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Universidade Catolica Portuguesa Faculdade de Ciencias Economicas Empresariais Corporate Strategy Unilever’s ice cream brand Portfolio Students: Maria Ines Galhardo, n? 150106011 Claudia Filipe, n? 150106026 Ricardo Lloret, n? 150106111 Joana Rodrigues dos Santos, n? 150106123 Diogo Sousa, n? 150106125 In order to draw the BCG matrix, we started by collecting some data. Based on the Datamonitor Market Report 2006 (appendix 1), we were able to calculate the total ice cream’s market value of 2008.We made the choice to do the work for the year 2008 because the present year has not already ended. We will write a custom essay sample on Logoplaste or any similar topic only for you Order Now Thus it was only possible to calculate estimated values for 2008. Market value: (212. 8-161)/4 = 12. 95 million per year 161 + (12. 95*2) = 186. 9 million in 2008 With the objective of studying Unilever’s principal products, we had to take into account Nestle (Unilever’s biggest competitor). We chose one equal competitor for each group of ice creams we thought were more important (appendix 2). Among all ice creams of Unilever, we focused on the ones that had a direct competitor in Nestle.This is why we did not choose Carte D’or or Solero, we thought that its competitors were not as obvious as the others. We assumed then that the market shares from Unilever and Nestle were the same as in 2006 (appendix 3). These values will enable us to estimate market values for each company and afterwards to calculate market shares and values for each product. We determined the division of the market in four segments: Super premium, Premium, Regular and Economy. The segments were chosen according to a price/quality ratio for each product we took into account (Appendix 4).The different market shares for each segment were estimated assuming that the super premium products would be a market niche with a small part of the market; the premium would be the most part and regular and economy would have similar market shares but smaller. Then, we estimated also proportions for the different products we took into account. Both Unilever and Nestle have 2 different market shares since we assumed that they value different products in different segments. The percentages are Unilever Economy 20% Super premium 5% Regular 15% Premium 60%The premium segment was divided in three different products with different proportions for Unilever and Nestle. Considering that we only studied one product in some segments, we considered the whole segment share for these ones and for the regular we regarded as to have other ice creams besides Calippo that we did not include (we took them into account as â€Å"others†). 3 Unilever – Premium Viennetta 17% Cornetto 43% Magnum 40% Nestle – Premium Tarte Carolina 19% Nestle 43% Extreme 38% Trough the division of the market, we were able to attribute to each product the market share inside its own company.Splitting the different segments, we multiplied the total percentage of the segment to the share of each product inside this segment (Appendix 5). For the growth of each product, we assumed values based on the growth of each segment (Appendix 6). Finally, to calculate the relative mark et shares, we had to divide Unilever’s market share for each product by Nestle’s market share for the respective competitor (Appendix 7). 4 5 Unilever Brand Portfolio: ? Cornetto – It is a premium product that is present in most of the restaurants and cafes in Portugal. Cornetto is a cash cow and yours best seller and that is why we did not consider having a big growth rate. We assumed that this ice cream is already in the desired place in the market for Unilever. Therefore the investments are not very high and it has a big return. ? Magnum – This represents the second best product of your company, also premium and with high sales. However, it is a relatively young brand, only created in 1990, that needs a higher investment than Cornetto to establish itself in the market.Strong investments in new products like the temptations or limited editions like 7 sins and marketing communication plans make this brand a star. ? Viennetta – This is a premium product only sold in restaurants and supermarkets therefore its market share isn’t very big. Although the brand is old and as a take home product it is very popular, not many people buy Viennetta because the take home ice cream market is smaller and most of the purchases are impulse. According to the case study on â€Å"Global ice cream:Nestle goes on attack†, the premium segment is growing up to 3% and since this brand is known by everybody there isn’t a great need to spend many resources on it. Occasional new flavors were added, however without great success. Still, it is a cash cow and therefore a good product because of its growth rate. ? Kids – This category integrates all the children directed products of your company, such as Perna de Pau, Super Maxi, Epa and Mini-Milk, which are cheap products specially directed to children with high levels of milk and calcium.It belongs to the economic segment, therefore, also according to the article mentioned above, the market growth is almost static. In this segment the competition is stronger, because Nestl e makes associations with known brands such as Smarties and Kit Kat, appealing to kid’s attention. The strong 6 investment that the competitors make on this category justifies why Ola is not the leader in it, making it a Dog but still having recent investments and trying to have a bigger market share. Calippo – This product represents the water-based products on your company, it is quite old and there is little differentiation between it and its competitors because there isn’t much space to evolve and innovate, therefore people won’t see significant differences between the value of each brand. There