Marketing Analysis - Durex

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word count 2963

Student ID: 0706335

Individual Assessment, IB209 Marketing Analysis 09/10

Erecting a global brand

word count 2963

Student ID: 0706335

Contents: 1. Introduction 1. Overview 2. Why Durex? 1. Financial performance 2. Market share 3. Brand strength 4. Speed of international expansion 2. The Marketing Environment 1. The Micronenvironment 1. Threat of substitute products 2. Threat of competitive rivalry 3. Threat of consumer bargaining power 4. Threat of supplier power 5. Threat of new entrants 2. The Macroenvironment 1. Political factors 2. Economic factors 3. Social forces (culture) 4. Technological forces 3. The Marketing Mix 1. Product 2. Place 3. Price 4. Promotion 4. Forecast & Conclusion 5. Appendix

Introduction

word count 2963

Student ID: 0706335

Overview Ask a random person on the street to name a major British company or brand and chances are that Durex won‟t be their first choice. Despite this, Durex (whose name is a combination of its core brand traits – durability, reliability and excellence) is one of the oldest and among the top selling brands in the world. The Durex brand dates its origins back to 1929 when it was first registered as a brand name by the London Rubber Company Ltd (LRC). Durex‟s legacy of constant development and innovation of its products (the brand is responsible for the development of the first lubricated condom, the first anatomically shaped condom and recently), its dedication to improving the production process (first fully automated production line in 1959 and the use of the first electronic testing facilities in 1953) and the increasing awareness of the dangers of sexually transmitted diseases has helped Durex become a global name with an undisputed share of the market and factories world-wide. As a result of a merger in 1999, Durex became part of SSL International Group1

Why Durex?
Financial Performance Over the past 5 years Durex has managed to maintain continuing impressive results with year on year growth in sales. Sales rose from £131.1 million in 2003 to over £266million in 2009 (with a rise of +9.4% in 2007/08 and +7.3% in 2008/092). Overall the SSL group fared very well with increases of 31% in operating profit growth and a 6.4% overall growth3. The company which owns Durex – SSL is currently valued at 720 pence in London trading, its sharpest climb since May 19 and its highest value since November 2000, valuing the company at 1.53 billion pounds 4. The firm said it was "well on target" to hit its goal of boosting earnings per share by 50% in the three years to 2012 5. Market Share Despite being around for only ~80 years Durex has managed to establish an undisputed leading position amongst its competitors when it comes to market share. Its current global (branded) condom share (value) increased from 32.5% to 34.2% 6 with it accounting for over a billion condoms being manufactured in the world. Durex is currently the number one condom brand in 16 (European) countries with its strongest hold being on countries such as: Croatia (86.8-88,8), Belgium (83%85%)and England (85%)7 . Brand Strength Due to the nature of its products, Durex is forced to operate in an environment where conventional marketing methods (such as mass TV advertising, celebrity endorsements etc) are restricted. This, combined with the social stigma attached with sex related products would usually result in big barriers for growth. However the recent rebranding of its product design and image has resulted not only in the creation of a £40million sub-brand (Durex Play) but also in the mass availability of Durex products in nation-wide supermarkets such as Boots, Tesco, Sainsbury‟s etc8. By producing a new aesthetically package design and changing its focus from “safer sex” to “better sex” Durex has been able to raise its sales and strengthen its global position without using an intensive advertisement campaign but rather the gradual and slow introduction of new product...
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