Euromonitor International's report on Reckitt Benckiser Plc (RB) delivers a detailed strategic analysis of the company's business, examining its performance in the market and the global economy.

Company and market share data provide a detailed look at the financial position of Reckitt Benckiser Plc (RB), while in-depth qualitative analysis will help you understand the brand strategy and growth prospects of Reckitt Benckiser Plc (RB).

This report examines: Company share by region and sector Brand portfolio New product developments Marketing and distribution strategies

A detailed SWOT analysis of Reckitt Benckiser Plc (RB) provides strategic intelligence on:

Strengths and weaknesses Category and country opportunities for growth Challenges and threats from current competition and future prospects Global and regional market positionsResearch You Can Trust:Euromonitor International's company profile reports are written by our research team, a dedicated group of analysts that knows the industry inside and out.

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TABLE OF CONTENTS

Scope of the Report

Scope

Strategic Evaluation

Key company facts

Financial analysis: A year in 2013

Product innovation underpins strong growth in 2013

SWOT: Reckitt Benckiser Group Plc

Strategic objectives and challenges

Competitive Positioning

Mature markets bias slows growth

Top players in 2013

Market Assessment

Powerbrands shine in growth categories

Upping the focus in emerging markets

Geographic and Category O pportunities

Laundry focus on stain and spots removers

Geographic and Category Opportunities

Lacking presence in China

Laundry detergents threatens future in Western Europe

Low-temperature washing creates potential

World leader in surface care

Good potential in development of task-specific products

Globa l leader in automatic dishwashing with focus on tablet innovation

Competition heats up in product development

North America a market worth fighting for

Emerging markets a long-term commitment

Air care focused on premium format

Rising competition from Procter & Gamble

Brand Strategy

Brand strategy assessment

Finish leads global automatic dishwashing

Dettol the most versatile brand

Operations

Business operation shift towards Powermarkets

Recommendations

Growth at the both ends of the world

RB's product innovations in 2015Our strength comes from our constant drive to innovate – on average 30% of our revenue comes from innovations launched in the last three years. 

And now we reveal our new innovations for 2015 – here's the range of exciting products joining RB's already extensive family this year.   

Nurofen ExpressExpress targets the muscles which are the real source of headaches, providing faster relief.

Scholl Velvet Smooth Express Pedi with Diamond CrystalsOur most advanced electronic foot file for effective and safe hard skin removal. With diamond crystal roller for superior exfoliation.

Scholl GelActiv insolesImproves the comfort of your shoes all day long. Unique GelActiv technology is a dual gel which provides optimum level of cushioning and shock absorption.

Durex Invisible Extra ThinDurex's thinnest latex condom ever, to maximise sensitivity for a closer connection.

Optrex ActiMist 2 in 1Clinically proven to moisturise dry, irritated eyes.

MegaRed SuperHeartUnique combination of three clinically proven ingredients for extra support for heart health.

Finish Shine & Protect with Glass Protect ActionProtects your glasses throughout the washing cycle for two-times longer glass protection.

Dettol proFresh Body WashRemoves odour-causing germs for all day freshness. Gently cleanses and cares for your skin.

Veet SpawaxSalon-perfect smoothness at home.

Mortein Activ CardKnocks out mosquitoes in just three minutes.

Air Wick Life ScentsBreakthrough fragrance technology that creates constantly changing fragrance experiences for your home.

Vanish Gold and Gold for WhitesNew premium gold-standard in stain removal. Removes stains in 30 seconds.

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o Announcements, press releases & presentations o The talk about RB o Investor information o Category performance Health Hygiene Home

Food o Corporate governance o Share price information o Shareholder information o Patient organisation donations o Joint working executive summaries o Newsletter registration o Financial support for Healthcare Professionals o Contact us

31%* Health 41%* Hygiene 20%* Home 4%*Portfolio Brands 4%* Food

Category performanceRB's 19 Powerbrands are globally leading brands in high growth categories. These high-performing categories are Health, Home, Hygiene, Portfolio Brands, Food and Pharmaceuticals. Click on the category to find out more.

