Unilever Canada Becel Margarine Case Analysis Table of Contents Executive Summary Introduction Problem Identification Situation Analysis Customer Environmental Analysis Competitive Analysis SWOT Analysis Alternatives “Run Canada, Run “Now We ” re Cooking with Becel “Body By Becel ” RecommendationImplementationConclusionAppendicesI. Executive SummaryBecel needs to adjust their promotional efforts to address both a heart healthy and great tasting product, while expanding their target market to the twenty-five and above demographic. Becel’s current customers are largely empty n ester households where the customers tend to be affluent with high incomes and over sixty-five years of age. By adjusting their promotional efforts to address both a heart healthy and great tasting product, Becel will be able to meet the needs of the twenty-five and above demographic.
Becel’s strengths include a strong reputation as a leader in heart health and nutrition education, being the premium priced margarine, and the highest consumer loyalty of any margarine category. Among some of the weaknesses of Becel are lack of a strong presence in Western Canada, not positioned as great tasting, and a low advertising awareness. Opportunities include the consideration of health and taste when selecting margarine, selling in bulk quantity to large family households, and increased awareness of health issues. Canola Harvest positioning their margarine as the healthiest and best tasting and offering it at a lower price, competitors gaining market share at a faster rate than Becel, and regulations on the margarine category are among the threats facing Becel. Three alternatives were developed to help solve Becel’s problem. “Run Canada, Run” portrays Becel as the margarine that is geared towards a heart-healthy lifestyle.
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“Body by Becel” conveys how Becel can help you lose weight and stay healthy. “Now We ” re Cooking with Becel” demonstrates how Becel can be used in a variety of healthy, day-to-day recipes. Innovative Solutions’ educated recommendation is “Now We ” re Cooking With Becel.” This will allow Becel to expand their target market, while promoting their product as heart healthy and great tasting. By implementing this recommendation, Becel will have the opportunity to create a competitive advantage and gain market share. II. Introduction Unilever was formed in 1930 when British soap maker Lever Brothers merged with the Dutch company Margarine Unit.
This merger “allowed both companies to benefit from many raw materials and resources that they had in common” (Kerin and Robertson 600).
Unilever Canada is a division of the international Unilever group, headed by two parent companies, Unilever NV and Unilever PLC. They are headquarter in Rotterdam and London. Lipton food division acquired Becel Margarine in 1999.
Today Unilever is one of the world’s largest consumer products companies. Becel Margarine was launched in 1978 as a premium priced product, positioned as the heart healthy margarine of choice. Previously, the Becel brand had been positioned as the heart healthy margarine of choice in Europe for twenty years prior to Canadian introduction. Despite unique positioning Becel struggled for many years gaining only 8. 1 percent market share by 1991.
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Unilever considered several options for growing the Becel brand, such as, price decreases, repositioning the product, and dramatic increases in advertising support. In 1991 Lipton devised the strategy “living a life that is young at heart.” This strategy was very successful with its current target market, 65 and above. In the butter and margarine category, butter holds fifty percent of the market. The Dairy Bureau of Canada positions butter as tasty and natural, which is conveying that margarine is processed and does not taste as good.
However, that is not true, margarine is better for you than butter and does suit consumers’ tastes. In addition, the health focus of the butter and margarine market is growing. More and more competitors are positioning their product as healthy for the consumer. For example, Parmalat is a brand of butter that has just entered the margarine market to compete with Becel with the brand Lactantia. The outline for the analysis will begin with the problem Identification.
This will convey the problem that Becel must address so it will be able to continue operating in today’s society. The situation analysis will follow the problem identification and will include the customer environmental analysis, the competitive analysis, and the SWOT analysis. Subsequently, three alternatives will be presented that will address the problem Becel Margarine is facing. A recommendation will then be made that best solves the problem at hand.
As a final point, a conclusion will be made of why this is the problem facing Becel and how the recommendation will remedy that problem. III. Problem Identification Becel needs to adjust their promotional efforts to address both a heart healthy and great tasting product, while expanding their target market to the 25 and above demographic. To adjust their promotional efforts the company needs to redirect promotions to reach the 25 and above market and differentiate Becel from its competitors.
