Unilever and its Product Lux: A Review
1.0 Introduction:
Business & Marketing lives in a dynamic environment which is changing very fast. So to keep up with the pace of change and to update & upgrade of value in the marketing theory’s principles and practices must be a continuous basis. In brief marketing activities are perpetual activities. Unilever follows these principles and continuously involve in value innovation.
of Business along with the management knowledge.
The purpose of making this report is to know all about Lux in particular and its marketing proses in Bangladesh i.e Business, Code of principles, Brand products, advertisement in general.
1.2 Source and methods of collecting data
We have collected data by two-method like-
1.4.1 Primary method
1.4.2 Secondary method
Primary method
We visited Unilever Head Office, Registered Office and Factory at Kalurghat and one distributor SMAH Limited, Dhaka and M/S Elias Brothers, Chittagong to know about their marketing process and how many products they are to produced and I discussed with experience marketing related persons.
* Kamran Bakr, Supply Chain Director,
* Waqar Kazi, Finance Director
* Reazul Huq Chowdhury, Customer Management Director.-who lead Unilever marketing process in Bangladesh and abroad. I asked them following question about Unilever:
Ø How old is Unilever?
Ø How old is Lever Brothers? What businesses do you operate in?
Ø What type of Company is a lever brother? What is the share split of the Company?
Ø What is the Company’s Objective or its Corporate Purpose?
Ø How is Lever Brothers governed?
Ø Where your products are manufactured?
Ø How a product formulation is developed?
Some questions they answer directly and some, advised me to follow the catalogues.
Secondary method
We tried to find out the answers of the following subject in catalog of Unilever of Bangladesh. We also browsed web sites Unilever of Bangladesh, are as bellows-
* Marketing processes of Unilever in Bangladesh.
* Products of Unilever in Bangladesh
* Annual financial reports of Unilever.
COMPANY PROFILE
(Brief History of Unilever)
2.1 Flashback, its global expansion:
Unilever’s corporate mission – to add vitality to life – shows how clearly the business understands 21st century-consumers and their lives. But the spirit of this mission forms a thread that runs throughout its history, leading right back to the late 19th century.
In the 1890s, William Hesketh Lever, founder of Lever Bros, wrote down his ideas for Sunlight Soap – his revolutionary new product that helped popularize cleanliness and hygiene in Victorian England. It was ‘to make cleanliness commonplace; to lessen work for women; to foster health and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the people who use Unilever’s products’. This was long before the phrase ‘Corporate Mission’ had been invented, but these ideas have stayed at the heart of Unilever’s business. Even if their language and the notion of only women doing housework has become outdated. In a history that now crosses three centuries, Unilever’s success has been influenced by the major events of the day – economic boom, depression, world wars, changing consumer lifestyles and advances in technology. And throughout Unilever has created products that help people get more out of life – cutting the time spent on household chores, improving nutrition, enabling people to enjoy food and take care of their homes, their clothes and themselves.
2.2 Balancing profit with responsible corporate behavior:
In the late 19th century the businesses that would later become Unilever were among the most philanthropic of their time. They set up projects to improve the lot of their workers and created products with a positive social impact, making hygiene and personal care commonplace and improving nutrition through adding vitamins to foods that were already daily staples. Today, Unilever still believes that success means acting with ‘the highest standards of corporate behavior towards its employees, consumers and the societies and world in which Unilever lives’. Over the years Unilever has launched or participated in an ever-growing range of initiatives to source sustainable supplies of raw materials, protect environments, support local communities and much more. Through this timeline you’ll see how Unilever’s brand portfolio has evolved. At the beginning of the 21st century, our Path to Growth strategy focused Unilever on global high-potential brands and their Vitality mission is taking them into a new phase of development. More than ever, Unilever’s brands are helping people ‘feel good, look good and get more out of life’ – a sentiment close to Lord Leverhulme’s heart over a hundred years ago.
2.3 Timeline:
19th century
Although Unilever wasn’t formed until 1930, the companies that joined forces to create the business we know today were already well established before the start of the 20th century.
1900s
Unilever’s founding companies produced products made of oils and fats, principally soap and margarine. At the beginning of the 20th century their expansion nearly outstrips the supply of raw materials.
1910s
Tough economic conditions and the First World War make trading difficult for everyone, so many businesses form trade associations to protect their shared interests.
1920s
With businesses expanding fast, companies set up negotiations intending to stop others producing the same types of products. But instead they agree to merge – and so Unilever is created.
1930s
Unilever’s first decade is no easy ride: it starts with the Great Depression and ends with the Second World War. But while the business rationalizes operations, it also continues to diversify.
1940s
Unilever’s operations around the world begin to fragment, but the business continues to expand further into the foods market and increase investment in research and development.
1950s
Business booms as new technology and the European Economic Community lead to rising standards of living in the West, while new markets open up in emerging economies around the globe.
1960s
As the world economy expands, so does Unilever and it sets about developing new products, entering new markets and running a highly ambitious acquisition programme.
1970s
Hard economic conditions and high inflation make the ’70s a tough time for everyone, but things are particularly difficult in the Fast Moving Consumer Goods (FMCG) sector as the big retailers start to flex their muscles.
1980s
Unilever is now one of the world’s biggest companies, but takes the decision to focus its portfolio, and rationalize its businesses to focus on core products and brands.
