Executive Summary
The report is based on the analysis of the consumer product industry where Reckitt Benckiser and Unilever & HCP are used. It is also based on Dettol and Vaseline which are products of the two companies respectively. It has been evident that Reckitt Benckiser is among the leading companies in the consumer industry with operations in more than 60 countries and sells its products in more than 180 nations. On the other hand, Unilever & HCP sells its products in more than 90 countries.
The companies have wider market coverage as its products are found in Africa, Asia, Middle East, and the U.S. to remain relevant in the market; the companies have put into consideration the macro environment and micro environment forces. They have also used differentiated segmentation to locate their various clients who are found all over the world. Other findings from the report analysis are that competition from other manufacturers has been the major threat in their operations.
However, they both have strong brands that have gained a large market share compared to other goods that can be used as substitutes. Open market in the European Union has ensured that the companies enjoy some tax lifts in its operations. Tax regulations and unstable regulatory policies have also been a threat to the company’s operations over the last years. Recommendations have been provided based on the whole report analysis.
Introduction
The report seeks to explore the consumer product industry by carrying out a case analysis of Reckitt Benckiser and Unilever & HCP companies. The report looks at one from each company, for instance, Dettol and Vaseline respectively. The purpose of the report is to address the various marketing concepts and their understanding based on practical work.
Reckitt Benckiser is one of the leading companies in the consumer products in different countries. The company has its headquarters in Slough UK. Its major brands are Strepsils, Dettol, Veet, Air week, Vanish, and durex. Unilever UK & HPC operates in the consumer and household industry. The company has its headquarters in Kingston-Upon-Thames, UK. It specialises in hair care, skin care, and hygiene markets. It has operations all over the world and its major products are Dove, Impulse, Lux, Lynx, and Vaseline among others.
Industry background
Reckitt Benckiser and the Unilever UK and HPC belong to the consumer goods industry. The industry has markets in Africa, Asia, the Middle East, and U.S.A among others. The companies manufacture, distribute and retail their commodities to the different markets in the world.
Both based in the UK, they have diversified distribution channels that ensure that their goods reach the targeted market. The consumer goods industry market trends have shifted at a more rapid speed because of competition, globalisation, and technology advancement.
The challenges facing the consumer industry has been the changing regulations, intense competition and markets that have become lean because of many players. This has forced the manufactures keep a close relationship with the supply chains so as to be successful in the demanding environment. However, because of the products manufactured by the industry like Cleaning products, condiments, healthcare, antiseptics, detergents, air fresheners, among other house hold products the industry has increased at a steady rate.
Some of the power brands of Reckitt Benckiser are Dettol, Mortein, Durex, dip-it, Strepsils, Harpic, and Vanish among many more. Unilever UK and HPC products include Dove, Impulse, Lux, Lynx, Sun silk, Sure, Timotei, and Vaseline (Datamonitor 2007, p.7). These products define the segmentation of their markets basically based on their wide market shares.
Company background
Reckitt Benckiser is the leading and the largest consumer goods company that has its headquarters located in Slough, UK. It was founded in 1814 with operations in more than 60. Reckitt Benckiser sells its products in more180 countries and a workforce of more than 2300 employees and annual net revenue of more than £3.5 billion (ProClarity Corporations, 2005 p.1).
Over the years the company has undergone mergers and acquisition so as to increase its efficiency and effectiveness along the supply chain. For instance the company formed a merger with Reckitt & Colman and the Benckiser to form the current Reckitt Benckiser (ProClarity Corporations, 2005, p.1).
Its management strategy has been ‘innovation marketing’ which combines product innovation and increased marketing spending. The management strategy focuses on the needs of consumers. This has made the company become successful in its operations and the increased market share. Reckitt Benckiser is the largest and fast growing consumer goods manufacturer in the U.K. it is known for its major brands such as Strepsils, Dettol, Durex, Cilit Bang, harpic, and Air wicks.
The market of the Reckitt Benckiser products has been segmented along different clustering aspects like age, sex, gender, and different geographical regions. This has made the company penetrate the market largely increasing its market share. It is estimated that Reckitt Benckiser sells more than 9 million products on a daily basis (ProClarity Corporations, 2005, p.2).
