Introduction
The story of Unilever’s journey in this red-green country for six decades is like the growth and business success of 22 popular brands, as well as positive changes in the lives of people in the country and playing a role in environmental protection. Unilever Bangladesh has a long-lasting impact on society, economy, and people’s lives as a pioneer in the development of the standard of living of ordinary people, supporting the economic development of small sellers (retailers) as well as leadership and talent development for the corporate sector of Bangladesh, human resource development, and various exemplary, innovative ideas. An enthusiastic connection is established through trust.
Business Description of Unilever Company
History
Unilever’s early journey began with the creation of William Hesketh Lever’s Sunlight laundry soap. In the United Kingdom, Unilever’s establishment is at least eight thousand kilometers from Bangladesh. In 1885, William Hesketh Lever launched the Sunlight trademark of soap throughout the supremacy of Queen Victoria. The title of the firm was Lever Brothers. Sunlight conquered the soap market. Not only in the UK, had Sunlight captured a share of the global soap trade. In 1917, the company began to diversify its products. In 1929 Lever Brothers merged with the Dutch food company Margarine Unie to become Unilever.
William Hesketh Lever joined the family business at the age of 15. His father had a grocery business. While working there, he began to learn the art of mixing butter and other products to make soap. In 1884, he developed Sunlight Laundry Soap with his funds. His soap specialty is making Laundry soaps in small pitches. Due to this, these soaps were within the purchasing power of all types of people.
The first Unilever products came to the subcontinent in 1888. A shipment of Lever Brothers goods arrived at Calcutta port that year. It was written, ‘Made in England by Lever Brothers’. Lever Brothers’ first workshop opened in Mumbai, India in 1933. Late they set up another plant in Kolkata. In 1948, Lever Brothers established an industrial unit in West Pakistan. Now Unilever makes sure of commercials in 190 countries. They have more than four hundred trademarks globally. They are the number one company in 44 nation-states in the FMCG (Fast-moving consumer goods) sector. According to Unilever’s yearly statement, their total manufactured consumer goods sales in 2019 were 5,198 million euros, more than 5 lakh crores in Bangladeshi currency.
Mission
Unilever’s mission is to add Vitality to life. We meet daily needs for nourishment, sanitation, and personal care brands that help people express good, feel good, and get more out of life. Unilever Bangladesh has been constantly bringing new and world-class products for the Bangladeshi people to remove the daily work of life.
Visions
The four supports of the vision set out the long-term path for the company:
1. It works to generate an enhanced future every day.
2. It helps people sense good, look well, and get more out of life with brands and facilities that are good for them and others.
3. It will encourage people to take small everyday actions that can make a great change for the world.
4. It will progress new ways of doing business that will permit us to double the size of our company while reducing our environmental effect.
Growth in Bangladesh perspective
Lever Brothers factory was opened in 1964 at Kalurghat in Chittagong, Bangladesh (then East Pakistan). It was a soap factory. After independence on July 5, 1973, Liver Brothers started its journey under the name of Bangladesh. In 2004 Lever Brothers started as Unilever.
It is a joint venture between the Government of Bangladesh and Unilever. Unilever’s share in the company is 60.4% and the Bangladesh government’s share is 39.6%.
Now Bangladesh Unilever has seven factories. One is their own, fashionable the remaining six manufacture products on a contract basis. Their best brands in the market are Lux in Soaps, Lifebuoy, Surf Excel in wheels and detergents, Shampoo brands Sunsilk, Cosmetics brands Ponds and Vaseline, Tea brands Taaza, and Water Purifiers Puret. There are many other brands.
Why is Unilever Bangladesh the market leader?
We use Unilever products daily, some points about how the country’s largest multinational FMCG Company has captured such a large market.
Unilever Bangladesh mainly divided its products into 8 categories. These are given below:-
1. Personal Care (Rexona, Axe, Vaseline)
2. Skincare (Fair & Lovely, Ponds)
3. Skin cleaning (Lux, Lifebuoy)
4. Hair care (Dove, Sunsilk, Clear)
5. Fabric cleaning (Surf Excel, Wheel)
6. Oral Care (Pepsodent, Closeup)
7. Household Care (Vim)
8. Beverage tea category (Taaza, Lipton)
Unilever Bangladesh`s most popular brand is Lux and maximum revenue comes from Toiletry Products.
Unilever has divided their TG (Target Group) into three categories Urban, Suburban, and Rural. Their main customers are the Upper, Middle, and Lower Middle Class. High-class customers will use foreign brand soaps and have to count the loss if they are put in this category. This group of middle-class people is looking for good quality products at affordable prices, and this psychology has been exploited.
