Research current digital marketing practices. You will choose an industry sector and analyse the digital marketing strategies of 3 organisations within that industry. you will submit a written report analysing the approaches taken by each company to digital marketing. The aim of this assessment is to gain an understanding of current industry practice in terms of digital marketing and to critically analyse differences in approaches using coursework concepts and additional research findings. Students are encouraged to critique or praise strategies and different approaches based on this research. To make the assignment more practical students are encouraged to connect to the companies through their multiple digital channels such as the website, email newsletter (sign up), social media (subscribe, follow, like etc.,) mobile and so on.
Unilever
Digital Marketing is umbrella term for all the online marketing efforts. Businesses are leveraging digital channels to connect with their prospective and current customers. The companies are aware that the way people used to buy and shop has really changed, which implies that offline marketing is no more that effective. Marketing has been always about connecting at right time with right audience. Today, it means meeting with the consumers where they have been spending time that is on Internet. Here we will be talking about marketing environment of FMCG industry and the posed threats and opportunities. We will be also talking about digital marketing practices of the three FMCG giants, Unilever, P&G and Nestle. We will be highlighting the company’s strategies to Tier 1 marketing and also the strategic marketing mix from a digital perspective.
According to the information hosted by the company on its website about 2.5 billion people use Unilever products to get more out of life and feel good, thus giving the company a unique opportunity for building a brighter future (Unilever 2017). The company has been in the business since 1880 making it one of the oldest multinational companies. Unilever PLC is a fast moving consumer goods company including Personal Care, Foods, Home Care and Refreshments. The company houses more than 400 brands some of them being Dove, Lux, Lipton, Hellman, Magnum, Cornetto and Rexona.
Celebrating its 150th years in 2016, Nestle is largest beverage and Food Company in the world. It was founded by pharmacist born in Germany, Henri Nestle. It is home to more than 2000 brands which range from global icons to favorites locally. Some of the well known brands are Cerelac, Nestum, Lactogen, Cetaphil, Milo, Nescafe, Maggi and Kitkat. They are present in around 191 countries of the world (Nestle 2017).
With a portfolio of quality brands that are trusted P & G claims to touch and improve people’s life around the world. The company was established in the year 1837. Its leadership brands include Tide, Pampers, Ariel, Whisper, Pantene, Duracell, Olay and Gillette. The company’s operations are widespread in around 80 countries with brands available in 180 countries of the world. It has worldwide 50 leadership brands and 24 of these generate annual sales of one billion dollar (P&G 2017).
FMCG or Fast Moving Consumer Goods Industry houses products having quick shelf turnover at a cost that is relatively low and which doesn’t require time, thought and financial investment for purchasing. The key segments include: Household Care, Personal Care and Food and Beverages.
Nestle
Marketing giants of the sector are concocting some greatest marketing stunts in history. Consumers are now becoming more involved in product’s life cycle and becoming keen to get involved in brands and product they support.
Interactivity has become modern age necessity because of internet and social media. Consumers want to get involved with brands they are buying, which is affecting traditional methods of marketing. One of the examples of interactive campaigning can be from Coca-Cola’s “Share a Coke” campaign and the next year it was reinvigorated with Bobby the Dog, who searches his name desperately on the bottle. This campaign catches imagination as well as induces customers to take part (Jarlett 2014).
While data acquisition, storage and processing is improving exponentially, Data explosion is underway. This is inclusive of social media related scores of brand engagement which is generated through searches, likes, mentions, comments, etc. which can be analyzed very well to give meaningful insights. FMCG world is already having weekly consumer sales, consumer panels, brands tracking, shopper’s data from well compensated and friendly retailers. The smarter organizations are using develop products effectively, manage their trade and communicate to consumers (Khanna 2015).
Social Media trend has taken over in all sectors including FMCG. It allows consumers to interact with the brands in a way that would have never been possible before and clever marketers have been using this to their advantage. With most of the big campaigns twitter hashtags are included, like #GivesYouWings (Red Bull), this encourage customers in getting involved and post their tweets with tag, and this way campaign takes off exponentially. The Industry very well understands that consumer information is now just a Google search away. Information is now moving at rapid speed. A tweet, YouTube video or FB post can go viral in hours. Brands may or may not be global but consumers are becoming global by shopping worldwide (Jarlett 2014).
Organic had never been this bigger, consumers are now more aware towards what they are putting into their bodies and also what are the products they are consuming doing to the planet. This issue had been most pressing in FMCG sector as goods are bought here on daily basis. Marketers are now beginning to realize natural products importance without artificial ingredients or additives (Khanna 2015).
This has been growing rapidly in most of the developed markets albeit off a relatively small base. People prefer shopping there groceries online as this does not involve any harassments on their part as they can just select what they want in their basket and pay though cards or e-banking. This is raging nowadays and will be booming in future (insidefmcg.com.au 2017).