1990s
The business expands into Central and Eastern Europe and further sharpens its focus on fewer product categories, leading to the sale or withdrawal of two-thirds of its brands.
The 21st century
The decade starts with the launch of Path to Growth, a five-year strategic plan, and in 2004 further sharpens its focus on the needs of 21st century-consumers with its Vitality mission.
1885-1900s
In the late 19th Century, at Oss in Brabant, the Netherlands, Jurgens and Van den Bergh – two family businesses of butter merchants – have thriving export trades to the UK.
In the early 1870s, they become interested in a new product made from beef fat and milk – margarine – which, they realize could be mass-produced as an affordable substitute for butter.
Later, over in the North of England in the mid-1880s, a successful wholesale family grocery business run by William Lever starts producing a new type of household soap. The product contains copra or pine kernel oil, which help it lather more easily than traditional soaps made of animal fats. Unusually for the time, Lever gives the soap a brand name – Sunlight – and sells it wrapped in distinctive packs.
The following Highlights reveals at glance how Unilever expedited its global expansion year wise.
2.3.1 Highlights:
| 1872 | In the Netherlands, Jurgens and Van den Bergh open their first factories to produce margarine. |
| 1884 | Lever & Co starts producing Sunlight soap. |
| 1886 | Knorr – which will become part of Unilever – launches soup tablets with meat extract to provide nutritious food for low-income consumers. |
| 1887 | By the end of this year Lever & Co is making 450 tons of Sunlight soap a week and William Lever buys the site on which he’ll build Port Sunlight – a large factory on the banks of the Mersey opposite Liverpool, with a purpose-built village for its workers providing a high standard of housing, amenities and leisure facilities. |
| 1888 | Jurgens and Van den Bergh both move into another prosperous market, Germany, and build factories there. |
| 1890 | Lever & Co become a limited company – Lever Brothers Ltd. |
| 1891 | Van den Bergh moves to new headquarters in Rotterdam. |
| 1894 | To support and promote the growing interest in personal hygiene, Lever & Co creates an affordable new product – Lifebuoy Soap.
Lever Brothers becomes a public company. |
| Mid 1890s | In the UK Lever Brothers is selling nearly 40 000 tons of Sunlight soap a year and starts expanding into Europe, America and the British colonies with factories, export businesses and plantations. |
| 1898 | By this time Van den Bergh already has a 750 strong sales-force and launches a new branded margarine – Vitello. |
| 1899 | Lever Brothers introduces a new type of product, Sunlight Flakes – which makes housework easier than with the traditional hard soap bars. In 1900 Sunlight Flakes would become Lux Flakes. |
1900s
In the early part of the 20th Century, margarine and soap producing businesses start to move further into each other’s markets.
Competition and a sudden sharp rises in the cost of raw materials leads many to set up associations, promoting their interests and defending themselves against supplier monopolies.
With supplies of oils and fats struggling to meet the demand created by fast growing soap and margarine production, the companies that will one day become Unilever focus on securing stable sources of raw materials.
2.3.2 Highlights:
| 1904 | In the UK Lever Brothers launch another product to make housework easier – Vim, one of the first scouring powers.
The company is incorporated in South Africa. |
| 1906 | By now Lever Brothers has a thriving export trade and factories in three European countries as well as one each in Canada, Australia and the US. It’s also started enterprises in the Pacific.
The same year Lever Brothers comes to an agreement with three other manufacturers to limit competition for raw materials, but is attacked by the press who, dubbing them ‘The Soap Trust’, accuse them of driving up prices. Lever Brothers subsequently sues the Daily Mail and in 1907 wins UK£50k damages – a massive settlement by the standards of the time. |
| 1908 | Jurgens and Van den Bergh strike a deal to form an association and share profits while continuing to compete against each other. |
| 1909 | Lever Brothers develops a palm plantation in the Solomon Islands and at the same time Jurgens and Van den Bergh set up a joint palm-planting venture in German Africa. |
1910s
The UK market for soap reaches saturation point, so Lever Brothers concentrates on acquisitions instead.
Meanwhile demand for margarine continues to escalate and Lever Brothers, Jurgens and Van den Bergh increase their interests in the production of raw materials.
Tough market conditions also lead to the further growth of trade associations. When new technology is invented to solidify whale oil, businesses join together in the Whale Oil Pool to regulate the distribution of this important new commodity.
But the clouds of war are gathering. The First World War is set to make a big impact, firstly through increasing demand for soap and margarine – vital wartime supplies – and secondly through the intervention of British and German governments, which effectively place the oil and fats industry under government control.
2.3.3 Highlights:
| 1910 | Lever Brothers buys its first company in West Africa, WB McIver Ltd, to secure supplies of palm oil for Port Sunlight. |
| 1911 | Lever Brother’s first purpose-built research laboratory is constructed at Port Sunlight. |
| 1912 | The first profit-sharing deal between Jurgens and Van den Bergh is terminated but the two companies continue to work together. |
| 1913 | Leading businesses in the Europe join forces to create the Whale Oil Pool. |
| 1914 | In the year that war breaks out, companies controlled by Lever Brothers are making about 135 000 tons of soap a year, while in the Netherlands Jurgens and Van den Bergh have both acquired a number of smaller businesses and each also controls seven margarine factories in Germany. |
| 1917 | Lever Brothers acquires Pears Soap, a company founded in 1789, and Jurgens forms an alliance with Kellogg’s in preparation for expansion into North America.