On 23rd December 2014 RB completed the demerger of the Reckitt Benckiser Pharmaceuticals business with a separate UK listing under the name of Indivior PLC. For any further information, please visit Indivior.com. 

* % net revenue. Figures based on Full Year Results for 2014.

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Reckitt BenckiserFrom Wikipedia, the free encyclopedia

Reckitt Benckiser Group plc

Type Public limited company

Traded as LSE   : RB

FWB   : GB00B24CGK77

ISIN GB00B24CGK77

Industry Consumer goods

Founded 1814 (J&J Colman)

1823 (Benckiser)

1840 (Reckitt & Sons)

1938 (merger of Reckitt & Sons and J&J

Colman)

1999 (merger of Reckitt &

Colman and Benckiser)

Headquarters Slough, Berkshire, UK

Key people Adrian Bellamy (Chairman)

Rakesh Kapoor (CEO)[1]

Products Cleaning products

Consumer healthcare products

Condiments

Personal care products

Revenue £8.836 billion (2014)[2]

Operating income £2.185 billion (2014)[2]

Net income £1.663 billion (2014)[2]

Number of employees

35,900 (2012)[3]

Website www.rb.com

Reckitt Benckiser Group plc (RB) (LSE: RB) is a multinational consumer goods company headquartered in Slough, Berkshire, England. It is a producer of health, hygiene and home products.[4] It was formed in 1999 by the merger of the UK-based Reckitt & Colman plc and the Netherlands-based Benckiser NV.

RB's brands include French's Mustard, the antiseptic brand Dettol, the sore throat medicine Strepsils, the hair removal brand Veet, the air freshener Air Wick, Calgon, Clearasil, Cillit Bang, Durex, Lysol, Mycil and Vanish.[5] It has operations in around 60 countries and its products are sold in almost 200 countries.

RB is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £38 billion as of 24 December 2014.[6]

Contents  [hide] 

1   History o 1.1   Origins o 1.2   1999 to present o 1.3   Name change

2   Operations 3   Products 4   Corporate governance 5   Corporate social responsibility

o 5.1   Save the Children o 5.2   Carbon 20 o 5.3   betterbusiness o 5.4   RB Trees

6   Anti-competitive behaviour 7   Legal challenges to rodenticide regulations 8   References 9   External links

History[edit]

Origins[edit]Main articles: Reckitt and Sons and Colman's

Stoke Holy Cross Mill, in Norwich, England, the home of Colman'smustard from 1814 to 1862

Johann A. Benckiser founded a business in Germany in 1823. Its main products were industrial and consumer goods industrial chemicals.[7] Benckiser went public in 1997.[8][9]

Reckitt & Sons started in 1840 when Isaac Reckitt rented a starch mill in Hull, England.[7] He diversified into other household products and after his death in 1862, the business passed to his three sons.[10] In 1886, Reckitt opened its first overseas business in Australia.[10] The firm was first listed on the London Stock Exchange in 1888.[7] Harpic Lavatory Cleaners was acquired in 1932, and that same year, Dettolwas launched.[10]

In 1938 Reckitt & Sons merged with J. & J. Colman, which had been founded in 1814 when Jeremiah Colman began milling flour andmustard in Norwich, England,[7] to become Reckitt & Colman Ltd.[7] The company made several acquisitions, including the Airwick and Carpet Fresh brands (1985), the Boyle-Midway division of American Home Products (1990), and the Lehn & Fink division of Sterling Drug(1994).

