Industry Report: Dove By Unilever
Category : Bargaining Power Samples, Business Essay Samples, Competition Sample, Competitive Positioning, Competitiveness Essays, Competitor Sample, Financial Aspect, Industries, Marketing, Marketing Branding, Marketing Management, Marketing Strategies, Methodology, Porter's Five Forces, Price Difference Samples, Report Examples, Wal-Mart Case Studies, Wal-Mart Corporation, Wall Mart Examples
Running Head: Industry Report: Dove By Unilever
Industry Report: Dove By Unilever
[Name of the writer]
[Name of the institution]
This industry report focuses on one of the most commonly used and known home and personal care product line in the world; Dove by Unilever.
Responding to new competitive conditions in its business environment, Unilever corporation has evolved into one of the foremost transnational companies and began to penetrate the home and personal market (Boone and Van Den Vosch, 1996; Maljers, 1992). With the marketing leverage and established brand name of Unilever, Dove became a success story shortly after its launch. The accomplishment of Dove has largely been built on Unilever’s ability to target the right consumers by offering quality and consumer-friendly products. Thus, despite the intense competition provided for by companies such as Procter and Gamble and Colgate-Palmolive, Dove remained to be on top of the market.
Today, Dove is the biggest Home and personal care brand by the leading multi-local multinational company, Unilever. Having been introduced for the first time as a skin-cleansing product, Dove is now a 2.5 billion euros brand.
Dove has a long range of brands including soaps, bodywashes and haircare shampoos and conditioners and the ways by which the soaps and bodywashes for skincare and shampoos and conditioners for haircare made their place in the market while maintaining at the leading position, are extensively discussed in this report. Consequently, Dove also offered different countries with Dove products that is unique to their climate, culture and skin texture.
This research report starts with an examination of Unilever, Dove’s parent company and the how it developed Dove to steer its success. Moreover, a review of branding and marketing strategies will be conducted along with the financial assessment of Dove through the years across countries, and the management of Unilever appointed for Dove. I have also discussed the goals of Unilever for Dove brands and how Unilever’s marketing and advertising strategy helped in the creation of Dove’s own marketing and advertising program. Furthermore, I outlined the position of Dove brands in Unilever as was be shown by facts and figures.
An industry analysis was also conducted with the leading competitors of Dove such as Procter and Gamble and Colgate-Palmolive has been discussed to show the position of Dove in the market and also to illustrate the ways by the help of which Dove attained its leading position in the market again.
It has been posited that one of Dove’s major advantages has been its curative effects. In fact, Dove is immensely important from the clinical point of view, as it has many curative advantages for skin and hair. Some of the curative advantages were also discussed in this report.
A survey was distributed to 100 consumers at random which has helped in gathering information on existing reasons why they would prefer any product based on the Dove’s product line.
This report sheds light on the current situations and the market standing reporting of this product line with the overall market segment that is taken over by Dove.
Ü List of Graphs - - - - - - - - - - - - - - - - - - - - - - 05
Ü Introduction - - - - - - - - - - - - - - - - - - - - - - - 06
Ü Introduction to Unilever - - - - - - - - - - - - - - - - - 07
Ü Organizational Structure - - - - - - - - - - - - - - - - - 09
Ü Overall Market Segment Taken Over By Dove- - - - - - - - - 12
Ü Goals of Unilever for Dove Brands- - - - - - - - - - - - - 16
Ü Financial Aspects for Dove - - - - - - - - - - - - - - - - 17
Ü Dove’s Presence in the Consumer’s Industry - - - - - - - - 18
Ü Dove's Operations in Marketing & Management- - - - - - - - 20
Ü Marketing Strategies of Unilever for Dove Brand- - - - - - 22
Ü Methodology- - - - - - - - - - - - - - - - - - - - - - - - 32
Ü Achievements - - - - - - - - - - - - - - - - - - - - - - - 32
Ü Position of Dove Brands in Unilever- - - - - - - - - - - - 33
Ü Comparison of the Facts & Figures with Major Competitors - 34
Ü Curative Advantages/Clinical Study - - - - - - - - - - - - 37
Ü Survey Of 100 Consumers: Why They Would Prefer Dove Brands 39
Ü Porter’s Five Forces Model Analysis- - - - - - - - - - - - 41
Ü Conclusion - - - - - - - - - - - - - - - - - - - - - - - - 44
Ü Suggestions- - - - - - - - - - - - - - - - - - - - - - - - 45
Ü References - - - - - - - - - - - - - - - - - - - - - - - - 47
List of Graphs
Ü Dove brands for haircare in International countries- - - - 15
Ü Leading Personal care brands - - - - - - - - - - - - - - - 33
Ü Leading Skin care brands - - - - - - - - - - - - - - - - - 34
Ü Comparison of Money spent for Advertisements by Dove & Competitors- - - - - - - - - - - - - - - - - - - - - - - - 36
Ü Percentage of People using Dove brands for personal care, household care and laundry - - - - - - - - - - - - - - - - 39
Unilever was established in 1930 and since that time, the brands introduced by Unilever are attaining the leading position in the International markets. Among all those brands by Unilever, Dove is one of the most famous brands in the consumer industry and they use Dove daily for their skincare and haircare. There is a wide range of brands of Dove including soap bars, facewashes, shampoos, conditioners, deodorants, moisturizing creams etc. that are used in 1 in 3 houses all over the world.
Unilever’s brand name used for many years on a toilet soap, became so successful its name was extended to other products (Lawrence, 1994). This might be a summary for the strategy used by Colgate on Palmolive (liquid light detergent, automatic dishwasher detergent, specialty products for the bath, shampoo, shave cream, brilliantine, deodorant), by P&G for Ivory (light liquid detergent, liquid soap, shampoo, Ivory Snow soapflakes), and for Camay (shampoo, bath products); and by Unilever for Lux (cream soap, light liquid detergent, soap flakes, specialty bath products), and for Dove (light liquid detergent, facial cream, beauty wash) (Crinkota and Ronkaninen, 1993).
However, being the consumers’ best choice, Dove is enjoying the leading position in the market with the largest market shares in 75 countries and is a 2.5 billion euros brand. The goals of Dove brands are to comply with the needs of the consumers all over the world and to work together in effective manner to adopt the advanced ideas while working out on the existing ones.
Unilever has always been a rather decentralized company (Bartlett and Ghoshal, 1989) and has not sought extensively to obtain the benefits of very large-scale production. A former cochairman of Unilever stated: "Unilever consists of hundreds of individual operating companies - each with their own identity" (Maljers, 1990, p. 64). Unilever has been strongly market-driven and has differentiated itself from its competitors by its marketing skills and its local adaptations (Business Week, 1994).
In fact, Unilever spends 2 billion euros every year on marketing whereas 1 billion euros for the research and development purpose. This marketing by Unilever has led Dove brands to attain the leading position in the market by the effective strategies including market research, concentration of a small number of products, varieties in brands, business in collaboration with any other renowned company, innovations, marketing according to demographics, commercials on television, announcements on radio, through contests, workshops and supermarkets, billboards, free helplines, knowledgeable website, and free gift offers etc.
Moreover, substantial country-to-country differences in consumer tastes, preferences, and practices, as well as market structures, distribution channels, and local regulations have motivated top management to allow extensive operating independence of Unilever's subsidiaries (Maljers, 1992). Moreover, rising trade barriers have, until recently, always reinforced the need for managerial autonomy at the subsidiary level.
The major competitors of Dove brands are Palmolive by Colgate-Palmolive and Ivory and Oil of Olay by P&G, but Dove is still at the top because of the consumers’ confidence in it, its best quality and curative advantages that keep the skin moist and beautiful and hair healthy and shiny by the advanced formulae of ¼ moisturizing cream, conditioners, vitamin B5, Vitamin E and nutrients used in Dove brands that also helps for the aged people to keep their skin protected from wrinkles.
Hence the success of Dove brands is attributed to just one thing that Unilever goes extra miles to give the loyal consumers high-quality, competitive products and services.
Company Profile: Unilever
Unilever is the most famous and reliable multinational company that was established in 1930 by the collaboration of two major organizations namely Lever Brothers that was a British soap making organization and a Dutch margarine firm, as there were many similarities in both of the firms like their collection of coarse material was the same, their line of communication and marketing channels were same, their means of distribution of products were similar, and both had the ambition to cover up the local and international market.
Unilever is a multinational company that is completely dedicated to its loyal consumers all over the world, as Unilever has introduced nearly every product related to the personal life of the people and millions of people around the world use the best household brands of Unilever everyday. Now Unilever is considered as the topmost Fortune Global 500 Company with the profit of 46 billion US dollars and spend 6.8 billion US dollars for the functions performed by Unilever. Besides that, every year 6.5 billion US dollars are spent for the marketing purpose of the products offered by Unilever whereas 1 billion dollars are spent for the research and marketing purpose. The remarkable products offered by Unilever are of first choice for the consumers all over the world including world’s best skin cleansing, hair care shampoos and conditioners, ice creams, frosted foods, delicious foods & condiments, teas, cooking oils, feasts and dry cleaners etc. for example Dove, Lipton, Ponds, Vaseline, Magnum and many more are very famous among the worldwide consumers.
