British-Dutch Unilever will continue its rationalization as it seeks to reduce its product references by another 30 %. On top of that, more than 800 marketing jobs will be cut in an attempt to save an additional 500 million euro.
Sizeable reduction of its array of products
Unilever has been streamlining for quite a while: with 1,600 brands in 2000, it only has 400 at this point. Unilever wants to focus its attention on several main brands, like Dove and Magnum.
Another way of cutting costs is reducing the number of products per brand, meaning a number of formats and flavours will disappear. This would not only mean a reduction in production costs, but also in marketing costs.
Marketing takes a pounding
Partly as a result of a more simplified product range, Unilever also wants to lower the costs in its marketing department. 12 % of the jobs will be cut, meaning a loss of 800 jobs. At this moment in time, Unilever employs some 7,000 marketing people.
The concern also wants to lower the cost of its commercials, which will result in agencies having to content themselves with a lower fee. In 2010, the fee was 32 % of a promotional campaign, 24 % this year and the goal is to get to 20 %. Unilever will increase its focus on digital promotions and adverts: 15 % of the budget currently is for this type of advert, with merely 12 % in 2011.
With the new cost-saving plan, Unilever want to “align itself to altered market situations” as especially emerging markets are growing slower than expected. Unilever currently gets half of its turnover out of nations like China and India.
(Translated by Gary Peeters)