Reckitt & Colman sold the Colman's food business in 1995.[7]

1999 to present[edit]The company was formed by a merger between Britain's Reckitt & Colman plc and the Dutch company Benckiser NV in December 1999. Bart Becht became CEO of the new company and has been credited for its transformation, focusing on core brands and improving efficiency in the supply chain. The new management team's strategy of "innovation marketing". [11] – a combination of increased marketing spend and product innovation, focusing on consumer needs – has been linked to the company's ongoing success. For example, in 2008, the company's "rapid succession of well publicised new product variants" were credited for helping them "to capture shoppers' imagination".[12] Business Weekhas also noted that "40% of Reckitt Benckiser's $10.5 billion in 2007 revenues came from products launched within the previous three years."[13]

In October 2005, RB agreed to purchase the over-the-counter drugs manufacturing business of Boots Group, Boots Healthcare International, for £1.9 billion. The three main brands acquired were Nurofen's analgesics, Strepsils sore throat lozenges, and Clearasil anti-acne treatments.[14] In January 2008, RB acquired Adams Respiratory Therapeutics, Inc., a pharmaceutical company, for $2.3 billion; one of the major brands acquired was Mucinex.[15] In July 2010, RB agreed to buy SSL International, the makers of Durex condoms  and Scholl's footcare products, in a £2.5 billion deal.[16]

On 27 August 2011, RB recalled all remaining stock of its major analgesic product, Nurofen Plus, after packs were found to contain an antipsychotic drug.[17] It turned out that this was the work of a codeine addict who had been stealing the pills and replacing them with his anti psychotic medication.[18]

In April 2011, Bart Becht announced he was to retire as CEO of Reckitt Benckiser and would be replaced from September 2011 by executive vice president of Category Development, Rakesh Kapoor, who had played a key role in recent acquisitions.[19]

In November 2012, RB agreed to acquire Schiff Nutrition, a United States-based manufacturer of vitamins and nutritional supplements including Digestive Advantage, MegaRed, Airborne, and Move Free, for US$1.4 billion (£877 million).[20][21] In December 2014, RB spun off its specialty pharmaceuticals business, which produces Suboxone, into a separate company named Indivior.[22]

Name change[edit]In 2014, Reckitt Benckiser announced it was dropping its full name in favour of RB.[23] According to the chief executive, Rakesh Kapoor, the old name was "a bit of a mouthful" and the name change would make life easier.'[24]

Operations[edit]

RB is headquartered in Slough, Berkshire, and has operations in around 60 countries. Its products are sold in nearly 200 countries.[25]

The company runs a number of graduate programmes, in most of its markets, with over 200 graduates joining the schemes worldwide.[26] Once hired, graduates tend to work for a couple of years as a trainee in the country in which they were originally employed, followed by a posting overseas for those who have excelled during initial training. Graduate trainees start off in one of the firm's business areas—marketing and sales, supply chain, research and development, human resources and information systems.

Products[edit]

RB organises the majority of its products into three main categories – health, hygiene and home – with other brands belonging to three further categories: food, pharmaceuticals and portfolio brands. The company's strategy is to have a highly focused portfolio concentrating on its 19 most profitable brands, which are responsible for 70% of net revenues.[27]

Reckitt Benckiser currently produces the following products:[28]

"Powerbrands"

Air Wick    Amope Calgon    Cillit Bang    Dettol    Durex    Finish    (previously Electrasol in North 

America) French's    Gaviscon    Harpic    Lemsip    Lysol    MegaRed Mortein    Mucinex    Nurofen    Scholl   

Brasso    Brio Bryza Calgonit    Cattlemen's Cēpacol    Ceraclen Cherry Blossom Clean and Smooth Clearasil    Cling Cling Free Cobra Brilliant Shiner Colon Coral d-CON    Delsym Digestive Advantage dip-it Disprin

French's Foods    Glass Mates Glass Plus    Glassex Hoffmann's Intima Liasan / Intima Bidex Kalia Kaltron K-Y    Lanacane Lanza Lemsip    Lewis Red Devil Lime-A-Way Lovela Masterpiece Metalist Mop & Glo Move Free Mr. Sheen    Mr. Min

Strepsils    Vanish    Veet   

Other

Aerogard    Airborne    Amphyl    Bonjela   

Dosia E45 Easy-Off Easy On Elena Frank's RedHot   

Nenuco Neutra-Air NoSalt Noxon Nugget Nurofen for Children   

Durex condoms

 