For the best management and to fully meet the needs of the consumers, the management teams selected are completely local with respect to the nation in every part of the world wherever Unilever has its business, as the local people have the best knowledge of the traditions of their nation and the needs and lifestyles of people so they can offer the best services to the consumers along with satisfaction and reliability. 247,000 employees are working at Unilever where 90% of the managers are recruited locally for the mutual benefit of Unilever as well as for the consumers.
It is the policy of Unilever that no such money is received that is offered in order to procure any illegal or dishonest action for the giver. Even if any employee gets any such offer this is immediately reported to the management in order to take action or is declined straightforwardly. Every account is recorded along with the description to define the nature of transaction.
Hence the combine efforts of both local and global market by not just providing the useful brands but also by fulfilling the commitments with the consumers are major reasons for Unilever to be at the leading position.
A firm’s organizational structure largely dictates the efficiency of the company in its supply chain and operations management. It provides an impetus for coordination and efficiency for the company.
Organizational actors and processes do not exist in a vacuum, but are embedded in a larger organizational system with distinct structural characteristics. Companies such as Unilever and Dove have employed a wide range of structural options in dealing with the increased complexity, uncertainty, and interdependence that accompany implementation. Hence, understanding the company's structure should provide us with greater insight into the effective implementation of Unilever and Dove’s marketing and supply chain management.
The economics of organization rests on two beliefs. One is that organizations are set up the way they are because it is more efficient to be that way than some other way (Freeman, 1999). The second belief is that organizational actors that matter are utility maximizers. Capturing a snapshot of organizational life is commonly achieved through the study of their organizational structure (Rapert and Wren, 1998). The prevailing view of organizational structure is embodied within the concept of policies, prescriptions of authority, and hierarchies of responsibility. Structural frameworks refer to the formal structuring properties of the organization. These structural properties embody the enduring configurations of roles and procedures for the performance of fundamental functions of the organization (Dalton et al., 1980).
The relationships of structural frameworks with organizational outcomes and processes such as performance, strategy implementation, and communication have been widely discussed with somewhat mixed conclusions (Rapert and Wren, 1998; Hrebiniak and Joyce, 1984; Lawrence and Lorsch, 1967). Those following a systems-structural perspective of management hypothesize that centralization improves effectiveness because it gives the decision maker the ability to plan, coordinate, and control all activities (Ruekert et al., 1985). Likewise, formalization is thought to lead to greater efficiency because the predefined rules and procedures serve to routinize repetitive activities and transactions (Pugh et al., 1968; Ruekert et al., 1985).
Organizational structure institutionalizes how people interact with each other, how communication flows, and how power relationships are defined (Prasad, Tata and Thorn, 1999). The structure of an organization reflects the value-based choices made by the company (Zammuto and O'Connor, 1992); it refers to how job tasks are formally divided, grouped, and coordinated. Moreover, company effectiveness necessitates changes in organizational structure and design (Dean and Bowen, 1994;). This is true for transnational organizations such as Dove.
Unilever has been known to maintain a tightly built organization that maintains a liberal view in terms of recruitment. Most of Unilever’s employees on its country branches are members of the locality. Moreover, it’s organizational structure can be considered as liberal as every country branches reports directly to the executive committee. This structure provides for a more efficient management not only within localities but more so on the whole Unilever organization.
Dove is considered as one of the main branch in Unilever’s organizational structure. Dove maintains a typical structure for transnational organizations: it has a central committee that oversees all its branches and is also subdivided on national or domestic markets. The local players are given their own autonomy in the structure.
Being under the skin and hair care division, it had been a tradition that zonal presidents handle the local operations of Unilever. In this way, management decisions within Dove is more flexible.
The responsibility of the Executive Committee is to approve the preferences and dispensing accumulations while bringing into contact with all the corporate objectives and observing the business plans of Unilever by ascertaining and accomplishing the right set of circumstances by Unilever and also manages the personal relations of Unilever with the corporate level. (Company Structure, Unilever)
The two Chairmen of Unilever PLC & NV, global division directors for personal care, laundry, foods etc, corporate development director, personnel director and the finance director lead this committee.
Antony Burgmans (Chairman, Unilever NV, Nationality: Dutch), Niall FitzGerald (Chairman, Unilever PLC, Nationality: Irish), Clive Butler (Corporate Development Director, Nationality: UK), Patrick Cescau (Foods Director, Nationality: French), Keki Dadiseth (Home and Personal Care Director, Nationality: Indian), Andre van Heemstra (Personnel Director, Nationality: Dutch) and Charles Strauss (President, Home and Personal Care North America and Global Prestige Business, Nationality: US) are the members of executive committee.
They are accountable for remitting the results of the business in their local areas. The report by these presidents is handed over either to the Director of personal care department or to the director of the food department, as they work out on the most important function for outlining the plans by the departments so to make sure that the plans of these regions are completely consonant with respect to the aims and objectives of Unilever.
Simon Clift (President, Marketing: Home and Personal Care, Nationality: UK), Jeff Fraser (President, Home and Personal Care Asia, Nationality: UK), Louis 'Tex' Gunning (President, Unilever Bestfoods Asia, Nationality: Dutch), Ralph Kugler (President, Home and Personal Care Europe, Nationality: UK), Anton Lenstra (President, Africa Middle East and Turkey, Nationality: Dutch), Harish Manwani (President, Home and Personal Care Latin America, Nationality: Indian), Jean Martin (Global integration Leader, Nationality: French), Rachid M Rachid (President, North Africa, Middle East and Turkey group, Nationality: Egyptian), John Rice (President & CEO Unilever Bestfoods North America & Slim•fast worldwide, Nationality: American), Anthony Simon (President marketing: Unilever Bestfoods, Nationality: UK), Alberto M Sobredo (Regional President, Unilever Bestfoods Latin America) and Manfred Stach (President, Unilever Bestfoods Europe, Nationality: German) are the zonal presidents.
These directors are liable to make certain that the stipulations by the Government are acceptable. Besides that, these advisory directors are also responsible to attend the meetings that are arranged every quarter of the year, meetings organized by the Committee, conferences and the ones scheduled by the Chairmen.
The senior corporate officers of Unilever are accountable to make sure that the meetings and the committees arranged by the panel of trustees are provided with all the necessary information that they require and for that the executive auditor checks that whether the committee has the necessary information or not, whereas the executive of corporate relations looks after the personal relations at the corporate level that are especially instructed by the committee.
Overall Market Segment Taken Over By Dove & The Way It Started
Dove is the most remarkable brand of Unilever regarding to skin care and hair care all over the world. When Unilever introduced Dove for the first time as only a skin-cleansing bar; it became an extremely renowned brand all over the United States. Dove was the topmost brand in United States at that time as compared to the other brands regarding skin care and advertisements were created for many years to give an emphasis on the fact that the cream used in Dove keeps the skin soft and that Dove is a compassionate brand that cares for the natural loveliness of the skin.
In a case study published by Unilever (Unilever Case Studies, 2003), the company recounted the successful launch in 1998 of a range of Dove shampoos and conditioners in Taiwan was closely followed in Korea and Japan - confirming that Dove can extend successfully across categories. Moreover, brand awareness has grown to over 90% and usage rose to over 30% within a year. Dove's moisturizing properties and mildness are cited as key reasons why consumers like the products. Again, Dove's compelling brand promised played a big role in the success. But another point of difference that allowed Dove to fill the gap in the market was the advertising, which focused on testimonials — using people like the target audience, with the same hair problems, talking directly to consumers (Unilever Case Studies, 2003).
Unilever seems to prefer having many brands unique to only one nation, and not nearly as many in wide distribution as do the other two MNC's (Crinkota and Ronkaninen, 1993). However, as previously seen, Unilever has the highest percentage of Dove brands found in only one country. This appears to be an important part of this MNC's strategy in marketing soap products.
The time when Unilever decided to introduce Dove bars in the global markets, the management of Unilever was aware of the fact that Dove brand has such qualities that will become the need of the people all over the world, and when Dove was promoted in 75 markets globally, it had Universal attractive power and in today’s market although the Dove product is the same everywhere but only the accomplishments are little exclusive for every market.
Dove originally was a moisturizing soap. Unilever then harnessed Dove’s brand power to expand from 13 countries to 75 over the past decade, with sales more than doubling to $800 million. In the United States alone, Dove bar soap sales grew 34 percent from 1997 to 2000, while overall sales in that category were flat. (Niall Fitzgerald, Chairman)
Since many years while remaining at the leading position in the market, Dove has also made a great influence in the hair care market. The commencement of a wide range of Dove shampoos, conditioners and other hair care products was highly exceptional and extraordinary, as after their launch in 1998 in Taiwan, they were also launched into Japan and Korea due to which Dove got the chances to expand eminently across various categories.
"With hair, there were more doubts about whether it was right for Dove so we started small. Hair has done so well it gives us confidence it can play in a beauty category.” (Silvia Lagnado, Global Brand Director, Unilever's Dove)
According to the marketing department of Unilever, Dove hair care product range appeared in the public a bit earlier and the Dove shampoo acquired the 2nd top most position in just one year, which was a great challenge for the Dove products as everyone is aware of the fact that the second largest personal care market after the United States all over the world is Japan and to do extremely well as a product line or a renowned brand is highly intricate.
Dove is a strong brand and the reason the range is doing so well is because we found that most shampoos and conditioners were aimed at target audiences that did not include 30–40 year olds. Consumers either bought teenage products or premium brands. So that was the audience we aimed for — and it's been a phenomenal success. (Seikei Itoh, Marketing Manager of Dove Hair in Japan)
Korea is the other major country where the hair care product line of Dove is being successfully publicized and in actual holds 50% of the main market in Korea. According to the marketing division of Unilever, Dove is the top brand in that specific product line.
