Unilever evolves, perhaps should revolt

September 27, 1999

BY MICHAEL KRAUSS

This is a tale of two speakers from colliding worlds: one from the traditional economy and one from the new economy; one an incrementalist, the other a revolutionary.

Goldstein and Kawasaki. I'll focus more on Goldstein in this column, but what Kawasaki has to say is just as illuminating.

I heard Richard A. Goldstein, President and CEO of New York- based Unilever United States, Inc., speak last July at Summer Internet World in Chicago.

Now here's a CEO who understands the Internet, a suit from a major company who walks the aisles of the high- tech trade shows with the ease of the khaki-and-denim crowd.

When it comes to the Internet, Goldstein is very good. But is he good enough? Are his ideas too evolutionary? That's where Kawasaki-the revolutionary-comes in.

First, though, consider all the good things Goldstein is up to at Unilever.

"Brand success will be determined by our ability to create brand awareness at the point-of-thought, not necessarily at the point-of-purchase," Goldstein says. "Brand differentiation will depend as much on service as on product and on our ability to anticipate and meet complete consumer needs."

Powerful ideas, especially from the mouth of a traditional consumer-products marketer whom one would expect to focus on product attributes and benefits, not on the augmented "service" potential the Internet might deliver.

He described an array of Internet investments and explorations that would be the envy of most traditional corporate boards and investors.

  • Early investment in the Internet: Unilever's Ragu spaghetti sauce was among the first packaged goods to have its own Web site (eat.com).
  • Ongoing commitment to connect online with brand users: Unilever has more than 50 branded Web sites and plans to have all their brands take advantage of the Internet.
  • Strategies to shift advertising investments from traditional to interactive media as the latter evolves.
  • Special marketing deals with AOL, Microsoft and the Excite At Home network to promote the brands.
  • One of the largest advertisers on women-oriented Web sites.
  • A centralized interactive brand center staffed with professionals with specialized skills to support internal brand groups as they foray into the Internet.
  • Investments in promotions that capitalize on the power of the Internet as a medium.
  • A permission-oriented database of 10 million consumers for relationship building.
  • Themed promotions with links between high-traffic content sites and Unilever brand sites that provide information, entertainment and fun to help build relationships and add value for Unilever consumers, and
  • A CEO who's a vociferous champion of the importance of the Internet.


Recognize that Unilever is a $50 billion global food, home and personal care products Goliath that comes to market with brands like Lipton, Ragu, Gorton's, Klondike, Breyer's, Q-tips, Wisk, Vaseline, Dove, Finesse, Mentadent, CKOne, Popsicle and I Can't Believe It's Not Butter. It employs 270,000 people in 90 countries. Unilever spends over $6 billion annually on advertising and marketing support on their brands.

Yet, under Goldstein's leadership, Unilever is recognizing the Internet's potential to serve as a brand value-building medium.

"We must engage, inform, entertain and provide real value in terms of trial offers, usage tips, and time saving information," Goldstein says. "We are there for consumers as an engaging and credible source of useful information at the moments in their lives when they need us most."

Some examples:

  • Lipton's Recipe Secrets site provides daily suggestions for dinner and a list of thousands of recipes as well as step-by-step narrated and illustrated preparation instructions available in full-motion video.
  • Getting ready for a big date? Salon Selectives has Yoursalon.com, providing information on the latest hair styles and grooming tips as well as a personal style consultation.
  • Considering getting pregnant? Home pregnancy kit Clear Plan provides all you need to know about pregnancy.

These investments have yielded positive results, according to Goldstein. At a time when click-throughs are under scrutiny, 8% of viewers of a Lipton Recipe banner ad clicked through to the site. Consumer research demonstrated that a significant number- 11% of the consumers who went to the site-also went to the store, bought the product and used it in a recipe pulled from the site.

Unilever also has been at the vanguard in building site stickiness while building physical world and virtual world advertising synergy. Using the "I Can't Believe It's Not Butter" brand as an example, Goldstein discusses how Unilever has built its physical-world positioning on the theme of passion for the taste of real butter. Its celebrity spokesperson, romance novel character Fabio, does double duty online and offline.

Web-based promotions for the butter substitute include "Advice From The Love Guru," "A List of 50 Ways To Please Your Lover," "Love Letter Writing Help" and "Tests To Rate Your Romantic Aptitude," building traffic and brand equity. The product delivered 450,000 click-throughs on MSN in December. In February, one million women used the site to send Valentines.

As Goldstein concludes, "The medium itself is secondary to our goals of building brand awareness, brand imagery, trial, usage and loyalty no matter where our consumers are today. Our traditional media spend will remain strong for the foreseeable future. Our presence in supermarkets and super stores will remain unabated."

Good thinking, yet I wonder if Goldstein is missing the point? He's doing all the evolutionary things that a rational marketer would do, but does he realize what a sea change the Internet truly will bring?

Is he a revolutionary? Where are the new business models that the Internet enables? Where are the totally new offerings Unilever might create?

That's where Guy Kawasaki, author of the recently published Rules for Revolutionaries, comes in. Kawasaki is the CEO of the online venture capital site, Garage.com. He's also the former Chief Evangelist of Apple and one of the inventors of the Macintosh.

I heard Kawasaki talk at a private gathering just days after Goldstein. The difference was earthshaking.

"Think differently in order to change the rules," is Kawasaki's motto.

Kawasaki probably would start by blowing up Unilever's traditional distribution and channel strategy and rethinking the entire enterprise. He'd probably recommend investment in entirely free-standing new business ventures that bypass traditional channels. Meanwhile, Goldstein went to great pains to justify continued reliance on existing channels.

Someday, a set of packaged goods retailers and packaged goods manufacturers will join forces to redefine the branded packaged goods industry, and the Internet will be core to their success.

Before that happens, I hope the very Internet-savvy Goldstein reads Kawasaki's book. You definitely should.

Michael Krauss is a partner with Diamond Technology Partners in Chicago.
He can be reached at news@ama.org.

 



 

 





 







 

 


 

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