Marketing Analysis of Unilever (OMO)
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October 21, 2020Marketing Analysis of Unilever (OMO)
Background of Unilever Group
Unilever is a multinational company that trades in a variety of products, and deals with fast moving goods. Unilever group has two parent companies that include Unilever NV and Unilever PLC. The company has been operating in North Africa and Middle East region since 1933, and has managed to penetrate the European and the Western country markets. The company produces goods made from fats and oils, for example, OMO. Omo is a Unilever product that was developed in the United Kingdom in 1908 and, has been the oldest laundry detergent powder in various countries such as Kenya. OMO is an acronym for “Old Mother Owl”, and after Unilever launched the product, it has met expectations of many customers. OMO has unimaginable benefits when washing clothes which include better whitening technology, a better removal of stains, new fragrance that makes the clothes to smell nice and, it has a slippery solution which prevents dryness of the skin. While OMO product is available in liquid and powder forms, in 2013, the product managed to achieve high sales rates across the European markets, delivering a 360 percent return on investment to Unilever group (Unilever, 2014a).
The focus of the paper is to analyze the marketing principles used by Unilever on OMO product by viewing the marketing strategies used and some of the factors that make it a strong brand in the competitive market
Task 1
AC1.1 Defining marketing and how it Applies to OMO Brand
Marketing is important in any business because it enables the business to achieve its objectives. Therefore, every company has to conduct effective marketing to achieve its goal of profit maximization. The term “marketing”, has been defined in many different ways but they all have a relatively same meaning. For instance, American Marketing Association (AMA) has defined marketing an activity that involves communicating, creating, delivering, and exchanging items that have value to the consumers, clients, partners, and society at large (Ferrell & Hartline, 2012, p. 7). Unilever has strategically placed OMO products by creating marketing divisions in various countries. According to Phillip Kotler, he has defined marketing is a science and art of utilizing, creating, and delivering value of the products, and services satisfying the wants of the customers with the aim of making profits. Marketing identifies needs and desires that have not been fulfilled, and defining, measuring and quantifying the size of the identified market and the potential profits. It pinpoints the strengths of the company that will enable it to offer, design and promote appropriate products and services (Cheng, Kotler, & Lee, 2010, p. 2).
Thus, Unilever has been marketing the OMO brands by ensuring they create values to the consumers of the product. OMO is largely for its whitening property across the world. For instance, the company has successfully marketed OMO product in Kenya, making it the best choice of detergent for washing clothes and removal of many types of stains. The company uses marketing concept to create awareness of OMO product to the customers. For example, Unilever launched OMO’s Water Footprint project in Turkey in 2009, to create awareness on the use of clean water, while at the same marketing the product as the suitable detergent that had less harmful effects to the environment (Chellaney, 2013. P. 191).
AC1.1. Various Elements of the Marketing Process Applicable For Unilever PL
The SWOT analysis is the examination of the Unilever PLC‘s internal strengths, weaknesses, opportunities and threats. The opportunities are for growth and improvement and the threats that come from the external environment. Thus, the management of the Unilever PLC have laid down the best planning strategies that bring balance between the company and its external environment. Strengths and weaknesses are factors within the organization, whereas opportunities and threats are factors from the external environment. Understanding and having the best elements of the marketing process helps the company to achieve its objectives (Ar, A., & Kragelj).
