Unilever Ice-cream Brand Repositioning (3C Notes)

Ghanta

Venkata

Company:

Leading consumer products company with more than 1600 brands

o Sales across the globe with major chunk of revenue from EU and
US
o Decentralized and diversified organization with more than 300
operating companies, operationally localized and managers at
operating companies had significant influence
o Often faced some internal resistance in operating companies
implementing the directions from Headquarters
Ice cream, one of the key contributor to the top and bottom line
o Business developed in the initial stages through inorganic growth
(>60 acquisitions) and not
o Largest player in the Ice cream market with sales of ~4.3 billion
euros (~8.1% market share), EU is a key driver accounting for
more than 50% of sales
o Entry of other players and competition is hurting the companys
business as it started seeing decline in both revenues and
volumes
o Weakness in out of the home segment hurting the sales and
dragging overall sales
o Diversified products, manufacturing facilities meant that the
company isnt able to achieve economies of scale and gain
significant buying power (200 individual brands, 2000 SKUs, 26
manufacturing facilities)
o Localized and diversified marketing and development meant
that resources are dispersed and not optimally utilized
o Intense threat of competition and competition from lot of
substitutes trying to satisfy the consumer needs using different
platforms
Why Consolidation? - Focused approach
o Non-consolidation is resulting in lot of over heads and the
company is unable to capitalize its scale
o Localized brands prevent a pan geographic
marketing/development promotions/campaigns
o Restructuring/condensing all the existing brands into 400 brands
to optimize marketing spending and building a focused portfolio
o Shelving underperforming brands that are unnecessarily
occupying space at retail shelves
o Concentrate more on product innovation, brand development
and focused supply chain network with fewer brands
o Estimated cost savings of more than 3.1 billion euros/year
through focused portfolio and global buying

Unilever Ice-cream Brand Repositioning (3C Notes)

Ghanta

Venkata

Positioning Strategy Local Heart Reduce the no. of.

brands:
o Decentralized approach similar to Nestle, resonating with
Hopelessly local and Mindlessly Global
o The company shouldnt push separate brands for out/in home
consumption as it wont be able to achieve/fully realize the
synergies it achieved through the decentralized approach
More importantly consumers needs and perception for ice
cream are same across both the categories.
Convince/Selection alone wont be strong enough reason to
segment the market/create different brands
o Allows the company to still be closer to local consumer and yet
focus on taking advantages of scale in
promotions/sourcing/production/developmental activities
Doesnt face too much of internal resistance across the
organization
Easy placement across a wide range of consumer base in
promotional activities
Achieve economies of scale, buying power

Customers- Segmentation: Even though consumers are segmented across

demographics, a further segmentation is required based on the needs of
each group and a brand catering to the top most needs if not all
Traditionally large segment - Children

Impulse buyers
Increase in the pocket money over the years facilitates more demand
Declining population
Demographic shift Spending more on gadgets and less on food
Needs/preferences:
o Cools me down, Fun, Longevity
o Chocolaty, Fruity (Substitute for chocolates and fruits)
o Aesthetics

Growing segment Adults/teens

Growing segment
Greatest disposable Income Future economic houses
Needs/preferences:
o Refreshment, Craving, Fun
o Treat, Socialization

Unilever Ice-cream Brand Repositioning (3C Notes)

Ghanta

Venkata

New Segmentation Based on Needs Brands should target consumers

based on needs and not on demographics

Craving/Treat
Hunger/Gap fill
Refreshment
Fun
Socialization
Wholesomeness

Competition Changes in the rules of the game: Substitutes are trying

to satisfy the needs of consumer posing a threat to the ice cream market.
New entrants who has a large presence in food/consumer products are
utilizing cross branding and are entering with a very low risky proposition
making the competition fearsome. Restrictions on freezers further eased
norms for new entrants and put the company at a disadvantage in the out of
home segment
Existing/New Entrants:

o Nestle: Largest consumer products company that started

focusing on ice creams lately due to contractual obligations
Increasing product portfolio through extension of its
confectionery product lines
Decentralized approach
JV with Haagen-Daz poised to further push sales
o Mars: Large confectionary player that has newly entered ice
cream market
Targeting premium customers
Product differentiation through bars
Limited number of brands
o Private labels: Increasing pressure from retailers, emerging to be
one of the significant subset among the competition
Offering great tastes at lower prices
Substitutes: Competition from substitutes such as soft drinks,
confectionery, coffee which satisfy similar needs of consumer are
eating into the consumers disposable income for
refreshment/socialization/fun etc.
o McDonalds: Largest retail presence with more than 30,000
locations
Increasing market share through additional offering
of ice cream with traditional products
o Starbucks: Growing coffee market at the expense of ice cream
targeting consumer needs through different platform

Unilever Ice-cream Brand Repositioning (3C Notes)

Ghanta

New offerings
Expanding retail presence

Venkata