Unilever aims to exploit recession

02 July 2009

LONDON: The economic climate will not begin to improve until next year at the earliest, but the downturn does provide brand owners with a number of opportunities, says Paul Polman, ceo of Unilever.

While many advertisers rein in their spending during periods of financial instability, this strategy can be costly, and Unilever has recently heightened its activity on social media and employed a unique form of co-creation for its deodorant brand, Axe.

Speaking at the Global Leadership Summit 2009 in London – and echoing the views of Sir Martin Sorrell, ceo of WPP Group – Polman said "I see an L-shaped rather than a V- or U-shaped recovery."

While Unilever's chief executive does not expect real growth to return until 2010, he also argued that the Anglo-Dutch corporation should benefit from its strong presence in key emerging markets.

Moreover, the consumer goods giant plans to increase its investment in innovation and marketing in order to improve its position as competitors cut back.

As such, Polman said, "this crisis could not have come at a better time for us," although he also warned that "I'm not sure we see all these green sprouts everyone talks about" in the near future.

At same event, John Connolly, chief executive and senior partner at Deloitte, said that "in buoyant markets, most companies perform within a relatively narrow range."

However, in recessions, the "range of performance broadens hugely," with some brands thriving while others suffer from changing behaviour in the marketplace.

Given this, he posited that "how companies act over the next 24 months will drive their performance for the next decade," a process that requires "thinking beyond today's challenging markets."

Data sourced from NamNews/Dow Jones; additional content by WARC staff