| StrengthsØ Strong awareness of the OMO brand to the customers
Ø High skilled marketing force for OMO products Ø Availability of loyal nationwide distributors Ø Large production capacity for OMO products Ø The product comes in wide package sizes that suit customer budget constraints (Unilever, 2013b). |
WeaknessesØ Crowded competition from products with similar OMO properties
Ø OMO has a small product range offering specific advantages to different customers Ø The product is also affected by price sensitivity (Unilever, 2013b). |
| OpportunitiesØ New technology
Ø No international trade barriers i.e. international trade barriers are not there Ø There is high rate of urbanization in targeted markets which provide opening market opportunities for OMO products, for example, Nigeria Ø There are emerging middle class consumers for the OMO products such as in the Middle East countries. This provides more marketing opportunities for OMO products (Unilever, 2013b). |
ThreatsØ There have been high inflation rates in some countries such as Nigeria
Ø Entrances of cheaper substitutes such as talc and lemon juice Ø Political conflicts in some countries may affect the performance of the OMO products Ø Competition from other strong brand products such as Arial detergents Ø Emerging competitors offering the similar products such as Procter & Gamble (Unilever, 2013b). |
AC 1.1 Marketing Environment
An analysis of the market and environment element entails about the examining the conditions in the market. The SWOT analysis is the strategic tool that is used to conduct the analysis. The company’s strengths include enough resources to be used in the marketing of the product, and qualified personnel that enable the company to achieve its objectives. The company has enough finances that they can use to synthesize the public or customers to buy the OMO product by having appropriate advertisements. Opportunities include the best chances of improving the sales of OMO products. The company uses new technology to market the OMO brand. For instance, use of social media such as twitter, emails, Facebook and others in making awareness of OMO brand. These chances include things like they are the only company dealing with such kind of product (Bakker, 2014, p. 96).
Due to removal of trade barriers, the company can sell the OMO brand to other regions by making it available to customers. The company does advertising globally so that everyone is aware of the importance of the OMO product. The company’s good reputation will enable it to be able to sell the OMP products because the customers prefer buying the products of the company as compared to other companies (Bakker, 2014, p. 96).
Setting the marketing objectives is another element of the marketing process, and they include profit maximization, increasing the value of the brand image. The company can increase the brand image by changing the packing and adding extra value to the content of the product so that it becomes more efficient when used. Profit maximization forces the company to ensure that the brand is being sold, and attracting more customers to buy its products by adding value to the brand image. The market mix element enables the company to achieve its objective of profit maximization (Bakker, 2014, p. 97).
AC1.1. marketing concept for OMO Product
The production concept, product concept, selling concept, marketing concept, societal marketing concept are some of the marketing concepts that can be used to market the OMO brand. OMO brand has been regarded as the cheapest detergent that customers can afford, and this falls under the production concept. Therefore, Unilever uses various marketing concepts to promote the OMO products. These concepts include price, place, promotion and product analysis. For instance, OMO products come in a variety of small packages which are relatively cheap to the consumers. Unilever markets OMO products by investigating the customer requirements from different places. For example, Unilever has ensured OMO products fits the customers’ demands in different countries by providing products range that the customers need, for example, introduction of powdered and liquid OMO detergents. The company also uses promotion as another concept of marketing. The company offers promotional activities such as washing machine advises, as a way of marketing the OMO products (Management Association, Information Resources, 2012, p. 517).
The company will go ahead and advertise that product effectively so that those who have no knowledge about the OMO product will buy to satisfy their needs. OMO product uses the marketing concept in that; it assists customers in satisfying their need while maintaining positive relationship with stakeholders. Therefore, the promotional activates used in marketing OMO products should not cause any harm to the environment, and to the consumers. However, there have been cases that OMO detergents cause irritation to some consumers when they are washing clothes (Management Association, Information Resources, 2012, p. 517).
Nevertheless, the objective of the company is profit maximization; the company will ensure that it has the best marketing strategies that will be used in marketing. Thus, for Unilever Company to achieve its objectives, it must meet their customer’s need by offering the best quality of OMO product. If there is high demand for the OMO brand, then the company will have to produce enough brands for their customers to avoid shortage, and dissatisfaction (Management Association, Information Resources, 2012, p. 517).
The OMO product is relatively cheap as compared to other detergents. OMO satisfies consumer needs through making sure that they are able to clean their items at relative costs. They spend less in buying OMO that they use to clean their household items and other items. The company uses the marketing concept to advertise OMO products. The product concept is whereby the company improves the quality of the OMO brand now and again to meet the customers’ needs. The company must have aggressive selling of the product by doing promotions that enable the customers buy the OMO brand or continue buying the brand. The societal marketing concept involves the company identifying what people or customers want their needs (Ansary, 1970, p.553). The managers of the company perform research to find out the interests of the target market. Thus, they offer high quality product and services to the market (Management Association, Information Resources, 2012, p. 517).