is small investment in this brand and low revenues, and since it is integrated in the regular ice cream segment its growth is small or even static, thus making it a dog also. Ben Jerry’s – This is your offer regarding the Super-Premium market segment, with high quality, high price ice creams with different flavors and colorful presentations. This brand is not yet very well-known and has a low market share because it targets a small market and it is yet in a phase of brand recognition. The company has to spend a lot of money in marketing campaigns to make the brand recognized by everyone and also in the research to find new flavors.According to the case study this market segment is expected to grow up to 6% and all this makes this brand a question mark or a problematic child. One problem for this brand in Portugal is that it is mainly sold in Ben and Jerry’s own stores, which are not many and being a recent brand it is difficult to make people know the locations of the stores. Brand Portfolio Recommendations: According to the BCG matrix your brand portfolio is well balanced, due to you having products in the different quadrants and in different stages of the lifecycle.Magnum, Cornetto and Viennetta are very profitable brands that support the less profitable brands of your company. However, it is not recommended to drop the other brands because your company needs to be 7 present in every segment in order to compete. This will increase brand awareness and reach more customers. Having this in mind, instead of decreasing any brands, you should increase some and adjust others. ? In addition we believe that your company should include low fat products directed to people that want to enjoy ice cream but don’t want the downsides of it. By providing these low caloric and low fat products your company will be covering an important segment that are the women, that according to the Key Note (page 53) are greater ice cream consumers than man, with increasingly focus on image not only in terms of self esteem but also on professional and personal related matters. Ben Jerry’s should create a new range of products with some versions of their best sellers in a low caloric way trying to maintain their original flavor. The other brands should adopt the same strategy and create at least one product with less calories. You should increase Ben Jerry’s market share and brand recognition to transform this problematic child in a star product. An idea can be to create a version of their ice cream for impulse consuming, perhaps adopting a similar format to the magnum ice cream (ice cream on stick) and include this brand in the Ola selling points, thus reaching more consumers. ? Your companies’ Kids segment is no t very well positioned and it is not the market leader. To change this situation it would be a good idea to arrange partnerships with other companies, such as confectionery brands and cartoon enterprises. You could create a partnership with known confectionery brands like Kinder because it will benefit from the other company’s brand recognition with little effort and reach this market segment with better arguments to compete with Nestle. 8 ? On the other hand the company should make a research every six month to determine which are the more popular cartoons at the moment and create a new product that offers prizes related to those cartoons. The basic product should be a high calcium ice cream that changes its packaging and prizes according to the research results.By doing this you will be captivating children’s attention that most of the time is only directed to the appearance and also their parents because you are offering an ice cream that is good for the kid’s health and growth. ? To access the Portuguese market it a good idea to create a new brand that sells ice cream with the flavors of some of the better recognized typical sweets in Portugal, such as â€Å" doce d’ovos†, â€Å"arroz doce† and â€Å"pastel de nata†. This brand would be sold as a premium product in restaurants and supermarkets. Another idea to increase your brand portfolio is to create specifically 18+ products with alcoholic beverage flavors such as vodka, whisky and baileys with special focus on a regional beverage that is Oporto wine that is typically Portuguese. This product should be premium or superpremium and it should be sold not only on the usual channels such as fancy restaurants and supermarkets but also in bars and summer discos. 9 Appendixes Appendix 1 2006 Market Value Growth Market share Source: Datamonitor Market Report 2006 2011 212,8 million 5,7% (2006-2011) 53,9% 161 million 4,3%Appendix 2 Unilever Ben and Jerry’s Magnum Cornetto Viennetta Calippo Kids Outros Nestle Nestle Gelataria Nestle Extreme Tarte Carolina Pirulo Kids Outros Appendix 3 Unilever Market share Market value 0,56 Nestle 0,13 186900000 104664000 24297000 10 Appendix 4 Segments Super Premium Premium Products Ben and Jerry’s Magnum Cornetto Viennetta Regular Economic Calippo Ola kids Appendix 5 Unilever Market Share Amount of Sales (â‚ ¬) 5,00% 5. 233. 200 24,00% 25. 119. 360 25,80% 27. 003. 312 10,20% 10. 675. 728 5,00% 5. 233. 200 20,00% 20. 932. 800 10,00% 10. 466. 400 100,00% 104. 664. 000Ben and Jerry’s Magnum Cornetto Viennetta Calippo Kids Outros Total Nestle Market share Amount of Sales (â‚ ¬) 8,00% 1. 943. 760 23,65% 5. 746. 240,5 20,90% 5. 078. 073 10,45% 2. 539. 036,5 6,00% 1. 457. 820 23,00% 5. 588. 310 8,00% 1. 943. 760 100% 24. 297. 000 Nestle Gelataria Nestle Extreme Tarte Carolina Pirulo Kids Outros Total 11 Appendix 6 Super Premium Premium Regular Economy Market Growth 6% 3% 1,50% 1,50% Source: Datamonitor Market Report 2006 Appendix 7 Relative Market share Ben and Jerry’s Magnum Cornetto Viennetta Calippo Kids Mean 0,63 1,01 1,23 0,98 0,83 0,87 0. 93 Market Growth 5,30% 2,90% 1,67% 1,90% 0,93% 1. 63% 2. 37% 12 How to cite Logoplaste, Papers