Unilever plans marketing and innovation push

05 February 2010

LONDON: Unilever, the FMCG giant, plans to heighten its investment in marketing and innovation this year, having seen this strategy start to pay off in 2009.

The Anglo-Dutch corporation recorded underlying volume growth of 2.3% over the last 12 months, posting three quarters of successive gains after experiencing a decline from January to March.

Western Europe was the only region to deliver a contraction over the whole of last year, down in both volume and value terms, the owner of Knorr and Hellmann's said in a statement.

"I am convinced that the environment is going to stay competitive as it's by no means clear that life will get any easier for our consumers and customers in the coming year," Paul Polman, its ceo, argued.

"Building brand equity is a cornerstone of the long-term success of consumer goods companies. This is very important to me and the way I think about the business," he added.

The overall volume trend was mirrored by Unilever's advertising and promotional spending, which fell by 110 basis points in Q1, and rose by 50 basis points in Q2, 130 basis points in Q3, and 240 basis points in Q4.

James Allison, its head of investor relations, said "advertising and promotional expenditure increased substantially in the second half of the year as we supported innovation strongly and continued to build brand equities."

The consumer goods firm registered a 15% uptick in its media impressions last year, partly due to "incremental expenditure", and also because of lower media rates, according to Allison.

"We substantially increased our expenditure on digital support, leading the expansion in to this media across a number of our brands," he continued.

As previously reported, the company launched a digital marketing effort for Dove Men+Care in the US, encompassing mobile, as well as social networks such as Facebook and Twitter, this month.

Polman suggested that Evolution, the acclaimed viral campaign produced for Dove, demonstrated Unilever's prowess in the field of communications, an area where it will continue to set high standards.

"During 2009, we have significantly stepped up the quantity and effectiveness of brand support. Our share of voice is improving," he said.

"At the same time we have been improving the quality of our communication, and increased product quality. So it's not just about more advertising, it's more and better advertising behind better quality products."

Even though the London-based organisation is argued to have out-performed major rivals such as Procter & Gamble and Nestlé, its chief executive believes further progress is required.

"Brand equities are strengthening but not yet everywhere. Our internal survey results indicate that, that we are not yet as consumer focused as I like and that we can be faster still," Polman said.

"So there is much still to do and much improvement still to make. But as the saying goes, Rome was not built in a day. We've made a good start."

Innovation will play a key part in this process, with recent initiatives including the roll out of Dove Fresh in 64 markets, Axe Temptation in 56 markets, and the "pyramid bag" variant of Lipton in 44 markets.

Pond's was also introduced into the Middle East, with Ben & Jerry's expanding into Norway, Cif into India and Sunlight into Nigeria, supporting Polman's prior claim that "all markets matter."

"We will continue to improve our products spending upwards of €100 million (€138m; £87m) on product quality in 2010 alone," he said.

"We expect to significantly increase the incremental turnover from key innovations in 2010, and the incremental turnover expected from projects launched in the next three to five years has doubled."

Unilever's strength in emerging markets was demonstrated by the fact that, in the home and personal care categories, it reaches 96% of the 1.9 billion consumers in Asia and South Africa.

Data sourced from Unilever; additional content by Warc staff