The Effect Of Product Branding On Profitability Of Unilever Essay

I assume that our new brand will be well welcome by the low-income consumer and that Unilever will have a 13% margin. We could have also repositioned Campeiro but it is too well known for being a cheap

Catherine, W., Tat Pui, L. and Henrik, U. (2011) The Roles of Branding for a Brand Entering

The purpose of this study is to explore three companies by focusing on how the brands have been performing as well as what the customers and other stakeholders are saying about the different brands. This study will also summarize the strategic issues that the companies and those they are likely to experience in future.

Operation of Unilever around the world starts fragmenting, but Unilever continues to expand globally and investment made in R&D is increased.

This report aims to analyse the financial position of Unilever PLC within its daily operating activities and it also compares the company’s performance with its key competitor, the Proctor and Gamble Company (P&G). The report also includes background of both the companies and an industry overview. To better understand the performance of both the companies, the segmental analyses have been done for both region and products. Due to the global crisis, Unilever and P&G both are facing price rise and inflation pressures, also instability in the Eurozone. All these factors are strongly impacting their operation activity and long-term growth decision plan. Finally After a careful examination of the financial ratios of both the companies, we recommend Unilever as a good company to invest as compared to P&G .The reasons for the following can be seen in the report below.

And it uses principally the same competitive strategy tactic in all the markets (Countries) where the company has a presence, sells much the same products everywhere, strives to build global brands and coordinates its actions worldwide. Strategy followed by Unilever is also called a think-global and act-global strategy. Once Unilever successfully launched its product in numerous markets, it expands its popular and successful brand to many other markets and starts competing globally. Unilever has a theme to swift Unilever managers to integrate and coordinate the company’s strategic moves all around the world and to expand into most, if not all nations where there is a noteworthy buyer demand. Building a global brand name is one of the most important prospect on which the company puts substantial strategic emphasis. Along with that Unilever focuses on aggressively chasing opportunities to transfer ideas, new products and competences from one country to the

11 Leadership Financials/Form 10-K Brands and Trademarks 1 Selected Financial Data 12 Financial Statements 27

Tesco can be said to be a global leader in the UK retail business. It is one of the leading world retailers. The company started using the trading name TESCO in the 1920s and since the group has expanded in many ways venturing in different markets and with interest in different sectors. Over the years, Tesco has recorded growth which has been achieved through different strategies. There has been emphasis on the growth of Core UK business in order to expand internationally. This growth has allowed the company to position itself in food and non-food sectors based on retailing services. Over the years, the company has witnessed financial fortunes which have been reflected in its growing sales. Sales have risen from 31,726,280 from 2013 to 32,074,650 in 2014 (Kantar, 2014.) This has been achieved through growth strategies which have seen the company expand its retail outlets and at the same time enter into new markets with high growth potential using their famous ‘every little helps’ branding along the way. The ‘Every little helps’ branding helped Tesco’s attract 1.3 million new customers in the period from 1990-1995, and the campaign achieved good effects on staff morale, attracting quality marketers to join Tesco, directly affected the share price and allowed the brand to move into non-grocery sectors where brand credibility is a key requirement. Disadvantages….limitations etc

In 2000, Unilever decided to reduce 1,600 brands down to 400 and then select a small number of them to serve as “Masterbrands”. One of the reasons to have fewer brands is to decrease control issues. It is harder to manage so many brands, especially when each one has its own particularities. As Deighton pointed, Unilever’s brand portfolio had grown in a relatively laissez-faire manner. In other words, the company’s brands were created without large interference.

Despite the inconsistent changes in spending from year to year, P&G’s market share consistently increased between 1% and 2% every twelve months (see Figure 1). The question is, with Unilever’s actions in regards to marketing expenditures, is the 15% increase going to be enough to restart P&G’s upward growth of market share?

As far as the pure economic aspect of the decision concerns, the implementation of a corporate branding strategy would increase the Customer Lifetime Value and therefore the profits of the company, as calculated in the attached

Branding is a tool to make the goods of one producer different from another producer (Keller, 2003). Carroll (2008) asserts that branding is a sign of quality, and it is helpful to increase

This would result in Unilever hitting back, thus causing P&G to deliver a second punishment. There is no doubt that Unilever analysed this position of P&G and decided on the probability of P&G 's response. Since P&G has value in other markets, it is likely that they would respond and react. Though a reaction is likely, Unilever knew that its consumers are risk-averse. Thus by surprising P&G with higher price promotions, consumers would attach loyalty to Unilever products before P&G could come up with a strategy. If P&G reacted by offering similar promotions, consumers would continue to purchase Unilever products till the prices offered by P&G are low enough (resulting in lower profits) to make consumers shift their loyalties.

The Unilever Group’s report on ice cream stated that they saw volume growth and share gains in most markets. Specifically they saw a strong performance in Western Europe, Mexico, Indonesia and Australia. Much of this growth was due to the Magnum Gold acquisition and the marketing of this product in these markets. Product quality improvements helped their Klondike line achieve strong results in the U.S.A. The Unilever Group maintained a negative price growth in ice cream. The negative price growth reflected slightly lower gross margins, at constant currency, with commodity costs higher.

Long before now has branding been considered as one of the peripheral aspects of business. Manufacturers, investors and other key players focused on the product without paying much attention to the consumer. But as the business landscape got tougher, marketing became not just an integral part of business but one of the fundamental principles of success.