Consumer’s purchasing power is going to increase in with economies going to boom across many countries in the near future. These developing economies are going to yield better markets for the FMCG companies to advent.
The FMCG companies can focus on merger and acquisitions with local companies which would help them in reducing competition as well as help them to tap new markets worldwide increasing their world market share.
Many economies like India, China are growing rapidly which means there is a huge scope for these companies to leverage consumer base these growing economies offer. With globalization and media proliferation, consumers are becoming more aspiring towards lifestyle of west which provides infinite opportunities for the consumer goods industry.
As the world is developing consumers have become more health conscious. They are driven by those products which have a thought behind them relating to health and nutrition. The FMCG companies can invest more on R&D and innovate such products which pocket health conscious consumers for them.
This is the primary reasons for the failure of the companies. Market share is lost due to low customer loyalty. It is a key for the FMCG companies to monitor and maintain their market share.
Lack of planning projects and resources risk the project’s ROI which causes failure of new projects or not meeting or exceeding the targets.
Disruption of a single supply chain can lead to a loss of USD 5 million to a company. FMCG Companies have to ensure that they have reliable suppliers who are financially sound flaunting good reputation.
This includes lack of time, short term focus and innovating resources and product.
Unilever
A study conducted on 250 companies by FTSE concludes that about 27% of the company’s market capitalisation is accounted by reputation. Luis Di Como, senior vice president, global media, and Unilever spoke about building those brands which people cannot live without. He quoted,” Brands require clear purpose and clear view point”. Unilever has been branding itself in the digital market aggressively where about 24% of the company’s global advertisement budget was going towards digital media as told by Keith Weed, Chief marketing and communication officer (Brownsell 2015).
(Source: Weed 2017)
Current Marketing Environment
Nestle
In its approach to digital age Nestle has proved itself as a world leader. It has become a trendsetter in tech and marketing world. Nestle has a huge presences across all the channels which include Twitter, Facebook and everything in between. Many of the brands have their own pages and post 1500 times each day. The facebook page has around 180 million fans. It is working closely with partners Google and Facebook and is in process of establishing similar ties with Twitter. It takes a six point approach for building its brands that includes Innovation, Knowing its customers for which it uses social media platforms, winning over shoppers, granting excellent product experience, using and inspiring through brand vision and forming creative and engaging experience of brand.
P&G
P&G is the planet’s biggest advertiser. It spends USD 8.6 billion on advertisement of its 300 brands. Roisin Donnelly who is responsible for building P&G brands says that brands are required to find right mix of traditional and digital media fir its consumers. For brands like Oral B power brush and Braun, e-retailing is business’s key part. Whereas for some brands like high involvement beauty segment, social media is important for having conversation with its customers that is two way and for brands becoming part of the community discussions. However she thinks not every brand requires presence in media. The choices need to be made driven by the consumers (Davidi 2013).
Unilever
Keith Weed said speaking in annual meeting of World’s Economic Forum that digital spending percentage is nearly 50% in digitally advanced markets like China and US. Whereas digital spend has been reduced to lower double digits in India (Reilly 2016).
P&G
As per Marketing Head of P&G, Roisin Donnelly, they understand the consumers for their brands and reaching them when and where they are receptive to the markets. Accordingly as consumers are spending more of their tie on digital media it will continue to company’s marketing activity’s part. However, traditional media has been complementing. In UK consumers have been watching TV on more of the devices as compared to before, and the company needs to be present where and when they are most receptive. Magazine and online newspaper are complementing the offline print. Digital radio is bringing availability to more people of more stations (Dan 2015).
Nestle
Nestle has an undifferentiated market for Polo, this implies that the product is sold at same price and same distribution channels with same promotion and advertising to undifferentiated target group. However the company has been recently making strategies which involve market widening and deepening by use of differentiated marketing (businesscasestudies.co.uk 2017).
Interactive Campaigns
Unilever
Unilever is the world’s second biggest spender on advertisements behind packed goods rival that is P&G (Chapman 2016). The company moved for its marketing to zero based budgeting which is a cost cutting measure implying that every spending on ads would be required to be justified. Weed has been calling the digital market platforms for addressing what he has been calling the ‘3Vs”- value, verification and viewability. Unilever will be more likely to spend on partnering with Facebook, Twitter and Google once these platforms prove that the ads served would be seen by actual people and provide actual vale to business.
P&G
The company’s brand officer is very bullish on marketing’s future. According to him it is example of creative canvas which is represented by art of advertising – taking a brilliant idea of brand and expressing it across media’s vast array, to paint masterpiece which connects with the consumers and builds profit and sales. He feels digital technology is enabling P&G to expand. The company is using the medium for creativity that is enabled by emerging technology and turning it into art and a business model for building brands (Seetharaman 2016).
Nestle
Nestle has been focusing on innovating and marketing which has doubled its ecommerce sales in last four years. E commerce is among company’s fastest growth areas. As per Nestle’s CFO, Francois Xavier Roger, the company has been investing in innovation, in marketing, and in order to premiumise product range. The company also invests a lot in new channels which according to them is at the core of their strategy. The company thrives higher market share online as compared to offline.