In addition, Becel needs to focus on delivering the message that their margarine is a heart healthy and great tasting product. Becel will expand their target market by creating a promotional campaign that meets the needs of this expanded target market. The company targets consumers that are educated, affluent, health conscious, and primarily 65 and older. However, in today’s society more consumers are striving to live a healthy lifestyle. With this in mind, the 65 and older market is not the only one concerned with their health. Therefore, Becel should implement a promotional campaign that would expand their target market and meet the needs of consumers.
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Becel needs to address the problem of adjusting their promotional efforts now. “By 1999, the health segment of the margarine market had become very competitive, with many brands attracted by the success of Becel and consumer interest in healthy products” (Kerin and Robertson 601).
More and more companies are entering the health segment of the margarine market and selling at a lower price than Becel. In addition, not only does Becel have to compete with other margarine’s but butter which has just over 50 percent of the butter / margarine market. Becel has 99 percent brand awareness with its current target market but a 24 percent advertising awareness. Therefore, one source of their promotions is not successful in reaching consumers.
By adjusting their promotional efforts to expand their target market, Becel will be reaching a new segment of the market and be able to gain more market share and a competitive advantage. IV. Situation AnalysisA situational analysis summarizes relevant information into a format that the organization can understand. The situational analysis includes a customer environmental analysis, a competitive analysis, and a SWOT analysis. The customer environmental analysis will provide information to Becel for understanding their current and potential customers. In a competitive analysis the company will discover what their competition has to offer today’s consumers.
The SWOT analysis will help them see their strengths, weaknesses, opportunities for the future, and the threats that they may face. Customer Environmental AnalysisA. Who are the current and potential customers? Becel’s current customers are largely empty n ester households where the customers tend to be affluent with high incomes and over sixty-five years of age. Potential customers for Becel are people in the 25 and above age demographic.
A target within this demographic is large families that have an average income, consisting of four or five members. Becel’s target market is located throughout Canada. This demographic is health conscious, and strives to find foods that compliment heart healthy lifestyles. The adult in the household is the usual purchaser of the product and is financially responsible. However, margarine can be used in a variety of different recipes, and would be consumed by the whole household. The adults in the household influence margarine purchases.
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B. Where do the firm’s customers purchase the products? Becel margarine is distributed in a wide selection of locations and stores. Grocery stores such as, Lob laws and So beys, are one of the channels of distribution being used currently. Convenience stores like Becker’s carries the Becel brand as well. Other examples are discount super stores such as Wal Mart and Zeller’s.
Becel is also sold at club stores such as Costco. However, the main distribution channel is the grocery store channel. C. When do firm’s customers purchase the products? Margarine is not seasonal. Consumers purchase margarine throughout the year.
The product is used in cooking and is used as a spread. It is purchased when the previous source of margarine has been consumed or when the anticipation of a future need presents itself. D. What customer needs do we satisfy? What do the firm’s customers do with the products? Becel is able to satisfy the psychological and physical needs of consumers by being the “best margarine for your heart’s health” (Kerin and Robertson 599).
In today’s society, many consumers are concerned about their health. Becel, being healthier for the consumer than other margarine’s or butters, is able to help consumers lead a healthy lifestyle. With this in mind, when consumers lead a healthy lifestyle they begin to have more confidence in themselves, which helps solve self-esteem needs. The functional needs that Becel satisfies are it adds taste, fits a healthy diet, and meets the baking needs of the household. E. Why and how do the customers select the products? Consumers select margarine on the basis of taste, health and price.
Consumers who purchase margarine on the basis of taste account for the lowest volume of margarine purchased. Health and price accounted for relatively the same amount of volume purchased by consumers as did on the basis of taste. Studies show that the majority of Becel’s target market does not select just one source to base their decision on. Becel is sold as the premium priced margarine. However, all margarine’s are priced lower than butter. Brand switching is very high for the margarine category however Becel has the highest brand loyalty at 50 percent.