Glass Plus glass cleaner

 

Lysol multi-surface cleaner

 

Strepsils throat lozenges

 

Suboxone sublingual film

Corporate governance[edit]

RB's current directors are: Rakesh Kapoor, Adrian Bellamy, Dr. Peter Harf, Jaspal Bindra, Nicandro Durante, Mary Harris, Adrian Hennah, Ken Hydon, Dr. Pamela Kirby, André Lacroix, Sue Shim, Christopher Sinclair, Judith Sprieser, Doug Tough, and Warren Tucker.[29] Current members of the executive committee are: Rob de Groot, Amadeo Fasano, Roberto Funari, Frederic Larmuseau, Darrell Stein, and Deborah Yates.[30]

From the company's creation in 1999 until he retired in 2011, Bart Becht was CEO. He was widely credited with the company's recent success. The Guardian called him "one of the most successful businessmen of his generation". Under him, the company focused on its core brands, and on improving efficiency in the supply chain. It also increased its marketing budget.[12] BusinessWeek noted that "40% of RB's $10.5 billion in 2007 revenues came from products launched within the previous three years".[13] Becht was Britain's highest-paid businessman, taking home more than £90 million in 2009.[31] In April 2011, he announced that he would step down in September of that year, to be replaced by Rakesh Kapoor, who had been with the company since 1987. Reckitt Benckiser shares fell by 6.6% on the news.[32]

Corporate social responsibility[edit]

RB has held Platinum status in the Business in the Community CR Index,[33] since 2005 and in 2009 entered the Dow Jones Sustainability World Index and the Carbon Disclosure Leadership Index. [34]

Save the Children[edit]Save the Children has described RB as its "most valuable UK-based corporate supporter".[35] Their staff fundraises in many different ways, from football tournaments and silly hat wearing to payroll giving and marathon running. Members of staff in 2009 completed a global employee trek, facing the challenges of natural disaster and altitude sickness in order to raise almost £250,000 for the charity. In 2011 a group of 65 RB employees took part in a Global Challenge in Brazil, some undertaking a dangerous trek and others volunteering on a community project.[36] In June 2012, 20 employees from six countries across Latin America took part in a gruelling trek challenge and helped to build a community centre in Cali, Colombia, raising £63,000 for Save the Children.

In its Full Year Results for 2012, RB stated it had helped to reach approximately 325,000 children and families in 2012 and since the relationship with Save The Children began in 2006 the initiative has reached nearly 900,000 vulnerable children and families.[37]

Carbon 20[edit]RB implemented an environmental initiative called Carbon 20.[38] The initiative, which was announced in November 2007, aimed to cut the total carbon footprint of its products—from creation to disposal by 20% by 2020. As part of the initiative the company has reduced by 70% the amount of plastic in the packaging of its Vanish cleaner.[39]

In January 2010, RB announced that they had already reached the halfway mark on their carbon reduction target in the third year of the Carbon20 initiative. RB stated "Over 3 million tonnes of CO2 was avoided last year by an 11% reduction per unit dose in the carbon impact across our

products’ life cycle – the same impact as taking nearly 1,000,000 cars off the road". RB cited new programmes to redesign products using fewer materials and less energy, packaging, and waste, along with moving a number of factories and plants to combined heat and power energy systems as the main contributors to achieving the target so far.[40]

The Independent characterised the Carbon 20 initiative as "a typically savvy bit of marketing"[41] on the part of Bart Becht, the company's former CEO. It observed that RB's initiative seemed to go further than similar green initiatives by other companies, and that it would lead to increased profits.

