Dr. Ankita Jain et .. al Journal of Management Research and Analysis (JMRA) Available online at http://jmraonline.com ISSN: 2394-2770, Impact Factor: 6.303, Volume 6 Issue 01, March -2019, Pages:264-273

Unilever: A FMCG Giant in Introducing Flanker Brands

Dr. Ankita Jain 1 Associate Professor, Department of Management, The IIS University, Jaipur Ritu Sharma2 Research Scholar, The IIS University, Jaipur

Abstract The aim of this paper is to understand the term Flagship and Flanker brands and to know the reason behind introducing flanker brands. This study is specifically deals with the American consumers. The main purpose is to examine the flagship and flanker brands of and buying preference of buyers towards the same. With the help of structured questionnaire, customer’s responses have been under taken to conclude the results of the study. Data was analyzed by using different statistical techniques such as descriptive statistics, Independent sample test and ANOVA analysis. Keywords: Unilever, Fast Moving Consumer Goods, Flagship Brand, Flanker Brand Introduction This paper deals with the flanker brands of Unilever it has launched in U.S.A market. A flanker brand is a new brand brought into the market by an organization that already has an established brand in the same product category. Basically flanker brand is designed with the lowest cost and as expected the least features to fulfill the need of price-sensitive consumers. Although everyone would like to possess acquisition of flagship brands (high-priced products caters the need of high income level consumers) especially in terms of gadgets, electronics, luxury brands of apparel and footwear such as Christian Louboutin, Gucci, Prada, Louis Vuitton, etc. but majority of consumers do not want to spend more money on Fast Moving Consumer Goods. Especially the Price-sensitive consumers who want to spend their each and every savings very carefully. The term flanker originated from a war metaphor as many organizations use flanker brands to counter attack a contender who challenges the existing main brand with a unique offer or proposition so the main focus is to position the flanker brand to counter the contender’s offering or positioning but not disturb the primary brand. Flanker brands are everywhere and one might not even know it. Most consumer product companies use a flanker brand strategy in some of their strategic business units. A flanker brand strategy is useful to grow business, or to defend it from lower priced competitors. Most commonly used in FMCG market, with the benefits including more shelf space and improved bargaining power with retailers, the flanker brand approach is a great opportunity to compete with new entrants to the market, protect existing brand (flagship brand). (Paul James Werner, July 24, 2013, Michigan State University Extension) Flanker branding is essential because it enables an organization to attract new customers from different market segments. The flagship brand or main brand of a company’s portfolio should

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target the market segment containing the most consumers. Another brand (flanker) can then be positioned to convert users from other market item attributes. (Nancy Giddens 2002) Table 1: Flagship and Flanker Brands of Unilever Product Category Flagship Brand Flanker Brand Hair Care Category Tresemme Gelato/Ice-Cream Category Klondike Bars Ben & Jerry Oral Care Category Close-up Personal Care Category Caress Dove Skin Care Category Pond’s Suave Dove Tea Category PG Tips Deodorant Category Dove Degree Suave Source: The classification of Flagship and flanker brands has been done on the basis of price Unilever offered to its customers. US Consumers display price sensitivity- About two out of 5 US Customers would switch from brand name to generic grocery items as a result of a 10-20% price increase, as per an October 2011 survey by Accenture. Data from the “Pricing Shopping Survey” demonstrates that around one out of 5 buyers would also make the switch given a price increment of under 10%. Among US buyers, New Yorkers seem to be the least price-sensitive: 55% would switch to a store label variant of a grocery item with a price change of up to 20%, contrasted with 64% of customers from the rest of the US (excluding Los Angeles). The percentage price increase that would result in buyers ceasing (stopping) their use of the brand name item is on average at least 30%, with consumers in New York and Los Angeles being less price-sensitive than the rest of the U.S, meanwhile, 73% of customers from the rest of the US category say they are somewhat or very likely to change their grocery shopping habits if food prices rises. Flanker brand is simply a new brand that one launch or purchases in a product category in which company already have a main brand (flagship brand). With the objective of growing share without damaging the pre-existing brand (flagship brand). And the main idea lays on a focal conviction that a firm would rather somewhat cannibalize its own sales than have some else firm take share from it. For instance, when it returned the Indian market in the mid 90’s, Coca Cola bought Thumps up, a local value segment brand. The first intention was that coke would focus on the middle class and affluent consumers in urban and larger secondary cities, while Thumbs up, which kept up overwhelming share at the time, targeted less affluent urban consumers and those in secondary cities and rural areas. Moreover, Coca-Cola wanted to eventually transition buyers from Thumbs