Around this time Jurgens and Van den Bergh both establish factories in England, with one in Purfleet, Essex still manufacturing margarine today. Lever Brothers also expands into the margarine market with the launch of Planters, increases operations in South Africa and sees its American business start to move into profit. |
1920s
By the end of the Roaring Twenties Jurgens owns margarine factories in Scotland, Ireland and England and Lord Leverhulme controls 60% of the output of UK soap manufacturing.
But during the decade the margarine market suffers declining demand as butter becomes more affordable.
Before his death in 1925, Lord Leverhulme builds up a private portfolio of companies that include some dealing with produce from his newly acquired estate in Scotland’s Western Isles. Many of these, including Mac Fisheries Ltd, will eventually be bought by Lever Brothers.
At the end of the decade alliances reach their ultimate conclusion and the official history of Unilever begins. First, Jurgens and Van den Bergh join together to create Margarine Unie. Then two years later – in one of the largest mergers of its time – Margarine Unie teams up with Lever Brothers to create Unilever.
2.3.4 Highlights:
| 1920 | Lever Brothers gains control of the Niger Company, which later became part of the United Africa Company. |
| 1922 | Lever Brothers buys Wall’s, a popular sausage company which is beginning to produce ice cream to sell in the summer when demand for sausages falls. |
| 1923 | The collapse of the German economy creates even harsher trading conditions for Jurgens and Van den Bergh. |
| 1925 | Lever Brothers buys British Oil & Cake Mills, one of its major competitors and the manufacturer of New Pin Soap. |
| 1926 | Lever Brothers launches its Clean Hands Campaign. Part of its child health policy, it educates children about dirt and germs and encouraging them to wash their hands ‘before breakfast, before dinner and after school.’ |
| 1927 | Jurgens and Van den Bergh, who have already teamed up with two European businesses, Centra and Schicht, join forces to create Margarine Unie – the Margarine Union. The union quickly gains new members, creating a large group of European businesses involved in the production of almost all goods created from oils and fats.
Planters Ltd, a Lever Brothers company launches the first vitamin-enriched margarine – Viking. |
| 1928 | Margarine Unie acquires the French-Dutch Calve-Delft group with factories in the Netherlands, France, Belgium and Czechoslovakia. The following year the Union also acquires the firm of Hartog’s. |
| 1929 | On 2 September Lever Brothers and Margarine Unie sign an agreement to create Unilever. The businesses initially aim to negotiate an arrangement to keep out of each other’s principal interests of soap and margarine production, but ultimately decide on an amalgamation instead. |
1930s
The 1930s is a tough decade – it starts with the Great Depression and ends with a new world war.
These conditions make the newly merged business’ need to rationalize even more urgent. So in the UK Unilever cuts its 50 soap-manufacturing companies to concentrate on fewer brands, while on the continent governments protect local butter production through taxes, excise duties and limits on production. The end result is that Unilever’s margarine and edible fat plants are cut from ten to five.
But despite the recession the business continues to expand: partly through the development of new products in its established markets, and partly by acquiring companies to take it into emerging categories like frozen and convenience foods.
2.3.5 Highlights:
| 1930 | On 1 January Unilever is officially established. |
| 1930 | Procter & Gamble enters the UK market with the acquisition of Thomas Hedley Ltd of Newcastle and becomes one of Unilever’s largest rivals. |
| Mid 30s | Soap production moves further from hard soaps to flakes and powders designed to make lighter work of household cleaning. This leads to expansion in the soap market. |
| 1935 | Vitamins A & D are added to margarine, to levels equivalent to those found in butter. |
| 1938 | After a campaign to improve public perceptions of margarine and the growth of vitamin-enriched brands including Stork in the UK and Blue Band in the Netherlands, sales of margarine rise to levels close to the highs of 1929. |
| Late 30s | With the advent of the World War II, exchange controls and frozen currencies make international trading increasingly complex. In Germany, Unilever is unable to move profits out of the country and has to invest instead in enterprises unconnected with oils and fats including public utilities. |
1940s
During the war years Unilever is effectively broken up, with businesses in German and Japanese-occupied territory cut off from London and Rotterdam.
This leads to the development of a corporate structure in which local Unilever businesses act with a high level of independence and focus on the needs of local markets.
After the war, Unilever’s interests in Eastern Europe are lost with nationalization and the control exerted by the Soviet Union. The Chinese market is affected in a similar way.
Yet throughout the 1940s Unilever continues to expand in the food market. New businesses with a diverse range of products are acquired, and resources are put into research and development for new materials and production techniques.
2.3.6 Highlights:
| 1940 | During the war years Unilever is effectively broken up, with businesses in German and Japanese-occupied territory cut off from London and Rotterdam.
This leads to the development of a corporate structure in which local Unilever businesses act with a high level of independence and focus on the needs of local markets. |
| 1941 | During the Blitz, Lifebuoy soap provides a free emergency washing service to Londoners. Lifebuoy vans equipped with hot showers, soap and towels visit bomb-struck areas of the capital to offer much-needed mobile washing facilities. |
| 1943 | Unilever becomes the majority shareholder in Frosted Foods which owns Birds Eye and the UK rights to a method of food preservation new to mass markets – deep-freezing. Years later, freezing will enjoy a resurgence of popularity when it’s shown to be one of the best ways of naturally preserving the goodness of fresh food.
