This paper conducts a strategic marketing analysis of Unilever’s brand, Dove. In this regard it discusses the market orientation of the company from different angles such as product orientation, customer orientation, branding orientation and culture orientation. Moreover, it also undertakes the macro and micro environmental analysis with regards to Dove. In this regard PESTEL analysis and Porter’s Five Forces Model is being utilized. Besides, it is also taken into account that how company segments the market and targets which segment of the market and thus positions its products accordingly. The other half of the paper then proposes a new product and discusses marketing mix elements and the strategy to promote the new product. 1.1 Company Introduction
Dove is a brand owned by Unilever. The latter owns many other personal care, food and beverages brand as well of which Dove is one. At present the company is selling its products in more than 35 countries. Dove was started in 1957 with the introduction of a soap bar and later a number of products were added to its products base including cleansers and moisturizers. Initially it provided women care products and had advertised products for women of all ages, sizes and shapes as its inspiration but now it introduced men care products too. (Unilever, 2014a.)
1.1.1 SWOT Analysis of the Company
More than one million customers visited the Dove’s website in August 2009 The shampoo and conditioner of company is its core products since majority of the visitors looked for these products online in August 2009 alone Strong brand image
International presence in various markets
It started off as a women’s brand and still features women in its advertisements The target market is primarily women and it was not until recently that the company introduced products for men as well The prices of products are not given on official website
No online ordering service is offered
Shampoo and conditioner are two different products but goes hand in hand with each other therefore they are self-promoter for each other They can also be offered on discount prices if bought together New Dove Men Care launched by Dove to introduce men care products Company must also target students and juveniles as pester power influences parents’ buying decisions
Dove’s shampoo and conditioner hold only 4% of the market share Dove’s sales declined to GBP 24 million from 25 million in 2009 Six main brands of international presence as competitors e.g. Head & Shoulders, Herbal Essences, Pantene, Elvive, Aussie and John Frieda Price compared to competitors is high
2 Market Orientation
Market orientation refers to the enforcement of marketing concept (Kohli & Jaworski, 1990). It is an umbrella under which different orientations may fall. This includes the culture orientation i.e. organization’s culture (Narver & Slater, 1990), customer orientation (Deshpande, et al. 1993), product orientation (Adcock, et al. 2001), branding orientation (Holt, 2004), etc.
2.1 Product Orientation
This refers to the organization strategy of emphasizing selling as many products of a particular line as possible. Economy of scale is exploited under this orientation. On one hand it can be utilized to get rid of the dead stock and on the other hand it can be utilized to differentiate the product from that of its competitors by bringing product innovation. (Adcock, et al. 2001) For example, Dove employs skin specialists to develop products that take extra care of skin. They go an extra mile and conduct clinical researches to bring product innovation.
1 2.2 Customer Orientation
The customer orientation is one the most important orientations. As per this orientation the company prioritizes the needs of its customers and develops products accordingly to achieve customer satisfaction. The companies usually employ a dedicated research and development department to prepare products as per customers’ requirements. (Kotler & Keller, 2009) Dove invests heavily in its research and development sector. This is evident from the fact that it employs team of medical scientists to develop products and their researches have been published in the medical literatures.
2 2.3 Branding Orientation
This orientation emphasizes on coining brand image in the minds of the customers. It focuses on enhancing the brand identity and undertaking such activities that customers feel associated with the brand. (Klein, 2000; Holt, 2004) For example, Dove launched the “Dove Campaign for Real Beauty” further to the research which indicated that only 4% of the women regarded themselves beautiful. Therefore the company launched the program to encourage women to feel comfortable with themselves. (Tanzina, 2013)
2.4 Culture Orientation
The culture orientation refers to establishment of such organization culture which develops behaviour for creating value for buyers (Narver & Slater, 1990). The culture at Dove is maintained to prioritize the consumers and innovation lies at the core of their culture.
3 3 Macro Analysis: PESTEL Analysis
This means political stability in market(s) in which companies operate. From British market perspective the political situation is stable and there is stability in policies of the government. However, policies such as minimum wage requirement which increases annually can affect the company.4 Besides, the company is also operating in other countries where political situation may not be as stable as in UK. Therefore, such situation can affect the company’s operations.
Since 2009 the British economy is in recession (BBC, 2009). This affected the organizations as costs of fuel, energy, water, etc rises and affected the average household income. Rise of inflation depicts the fall of buying capacity which can affect organizations like Dove. Moreover, rise of interest rate also decreases the buying power of consumer and it is expected that interest rate in Britain will rise in future (BBC, 2014). However, most of the products offered by company are essential care such as shampoo, conditioner and personal care for women. Therefore, it is less likely that the consumer would stop buying such products.
Social element takes into account age, background, education, gender, culture, demographics, buying habits, etc. Dove has primarily been a feminine brand until recently when it introduced men care products as well. Moreover, it has little less to offer to juveniles which represents an important power in the market as pester power can influence the buying decision of parents.
