Reckitt Benckiser maintain their business performance and value
To be successful in the fast-paced world of household, health and personal care products, you have to think big. Reckitt Benckiser (RB) is a world leader in the making and marketing of household, consumer health care and personal products. With over 20 million products sold daily across almost 200 countries, RB is a global success story. RB came about as a result of a merger in 1999 between the German company Benckiser and Reckitt & Colman from the United Kingdom. The two businesses were a good match, with a combined history of innovation spanning over 150 years. Complimenting each other geographically, they now covered extensive markets across Europe, the UK, Australia, the United States and many smaller markets worldwide.
Similarly, their product portfolios worked well together, with Benckiser a market leader in automatic dishwashing and fabric care products, while Reckitt & Colman had achieved success in disinfectants, home care, pest control and health and personal care. The merger was a successful one, with RB the fastest growing business in its sector. The above industry-average growth since the merger can be linked directly to the company’s strategy, company culture and leadership model. Having the right people helps create the right culture, one RB describes as strong, fast-acting and highly effective. The company embraces diversity and encourages constructive conflict to achieve the best ideas and innovations. The leadership team expects their employees to use initiative, take ownership of their ideas and to take risks, with the aim of outperforming the market.
Marketing, Advertising and Customer Social Responsibility
To stay ahead of the market, RB needs creative thinking and employees who are willing to take a risk on new ideas, as well as a leadership team prepared to support them. The range of products RB manufacture and sell is extensive. Household names such as Aerogard, Clearasil, Dettol, Mortein, Pine O Cleen and Strepsils are but a few of the easily recognisable products in Australia. However, RB has identified 19 of their best selling products that, in their category, are globally number one or two on the market. They call these their Powerbrands, global leaders in high growth categories. Focussing on their Powerbrands makes sense, as the profits from these 19 brands alone make up more than two-thirds of the company’s total revenue. RB invests heavily in these brands through advertising and marketing to maximise the returns and grow their market share. They also concentrate on continual innovation, listening to the needs of their customers and looking for ways to make their products better.
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. 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...
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