This cooperation has helped Unilever Viet Nam save import cost, price reduction, so that strengthen competitiveness of its products in Viet Nam’s market, also support Vietnamese partners
Trang 1OPERATIONS MANAGEMENT
Strategy for Omo Washing-powder of Unilever Company
I Introduction on Unilever
Unilever is a multinational Group of the United Kingdom and the Netherlands which is famous in the world for production of fast consumption products including personal and family hygiene products, foods, tea and tea drinks
The establishment of Unilever Viet Nam in 1995 is one step in the overall strategy
of Unilever Unilever Viet Nam is a group of three separate companies: Lever Viet Nam
(headquarter in Ha Noi), Elida P/S in Ho Chi Minh City and Best Food in Ho Chi Minh
City
Unilever Viet Nam currently has 5 factories in Ha Noi, Cu Chi, Thu Duc and Bien Hoa Industrial Zone The Company has deployed its distribution system nationwide with more than 350 big distributors and more than 150.000 retail stores Currently, the growth
of the Company has been 35-40% and recruited more than 2000 officers In addition, the Company has cooperated with many domestic companies in processing, supplying materials and finished packing This cooperation has helped Unilever Viet Nam save import cost, price reduction, so that strengthen competitiveness of its products in Viet Nam’s market, also support Vietnamese partners to develop its production and promote income for officers and create more 5500 jobs
Trang 2The generally accepted trademarks of Unilever include Lipton, Knorr, Cornetto, Omo, Lux, Vim, Lifebouy, Dove, Close-Up, Sunsilk, Clear, Pond’s, Hazeline, Vaseline, etc
And Omo washing-powder is one of the typically famous products of Unilever Company
II Purposes of the strategy
1 Purposes:
- The main purpose of Unilever Company is to control 50-60% share market in Viet Nam
in supplying personal and family caring products in order to make the Company the leading in this field
- The annual increase of sale of these products reaches about 20-25%
- Access to almost consumers of average income in Vietnamese society
- Adaptation of products of the Company in Viet Nam
- Making the customer feel and appreciate product of the Company sin comparison with the same kind in the market
Among which, Omo products have to diversify styles and categories, satisfy the demand of the consumers In addition, the products have to make the consumers to easily access to its products by the distribution channel nationwide
Suitable price by investing in the modern facility, promoting productivity and quality
Strengthen competitiveness with the competitors by promotion and building trademark through society activities To achieve those purposes, Unilever Viet Nam has defined many solutions for realizing those purposes
2 Market analysis
Trang 3Competitors: In business, there are always competitors in each sector, especially
for Omo - an essential product Currently, the competitors of Omo are Tide of P&G and some other domestic washing-powder enterprises
The high competitive market requires Unilever to have criteria for its products as well as the access to the particularity of Viet Nam’s market
Although this is a popular product, the method to access the right consumers has been considered by Unilever
A long-term and persistent plan and the strong finance are also the decisive elements for the success of Omo products
III Solutions for implementing the strategy of the Company.
One of the desirous success of Unilever Viet Nam when operating in Viet Nam was the expansion its products in the market of Viet Nam In a short time since the Company opened its operation in 1995 and introduced its first product of Sunsilk and Omo later on This trademark, by wide marketing plan on media has played an important role and been considered the very first choice of the majority of Vietnamese households It also means the rapid increase of distribution system, branches, wholesale and retail agencies
- Implementing the strategy of gradual reduction of price to attract more consumers (especially the mass reduction of products including OMO)
- The distribution system has to satisfy the criteria of “always visible and available”
- The products have to always change to attract more consumers, satisfy the various demand and potential demand of the consumers
- Thorough customer care
- Implementing and utilizing media to attract consumers (entertainment on television, press, poster, sponsor, promotion, etc.)
