Evaluation of Unilever's International Marketing Strategy: A Report

This report provides a comprehensive analysis of Unilever's international marketing strategy. It begins by defining standardization and adaptation in the context of international marketing, highlighting how customer preferences, legal and cultural consequences, and environmental factors influence a company's operations. The report then evaluates Unilever's international strategy development using international trade theories, including the Heckscher-Ohlin Theory and Michael Porter's Diamond Model, to explain how Unilever achieves a competitive advantage. Furthermore, it examines essential decisions in strategy development, such as production efficiency, cost reduction, customer targeting, and the use of technology. The report concludes by emphasizing the benefits of standardization for a company's growth and market success. The report references books and journals for further reading.

International Marketing

Table of Contents
INTRODUCTION…………………………………………………………….3
DEFINITION OF STANDARDISATION/ADAPTATION………………….4
EVALUATION OF UNILEVER INTERNATIONAL STRATEGY………...6
ESSENTIAL DECISIONS IN THE STRATEGY DEVELOPMENT………..7
CONCLUSION………………………………………………………………..8
REFERENCE………………………………………………………………….
9

INTRODUCTION
International marketing is the trading of goods and services among different countries. The
main aim is to satisfy the need of customers while planning, executing, distributing, and
marketing products and services worldwide. (Morgan and et.al., 2018.) Unilever is a British
International consumer goods company based in London. Unilever was founded in 1929, it is a
91-year-old company and run its business around 190 countries. This report will define the
standardization of a company in the international market while investigating and evaluating
international marketing strategies. It will also show important decisions in developing strategy.
Section 1 - Definition of standardisation/adaptation
Understanding standardization and trends affecting the operations
Standardization is the process of executing and developing technical standards of a
company, based on the consensus related to various companies. Standardization is built on a
structure of transactions to which all the relevant organizations must stick to the process adopted.
(Definition of standardisation/adaptation. 2016.) It also makes sure that the production of goods
and services performed are going under regulation and according to the set guidelines.Unilever
follows the Code and standard of conduct, which includes law obeying, community involvement,
risk management policy, and avoiding conflicts of interest. The biggest competitor of Unilever is
Procter & Gamble Company (P&G) that has its products in about 180 countries.
Various factors affect the operation of Unilever in the market, these factors influence the
marketing strategies of Unilever and its competitive company. Some of these are-

 Customer preferences
The one factor that affects standardization is the customer's choices based on taste, social-
culture, purchasing power, and literacy. For example, Unilever contains more variety of skincare
products that are preferred by customers like, Dove, Lifebuoy. P&G skin care products are less
and costly, so customers avoid buying them like Olay.
 Legal Consequences
Every country has its policies and guidelines which need to follow. Safety standards,
labeling, packing, and patents are some factors. On both companies Unilever and P&G a suit was
filed related to shampoo, on selling shampoo in a sachet, it was agreed that sale has increased by
70% because of sachets.
 Cultural Consequences
Several cultures adopted in different countries create cultural differences, which affect
the adoption of products or services. For example, in countries where the young generation is
more they used more beauty products. Asian and Americans used more skin and hair care
products.
 Environment Consequences
As climatic conditions vary in foreign countries, to maintain the standard of the product
is quite challenging for some products. In countries where the temperature is low, there the
sale of cold cream like Unilever Pond's cold cream is sold more than P&G cream Olay.

Section 2 - Evaluation of Unilever International Strategy
Evaluating and analysing international strategy development
Evaluation of Unilever's international marketing strategies for development is executed
with different theories. (Rao-Nicholson and Khan, 2017.) These theories explain international
trade and focus on the reason for planning international marketing strategies.
International Trade Theory
International trade theories are a combination of various theories that helps in
understanding international trade. (Krugman and et.al., 2018. ) Trading involves two-person or
two organizations doing a transaction of goods and services. International trading includes two
foreign countries coming together for trade.
Heckscher-Ohlin Theory
It is an international theory that explains how a country can achieve a comparative
advantage by manufacturing products that are copious in the country. (Cavusoglu, 2019.) The
theory is based on production factors of a country like labor, land, capital for investment in
manufacturing. It shows the cost of any resources involved in the production is based on demand
and supply. For example, Unilever committed in 2010 to use 100% of agricultural raw materials
in their products. Denmark and China have a large number of agricultural raw materials, so
Unilver has its manufacturing plant in China and Denmark. As China produces a lot of
agricultural products, Unilver produces more goods in China.

