Brands & Branding and Private Labels Case Study

Unilever: Would the ‘Power Brand’ Strategy Pay Off?

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Abstract:
Unilever, the Anglo-Dutch consumer product company, was formed in 1930 with the mission of ‘meeting the everyday needs of people everywhere’. Over the years, it became the world’s second largest packaged consumer goods company (after Procter & Gamble) and third largest food firm (after Nestle and Kraft Foods). Armed with 1600 brands in the home and personal care, and food and beverage segments, the company was present in 150 countries and its brands were used by 200 million people everyday. However, since the late 1990s, the company started facing competition which resulted in a decline in the net profit and marginal growth in revenue. In February 2000, the company announced a five-year growth strategy, directed towards bringing a significant improvement in its performance. The strategy, known as ‘Path to Growth,’ declared the company’s intention of streamlining and rationalising its unwieldy portfolio of 1600 brands. Unilever aimed at getting rid of some of its ‘non-strategic’ brands and reducing its portfolio to 400 ‘power brands’, by 2004. The plan attempted to save $7 billion within five years. The initiatives, however, received mixed feedback. While a group of industry analysts appreciated the unique move, another group was doubtful about the effectiveness of this strategy. The case discusses the brand portfolio and the brand portfolio restructuring idea. Also, it offers scope for discussing how Unilever continued with the brand restructuring exercise and whether the company would be able to achieve the desired growth rate by following the strategy.

Pedagogical Objectives:

• To discuss branding as a tool of key differentiator in strategic marketing
• To discuss how Unilever categorised its brands as ‘Power Brand’
• To discuss how companies do ‘Brand Portfolio Management’
• To discuss how companies do ‘Brand Portfolio Restructuring’ exercises
• To discuss how companies do ‘Brand Renewal Matrix’ for their respective category
• To discuss how to perform Brand Audit, preparation of Brand Audit Sheet and classification of brands.

Keywords : Unilever, Procter & Gamble, Path to Growth strategy, Power brands, Local jewels, Brand portfolio, Brands & Branding Case Study, Brand contribution, Brand restructuring, Food and beverage, Home and personal care, Consumer product, Topline brands, Brand renewal matrix, Brand audit sheet, Global brands