Renova Case Study

Topics: Pricing, Paper, Toilet paper Pages: 7 (1682 words) Published: September 27, 2012
Mission – promote the well-being of both body and mind, while granting a successful relationship not only of a person with oneself but also with the whole environment.

Vision – Europe’s leading brand that loves the consumers, cares about them and has a culture of innovation, always appearing with creative, daring and well designed solutions that have in mind environmental issues and the emotional connection between products and consumer.

Strategic objectives:
* Expand into new markets, such as Brazil, in the next 15 years * Grow the business in current markets:
1) increase the worldwide market share in the tissue industry to 10% in the next 10 years 2) increase the market share in the toilet paper market in Portugal to 50% in the next 10 years * decrease in 15% the environmental impact, in the next 10 years * Focus on innovation: launch 15 new product categories in each line of production in the next 10 years

Critical success factors:
* Attract new costumers
* Increase competitiveness by innovating and corresponding to the new environmental and design trends * Develop new technologies to decrease environmental impact * Invest in research and development

Financial: decrease the dependency on promotions

Marketing objectives:
* Increase brand awareness to 95% in Portugal in 2 years
* Increase brand awareness in the rest of Europe in 25% in the next 3 years * To be more than a toilet paper brand – to be a well being brand which creates emotional connections with the consumer

Five forces of porter
* Supplier power: low number of suppliers meaning that they have a certain power to drive prices up, specially the owners of paper pulp; however Renova have been trying to reduce this dependency and with its RenovaGreen category uses 100% recycled paper.

* Buyer power: high power of the buyers to drive prices down. In spite of offering products that everyone needs, there are many options to choose from (competitors with substitute goods) and consumers are very price sensitive since they don’t usually perceive differentiation in the tissue industry in general and don’t have costs of changing between brands. However, Renova, as well as other premium brands, try to innovate in order to differentiate from each other an be able to practice the desired prices. In the case of retailers (as Renova’s clients and competitors) the power in even bigger since they usually buy only 2 or 3 brands to re-sell.

* Threat of substitution: There are many competitors offering similar products; Renova is usually able to be one step ahead in terms of innovation and new features, but it is constantly copied by competitors, who are also trying to launch new and creative products.

* Competitive rivalry:
1) competitors in the tissue industry: Procter and Gamble, Kimberly-Clark, Georgia-Pacific, SCA, retailers (Carrefour, Lidl and Tesco in Europe and other local private lables, such as Continente, pingo doce, feiranova, intermarché and Jumbo in Portugal). Competitors in the toilet paper market in Portugal are mostly private labels, Kimberly-Clark (with Kleenex and scottex) and GP (with Colhogar). As it is possible to see, there are many competitors 2) In the toilet paper industry, premium brands are always trying to differentiate by adding new features; private labels are also improving quality and gaining power all over Europe due to the quality/price ratio 3) There is no consumer loyalty since they care essentially about prices and there are no switching costs

* Threat of new entry: In Portugal it is high since there are large paper producers, such as Sofidel and Tronchetti, and strong European retailers that can potentially enter the market; However, the threat of new entry in Europe is low since retailers typically buy only 2 or 3 national brands to re-sell and therefore it is very difficult to second and lower market players to secure distribution and shelf...
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