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Up to Coke. Surprisingly for coke, Thumbs up declined to die. Further, that particular flanker brand remained extraordinarily strong, keeping Pepsi under control and giving Coca –Cola considerably more share than what might be conceivable through its coke brand alone. And having realized its lesson, Coca-Cola has since re-launched and more completely resourced the Thumbs up brand-concentrating it on specific segments that are different from those targeted with the coke brand. Literature Review Sharma and Jain (2018) explained the preference of consumers towards flagship and flanker brands of HUL and P&G. Results of the study states that HUL’s product topped consumer’s preference under home care and hair care category. Solo reason behind HUL’s popularity is that it offers a wide range of flanker brands in several product categories such as hair care, skin care, oral care, food and beverages as compared to its rivals. Due to the price sensitive nature consumers would prefer reasonable priced products over highly priced products. Aaron Lim (2015) states that flanker brands are those brands which has been secretly placed in a competitive market in regards to protect the flagship brand, with the purpose of stand strong against competition, without damaging the flagship brands position. Flanker brand is less important brand as compared to flagship brand which is very strong and powerful in terms of attributes and simple to position in market place. Sinha, Sahqual and Mathur (2013), opined that by launching flanker brands in a new market an organization is in the state to extend its productivity, revenue and having an impressive and positive impact on its brand positioning. Flanker brands should be designed and executed very carefully, so they should not take sales away from the flagship brand. Laurent Tournois (2013), marked the situation of hair care market (mainly shampoo and conditioners) in France in 1997, dominated by brands from the portfolio of L’Oreal. L’Oreal Paris Elseve was the leader, protected by two strong “flankers”- the Dop and Ultra-Doux brands at the lower end of the market and Jacques Dessange at the high end. In 1997, the launch of the new Fructis brand complimented these offerings by responding to a growing demand for natural products. Procter & Gamble’s Pantene was relaunching as Pantene Pro-V which steals the show with 8.6 percent of volume market share. Most affected brands after the Pantene’s relaunch was Elseve, Jacques Dessange, Ultra-Doux and Fructis. Pantene’s price positioning was well above the average market price and 10% of higher since its relaunch, making the brand one of the most expensive in the market equivalent to brand like Jacques Dessange, which relies on the legitimacy and reputation of the expert hairdresser. In results of this, L’Oreal’s flankers played their part well in protecting the Elseve brand, which was less impacted by improvements in the Pantene brand due to its high price. Finally, an important feature of this competitive environment was the gradual specialisation and differentiation since consumers became more sensitive to the perceived quality of the offer than to its (perceived) price. Chang Kuei Feng, Yang Hao Wei (2013), the main aim of this study was to examine the brand counter extensions strategy as a means of fighting back against strong competitors. This study applies a measure conditions among competitors, namely market position and extension outcomes as well as firm’s own technological capabilities in order to develop the fight- back strategy of brand counter extensions and brand appeal strategy with the aim of learning the degree of support