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F. Why do potential customers not purchase these products? Although, consumers buy on three attributes of margarine price can be a determinant. A consumer might start out buying another brand because it satisfies the same needs as Becel but is offered at a lower price. In addition, Becel’s potential target market primarily has a lower than average income and might choose to buy a lower price brand to save money. Consumers who are not health conscious might not buy Becel margarine.
Another reason consumers might not by Becel is their preference for butter over margarine. Potential for converting customers to the Becel brand is extremely likely. The brand has exceptional brand awareness within its target market. Becel is premium quality margarine and helps consumers lead a healthy lifestyle, which is appealing to their target market. Competitive Analysis The competitive analysis consists of the main brand, product, generic, and total budget competitors and their characteristics. Brand competitors market products that are direct substitutes and have similar features and benefits to the same customers at similar prices.
Product competitors compete in the same product class, but with products that have different features, benefits, and price. Generic competitors market very different products that solve essentially the same basic customer need. Total Budget competitors compete for limited financial resources of the same customer. A. Brand Competitors Parmalat Lactantia competes as a direct substitute for butter (the leading product in the category) on the positioning statement “the makers of great tasting butter now bring you great tasting margarine.” The company has only secured a small portion of the market share but their share is increasing at a faster rate than Becel’s. Canola Harvest is positioned as the margarine with the best taste and best for one’s health because it contains canola oil.
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Retailers like this product because it offers many of the same benefits as Becel but is sold at a cheaper price. As with Lactantia, Canola Harvest has secured only a small share of the Canadian national market and that is mostly in western Canada. B. Product Competitors Butter is the largest competitor in the market but remains in the product category because it does not have the same benefits and features as Becel. Butter has over fifty percent of the market in Canada. This product is positioned aggressively by the Dairy Bureau on its primary benefit of taste and naturalness.
In addition, butter advertising depicts margarine as “processed food.” Butter also boasts a fifty percent share of advertising spending in the category with about $7 million / yr . Another competitor in the product category is Olivina. Olivina is positioned using a “Mediterranean diet” association (centers around the use of olive oil).
Health professionals are starting to favor recommending olive oil over margarine and there is a growing interest in olive oil among consumers.
While the company only has about 0. 6 percent of the market at present time it is showing strong growth. C. Generic Competitors Generic competitors consist of many products such as spices, cooking products, and spreads that can serve some of the same purposes as Becel margarine. One example of this kind of product could be seasonings for baking and frying.
Furthermore, marinades and dressings could serve as a substitute for Becel margarine. When considering Becel as a spread rather than an ingredient for cooking, other generic competitors present themselves. Among these competitors are peanut butter, cream cheese, jam, and others. D.
Total Budget Competitors Total budget competitors can be viewed as anything that prevents a consumer from cooking with Becel. Restaurants fall into this category. If consumers go out to eat then they are not at home cooking with the Becel product. The same can be said about having food delivered to one’s home.
Another type of total budget competitor could be prepackaged meals. These products are usually seasoned during manufacturing therefore cutting the need for consumers to use Becel in either the preparation or for added flavor. SWOT AnalysisA. Strengths Having created the Heart Health Information Bureau, Becel margarine has established a strong reputation among customers as a leader in heart health and nutrition education, thereby fostering trust of Becel among customers.
Along with being a leader in heart health, Becel currently commands a higher than average price premium in the health margarine category and thus has effectively managed to communicate quality to their consumers. In a market where brand switching is relatively high, Becel has managed to retain the highest consumer loyalty of any brand in the category at 50%. Another strength for Becel is their ability to effectively utilize advertising to gain market share (Advertising campaign of 1991) which will in essence allow them to obtain a larger amount of advertising revenue from Lipton than some of their co-subsidiaries. Finally, Becel the largest market share in the margarine category. B.
WeaknessesBecel’s lack of presence in Western Canada leaves room for competitors to take over that market and this is a point of weakness for Becel. Even though Becel’s margarine has been positioned as healthy, the product is not considered to be great tasting, unlike Canola Harvest. Thus a large group of consumers that consider taste when purchasing margarine may not purchase Becel. In addition, Becel’s positioning as the “best margarine for your hearts health” has made them a target for competitors.