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Product Mix |
Unilever |
Nestle |
P&G |
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Product |
The company makes some of the world’s most loved brands like Dove, Lynx and Magnum to name a few (unilever.co.uk 2017). The company promotes benefit of their products using brand communication’s many different channels. For example, Dove’s campaign related to Real Beauty that challenged current beauty stereotypes. Persil’s campaign that, “Dirt is good”, promoting that getting dirty as a positive and natural part of growing up for children – all part of development and learning (Unilever 2017). The company has been focusing on brand differentiation through promotion and pricing. The focus has been also moved to product sustainability. |
The major product line Nestle boosts is beverages in form of Nescafe, milk and milk products, prepared dishes and chocolates. The company launches various promotion campaign like latest one of Personalised Kitkat promotion (Corbin 2017). Recently, an attack was launced by Greenpace on Nestle for using palm oil in their products and how its going to impact natural ecosystem and climate. When Nestle responded through Facebook there was severe backlash. As a result Nestle increased its auditing efforts subsequently in supply chain, and made promise to cut contracts with firms producing palm oil. This shows the company’s adaptability to changes. |
P&G deals in goods with a closely related product range. The company main objective is to make accessible products. The company has been producing its product line through various multi brand campaigns like “My Black is Beautiful”. This effort led the company to reach 2 times as many consumers as in the prior year. Best of all the activation that was live delighted thousands of girls and black women earning this award. |
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Price |
Unilever follows penetration pricing, this implies high quality but low cost. Due to immense competition in the FMCG Sector the company has to price its products competitively. According to market conditions, prices are changed. This market conditions are continuously analysed by the company through the news about the company on social media platforms. The company also gets a lot of information about its competitors through social media platform which helps in pricing. |
Pricing is done as per individual products market. Maggi and Nescafe are clear leaders and priced with high margins. Nestle derives its pricing strength from consumption based pricing or packaging. Nestle offers option in sizes like 16 packets magi in supermarkets and small packets in retail shop. In chocolates due to tough competition competitive pricing needs to be followed. |
The company follows different pricing policy for its products. Where the competition is high for a certain product then the marketing team keeps an eye on competitors price. P&G prices its products based on competitors like if the competitor decreases its price then P&G also comes out with certain gifts or discounts for countering. For new products penetration pricing is followed. And for the high quality goods of premium category, company follows policy of premium pricing. |
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Digital Marketing Communications |
The company has been using various social media platforms like Facebook, Twitter, Instagram, Youtube etc for communicating with its consumers. Marketing and communications officer Keith Weed has been pressurizing likes of Facebook, Google and Twitter to address, value, verification and viewability. As believed by Weed that the experience of mobile ad is still not great and believes that the industry needs to ensure that high quality and engaging content is been made by them. |
As per the company Chief Executive Officer, Paul Bulcke, they are working with big partners to implement and drive the tools for testing communication’s efficiency. Understanding the importance that internet and digital media has, the company has changed the way it engages with its consumers and the way the consumers engage with them. Besides advertisements, the company marks its presence on various platforms like Facebook, Instagram, Twitter and Youtube. |
The company has vision to have one on one conversation between the consumers and the brand, which is tailored to them and their preferences and needs. The Company’s marketing director is of the view that gone are the age of one way push only communications and digital gives chance for building emotional, real and long lasting connections with people in spaces they choose. The company beside undertaking ad campaigns has its presence on all possible social media platforms (Boulton and Howlett 2016). |
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Place (Distribution) |
As hosted on company’s website, they transport from 1600 warehouses daily more than 145000 tones which is equivalent of 274 times each day around the world. The company for improving its presence in e-commerce announced strategic partnership with Alibaba (Alibabagroup.com 2015). |
Nestle runs globally having its setup running in 86 countries. It has global sales and impulsive ones. Nestle understands the importance of Digital Marketing, for improving its disappointing business in China the company has partnered with e-commerce giant Alibaba to innovate its products and digital distribution channels (Zhuoqiong 2016). |
P&G created a digitally enhanced operational program which they call Control Tower in logistics and transport which allows them to see transport done by them: outbound, inbound, raw materials, finished products. They have been using DistributorConnect which links them directly with the consumers. For connecting to retailers they use GSDN (Chui and Fleming 2017). |
Conclusion
Digital marketing has become modern day necessity in every sector. We can see how these FMCG giants are using this tool of digital marketing for advantage of their product. They are using digital marketing to create platforms for their products and reach to global consumers. They are using digital tools to innovate their products because continuous innovation has become truth of today’s business world. They are now trying to communicate more and more with the consumers so that they can create a loyal customer base. These giants are well aware that to sustain in such a competitive market they have to adapt themselves to modern day realm of digital marketing.
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