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and purchase intention of consumers. Brand extension is a widely adopted strategy that enables firms to take advantage of existing brand equity and enter a new product category (Aaker, 1991; Martinez et al., 2009). This study employs experimental methods to explore the effects on customers’ degrees of support and intention to purchase based on the factors such as- the market position of the firm (major versus minor); the outcome of previous brand extensions (success versus failure); and the technology capability of the firm itself (leading or lagging). A successful extension has a positive effect on the parent brand (Dillon et al., 2001), as it can reinforce brand associations (Rangaswamy et al., 1993), increase the brand’s choice share (Balachander and Ghose, 2003), and reduce the investment required to launch the new product (Ouwesloot et al., 2001). In contrast, a failed extension could have a negative effect on the parent brand (John et al., 1998), reducing attribute belief, market share (Loken and John, 1993) and brand equity (Lane and Jacobson, 1995). Junsong Chen, Stanley J. Paliwoda (2002), explains that multi-branding strategy enables the company to lock up more distribution shelf space and to protect its major brand by setting up flanker brands. The new brand will bring internal competition into the firm and improve working efficiency. Sometimes, the appearance of a new brand in the market will produce a new stimulus and establish a brand image. Multi- branding helps the company to target different market segments, spread risk, and meet the consumer’s need for variety seeking. Author suggested three options for growth i.e. diversification growth, integration growth or intensive growth. Brand extensions are virtually prevalent in diversification growth, i.e. companies simply extend the existing brand into a new product line not currently served by this brand. When a company considers intensive growth, it may intensify market penetration with existing products on enter new segments by products with new features such as new flavours, package sizes, colours and compositions, which are termed as line extensions. Patton and Holstius (1993) explained the product offerings of Unilever which it offers to various countries. This study has been taken 51 countries in which Unilever introduces lots of variety of new brands in distinct product categories such as food and beverages, Health and beauty aids, Cosmetics, Detergents, Cleaning, Tea, Soap bars. Results of the study indicates that 700 different brand names marketed by Unilever. Unilever’s largest product category is food, but because of recent acquisitions such as Chesebrough-Pond’s, Calvin Klein, Faberge, etc., the company has become a giant in health and beauty aids, and in cosmetics. Research Methodology Sample of the study constitutes the respondents from Plano, Texas. The total sample size was 200 out of which 192 respondents participated in the survey including 84 males and 108 females drawn using simple random sampling method. As the study is empirical in nature it is based on survey research. Primary data is collected with the help of a questionnaire designed for the purpose of the study. Questionnaire consists of two sections- First section provides demographic details of the respondents and the second section presents question related to the preference and buying behaviour of consumers towards the Hair care category, Gelato category, Oral care category,

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Personal care category, Skin care category, Tea category, Deodorant Category consists flagship and flanker brands of Unilever USA. Objectives of the study  To examine the preference of buyers towards flagship and flanker offerings of Unilever.  To identify the impact of various factors which affects the buying decision of buyers.  To analyse the buying habits of consumers towards Fast Moving Consumer Goods. Hypothesis to be tested

H01: There is no significant difference in the impact of various factors (Price, Quality, Advertisements, Promotional offers and Brand Image) on consumers while making purchasing decision regarding flagship and flanker products of Unilever

H02: There is no significant variance has been found in buying habits of consumers towards Fast Moving Consumer Goods. Analysis and Discussions As per (table 3) one way ANOVA was performed to examine the significance difference towards the buying decision of buyers regarding flagship and flanker brands of Unilever. Significant difference was found among the purchasing decision of respondents on the basis of Price. At the p <0.05 level for three conditions (F (4, 187) =2.526 P = 0.042). According the results of (table 3) a one way ANOVA was performed to examine the significance difference in the buying decision of respondents regarding flagship and flanker brands. Significant difference was found among the purchasing decision of respondents towards the flagship and flanker brands of Unilever on the basis of Quality. At the p<0.05 level for three conditions (F (4, 187) = 3.523 P =0.008). Results of (table 3) states that one way ANOVA was performed to analyze the significant difference in the purchasing decision of respondents towards flagship and flanker brands of Unilever. Significant difference was found among the buying decision of respondents towards the flagship and flanker offerings of Unilever on the basis of Advertisements. At the p<0.05 level for the three conditions (F (4,187) =9.119 P = 0.000). On the basis of Promotional offers at the p<0.05 level for the three conditions (F (4, 187) = 3.904 P = 0.005). On the basis of Brand image at the p <0.05 level for the three conditions (F (4,187) = 3.200 P = 0.014). According to (table 4) results of the t-test shows that significant difference was found among the male and female respondent’s choice over the preferred channel for purchasing products, frequency of using preferred brands, influencing buying factor whereas no significant difference was found in the other aspects of buying decision of buyers like reason to switch preferred brand and preferred price-range of Fast Moving Consumer Goods. It has been noted that Dove was the only brand which was highly preferred by respondents in Hair care category (36%), Personal care category (37%), Skin care category (31%) and Deodorant category (35%). Ben & Jerry (24%) was the most preferred brand for Gelato. For Tea category PG Tips (42%) was highly preferred by respondents. Findings and Recommendations The study shows the preference of buyers towards flagship and flanker brands of Unilever which it offers in American market. Result indicates that respondents are significantly concerned about