Lux is available in the market with 6 different flavor soaps in 3 weight categories (40gm, 80gm, and 120gm) and is priced like other soap brands and close to others.
But why do customers prefer Unilever?
The answer is positioning and promotion.
1. Positioning Strategy: Unilever is creating positioning in the customer’s mind through its product quality, price product visibility and availability (Product Visibility & Availability), and promotion. Due to this customers have become loyal customers.
2. Product Visibility: A survey shows that only 7% of customers are interested in buying different product lines of the same brand name, such as a customer who prefers Dove for soap but Sunsilk or Clear instead of Dove for shampoo.
3. Display of products on store shelves attracts customers: More than 80% of people buy products without prior planning. It does not decide in advance whether I will buy a particular brand or not. In the shop where the same category of products is more on the shelf, everyone can see it, in the superstore or grocery or small grocery store in the mohalla, you will see the leaf shampoo packets arranged in a line, all Lux and Lifebuoy in the soap line, in this way only Unilever products cover the entire 4/5 shelves. No other company’s products are seen. You may not buy soap, buy shampoo but have no plan to buy. Unilever says there is no problem buying Lux, Dove, Lifebuoy, or shampoo. But will my company need it? You may not know that this is a Unilever product, the shelf is arranged with products in such a way that the customer stands in the store and starts making his purchase decision which one he will buy.
Stages of Business Development
Early stage:
The popularity of Unilever has come to us in Bangladesh through Lux and in the customer’s mind, the positioning brand has been created with Lux. There is no one from the rich to the poor who does not know the name Lux.
This lux is BCG Metrics’ Cash Cow (which automatically generates the most revenue year after year). Lux alone has a market share of 50% and all other soap brands together account for the remaining 50%.
Unilever’s Lux is the product that generates the most revenue. Sales will not decrease even if it doesn’t spend on advertising. The market sells 10 million lux of soap every year.
Growth stage:
Although Unilever has been around since its pre-liberation days, the real impetus for growth started in 1999. Since then the sales evolution has reliably been in double digits and at more than double the Gross Domestic Products (GDP) rate of growth. In 2003 Unilever Bangladesh Ltd. was the fastest-growing business for Unilever Asia distributing profitable growth of 17%. They have also strengthened the fundamentals of the business and have been able to double the rate of gross margins, which has provided us with the necessary fuel for growth. During the last few years, the profit after tax has increased more than 8 times, resulting in exponential growth in shareholder’s funds now being one of the highest in corporate in Bangladesh.
Expansion Strategy:
Unilever has 195 distributor houses across the country. There are 5 warehouses. The product is manufactured and goes to the distributor’s house. Distributors have an SR (Sales Representative) who brings the order to the store and delivers within 1-2 days. Unilever gives their distributors a profit margin of 4.67%. Unilever has several services that make product delivery and ordering easier. Such as:-
1. Lever Bazar: There is an app for retailers called Lever Bazaar where retailers can directly place orders at the distribution center without waiting for SR for product orders.
2. Laabher Bazaar: This means some BP (Brand Promoters) are appointed by TM (Territory Managers) and inform customers about the lucrative market offers in major markets. For example, if someone buys Unilever’s specific category products worth Tk 500, then that customer will get a mobile recharge of Tk. 25. In this way, the more money you spend in the market, the more money you will get recharged.
3. Ushop: Unilever has launched the Ushop app for its customers. The customer can order the products he needs from the Ushop app.
4. Unilever Pallydut: Unilever’s new strategy by which their distribution is strengthened.
What is Pallydut?
There are many remote areas where there are no distributors nearby or if there are, the SR from the distributor center does not go there because the shops are far away and have few sales the roads are not good and the cost will be more than the profit.
Pallydut is an individual entrepreneur who takes a certain amount of goods from the distribution center near him and delivers them to those remote shops in his vehicle, be it a bicycle or any other vehicle. These rural workers work on a commission basis, they do not have a fixed salary, a 2% profit margin is given to them from the distribution center and Unilever gives them incentives based on KPI (Key Performance Indicator).
For example: For example, if a Pallydut is told that this month he can supply Lux Unilever to 500 stores, then he will be given such % incentives. He earns money in two ways one is 2% from the distribution center and another is through KPI. By strengthening its distribution and channels, Unilever is the market leader.
Future Growth Strategy:
• Unilever empowers local managers in each country to make any important decisions necessary to strengthen their position in the global market.