The Dove brand was strongly established through the show gel nearly ten years ago and represents 50% of the total shower gel market in Korea. So Korean consumers immediately understood the Dove haircare line and mild care through nourishment and moisturizing. When Dove launched in the hair market, our competitors were knocked off their feet and we are now the number one brand. (Jaekyung Kim, Brand Manager for Dove Haircare in Korea)
The deodorants of Dove were introduced for the first time in Chile and Italy whereas the new brands of moisturizers have been introduced in the last 2 months. As a result, the profit margins because of the sales of Dove products have increased from 12.4 percent to 14.9 percent.
Dove product is the leading brand of its classification in the worldwide market due to which it has been given the value of a master brand by Unilever, as it has also made the way for many other products of the same brand like now there are many different types of facial bars of Dove, body washes for skin care, large number of creams, perfumes, body sprays and hair care shampoos with conditioners etc. and has also made the way for the communication of these wide range of outstanding products.
Goals of Unilever for Dove Brands
Unilever’s short-term and long-term goals for Dove are apparently congruent with customer satisfaction and quality product as the core. Dove was built with the purpose of producing quality home and personal products, thus, Dove was established. Looking at the goals proposed by Dove, the primary objective of its existence is still apparent.
This congruence is important for three apparent reasons: (1) Dove can still maintain its competitiveness in the short-run while targeting its long-term goals as a market leader; (2) the growth expected in the long-run shall will not be counterbalanced by that of the short-run targets and; (3) maintaining congruence on short and long-term goals assures that no contradictory plans will take place, thus, preventing an eventual upsurge of either Procter and Gamble and Colgate-Palmolive.
The short-term goals of Unilever for Dove brands are to comply with the needs of the consumers all over the world and to foresee the enthusiasm of the consumers so as to acknowledge them ambitiously and ingeniously with Dove brands made of best quality with beneficial and latest formulae at reasonable prices for modernizing the lifestyle of the consumers. The local traditions and multinational markets worldwide are the basis of success for the future of Dove brands. Unilever is a true multi-local multinational company that is bringing immense knowledge and the skilled people internationally to the service of local consumers.
Long Term Goals
The long term goals of Unilever for Dove brand include the obligation to extremely outstanding performance and efficiency in order to work together in effective manner to adopt the advanced ideas while working out on the existing ones. Unilever believes on unity and honesty of its employees and shareholders and appreciation and loyalty of its consumers, and assumes these believe as the keys to the success for the Dove brands to accomplish more profitable advancements.
Implications of Short-term on Long-term Goals
A long-range plan can help avoid pitfalls and position business for the long haul (Beech, 1998). Also known as the strategic plan, the long-range plan helps a company establish new goals and objectives or revise existing ones. In putting together a long-range plan, an assessment of the present state of the business is necessitated business. Is the company operating in the black or red? At Dove, the business has been operating on a highly profitable state. A crucial part of a long-range plan involves mission as an operation and the synchronization with the short-term goals of the company (Enterprise, 1997).
The short-term goal of Dove can be considered as trading the same line as that of their long-term goals. This congruency has several implications. First, that Dove is not sacrificing the short-term returns to the long-run state of the company. This implies that contrary to most companies who seeks short-term rewards, Dove is willing to sacrifice some short-term profits in order to be more competitive in the long-run. This move we can say is because Dove can afford such sacrifice. This is because, it has been operating efficiently and profitably over the decades.
Second, Dove’s long-term goals has not been sacrifice for their short-term goals. For instance, Dove has terminated the manufacturing of several profitable Dove products in order to cut concentrate on more profitable products. This is move that indicates their foresightedness since operating profitably but in a lower efficiency as that of other products will damage the long-term profitability of Dove.
Finally, Dove has been know to establish itself as a quality product. Thus, it has not cut back on expenses despite economic recessions around the world. Instead, it has enhanced its product and its production system so as not to let the quality of Dove soaps suffer. Again, it has sacrificed the possible profits from cutting back costs to that of preserving the Dove that its loyal consumers had counted on.
Financial Aspects for Dove
Modernizations in the product ranges of Dove by Unilever have assisted Dove to achieve more than 25% advancements for the fourth-fifth consecutive year. Such accomplishment has not been seen before, as being a global product the surplus of 2 billion pounds is highly impressive and extraordinary.
Since many years, the bar soap market has turned down on an annual rate of 2% which is an average rate, whereas Dove has grown at an annual range of 30% regarding to the product conflictions and geographical amplifications.
According to the management and sales force of Unilever, last year (2002) in Europe the bargaining of Dove products escalated up to 60%, i.e. Dove earned the net gain of 927 million euros, which means 832 million dollars or 572 million pounds in just the first 3 months (from January till April) of 2002. Within the same time in 2001, the financial amount was 35% below as compared to 2002, as it was 685 million euros. According to Unilever, Dove brands along with some other brands like Lipton teas, soups and ice creams etc. have the ability to cover readily from the onerous market environment because of the competitors and have contributed in growing the sales up to 4.5% as compared to 2002. Unilever is still looking ahead for more growth in the sales of Dove brands, as 90% of the profit and sales come from Dove beauty products for skin care and hair care and the other four to five brands by Unilever.
According to Unilever, taking into consideration the possible market failures, Unilever is still projected to exceed the growth that of the industry. In fact, its market in Asia is beginning to grow as indicated in the Unilever’s case study showing that after just a few years in the market, it had substantially gained a customer base among Asians.
However, business leaders in the home and personal products field acknowledge the strong position Colgate Palmolive, Procter & Gamble and Unilever have in the world (Adweek, 1994; Cordell, 1993; Marketing, 1994; Advertising Age, 1993). However, growing competition has come from Henkel in Germany, Kao in Japan, and a multitude of private labels of rapidly growing retailers such as Sam's Wholesale Club and its affiliate, Wal Mart, in the United States. These p[products however, are not expected to topple Dove’s position in the market.
The World Market for Cosmetics and Toiletries reveals how the global market is being shaped by trends towards more sophisticated, value-added formulas (Euromonitor, 2003). In emerging markets, consumer awareness of less essential products continues to grow, resulting in increased penetration levels. Whilst in more mature countries growth is being driven by manufacturers focusing on developing higher-priced products with additional benefits, particularly in the more mature sectors such as bath and shower products and oral hygiene, in an effort to encourage existing users to spend more.
However, as manufacturers seek to enhance their products, differentiate their brands and stimulate customer trial and loyalty, they face striking a balance between satisfying high quality demand and fighting increasing price pressures in a tough market environment (Euromonitor, 2003).
Unilever Holdings Ltd remained the leading cosmetics and toiletries company in 2002 with an overall value share of 22%, more than nine percentage points ahead of its closest rival, Colgate-Palmolive Ltd who captured 12% share. Unilever had products available throughout cosmetics and toiletries, most of which were ranked among the top three. For example, Unilever led sales of bath and shower products with its brands Lux, Dove and Harmony, and led deodorants with Rexona and Impulse. It also dominated hair care sales, holding almost double the value share achieved by global hair care giant Procter & Gamble Manufacturing Ltd. Unilever is strong in terms of distribution and promotional efforts. Most of its brands are very well established and have a long presence.
Euromitor (2003) predicted that such market position for Unilever particularly Dove will continue until 2007. This is because of the strength it has shown in new markets such as in Asia.
However, Unilever and Ananova (2003) has shown a lower expectation of market growth for Unilever and Dove. Unilever has dealt a fresh blow to investors by scaling back growth forecasts for its top brands- Hellmann's mayonnaise, Magnum ice cream and Dove soap, said growth of its 400 leading brands was now expected to be below 3% (Ananova, 2003). The target earlier this year had been between 5% and 6%. Unilever's focus on its leading brands - now accounting for 92% of business - is a key part of a five-year Path to Growth strategy launched in 2000.
However, despite lower expectations, joint chairman Niall Fitzgerald said the underlying performance of the group remained strong, with underlying earnings expected to be ahead by around 12% in the third quarter of 2003.
Moreover, Unilever UK, Europe, Philippines, Thailand, Japan and USA, is confident that it would continue to post double-digit growth this year despite the economic slowdown. In its bid to become a net exporter, Unilever has stepped up plans to ship more of its health and personal care, as well as detergent products abroad.
Dove’s Presence in the Consumer’s Industry
The daily sale of the Unilever brands is 150 million all over the world. No matter in which part of the world the consumers are residing and whatever their traditions are, but the Dove brands of Unilever are very familiar to them, as they use these brands in their daily routine.
This is a fact that:
"Take care of the customer and he'll take care of the company".
So Unilever considers the Dove brands from the customer’s point of view instead of the company’s point of view, and this is the key to the heart of the consumers because of which Unilever has locked-in the worldwide consumers and locked-out the competitors.
For the sake of personal care and personal cleanliness, the clients require eminent and extraordinary products to provide sustenance for an energetic and robust lifestyle, along with a reasonable amount of those products. Dove is not just a famous brand but has now become a desideratum for the people all over the world. It is also a very strong registered trademark that is extremely indispensable for financial gains, as it is such a remarkable brand that is trustworthy for the people and because of this reason the cost is not a matter of fact for them and they easily keep paying for it. Although Dove doesn’t need to be marketed in any way by Unilever or needs a very little marketing, as it has been benefited from a highly esteemed market and has acquired more than half of the market share because of its staunch customers who beat the drum for the usage of Dove products and obviously the most profitable advertisement is the one which is done by the consumers who hype up Dove to many other people by advising them to use Dove products by Unilever.