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the Price, Quality, Advertisement, Promotional offers and Brand image of their preferred brands. From addition to this, variance has also been found out on the basis of gender in regards of preferred price range and reason to switch Fast Moving Consumer Goods. Most preferred brand in Hair care category was flagship brand Dove (36%), followed by flanker brand Sunsilk (21%) and then flagship brand Tresemme (19%) and Clear (14%). In Ice-cream or Gelato category most preferred brand under Flagship brand category was Ben & Jerry (24%), Talenti (20%) and Magnum (18%) and Popsicle (17%) and Klondike Bar (13%) under flanker brand category. For oral care category flanker brand Pepsodent (46%) was most preferred by respondents followed by Close-up (42%) which is the flagship offering of Unilever. Flagship brands Dove (37%), Caress (28%) and Pears (38%) were most preferred by respondents under Personal care category followed by Suave (14%) flanker offering of Unilever. Under Tea category flanker brand PG Tips (42%) was most preferred by respondents followed by Lipton Flagship brand of Unilever (41%). Under Skin care category most preferred brands was flagship brands such as Dove (31%), Vaseline (24%), Pond’s (18%) followed by flanker brand Suave (17%). Flagship brands Dove (35%), Degree (28%) was highly preferred by respondents followed by flanker brand Axe (13%) and Suave (6.8%). Conclusion Flagship brands of Unilever has been highly preferred by respondents under Hair care category, Gelato category, Personal care category, Skin care category and Deodorant category whereas flanker brand was more preferred by respondents under Oral care category and Tea category. The main purpose of introducing flanker brands is to gain more shelf space and threat new entrant into the market. By doing so, one can protect its premium offerings (flagship brand), and can acquire more consumers who are price sensitive by offering them flanker brands. By introducing flanker brands company is in the position to increase its profitability revenue and having a positive impact on brands ranking. Flanker brand is strong enough to compete not only with low-priced rivals but also do it so profitably in order to meet the need of price- sensitive consumers. It also create to attract value conscious consumers in tough times (recession), but this product will succeed only if it can be produced at a significantly at a lower cost than the main brand (flagship brand).

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Analysis and Results Table 2: Demographic Details Particluars Variables Frequency Percentage Gender Male 84 43.8

Female 108 56.3

Age Below 25 Years 25 13

25-30 Years 61 31.8 31-40 Years 66 34.4 Above 40 Years 40 20.8 Qualification School Level 19 9.9 UG 71 37 PG 76 39.6 Professional 26 13.5 Occupation Student 12 6.3 Employed 63 32.8 Business 100 52.1 Home-maker 17 8.9 Income Below $2000 10 5.2 $ 2000- $ 4000 37 19.3 $ 4000- $ 6000 86 44.8

Above $ 6000 59 30.7 Source: Primary data H01: There is no significant difference in the impact of various factors (Price, Quality, Advertisements, Promotional offers and Brand Image) on consumers while making purchasing decision regarding flagship and flanker products of Unilever.

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Table 3: ANOVA Factors Sum of Df Mean F Sig. Squares Square Price Between 14.096 4 3.524 2.526 0.042 Groups Within 260.884 187 1.395 Groups 274.979 191 Total Quality Between 15.893 4 3.973 3.523 0.008 Groups Within 210.920 187 1.128 Groups 226.812 191 Total Advertisements Between 44.883 4 11.221 9.119 0.000 Groups Within 230.097 187 1.230 Groups 274.979 191 Total Promotional Between 17.481 4 4.370 3.904 0.005 Offers Groups Within 209.331 187 1.119 Groups 226.813 191 Total Brand Image Between 33.699 4 8.425 3.200 0.014 Groups Within 492.281 187 2.633 Groups 525.979 191 Total Source: Primary data processed in SPSS