Dettol antiseptic is one of the leading brands of Reckitt Benckiser. The product comes in both solid and liquid forms. The liquid product has a light yellow colouration but it usually changes to milky white when added to water.
Dettol comes in glass plastic containers that have different packaging sizes. When the product is swallowed it could kill because of its poisonous nature. It is used by different people in different geographical representation because of its effectiveness. Being a household commodity, the product is used as an antiseptic to treat wounds, cuts, acnes, skin disorders and cleaning abrasions and cuts.
Unilever UK and HPC
The company was founded in 1930 after several UK based soap manufacturers merged (Datamonitor 2007, p.6). Since then the company has concentrated in the manufacture of personal care products. The company specialises in the hygiene markets, skin care and healthcare products. The company has its headquarters in Kingston-Upon-Thames, the UK (Datamonitor 2007, p.4). Most of the company’s products are sold in the UK, Africa, Middle East, Asia, and USA.
The financial record indicates that it had recorded net revenues is £25bn (Steiner 2010). The global retail consumer products manufacturer is a leader in its unique productions although it faces a huge competition in its manufacturing. The home care and personal division of Unilever UK and HPC are responsible for the production of several consumer products (Datamonitor 2007, p.5).
The company is a global has found its market share by specializing in home care and personal care products. To ensure market segmentation, the company two manufacturing divisions have been operating to make sure it increases its market share. For instance, it produces products that cater for all generations, sex, gender, and geographical representation.
Vaseline is one of the major brands of Unilever UK and HPC. It is sold all over the world by all people regardless of their age, colour or sex. Vaseline products are found in almost more than 90 countries. The petroleum jelly has been segmented to fit different markets in the world.
The product comes in different forms with Vaseline Lip therapy being the largest brands used on lips. Vaseline has been ranked as the number one body and hand lotion in the world. The product has many uses such as protecting the skin from rays, heat, dryness and moisture restoration. Because of its medicinal and healing properties, Vaseline is used on cuts, skin abrasions and burns. Like Detoll, Vaseline has no age limit and is used all over the world.
Strategic marketing and planning
Strategic planning is a marketing concept that deals with the direction of the company while strategic marketing involves the management of the business and the market it operates from by linking the two. The two companies have strategic levels as part of their strategic marketing and planning.
The two companies have incorporated functional, business and corporate strategies in their operations. The three levels of strategic hierarchy are witnessed in the company marketing management. For example, Reckitt Benckiser as applied the porters model differentiation as part of its target strategy to maintain a competitive edge. The company’s operations are also diversified with new marketing strategies being put into place. The same has been done in Unilever & HCP Company.
Macro environmental forces
They are the external forces that originate from the outside. They affect a company directly as well as the whole industry. Examples are economics, politics, legal frameworks, technology, social cultural factors and the natural environment (Groucutt, Forsyth & Leadley 2004, p.34).
Politics
The marketing place is by shaped the political forces which influence the regulatory environment (Young & Pagoso 2009, p.56). These factors influence marketers on how the distribute and sell their products. Political forces affect the industry and organisations in a negative or positive way.
According to Kotler, Kotler & Kotler (2008, p. 50) some of other aspects include regulatory processes, employment laws and international rules. For instance, in Europe the European Union formation opened the market industry for most of the companies in the region.
Marketers can now distribute and sell products without fear of high taxation and international regulations. Taxes have been lifted on members’ states and can operate well. For example, the consumer product industry from which the Reckitt Benckiser and Unilever & HCP operates from is located in the UK, the centre of the European Union. Opening the market, lifting some of the taxes and operating with same currency has made it possible for two companies to fair well in the consumer product industry.
Technology
The 21st century is characterised by the advancement in technology which affects the whole industry. The development in technology offers both threats and opportunities to the marketers. Companies are often faced with challenges brought by technological change in the industry (Young & Pagoso 2009, p. 55).
Although, some products have some technological aspects incorporated, technological changes mean that the company has to have technical solutions in the product so as to address the changes and remain relevant in industry. The consumer product industry has not been left behind technological advancement and changes.
