Brand Building Strategy and Customer Buying Decision - Myassignmenthel

Question: Discuss about the Brand Building Strategy and Customer Buying Decision. Answer: Introduction: Marketing is a very important role which the marketing managers in the multinational companies undertake to ensure strong businesses of the companies. The marketing activities have several significances to the MNC companies. First, it helps them to market their products which generate revenue. Secondly, they can channelize this revenue towards achievement of future growth. The assignment would take into account marketing of the Sri Lankan arm of the British Dutch company Unilever, Unilever Sri Lanka. The paper would first delve into the external and internal market analysis of Unilever Sri Lanka through PESTEL and SWOT respectively. Then the next section would explore the segmentation, targeting and positioning of the multinational fast moving consumer goods manufacturing company. The third section would explore the present market performance of Unilever Sri Lanka to predict its future business generation (UnileverSrilanka.com 2018). The next section would be an Ansoff matrix analysi s of the companys present and prospective product line. The fifth section would be a marketing mix and an action plan drawing from the previous discussions. The final section would point out how every department and branch of Unilever operate in an integrated manner to give the company its enviable position it holds in the FMCG market. Market environment of Unilever Sri Lanka: Internal Organizational Environment (SWOT) The internal organizational environment of Unilever Sri Lanka can be explained in the form of a SWOT Analysis. STRENGTH 1. Multinational company has strong global presence. 2. The quality of the Unilever Sri Lanka products has its reputation. 3. Having a good distribution network universally. 4. Having a good consumer satisfaction. 5. Products must be promoted strongly with strategies. WEAKNESSES 1. Logistics charges get higher because of the vast geographically dispersed market. 2. Lower revenue generation compared to promotional cost adds to the cost of production. 3. There is a down curve in the sales growth if compared to other competitors of the market. 4. The alternative products of the competitors might be satisfying the customers more. OPPORTUNITIES 1. Extension of product line is necessary. 2. The organic product line must be strengthened. 3. The products must be down stretched. 4. Strengthening of the brands is essential. 5. Localizing the appeal of the products. THREATS 1. The presence of the strong competitors in almost all the markets acts as a threat. For example, Nestle and PG. 2. Emerging of strong local competitors in the market. External Market Environment (PEST) A PEST Analysis is used to recognize the external market environment of Unilever Sri Lanka. POLITICAL 1. Sri Lanka is politically strong and stable and promotes market expansions by liberal trade policies. 2. The government determines the operations of the corporate sectors by forming laws and regulations. 3. Legislation is levied such as discrimination laws and minimum wages ECONOMIC 1. The national and global interest rate and fiscal policies are set around the economic conditions. 2. Organizations must respond to the economic conditions and the behavior of the stakeholder. 3. In developing countries, the cheap labor affects the competitiveness of the products from the developed countries. SOCIAL 1. The alteration in the population of the country has a direct impact on the corporate sectors (Greenspan 2015). 2. Changes in the birth and death rate will result in greater competition and decrease in the demand. TECHNOLOGICAL 1. Technological advancements help in sharing and protecting the data of the companies. 2. Advance manufacturing technologies enables mass production of high quality goods and reduces the cost of production. Operational Constraints The constraints of the organization are the local competitors who are available in the market. The presence of the strong competitors in the market affects the sale and demand of the company. Brands like Nestle and PG are considered to be as strong brands in the market as Unilever. Segmentation, Targeting and Positioning of Unilever Sri Lanka: The following are the segmentation, targeting and positioning of Unilever Sri Lanka in the Sri Lankan market: Segmentation: Unilever uses a powerful segmentation strategy to segment its market of Sri Lanka to sell its products. The first segmentation strategy which the company uses is geographical segmentation. The products like Lux, especially the low price variants are sold in the rural areas whereas the expensive products like Dove and Lakme are available mostly in cities where customers have sufficient disposable income to buy expensive skin products. The second segmentation category consists of segmenting market based on lifestyle. For example, Lifebuoy promotes the healthy lifestyle habit of washing hands before having food. Axe is meant for young and middle aged male consumers who like taking care of themselves. Again, the main consumer segment consuming Lakme consist of modern women who consider using cosmetics to take care of themselves. The multinational company also segments its market based on gender (Verma, Malhotra and Halady Rao 2017). For example, Axe targets male customers while Lakme is a flagship brand targeting modern female consumers. This analysis shows