Around the same time Unilever acquires Bachelor’s, which specializes in freeze-dried vegetables and canned goods. |
| 1945 | At the end of the war, Unilever is able to regain control of its international network although remains shut out from Eastern Europe and China. The decentralization of the business that was unavoidable during wartime is continued as a policy decision. |
| 1946 | Birds Eye launches the first frozen peas in the UK. At this time meat, fish, ice cream and canned goods account for only 9% of Unilever’s total turnover. |
1950s
From the late ’40s into the ’50s the development of new mass markets for consumer goods – including Africa and Asia – provide opportunities for expansion.
Unilever’s United Africa Company grows fast, producing goods for sale in the newly independent African states, which helps create new local manufacturing industries. Meanwhile post-war prosperity in Europe, spurred by the start of the European Community, leads to a consumer boom and rising standards of living.
As new scientific advances come thick and fast, Unilever increases its focus on technology, making Port Sunlight Research its Research Division with responsibility for both UK & Dutch laboratories. It also establishes a nutrition research group in the Netherlands which fifty years later will become the Unilever Health Institute – a centre of excellence in nutrition, health and vitality.
During the 1950s new types of food – most famously the fish finger – are developed as a direct response to the need for nutritious food that makes use of ingredients available in the wake of post-war rationing. Some of these are then marketed through a promising new channel – commercial TV.
2.3.7 Highlights
| 1954 | Sunsilk shampoo is launched in the UK and will become our leading shampoo brand – by 1959 it’s available in 18 countries worldwide. |
| 1955 | On the 22 September Unilever airs the very first advertisement on UK commercial TV, which is for Gibbs SR toothpaste.
Fish fingers are introduced in the UK and within a decade will account for 10 percent of British fish consumption. Dove soap is launched in US. |
| 1956 | Unilever Research establishes its Biology Department, which in the 1980s will become the Bioscience, Nutrition and Safety unit.
The PG Tips chimps make their debut appearance on the UK’s newly launched commercial TV station. Aired on Christmas Day, the commercial is inspired by London Zoo’s chimpanzees’ tea party. It results in PG Tips becoming the UK’s biggest selling tea brand. The first Miss Pears is crowned in the Pear’s Soap famous beauty contest celebrating the beauty of natural, clear complexions. |
| 1958 | In the Netherlands Unilever expands into frozen foods and ice cream through the acquisition of Vita NV, which was later to become the Igloo Mora Group. |
| 1959 | Unilever launches its first margarine in a tub, replacing the traditional block wrapped in greaseproof paper with Blauband in Germany followed by Flora in Britain. |
1960s
The Swinging Sixties bring optimism and new ideas as the world economy expands and standards of living continue to rise.
As a result Unilever expands and diversifies through innovation and acquisition, setting up advertising agencies, market research companies and packaging businesses. In 1968 it tries to merge with Allied Breweries in a truly ambitious acquisition bid. But maintaining profit stability is difficult as the gap widens between best and worst performing operations, and funds are invested to maintain low-yield businesses.
In the mid-60s, a restructure increases opportunities to grow brands internationally. Control and European profit responsibility for the biggest brands is subsequently moved from individual operating companies to category-focused teams called Co-ordinations.
2.3.8 Highlights:
| 1960 | All washing-related brands are placed under the control of a single company, Lever Brothers and Associates. Becel, the pioneering ‘health’ margarine, is launched after the medical community asks Unilever to develop a cholesterol-lowering food product. Initially it’s only available from pharmacies. |
| 1961 | Good Humor ice cream is acquired in the US. |
| 1963 | Cornetto, the first packaged and branded ice cream cone, begins its launch in Europe. Becel is repositioned as diet margarine and distribution is widened to include the grocery sector. |
| 1965 | Unilever forms its own specialist packaging business, the 4P Group, turning an internal service provider into a profit earning business. CIF is first launched, starting in France. |
| 1967 | Captain Birds Eye/Iglo/Frudesa makes his first appearance in TV commercials. |
| 1968 | Unilever attempts unsuccessfully to merge with Allied Breweries, one of the UK’s largest brewing companies. |
| 1969 | Unilever airs the UK’s first ever color TV commercial, which is for Birds Eye peas. |
1970s
During the 1970s hard economic conditions – including high inflation in the wake of the 1973 oil crisis – leads to flat sales.
The growth of large retailers including supermarkets also starts a shift in negotiating power away from manufacturers.
So Unilever continues to build ‘turnkey’ consumer goods businesses in sectors including transport and packaging and has a major thrust into North America with the purchase of National Starch. Fortunately the subsidiary United Africa Company yields large profits in oil-booming Nigeria, helping balance out the costs of businesses in Europe and the United States.
But while Unilever continues to diversify in the 1970s, it stops expanding along the supply chain as third party suppliers become larger and better equipped to take over non-core tasks.
2.3.9 Highlights:
| 1970 | Unilever acquires the meat business Zwanenberg’s at Oss, which would eventually become the Unilever meat group UVG. |
| 1971 | Lipton International is acquired and Unilever’s tea business becomes one of the largest in the world.