To remain relevant the two companies in the consumer products industry have to adopt new technology while manufacturing and marketing their products. For any company to remain competitive in the market, it has keep up with increased technological advancements. This is because technology has the accelerating products obsolescence in the industry. During product development, a company has to consider the way the product needs to be developed so as to be competitive.
Social cultural factors
The tastes and opinions of the people are determined by the culture. The consumer products industry is a wide industry where the products are sold in different markets. The populations that make societies are note homogenous and marketers need to address all the needs of the customers.
There are subcultures found in these populations which have values and beliefs that people follow. Some of these subcultures include religion, social activity or race. Some beliefs and values are strong and cannot be broken by marketers in that industry so they are faced with the challenge of addressing all the people. The consumer goods industry manufactures products which are more into the people than any other industry and Adverts made should not jeopardize the market share of the product.
Marketers should consider these sub-cultures for people are known to have consumption habits that are different from the general population. There are also secondary values that influence the opinions of people like changing tastes, role of models and the media. The two companies have considered all these social-cultural factors as they have products in different geographical representation.
Micro environmental forces
They are the internal forces that surface from the company and the company can control them. For example, suppliers, employees, customers, competitors, regulators, trade unions among others (Groucutt, Forsyth & Leadley 2004, p.29).
Reckitt Benckiser
Customers
The company has survived in the consumer product market because they have met the demands of the people. For instance, Dettol has been successful in the market for it meets the demands and the needs of the people.
Employees
The company has employed the correct staff and kept them over the years. As part of strategic planning, the company ensures all the employees are motivated. The employees have also undergone training to develop their skills so as to gain competitive edge.
Competitors
The company has been able to remain relevant in the consumer product industry through the manufacturer of brands that has been competitive in the market. For example, Dettol has been one of the leading brands in the market making the company have its position in the industry.
Unilever & HCP
Media
The company has able to remain relevant through the media coverage. The adverts of Unilever are common making a positive impact to the consumers and the company. This has made the company gain compete with other competitors like Procter & gamble.
Competitors
Differentiation has been the marketing concept that Unilever has been using in its country. The company has been able to offer products that are more competitive for a long period of time. For its brands, the company has done competitor analysis thus remaining relevant to the market.
Employees
The company has employed a staff and kept them over the years. As part of strategic planning, the company ensures all the employees are motivated. So as to gain competitive edge the company has been training and developing its employees.
SWOT analysis
It is an analysis framework that gives the strengths, weakness, opportunities and threats that an organisation faces in the market industry. According to Bohm ( 2009, p.1) SWOT analysis uses an integrated approach to confront internal strengths and weakness of a company as well as the external opportunities to the company and the threats it faces so as to come up with strategic options.
Unilever SWOT Analysis
SWOT Analysis of Reckitt Benckiser
Market segmentation
The marketing concept entails the division of the targeted market into segments that have similar characteristics. Botha, Strydom and brink (2004, p.61) note that market segmentation involves the practice of clustering different people who share similar needs based on aspects like age, sex, and gender among others. The common segmentation variables are geographic, demographic, psychographic and behavioural segments (Morgan & Summers 2005, P.97).
The geographic segmentation is deals with the location. The two companies have used this approach to segments its market because they have customers from UK, USA, Middle East, Asia, and Africa among others. Demographic segmentation this concentrates on the social economical aspects of a given population. Example of these is age, gender, the size of the household, education, sex, and income level segments (Morgan & Summers 2005, P.97).
Psychographic segmentation is concerned with aspects like lifestyle of the customers, social class of the targeted group, the opinion of the people towards the brand of that particular company, interests and activities the customers such as games they are involved in the beliefs and the attitudes of the people toward the products since they determine the opinions of the people toward a particular product segments (Morgan & Summers 2005, P.97).
Behavioural segmentation addresses the customers’ behaviours towards the products being launched or already existing in the market. Some of the characteristics of behavioural segmentation considered are the degree of the product usage; customers brand loyalty, and the type of the users the company is targeting segments (Morgan & Summers 2005, P.98).