Among which, the most expected by the Company is the implementation of the promotion campaign of trademarks of the Company The Company directs most of
Trang 4activities of the Marketing Division to this operation, considers this operation the center of the Marketing Division in the years the Company began its access to Viet Nam’s market
1 Market element:
+ Economy:
The element of economy has its huge effect to the consumption of the customer and creates the variants of the Omo product satisfying the demand of the customer such as: convenience, quality, sense, etc
Furthermore, Omo of Unilever has partly satisfied demand on:
- The bleaching ability;
- Diversification of styles and weight: 100g, 800g, 3kg
The increase of income of the people and the less time need the convenient product that helps save cost, time but good effect resulting in the founding of fragrance Omo that helps the housewives to save time for the shopping for suitable products
+ Natural resources:
It is the important input for the enterprises and has big effect to the marketing of the enterprises
Currently, the resources for the production have been exhausted, negatively effecting to the production of Omo such as the increase of cost resulting in the increase of price To overcome this problem, Omo has changed it image to attract customer For instance, the traditional color of Omo was red and white with blue, Omo has changed to add green and orange, etc However, due to the increase of price, there has been reduction
in consumption of some products
+ Technology:
In order to create various products and strengthen its competitiveness, Unilever Viet Nam always focuses on applying information technology to sales; production so that
Trang 5helps Omo to be diversified in products, suitable price, available information on press, television, internet, etc Therefore, Omo has been close to the customer
+ Legislation:
Currently, Viet Nam has been deploying the open-market policy that creates favorable conditions to access to the good products which brings high benefit However, there are obstacles such as taxes resulting in the increase of price and Omo is affected causing the increasing price of some products, so that the customer has choices and consideration
+ Culture:
Consumption culture and characteristics of Vietnamese deeply affect to the choice
of products such as the convenience, quality, style, etc To meet those demands, Unilever has profound Omo categories satisfying the various demands
- Customers favoring the white clothes: Omo Whitening, dislodging 99% dirt: Customers favoring the white and fragrance clothes: Unilever profounds fragrance Omo, Omo matic, etc
2 Market for Omo
Washing-powder market, supplying product with high bleaching ability and quality
- Market segment:
Unilever segments the market for Omo trademark upon the population and geography, based on variables as follows:
Urban scale and density: Omo mainly controls big cities and towns nationwide as these are the attractive and beneficial market The population density of these locations are quite high and also the demand of bleaching products
city
Population
(million):
urban
Trang 6- Gender: Including male and female However, the targets are mainly the
housewives who are decisive in choosing the trademarks of consumption products for their households In particular, when choosing the washing-powder trademark for their families, they consider the bleaching ability, thus Omo defines its main function as ability of bleaching and cleansing
- Age: Everyone has demand of the product However, the strategy targets the
customer of ages from 18, adults, and stable income or getting married When choosing the washing-powder trademark, they mainly consider the quality and prestige of that trademark
- Family scale: Expansion, including 2 to 3 generations The bigger the family
scale is, the bigger the demand of washing-powder
- Income: The comparatively The customer chooses the different weight depending
on their income
- Occupation: Carriers with stable and high income such as officer, doctor, etc In
addition, Omo also targets to people working in the environment of dirty ability in order to show its advanced bleaching ability such as mechanical engineer, constructional engineer, etc
- Slogan of the product:
Target to the right customer, Omo has propagated the contensive, intelligible and impressive slogans through media such as:
- Whitening Omo targets to people working in the dirty environment
- Fragrance Omo targets to affirmative people and people who want to save surplus water
- Omo matic targets to customer using washing machine
- Omo cleansing dry dirt
- Omo - dirt cleansing expert
- Omo - Learning the good thing, we are not afraid of dirt
Trang 7- Omo cleansing 99 hard dirt.
…
- Location in the market
Location is one of the steps Unilever has done the best All the customers know this product With the strategy of location, Omo creates the difference to the competitors
This strategy of location is very successful as when people think of Omo, they think of the “whitening” To reach this achievement, the Company has planned many strategies such as: “Omo – future
“Omo – white clothes with bright future” highlights its advanced bleaching ability Especially, Omo organizes to interview customer on their experience when using Omo That has been considered the “torture” to the customer for the long time but quite effective The result is that everyone knows Omo with the whitening ability
Furthermore, Omo has introduced fragrance comfort of Omo product, creating the abundance for the category which can remain the fragrance in addition to the whitening
The good thing when speaking Omo, customer always thinks of the charity activities in connection with this product And the appearance of Omo is more than Tide
We can see the image of Omo everywhere This makes Omo a popular trademark to the customer
- Strategy of product and product valuation.