Product Prices and Sales
Empirical research suggests that managers sometimes make operating decisions to meet short-term financial reporting objectives, even though those decisions may be detrimental to the firm in the long run (Jackson and Wilcox, 2000). For example, the results of Baber et al. (1991) and Bushee (1998) indicate that managers may cut investments in research and development (R&D) to reverse an earnings decline. Similarly, anecdotal evidence suggests that concern about short-term earnings may motivate managers to forego investments that have long-term payoffs such as increase in product prices, advertising, employee training, and research and development (Laverty, 1996; Porter, 1992).
This issue is of considerable importance because sales price reductions should be used in a manner consistent with the firm's pricing strategy and strategic objectives (Smith and Nagle, 1994). To the extent that sales price reductions are used to achieve financial reporting objectives, several negative consequences may result. First, customers may develop buying habits in which they time purchases to coincide with the end of financial reporting periods to enhance their negotiating power and obtain lower prices (Ip, 1997). Second, customers may expect sales price reductions on all subsequent purchases. Third, customers who do not currently receive sales price reductions may become aware of reductions granted to their competitors and require equivalent treatment.
While the practice of granting sales price reductions to induce customer purchases and meet financial reporting targets is not a technical violation of generally accepted accounting principles (GAAP), it is nonetheless questionable. Certain industries have been roundly criticized for using sales price reductions to accelerate sales, and critics allege that this practice materially distorts the operating results of firms (Loomis, 1989). Bruns and Merchant (1990) and Beaver (1995) suggest that operating manipulations are ethically questionable, particularly those relating to sales price reductions, because the quality of financial statement information is eroded and the firm is potentially damaged.
Comparing prices between Procter and Gamble, Colgate-Palmolive and Unilever shows that there are price differences. Unilever’s Dove is the most expensive of the three. However, it had attracted its own customer base. This is because of the consumer loyalty that it had sowed through the years. Consumer loyalty is generated through brand management and the development of brand loyalty.
However, competition among brands has become more complicated as the number of brands originating from foreign countries increases (Chung and Kim, 1997). This implies that consumer loyalty is also becoming more precious for products such as Dove. The long-term effect of brand popularity is expected to occur due to the contribution of brand popularity to brand image, which tends to be country-specific in a global market, as subsequently discussed (Erickson, Jacobson and Johansson 1992). Although the concept and the effect of consumer loyalty have been found to be important for successful brand management, no study has attempted to address the issue of brand popularity in the context of global competition.
Much has been written about the importance of brand loyalty as a key determinant of brand choice and brand equity. David Aaker (1991) wrote, "The brand loyalty of the customer base is often the core of a brand's equity. If customers are indifferent to the brand and, in fact, buy with respect to features, price, . . . there is likely little equity."
More loyal consumers, as measured by probability of purchase or "share of requirements" from past purchase panel data, are less likely to switch due to a given price inducement; as a corollary a loyal buyer usually needs a bigger discount to switch than would a less loyal buyer (Baldinger and Rubinson, 1996).
Reviewing the marketing literature reveals that loyalty is almost always defined behaviorally, either as a share of requirements measure, or as a pattern in choices in terms of beauty soaps.
Moreover, loyal customers make a dramatic difference in the bottom line. There is plenty of solid economic evidence to prove that a company that keeps just 5% more of its customers could lift profits by 50%. Loyalty pays. The key to loyalty is strong, well-supported, vital brands. (Shelly Lazarus)
Dove's Operations in Marketing & Management
For instance, abundant research evidence attests to the effectiveness of employing attractive rather than unattractive spokespersons and models in advertising and promotions particularly in beauty soaps (Ashmore, Longo, and Solomon, 1992; Bloch and Richins 1992; Kahle and Homer 1985;). Is mere attractiveness sufficient, however, to adequately communicate a product's intended message? For Dove, this marketing strategy is insufficient. Thus, it has outlined a marketing approach that integrates several approaches in attracting and maintaining its customer base.
Stated somewhat more formally, beauty is a psychological multiplicity; perceivers can and do distinguish multiple types of good looks (e.g., cute, elegant, sexy). The notion that beauty is a multidimensional construct replete with nuance rather than a single continuum (i.e., attractive to unattractive) is most likely intuitive to many. Surprisingly, though, this assumption does not inform existing conceptualizations of attractiveness in either psychological or marketing research (Ashmore et al. 1990; Patzer 1985). Studies in both domains almost exclusively use a single attractive-unattractive rating scale to assess beauty. We further propose that perceivers mentally associate exemplars of different types of beauty with distinct personalities and lifestyles.
Davis (1995) stressed the importance of treating marketing management as a strategic management process to maximize the long-term value of a product. It is asserted that companies that have not had a traditional marketing focus often misunderstand the role of branding. Many companies hire senior-level packaged goods marketers and expect quick fixes. Marketing strategies are seen simply as a new "design and control" function to quickly clean up corporate identity and wrap an existing product or service into a nice, neat package.
In the field of marketing, the construct of perceived value has been identified as one of the most important measures for gaining competitive edge (Parasuraman, 1997), and has been argued to be the most important indicator of repurchase intentions (Parasuraman & Grewal, 2000). Yet, in regards to leisure and tourism services, repurchase intentions and consumer loyalty are often predicted solely by measures of consumer satisfaction, and/or service quality (Petrick, 1999). Woodruff (1997) states, "if consumer satisfaction measurement is not backed up with in-depth learning about customer value and related problems that underlie their evaluations, it may not provide enough of the customer's voice to guide managers where to respond" (p. 139). Further, just because a consumer is "satisfied" with a product/service, does not necessarily mean the product/service is a good value. It is quite possible a consumer who is very satisfied with a product or service, may consider it a poor value if the costs for obtaining it a re perceived to be too high (Petrick, 2002). On the contrary, a moderately satisfied consumer may find a service to have good value, if they believe they receive good utility for the price paid (Petrick, 2002).
The purpose of branding is to create high brand familiarity and positive brand image, which contribute to the building of brand equity. Marketing researchers have long advocated that managers need to start managing their brands more like assets--increasing their value over time (Keller, 1997). Management has to invest in understanding its brand today to make better brand decisions tomorrow. Such a notion holds true for the media industries as well. As the theory of "brand lifecycle" suggests, a brand, if well managed and perceived, may enter a stage of fortification with the objective of leveraging a brand's value by extending the brand to other related product categories (Aaker, 1996).
Dove brands have many varieties and the number of employees working there are more than 620 at Unilever for just Dove brand in more than 85 countries. The variation in brand is due mainly to the objective of Dove to cater specifically to the each locality. However, this had proved to be inefficient despite the success of the Dove brands so Unilever tried to cut back on their variations.
In lieu with the variations on Dove’s products, they had also instituted a local recruitment system within the localities in order to address specific problems and quality issues on Dove’s products. This cultural recognition had reflected well in Unilever’s thrust and complemented their commitment to global competitiveness that included local participation.
Moreover, in the official environment of Unilever, every employee respects the other and so as the administrators of the company who give respect to the subordinates and trust them, as every single person is accountable for the stature and accomplishments of Unilever.
The best business experts are recruited worldwide on the basis of their educational background, their abilities and their experiences, to serve their nations and the consumers. Because of the selection of employees in this way, the skills of the employees are enhanced while working in the world’s best organization as well as the consumers are provided with the best services and quality. The management for Dove here is truly dedicated to fulfill the requirements for the future of the consumers as well as for the company and the arrangement of Unilever throws light on the roles, liabilities and decision-making for Dove’s management so that they can come up with remarkable performance in worldwide markets.
Unilever spends more than 2 billion euros on marketing campaigns every year. The time is going on very fast and the marketing environment is getting tough day by day. People are getting very dynamic and do not have much time to spend and if they get a little free time, only in that condition they just spend some of that free time in front of the Television. Because of this fact, overall marketing through television is no more the first choice for Unilever to associate with the consumers to market Dove brands. The way to reach the consumers has also changed a lot with the changes in time and the thinking and activities of the consumers.
Marketing Strategies of Unilever for Dove Brand
Intense competition, emerging markets, brand extension, acquisitions, and many other activities have left companies with a confusion of products to make and brands to manage. More important than understanding how to manage "a brand" is how to manage the bundle of brand identities in a firm's portfolio. There are many ways of doing this, from corporate dominant strategies to the use of furtive brands (Laforet and Saunders, 1999).
Hence, Unilever's management had to learn to deal with this new situation and to develop capabilities to coordinate their activities with the other (often foreign) operating companies, while maintaining their knowledge of the inherited diversity in the various local markets (e.g., customer preferences, business customs) (Bartlett and Ghoshal, 1989).
Dove brand is the brand completely made for the people and its their own brand, as brand is given rise to in the hearts and thoughts of the consumers and is in actual the tie-up between the artefact and consumers. The advertising campaigns regarding the Dove products promoted Dove through the most renowned magazines, personal letters, newspapers, public relations, sales puffing, and by exposing to view in stores etc.