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Table 4: Independent Samples Test S.No Purchasing decision Mean Standard t Sig.@P<0.05 aspects of consumers Deviation

1 Preference channel 1.25 (Male) .436 -2.698 0.000 for buying products 1.44 (Female) .498 -2.743

2 Frequency of using 2.98 (Male) 1.489 -1.484 0.048 preferred brands 3.33 (Female) 1.772 -1.517

3 Influencing buying 2.99 (Male) 0.976 2.347 0.005 factor 2.62 (Female) 1.150 2.395

4 Reason for switch 2.77 (Male) 1.144 0.136 0.246 preferred brand 2..75 (Female) 1.246 0.138

5 Preferred price-range 1.77 (Male) 0.700 0.227 0.358 of FMCG products 1.75 (Female) 0.738 0.228

Source: Primary data processed in SPSS References:  Sharma, Ritu and Jain, Ankita, Flagship and Flanker Brands (2018): Consumer Preference Study of Limited and Procter & Gamble (September 2018). The IUP Journal of Brand Management, Vol. XV, No. 3, September 2018, pp. 7-22. Available at SSRN: https://ssrn.com/abstract=3316703  Lim Aaron (2015), “The Art of Brand War: An Approach To Conceptualising Flanker Brands”, Marketing Insights, Working Paper Series, School of Marketing, ISSN: 1448- 9716  Tournois Laurent (2013), “Mass Marketing Leadership & Shampoo Wars: The L’Oreal Strategy”, Journal of Business Strategy, Vol. 34, No. 1, pp: 4-14, ISSN: 0275-6668  Chang Kuei – Feng & Yang Hao – Wei (2013), “Brand Counter Extensions for Fight Back & Appeal Strategies.” Journal of Management Decisions, vol 51, Issue 4, Pg. no: 839-85  Sinha Ashish, Sahqal Anna, Mathur Sharat K (2013), “Category Optimizer: A Dynamic – Assortment, New product – Introduction, Mix – Optimization, &Demand planning system”, Journal of Marketing Science vol 32, Issue 2, pg no: 221-228.  Paul James Werner, July 24, 2013, Michigan State University Extension  Martinez, E., Montaner, T. and Pina, J.M. (2009), “Brand extension feedback: the role of advertising”, Journal of Business Research, Vol.62, No.3, pp. 305-313

 Chen Junsong, Paliwoda J. Stanley (2002), “On the Application of Multi-Branding Strategy”, American marketing Association, Conference Proceedings, Vol.13

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 Giddens Nancy (2002), AG DM newsletter article, Agricultural Extension Value-added Marketing Specialist, Missouri Value-added Development Center, University of Missouri; and Amanda Hofmann, Student Research Assistant

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 Ouwesloot, H., Lemmink, L. and Allard, C.R. (2001), “Consumer evaluation of service brand extension”, Journal of Service Research, Vol.31, No.1, pp: 61-75.  John, D.R., Loken, B. and Joiner, C. (1998), “The negative impact of brand: can flagship product can be diluted”, Journal of Marketing, Vol.62, No.1, pp: 19-32.  Lane, V. and Jacobson, R. (1995), “Stock market reactions to brand extension announcement: the effects of brand attitude and familiarity”, Journal of Marketing, Vol. 59, No.1, pp: 63-77.  Patton R. Charles and Holstius Karin (1993), “Unilever: A Marketing Giant, Proceedings of the 1993 World Marketing Congress, Springer, Cham, ISBN: 978-3-319-17322-1, inline ISBN: 978-3-319-17323-8  Loken, B. and John, D.R. (1993), “Diluting brand beliefs: when do brand extensions have a negative impact”, Journal of Marketing, Vol. 57, July, pp: 71-84.  Rangaswamy, A., Burke, R.R. and Oliva, T.A. (1993), “Brand equity and the extendibility of brand names”, International Journal of Research in Marketing, Vol.10, No.1, pp: 61-75.  Aaker, D.A. (1991), Managing Brand Equity: Capitalizing on the Value of a Brand Name, The Free Press, New York, NY.  Don’t Discount Flanker Brands (Tower strategy group, https://www.towerstrategy.com/tower-insights/the importance-and-role-of-flanker-brands

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