Unilever manufactures products for the nutrition, health and beauty, and home care industries. The company faces industry issues of economic pressures, high commodity prices, and increased competitor focus. The sustainability issues include food security, poverty reduction, and sustainability of resources, climate change, as well as social and economic development. Unilever expects these issues to continue for the medium term as volatility and uncertainty have become a new norm. (Annual Report and Accounts 2011)
Economic pressures dominated 2011. There was major instability in the Eurozone and a weak recovery by the U.S. economy. Unemployment remained high in developed countries causing consumer spending to be continually squeezed. Commodity prices remained high with many rising even more. Competitor focus increased on the operational environment in emerging markets. There were a number of natural disasters in 2011. This required Unilever to respond to the societies in a humanitarian level. Employer and operational levels were also required in response.
There were also greater interdependent challenges. With population growth continuing to rise, there are stronger issues of food security. The issue of poverty reduction has been a continual challenge and growing with population growth. Sustainability of resources is a stronger issue with population growth and the continual depletion of earth ecosystems. Climate change and social and economic issues also have become stronger issues. These issues have created even stronger requirements for the company on the humanitarian, employer, and operational levels.
The Unilever business model is designed to deliver new sustainable and equity growth. It implements investing to strengthen brands and the working of cost reduction strategies to enhance the bottom line. It has set high values to attract people with rewards based on work performance and incentives to excel in the workplace. Through products and working to reduce the current rate of consumption of scarce resources, the aim is for more sustainable living. Consistency, competition, profits, and the meeting of major social and environmental needs are the goals of the Sustainable Growth Plan. The research and development plan is designed to deliver long-term results.
Unilever has a competitive advantage through brands, people, and the cost reduction strategies. The company has resources competitors do not have to take brands into other countries and strives to strengthen the portfolio in key countries. The aim is to grow in developed markets, such as Western Europe and Italy. Another goal of the company is it to be market leaders for the liquid cleaning industry in Vietnam, Thailand, Philippines, and Indonesia. Unilever has further brand related goals. By 2015, the goal for Knor products is to have all the ingredients sustainable. By 2020, the goal is to have all agricultural raw products sustainable.
Marketing plans include the Lifgebuoy brands developed program called, "School of Five." This program encourages hand washing at least five times a day and has a 4.1% growth in Vietnam. The company is working on market growth by offering premium brand products to more affluent consumers and making products for affordable and accessible for low income consumers. Further efforts include taking products to new geographies with portfolio expansion.
For 2012, Unilever will compete for a higher share in the beauty segment with Toni & Guy, Axe hair, Dove Men+Care, and Pond's Anti-Aging products. There are plans for expansion to Africa. In India, the company developed the Shakti program. It is a direct distribution network of micro-entrepreneurs that sell Unilever products. The Perfect Store program was developed to provide optimal merchandizing for retailers. New standards have been implemented for sustainability in design and building for additional factories.
Unilever's Sustainable Living Plan aims for changes in attitude and behavior for sustainable growth in societies. (Unilever Sustainable Living Plan) Unilever is constantly researching consumer attitudes, needs, and motivations. The marketing strategy used is to send consumers messages to improve health habits, reduce their environmental footprint, and to source 100% sustainability of agricultural raw material. There are five levels of the plan. Understood is to raise awareness and encourage acceptance of sustainability. Easy helps to establish convenience and confidence for the consumer. Desirable is designed to build self-relation in society, how consumers relate to others in society. Rewarding is the development of proof and payoff. For instance, Suave encourages turning off the water while washing hair to conserve water and utility cost. And, habit is the reinforcing and reminding of consumers to continue these habits.
There are metrics being measured. Sales and volume growth are measured on a quarter and annual basis. The…