Unilever haircare strategy fits troubled times

"Consumers amid the crisis want value at reasonable prices. Various haircare brands are available to be their choice and they're ready to shift to those that can offer them high value," Porranee Ungpakorn, marketing development director for the haircare group, said last week.

Amid the economic crisis, every brand is fighting hard to boost sales, while consumers have switched to seeking value-added products with a limited budget.

That makes it quite difficult for the haircare group to adapt its marketing plan to meet consumers' needs, she said.

"My haircare team and I have returned to studying the company's plan during the 1997 financial crisis in order to know that what strategy we used to survive the crisis.

"We have used parts of that strategy again in this round and there are some new methods that fit with the current situation, which we will apply to the market," she said.

Porranee has worked with Unilever for 17 years, of which 11 have been in the haircare group, whose three brands - Sunsilk, Dove and Clinic Clear - commanded 51 per cent of the Bt11.8-billion market last year.

Unilever's haircare strategy for this year has three focuses. First, the company will analyse the market and consumer behaviour with a short time frame because the market has been evolving rapidly due to the serious competition.

There is a lot of marketing data from various agencies, showing the haircare market situation, such as market share. Unilever uses that data to make sure it is going in the right direction.

Second, Unilever will offer more value to consumers by upsizing its products such as shampoo but sell them at the same price. It has done this with Sunsilk and Clinic Clear, while it chose to downsize Dove's packaging and sell it at a lower price because it wants consumers to easily approach the brand, which is positioned above Sunsilk and Clinic Clear.

"Several brands take a similar strategy. Fortunately, Sunsilk is the market leader, so if we offer more value, consumers will trust us and continue using our brand," she said.

Last, the company will cut operating costs to maintain its gross margin.

"The policy to increase quantity and resize the products' packaging has affected Unilever's revenue. So, we have to cut other unnecessary costs in order to maintain our profit," she said. The marketing strategy appears to be working, as the market shares of Dove and Clinic Clear were lifted from 9.7 per cent and 13 per cent last year to 10.8 per cent and 13.2 per cent last month, respectively, while the market share of Sunsilk was propped up at 26 per cent.

The haircare market in the first five months grew by 11 per cent, while Unilever's sales in this segment increased by 15 per cent. The haircare group ranks second in revenue contribution to the company.

The haircare market this year is expected to expand at a double-digit rate from Bt11.8 billion last year, she added.