Impulse deodorant is launched, starting in South Africa. By 1985 it will be sold in 30 countries. Mentadent is launched in Austria as a revolutionary gum health brand. |
| 1973 | Frigo ice cream is acquired in Spain.
Unilever’s subsidiary, the United Africa Company, becomes UAC International – having expanded since its inception in the 1920s to trade in 43 countries. |
| 1977 | By now, across the nine members of the EEC, Unilever employs nearly 177,000 people in 200 offices and factories, investing in fixed assets at a rate of about UK £30million a year and spending about UK £1bn on supplies. |
| 1978 | Signaling intentions to increase its presence in the US, Unilever acquires National Starch, a leading producer of adhesives, starch and speciality organic chemicals. It’s the largest acquisition by a European company in the US at this time. |
1980s
At the start of the 1980s Unilever is the world’s 26th largest business. Its interests include plastics, packaging, tropical plantations and a shipping line, as well as a wide range of foods, home and personal care products.
Early in the decade in a bold change of strategy it decides to refocus on core product areas with strong markets and equally strong growth potential. The necessary rationalization leads to large acquisitions and equally large divestments, including the sale of animal feeds, packaging, transport and fish farming businesses.
But by 1989 the resulting growth of core businesses is clearly evident.
2.3.9 Highlights:
| 1982 | A Viennetta ice cream gateau is first launched, starting in Britain as a Christmas specialty. |
| 1983 | Axe body spray for men (Lynx in the UK) is first launched, starting in France. |
| 1984 | Unilever announces its Core Business Strategy and large acquisitions and disposals follow over next decade.
Brooke Bond is acquired in Unilever’s first hostile take-over. |
| 1985 | Unipath launches a home pregnancy testing kit Clearblue, which is sold through pharmaceutical outlets in Britain. |
| 1986 | The acquisition of Naarden doubles Unilever’s business in fragrances and food flavours. Chesebrough-Pond’s, which owns Pond’s and Vaseline, is acquired in the US. |
| 1987 | Dove is re-launched in Europe, starting in Italy. |
| 1989 | Calvin Klein and Elizabeth Arden/Faberge are acquired while Magnum ice cream is launched in Germany. |
1990s
The new business focus continues with the number of categories in which Unilever competes cut from over 50 to just 13 by the end of the decade.
This includes the decision to sell or withdraw many brands and concentrate on those with the biggest potential.
Restructuring creates four core business areas: Home Care, Personal Care, Foods and Specialty Chemicals. The new structure is led by a new team, ExCo (the Executive Committee) and includes 12 business groups, each responsible for a mix of geographical and product areas.
Also during this decade Unilever sets up a sustainable agriculture program in light of growing environmental pressures and consumer concerns about the food chain. Other initiatives to preserve water resource and source fish from sustainable stocks soon follow.
2.3.10 Highlights:
| 1992 | Unilever enters the Czech Republic and Hungary, and establishes UniRus in Russia. |
| 1993 | Breyers ice cream is acquired in the US and Organics shampoo is first launched in Thailand. By 1995 Organics is sold in over 40 countries. |
| 1994 | The disposal of United Africa Company, Unilever’s huge West African trading, brewing and textiles company, is completed. |
| 1995 | Unilever publishes its Code of Business Principles. The unprecedented decision is taken to practically eliminate trans-fats from food production in a rapid response to new research suggesting that their effect on blood cholesterol is at least as adverse as that of saturated fats. |
| 1996 | Unilever makes an ambitious commitment to source all fish from sustainable stocks and starts working with the WWF to establish a certification programmed for sustainable fisheries known as the Marine Stewardship Council (MSC).
Hindustan Lever and Brooke Bond Lipton India merge to create India’s largest private sector company, and the Helene Curtis hair care business in the US is acquired. The Unilever Nutrition Centre is created. Annapurna iodized salt is launched in India and starts to make a big impact on redressing iodine deficiency. |
| 1997 | Kibon ice cream is acquired in Brazil. Unilever’s chemicals businesses including National Starch and Quest International are sold. |
| 1999 | Shareholders authorize a special dividend of €7.4 billion and a share consolidation to reduce the number of shares per issue. |
2000s
The 21st Century starts with the launch of Path to Growth – a five-year strategy to transform the business by focusing on leading brands, improving operating margins and increasing top-line growth.
Path to Growth quickly leads to more acquisitions, particularly to boost the foods portfolio, and the rationalization of manufacturing and production sites to form centers of excellence. By the end of 2003 operating margins have risen from 11% to 15.7%, the integration of Bestfoods has been successfully completed, and the portfolio is radically reshaped through the sale of 140 businesses – with the result that leading brands represent 93% of sales.
The beginning of the century sees Unilever Health Institute (UHI) opening – a centre of excellence in nutrition, health and vitality. UHI quickly plays a leading role in creating nutrition-based foods and providing evidence to support brands’ nutritional-health claims.
Environmental issues also remain a high priority and in 2002 Unilever launched the Sustainable Agriculture Initiative in partnership with Danone and Nestle to promote sustainable agriculture practices.
Looking to the future, Unilever launched a new mission in 2004. “Unilever’s mission is to add Vitality to life. Unilever meets every day needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life.”
The mission – together with the Unilever brand which was launched at the same time – link its business and brands, shaping Unilever’s future direction. They help to position Unilever to deliver profitable growth and clarify what Unilever stands for around the world.
The next 12 months will see Vitality start to come to life across Unilever’s business.
