Unilever’s 19th-century style product innovation: How their humble beginnings led to their success today [Monday Marketing Marvels]
A business founded on a sense of purpose.
A unique heritage that still shapes the way they do business today.
Unilever is one of the oldest and biggest multinational companies in the world.
With 400 brands and products available in 190 countries, they have truly made their mark in the consumer goods sector.
…and it all started with margarine and soap.
In 1872, because of a lot of competitors in the industry, Antoon Jergens and Samuel van den Burgh decided to strengthen their margarine company in the Netherlands by merging with another margarine manufacturer in Bohemia.
This new company merged with three more companies through the years, to eventually form Margarine Unie.
Meanwhile, on the other side of the globe, William Hesketh Lever introduced a revolutionary new product he called Sunlight Soap in the 1890s.
This promoted and popularized cleanliness and hygiene in Victorian England in a time when diseases like cholera, smallpox, and tuberculosis were relapsing and spreading in waves.
Sunlight Soap was deemed revolutionary because it contained copra or pine kernel oil, which helped it lather more easily than other traditional soaps made of animal fats in the market.
The rapid success of this soap in the UK gave the Lever Brothers, Lever’s company, more business worldwide, and they began to export their product and fulfill large demands from different countries.
Then, in September 1929…
Margarine Unie merged with the Lever Brothers.
At that time, an international merger was an unusual decision. But both companies believed that a strong global network would create new opportunities for everyone.
Finally, by blending the two company names, the name Unilever was born.
Through the years, Unilever continued to innovate to further improve their business and goals of creating a sustainable living for all. They continually diversified their product lines and had a lot of mergers and acquisitions, all to stay relevant to its consumers.
Today, they handle and manufacture products and brands that we all know and love, such as Pond’s, Vaseline, Cutex, Ben & Jerry’s, Breyers, Kraft, Lipton, Knorr, and many other known product lines.
Unilever has a lot of brands that were heavily marketed to become “top-of-mind” for its target consumers.
What made Unilever so successful?
Innovation and purpose.
In addition to making sure that their business remained strong and profitable, Unilever also lived by a sense of purpose and a mission that all started at the time of Sunlight Soap.
“To make cleanliness commonplace; to lessen work for women; to foster health and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the people who use our products” – Our History, Unilever.com
Even up to today, this is still heavily rooted as part of their company culture.
It’s hard to imagine how people were able to innovate without the technology we have today, but that didn’t stop Unilever from finding multiple ways to innovate in the 1800s when other companies were pretty much set in their own ways.
Other than quality products and more options for their customers, William Hesketh Lever also found new ways of marketing and promoting his product:
“Sunlight soap becomes one of the first brands to advertise in-home, using innovative means such as small cards inserted into soap packaging, featuring the Sunlight brand in cartoon drawings or calendars. As early as 1893, postage stamps were used in New Zealand to advertise Sunlight Soap.” – Interactive Timeline, Unilever.com
Throughout the years, Unilever has done a lot to be as successful as they are today. Their most recent achievements show that they are still living up to the company’s goal and innovative processes in mind.
- Ranked leader of the Personal Products sector in 2019 again = Since taking part in the annual Corporate Sustainability Assessment, Unilever has held the top of its sector 20 times.
- Top corporate leadership ranking in the 2019 Sustainability Leaders survey, for the ninth year running (2011-2019)
- Named leader of the Personal Products sector again in 2018 (since partaking in the annual Corporate Sustainability Assessment, Unilever has been top of its sector 19 times)
- One of 71 companies on the CDP Water A List for 2019, with leading performance in a number of areas including water strategy, risk management and transparency (water accounting)
- One of 179 companies on the CDP Climate A List for 2019 (part of the list since 2013)
- One of 8 companies on the CDP Forests A List for 2019, with leading performance in Palm oil and Soy
Unilever’s Earning Power: Valens Research vs. As-reported numbers
Unilever makes for a great study because of one simple reason: they have proved to be a phenomenal earnings power generator.
The blue bars below represent true earning power (Uniform Return On Assets). For Unilever, that number has been at well over 20% for more than 10 years.
For context, the global average of this number over the last 60 years is just 6%.
The orange bars are the as-reported financial information. If you relied on these numbers, you wouldn’t know this—you’d just see the 13% orange bar when you look at the as-reported ROA (return on assets, measure of earning power).
That’s what you’ll see in Yahoo Finance, Google Finance, and most other databases.
So, how is Unilever actually doing now, and how have innovation, creative marketing, and partnerships been effective tools in their business?
The research and results don’t lie. Earning power (the blue bars) has been up and continues to show results much higher than what traditional databases show.
The stock price performed better than the rest of the stock market (the blue line) over the past ten years, with returns well above 1.0x the market.
The numbers show that they are doing well and making a profit.
Unilever’s innovation, mission, and sense of purpose played a big role in how they came to be.
They were able to create new and sustainable ways to make their company grow while making their customers’ well-being a priority—all while inspiring social and environmental change.
“Monday Marketing Marvels”
Too often, industry experts and the marketing press sing the praises of some company’s marketing strategy.
…Only for the audience to later find out that their product was a flop, or worse, that the company went bankrupt.
The true ROI in marketing can’t be separated from the business as a whole.
What good is a marketing case study if one can’t prove that the company’s efforts actually paid off?
At the end of the day, either the entire business is successful or it isn’t. And the role of marketing is always paramount to that success.
Every Monday, we publish a case study that highlights the world’s greatest marketing strategies.
However, the difference between our case studies and the numerous ones out there, is that we will always make certain that the firm really did generate and demonstrate earning power worthy of study in the first place (compliments of Valens Research’s finance group).
By looking at the true earnings of a company, we can now rely on those successful businesses to get tips and insights on what they did right.
We’ll also study the greatest marketing fails and analyze what they did wrong, or what they needed to improve on. We all make our mistakes, but better we learn from others’ mistakes—and earlier, rather than later.
Hope you found this week’s marketing marvel interesting and helpful.
Stay tuned for next week’s Monday Marketing Marvels!
Kyle Yu and Joel Litman
Head of Marketing & President and CEO
Valens Dynamic Marketing Capabilities
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