AC1.2. The Possible Costs and Benefits of OMO Products
The product is used for washing utensils, clothes and other items, and it was regarded as the affordable detergent. The relatively low cost of the detergent has led to high demand of it, and most customers value OMO since it cleans well. The aim of any organization is to spent time and resource in a way that the final product presented in the market, its sales should exceed its cost of production. Therefore, OMO products come in relatively cheaper prices which exceed the cost of producing it. Such low prices have enabled the product to fetch a big share of the consumer market, and at the same time, earned Unilever profits. For instance, the usage of OMO product in Pakistan is by over 90 percent of the people’s population; the high demand for the OMO products has been attribute to the low prices available for the majority of the population. The product has met the satisfaction of the consumers and covered cost of producing the product such as the taxes, import duties, the cost of material and labour. The low income earners prefer buying OMO because it is affordable to them (Oosthuizen, 2013, p. 105).
| Item 1 kg | Average Cost £ | Advertisement costs £ | Benefits |
| OMO | 18 | 2500 | More sales |
| surf | 24 | 3000 | Decreases in sales because it is expensive. |
| Klin | 20 | 2700 | Decreases in sales because it is expensive |
| lo clean | 30 | 2650 | Decreases in sales because it is expensive |
| Viso | 35 | 4500 | Decreases in sales because it is expensive |
| Sunlight | 25 | 3100 | Decreases in sales because it is expensive |
| Wheel | 20 | 3400 | Decreases in sales because it is expensive (Oosthuizen, 2013, p. 105). |
Task 2
AC2.1. Macro and Micro Marketing Environments
Micro-marketing environment are factors within the company itself and all the other factors from within, that affect the overall performance of the business. Micro-environment factors are sometimes referred as the internal environment and they include factors such as the suppliers and the customer markets. The suppliers have a lot of influence in the way Unilever markets OMO products. Suppliers are involved in the distribution and packaging of the OMO products, and they help the company by designing the most suitable packaging plans that conform to the customers’ preferences. As a result, suppliers have given the OMO products a competitive advantage in the marketing environments by introducing OMO packages of different sizes that the customers want. Furthermore, the customer’ competitive markets also form part of the internal environment of Unilever. The company has successfully designed its products to match the needs of different customer markets. For example, Unilever’s OMO is the most powerful brand in UK, and is it is being consumed in China due to its suitability among the middle-class customers (Dibb, 2012. P. 19).
The macro environment factors arise from the larger society which influences all the activities of the business organization. These factors are best explained using the PESTEL model. PESTEL are initials which stand for Political, Economic, Social, Technological, Environmental and Legal factors. In the case of OMO, economic and technological factors constantly affect the marketing environment of the product. Economic factors that affect OMO products include economies of scale. Economies of scale refer to the ability of the company to produce a give product in large scale production, while lowering the average costs in the log-run. Unilever has an advantage of producing OMO products in large scale, at a minimum costs, which enable the product to stand against other competitors. For instance, this economic factor is part of the external factors in Ghana that has promoted OMO as a strong brand in the Ghanaian market (Dibb, 2012. P. 19).
Technology helps the business organizations to produces goods in large quantities by reducing the cost of production. Technology can also be employed in the product design, so that the product meets the customers’ demand. Unilever is constantly redesigning its product to match the needs of its customers by improving the product performance. For instance, the latest laundry technologies include the OMO’s whitening technology that has produced a double win for cleaning both the white and the stained clothes. As a result, OMO has maintained its brand in most countries because of the whitening technology (Dibb, 2012. P. 19).
AC2.2. Segmentation Criteria for OMO Products
A market consist a group of customers that have the same characteristics, but they cannot share all the characteristics such as nature, hobbies, habits, and purchasing power. Segmentation includes elements such as the geographic, cultural, demographic and behavioural. Market segmentation is important when grouping customers according to different sets, so as to identify the needs of each group and develop a product that satisfies their needs (O’Shaughnessy, 2014, p. 211).
For instance, most business organizations have focused on international markets where the market segments transcend geographical boundaries. Multinational companies have the advantage of offering different prices to different geographical market segments. As such, Unilever has its OMO products penetrating in different countries due to their relatively lower prices, which also translated to increase in demand for the product. For instance, Unilever has been using ads which are tailored to meet the demand of most of the low income earners in less developed countries and as such, OMO products can be afforded at low prices in regions where people have a low standard of living. For instance, Unilever has successfully penetrated South Africa’s market by designing its products that matches most of the South Africans’ consumer price basket (O’Shaughnessy, 2014, p. 211).
