Unilever shakes up its product portfolio

Unilever recently sold off its spreads and margarine brands to concentrate on other, higher-potential products in its portfolio. The company's CEO explained: 'The announcement today marks a further step in reshaping and sharpening our portfolio for long term growth'.

Brands sold to KKR, a private equity firm, include Flora, ProActiv, Becel, Country Crock, I Can't Believe It's Not Butter and and Blueband.

Although the spreads business was profitable for Unilever, with margins of about 20%, the firm wants to concentrate its marketing resources on products that closely fit its vision.

In particular, Unilever has been growing formerly niche brands like Pukka Herbs tea into mainstream brands to accelerate growth. It's also investing in personal care brands that are growing quickly and launching a number of new products for highly targeted customer segments within specific geographic markets.

This updates the Unilever examples in Essential Guide to Marketing Planning 4th edn.

Tesco refocuses on core businesses

From: Tesco Core Purpose and Values

UK retail giant Tesco continues to shed non-core businesses so it can refocus resources on its main business strengths.

The company's new mission is: Serving Britain's shoppers a little better every day.

This mission statement defines the company's geographic realm (Britain--no more US convenience stores or South Korean grocery stores). It also emphasises value as a core benefit for shoppers. Finally, it defines customers as shoppers. Shoppers can be bank customers, too, by the way.

Not surprisingly, Tesco just sold its Giraffe restaurants, which it had been both standalone and in-store businesses. The company operates 6,900 stores and bank branches, with yearly revenues of £48.4 billion.

Committing to a mission focused on shoppers also means Tesco is adjusting profit expectations. Grocery retailing is a low-margin business. Price wars (several times a year) often sap profits even further as Tesco fights to defend market share.

What's next for Tesco?

Tesco's vision includes restaurants

Tesco is continuing to expand and serve customers by investing in restaurant ventures, often with the idea of locating them near or within its stores. This is part of its vision to be (1) wanted/needed around the world, (2) a growing business, (3) innovative, (4) local/global winners and (5) inspire loyalty from customers, colleagues and communities.

By expanding its restaurant investments, Tesco is adding retail services that customers need and want, with innovative retail formats, and intriguing international touches. The latest restaurant venture is Fred's Food Construction, a casual restaurant featuring 'authentic American candy, soda and snacks' plus healthy salads and deli-style 'submarine' sandwiches.

Previously, Tesco has purchased Giraffe, casual family restaurants with burgers, brunch and a kids' meal deal. Now some Tesco Extra stores include Giraffe restaurants, to attract family shoppers to Tesco as a destination and provide other experiences beyond shopping, in line with the long-term vision.

The retailer also invested in Harris & Hoole, a coffee house with the image of a family-owned, artisanal restaurant that's expanding rapidly. It doesn't publicise Tesco's stake in the company because 'We don't believe our customers are interested in who is providing the financial backing for our business', according to a spokesperson.

After Tesco's costly and ill-fated expansion into Fresh & Easy grocery markets in the US, these restaurant ventures are intended to tap into revenue opportunities in markets where Tesco is strong.