Furthermore, Becel has very low advertising awareness (twenty-four percent).
This fact illustrates how Becel is wasting money, as the advertising is not reaching the target market. C. Opportunities About twelve percent of the margarine buyers in this market consider both health and taste when buying margarine. This offers Becel the opportunity to market to this group without compromising prices.
Another opportunity for Becel to explore is large family households; they are the biggest consumers of margarine and are likely to purchase larger quantities. Becel could sell greater quantities by targeting their product to this large family group. D. Threats Canola Harvest is positioned as the “best for your health and best tasting” product and is sold at a lower price than Becel.
It could therefore steal some of Becel’s non-loyal market. Another threat for Becel is Parmalat’s Lactantia. They are gaining market share at a faster rate than Becel and could make inroads with not only the margarine market, but also with the butter market that Becel targets. VI. Alternatives “Run Canada, Run ” Becel will become a sponsor for a number of marathons across Canada. By becoming associated with an array of marathons, Becel will enhance their position as the heart-healthy margarine of choice for Canadians through attendance and intense media coverage.
The Canadian Broadcasting Corporation (CBC) and CHUM Limited (parent company of thirty-three Canadian television channels and thirty-three radio stations) both cover these annual events (cbc. ca and chum limited. com).
Additional prestigious sponsors for these marathons include Honda, Holiday Inn, Hilton, and Motrin among others.
Furthermore, marathon participants are of all ages, in good shape, and generally have healthy diets. The sponsorship will enhance the already present image of Becel as a heart-healthy product. A. Advantages o Reaches health conscious participants and viewers on site and through intense media coverage o Helps Becel become an advocate for the prevention of heart disease Marathons spread out across Canada. Disadvantageso Limited to five events annually o Interest may be minimal in areas not geographically located near marathon sites “Body By Becel ” Becel will become integrated into Canada’s Weight Watchers (WWC) meal program. Becel’s margarine is low in saturated fat and free of transf at, which is necessary for the program.
The margarine company will have opportunities to advertise in monthly program magazines such as WOW in the Ontario Region. By reaching the millions of members and the 1100 meeting places across Canada, Becel will be featured as a more appealing, better-tasting, healthier alternative to butter. A. Advantageso Reaches health-conscious program member so Lack of transf at and low saturated fat assists in weight loss o Membership is Canada-wide. Disadvantageso May be labeled as a product for people who are just trying to lose weight o Exposure limited to only Weight Watchers members “Now We ” re Cooking With Becel ” Becel will become the “butter substitute of choice” for the Food Network of Canada (FNC).
As one of the top fifteen cable channels across all age demographics in Canada (Nielsen’s Canada), FNC will prove to help Unilever Becel expand their target market. While Becel will be integrated into FNC’s programming, the company will focus its promotional efforts on the show Cooking Thin. Hosted by Chef Kathleen Daelemans, the show aims to teach viewers how to cook nutritious meals at home. Their association with a health-centered television program will promote Becel’s heart-healthy position.
A. Advantageso FNC is one of the top fifteen cable channels among all age groups in Canada thereby increasing exposure o Product placement will almost ensure that the audience is aware of Becel’s involvement with the show Cooking Thin’s audience falls into Becel’s intended market segment o Health-conscious Cooks at home Vast age range. Disadvantageso Viewer’s may stray away from television during Becel commercial so Zipping & Zapping VII. Recommendation and Implementation To select an alternative to recommend we will explain the method used, give and explain the objectives set forth for the selection process, and discuss the selected alternative. An implementation plan will then be proposed for the recommended alternative.
Method: Weighted Analysis In order to recommend an alternative, some objectives were established that the alternatives had to satisfy. The objectives were assigned different weights according to how important they were in relevance to our problem diagnosis for Becel Margarine. A 0 to 10 weight range was used to describe the relative importance of each objective where a weight of 0 meant that a given objective was not at all important and a weight of 10 indicated that the objective was extremely important. Each alternative was scored on a 0 to 10 scale depending on how well they satisfied each objective.
