Unilever is a giant multi-national company operating in several countries globally. Unilever Gulf FZE is the UAE Unilever chapter that is located in Dubai. The company produces over 400 brands in its personal care, food and household care categories. LUX (soaps and body creams) is one of the popular brands manufactured by the Unilever Company. It has over 180,000 employees working in the company’s 500 branches spread in several countries globally generating over €2.4 billion annually (Ayas, Philip, and George 81). Unilever’s brand, Lux, is a household brand in many countries.
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Unilever was launched in 1930 following a successful merger involving two firms, Lever Brothers, a British soap manufacturer, and Margarine Unie, a Dutch food producer. It has its headquarters in Rotterdam (UN NV) and London (UN PLC) each running a different product line. The Level Brothers founded Lux soap, a popular toilet soap, which first came into the market in 1916. The soap product was initially called “Sunlight Flakes” but was changed to Lux in 1925, which is short for ‘Luxury’.
In the early 1980s, the sales from soaps and margarines contributed 40% of Unilever’s profits (Unilever Para. 4). Over the years, Unilever has merged with companies operating in the skin care industry including Cutex and Aqua-Net. In 1989, the company strengthened its position in this market by acquiring Faberge and Calvin Klein Cosmetics (Ayas, Philip, and George 87). The purchase of Helene Curtis and America’s Best Foods in the 2000s gave Unilever a strong presence in the U.S.
Unilever has a strong presence in the United Arab Emirates (UAE) market. In the Middle East, it has five offices and many manufacturing sites, 11 of these sites are in the UAE employing over 2000 workers. Unilever UAE sales from food products amount to about £900 million annually (Ayas, Philip, and George 82). The company has over 30 brands in the UAE market. Its Lux brand comes in different fragrances, packaging and colors that meet diverse customer preferences and tastes.
A company’s micro-environmental factors include the company/organization, the customers, distributors/intermediaries, suppliers and competitors.
Unilever UAE has over 2000 workers working on its 11 sites (Unilever Para. 5). Unilever is a multi-national firm that has many offices and manufacturing sites in many countries. The organizational strategy is to enhance customer satisfaction by providing diverse, customer-oriented products. Lux’s management communicates the company’s short-term and long-term goals while the marketing teams formulate strategies for implementing these goals.
The company offers its customers a range of household products. It produces quality products, which has allowed the company to build strong relationships with its clients over the years. The Lux beauty product line has a strong presence in its market segment. A wide range of Lux products including Peach & Cream, Scarlet Blossom and Magical Spell are popular brands in the UAE market.
Unilever sources its raw materials from different suppliers. They play a crucial role in value creation and brand development.
The intermediaries distribute Unilever’s products to the target customers. They ensure that local stores are well stocked with Unilever’s products by forming an elaborate distribution system (Ayas, Philip, and George 81). The intermediaries also help market the company’s products to new markets.
The toilet soap market has many players. Leading local and multi-national companies produce several top brands in the UAE market. Examples include Lifebuoy, Rexona and Nirma, which are all competitors of Unilever’s Lux soap.
Macro-environment factors are external forces that may affect a company’s operations and performance. They include economic, cultural, political, and demographic factors.
A low household income, inflation and high pricing of Lux products may affect the consumers’ purchasing patterns of the Lux products. In particular, these factors can affect the company’s market share in the soap market segment.
The UAE has a larger market for Lux products compared to other countries in the Middle East. Demographically, factors such as age, gender, ethnicity and occupation influence the demand for soap products in the UAE. Lux is designed for the upper and middle class in the UAE.
The UAE enjoys a wide cultural diversity because of the large number of visitors from other countries. The Lux products (soap and cream) primarily target the locals, but international visitors, who use the same products in their home countries, can purchase them.
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The UAE is one of the countries in the Middle East that enjoys political and social stability. This has attracted foreign investment in this country. The stable political conditions are suitable for businesses to flourish.
A company can group its target customers into segments based on geographical location, demographics (age, gender and ethnicity) or behavioral characteristics. The consumers in each group have the same preferences or tastes (Unilever Para. 2). Market segmentation allows a company to apply a specific marketing mix for each market segment.
Unilever’s Lux product is one of the leading brands in the global market. Lux’s market is grouped into segments based on geographical location. The UAE market segment is one of the largest market segments in the Middle East. It is further segmented based on Socioeconomic Cluster (SEC), whereby customers are categorized based on their occupation and level of education (Ayas, Philip, and George 89). Occupation and level of education determine the customers’ buying ability.
There are five classes that make up SEC. Lux mainly targets the upper middle and the lower middle classes. Its premium Lux soap brand is meant for the upper middle class market while the popular brand targets the lower middle class population. The products are available both for the urban population and the people living in suburbs and rural areas.
Unilever uses a number of marketing strategies to market Lux products including 4P’s. The standards of Lux products (beauty soaps and creams) produced in the UAE are the same as those of the similar products in the other countries. The Lux product (imagery cream) is produced in many fragrances and sizes. Its demand depends on its pricing relative to other popular brands.
The competition in the beauty soap market is stiff as it has many players. Unilever’s Lux products are fairly priced to target the middle class, which allows the company to maintain its market share. Unilever UAE has multiple manufacturing sites spread across the country.
Its distribution channels are offered by other companies and distributors, which distribute the Lux products to local retail stores in the country. The distributors also market the Lux products directly to consumers. The company has one of the most robust advertising campaigns in the beauty products industry. It uses celebrity endorsements in its ads, which acts as an incentive for customers to purchase Lux products. Aromatic and Tibbet are some of the competing brands. Lux’s elaborate distribution system and robust advertising campaigns have made Lux imagery cream a favorite brand for many consumers.
Current Target Market
Lux’s marketing strategy has largely focused on niche marketing. Niche marketing has allowed Lux to have a strong presence and a large market share in its target segments. The peach and cream, and the strawberry form the bulk of Lux’s beauty products in the UAE.
The Aqua Sparkle and Purple lotus are meant for the classy consumers who want unique skin care products. Lux curret targets the middle class population living in cosmopolitan cities. It targets customers of the ages of 16 to 50 (Unilever Para. 7). The Lux imagery cream is popular among women in this age category. Thus, Lux beauty creams target young and trendy urban middle class population.
The Lux imagery cream is a new product with a new fragrance for the trendy consumers. It is highly priced compared to the other Lux soap brands. In order to meet the dynamic needs of the target market, the Unilever’s R&D department came up with the Lux imagery cream that is both trendy and high quality.
Lux produces products for household and office use. Its products are available at retail stores near residential places, offices and university campuses. This marketing approach ensures that the products meet the needs and convenience of Lux’s target customers. This has made Lux imagery cream a trusted brand among the company’s customers.
Ayas, Karen, Philip, Mirvis, and George, Roth. To the desert and back–the story of one of the most dramatic business. New York: John Wiley & Sons, Inc., 2003. Print.
Unilever 2003. Unilever at a glance. Web.