strategy since it largely sales its products in physical stores.

Unilever also uses sales promotion in order to make its products available to the market. It refers to all actions to promote the product in the short term for the sake of driving high revenues. Some of the examples of sales promotion used by Unilever include discounts, free samples, prize draws, cultural competitions, demonstrations and tastings, among others (Liu et al., 2010).

Sales promotion is a set of incentive tools designed to stimulate buying faster or in greater quantities. It mostly takes place for the short term. This marketing tool is of key importance when it comes to holidays like Christmas. As a matter of fact, Unilever employs a number of sales promotions as part and parcel of ensuring that its products can be accessed by the wider market (Hassan & Craft, 2012).

Resources and segmentation

For the Unilever Company, the segmentation adopted is indeed appropriate according to the resources owned by the company. The objectives of the company are also in tandem with the segmentation plan in place. The company has been carrying out segmentation based on gender. For instance, the company has developed new toothpaste that specifically targets men. It is also an innovation factor for the Unilever Company to design products based on gender (Simkin, 2008).

Appropriate principles

The marketplace must be validated in line with appropriate principles of segmentation. In the case of Unilever, the company has simplified the process of segmentation, although it is robust in some cases (Simkin, 2008). When evaluated for a long time, the product segmentation process at Unilever is quite cost-effective and more flexible because it can allow changes to be executed on a regular basis. Nonetheless, the appropriateness of the segmentation process to the policies and resources of Unilever can be witnessed through the new growth opportunities put in place by the company (Hassan & Craft, 2012).

The concept of segmentation entails selecting groups of customers with similar profiles and demands. The latter is indeed in line with Unilevers value proposition which is attractive for the business organisation. The attractiveness is related to the size of the product being segmented and profitability margin. These groups cannot be too narrow and hence makes it less worthy of investing resources in this regard. In addition, it should not be too large so as not to show its main features. This is an appropriate procedure that prevents a more focused approach (Hassan & Craft, 2012).

Segmentation structure

For each identified segment, it is necessary to establish an approach strategy. In some cases, it demands a performance through direct sales force while in others, the performance of diversified channels will be needed by Unilever. Close interaction with each of this public should also be performed in a personalized manner so that each customer understands that the proposition was developed for the stated purpose (Liu et al., 2010). In essence, the practice of segmentation in customer satisfaction is a common experience at Unilever. From the outset, Unilever concludes that it is necessary to give up some customers (Hassan & Craft, 2012).

References

Hassan, S.S. & Craft, S 2012, Examining world market segmentation and brand positioning strategies, The Journal of Consumer Marketing, vol. 29, no. 5, pp. 344-356.

Liu, Y., Ram, S., Lusch, R.F. & Brusco, M 2010, Multicriterion Market Segmentation: A New Model, Implementation, and Evaluation, Marketing Science, vol. 29, no. 5, pp. 880-960.

Simkin, L 2008, Achieving market segmentation from B2B sectorisation, The Journal of Business & Industrial Marketing, vol. 23, no. 7, pp. 464-474.