A score of 0 means that a given alternative did not at all satisfy the objective being considered whereas a score of 10 indicated an alternative completely satisfied the objective being considered. Using the weighted matrix shown in appendix 1 the alternative that scored the highest was selected. Explanation of Objectives and Their Importance A. Target Market Reach was extremely important and ranked a 10 o In order for the chosen alternative to be successful, it needs to reach all segments of the suggested 25 and above demographic as they are the expected purchasers of Becel.
B. Raising Advertising Awareness was very important and ranked a 9 o Although brand awareness for Becel is currently at 99 percent, advertising awareness for Becel Margarine is at 24 percent compared to a level of 35 percent in 1995. This indicates that advertising dollars are being wasted. The selected alternative should therefore raise advertising awareness because an increase in advertising awareness will mean that potential customers are getting the new positioning message.
They will therefore consider Becel Margarine as not only a product for older consumers but for them as well. C. Product Involvement was very important and ranked a 10 o It is extremely important that the alternative selected encourage customers’ involvement with Becel Margarine in order to give Becel as much exposure as possible. Since most potential customers are already aware of the brand, the selected alternative lead to high product involvement in order for consumers to “experience” Becel. Recommendation Innovative Solutions has decided that the best alternative to solve Becel’s current problem is “Now We ” re Cooking With Becel.” This alternative is targeted at reaching those consumers 25 years of age and older, who are health conscious, and cook at home.
With this alternative Becel can achieve its goal of reaching its current and potential target market. By joining with the Food Network of Canada, Becel will become part of one of Canada’s fifteen most popular channels across a vast age range (18-95 years).
Unilever will integrate Becel into FNC’s programming. However, the focus will be on the show Cooking Thin, hosted by Chef Kathleen Daelemans. The show aims to teach viewers how to cook nutritious meals. Kathleen’s health focused meals will promote Becel’s heart-health position.
On her show, Kathleen will use Becel as an ingredient in the meals she prepares as well as a cooking aid in meals that are usually cooked in oil or butter. Becel will be used instead of oil or butter. Becel’s product placement on a show of this magnitude ensures that the audience is aware that Becel in involved in the show. Although Becel will run ads on FNC, product placement on the show will reduce the possibility of zipping and zapping thus increasing advertising awareness. Becel’s current brand awareness is ninety-nine percent among its current target market of sixty-five years of age and older. This age demographic accounts for thirteen percent of Canada’s total population (The World fact book).
By implementing the alternative, “Now We ” re Cooking with Becel”, they will increase their target market to about eighty percent. This increase will ensure that Becel will reach health conscious individuals twenty-five years of age and older who strive to find foods to complement their heart-healthy lifestyles. Implementation Now we ” re cooking with Becel will be implemented for the 12 month period beginning February 2000. Becel will produce 2 commercials for national distribution on Food Network Canada (FNC) and during “Cooking Thin.” The Commercials, voiced over in French, will also be aired on CBC Quebec as Quebec is 70 percent French speaking and is also the market where Butter is strongest.
Additionally, since Western Canada has traditionally been a weak sales region for Becel, the commercials will also air on CBC Western. CBC airs more Canadian programming than any other network allowing Becel to reach people when they watch foreign shows such as “Cooking Thin,” as well as when they watch Canadian shows (CBC radio/Canada).
In February, Networks will be contacted and the commercials will be produced. The English commercials will first be aired on FNC during March and in April the other commercials will be aired. Please see appendix 3 for a timeline for implementation. The theme of one of the commercials will include a park scene with people of all ages within the 25 and above demographic running in the park.
At the end of the day, three scenes of a large family, an empty n ester couple, and a group of young singles all sit at their respective tables to a dinner which includes Becel. The message to be stated towards the end of the commercial as the Becel logo flashes across the screen would be: “Incorporating our great tasting Becel into an overall healthy lifestyle helps you become healthy and stay healthy. Becel takes your health to heart.” The second commercial will be centered on cooking foods with Becel. Again a variety of people within the 25 and above age demographic will be featured cooking various kinds of delicious foods that are common in different parts of Canada. The models, who will be everyday people, will be marveling at all the nutritious foods they get to cook with Becel without sacrificing taste. Towards the end of this commercial, the message would again be: “Incorporating our great tasting Becel into an overall healthy lifestyle helps you become healthy and stay healthy.