In New York in February 2009, Earthjustice filed a lawsuit against RB and others. The petition seeks to compel the companies to identify all of the ingredients used in their products.[42] Earthjustice contacted several companies in September 2008 requesting that they comply with a 1971 law requiring them to disclose the ingredients in their products and make available any associated health or safety studies. RB and the other defendants ignored or refused the request. [43]

betterbusiness[edit]In September 2012, following the success of Carbon 20, RB launched a new strategy for sustainable innovation, betterbusiness, which focuses on the changing needs of women and the scarcity of water.[44] The initiative sets three key goals for 2020: a third of net revenue to come from more sustainable products, a reduction in the water impact per product by one-third across its lifecycle and a reduction in carbon footprint per dose by a third.[45]

RB Trees[edit]In June 2006, RB launched RB Trees (then known as Trees for Change), a major forestation project designed to offset the greenhouse gases created as a by-product of its manufacturing processes. The project aims to plant 10,000,000 trees, on land used or previously cleared for cultivation, to turn this back to forest.[46]

Anti-competitive behaviour[edit]

In 2008 the BBC's Newsnight [47] [48]  accused Reckitt Benckiser of attempting to delay the introduction of a competitive, generic version of one of its most popular products,Gaviscon, a treatment for heartburn and gastroesophageal reflux disease. In his introduction, reporter Martin Shankleman said, "Gaviscon is hailed as a power brand by its owners, Reckitt Benckiser". He continued,

"Reckitt Benckiser likes to claim that the profits flow from their expertise in marketing. But we know that there's another way in which they've been coining it in—-by ripping-off the NHS, as a whistle-blower has told us.

The "whistle-blower" was shown in silhouette, and his words were spoken by an actor: "Reckitt's cheated the National Health Service. It could have saved the NHS millions of pounds. But not just the NHS, patients, doctors—they've cheated health professionals. I felt it had to be exposed".

Newsnight claimed that RB had a "secret plan to ensure that it kept its stranglehold" after the Gaviscon patent expired in 1999, and that Newsnight had seen the plan. TheDepartment of Health asked Newsnight to hand its documents to the NHS counter-fraud service.

The investigation was widely reported in the British press. The Guardian quoted a leaked memo in which the product's manager explained that the company could use "the rationale of health and safety" to design a switched product to "muddy the waters."[49] The newspaper quoted RB as stating that the leaked memos were "inappropriate and did not reflect Reckitt's eventual actions".

The Independent quoted Warwick Smith, director of the British Generic Manufacturers Association (BGMA): "The sort of evergreening alleged by Newsnight can cost the NHS tens of millions of pounds with no patient benefit."[50] It also quoted a statement issued by the company: "...RB is a

responsible company and we have therefore instigated an immediate internal investigation and will take action. However, we do not accept much of what has been alleged."

The Times noted that "Although Gaviscon has been out of patent for almost ten years, no other manufacturer has developed a cheap generic version. Such a drug could have saved the NHS up to £40 million."[51] It stated that the Office of Fair Trading was expected to examine whether Reckitt had acted illegally. It also printed verbatim extracts from several of the leaked memos.[52] The Times report included an extract from the statement issued by the company (see below).

In response to the Newsnight report and the reports in the press, RB issued a statement that began:

We are shocked by the allegations made as Reckitt Benckiser is a responsible company in the way it conducts its business.

Nevertheless, we are deeply concerned by the inappropriate sentiment expressed in some of the historic internal correspondence reported. We take this very seriously and have instigated an immediate internal investigation, and will take action. We also refute much of what has been reported which implies a power and influence we simply do not possess.

The company has never objected to a monograph driven generic name being published. The timetable of which is not, and never has been, within our control a monograph/generic name could have been published at any time by the regulators without reference to any third party.

