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Introduction
Reckitt Benckiser Group is a manufacturer and marketer of health, hygiene, post-natal, and home products. The Company's segments include ENA and DvM. The ENA segment consists of Europe, Russia/Commonwealth of Independent States (CIS), North America, Australia, and New Zealand. The DvM segment consists of North Africa, the Middle East (excluding Israel) and Turkey, Africa, South Asia, North Asia, Latin America, Japan, Korea, and the Association of Southeast Asian Nations (ASEAN). Health, Hygiene, Home, and Portfolio Brands categories are split across the geographical segments of ENA and DVM. Its range of hygiene products includes disinfectant cleaners, automatic dishwashing detergents, pest control, depilatory products, and acne treatments. The Company's portfolio of brands includes Durex, Mucinex, Scholl, Strepsils, Cillit Bang, Clearasil, Dettol, Harpic, Lysol, Mortein, Veet, Air Wick, Calgon, Vanish, and Woolite.
The Reckitt Benckiser Group is a British multinational company also known as RB was established in December 1999 by the merger of the British company Reckitt & Colman and the Dutch company Benckiser. The company offers products in the health, hygiene, and home care sector and it is one of the world’s leading manufacturers and marketers.
The company is listed on the London stock exchange. The company has over 30 brands, its operations in over 60 countries, and is sold in nearly 180 countries. The current CEO (2020) of the company is Laxam Narasimhan.
4 P’s of Marketing Mix
Product
Each of these brands has many variants and pack sizes. The organization combines the latest knowledge in science with consumer requirements and builds relevant products. In the future, the company plans to enter the food and pharmaceutical sectors. Reckitt Benckiser has collaborated with different partners to address some of the problems and has come up with innovative solutions. Reckitt Benckiser has a global R&D facility for product innovation. The products comply with the relevant regulatory bodies and their safety is established through clinical and scientific evidence. They also have developed innovative packaging, devices, and manufacturing processes as a part of their marketing mix product strategy. Also, the strategy is to tap the products which are relatively new and hence have a new entrant advantage with a skimming pricing advantage. Also, they invest disproportionately among different power brands.
Price
The pricing of the product is of utmost importance for proper functioning and RB periodically evaluates it. Reckitt Benckiser has adopted value-based pricing as a part of its marketing mix and is kept at an optimal level and the consumer's perception level. Though the prices are affordable, they are a bit on the higher side which the consumer associates with better quality due to trust built by the brand. The listing of Reckitt Benckiser is on the London stock exchange and it is a constituent of the FTSE 100 index. The company has adopted the strategy of having a focused product portfolio. It concentrates on 19 brands that generate more than 70% of revenue. The company focuses on rapidly growing consumer sectors that are yet to be explored, thus having superior margin potential and consistent return on investment to their investors. Another strategy for revenue generation is shifting focus on developing economies with emerging consumer potential. RB believes in the conversion of profit to cash for which they have networking capital objectives incorporated in the annual bonus targets of all the operational management teams.
Place
The company founder Johann Benckiser established the company in Pforzheim, Germany in 1823. The first overseas business was opened in Australia in 1886. Reckitt Benckiser is a global organization operational in nearly 60 countries and sales in 200 countries spread over 6 continents. Over 40000 employees are working for RB in these locations. In India, the corporate operations of RB are located in Gurgaon, Haryana. The company has always focused on its core brands with an emphasis on supply chain and distribution. For continuous innovation, Reckitt Benckiser has R&D facilities located in 35 countries. Major facilities and based in India, Germany, Italy, China, Thailand, and the USA. This global network of experts works together for the formulation of new products. They have planned to start the newest Center for Scientific Excellence in Hull, the United Kingdom in 2018. It is the largest single investment for a company with £105 million.
The center has a sustainable building harboring a health department compliant with Good Manufacturing Practices for the formulation and testing of products.
Promotion
The organization has adopted the strategy of 'innovative Marketing’. As the products are mainly in the FMCG sector, it has used all the promotional media available (print, broadcast, billboards, and hoardings, digital). It has also implemented consistent and innovative packaging which consumers recognize and associate. Reckitt Benckiser has put a big emphasis on advertising. In the UK it is among the top ten advertisers with first in television ads. It has also invested in a digital world like an i-phone application for Nurofen in the UK, 2010. The company has allocated a budget for Marketing activities along with continuous product innovation considering consumer needs. This proved to be profitable for the company which can be seen in revenue boost in 2007 due to the 'rapid succession of well-practiced new product variants,’ which correctly seized consumer imagination. It has organized a scientific challenge for University students in the UK to solve future consumer health problems. The winner of the contest will get £5000 and paid summer internship at their latest facility. This completes the marketing mix of Reckitt Benckiser.