Michael Porter’s Diamond Model
Michael Porter of Harvard Business School introduced a model-based theory, which
shows a diamond-shaped structure that focuses on the national strength of a company to be used
for competing in the international market. (Barghouthi, 2017.) The determinants used in the
model are -
Firm Strategy, Structure and Rivalry - Unilever focuses more on natural ingredients for its
skincare products like Love beauty and planet brand to compete in the international market. The
brand contains products for skin, hair, body, and oral care. Unilever competitive, P&G also used
natural ingredients in its products, but yet the company has not established any particular brand.
Factor Conditions – It evaluate the natural, capital, and human resources available in the
country. Unilever relies on natural capital and raw material for its products, that's the reason
Hefei Industrial Park in China is the biggest manufacturing unit in the world, producing around
10 million units a day for brands such as Dove, Clear, and Lux.
Demand Condition - More demand in the country prevents companies to penetrate an
international market. Unilever recently introduced a new product Vaseline anti-bacterial hand
cream in the UK, which raise the total sale by 0.2% to £10.8 billion.
Related and Supporting Industry - Unilver supporting industry is agriculture as most of its raw
materials are natural, like the seed of a plant, palm oil, sugar, soy which are used in the

manufacturing of soaps, shampoo, and hair care products. Hefei supports in bring agricultural
raw material.
Government - In this model, it explains that the government support companies for international
trade. For example, the UK government and Unilver entered into an agreement to help the
world's poor by giving them jobs, developing water and sanitation facility.
Chance - Here chances refer to natural disaster, terrorist attack, accident, and any such event
which are external like Covid has decreased the sale of Unilever products in many countries.
Essential decisions in the strategy development
Key decisions to standardize product and service
In developing a systematic strategy in the international market, there are some aspects to be
considered. These are accessible to companies while taking decisions.
Production efficiency – When production will be effective, there are more chances of its growth.
Unilever's new product Vaseline anti-bacterial hand cream in the UK, which raises the total sale
by 0.2% to £10.8 billion. It is an uninformed and standard product which includes the factor like
protecting from bacteria.
Cost Reduction - A similar product can be produced using the same materials and the same
processes. Unilever uses palm oil and soy in it most of the beauty product like Fair and lovely,
ponds, and Dove. It reduces the cost of purchasing palm oil, which will also cause less wastage.

Customer Targeting - Unilever's target customers are of every age and every segment. For kids,
Matey like products is used in the UK, which is children’s bubble bath brands.
Use of technology - Standardization is affiliated with technology, and it generates mostly positive
outcomes. Production when done using the latest technology is an aid in standardization.

CONCLUSION
This report explains that the following standardization provides an advantages growth to the
company. There are many factors which affect the standardization like, market trend, customer
requirements, culture differentiation, climatic change, and government policies. A critical
evaluation of international strategy development was explained with three theories of
international trade. Some essential decisions are described which are required in the strategy
development. When the products standardize, they became very beneficial for the company and
market.

REFERENCES
Books and journals
Barghouthi, O.A., 2017. Analysis of Competitive Advantage of the Basic Industries in Palestine
Based on the Porter’s Diamond Model. International Journal of Marketing Research
Innovation. 1(1). pp.25-39.
Cavusoglu, N., 2019. The chain version of Heckscher-Ohlin theory correctly predicts US trade
flows!. International Economics. 157. pp.170-178.
Krugman, P.R., and et.al., 2018. International trade: theory & policy. Pearson Education
Limited.
Morgan, N.A., and et.al., 2018. Marketing capabilities in international marketing. Journal of
International Marketing. 26(1). pp.61-95.
Rao-Nicholson, R. and Khan, Z., 2017. Standardization versus adaptation of global marketing
strategies in emerging market cross-border acquisitions. International Marketing
Review.
Online
Definition of standardisation/adaptation. 2016. [ONLINE] Available through: <
https://www.nerdynaut.com/product-standardization-vs-product-adaptation/>