AC2.3. Targeting strategy used on OMO Product
Targeting strategy is important in the demand of the company’s product, and marketing strategies include differentiated and undifferentiated targeting. In this case, the company positions its products where the customers can access them quickly. The undifferentiated targeting strategy, involves designing a product that can be assimilated in any market segment. Differentiated marketing segment involving identifying the needs of different markets, and then, designing a product that suits the needs of each market. There is also concentrated marketing whereby the business organization design products for different market segments, with the aim of trying to gain an added advantage against the competitors (O’Shaughnessy, 2014, p. 58).
Unilever uses concentrated targeting strategy for OMO products. The company has introduced different prices and variants of the OMO products for different countries. For instance, the company use powdered low price packages which can be affordable to the low-income earners while in middle-class countries such as UK, OMO is packed in liquid containers in order o meet the needs of the customers (O’Shaughnessy, 2014, p. 60).
AC2.4. How Buyer Behaviour Affects Marketing Activities of OMO Products
The buyers’ behaviour affects the demand of the brand in different ways. When the customers change their tastes, and preferences, they eventually change their buying habits. They start buying different products, thus affecting the sales of the OMO brand negatively. The change of the buyers’ behaviour should be observed by the company to ensure that they continue buying the brand. For instance, the social behaviour of the consumers can influence potential buyers when making decisions to purchase the product. The choice of the buyer to buy the product can be influence by other buyers attribute on how they perceive the products. OMO is packaged in attractive packets which are appealing to the customer. Therefore, this leads to the high purchase volume of the OMO products, due to the social influence of other consumers of the same product on the potential buyers. As such, most buyers will have routine behaviour under the OMO brand because it is not expensive. The company needs to understand the need of their customer, what motivates them to buy that product. For instance, improvement on the appearance of the product can influence buyers to purchase the product, which translates to high sale volumes for the company (Botterill, MacRury & Richards, 2013).
AC2.5 positioning of OMO Products in the Market
Product position is very important to the company because they lead to the successful selling of the product, by addressing the needs of the target customers so that it can be appealing and have a competing advantage against other products. OMO has positioned its products to prevent irritation on hands when washing, and use of a slogan that has promoted and advertised the product to many users. For instance, the slogan, “Dirt is good”, has been very convincing as the best detergent for washing all types of clothes with dirt.
Task 3
AC3.1. Features, Benefits and Advantages of OMO Products
The idea of “Dirt is good” does not occur as a disadvantage for OMO product. OMO is a washing detergent that packaged in powder, or liquid form. The product is a strong washing detergent for a number of stains such as beer, blood stains, candle wax, chewing gums, cooking oil and deodorant stains. OMO is a high quality product and comes in affordable prices. Moreover, OMO uses the slippery solution technology to prevent irritation and dryness caused by the detergents. It appearance is also a striking feature that differentiates it from other substitute products, making it to be identified easily by the customers.
An Image of OMO product
Source; (Unilever, 2014b).
AC3.2. Marketing mix of two different segments.
Marketing mix is an important tool that can be used by the company to market its products. Product decision is done to ensure that the company achieves its objectives. Risk choices, image position, branding, brand extensions, distribution, competitive response, and product lines are some of the activities that the company engages to achieve effective marketing. Having marketing mix of different segments enables the company to achieve its objectives effectively (Richter, 2012).
Proposing Two Different Segments for OMO Product
OMO product is sold in new consumer segments. Due to its effective detergent properties, OMO has been suitable for children under the age of age of 16 years and, for individuals interested in sport activities. Penetrating into these market segments has been possible by analysing the four marketing elements which include price, promotion, place and the product. The table below shows how OMO product can be introduced into the two market segments using the four elements of the marketing mix.