• Also, Unilever uses some unique strategies to make their products more competitive and attractive than others. For example, they marketed self-care products gradually through various stages of change and at the same time increased the price according to the quantity and features of the product.
• Creating a strategy to deliver all products to people of different incomes, and different tastes in different parts of the world through marketing strategy.
Strategy and Marketing System
SWOT Analysis:
The following SWOT analysis detentions the key strengths and weaknesses within the business and defines the opportunities and threats facing Unilever Bangladesh Ltd.
Strengths:
• In-depth industry experience and understanding.
• The largest amount of share in the market.
• Having a good number of established brands.
• An exceptional distribution network.
• Having economic benefits.
• Having a strong brand image.
• Product is highly qualified.
• Participative organization style.
Weaknesses:
• Dependence on outside raw ingredients.
• So many alternatives are existing in the market.
• Competitors have strong marketing activities.
• Absence of control in the market.
• Lack of informational trustworthiness, since the market is too large.
• Some products have high prices.
• Product’s quality loses its value.
• Poor Promotion of free samples.
• Having fewer purchase locations.
• Some products are unavailable in rural areas.
Opportunities:
• Contribution to a growing industry.
• Utilization of changing lifestyles of individuals for growing demand.
• The opportunity of rising the market vertically and horizontally.
• Application of new strategies and surprise packages.
• Niche marketing system.
• Launch a new product for customers.
• Has the opportunity to create business in any other sector.
Threats:
• Threats of the market competitors.
• An undesirable outcome on people’s spending because of the current economic crisis.
• The presence of political disturbance throughout the country.
• Many new competitors can produce in the market.
• Some products are served at low prices.
• The price of raw ingredients can go up.
Marketing and Advertising
Promotional Strategy:
• Groundbreaking Campaigns such as “Hairy Tales”, and “Life can’t wait” were launched to attract women.
• Sponsored short films that were shown during popular television shows.
• Media and Print media platforms used.
• Internet and Music Videos Campaign.
• Interned in rural Demo campaigning.
• Environment concern advertisements.
• Free sample dissertation.
• Enhancement of product mix.
• New product preparations according to varying consumer preferences.
Unique Advertising Concept:
First advertising:
Sunsilk started promotion in 1955 with a campaign that motivated specific hair “issues”. In the UK, the campaign is intensive on shiny hair. Through the 1960s, a television commercial of Sunsilk highlighted a tune composed by John Barry, “The Girl with the Sun in her hair”, which proved so popular that it was next released as a pop single.
Sunsilk radio commercial Uniliver was aired in 1969 featuring Derek Nimmo to support the new Sunsilk Herb shampoo for problem hair called “Hairy Tales”. In the first 1970s, Sunsilk was promoted with the slogan “All you need is Sunsilk”.
As a result of taking such exceptional initiatives in those days, the company’s products began to sell twice as greatly and Unilever gained a lot of popularity and became one of the leading companies.
Advertising for Bangladeshi Consumers:
Lux soap and Sunsilk shampoo gained popularity with people through attractive advertisements with popular actresses of Bangladesh.
Simple advertisements of Dove soap by simple girls inspired the common women of lower and middle-class families to use this product more. As a result, within a short period, Unilever Bangladesh became a popular and trusted company for families from the upper to lower classes. Unilever has many brands but they only sponsor 25-30% of their sales through Lux branding, advertising, events, brand ambassadors, and various reality shows like Lux Channel I in various competitions and award shows.
Financing arrangement of the Company
British soap producer Lever Brothers and Dutch margarine manufacturer Margarine Unie mutually formed the Unilever Company in 1929. Primarily be able to its funds by leveraging the substantial capital and assets of the founding of two joint companies. Lever Brothers was founded by assembling money from their established soap business and the business of Margarine Unie Company. The market value of the joint funding of the two companies was $100 million.
Different Stages of Funding:
1. Pre-Seed Funding Stage
Unilever’s early journey began with the creation of William Hesketh Lever’s Sunlight laundry soap. He started this business with his money.
2. Seed Funding Stage (1929s)
Source of Funds: Equity.
The joint funding value was $100 million.
3. Series A Funding or Early Expansion Stage (1930s – 1950s)
Source of Funds: Internal Revenue, Equity, Investors.
Money is principally produced from inside profits formed by its various product varieties, including soaps, margarine, and other daily consumed things. Further equity might have been raised over-invested revenues and possibly reduced equity arrangements from the investors.
4. Series B Funding or Post-War Expansion Stage (1950s – 1980s)
Source of Funds: Internal Revenue, Debt, Equity, Investors.