that Unilever Sri Lanka segments its market on the basis of geography, income, gender and lifestyle. Targeting: The targeting strategy of Unilever Sri Lanka is well aligned with its segmentation strategy. The multinational company targets consumers belonging mostly to the middle and upper middle class society. The products of the company are priced according to their target markets. For example, Lakme targets the upper class and middle class women. The product line of Lakme consists of makeup, skincare, Lakme Salon and Lakme Fashion Week (LFW). Thus the target markets of Lakme consist of end consumers, salons and fashion designers who participate in LFW (Munasinghe and Dissanayake 2017). Again, the target consumers of Elle 18, which is another beauty brand, owned by Unilever targets the young consumers and its products are less expensive compared to Lakme. This analysis shows that Unilever Sri Lanka targets both upper and middle class consumers using appropriate products and pricing strategies. Positioning: Unilever Sri Lanka positions itself as a multinational company which offers its consumers high quality products at their convenient prices. For example, Magnum is the premium ice cream brand owned by Unilever which is expensive and targets the upper class consumers. Again, the Kwality Walls Mango zap ice-cream is very affordable to the lower class consumers. Unilever follows pricing strategies to suit needs of both upper and lower class consumers using the same brand (Dissanayake 2015). For example, Lux, the beauty soap brand the company owns is available in both low priced variants and high priced variants. Thus, it can be inferred from the discussion that Unilever uses the products and pricing strategies to position itself in the emerging market of Sri Lanka. The multinational company is capable of catering to the needs of the lower, middle and the upper class consumers. Marketing Performance of Unilever Sri Lanka: Unilever Sri Lanka is considered to be a multinational consumer product manufacturing giant operating in over hundred countries globally. Figure 1: Share Index of Unilever Sri Lanka as on 22nd February, 2018 at 12:26pm (Source: nasdaq.com 2018) As it can be observed from the above graph, the products of Unilever Sri Lanka have been rising consistently since 2014. Despite the threats of the competitors in the market, Unilever Sri Lanka has maintained its position in the market and have improved as well. Unilever Sri Lanka has four categories of products, which includes personal care, home care, food products and water purifier (Lockrey 2015). Under all these categories, along with Unilever Sri Lanka other there are other existing brands in the market. The sale of the competitors has not affected the sales and profit growth and margin of Unilever Sri Lanka in Sri Lanka. Therefore, keeping the last five years graph in mind it can be predicted that Unilever Sri Lanka will keep rising in the coming 3 years and so will its goodwill (Geethanga and Dissanayake 2014). Figure 2: Annual net profit of Unilever Sri Lanka (Source: Unilever Srilanka.com. 2018) Unilever Sri Lanka is a company that has developed and grown over the years as observed above. Now by viewing the net profit sales in the above of the products of the Unilever Sri Lanka, it can be predicted and assumed that the sales rate will also rise. It can be determined that Unilever Sri Lanka will be consistent with its product variations and profit margin. The existing products will be consistent in the market because of its goodwill and will not be affected by the competitors (Grant 2016). The company is strengthening its market position by introducing upgraded versions of its existing and new products. This analysis clearly shows that the company is going to experience a steady growth in the coming three years. Therefore, it can be concluded that Unilever Sri Lanka will remain constant in the future of the market situation in Sri Lanka. Unilever Sri Lanka is known for the quality of the brands. Unilever Sri Lanka has been in the market for a long time and can retain its posi tion in the Sri Lanka (Hopkins and Gross 2015). Ansoff matrix of Unilever: Ansoff matrix is a tool which Unilever Sri Lanka uses to determine its future business strategies to strengthen its market and maximise its revenue generation. The matrix has four quadrants namely, market development, market penetration, product development and diversification. The multinational FMCG company assesses the risks of both its existing and new markets and makes appropriate marketing strategies to counteract the risks. The below analysis would study the future marketing strategies of Unilever Sri Lanka in the coming three years with reference to the Sri Lankan market (Callen et al. 2014). Market development: The market development strategies consist of expanding into new markets using its existing products. Unilever uses niche marketing strategy to develop its markets in different market segments within Sri Lanka. The company introduces low price variants of products like Dove soap and Lux soap in low income areas of Sri Lanka. Again, Sunsilk shampoo products are made available in smaller packages which are more affordable for the low income people in towns and villages in Sri Lanka. Unilever then gradually introduces its more expensive products like high variants of Dove in these towns as the income of the people increases. It is this aggressive market development strategy of the