This research by Unilever is fulfilled by various means including surveys, questionnaires, interviews or the information taken from the existing resources of data. For example the consumers may be asked that:
Ü How do they feel about themselves when they use Dove brands?
Ü Why do they purchase Dove products?
Ü How do they use Dove brands i.e. for personal care or for skin care?
Ü What they like and dislike about Dove brands?
Ü How do they compare Dove brands with the competitors in the market?
Ü What exasperate or delight them, related to Dove?
The gathered data is then processed, analyzed and interpreted in a systematic and objective fashion, to design an effective advertising program by the use of tactical and accomplished research. Unilever spent nearly 1 billion US dollars or 2% of the gross revenue in 2002 for the sake of research and development.
Concentration on a Considerable Extent of Products
Unilever had decided to completely concentrate on a smaller number of products by sorting them out, and because of that they announced to cut off their brands from 1200 to 400, in order to bring into focus their enormous and outstanding brands, as they were fully aware of the fact that the blooming plants are always fruitful and admired by everyone and so as their remarkable products that can cover up the whole target market. This was not because their brands were not going well in the market but because they wanted to focus on their master brands, where Dove is also considered as the master brand of Unilever.
Providing Varieties to Customers
Unilever after cutting down the list of the brands to just 400 brands, is now increasing the range of its most leading brands in the market, like it is increasing the range of products of Dove including more shampoos, face sponges and deodorants etc., by investing the profits that Unilever has earned by Dove brands and some other brands, in order to increase the sales of Dove brands and also to provide its customers a wide range of products for their skin care and hair care but with equal satisfaction and reliability that is provided by the existing Dove brands.
Increase of Outlets
In order to get the profits to unimaginable extent, Unilever has decided to increase its outlets so that more and more people can buy and use the brands of Unilever. It is obvious that if there would be a large number of outlets having the brands of Unilever then more people from anywhere in the world will be ale to buy Dove brands from their nearby outlet very easily.
Work in Collaboration With Another Business
Unilever also sometimes shares advertising costs with another company by making high-quality printing and larger ads affordable to combine two products in the same price for the mutual benefits of both companies as well as the consumers, as this results into more publicity of Dove brands in order to attract the consumers as well as to reduce the costs of the advertisements.
This method most of the time also leads to monopoly, which is a situation in which one supplier or producer controls more than a specified fraction of the market, but as it is already covering up most of the market shares, so in such condition it is usually covering up the whole market.
Marketing according to Demographics
Unilever always takes special care of the demographics where it is going to market its products, as most effective marketing can not only be done by just global publicity but also by keeping in view the local traditions and environment of that place and country. The marketing division of Unilever makes many plans but the local marketers are given full hand to promote the Dove brands in their native languages or according to their traditions, as consumers are mostly attracted towards the advertisements in which their demographics have been considered.
The bodywashes of Dove are also extremely successful because of its quality, quantity and reasonable prices but innovation is extremely important for the success of any brand and to remain at the leading position in the market. Because of this fact, Unilever has introduced unique formulae in the bodywashes in order to make the hair and skin healthy with all the fundamental nutrients and vitamin E. Besides that such bodywashes and shampoos have also been introduced that can keep the hair dry if the hair are oily, and also the new conditioners have unique formulae that contains moisturizing milk so that the hair can undergo hydration without any side effect. The innovation rate of Dove brands is 25% per annum.
Publicity by Letter of Recommendations
Letters of recommendations are always a need for the brand to remain at the leading position in market because by these letters, the company may get to know about the choice, needs and expectations of the consumers towards the product and also let the customers feel that their opinions are being respected by the company and the brand is of their choice. So keeping this view in mind, letters of recommendations were taken by many consumers in order to make Dove a more effective product for skin care and the consumers sincerely worked out a lot for it.
Marketing by Television
Only for the people who still watch TV or for the house wives or the girls who stay most of the time at home especially in most of the Asian countries, Unilever communicates to them via the ads on the TV, so that they may get to know about the best brands especially produced for their skin care and health care. But the ads are only telecasted in the breaks of the famous dramas, movies or news that are seen still by many of the consumers.
Marketing via Radio Channels
Radio is one of the best communication channels for Unilever to promote Dove brands to the consumers that are either dynamic or free, so that they can get to know about the range of Dove brands either in their leisure time or while they are driving to anyplace by just listening to the famous radio channels.
Promotion of Dove Products through Contests
Many competitions are also arranged for the consumers’ interests by giving the consumers extortionate prizes so that they can participate in the contests by using Dove products, as such contests provide exciting ways to build awareness of Dove products, the special care and health services and Unilever, as well as produce the benevolence that gives natural inducement.
Publicity of Dove Products by Workshops
Many workshops/seminars are arranged by Unilever regarding to the promotion of Dove products by providing knowledge to the consumers about the favorable aspects of Dove products that how these products are good for skin, hair, body and health etc. and also accommodate the consumers with the baths with Dove products that were intended for the alleviation and cure of the skin problems faced by the consumers, and also provided refreshments to the consumers by meals and many other entertainments.
Publicity through Supermarkets
Supermarkets are also a major way to promote the Dove brands, as obviously the people must need to come over to the supermarkets for buying their daily necessities where they can also have a look on the Dove brands at the shelves of the market along with the personal care and medicinal benefits offered by these brands.
Unilever also market the Dove brands by billboards that are the large outdoor boards or hoardings for the advertisements and are the best channels to communicate with the dynamic people, so that the people when going to offices or just driving on their way to their workplace can see these boards promoting Dove brands.
Toll-Free Help Line
Unilever as being a customer-centered company has adopted a quick-fix response that is convenient for its customers and that is the 24-hour service line that is set up in every nation where Dove brands are available, in order to focus the problems and needs of the consumers.
Promotion of Trends
Unilever also gains immense publicity, when it associates with known groups or sponsor the events for the entertainment of the consumers. Like they sponsor Cricket matches or Olympics or any other sort of function, then definitely Dove brands can easily get internationally renowned. Unilever spent 69 million euros on entertainment programmes in 2002.
Unilever has uploaded their website with the name of Unilever and much information so that the people all over the world can retrieve the required information, and it is also the easiest way for the people of this era to check the Dove brands on this website. Especially the name of Unilever is highly convincing, so millions of the consumers visit the website.
MSN in the US worked with the beauty brand to show that raising online ad spends can greatly increase the success of a campaign. If the number of impressions bought doubled over six weeks, the effectiveness of Dove's branding would rise 42 per cent. (http://www.flytxt.com/press/press_Revolution_01_05_03%20101%20things.html)
Marketing to Change Perceptions
Marketing of Dove brands in actual is not a battle of the products of Dove, as in Unilever it is the matter of perception because many Dove brands that consumers like, they use them and don’t even try the other ones, as Unilever advertises Dove brands in such a way that changes the perceptions of the customers. No doubt it’s very difficult to change the perceptions of consumers but for the brands of Dove having the best quality for skin care and hair care with medicinal benefits at very reasonable prices, it is very easy.
In order to guarantee the attention from the consumers and to attract them to purchase Dove brands, Unilever sometimes offers them any free Dove brand on the purchase of a Dove brand.
Invite Complaints About Dove Brands
Although the quality of the products of Unilever is the best, even then Unilever always provides easier ways for the customers to complain about the Dove brands, as the consumers can call them at their free helpline and can also mail them at their mailing address if they have any complaint regarding to the Dove brands. Unilever quickly respond to those complaints and improve the brand rather than wait until it has a large number of unhappy consumers.
Unilever believes in Joint Application Development (JAD), so that the leaders of Unilever may ask their employees and their business partners to criticize on whatever they want them to change and the way they should advertise Dove brands. They listen to everyone carefully along with the reasons, and then implement those changes that are beneficial, as in this meeting of 5-8 hours; everyone is giving his/her own ideas that help Unilever a lot in making the services better and more attractive to the consumers.
Commitment, Consistency & Confidence
The marketing messages for Dove brands constantly emphasize on the benefits of these brands in order to retain the consumers and Unilever always remain patient for their advertisement to work out, as sometimes the efforts payoff in a long time. Unilever commits the money and then leave it and wait till the time it grows.
Analysis of Marketing Strategy
Every company has its own work style. Unilever is an international producer of foods, home products and personal care products. It has a worldwide turnover of more than 47 billion Euros for the year 2000, with 295,000 employees and branches in more than 100 countries. Unilever and its employees recognize that its business processes must continually evolve if the company is to remain vital and grow in the global economy.
In a competitive global economy, the success of a company depends on the way the organization handles information. Both main commodities of Unilever belong to the category of fast moving consumer goods (FMCG). In this market, quick acquisition and processing of information about the state of the market, customers and competition can highly influence further sales.
Thus, the challenge facing Dove now is that markets in the developing countries are not growing fast enough to compensate for stagnating performance in the developed world. The result is that manufacturers are not offering increasing returns to investors. The share prices of product companies like Unilever, Procter & Gamble, Gillette and Cadbury have tumbled in recent years.
Unilever's announcement that it is moving into the household services market is a sign of the times. It proposes to start with a domestic cleaning service, but then envisages offering gardening, domestic repairs and home security services. This is quite a change for a company that is Europe's largest manufacturer of household products—soap and detergents, foods, cosmetics and ice cream.
This shift from products to services is at the top of the agenda for most ambitious companies. Unilever typifies the problems of most manufacturers. Most of the products it makes are in mature, low-growth markets. Strong supermarket groups with great buying power are pushing own-label brands and squeezing manufacturers' margins.