Becel takes your health to heart.” At the corner of the screen customers will be urged to visit the Becel website for delicious nutritious recipes. The total estimated budget for producing and airing the commercials as well as sponsoring Kathleen Daelemans’s how will be about $1. 295 million. The budget in appendix 3 shows a breakdown of the various associated costs. VIII. Conclusion Unilever Becel’s current problem stems from their sole emphasis on the health aspect of their product while focusing on too small of a market segment (sixty-five and older).
By expanding their promotions to include members from a more expansive age bracket (twenty-five and older), the company will enjoy an increase in revenue and potentially an increase in advertisement awareness. Coupled with this strategy should be a new promotional emphasis on health and taste. While Becel has managed to get their healthy message across with great success (through previous ad campaigns, the invention of the Heart Health Information Bureau, etc. ), their lack of emphasis on the product’s taste has left some consumers longing for other products. The proposed recommendation, “Now We ” re Cooking with Becel”, will undoubtedly give Becel a much firmer stance at the head of the margarine market in Canada. This promotional strategy takes into account the main hurdles for Becel: it takes on a much larger age bracket through the use of Food Network Canada; it increases presence throughout western Canada with the cable and local channel advertisements; and it helps the consumer visualize satisfaction and then utilize Becel Margarine.
Appendix 1 WEIGHTED MATRIX DECISION STATEMENT: Select the best promotional alternative for Becel margarine’s market share. OBJECTIVES WT ALTERNATIVES Run Canada, Run. Body By Becel Now we ” re cooking with Becel SC WTS C SC WT SC SC WTSCTarget Market Reach 10 10 100 6 60 10 100 Raises Advertising Awareness 9 6 54 7 63 9 81 Product Involvement 10 1 10 10 100 10 100 TOTAL WEIGHTED SCORE 164 223 281 Appendix 2 TIMELINE Months Miscellaneous TV Networks Food Network Canada CBC Western CBC Quebec February – Start production of commercials and boost production – Contact networks for primetime advertising March – Continue boosting production- Progress review Air 30 second commercials during “Cooking Thin” April – Move into Western Canada and Quebec- mid month progress review Continue commercials Air English commercials Air French commercials May End of the month evaluation Continue commercials Continue commercials Continue commercials June End of the month evaluation Continue commercials Continue commercials Continue commercials July End of the month evaluation Continue commercials Continue commercials Continue commercials August End of the month evaluation Continue commercials Continue commercials Continue commercials September End of the month evaluation Continue commercials Continue commercials Continue commercials October End of the month evaluation Continue commercials Continue commercials Continue commercials November End of the month evaluation Continue commercials Continue commercials Continue commercials December End of the month evaluation Continue commercials Continue commercials Continue commercials January End of year evaluation and review of advertising. Continue commercials Continue commercials Continue commercials Appendix 3 BUDGET ” Now We ” re Cooking With Becel.” Cos Cost of production $2000 X 2 Commercials$4, 000. 00 Commercial Placement Costs Food Network (11 months, 14 spots / wk at $232.
13 each) $142, 992. 08 CBC Quebec, (10 months, 10 spots / wk $200) $80, 000. 00 CBC Western (10 months, 10 spots / week $170) $68, 000. 00 Sponsorship of Cooking Thin television show (negotiable) $1, 000, 000. 00 Total $1, 294, 992.
08 Works Cited Canadian Broadcasting Corporation web Limited Media web ‘s Canada http: //64. 233. 161. 104/search? q = cache: 5 qd-mM 60 xAU J: web 4 th Qtr BC Adult. pdf+food+network+canada+rank&hl = en Weight Watchers Canada web Network Canada web world Fact book web from these sources as well: web web web supermarkets / unilever /Unilever-profile. rt f.