company which has made its products the leading brands in both affluent and the emerging markets within Sri Lanka (Guilln and Capron 2016). The risk involved in this strategy revolves around failed product launches and resultant losses from these failures. Market penetration: The penetration strategy consists of growing in the existing markets using existing products. Unilever to achieve higher degree of market penetration uses two strategies. The aims of these strategies are to counteract both international competitors like PG and the emerging Sri Lankan FMCG companies. Unilever conducts continuous research and development to bring about new improved versions of its existing products. For example, the company keeps on introducing new versions of Cornetto, the ice cream the company owns under the brand Kwality Walls. Again, the company uses market penetration by making similar products available for different variants to suit the needs of different consumer segment. For example, Lakme products are available suiting the needs of both women participating in festive occasions and corporate meetings. (Pradhan et al. 2014) The second market penetration strategy which Unilever Sri Lanka uses to strengthen its position in the country against its competitors is niche marketing. The company introduces different variants of the same product to serve more specific needs of the consumers. For example, Clear, the anti-dandruff shampoo brand owned by Unilever are available in variants like Complete Scalp Care and Hydration Fix Shampoo. The primary consumer segments of the Clear brand consist of men and women who use anti-dandruff shampoo to care for their hair (Subbaiah and Bharathi 2017). Then the company goes on to cater to the deeper needs of these consumers. The Complete Scalp Care variant caters to the needs of consumers who require scalp skincare alongside the basic anti-dandruff treatment. The Hydration Fix variant caters to the needs of the consumers to hydrate their scalps. This niche marketing strategy of Unilever has boosted its market position in the Sri Lankan market (Anselmsson and Bondesson 2015) . The risk which Unilever Sri Lank may face in market penetration is loss due to failed niche marketing strategies. If the niche products are not accepted in the market, the company would suffer huge losses. Product development: Product development is the next marketing strategy used by Unilever Sri Lanka to maintain its market position. The product development strategy consists of introducing new products targeting existing consumer base. Unilever in response to the changing needs of the consumers keeps on introducing new products in its existing markets. The multinational company introduces new products which helps it to counteract challenges from its competitors. For example, Unilever Sri Lanka introduced Surf Excel in the countrys market in 1993. The brand power and consumer loyalty of Surf Excel has increased in Sri Lanka. The company can also introduce new products like Tresemme range of shampoos in the market to cater to the needs of the female customers who seek professional care for their hair (Benur and Bramwell 2015). The risk which Unilever Sri Lank can encounter while adopting this strategy in the market is presence of strong competitors at both local and international levels which sell similar products. They would eat into the market and profit generation of these products, thus causing losses or lowering the profit of the company. Diversification: The diversification strategy of Unilever consists of growing market by introducing new offerings in new markets. The company offers more products in its developed European and American markets. The above figure shows that range of products which Unilever sells in the developed markets like the USA and Sri Lanka. It can be pointed out that in the African market; the company sells far less products owing to the low profitability of the market. This shows that Unilever Sri Lanka must enter these less developed markets with new products (Hasan 2015). This diversification strategy would lend the company stronger position globally. One can say from the analysis of the product line of Unilever Sri Lanka that the company has strong presence in the personal care segment and weak in the food product segment, especially dairy products. Thus, the company must diversify towards acquiring more food product brands as its diversification strategy. This would help Unilever Sri Lanka improve its sales (unileverusa.com 2018). The third figure below shows that the turnover Unilever has earned from personal care products have increased while the turnover earned from food products shows a decrease. The refreshments and home care products show steady share in the turnover. One can predict from the figure that Unilever can expect more sales and profit generation from these product segments based on the figure projected below. Unilever Sri Lanka can use its root level strategies like opening rural shops and employing sales forces especially trained to sell products in under-developed markets like Africa to boost its sales (Hashai 2015). The company projects a sales growth in Sri Lanka along with reduction in carbon and water footprints, thus aiming to gain higher sustainability and cost cutting in the coming 3 years and as projected in the project plan discussed later. A risk assessment of the diversification strategy shows that Unilever Australia would face the financial risks