However, Unilever’s brand name particularly that of Dove has been deeply embedded into the consumer market that despite the threats to the market, it is predicted to survive such economic slumps. Moreover, the marketing strategy of Unilever to expand its market to the services sector to sustain its growth.
Analysis on Dove’s Marketing Strategy
Dove’s competitive environment, defined by the industry in which it chooses to compete, was initially characterized by the level of munificence -- a concept meant to reflect the growth rates of specific industries over time. That is, an industry with a high level of munificence would be one in which firms are able to enter and maintain competitive positions with relative ease.
Within the constraints imposed by the personal products competitive environment, firms such as Dove use their resources to develop strategies for competition in their marketplace which, in turn, affects the firm's financial performance (Andrews, 1987; Hambrick & Lei, 1985; Porter, 1985). In this case, Dove’s strategic management is critical not only to its leadership in the beauty soap field but also in its survival.
Strategic management seeks to integrate the traditional functionally-related business fields, such as economics, finance, marketing and accounting, by focusing on top management decisions having long-term impact on the future success of the firm (Andrews, 1987; Porter, 1985). The most commonly cited factor linking strategic management with these fields is the financial outcome of the firm. Describing how "strategic" factors focus on the external environment of the firm and affect the performance of the firm was the starting point for early models in strategic management (Hofer, 1975). For example, Porter's (1980) well-known model of competition serves as a basis for assessing the relative impact that key external factors, such as buyers, suppliers and rivals, have on competition within a particular industry. Thus, strategic management historically sought to address how contingent factors from the firm's external environment, and resulting decisions made within the firm, systematically affected financial performance of head-to-head competitors (Jauch, Osborn & Glueck, 1980).
More recently, research in strategic management (Venkatraman & Ramanujam, 1986), behavioral finance (Olsen, 1998) and financial accounting (Das, Levine & Sivaramakrishnan, 1998; Shipper, 1991; and Dreman & Berry, 1995) has attempted to expand our understanding of the factors affecting the prediction of future firm performance, with particular emphasis on the accuracy of indicators predicting future firm performance. This interest is increasing in importance as a strategic focus because understanding the factors affecting the accuracy of the firm's future earnings is key to understanding the firm's future valuation, cost of capital and the relationship between earnings and stock prices (Brown & Rozeff, 1978). That is, factors affecting the accuracy of performance predictors have a direct impact on the strategic alternatives available to firm managers. Market valuation, stock price and cost of capital affect management's ability to implement broad competitive strategies, such as expanding the firm through mergers or acquisitions (Barton & Gordon, 1988). Successful mergers and acquisitions are based on securing cost-effective capital through debt or equity markets (Abolafia, 1996; Shefrin & Statman, 1993).
Dove’s strategic management is an amalgam of several approaches that utilizes not only advertising, branding and internet-related promotional tools but also in terms of direct measurement marketing. However, mainly, Dove has banked on testimonials from its consumers in its advertisements. This is an effective strategy for Dove in that it had presented realistic advertisement.
Moreover, the regard of Dove to the domestic market (hiring of locals and Dove brands specifically for certain countries) provided an impetus for greater accessibility and link to the consumers.
The information for this report is unperturbed from different websites, magazines, brochures, interviews of directors of Dove, reports by consumers/students, commercials through communication media and the chronicles promulgated for Dove brands by Unilever.
Before dealing with the retrieved information from the above given sources, the photostats of a formulated series of questions for statistical analysis was distributed to 100 consumers and the copies of another questionnaire were sent to the clinics in order to get the recommendations by the doctors about Dove brand.
Unilever achieves large number of eminent awards every year for its advertisements and public relations for the promotion of Dove brands.
Position of Dove Brands in Unilever
There are in all 13 brands of Dove by Unilever including personal skin care and hair care brands, personal wash, and deodorants. Among all the personal skin care and hair care brands offered by Unilever, Dove came at the fourth number with respect to the budget i.e. 2 billion euros after L’Oreal, Colgate and Nivea in 2002.
(Personal Care Path to Growth)
But as far as only the leading skin care brands by Unilever are concerned, Dove was at number two with an estimate of 1.4 billion euros after Nivea whereas in deodorants, it was at number 7 at 0.3 billion euros after Rexona, Axe, Secret, Nivea Deo, Mennen and Right guard.
(Personal Care Path to Growth)
Comparison of the Facts & Figures of Dove Brands with Major Competitors
The soaps, bodywashes and shampoos for personal care in the market are facing forceful competitors and so as Dove that is facing Oil of Olay, Ivory and Palmolive by P&G and Colgate-Palmolive that are the competitors to Unilever.
Dove brand was introduced in 1964 and was the most successful brand till the next 30 years i.e. till 1994 because of its outstanding cleansing formula to use quarter moisturizing cream in it that doesn’t let the face to dry. Till 1995, Dove didn’t have any competitor as it was the leading brand and there was no brand at the comparison of Dove, but this competition started in 1996 when P&G introduced Oil of Olay and Ivory bars that also had cream with the similar moisturizing qualities as that of Dove brands. P&G and Colgate Palmolive took the advantage by their advertisements that their soap bars (Oil of Olay, Ivory and Palmolive) do not dry the skin and also keep the skin soft and shiny. Due to such kind of advertisement, the sale of Dove started going down, but Dove overcame this problem very soon by improving its advertisements until the sale of Ivory came down half of that of Dove. But then P&G introduced more cleansing bars and bodywashes with more advanced formulae that were absolutely similar to that of Dove brands. Due to this reason Dove has these major competitors.
These competitors also tried to lead the market by prices, as Dove increased the price by 4% in just one year, but even then the consumers continued to pay up this amount as well to use Dove brands. So by the outstanding marketing of Dove brands, it came back at the top most position in the market.
The difference in the money spent by the competitors and Dove for the advertisements can be seen by the graph given below:
(Personal Care Path to Growth)
Palmolive introduced by Colgate-Palmolive brought in a liquid duty detergent last year that is very light and is especially formulized for dishwashing and caring for the sensitive skins.
The usage of Dove brands in the families with low income in Asian countries is a bit low as the statistics have shown that middle class or lower class families use 19% Lux by Unilever, 15% Palmolive by Colgate-Palmolive, 11% Camay by P&G, 9% Protex by Colgate-Palmolive, 8% Neko by Warner Lambert, 8% Rosa y Limón by Unilever and 4% Dove by Unilever. (http://www.globalhandwashing.org/Country%20act/Attachments/concept%20sept%2020.doc)
Unilever than introduced deodorants as the Dove brands that took over most of the business all over the world.
Unilever has also exploited consumers’ favorable perceptions of Dove as a skin-care product to introduce a Dove underarm deodorant. By virtue of its brand family connections, Dove deodorant generated $79 million during its first year in the United States, a 4.7 percent market share equal to the established Old Spice brand of Procter & Gamble. (Niall Fitzgerald, Chairman, MMC Views)
Curative Advantages/Clinical Study
Everyone is aware of the fact that the soaps are made of base due to which they destroy the cells on the layers of the skin that leads to the skin remains unprotected from air and germs and make the user of the soap feel dry and apprehensive for his skin.
To avoid such problems and distresses of the people, Dove was introduced by Unilever especially to care for the skin and hair of the consumers, as Dove brands contain ¼ of the cream that keeps the skin moist and beautiful with no discomfited feeling. These brands protect the protective cells on the layers of the skin as they are neutral and doesn’t contain base at all due to which these brands do not mummify the skin and the moisturizing cream in these brands keeps the skin soft and healthy for the whole day. Besides that the deodorants of Dove have no side affects and help in keeping the underarms dry to avoid sweating and also protect from bad smell. Not just that the nutrients used in the Dove brands also diminish every possible sign of aging to leave the skin with a young caress.
The shampoos and conditioners by Dove are also very significant for making the hair healthy and shiny and leaving the scalp smooth and protective.
Now the latest formula of Vitamin E in the Dove brands is an added advantage for the consumers, as it keeps the skin smooth and healthy forever and also protects the skin from the effects of makeup products.
Unilever, one of P&G’s biggest competitors, expanded its presence in the anti-aging segment in a big way with the recent launch of Dove Essential Nutrients. The nine-item line of cleansers, moisturizers and toner includes two products that boast SPF 15 protection: day lotion and day cream. But all the products contain a proprietary complex of lipids, amino acids, minerals and vitamins A, E and B5. According to Unilever, the brand could capture 10% of the U.S. facial care market within five years. If those predictions are correct, then Dove Essential Nutrients would become a $200 million business. (Tom Branna, Editorial Director)
Doctors also recommend Dove soap especially to those people who have sensitive skins or are suffering from Diabetes problem, dermatitis and psoriasis.
Survey Of 100 Consumers That Why They Would Prefer Dove Brands
The following graph can easily illustrate that the highest percentage is of those people who use these brands for personal care.
(Personal Care Path to Growth)
1 in 3 houses purchase Dove brands, as it is the best moisturizer if it’s a skin care brand and the best shampoo or conditioner if it’s any hair care brand. More than 70% of the people believe on Dove brands as they are made for protecting the natural beauty of skin and hair while providing the elucidations for the ways to care for the skin and hair.