Unilever carry on to produce through acquirements and departure into new manufactured goods classes such as food, beverages, and personal care. Remarkable acquisitions comprised Lipton Tea and Brooke Bond.
5. Series C Funding or Innovation Stage (1990s – 2010s)
Source of Funds: Internal Profits, Debt, Equity, Shareholders, Divestments.
The company focused on getting brands to support its assortment, such as Best Foods (2000) for $20.3 billion, and Alberto-Culver (2010) for $3.7 billion. These agreements were financed over and done with an arrangement of inner cash funds, debt funding, and equity issuances.
6. Initial Public Offering (IPO) Stage (2010-present)
Source of Funds: Internal Revenue, Debt, Equity, Investor, Shareholders.
Funding originates from numerous stockholders and investors. The Foster Plastic Circularity and Climate Innovation project is funded by the UK government and the EY (Ernst & Young) Foundation.
Financial Presentation of Unilever Bangladesh Limited
First Quarter Financial Report 2024:
• The company’s Earnings Per Share (EPS) for the first quarter (January-March’24) was 11.61 Taka. In the equivalent period of the previous fiscal, the company’s EPS raised at 9 paisa.
• The company’s EPS for the third quarter or 9 months of the fiscal year was 12 paisa. EPS was 10.45 Taka in the same period of the previous financial year.
• The company’s exchange current per portion during the period under evaluation was 13.49 Taka, which was 3.88 Taka in the previous year.
• As of March 31, 2024, the institution’s Net Asset Value Per Share (NAVPS) stood at 133.82 taka.
Audited financial statements:
Unilever Bangladesh Limited is the largest multinational company in the customer goods sector of the country. The company started business in this country about six decades ago. Although doing business in more than 190 countries and regions, Unilever’s largest markets are Asia and Africa. The price of their products was increased last year due to the increase in the cost of raw materials and the effect of devaluation of the currency. In this, the income of Unilever Bangladesh increased in terms of rupees, but the amount of sales decreased. So later the multinational company was forced to reduce the price a bit. A review of the audited financial reports of Unilever Bangladesh for 2020, 2021, and 2022 shows that the company’s business income has increased significantly over the three years. Out of this, the income in 2020 was Tk. 5 thousand 120 crores. The following year in 2021, the income decreased slightly to 5 thousand 100 crores. In the last year 2022, the income of the industry increased to 5 thousand 707 crore 79 lakh taka. Unilever Bangladesh’s profits have been superior to before by about 12% in one year. However, even though the rise in revenue, the quantity of pre-tax profit has reduced slightly in three years. The company’s pre-tax returns in 2020 was Tk. 1,295 crore. The next year in 2021, it increased to 1 thousand 340 crores. Unilever’s global business and financial presentation at the end of 2022 was pretty good.
Unique Selling Propositions
The limited-income people of Bangladesh learned the shampoo that can be used for washing hair by holding a mini pack of one taka. This marketing strategy revolutionized the FMCG market in the country. Products like shampoo were delivered to the homes of the common people of the country.
The marketing strategy was initially taken up by Unilever Bangladesh Limited (UBL). In 2003, they launched the first shampoo brand Clinic Plus in the market for one taka mini pack. After that Sunsilk Mini pack is released.
The technique gained immense popularity. Other companies also market products in mini packs. Not only shampoo but now almost all daily necessities and consumer goods are marketed by companies in small packages.
Success Story
• The journey to this delta started 55 years ago. 9 and a half of every 10 families in Bangladesh buy the company’s products. Bangladesh’s government gets almost 40 percent of the profit. Globally, Bangladesh ranks in the top five in terms of profit rate among 190 countries.
• The company is a British and Dutch multinational. However, in Bangladesh only Bangladeshis work on it. Out of 20,000 workers, only 6 are foreigners. In contrast, 11 people from Bangladesh work in Unilever in different countries.
• According to Nielsen, a multinational market research company, Unilever’s annual sales in Bangladesh are about Tk 9,000 crore. Their share in the FMCG market is 53 percent.
• People think multinationals come to a country only to make money and leave. The word profit is also not positive in Bengali. But Unilever came to this country before independence. Wish to stay many more years. He is investing regularly with a goal. Unilever is one of the best tax-paying companies in the country. The people of this country are getting their profit share through the government. Unilever is also playing a role in socio-economic development.
• 99% of people in Bangladesh use soap, 97% use shampoo, 70% use toothpaste, and 30% use toothpaste, Horlicks has 15%.
