Managing a range of brands across various product categories comes both with opportunity – like an increased share across markets and leveraging established brands – but also with challenges – like maintaining a collective corporate brand, shared values and complimentary brand identities. Effectively managing a coordinated brand portfolio in today’s society where customers have instant access to a multitude of information and can voice their opinions with a click of a button brings even more challenges to the fore for brands.
In this article I will look at how fast-moving consumer goods (FMCG) manufacturer, Unilever, manages its brand portfolio by considering the brand’s reputation and consumers’ perspective in terms of transparency, ethical practices and sustainability.
Power to the people
As Uncle Fishbits suggests, today we live in an age of accountability and transparency where customers are empowered through word-of-mouth on a range of social media channels. A disgruntled consumer can easily take a brand to task on Facebook for bad service, unethical practices or unlawful conduct which could go viral and cause major damage and loss to a brand. Here are 7 Customer Service Blunders that went viral.
Increasingly, customers are demanding that brands apply sustainable practices in their operations, ethically source ingredients, reduce their carbon footprint, treat their employees better and give back to the communities in which they operate in. As such, when managing a brand portfolio it is important to make a number of pro-accountability choices that would reflect back positively on the product brand and the ethics behind the corporate brand.
Unilever and business ethics
Unilever is the world’s second-largest packaged-goods manufacturer (after Proctor and Gamble) with more than 160 production facilities globally, including South Africa. The company’s turnover in 2016 was €53.3 billion and its brand portfolio worth US$42.9 billion in 2017 (Brand Finance, 2017). Unilever is well-known for its business ethics and more than two billion people across the world use their products every day. Its 400-strong product range include Dove, Axe, Vaseline, Lipton tea, Omo, Marmite, Hellmann’s mayonnaise and many other personal care, household goods and food products.
Unilever’s diverse brand products (source)
Given such a diverse product portfolio, Unilever has purposefully ingrained a single vision across these brands: “to grow our business, while decoupling our environmental footprint from our growth and increasing our positive social impact.” (Unilever website). This strategic vision is captured in the Unilever Sustainable Living Plan, which has three ambitious goals:
If achieved, the plan will not only cover Unilever’s greenhouse gas emissions, waste and water use but also the impact caused by its suppliers and its consumers (The Guardian, 2010). In order to achieve its Sustainable Living Plan, Unilever focuses on building purpose-led brands. Some of the most prominent social-impact programmes of its brands include:
- Dove, who has helped more than 19 million young people build self-esteem
- Lifebuoy, who is teaching 300 million people to wash their hands
- Domestos, who is helping 5 million people access toilets
- Pepsodent, who is teaching 68 million children to brush their teeth
Here’s a short clip that encapsulates this purpose-led strategic direction of Unilever through its brand portfolio:
According to Keith Weed, Unilever’s Chief Marketing and Communications Officer, “Our brands that most engage with our sustainability and social purpose plan are growing faster”. The brands that have engaged the most with the plan have yielded 10% growth over the past three years. In accordance with the company’s overarching vision, Unilever puts its U logo on all its products as a ‘trust mark of sustainability’ to assure consumers that any product with the U is the right choice for the planet. It also promotes the corporate brand of the various product brands (Adweek, 2015).
“At Unilever, we have a really simple philosophy: when you bring people and brands together under the banner of purpose, ordinary people can achieve some extraordinary things.” – Unilever Vice President of Global Talent and Resourcing, Stephen Lochhead (Adweek, 2015).
Whilst Unilever’s market share continues to grow, its biggest competitor – Proctor and Gamble – are consolidating its brand portfolio in order to maintain profitability. With increased growth comes increased environmental responsibility, of course, if the company is to maintain its ethical standpoint. As such, the Sustainable Living Plan has come to encompass various business practices like ethically sourcing raw materials and reducing deforestation by Lipton tea farmers to having a notable positive influence on improving health and well-being for its consumers (source).
However, dovetailing marketing, social purpose and sustainability under a parent brand is not without risk. Some critics like Claudia Fisher of the brand consultancy, Rivia, have criticised some of Unilever’s most well-known campaigns, like the Bright Futures Speech campaign, stating that it singles out specific product brands instead of transcending its brand categories by focusing on the corporate brand (Adweek, 2015). In addition, a missed social purpose goal or a failed social intervention could lead to a company-wide backlash by critics and consumers. With the advent of social media and the viral spread of content and messages, this becomes even more risky.
As such, in today’s age of accountability and transparency brands have to carefully manage its brand portfolios and actively make brand choices that favour sustainable and ethical practices. Amidst the backdrop of three very commendable but ambitious Sustainable Living Plan goals, Unilever might need to rationalise its brand products in order to achieve these set goals. Notably, the time-frame on one of its goals – halving its environmental footprint in the making and use of its products – has already been increased by 10 years from 2020 to 2030. Eventually removing unsustainable products from its brand portfolio could build and maintain Unilever’s reputation even more and create positive brand resonance among its customers.