The two companies being in the consumer product industry with markets all over the world and even with covering demographic aspects use all the four variables in segmenting their different markets. With their products being used by all people covers all the four segmentation variables
Target markets
They are the chosen groups of people that a marketing department targets for sell of its goods. The Vaseline targeted group is the whole population because its policy is no matter your age or your skin Vaseline care for you. The target market for Dettol is all the households who need family protection from germs and bacteria.
Figure 1. Characteristics of the target market in relation to different segmentation variables.
Targeting strategy
There are three common targeting strategies are they are undifferentiated, concentrated and differentiated.
Undifferentiated
This is applied by a company that decides to relay product benefits by using similar promotional message to the targeted population (Sandhusen 2008, p.298). This works well for products that are affordable and available to all consumers. The customers should be able to derive the same benefits from the product.
Differentiated
A company uses this type of strategy while the product targets a particular specific segment (Sandhusen 2008, p.298). The promotional messages are designed in such a way that they target a single specified segment.
Concentrated
A company using this strategy chooses to concentrate on a particular segment chosen from a cluster of several segments but leaves the others to close competitors (Sandhusen 2008, p.298). The designed promotions message has the capacity to communicate different benefits.
Based on the explanations on the different targets, Reckitt Benckiser and Unilever & HCP operate using the differentiated strategy. This is because the companies tailor the products based on the needs of the customer targeting one of the segments in the market through differentiation.
Choosing targeting strategy
After specifying the several segments that fit the product, the marketing department positions itself in the industry using either of the strategy. However, the marketers can use either the cost leadership approach or the differentiation. In the cost leadership, the companies aim at high sales with the aim of attaining market leadership through competitors undercut.
On the other hand, a company differentiates itself from other companies by offering a product that is unique. The products offered have strong benefits and are different from competitors. After locating the different tastes, preferences, attitudes and behaviours of a segment group, the company can decide to choose one of the approaches to get the strategy.
Positioning strategy
They are used to project a favourable image of the brands to the minds of the customers and they are,
Product characteristics/ attribute
This approach uses the characteristic of the product to give an illustration of what a consumer would expect from it. Some products have single of more characteristics being used to position the product. For example, Vaseline offers a healthy skin all day while Dettol protects the family from germs.
Pricing
The positioning strategy use price and quality approach to reach the customers. The combination of this depends on the people mindset that if a product is expensive then it is of good or high quality, and vice versa. A good example is Dettol which is referred to as a premium brand. Mothers are always willing to pay more to protect their children from bacteria and germs and use Vaseline to keep the family healthy.
Application or Use
Position strategy that relies on application or use is used to expand the market of the particular brand. For instance, modifying the product to increase its application expands its brand market. For example the Dettol Antiseptic uses have been increased over the years thus creating an application positioning strategy this has also been the case with
Positioning strategy based on competitors (Saxena, R., 2009, p.281)
The company focuses more on the competitors substitute products in the market. In some extreme cases a company can use the positioning strategies applied by competitors so as to take over on the competitors’ base. For instance, Dettol is displayed as a premium brand that provides 100% protection form bacteria and germs that all mother need to protect their family as a whole. Mother is used as a focal point for Dettol soap users positioning which when compared to Lux which has focus on men.
The Unilever Company uses the product characteristics and the application positioning strategy. For example, Vaseline is marketed using its characteristics and the application or the usage mode. On the other hand, Reckitt Benckiser uses are the application, positioning based on competitors, pricing and the product attribute as explained above.
Recommendations
Based on the findings no company has operations in more 190 countries, it is recommendable the companies make their products available in all countries. This would increase its market share and reach many people thus having competitive edge over its competitors. Benckiser should design products that target graduates and students.
For example, the new acquired brand Durex can be a power brand dedicated to students, undergraduates and people in their first careers. This would encourage entrepreneurial and attitude spirits. Although, it may not increase its sales it promotes the company and its brand name. Most of the Unilever products target the family or the household. It could make some brands that focus on the career professionals; this would encourage more people to by buy goods so as to be associated with that particular product.
Reference List
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