Monday, 7 July 2014

To grow, Unilever trims its product portfolio

Updating the chapter 12 preview example in my Essential Guide to Marketing Planning, Unilever has been adjusting its marketing plan to drive growth by focusing on core brands. The idea is to cut costs and provide marketing efficiency for a streamlined portfolio.

Here, from Unilever's 2013 annual report, is a graphic of its business model, showing a virtuous cycle of growth.

In recent months, Unilever's brand divestments have included:
  • Selling its Ragu and Bertolli pasta sauce brands to Mizkan, based in Japan.
  • Selling its Peperami meat snack brand to Jack Link's, based in the US.
Still to be sold are hair-care brand Brylcreem and diet shake brand Slim-Fast.

Even with these portfolio changes, Unilever markets brands in three broad product categories: (1) food and drink, (2) home care and (3) personal care. Earlier this year, it became majority owner of a water purification company in China, to profit from that firm's knowledge of the local market, distribution ties and technological skill.

With marketing investment concentrated on fewer but stronger brands, Unilever expects to stimulate growth in turnover and further enhance its bottom-line results.