The collected and analyzed facts show that 92% of the consumers agree that Dove brands keep the skin and hair moist inspite of drying the skin and hair like other brands, 96% consumers use Dove brands as they keep the skin soft and hair healthy, 92% believe that the hair remains thick by Dove shampoos and conditioners, 98% consumers have the opinion that the hair and skin looks beautiful and shiny and give an extraordinary look to attract everyone, 70% surmise that the prices of Dove brands are reasonable, 99% say that Dove brands are extremely beneficial with respect to the medicinal aspects, 72% women presume that they cannot even stay without the deodorants of Dove, whereas 72% consumers admire Dove brands as they consider these brands much better as compared to the other brands or the competitors of Dove.
The drawbacks of Dove soap that are only mentioned by few consumers are mentioned below:
Ü The cover of Dove soap is freely lacerated as soon as the customers in the market move on the products because it is very thin and is shabbily made.
Ü The blue granules in Dove soap are very much apparent due to which it resembles a bar of the washing power.
Ü The smell of the soap is very much similar to that of the washing powder.
Ü Because of the ¼ moisturizing cream in Dove soap, it soon becomes a formless mass and doesn’t remain in the same state for a long time.
Ü Because of the moisturizing cream, it becomes waterlogged if it is left wet in the soap container and ends up very quickly.
Ü Dove soap is quite expensive as compared to the other soaps.
Porter’s Five Forces Model Analysis
The analysis of Dove by Unilever can be clearly demonstrated by the Porter’s Five Forces Model:
Risk of Entry by Potential Competitors
As Dove brand is one of the best brands all over the world, so it faces the risk of competitors but till now all the competitors that it has faced, it has remained the best one because of its outstanding marketing strategies and high quality of the products. In 1996, after the introduction of the brands by the competitors (P&G and Colgate-Palmolive), the amounts of Dove brands transported by Unilever were going in loss, but within one year, Dove brands came over this problem and increased the shipments by 20%, but the competitors only remained below 4.2% of the shipments even after spending much on their marketing.
Threat of Substitute Products
Although there was a threat of replacement of Dove brands by the products introduced by P&G in 1996, but Unilever started marketing Dove as a soap for moisturizing and softness without any side effect of any base because it is neutral and instead of taking letters of recommendations started the promotion by the help of litmus (a soluble blue powder obtained from various lichens which turns red in acidic conditions and blue in alkaline over a range of pH 4.5-8.3), to test and prove that Dove soap is not alkaline in front of the consumers and telecasted it by television. But now the people love Dove very deeply and there is no threat of its replacement with the existing products. Hopefully because of the love of people and the clinical advantages of Dove, any other product won’t substitute it.
Bargaining Power of Buyers
Unilever broadcasted many outstanding stories about Dove brands by the Dove regular consumers through television that kept on increasing their sales regardless of the increase in the price of Dove up to 14% within one year ($1.14 – $1.17) while leaving behind the products of the competitors because of its remarkable marketing and quality products.
Bargaining Power of Suppliers
The supply management strategy of Dove brands executes fascination of the development of the suppliers. There are more than 80,000 suppliers of Unilever and if they feel that their profits are being decreased due to any reason or any change in the marketing strategy, they increase their bargaining power, so in such case Unilever do not apply any sort of pressure on the suppliers to cut down their price, but tries its level best to eliminate all such problems that are escalating the prices.
Rivalry of Established Firms
The competition of Unilever for Dove brands is with Proctor & Gamble (P&G) and Colgate-Palmolive because of their quality products that are quite similar to the Dove brands but not as much effective as Dove. But Dove has always remained at number 1 because of the love of the loyal consumers and its skin curing abilities.
It is almost clear that most successful Dove brand is much more than a product in the eyes of the consumers, because it is extremely efficacious and completely invulnerable with no side effects. Dove efficiently demonstrates sagacious and incorporeal qualities to illustrate that it is an important brand for the consumers and has every quality in it that is immensely needed by the customers.
The brand is not just what you say it is, the brand is the totality of what the consumer experiences. From quality, to taste, to packaging, to line extensions, to the retail environment, to the showroom, to the lobby, design and color, to sales promotion, price, and product displays, to sponsorships and joint ventures, to corporate reputation, public relations, and environmental policy, to the sales force and service experience, to the delivery trucks, to the website, to word-of-mouth, to telemarketing scripts and receptionist’s style, to the way the telephone is answered, and complaints are responded to, to the attitudes and customs of your employees.
It is the customer’s experience of the brand, in all of these manifestations, that creates the brand relationship that determines whether it is positive or negative, which builds loyalty and market share. (Shelly Lazarus)
Because of the tough competition in the market in 1996, Dove brought into revolutionary changes in its marketing strategies, which proved to be very helpful.
Unilever also started the delivery of the skin care books for women and the women could ask for their skin problems from the dermatologists especially paid for this purpose by Unilever.
Hence, the way to success of Unilever’s Dove brands is clear, as Unilever goes extra miles to give the loyal consumers high-quality, competitive products and services, by spending money to make money, by working to attract and, more important, retain the customers with every well-produced marketing device appropriate to its business.
There is no need to suggest for anything, as Unilever is one of the best multinationals all over the world. But there are only a few things that the customers want, including:
Ü Good smell of soap
Ü Good covers so that they cannot easily by torn-out
Ü Improved bottles for the bodywashes to reduce the wastage of the bodywash incase if the bottle is pressed a little harder
Ü It needs to be more economical
Aaker, D. (1996). Building Strong Brands. New York: The Free Press.
Aaker, David. Managing Brand Equity. New York, NY: The Free Press, A Division of Macmillan, Inc., 1991.
Abolafia, M. (1996). Making markets: Opportunism and restraint on Wall Street. Cambridge, MA: Harvard Press.
Agcaoili, L. (2003) Unilever confident of 10% growth despite sales slump. Today.
Ananova. (Oct 24, 2003) Unilever dismays investors with lower growth.
Andrews, K. (1987). The Concept of Corporate Strategy, Homewood, IL: Irwin Publishing.
Ashmore, R., Longo, L. and Solomon, M. (1992) The beauty match-up hypothesis: congruence between types of beauty and product images in advertising. Journal of Advertising, Vol. 21.
Ashmore, Richard D., Michael R. Solomon, and Laura C. Longo (1990), "Thinking About Physical Attractiveness: A Single Psychological Dimension or Multiple Content-Specific Continua?," paper presented at the meetings of the American Psychological Association, Boston, MA.
Awards, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/brands/communications/brandawards/
Baber. W.. P. Fairfield. and J. Haggard. "The Effect of Concern About Reported Income on Discretionary Spending Decisions: The Case of Research and Development." The Accounting Review. 66 (October 1991). pp. 818-829.
Baldinger, A. and Rubinson, J. (1996) Brand loyalty: the link between attitude and behavior. Journal of Advertising Research, Vol. 36.
Bartlett, C.A., and Ghoshal, S. Managing across Borders: The Transnational Solution. Boston: Harvard Business School Press, 1989.
Beaver. W., "Corporations' Misguided Obsession with Shareholder Wealth," Business and Society Review. 95 (Fall 1995). pp. 49-53.
Beech, W. (March 1998) In it for the long haul: establish new business goals and objectives in your long-range plan. Black Enterprise, Vol. 28.
Bloch, Peter H. and Marsha L. Richins (1992), "You Look 'Marvelous': The Pursuit of Beauty and the Marketing Concept," Psychology & Marketing, 9 (January), 3-15.
Boone, P. and Van Den Vosch, F. (1996) Discerning a key characteristic of a European style of management: managing the tension between integration opportunities and the constraining diversity in Europe. International Studies of Management & Organization, Vol. 26.
Brands on the Run. (1994) Adweek, vol. 35, no. 7, p. 38.
Brown, L. & Rozeff, M. (1978). The superiority of analyst forecasts as a measure of expectations: Evidence from earnings. The Journal of Finance. 33(1), 1-17.
Bruns. W.J., and K. Merchant, "The Dangerous Morality of Managing Earnings." Management Accounting 72 (1990). pp. 22-25.
Bushee, B., "The Influence of Institutional Investors on Myopic R&D Investment Behavior." The Accounting Review. 73 (July 1998). pp. 305-333.
Business Week. "Unilever's Global Fight - Can Its New Management Team Win the Struggle for Growth?" (July 4, 1994), 40-45.
Chung, JY and Kim, CK. (1997) Brand popularity, country image and market share: an empirical study. Journal of International Business Studies, Vol. 28.
Company Structure, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/company/unilevertoday/companystructure/
Cordell, M. (1993) Interaction Effects of Country of Origin with Branding, Price, and Perceived Performance Risk, vol. 5, no. 2, p. 5.
Crinkota and Ronkaninen. (1993) International Marketing, 3rd edition. (Dryden Press).
Dalton, D. R., W. D. Tudor, M. J. Spendolini, G. J. Fielding, and L. W. Porter. 1980. "Organizational Structure and Performance: A Critical Review." Academy of Management Review 5 (1): 49-64.
Das, S. & Saudagaran, S. (1998). Accuracy, bias and dispersion in analysts' earnings forecasts: The case of cross-listed foreign firms. Journal of International Financial Management & Accounting. 9(1), 16-33.
Davis, S. (1995). A vision for the year 2000: Brand asset management. Journal of Consumer Marketing, 12, 65-82.