Entry Mode
Reckitt Benckiser is a multinational company. The company was incorporated in India on July 5th, 1951 in Calcutta state. The company Manufacture ultramarine blue food products, Antiseptics, polishes, cosmetics, and pharmaceuticals. The Company took over the manufacturing assets and manufacturing operations of Atlantic (East) Ltd., a company in the Reckitt & Colman group incorporated in England, trading in India in 1934 and established new facilities for the manufacture of several households, pharmaceutical, food, and toiletry products.
Reckitt & Colman's over-the-counter (OTC) pharmaceutical products have been allocated to its' joint venture company, Reckitt Piramal Ltd, from March 1998. Reckitt Piramal has an extensive distribution network with chemists and doctors. R&C also said its joint venture Reckitt Piramal Ltd. (RPL) handling the OTC pharmaceutical product business had in its first year of operations, become the single largest OTC company in India. The joint venture markets brands like Dettol, Disprin, and Gelora. The company has also reached an agreement with its workers on the reorientation of productivity norms that will be required to modernize the production process.
STP Analysis of Reckitt Benckiser
Segmentation
Segmenting is a process of dividing the market into segments based on customer characteristics, needs, and behavior. Segmenting of any Market is done in various ways; few of the important bases of segmentation.
• Geographic Segmentation, Region: - RB is headquartered in Slough, England, and has operations in around 60 countries. Its products are sold in nearly 200 countries.
• Demographic Segmentation; Age, Family Size, Gender, Income, Occupation, Education
• Psychographic Segmentation; Socioeconomic Classification (SEC), Lifestyle, Personality
• Behavioral Segmentation; occasions, benefits, user status, usage rate, loyalty status, attitude
• The most scientific way to identify a segment with consumers with common customer value for which there isn’t a proper parameter and hence the above-mentioned bases are used. RB works mostly in the segment of healthcare.
Target Group
Proper Targeting is very important to make the brand successful; it’s not only about targeting the right people but also targeting them most appropriately. So far Reckitt Benckiser has been very successful in targeting the right consumers, however, the earning and the disposable money is increasing for many people in urban and semi-urban areas and status symbol is a key factor while making any purchase decisions. The main target population of Reckitt Benckiser is Urban Households and Hospitals, Clinics.
Positioning
Positioning is done after segmentation is done and target markets have been identified, the brand needs to position its products/ services most suitable to the product/service as well to the target consumers. Positioning is done by following POD and POP methods, in POD (Point of difference) you create a product or service in an existing category but it’s different from the other offerings by competitors, and in POP (Point of Parity) you create a product or a service which is very similar to that of the market leaders offering to the consumers. Reckitt Benckiser follows the POD method and has always created unique products with great quality at affordable prices and that’s why Reckitt Benckiser is India’s one of the biggest FMCG Companies. RB always tries to position as a “Consumer-Centric Innovative” company.
• Methods for new market entry
Partnership/ Joint Venture
R & C, RCI, and Nicholas Piramal India signed an agreement for a tripartite joint venture company, Reckitt Piramal (RP). The venture will have an equity of Rs.10 crore with the state of R&C, RCI, and Nicholas Piramal being in the ratio of 4:2:4 in order. Meanwhile, Reckitt and Colman Plc has set up a joint venture with Nicholas Piramal which is one of India's largest prescription pharmaceuticals companies with excellent detailing relationships with doctors throughout the country, said the RCI chairman. The joint venture agreement is aimed at being the overall number one OTC pharmaceutical company in the country. Reckitt & Coleman of India Ltd. (RCIL) has acquired the brand `Colin', glass and household cleaner, from Fernhill Laboratories & Industrial Establishment. Reckitt Piramal India Ltd, the 60:40 joint venture between the Reckitt & Colman (R&C) companies and Nicholas Piramal India Ltd. The company will introduce six new products next year including line extensions. In a joint venture, two or more investors share ownership and control over firm operations. The advantages of Joint ventures are Foreign partner has vast knowledge about the market in his country. Joint financial strength is established
between the partners. They also have disadvantages: Partners may not sometimes negotiate. The recovery of capital can become impossible. To license, Licensing is the method of foreign operation where a firm in one country agrees to permit a company in another country to use the manufacturing and processing provided by the licensor. For example, United Bottlers in Zimbabwe have a license to make Coke. The licensing cost is signing the agreement and policing the implementation. The disadvantages are there is a limited form of participation e.g. in the length of the agreement or specific product manufacturing.
Conclusion
Reckitt Benkiser is a multinational company and is always looking for increasing its business. these product mix dimensions provide the handle for defining the company's product and expansion strategies. The company can increase its business in such ways. It can add new product lines, Widening its Product mi. In this way, Its new lines build on the company's reputation in its other lines. It can add more versions of each product and thus deepen its products mix. Finally, the company can pursue more product line consistency or less depending on whether it wants to have a strong reputation in a single field or in several fields.