The company employed latest packaging technology, MuCell Technology, whereby 15% less plastic will be used in packaging of its products.5 The company also developed moisturizing body wash as compared to liquid wash using high emollients level under latest technology.6 Moreover, it also introduced the new “compressed” cans for its deodorants whereby the amount of deodorant is the same but the size of the can is small.7 Hence, the company is using latest technology to further the merchandise so that sales optimization can be achieved.
Consumers these days want organizations to preserve environment in their operations that is why organizations have included this as part of their corporate social responsibility (Harrison, 2010). In this regard Dove would utilize compressed cans which will reduce the carbon footprint by 25% and 35% less lorries on road as more cans will fit in same lorry. Unilever as a whole has the objectives of reducing the greenhouse gas emission and reducing the waste that arises from disposal of products by 2020. Its lesser number of cans across its brands base would mean 24 tons less aluminium and 283 tons less carbon3 annually.
8 3.6 Legal
This represents the laws of the market in which the company operates e.g. in UK there are consumer protection laws which protect the consumer. This includes the Unfair Contract Terms Act 1977 and Sale of Goods Act 1979. Such Acts require the producers and sellers to produce/sell goods that are fit for the purpose for which they are being produced/sold.
4 Micro Analysis: Porter’s Five Forces Model
4.1 Bargaining Power of Buyers
The bargaining powers of buyers will be high if there are number of competitors in the market. Their power will also be high if the prices of the company in question are higher than the prices of the competitors and if there are alternative products available as well. Dove operates in a very saturated market. There are number of alternative products available by competing companies such as Proctor & Gamble and the products produced by retailers like ASDA, Tesco, Sainsbury’s, etc.
4.2 Bargaining Power of Suppliers
Suppliers are responsible for providing raw materials to the organization. Their bargaining power will be high if there are fewer suppliers as the company will be dependent upon them and their bargaining power will also be high if there are too many organizations to supply to as they can then dictate their terms (Porter, 2008). However, Dove maintains healthy relationship with its suppliers. It is with the collaboration of its global packaging suppliers, ALPLA and MuCell Extrusion, that it developed the technology to reduce plastic consumption in the manufacturing of bottles i.w. 275 tonnes annually.
9 4.3 Threat of Substitute Products
This refers to the alternative products being available in the market. If there is increased number of products in the market then this can affect the company since the company will have to adjust prices accordingly which can affect the profitability of the company. The alternative products in shampoo line include Head & Shoulders, Pert Plus, Pantene, Herbal Essences, etc. Similarly there are other alternative products of women care available as well. Therefore, the threat of substitute product is high in the industry.
4.4 Threat of New Entrants
The industry is quite saturated due to the presence of already established brands. Unilever alone owns more than 400 brands of which Dove is one. Therefore, Dove is under a strong umbrella. Any new entrant will have to cross high barriers to enter into the market. Therefore, the threat of new entrants is low.
4.5 Industry Rivalry
Industry rivalry is high as there exists number of competitors in America, European and Asian markets which are providing like products of like nature. This includes those by Procter & Gamble, Sara Lee, L’Oreal and Avon, etc. However, in order to deal with such situations, Unilever as a parent company had acquired one of the prime competitors, Sara Lee for $1.87 billion. This represents one of the strategies to deal with competing forces which not only broadens the products base of the company but also minimizes the threat of rivalry in industry.
5 STP Analysis: Segmentation, Target, Positioning
This refers to creating segments of the market on the basis of characteristics. This may include gender, age, demographics, etc. It can be stated that Dove segments its market on the basis of gender as it started off as a women’s brand and provided products for personal care and cleansing products for women. (Unilever, 2014b)
The targeting can be differentiated, undifferentiated or concentrated. Differentiated targeting strategy is the one whereby two or more segments are targeted in a different manner, undifferentiated targeting strategy is the one which is aimed at targeting everyone at the same time without any difference and concentrated targeting strategy is the one which is aimed at targeting a particular segment only. (Pride & Ferrell, 2008) In the case of Dove, it can be stated that the company primarily focuses on targeting women. Initially it focused only on women therefore its strategy was concentrated at that time. However, now it has introduced products for men as well therefore its strategy is differentiated whereby different products are offered to men and different to women. (Unilever, 2014b)
Positioning refers to placing the product within the market in such a manner that the market niche is occupied by the brand through that product (Ries & Trout, 1981). It also means communicating the benefits of the products to the target segment (Levi, 2007). Since Dove has an international presence in both first world and third world markets therefore one of its core positioning strategies is cross-market subsidization. As per this strategy the prices in one market are higher as compared to the prices in those markets where the buying capacity of the buyers is low. This enables the brand to position its products internationally. That is why despite the economic recession in some parts of the world, Dove had 3.2% sales increase across the globe. (Reuters, 2013) 6 New Product Range
The product represents the baby care product i.e. diapers. But it is marked with slight innovation i.e. the outer layer of the diaper is that of Denim Jeans. Moreover, the diaper will cover half the hips of the child making it slightly larger in length than the size of a traditional diaper and little less than shorts. This gives a trendy look to the diapers than the traditional look and size of diapers. The idea behind this is to introduce diapers on move i.e. to introduce a product that the diaper itself is the outer cloth of the child and that the parents can take the child while on move in diapers only, as the denim jeans and slightly larger length will give a trendy look to diaper.