The company made appropriate challenges where it felt it was justified in order to ensure patients are prescribed the right treatment. These were within the law and relevant regulations. We stress that the regulators only take a comment into account when it is valid.[53]

On 15 October 2010, RB was fined £10.2 million by the Office of Fair Trading after the company admitted anti-competitive behaviour.[54]

Legal challenges to rodenticide regulations[edit]

In 2008 the United States Environmental Protection Agency (EPA) announced a decision to remove second-generation anticoagulant rodenticides from store shelves, leaving the products available for purchase only by US licensed applicators. The ruling was slated to go into effect in 2011 allowing poison companies time to adjust to the new law. EPA's decision was based on tens of thousands of reports of pet, wildlife and child poisonings that resulted annually from rat poisons in the US alone. In 2011, Reckitt Benckiser makers of d-CON products initiated a legal challenge to the EPA expected to take several years to resolve. Early in 2014, California State Department of Pesticide Regulation ruled that anticoagulant rat poison sales would be restricted beginning on 1 July 2014. RB filed suit in San Diego County Superior Court in April 2014 to block the decision.[55][56]

MANAGING DIGITAL: RECKITT BENCKISER’S VP MARKETINGVP to agencies: understand consumers' digital behaviour and deliver KPIsSTEPHAN ARGENT  MAY 22, 2015In this series on managing the digital revolution, Ari Aronson and Stephan Argent collect insights from both the agency and the brand sides of the street.This week, Marketing contributor Stephan Argent chats with Shailesh Shukla, vice-president marketing & trade marketing at Reckitt Benckiser, to get an idea how the company is navigating its way through the digital marketing revolution.What’s your vision for the future of digital in your organization?It’s defined by what we do. We are in the business of providing solutions for consumers that lead to healthier lives and happier homes and how the consumer is moving into the digital world will dictate the role of digital. Right now, digital is becoming the lead in terms of consumer communications, media and content.Overtime I see development of etailing and direct selling to the consumer becoming a larger portion of digital, though that will take time.

The third thing coming to the fore is market research because it’s a tool that leads to input into R+D into what consumers are looking for and asking for.

But above all, our vision will be driven by consumer’s digital behaviour because we are here to service the consumer.

What areas of digital do you do in-house vs. outsource, and why?Brand strategy, digital strategy and how our digital footprint is interacting with the consumer is all done internally. The media strategy and deployment, content strategy and content deployment is outsourced. The one exception, our online video buying is done in house because we have a huge volume of online video across the world, and we have a central team that buys that for us.

Do you use a one-stop agency or split out digital separately, and why?At the moment it’s split out separately for two reasons:First because we could not find one agency that was expert in all aspects of digital. Knowing consumer behaviour with a particular category in digital was important in planning. We needed expertise in managing search and optimization in specific categories. We needed expertise in social, CRM as well as programmatic buying and so on. And we just didn’t find all that expertise in one place.

Second, as we started walking in this [digital] space, all these new technologies and ways of connecting with the consumer started coming up and we were approached by companies like Facebook, which demonstrated its expertise in specific areas. So the fact the new technologies were emerging and our agencies weren’t comprehending all of them, we had to form specialist partnerships where necessary.

How has digital impacted your marketing org chart?The only way it has impacted us is that we have a digital manager in-house now. What it’s really impacted is the thinking of our marketing organization and being digital at heart and digital first because the comfort levels used to take them back to traditional. But, the thinking now is rapidly evolving to digital first and digital at heart because that’s the most important and complex thing to grasp and deploy. I’m pushing the team to think digital first and digital at heart.What are the biggest challenges you’re facing from a digital perspective?I need our digital agencies and partners to have the expertise to understand the consumer digital behaviour in relation to the category.For example, how the consumer interacts with removing a stain from their clothes digitally is completely different from the same consumer’s behaviour when it comes to preventing cold and flu infection in their home digitally. One requires an immediate solution to get rid of the stain and search might be the most obvious interaction digitally, and we have to be number one there. If someone is concerned about germs in cold and flu season, then they may be looking for content and going into sites and information areas that may not be driven by search.

That’s where we sometimes apply digital as a tool without really thinking about the real objective or the KPI. At times I’ve seen the same strategy come to me for Resolve stain remover and the same strategy for Lysol. But it’s different. We have to ask have we thought through how the consumer is using digital in relation to the category. We are marketing in a digital world, we’re not doing digital marketing for the sake of digital.