due to the lack of economic development and political disturbances in these African countries. The lack of awareness about MNC products in the rural population and lack of storage facilities also pose risk to business of Unilever Sri Lanka in these markets. Existing markets Market Development: Low priced variants of Dove, Lakme etc Diversification: Introducing new products in new markets New markets Market Penetration: Lakme products bridal range and corporate range Product development: Tresemme Existing products New products Figure 4. Figure showing Ansoff Matrix of Unilever Sri Lanka (Source: Author) Marketing Mix Analysis The 7 Ps of the Marketing Mix of Unilever in Sri Lanka deals with the following: 1. Product A product is referred to an item that satisfies the wants of a consumer. Every product is subjected to a life-cycle which consists of a growth phase followed by a phase of maturity. It is the duty of the marketer to do a careful research on the life cycle of the product since their focus and attention are on different challenges. The marketer should also consider the product mix (Hasan 2015). The marketers have the power to expand the present product mix by increasing the number of product lines. A products development strategies should also be implemented by the marketer Price The price is the amount that a customer pays for purchasing the product. Price plays a significant role since the companys profit is determined by it. The price of the Unilever products in Sri Lanka have been consistent and satisfying its loyal consumers. Setting the price of a product is a form of marketing strategy since the elasticity of the product depends on it. Such a price should be set that will complement the other elements of the marketing mix (Benur and Bramwell 2015). Promotion Promotion of the products symbolize the tools of communication that a marketer might use to supply information to the various parties about the product. Promotion of a product is executed by various ways, which includes public relations, media, advertising and personal selling. Advertising of products is communicated in a paid form as in commercials, cinema and radio. For promotion of a product, the sales staff generally plays an essential role in the public relations. Therefore, these tools promote the products of Unilever Srilanka (Hashai 2015). Place Place refers to providing the product at a place that is expedient for consumers to access. Distribution of the products depends on the place as well. Unilever in Sri Lanka has been constant and consumers have also been loyal towards the brand. Plenty of strategies are applied such as selective, intensive, exclusive and franchising distribution. The marketer uses these various strategies to complement the other aspects of the marketing mix (Subbaiah and Bharathi 2017). People A significant component to any service provision defines the usage of appropriate staff and people. The consumers of Sri Lanka are referred to as the people who purchase the products of Unilever, make judgments, and deliver feedback of the service. Recruiting the right staff and providing them proper training in the delivery of their service is important for obtaining an advantage (Benur and Bramwell 2015). Process The supply chains of the products of Unilever is smooth and therefore there are no chances of loopholes. The processing of the products starts with the manufacturing and distributing it globally. Due to the smooth supply chain, no disturbances are caused in the process. This results in the consistent growth of sales and profit in the products of Unilever Sri Lanka (Hashai 2015). Physical Evidence The products of Unilever is easily accessible in all the stores globally that includes shopping malls and retail stores. Consumers can directly go up to the stores and purchase it. This way the consumers can also submit their feedback to the company directly. Online visibility on e-commerce websites also makes the brand and products physically evident to every consumer out there. The brand value of the Unilever products is strong and stable and the company owns some of the biggest brands in the global FMCG Market (Anselmsson and Bondesson 2015). Development of action plan: The above discussion brings to light several issues regarding marketing of the products of Unilever Sri Lanka which requires development of an action plan to market its products. The following is the action plan which would be taken in account to market the products of Unilever Sri Lanka in the country: Conducting a PESTEL analysis and SWOT analysis: 6 months each The first action would be conducting a PESTEL analysis of the Sri Lankan market. This would allow the company to recognise the market changes like emergence of new competitors and new laws. This would take around 6 months. The outcome of the PESTEL analysis would be used to conduct a SWOT analysis of Unilever Sri Lanka. This would help the company to recognise its own strengths and weaknesses. The SWOT analysis would take another 6 months which means this activity would take around 12 months. Using market penetration (Ansoff matrix): 6 months The second activity would be introducing the existing products more aggressively in the Sri Lankan market. This would continue simultaneously with the PESTEL and SWOT analysis. This is because it would help the company to earn revenue which it can channelize towards this marketing activity. Employ a advertising service agency: 1 year Unilever