• Currently, this British-Dutch company has more than four hundred brands of products from food, beverages, and cosmetics all over the world. Among them, 13 brands are the most important. Dove, Omo, Flora, Heartbrand Ice Cream, Hellman’s, Knorr, Lipton, Lux, Magnum, Rama, Rexona, Sunsilk, and Surf – these 13 products have annual sales of more than one billion dollars. Unilever currently has research and development offices in the UK, the Netherlands, China, India, and the US.
• In terms of revenue, this multinational company, selling products in 190 countries, is the third largest consumer goods manufacturer in the world. As such, Unilever is followed by Procter & Gamble and Nestle. About one-third of the world’s total people, i.e. 2.5 billion people, are consuming Unilever’s goods. Presently, Unilever’s normal yearly revenue is over $60 billion.
Awards and Recognition:
• It has won the Brilliance award in the “Poverty Alleviation” category for its Women’s Empowerment Scheme.
• Received the Best IT Use Award in 2007 from BASIS (Bangladesh Association of Software and Information Services).
• Received two of Unilever’s prestigious international awards at the Asia-AMET (AA) level in 2008.
• Oral Care Team won the Regional Asia Oral Care Awards in 2009.
• It has won the “Asia’s Best Employer Brands 2022”.
• Wins the Bangladesh Sustainability Excellence Award.
Challenges Faced by the Company
• Business Portfolio & Resource Allocation: A portfolio balance and allocation of resources that does not support the business strategy.
• Safe & High-Quality Goods: Removal of a product from the market due to a serious compromise of product truthfulness.
• Continuousness of Operations: An interruption to product supply due to a disturbance in supply chain operations.
• Security: A security opening resulting in the cooperation of company assets, including the risk of harm to people.
• Protection: A serious protection incident that leads to loss of life or challenges confidence in work plan safety.
• Commodities: Commodity exposure that results in a material loss of stockholder value.
• Product Evaluating and Trade Terms: Noteworthy loss of effectiveness caused by inappropriate product evaluating or trade terms.
• Supplier Operations: Significant loss of sales and turnover through ineffective management of supplier operations.
• Accurate Financial Records & Reporting: Material inaccuracy in financial reporting.
• Climate Change: Environmental changes and governmental actions to reduce carbon emissions may disrupt its operations or reduce consumer demand for our products.
• Regulatory Product Compliance: Withdrawal of a product from the market due to regulatory non-compliance.
Future Plan
Javed Akhtar, CEO and MD, of Unilever Bangladesh, said, “As part of Unilever’s worldwide promise to build a civilized world, we have been using ground-breaking methodologies to plastic waste management since 2020, together with innovation in wrapping and developing and functioning a maintainable model for plastic waste collection is included. To implement Bangladesh’s ‘Vision 2041’ we must challenge plastic pollution and take immediate action to protect our environment. At Unilever, we have started working through our multi-stakeholder ideal and we have united with numerous stakeholders in the value chain to bring about the preferred change. Though we can now proudly say that we have composed more than 7000 tons of plastic waste from Chittagong and have confirmed 100% recycling of the composed plastic, this is not enough to improve the overall plastic pollution in Bangladesh. Javed Akhtar also said that we have partnered with Chittagong City Corporation and IPSA to increase our efforts to achieve ‘economies of scale’.
Unilever Bangladesh (UBL) and the Global Alliance for Improved Nutrition (GAIN) have jointly launched a pilot project to increase environmental sustainability and improve public health in urban areas. The objective of the project is to develop alternatives to plastics used in the food market to reduce waste and recycling and to support plastic product suppliers and waste collectors.
Unilever will continue to strive towards the joint goal of a waste-free Bangladesh by partnering with the Government of Bangladesh and other partners to reduce the impact of plastic on the environment and strengthen efforts to build a more sustainable future.
Conclusion
Unilever Bangladesh Ltd. is a very popular organization in Bangladesh. They are trying to social work for Bangladeshi people. In my opinion, they are doing some important work for this society. And they will also improve in the future.
If the services are good the demand of the customers will increase daily. The quality of the product should be better and the price should be less. As Unilever is a multinational company, it will be more established if it opens more outlets in more countries. UNILEVER is a globally successful company, they create brands for specific countries and regions. Products, for example, found in South America will not be found in South Asian countries. Since cultural alteration exists worldwide, the manufacture and supply of brands have to be taken seriously. UNILEVER Bangladesh is the market leader in home and personal care goods. The UNILEVER products can gain customer satisfaction and trust. Their production and distribution is expanding rapidly.