2.3.11 Highlights:
| 2000 | Best foods are acquired in the second largest cash acquisition in world history. Other acquisitions include Slim.Fast Foods, Ben & Jerry’s and the Amora-Maille culinary business in France.
Becel/Flora pro-active spreads with cholesterol-lowering plant sterols are launched and become the first functional food to win FDA and EU approval. The Unilever Health Institute – a centre of excellence in nutrition, health and vitality – is launched. Unilever screens the first interactive advertisement: it’s broadcast on Sky’s Open channel and promotes Chicken Tonight. |
| 2001 | By 2001 Unilever has cut the number of its brands from 1600 at the end of the 20th Century, to 900. Diverse Lever, Elizabeth Arden and Unipath are sold.
Unilever Best foods establish its Global Nutrition and Health Network. Unilever screens the first interactive TV commercial on a mainstream terrestrial channel in the UK; it promotes Colman’s and Olivio. |
| 2002 | The business invests €500million in advertising – up 10% on the previous year, which contributes to leading brands growing by more than 5%.
Unilever Australia wins a Cannes Media Lion Grand Prix award in recognition for excellence in advertising for Magnum’s Seven Deadly Sins campaign. |
| 2003 | Unilever Health Institute opens regional centers in Bangkok and Accra, Ghana.
Unilever is consulted by the WHO regarding the development of a Global Strategy on Diet, Physical Activity and Health (published May 2004). Our Nutrition Policy and Nutrition & Health Academy are launched. The Healthy Heart Brand signs a three-year sponsorship deal with the World Heart Federation. Unilever leads a UK cross-industry initiative to reduce salt levels in soups and meal sauces. Lever Faberge Spain sends 21 tones of Health and Personal Care products to volunteers clearing up North West Spain after the oil tanker ‘The Prestige’ sinks. By the end of 2003 the business is buying half its fish from sustainable sources and water consumption per ton of production is down by 13%. |
| 2004 | Unilever set out on its journey to become the ‘vitality company’ in 2004. Two key milestones on this journey have been the launch of the Vitality mission and the roll out of the new Unilever brand.
By putting Vitality at the heart of the business we are building on our heritage for developing innovative products that meet the changing needs of consumers. And positioning Unilever to continue to create value for its stakeholders now and in the future. But Vitality is more than a mission. It embraces everything we do and how we do it. It’s about helping people to look good, feel good and get more out of life – and the way we manage our business, including our impact on communities and the environment. Good health is the key to Vitality, which is why we are looking at the nutritional content of our food brands and launching a global nutrition enhancement programmed across the Company in 2005. A second initiative focusing on hygiene is also being developed. Unilever also unveiled its new identity in 2004. At its centre is the Unilever logo, which is made up of 25 icons representing different aspects of Unilever’s business – everything from palm trees, fish and flowers to tea, hair and spoons. The new logo has been appearing at Unilever sites around the world and from now on will be on all Unilever products. A symbol that represents the diversity of Unilever’s business, its products and its people. |
2.4 Lever brothers
The year 1964 marked a new beginning for Kalurghat in Chittagong. It was in this year that Lever Brothers Pakistan Ltd a subsidiary of Unilever, the Anglo Dutch Consumer Goods Company, decided to establish a manufacturing unit at Kalurghat. Lever Brothers started its quest to contribute to enhance the quality of human life, not confining its mission to produce quality branded products, but also providing opportunities of employment, developing ancillary industries, protecting the environment, and propagating community development through social contributions.
In 1964, Lever Brothers started producing mechanized soaps, thus ushering industrialization in the area. Productions started off with Sunlight soap and Lifebuoy soap. Back in those days the average weekly capacity was 50 to 60 tons. After mitigating the local demands, surplus was shipped to Pakistan.
2.5 Lever brothers to Unilever
Lever Brothers Bangladesh Ltd has now become Unilever Bangladesh Limited. The Chairman and Managing Director of the company, Mr. Sanjiv Mehta, unveiled the new name and the logo at a function on December 2, 2004. This name change aligns our identity with global Unilever and reaffirms Unilever’s commitment to Bangladesh said Mr. Mehta. With a new name we are renewing our pledge to serve our consumers and customers even better and in a more reliable manner. We will prominently display our corporate name in all our packaging as a stamp of quality and as a matter of corporate responsibility.
‘Unilever’s mission is to add vitality to life. We meet the everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.’ When our brand Wheel relieves housewives from drudgery of washing clothes, Close-Up brings the youth together, Lux makes an ordinary person feel extraordinary, Lifebuoy assures your family is well protected this is what we call as adding vitality to life. The vitality mission will help Unilever to focus on new consumer opportunities and to grow its brands and its business. The new logo is a powerful symbol of Unilever’s Vitality mission. It is constructed from a number of individual symbols that all represent various aspects of Unilever.
Unilever Bangladesh is one of the largest and most reputed companies in the country. “We are acutely conscious of our responsibilities as a corporate citizen. While our primary obligation to our shareholders is to create value, our fiduciary responsibility goes further, as we are committed to achieving this in a manner that is ethical, based on sound principles and is in a socially responsible manner”, emphasized the Chairman in his unveiling speech.