Sri Lanka along with the PESTEL, SWOT and market penetration activities should employ an advertising agency which would advertise its products all over Sri Lanka. The firm should advertise the products of Unilever in new and innovative ways to create fresh appeal among the customers. This would result in more intense promotion of the products that would help the company generate more demand. This activity can be aligned with activity 2 to generate more revenue. Strengthen online presence: 1 year The fourth activity which Unilever Sri Lanka can undertake to strengthen marketing of its products is to strengthen its online presence. The company should make more products available online to be able to receive orders online. This would enable to reach out to more customers than its physical outlets and retailers. This would generate huge revenue which the company can channelize towards strengthening its business. Acquiring local diary brands of Sri Lanka: 3 years The PESTEL analysis would enable the Unilever to locate its newly emerging competitors including the local companies. As pointed out in the Ansoff matrix analysis that Unilever Sri Lanka has strong presence in personal care segment but weak presence in the food segment, especially dairy products. This means that the company should acquire its strong local competitors. This strategy would enable the company to lessen local competition from the emerging companies it would face in Sri Lanka in the coming 3 years. Introduce new products: 6 months Unilever Sri Lanka should introduce new products in the Sri Lankan market. This would enable the company to attract new consumers. The new products must be suited to the positioning of Unilever in the country of a company capable of catering to the lower class consumers as well. The new products can be low priced versions of Lakme products under new labels or traditional milk products of Sri Lanka (following activity 5). The outcome of the project would be stronger marketing of Unilever products to boost its revenue generation in the coming years. The second outcome would be strengthening of the position of Unilever Sri Lanka in the country (Gantt chart). The cross functional dependencies of Unilever Sri Lanka Unilever is a brand that is known for its quality globally. It has an apex head and other subsidiaries all across the world. Various departments look after the individual section of the company. When an alteration occurs in one department, other departments should be informed and updated about it. The Apex department needs to pass on the changes to all the other departments. If not all the departments are informed on time, the changes cannot be made immediately (Hashai 2015). Unilever being a global company includes departments like manufacturing, finance, distribution and legal. Therefore, if the budgets are not prepared then the prices cannot be tagged for the consumers. These changes can occur due to the weather, consumers and other issues. Unilever always satisfies the wants and demands of their customers. Their products are updated with the weather such as for during winter they have separate skin products that are consumed by the customers. Therefore, all these changes in the p roducts are distributed to all the retail shops and shopping malls. Unilever must also update their products online as it has consumers who belong from other countries. Products must be available online for the purchasers residing outside Sri Lanka (Kot and Brzezinski 2015). Therefore, efforts and coordination of all the departments of the organization results in the profit and goodwill. Being a globally known company, its aim is to keep is position constant in the market by being aware of all the competitors in the market. If the government has imposed any new amended law and tax on the products, it will be the duty of the legal department to inform the management department. Thereafter, the management department must circulate it to the finance department since the price of the product will get affected to some extent. For keeping their loyal consumers updated and aware of the new products of the company, it must promote and advertise it. Advertisement with the help of media and o ther resources will keep the brand name and value intact (Pereira, Munjal and Nandakumar 2016). However, the cross functional dependencies of Unilever in Sri Lanka will result in the success of the company and its products. Thus, this analysis shows that the integration of all the departments of Unilever Sri Lanka and all its foreign counter parts work in unison to ensure that the company operates efficiently and maintain its high market position in the country. Conclusion: One can derive several conclusions from the analysis. First, Unilever Sri Lanka has a very strong presence in the Sri Lankan FMCG market. Second, the company generates huge revenue both from Sri Lanka and abroad. Unilever is supported by a vast investor base which provides the company with its robust financial strength. This financial strength is also evident from the graphs shown above. Third, Unilever has a strong product line with a very strong presence in the personal care segment. The company has weak presence in the food market especially in the dairy segment. This points out to the issue which have been covered in the activity. The aim is to strengthen the market position of Unilever Sri Lanka in the coming 3 years. 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