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Case Studies » Featured Case Studies » Case Studies » Reckitt Benckiser: Strategy, leadership and company culture - 3. The Global Powerbrands

Reckitt Benckiser: Strategy, leadership and company culture - 3. The Global Powerbrands

3. The Global Powerbrands

The concept of the Powerbrand was introduced in 2002 and consists of RB’s leading global brands that compete in markets with significant potential for high growth. The profit margins on Powerbrands are disproportional – that is – they are well above the industry average. Only the exceptional ones make the grade. They are mainly number one or two globally in their category.

Brands like Finish, Vanish, Clearasil, Mortein, Dettol, Scholl, Harpic and Airwick are worldwide household names as a result of RB concentrating the majority of their innovation, marketing and media investments around them. In 2010, 69 percent of RB’s revenue and 85 percent of their growth came from these 19 Powerbrands. Product brand recognition is one of the company’s great strengths and is a result of RB’s products maintaining a consistent overall image around the world. Their plan is to create brands that are truly global. Local leaders can express the product differently, taking into account local market conditions, if it means gaining market share or improving growth – however, this does not allow them to change the way a brand is headed. To keep the consistency in their brands, RB has a global category team for each category, which works with the markets to define and ensure consistency of the brand’s purpose and positioning everywhere in the world.

Marketing

RB’s Powerbrands are supported by an extensive marketing strategy. They spend approximately 12-13 percent of their net revenue on media advertising – higher than any of their competitors. Not happy with simply trying to gain a greater share of the market, they invest with the aim of actually growing the entire category. For example, RB spent a large amount of advertising dollars promoting the sale of dishwashers – which is not one of their product lines – with the aim of increasing the demand for automatic dishwasher detergents.

Innovation

In a market where there are many competitors all selling very similar products, differentiation is a key tactic in setting your product apart from the rest. In the markets that RB competes in, innovation is essential. Instead of spending large amounts of money researching and developing new products, they use extensive market research to determine what the consumer wants and needs, in order to make their use of the product ever more easy and convenient, and the results from the product ever better.

These are sometimes big innovations but often many smaller ones, where they can incrementally improve a product, implementing a few changes that may save the consumer time or make the product more convenient to use, and that they are prepared to pay more money for.

A good example is the Finish dishwasher detergent. They noticed that consumers usually use three different products in their dishwashers: a powder, a rinse and salt. In 2000 RB came up with the Finish PowerBall 2-in-1 that combined the powder and rinse aid. They then improved it in 2001 by adding salt, and again in 2005 by adding a glass protector. They support their new and improved products with heavy marketing and

their strategy has paid off, with over a third of their revenue coming from products that have been developed in the last three years.

 

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Associated with:
Learning Area(s):
  • Business Environment | Developing organisational culture
  • Business Structure and Organisation | Aligning structure to objectives
  • Business Structure and Organisation | Organisational structures:overview
  • Careers | Career training and development
  • Change Management | Leadership and change
  • Communication | Interpersonal communication
  • Entrepreneurship/Innovation | Fostering innovation within business
  • Entrepreneurship/Innovation | Innovative business
  • Entrepreneurship/Innovation | Product/service innovation
  • Global Business | Types of global business/expansion
  • Human Resource Management | Diversity management
  • Human Resource Management | Employee Motivation
  • Human Resource Management | Recruitment and selection
  • Management Skills | Communication
  • Management Skills | Managing in a team environment
  • Management Skills | Role of leadership
  • Management Styles | Effective styles in management situations
  • Marketing | Product development
  • Marketing | Promotion strategies and their application
From: Edition 7

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