Dominant Economic Characteristics of the Industry Environment, Retrieved on 10th September 2003 from World Wide Web: http://www.prism.gatech.edu/~gte009v/hw2part1.html
Dove by Unilever, Retrieved on 10th September 2003 from World Wide Web: http://www.dove.com/default.asp
Dove, Retrieved on 10th September 2003 from World Wide Web: http://www.consumerlink.unilever.com.au/Skin+Care/Brand/Dove/FAQ/Why+is+Dove+pH+neutral%3f.htm
Dove, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.ca/products/index.asp?navLev=3&NavId=11
Dove, Retrieved on 10th September 2003 from World Wide Web: http://www.cassies.ca/winners/Dove.pdf
Dreman, D. & Berry, M. (1995). Analyst forecasting errors and their implications for security analysis. Financial Analysts Journal. 51(3), 30-41.
Enterprise. (October, 1997) Putting Your Business Into Perspective.
Euromonitor International. (2003) The World Market For Cosmetics and Toiletries.
Fact Sheet, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/news/corporateinformation/factsheet/default.asp?ComponentID=1796&SourcePageID=295
Freeman, J. (1999) Efficiency and rationality in organizations. Administrative Science Quarterly, Vol. 44.
Global branding policies by the big three soap makers, Retrieved on 10th September 2003 from World Wide Web: http://www.sbaer.uca.edu/Research/1995/SMA/95swa358.htm
History of Unilever, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/company/ourhistory/
Hofer, C. (1975). Toward a contingency theory of business strategy. Academy of Management Journal. 18, 784-810.
Hrebriniak, L. G. and W. F. Joyce. 1984. "Organizational Adaptation: Strategic Choice and Environmental Determinism." Administrative Science Quarterly 30 (September): 336- 349.
Industry Trends and News, Retrieved on 10th September 2003 from World Wide Web: http://www.123act.com/AdvertisingSolutions/trends.htm
Innovation, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/brands/innovation/
Ip. G., "Growth Companies Feel Pressure to Book Sales," The Wall Street Journal (September 16, 1997), p. Cl.
Jackson, S. and Wilcox, W. (2000) Do managers grant sales price reductions to avoid losses and declines in earnings and sales? Quarterly Journal of Business and Economics, Vol. 39.
Jauch, L., Osborn, R. & Glueck, W. (1980). Short term financial success in large business organizations: The environment-strategy connection. Strategic Management Journal. 1, 49-63.
Kahle, Lynn R. and Pamela M. Homer (1985), "Physical Attractiveness of the Celebrity Endorser: A Social Adaptation Perspective," Journal of Consumer Research, 11 (March), 954-961.
Keller, K. L. (1997). Twebty-first century branding. The Journal of Brand Management, 4 (6), 368-370.
Laforet, S. and Saunders, J. (1994) Managing brand portfolios: how the leaders do it. Journal of Advertising Research, Vol. 34.
Laforet, S., and Saunders, J. (1999) Managing Brand Portfolios: Why Leaders Do What They Do. Journal of Advertising Research, Vol. 39.
Laverty, K., "Economic 'Short-Termism': The Debate, the Unresolved Issues, and the Implications for Managerial Practice and Research," Academy of Management Review; 21 (July 1996), pp. 825-860.
Lawrence, P. R. and J. W. Lorsch. 1967. "Differentiation and Integration in Complex Organizations." Administrative Science Quarterly 12: 1-47.
Lawrence. (February 7 1994) P&G Makes New Push with Tide. Advertising Age, p. 12.
Loomis, C., "The $600 Million Cigarette Scam," Fortune. 120 (December 4, 1989), pp. 89-104.
Maljers, F. "Strategic Planning and Intuition in Unilever." Long Range Planning, 23, 2 (1990), 63-68.
Michael Murray, Cuts strategy shows results at Unilever results indicates cuts plan e5bn cuts over 5 years, Retrieved on 10th September 2003 from World Wide Web: http://archives.tcm.ie/businesspost/2001/02/11/story296947.asp
Niall FitzGerald KBE, Chairman, Address to Unilever PLC Annual Meeting, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/news/speeches/2003English_8522.asp?ComponentID=8522&SourcePageID=301
Niall Fitzgerald, Dove soap helps Unilever clean up, Retrieved on 10th September 2003 from World Wide Web: http://news.bbc.co.uk/1/hi/business/1952405.stm
Niall Fitzgerald, MMC Views, Retrieved on 10th September 2003 from World Wide Web: http://www.mmc.com/views2/spring02Pierce.php
Parasuraman, A. (1997). Reflections on Gaining Competitive Advantage through Customer Value. Journal of the Academy of Marketing Science, 25(2), 154-161.
Parasuraman, A., & Grewal, D. (2000). The impact of technology on the quality-value-loyalty chain: A research agenda. Journal of the Academy of Marketing Science, 28 (1), 168-74.
Patzer, Gordon L. (1985), The Physical Attractiveness Phenomena, New York: Plenum.
Personal Care Path to Growth, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/Images/3_9096.pdf
Petrick, J. F. (2002). Development of a Multi-Dimensional Scale for Measuring the Perceived Value of a Service. Paper presented at the 32nd Annual Conference of the Travel and Tourism Research Association, Fort Myers, Florida.
Porter, M. (1980). Competitive strategy. New York: Free Press.
Porter, M. (1985). Competitive advantage. New York: Free Press
Porter, M., "Capital Disadvantage: America's Failing Capital Investment System," Harvard Business Review. 71 (September-October 1992), pp. 65-82.
Prasad, S., Tata, J. and Thorn, R. (1999) The Influence Of Organizational Structure On The Effectiveness Of TQM Programs. Journal of Managerial Issues, Vol. 11.
Press, Retrieved on 10th September 2003 from World Wide Web: http://www.flytxt.com/press/press_Revolution_01_05_03%20101%20things.html
Public-Private Partnership for Handwashing, Retrieved on 10th September 2003 from World Wide Web: http://www.globalhandwashing.org/Country%20act/Attachments/concept%20sept%2020.doc
Pugh, D. S., D. J. Hickson, C. R. Hinings, and C. Turner. 1968. "Dimensions of Organization Structure." Administrative Science Quarterly 13: 65-105.
Rapert, MI and Wren, B. (1998) Reconsidering organizational structure: a dual perspective of frameworks and processes. Journal of Managerial Issues, Vol. 10.
Ruekert, R. W. C. Walker, and K. J. Roering. 1985. "The Organization of Marketing Activities: A Contingency Theory of Structure and Performance." Journal of Marketing 49 (Winter): 13-25.
Seikei Itoh, Marketing Manager of Dove Hair in Japan, Natural move from skin to hair, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/brands/Casestudies/dovehaircasestudy.asp?ComponentID=9217&SourcePageID=9273
Shefrin, H. & Statman, M. (1993). Behavioral aspects of the design and marketing of financial products. Financial Management. 22(2), 123-134.
Smith, G., and T. Nagle. "Financial Analysis for Profit-Driven Pricing," Sloan Management Review (Spring 1994), pp. 71-84.
Sylvia Lagnado, Global Brand Director of Unilever, Retrieved on 10th September 2003 from World Wide Web: http://www.adage.com/news.cms?newsId=37908
The situation analysis, Retrieved on 10th September 2003 from World Wide Web: http://www.cassies.ca/eng_on-line2.shtml
Tom Branna, Editorial Director, UV Protection in skincare products, Retrieved on 10th September 2003 from World Wide Web: http://www.happi.com/current/Sept031.htm
Unilever and P&G go head to head, Retrieved on 10th September 2003 from World Wide Web: http://www.bandt.com.au/articles/51/0c00c351.asp
Unilever Brands Alive, Kicking, Chairman Assures. (1993) Advertising Age, vol. 64, no. 21, p. 39.
Unilever brings world's No. 1 male deodorant brand to North America, Retrieved on 10th September 2003 from World Wide Web: http://www.canadanewswire.ca/releases/August2002/22/c4801.html
Unilever Case Studies. (2003) Natural move from skin to hair. Retrieved Oct 24, 2003. Available at http://www.unilever.com/brands/Casestudies/dovehaircasestudy.asp?ComponentID=9217&SourcePageID=10253#1.
Unilever Changes Track, Retrieved on 10th September 2003 from World Wide Web: http://news.bbc.co.uk/1/hi/business/652154.stm
Unilever H1 profits rise, holds to earnings target, Retrieved on 10th September 2003 from World Wide Web: http://in.news.yahoo.com/030730/137/26hjf.html
Unilever to Axe Fifth of Brands. (April 7 1994) Marketing, (U.K.) p. 1.
Unilever, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com.cn/english/home_in_china/worldwide_operations.asp
Unilever, Retrieved on 10th September 2003 from World Wide Web: http://www.unilever.com/Images/3_9090.pdf
Unilever's treasury breaks with the past to deal in the 21st century, Retrieved on 10th September 2003 from World Wide Web: http://www.trema.com/case_studies/eK_Unilever.html
Venkatraman, N. & Ramanujam, V. (1986). Measurement of business performance in strategy research: A comparison of approaches. Academy of Management Review. 11(4), 801-814.
Zammuto, R. F. and J. Y. Krakower. 1991. "Quantitative and qualitative studies of organizational culture." Research in Organizational Change and Development 5: 83- 114. Dean, J. W. and D. E. Bowen. 1994. "Management theory and total quality: Improving research and practice through theory improvement." Academy of Management Review 19: 393- 418.