6.2 STP Analysis of the Proposed Product
As stated earlier that market segmentation can be made on the basis of age, gender, demographics, etc. For the purpose of new products the segmentation was made on the basis of age and gender as the product was introduced for children both boys and girls aged up till
3 or 4. 6.2.2 Target
As discussed earlier that the targeting can be undifferentiated, differentiated or concentrated. The current targeting strategy is concentrated one whereby only children aged up till 4 are targeted by the product.
In order to position the product, it will not only be offered through retailers offering baby care products but also through such fashion retail shops which offer baby wear products. It is because the concept behind the product is to introduce (denim) diapers which represent alternative but trendy style.
6.3 Marketing Mix Analysis of the Proposed Product
This refers to the product being offered to the customer, the way it brings benefits to the customer with its attributes, the way it is distinguishable from the products of the competitors and the needs it fulfils. (Needham, 1996) In the current situation the product offered is denim diapers. It is beneficial for baby care as the parents don’t have to put another layer such as trouser or shorts on the child after wrapping him with diaper but that the diaper itself will represent a trendy wear for the child. Therefore, they can simply buckle up the diaper to their child and travel with him/her, etc. Moreover, the product is being offered for both girls and boys, aged up till the age of 4.
It will also be available in different colours. Moreover, it will also be introduced in chino cloth in different colours. This will change the concept of traditional diapers. This is distinguishable from majority of the competitors as main companies are not providing the diapers in this stuff. They are providing in cotton. However, the product proposed will be composed internally of the cotton to provide extra skin care for baby but its outer layer will be composed of either denim jeans or chino cloth to give a trendy and smart look.
This represents the amount to be paid by the customer. It must be the one which the customer regards whether it is the value for the product or not. It must also be set in such a manner that it maintains the profitability of the company and does not place it in a disadvantaged position as compared to its competitors (Needham, 1996). A number of pricing strategies may then be utilized to price the product not only to meet the demands of the customer but to deal with the competition in the market.
This includes pricing strategies such as high-low pricing, market penetration pricing, market skimming pricing, marginal cost pricing, cost leadership pricing, etc (Smith, 2011). However, in order to acquire market share rapidly the pricing strategy adopted will be cost leadership strategy. This will help in gaining the share in market and attracting the customers towards the product not only through its distinguished features but affordable cost as well. The idea behind this is to meet the affordability criteria of customers.
This refers to the method of communication between the marketer and the customer to convey the existence and benefits of the products. This may include advertisements, sales promotion, publicity, etc. (Kerin & Rudelius, 2001) In the current scenario print media advertisement and social networking websites will be utilized to advertise the product and stay in contact with the customers respectively. Moreover, advertisement through social media will also be made such as paid advertisements on Facebook. This will attract a larger audience.
This refers to distribution of the product in such a manner that it is convenient for the consumers to get to it. It will not only be offered through retailers offering baby care products but also through such fashion retail shops (that are not brands) which offer baby wear products.
126.96.36.199 Distribution Strategy
In order to place the product in the market it is imperative to devise a distribution strategy. This includes mainly three types of strategies: intensive, selective and exclusive. Intensive is the one whereby the product is available through various outlets, selective is the one whereby the product is available either only through company’s outlets or through specialized outlets of that respective field only, exclusive strategy is the one whereby the product is offered only through few intermediaries. (Kotler, Keller & Burton, 2009) However, in the current scenario, intensive distribution strategy will be utilized whereby the product will not only be offered through retailers like ASDA, Tesco, Sainsbury’s but through fashion retail shops which offers products of different brands under one roof. This means that marketing will not only be made from business to consumer but also business to business. This is further discussed below:
188.8.131.52 B2C and B2B Marketing
B2B marketing is the one whereby one company markets its products to other companies or businesses whereby B2C marketing is the one whereby the company markets its products to consumers (Sandhusen, 2008). For B2B marketing direct channels of marketing may be employed e.g. direct email marketing, business magazine marketing or through dedicated calling whereas in B2C marketing indirect channels may be utilized such as television advertisements, brochures, etc. In the current scenario the B2B marketing will be done by direct contact with respective retailers.
They will be briefed about the products, its tangible and intangible features and offered to be place in their shelves on credit basis as well. This will be done to attract their interest in the product and secure a position for product in their stores. Moreover, for the purpose of international marketing, expositions will be attended to and the product will be introduced in such expositions to attract the interest of the retailers in foreign markets.
This paper conducted the strategic marketing analysis of Dove and utilized various tools in this regard. This included the PESTEL analysis and the Porter’s Five Forces Model. Besides, it also proposed the new product and conducted marketing mix analysis with regards to the product and determined the distribution strategy of the new product.
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