Unilever Bangladesh a successful partnership between Unilever and the Government of Bangladesh has a long history of enriching the lives of Bangladeshis. More than 90% of the households in the country use its products in one form or more. “Having earned the trust & esteem of millions of Bangladeshis we will continue to serve their interests and delight them with added vigor and vitality. We are committed to participating in the country’s development. In the days ahead Unilever Bangladesh is pledge bound to play an even more powerful role in developing Bangladesh. We will strengthen the image of “Made in Bangladesh” and continue to act as a catalyst in transforming the quality of life of millions of Bangladeshi men and women.” added Mr. Mehta.
Unilever Bangladesh has delivered double digit growth for the last six successive years. It is one of the fastest growing businesses for Unilever in Asia. It is a company with strong fundamentals and a sound set of organizational capabilities. “The entrepreneurial spirit of our people together with their vibrant energy, creativity and growth mindset is the vital differentiating factor of our company. Our local talent is comparable to the best the world has to offer. ” said Mr. Mehta.
2.6 About Unilever
Unilever’s roots go back more than a century.
Margarine was first produced commercially in the Netherlands in the 1870s and by 1927 two early manufacturers, Jurgens and Van den Bergh, decided to merge their operations to form Margarine Unie.
Meanwhile, in the UK, William Hesketh Lever founded his company, Lever Brothers, in 1885 and soon established soap factories around the world. In 1917, he began to diversify into foods, acquiring fish, ice cream and canned food businesses.
The Unilever Group came together in 1930 through the merger of Margarine Unie and Lever Brothers. Since then Unilever has operated as one. Although there are still two parent companies, Unilever N.V. and Unilever PLC, they operate as one and are linked by a series of agreements, follow common policies and have the same directors.
2.6.1 Company’s objective
Unilever’s Corporate Purpose, which goes as under:
The purpose in Unilever is to meet the everyday needs of people everywhere – to anticipate the aspirations of their consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life.
Unilever deep roots in local cultures and markets around the world are their unparalleled inheritance and the foundation for Unilever future growth. They will bring their wealth of knowledge and international expertise to the service of local consumers – a truly multi-local multinational.
Unilever long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively and to a willingness to embrace new ideas and learn continuously.
Unilever believe that to succeed requires the highest standards of corporate behavior towards their employees, consumers and the societies and world in which unilever live.
This is Unilever’s road to sustainable, profitable growth for their business and long-term value creation for their shareholders and employees
2.6.2 About the company:
| Constitution | Unilever – 60.75% shares, Government of Bangladesh – 39.25% |
| Operations | Home and Personal Care, Foods |
| Product Categories | Household Care, Fabric Cleaning, Skin Cleansing, Skin Care, Oral Care, Hair Care, Personal Grooming, Tea based Beverages |
| Top Brands | Wheel, Lux, Lifebuoy, Fair & Lovely, Pond’s, Close Up, Sunsilk, Lipton Taaza |
| Manufacturing Facility | Soap Manufacturing factory and a Personal Products Factory located in Chittagong. Besides these, there is a tea packaging operation in Chittagong and three manufacturing units in Dhaka, which are exclusively for Lever Brothers. |
| Employees | Over 5000 people are provided with through direct employment for factories, distributors, and exclusive manufacturers. |
2.6.3 Impact of Unilever operations
This is the way through which Unilever chooses to do business. They choose to do business, maintaining the “highest standards of corporate behavior towards their employees, consumers and the societies and world in which we live”. Unilever operates with integrity and respect for the interests of its stakeholders because we believe that they would grow only when they have created value for their consumers, shareholders, business partners and employees. In Unilever quest to create value for their consumers we relentlessly strive to make high quality products that are affordable to the masses of Bangladesh. Unilever has extended more than 21 international brands to their consumers in more than a 100 different shapes, sizes, colors, and fragrances, suiting their aspirations and affordability. Unilever’s strive for excellence in quality has made it market leaders in most of the categories they operate in. Unilevers incessant efforts to connect with its consumers have led us to introduce many new product categories. For three years in a row they have been awarded Unilever’s prestigious “Sustained Innovation Performer” status. Meanwhile, in recognition of its rapid growth through innovation, Unilever Bangladesh has won the prestigious international platinum Sustaineal Innovation performer’ award.
The Unilever companies that can achieve more than 10 percent growths abiding by some pre-determined condition of underlying volume growth are categorized as sustained innovation performers, and those sustained innovation performers that can uphold this uniformity of success for a consecutive period of six years or more, are crowned with ‘Platinum Awards’.
Unilever, Bangladesh is one of 150 (one fifty) world-wide companies that has achieved this uniform record of innovation and growth for a period from 2002-2005. Uni-lever has been achieving this uniform growth through innovation to the satisfaction of its Bangladeshi consumers for long 8 years. Mr. Sanjib Meheta, The Chairman and the Managing Director of Unilever, said that the winning of this prestigious award is a matter of great pride for the company and the country.
To ensure the affordability of the consumers we have pioneered the concept of low unit price packs. Today 90% of the Bangladeshi households use Unilever products in one form or more. Unilever has created value for its consumers in terms of real price reductions, not changing its prices for most of its products during the last five years in spite of the ever-increasing devaluation of the currency and the country’s inflation rate.
