Portfolio Overview of Unilever and P&G Essay

847 Words 4 Pages
There were a number of reasons why Unilever and P&G were harmonizing their brand portfolio as outlined below:
• The concentration of resources on a smaller portfolio of global power brands decreased the complexity in the portfolio as well as costs. For example, Elida Gibbs, a Unilever personal care company, had reduced its brand portfolio in Brazil from 20 to 7 in 5 years, and in the same period had increased revenues by 50% and margins by 100% (Arnold 6).
• The reduction of the number of stock-keeping units (SKUs) that had to be handled would result in production savings as well as savings from more concentrated marketing support.
• There was a significant pressure from big European retailers that were consolidating. The top 5 grocery retailers in Western Europe accounted for some 32% of total sales across all categories in 2000, a figure which projected to rise to 45% by 2005 (Arnold 5). Retailers wanted to create regional listings of a limited number of strong, well-supported global brands. This was also magnified by the economic convergence and the rise of the Euro as a shared currency across the Eurozone. This brought greater international price transparency across markets.
• Since market expenditures in consumer advertising had declined from 60% to 45% (Arnold 6), harmonizing the brand portfolio internationally would mitigate the dilution of advertising budgets across many brands.
To summarize, by harmonizing their brand portfolio internationally, Unilever and P&G…

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