"160 million times a day, someone somewhere chooses a Unilever product," says the official website of the FMCG giant in the country. And likely so. Extensive upbeat marketing by the company, particularly for home and personal care (HPC) products is nothing new for Unilever.
The widespread advertising, marketing and distribution efforts, establishing a sound brand identity and stimulating massive purchases among consumers seem to have driven up the turnover for the company by 20 percent during 1HCY10.
Sunsilk and Lifebuoy witnessed double-digit growth for the first half on the back of heightened demand, particularly since new advertisement campaigns for the products were launched.
Other HPC products such as Fair & Lovely, Surf excel and Lux have also shared the limelight with new, appealing ad campaigns. Consequently, HPC has been the growth driver for Unilevers revenue streams for the first half this year.
The ice cream segment defied all murmurs of threats from competitors such as Omore by bracing up cost-cutting strategies. Consequent price reductions helped boost up sales for the chilled product.
Theme advertisements with a slice-of-life approach have also done their part in helping the ice cream segment, highlighting the marketing expertise of the company.
But, shortcomings in the distribution system are believed to be the chink in the armour for the ice cream segment in the future, primarily due to law and order conditions and persistent power crisis.
Strapping up distribution seems to be a challenge for the company in keeping up the positive work seen for the firms frozen desserts.
Even so, the bottom line of the company was kept in check by rising input costs and depreciation of the rupee, bringing down earnings by 3.2 percent during the period.
One area where the advertising and marketing proficiency of Unilever seems to prove futile is the tea segment which continues to bear the toll of tea smuggling. Its available at much cheaper rates, thanks to a hefty tax charge of 39 percent on legally imported tea. Rising global prices of tea took a toll on profitability as well.
While distribution and smuggling will be major challenges that Unilever Pakistan will have to battle for the coming year, one continues to cheer their adept marketing and advertising mix, which is indeed their core competency.
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Unilever Pakistan - P&L
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Rs (mn) 1HCY10 1HCY09 Chg
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Sales 21,504 17,980 20%
Cost of Sales 14,692 11,544 27%
Gross Profit 6,812 6,436 6%
Distribution costs 4,275 3,816 12%
Admin expenses 581 519 12%
Other operating income 110 112 -2%
Finance costs 71 241 -71%
Profit after taxation 1,187 1,227 -3%
EPS (Rs) 89.3 92.3
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Source: KSE announcement
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