A table consisting of children under the age of 16 years
| Marketing Mix | Application for Segment 1 |
| Product | A new product of OMO which does not cause irritation to the children when wearing diapers and other clothes washed using the detergent |
| Price | The price should be affordable to match the current prices of the OMO products |
| Place | Unilever should distribute the new OMO product using distributors and wholesalers in regions where there are population of children under the age of 16 |
| Promotion | The company can use promotional media such as the radio, television, newspapers.Also, the company can use other promotional activities such as the use of brochures, business cards, or, fiving free samples and initiating OMO campaigns addressing the children issues (Botterill, MacRury & Richards, 2013). |
A table consisting of individuals interested in Sports activities
| Marketing Mix | Application for Segment 2 |
| Product | The new OMO product should provide solution for the best cleaning detergent for sports uniforms |
| Price | The price of the new product should be equal to the standards of the current OMO products used by the sport’s individuals |
| Place | The new product should be made available to sports centres using key agents such as the distributors and the wholesalers |
| Promotion | The new OMO product can be promoted using media such as sports entertainment media. Brochures can also be used to promote the new product (Botterill, MacRury & Richards, 2013). |
AC3.4. promotional activities for the New Proposed OMO Product
Promotional activities are those factors that are done by the company to create awareness and to enhance attractiveness of the product. In additional, there is pull promotional activities which involve use of marketing activities that attract the consumers to buy the product. The pull activities for the new OMO product involve the use of media advertisements such as the social media and, giving free sample in a road campaigns to encourage the customers to buy the new product. On the other hand, push promotional activities can be used which involves taking using marketing activities to convince the customer to buy the new product. For example, marketing agents can to talk to people directly and convince them to cross-examine the new OMO product, so that the buyer can make a decision to buy the product (Botterill, MacRury & Richards, 2013).
AC3.5. Additional elements of the extended marketing mix (i.e. people, process and physical evidence)
The company can allow people to give feedback about the service delivery, the quality of the company’s products, and give comments on the price of the company’s products. Unilever Company should allow the public to give out their views about the products and services of the product by organizing discussion forums where people will give out their views. The company can have a mechanism where every customer who buys the company’s product comments on the kind of service he or she received. Then those views, and comments are then collected together, analysed for better changes in the way employees of the company attend customers. The management of the company can create questions with yes or no answers and should be in the form of questionnaires where they are distributed to the selected sample population. They are then collected for analysis. Then, the company can improve on areas where they found had some weaknesses or problems (Richter, 2012).
AC4.2. The differences in marketing products for businesses (B2B) and consumers (B2C).
| B2C | B2B |
| Ø Focuses on the benefits of the products | Ø It involves focusing on the logic and features of the product |
| Ø Customers are not interested in the message but are interested about the product itself. | Ø It entails seeking information and knowledge about the product |
| Ø Oriented to meet only the basic details of the consumers | Ø It requires detailed contents in marketing for the consumers’ satisfaction of the use of the product |
| Ø The consumer audience are concerned with deals and entertainment | Ø The B2B audience are more concerned with efficiency and expertise |
| Ø The B2C choices are emotionally triggered | Ø The B2B purchase is logically driven and it tends to be rationally. |
| Ø The total contract in B2C cycle takes a short as a few minutes depending on the product. For example, retailers can drop the new OMO product if it fails to attract customers (Oosthuizen, 2013). | Ø A contract under B2B purchase usually last for months or years, for example, customers will continue buying the new OMO product once they are aware of it (Oosthuizen, 2013). |
B2C is involves selling products directly to consumers whereas B2B is marketing products to other businesses. Marketing to consumer (B2C) focuses on the benefits of the product. Under (B2C), consumers are not interested in the length of the marketing message like marketing to marketing. By using B2B, the Unilever Company can sell the new OMO product by marketing it to wholesalers and retailers (Oosthuizen, 2013).
AC4.2. characteristics of service and how it applies to the marketing of OMO product
Service is the act of doing something like helping a customer in getting what he or she needs. The following are the characteristics of the service. (Cho S., and Park, K.).
- The service cannot be owned. One cannot own and store a service like a product because a service is used for a particular period.
- The service cannot be touched. One cannot hold a service, and it is intangible unlike the product that can be touched and felt.
- Services cannot be separated like products. You cannot a separate a service from other because they are intangible.
- Services cannot be stored and they are there for a specific time or period. They are perishability (Richter, 2012).
The OMO brand can use service element in marketing. For instance, service can be applied to the new OMO product by giving free delivery to the customers when they buy goods from the business stores.
AC4.3. international marketing and domestic marketing
| International marketing | Domestic marketing |
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