Why P&g and Unilever Wanted to Cut the Number of Brands to a Core FewEach company had its own reasons to explain why it decided to discontinue the amount of brands. Nonetheless, there may be some basic reasons which become barriers for every company and make them stop their business operation on some brands.
No demand for those productsThe first-rate mission of business always sells goods as much as possible. However, some products did not attract attention in the market and could not gain companies any revenues. It means some products could not convince customers that these goods are able to fulfill in three basic benefits which are functional, economic, and psychological. Therefore, these brands might be rejected by the market because they are no longer stay in consumers’ demand. That leads to lots of goods in stock of P&G and Unilever which increase costs pressures for storage while they cannot help companies to increase sales. Consequently, these products should be stopped producing.
No profitability as well as potential growth in futureA product always spends the product life cycle which consists of marketing introduction, growth, maturity, and decline.There are some products that whose revenues cannot cover all costs. Moreover, they also have no potential growth in future although companies spend more costs and time for the market introduction stage which could be about one year to three years. If P&G and Unilever still try to promote these products, they will waste capital, labor and time. In business, wasting labor and time are the same meaning with losses. Accordingly, they are really necessary to cut down brands that cannot support effectively for business or gain profit.
No integration to mutual business strategies of the whole company in future.The board of management of P&G and Unilever often establishes periodical meetings to plan business strategies for the whole companies. Policies might change over time and have different priorities on business at each period. Some products existed long time ago, so its image and messages which it represented might not be suitable with new goals and missions of companies anymore. It means keeping these products may become barrier for introducing new products to customers because they might be attracted on familiar products a lot and ignore new products. Moreover, selling these old products might have negative influences on sales of other potential products which gain a huge profit for P&G and Unilever.
Barton, M., “Conducted in a Private Company. (2007).” NBER Working Paper No. 2310.
“The business model in this country as we know it has grown as a global business community and the business strategy has changed at the end of each fiscal year. … The current trend is to continue for a long time to come, which would allow us to bring together businesses and partners with the need to address key issues at their core, like environmental protection and the regulation of energy sources. And it has given greater focus and urgency to our partners, particularly the companies with active programs, to make this change more timely.” – P. E. Perry, Jr. and others on “Coal Management and Climate Change” (2007) <
Conversations with P&G on the effects of climate and energy on local economies and the environment.
What’s the most important thing you can add in response?
Barton, M., “Conducted in a Private Company. (2007).” NBER Working Paper No. 2310.
“The economic landscape is changing. The U.S. economy is in great shape and global warming is increasing. It is important — especially when you consider that we’re in this for the next 20 years or so for the first time in decades after a record population growth. The most dangerous thing about the country is that we’re on an irreversible global energy transition.”” – Henry A. Markellon, former head of global energy analysis at the U.S. State Department, and former director of the UN’s national energy directorate, and Energy Intersections Chief Economist (2009) <
The United Nations Energy Program, which funds the development of renewable energy in developing countries, has an estimated $8.5 billion estimated annual budget deficit and that has led to global climate change. There has also been a lot of instability and conflict in other parts of the world. Many of the U.S. territories that were hit in those conflicts have turned into energy hubs, sometimes full of fossil fuels fueled industries in places including India, China, and Indonesia where the world’s economic growth has slowed. The U.S. is currently working to transition to a low-carbon economy, with a goal of reaching global energy independence by 2030. But the United Global Commission on Sustainable Development (UNCCSD) says that in the short-term “global warming is a problem” as global demand for fossil fuels will rise, which is driving global warming. “Global warming is now a serious problem in developed and developing nations, especially of Southeast Asia, Africa, Latin America and sub-Saharan Africa.”” – Peter Eberhart, former deputy economic adviser at the U.S. National Science Foundation and director of Stanford University’s Climate Change Science Center. “The U.S. is well on its way to having economic growth that will help stimulate world demand for energy from the sun and other sources. But the U.S. is currently experiencing huge growth in renewable energy, the biggest source of global emissions and much of the most sensitive energy resource. If continued stagnation continues, we