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Dove Case Tim May April 11, 2012

Executive Summary The age old brand, Dove has been around for a very long time, but recently (in the case) has taken a turn toward decline. With the help of some research, Dove has noticed what women truly think about themselves, and the results were scary. Most women did not consider themselves beautiful, and this was a problem. The industry Dove resides in is very competitive and products lack differentiation most of the time. With big name competitors like Garnier, Nivea, Jergens, and LOreal, Dove has little room for error in the industry, and is in need of change after recent record low sales. Dove launched their Real Beauty campaign. This global initiative toward the aiding of women in their personal self-esteem did wonders for the brand and its image by driving up sales and exposure. The next step for Dove would be a problem which they would try to solve. Alternatives for Dove include a market penetration strategy, in the form of another marketing campaign; a product development strategy, by adding product lines geared toward men; and a cost reduction strategy, by cutting products that are not profitable and are damaging the firm. This paper chooses the cost reduction strategy because of the fact Dove has already spent a large sum of money pn the most recent marketing campaign. This strategy could greatly improve Dove financial stability and provide a long-term plan for the betterment of Dove as a brand, now and in the future.

Situational Analysis Environment, Industry, Organization The Dove brand has been around since WWII, and in 1957 took the shape of the moisturizing, white bar of soap we know today. After noticing some decline in the late 1990s, Unilever decided a change was needed. After conducting much research, Unilever concluded that most women thought that the media portrayed an image of beauty that was unrealistic and unattainable. They found that: Just 12 % of women are very satisfied with their physical attractiveness; Only 2 % of women describe themselves as beautiful; 68 % strongly agree that the media sets an unrealistic standard of beauty; and 75 % wish the media did a better job in portraying the diversity of a woman's physical attractiveness, including size and shape, across all ages. With these results, Dove helped to identify the persona of the personal beauty care industry in the minds of the public. Dove needed to capture more market share by doing something other than coming out with a new product, especially with the environmental movement in full swing, and consumers becoming more green in the products that they purchased. The beauty industry is one with very little product differentiation and very similar product offerings. Also, there are very little trade secrets in the industry. These facts leave very little room for competitive advantage between firms. Some of Dove's major competitors in the industry are Garnier, Nivea, Jergens, and LOreal. Dove and its competitors have realized that to grow and capture market share in the industry that utilizing marketing is the key to success. Sales of Unilever's flagship, Dove, were in decline in almost all of its forty countries were it is available. Management had to meet to come up with a way to boost the sales of the brand. Current Strategy After several meetings of Dove's upper management, three major goals were set in strategic motion. First, was to increase market share through improvement of the brand image. Next, was to develop a full-scale marketing campaign. And lastly, they wanted retain the functional strengths of the

brand. After doing much research into consumer-related variables rather than product-related variables, they launched their biggest marketing campaign to date. During the Campaign for Real Beauty, Dove sought the help of marketing company Ogilvy to make their vision a reality. They utilized social marketing, with the first ever text message driven pole, which also helped to modernize the brand. They also used billboards, the Internet, and television commercials to convey the essence of their socially responsible message of true beauty in this international campaign. Dove also donated to self-esteem building funds and other organizations that reflected similar ideals of the Real Beauty campaign. Dove saw an immediate impact. Sales grew in all markets and Dove was getting brand recognition for spreading their positive message. This message was being spread throughout the globe, and helped many to realize what beauty really is. Overall, the campaign was a complete success and Dove capitalized on the use of strategic marketing to convey a very positive message to the public. Definition of the Decision to be Made Now that Dove has modernized and revitalized the brand, especially in the eyes of their consumers, Dove faces a decision to make: What is the next step? After instituting such an outstanding campaign, there is little room for error now that the brand is in the eye of the public. Under the microscope, Dove still looks spotless, but with the Real Beauty campaign coming to a close, there is still much work to be done to keep Dove in a top-of-mind standpoint in the mind of the consumer. Alternatives Dove has different options when it comes to following their tremendously successful Real Beauty campaign. One option they have is another marketing campaign. An obvious benefit of this would be the continued promotion of the Dove brand and expand of the reach of the product. Also, it would enhance the recognition of the brand, and could help to keep Dove in the top-of-mind placement that their previous campaign helped them do so well. Lastly, they could see growth in sales and profits, even further. The Real Beauty campaign helped to do this in a very large way. A major disadvantage would be

the tremendous cost associated with a brand new campaign. The Real Beauty campaign already cost the company a large sum of money, and following up with another campaign could be extremely costly and risky to the financial integrity of the firm. Another disadvantage is that it is not just the investment of money that could be a waste, but also an investment of time. Researching the appropriate marketing strategy, designing and writing the advertisements, getting them published, and dealing with any response is a very time consuming process. Another strategy that Dove could incorporate would be the addition of new products to the Dove product line. Currently, the main demographic to whom Dove markets their products, and ultimately sells most of their products, is women. This leaves a substantial amount of room for growth in their product line, in the fact that they could introduce a product line specifically made and marketed to men. With an expansion of the product line, Dove could capitalize on the exposure generated by their recent nonproduct related marketing campaign and not have to advertise the new product as much. In this way, Dove could save some cost in advertising. Also, Dove could make a breakthrough into a current market. It would be easier for Dove to capture some share of the men's hygiene and care market because they are already a very established company, and brand loyalty from the women who buy their products can shift toward loyalty toward this new producti.e. Women buying these new products for their husbands, boyfriends, sons, brothers, etc. Some disadvantages of a new product line, however, lie in the cost of the new product and the launch. There are tremendous costs associated with developing new products. These costs arise from not only R&D, but from every aspect of taking an idea and making it into an actual product on a shelf. Doves has the risk of the new line catching on. Dove, previously with marketing solely toward women, could be viewed as a feminine brand. If men do not adopt the product because of this or any other reason, the product could be a complete failure. A third strategy that Dove could implement could be a cutting back strategy. Currently, Dove have more than 1600 products globally, and some products are creating a loss rather than a gain. It would

be in Dove's best financial interests to cut these product lines, and narrow down their product offering to a forth of this number. A major disadvantage with this option would be that some consumers might actually prefer a certain product that is failing, and when it is discontinued then they might switch to a competitor's product. Also, dropping a line could create underutilized capacity for Dove, and they would need to find products that are worth producing at a larger scale to fill this void. The benefits behind dropping products that are under-performing lie in the realm of cost and financial success. If Dove stops sinking money into products that do not have a good return on investment (ROI), they will be able to have more cash on hand to reinvest into the company, pay dividends, and pay of current and long term debt. This will make Dove's financial statements sparkle. Recommendation For this case, I would recommend that Dove implement the third alternative that was given. Dove now has a better reputation because of the Real Beauty campaign, but has also spent a large amount of cash on it. To improve their financial statements and make their stock price climb, Dove could use a cost cutting strategy to help improve their ROI and overall financial stability. Since Dove did spend a great deal of money on a recent marketing campaign, the first two alternatives prove to be risky, costly, and could damage the image that Dove recently built up. Conclusion Dove's Real Beauty Campaign helped to skyrocket an age old brand into the public limelight, and gave them a much needed boost in sales and exposure. Dove did a public service with this campaign and gave women a self-esteem boost. The success of this campaign needs to be followed up with something else; not necessarily as massive, but something to echo the boost that the campaign gave them. The alternative chosen help to do this, and does so in a safe and affordable way.