1 Product
Character: a strong product expertises in the bleaching characteristics with higher
bleaching than other washing-powders that is able to cleanse the dirty points in the clothes
Trademark: The mnemonic and brief name
Packaging: Packaging is considered the fifth “P” following Product, Price, Place
and Promotion Packaging is regarded as the quiet seller, that is why the package of Omo
is very prominent and impressive The traditional color of Omo includes red, white and blue The package has been promoted in order to strengthen the best convenience and style for the customer as well as the best protection of the product And Omo has introduced the
Trang 8package sample applying to all products of “popular” category of all kinds of weight The difference of this new package is that the image on the both main sides of the package In addition, there are two other colors including green and orange of “splat” symbol – symbol
of “playing and learning” dirt All of those are designed on the extraordinary, harmonious, close and lively way
Size: To best serve the customer, and satisfy all the demand of consumption, Omo
designs various sizes including 400g, 800g, 1.5kg, 3kg, 4.5kg, 5 box/bucket
2 Price and strategy of price valuation
Price is an important factor in Marketing mix including retail price, wholesale price, discount, credit The price must in compatible with the value received by the customer and has competitiveness
As considering 80% of Vietnamese customer in the suburban with low income, Unilever Viet Nam set the goal to reduce the production cost to have the suitable price for the customer The Company has relied on the small local enterprises to research for the local material replacing some imported materials This helps reduce the cost and import tax In addition, the Company distributes its production, packaging for the branches in the Northern, the Middle and the Southern to reduce transportation and storage cost Unilever has also implemented the strategy of financial support for the local enterprises to improve equipments, technology transfer, training In fact, the famous Omo product in Viet Nam is produced by Vietnamese
Omo has meet the demand of the customer at that time: The customer needs a washing-powder with high quality, especially the good bleaching ability and suitable price Omo has applied the strategy of price accessing the market In 5 first years, the Company remained the price and the quality although other products increased their prices due to the effect of price of material and petrol These measures helped Omo to gradually control the high share in the market
Omo and Tide control the market and critically compete Experience of Unilever in
the competitive environment with competitor P&G: “if two competitors have the equal
Trang 9share, who increases its share can make the difference on the turnover and cost and thus resulting in the strong competitiveness advantage” There is no reason for loss of share because it will result in the reduction of competitiveness advantage, benefit, increasing cost and will be the threat to loose market
Therefore, in 2002, the market witnessed the fierce battle on price between OMO and Tide for controlling the market The strategy of reduction of price has been opened in
the early August 2002 between P&G and Unilever.
This battle triggered when P&G reduced price of Tide from 8000d to 6000d/bag of 400gr, in response, Unilever reduced price of Omo from 7500đ to 5500đ/bag 500gr P&G continued to reduce price of Tide from 6000đ to 4500đ/bag of 400gr Unilever set a new strategy to encourage the agencies: displaying one Omo bag should receive 1000d, as well
as increasing price by reducing the weight, the Omo bag of 500gr with price of 5500d reduced to 400gr In variety stores, supermarkets, Omo trademark invading the market, Omo tower was built of ten meter in the big supermarkets Price of Tide of P&G reduced 30% and price of Omo reduced 26%, and the customer enjoyed the benefit As the price reached to the floor, the trademarks increased their price and the battle was settled and the price came back to the original At this time, the customer was familiar with the Omo trademark, so that they were satisfied irrespective of the little increase of price of Omo
After 6 months of competition, these two trademarks started cooperating, and increasing their prices up to now Since 2002, prices of Omo and Tide have increased of 10.000 d/kg"
3 Distribution system
In 1995, Unilever accessed to Viet Nam and decided to create a nationwide marketing and distribution system, in other words of 100.000 locations Unilever deployed its concept of online retail, using sale officers to every retail points who are in charge of new orders, delivery and granting credit for the next order The retail points were annually equipped display shelf, using the space for their stores and the attractiveness of the
Trang 10product Furthermore, the Company supported the distributors to arrange the loan, vehicle, management training and sale organization
Currently, as the Vietnamese economy has rapidly increased, illustrated by becoming an official member of the WTO, creating favorable conditions for the segment
of market, the companies has gradually increased their distribution quality Unilever Viet Nam not simply divided the market into 7 sale areas including NorthEast, NorthWest, Northern of the Middle, Souhthern of the Middle, Eastern, Ho Chi Minh City, and Mekong Delta, but divided upon the priority Accordingly, big cities are divided into one Company, Group of media distribution channel 2 (GT2) including Ho Chi Minh city and Ha Noi, GT4 including GT2 and Da Nang, Can Tho; GT8 including GT4 and Hai Phong, Vinh, Nha Trang, Bien Hoa Therefore, we can see the rapid development of the distribution channels, creating the favorable conditions for the Company to sale more products and enjoyed huge benefit Omo is a kind of personal consumption product, thus, the distribution channel is different to the others
- First, as a direct channel from the producer directing selling to the final customer
Thus, the Company has used the direct sale force, via mail, order by mail, sale by Catalog, etc These methods shall permit the customers to buy the product through promotion media without meeting the seller
- Second, through indirect channels as the agent is the connection between the
producer and the customer
Producer => Retail agency => Customer
Overview on Vietnamese market: with the characters such as 75% of 82 million of population in the suburban, the complicated retail market with 450.000 stores, the control
of wholesale stores Moreover, the habit of shopping of Vietnamese to choose the distribution channel such as through agents, supermarkets, distributors, etc Vietnamese customer usually shops daily in stead of shopping at the weekend Unilever utilize the available channels such as markets, wholesale points