Unilever continuously innovates to create value – value that they share with their stakeholders. Lever Brothers is one of the largest contributors of revenue to the Government of Bangladesh. In 2003 alone they have paid more than Tk. 200 crores to the government as taxes, duties, and dividends. 73% of the value addition in Lever Brothers is distributed to the Government. Over 5000 people are provided with employment through factories, distributors, and exclusive manufacturers. Add to this, the numerous jobs created and supported through their suppliers throughout the country.
Unilever excellence is but the reflection of the human capital that they foster and develop. They treat their employees with utmost respect, provide equal opportunities for all and ensure a safe working environment for them. Unilever commitment to ensure employees’ safety has earned us the Unilever’s Gold Award for operating 3,000,000 hours without any loss time accidents. In 2003, they spent over Tk. 18 million in training. Unilever is regarded as one of the most preferred employers offering a wide scope for career development.
2.6.4 Impact through the value chain
Over the years Unilever has built and nurtured partners at both the front and back end of the Supply Chain, which helped to develop local industry using their international expertise. Today, Unilevers sources in most of their packaging requirements saves precious foreign exchange. Over the last five years there has been an increase in the share of local input from 20% to 39%. Unilever constant support and guidance has enabled some of their partners to reach a standard of quality, enabling them to export to more developed markets. On the front end of the Supply chain they provide their distributors with resources, training, and infrastructure to enhance their efficiency in operations. Unilever distributors are well reputed for their professionalism and are the prime choice for any company for distributing their products.
Unilever is committed to making continuous improvements in the management of their environmental impacts. Their environmental strategy focuses primarily on achieving its goals through eco- efficiency in manufacturing. Recognizing the precarious state of the depleting ground water table, they embarked upon a water conservation program- achieving a phenomenal 60% reduction in water consumption. To deal with industrial effluents they installed an Effluent Treatment Plant at an investment of Tk 2 crores leading to effluent quality far exceeding mandatory requirements.
2.7 Corporate offices relocated from Chittagong to Dhaka
The registered office of Unilever is still in Chittagong and their main manufacturing operations are and will remain in Chittagong. They have moved only the Corporate Office to Dhaka, which has been an initiative to improve the communication with their stakeholders like the Government of Bangladesh, advertising and research agencies, Banks as well as to be in close proximity to their suppliers and their largest consumer base
2.8 List of Brand Products Launched by Year:
| 1964 | Lifebuoy |
| 1964 | Lux |
| 1972 | Wheel Laundry Soap |
| 1980 | Sun Silk / Close Up |
| 1984 | Close Up Whitening |
| 1987 | Vim/ Vim liquid |
| 1988 | Fair & Lovely |
| 1989 | All Clear |
| 1990 | Lipton Yellow Label |
| 1991 | Ponds’ |
| 1991 | Pepsodent |
| 1992 | Lipton Taaza |
| 1993 | Surf Excel |
| 1997 | Wheel Washing Powder |
| 1998 | Close Up Renewal |
| 2000 | Vim Powder |
| 2001 | Vim Bar |
| 2002 | Clinic Plus |
| 2002 | Rexona |
| 2003 | Pepsodent Tooth Powder |
| 2003 | Kissan Fruit Kick |
3.0 Brand equity
Brand equity refers to the marketing effects and outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name. Because of the well known brand name the company some time charges premium prices from the consumer. And, at the root of these marketing effects is consumers’ knowledge. In other words, consumers’ knowledge about a brand makes manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand. The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are one of the most valuable assets that a company has. Brand equity is one of the factors which can increase the financial value of a brand to the brand owner, although not the only one. Elements that can be included in the valuation of brand equity include (but not limited to): changing market share, profit margins, consumer recognition of logos and other visual elements, brand language associations made by consumers, consumers’ perceptions of quality and other relevant brand values.
In other way we can say that, A brand is a name or symbol used to identify the source of a product. When developing a new product, branding is an important decision. The brand can add significant value when it is well recognized and has positive associations in the mind
of the consumer. This concept is referred to as brand equity.
Brand equity is an intangible asset that depends on associations made by the consumer. There are at least three perspectives from which to view brand equity:
3.0.1 Financial – One way to measure brand equity is to determine the price premium that a brand commands over a generic product. For example, if consumers are willing to pay $100 more for a branded television over the same unbranded television, this premium provides important information about the value of the brand. However, expenses such as promotional costs must be taken into account when using this method to measure brand equity.
3.0.2 Brand extensions – A successful brand can be used as a platform to launch related products. The benefits of brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures, and a lower risk from the perspective of the consumer. Furthermore, appropriate brand extensions can enhance the core brand. However, the value of brand extensions is more difficult to quantify than are direct financial measures of
brand equity.
3.0.3 Consumer-based – A strong brand increases the consumer’s attitude strength toward the product associated with the brand. Attitude strength is built by experience with a product. This importance of actual experience by the customer implies that trial samples are more effective than advertising in the early stages of building a strong brand. The consumer’s awareness and associations lead to perceived quality, inferred attributes, and eventually, brand loyalty. Strong brand equity provides the following benefits:
Facilitates a more predictable income stream. Increases cash flow by increasing market share, reducing promotional costs, and allowing premium pricing. Brand equity is an asset that can be sold or leased. However, brand equity is not always positive in value. Some brands acquire a bad reputation that results in negative brand equity. Negative brand equity can be measured by surveys in which consumers indicate that a discount is needed to purchase the brand over a generic product.
3.1 Building and Managing Brand Equity