What are the key expectations from your brand team and digital partner?Three things:

Understand my brand and my consumer Understand the digital consumer behaviour in relation to the category Deliver the media and content strategy accordingly

Everything should align and all the dots should connect.

What key lessons have you learned as an organization when it comes to digital?What we are learning now is that digital is very shiny and very exciting. There seems to be a new tool and a new app everyday and we can sometimes get carried away. So there are two things that we need to do. First we have to ask, does it make sense with what we want to achieve with the consumer, is this the right bridge connecting us with the consumer, or is it a nice shiny toy and I’m running after it?Second, what’s the ROI? We sometimes get very excited and we run it, but we realize it’s not the right bridge that connects us to the consumer and we’ve wasted time and money and we don’t see an appropriate ROI.

Do you decide how to allocate budget between traditional and digital?It’s driven by our objectives. There’s no directive as to what the percentages should be. It’s driven by what the brand objectives, media objectives, consumer digital behaviour and what our consumers are looking for. I expect it to grow, but what I don’t want to do is make it a fixed percentage of say 60% because then we’ll make it 60% without thinking about what really makes sense.How can agencies be more effective to you and other marketers in their digital solutions?Understand what the brand’s strategy and objectives are. Clearly understand what the consumer digital behaviour is and deliver the brand KPIs in that manner with the right tools. I want my agencies to keep on bringing the new shiny apps and solutions to us, after thinking through whether it makes sense, while educating us on what’s changing consumer behaviour in the digital world.

Reckitt Benckiser and Unilever's marketing strategies provide a study in contrastsby Gemma Charles, 04.08.2008

inShare

LONDON - When it emerged last week that Unilever's chief executive Patrick Cescau was stepping down from his post, a clutch of internal candidates were suggested as possible successors. Alongside the Unilever executives, however, the name of Bart Brecht, Cescau's opposite number at Reckitt Benckiser, cropped up.

Even if Unilever plays it safe and opts for one of its own, this will be no reflection on its rival's business performance. While Reckitt wowed the City last week with its figures - operating profit increased by 22% in the second quarter - Unilever's were underwhelming. The owner of Dove, Vaseline and Hellmann's posted only a 6.8% rise in sales over the same period, achieved largely through price rises.

'Our performance in the first half year has been good in what has been a challenging environment,' argued Cescau. The City begged to differ, and concern over Unilever's flat volume growth sent its share price tumbling.

The companies' fortunes contrast sharply. Cescau, who became Unilever's first group chief executive after its infamous first ever profit warning in 2004, has overseen a painful restructuring programme. The drive, 'One Unilever', aims to cut costs by streamlining the unwieldy country-run businesses into a tighter operation, running ad campaigns and new product development on a global basis.

Unilever has made high-profile disposals to focus resources on its most successful lines. It sold both its European frozen-food business, which included Birds Eye, and the Bertolli olive oil brand.

Reflecting on the restructure, Fernand De Boer, an analyst for investment bank Petercam, says: 'It's going OK internally but the outside world is changing more than Unilever could have expected.' De Boer predicts a gloomy outlook for Unilever, with flat volume growth as consumers shift to cheaper, private-label goods.

Reckitt went through its own organisational changes in the late 90s, after the merger between Reckitt & Colman and Benckiser, having sold the Colman's food business in 1995. As a result, commentators say it has already reached the place where Unilever is striving to be.

'Reckitt is a more focused company that has had fewer evolution problems than Unilever,' says Investec consumer goods analyst Martin Deboo.

A former Unilever executive adds: 'The choice Cescau had was to split food from household and personal care, or drive them together to find synergies. He chose the latter and it has been successful, but what has been more difficult is driving innovation.'

Being innovative has posed no problem for Reckitt, whose business is built on cleaning products, including Cillit Bang and Harpic, and, latterly, over-the-counter medicines, after its £1.9bn acquisition of Boots Healthcare International in 2005. Impressively, 40% of Reckitt's revenue is from products launched in the past three years.

'In household goods it tends to be the newer products that do well,' says Adrian Atterby, industry analyst for household care products at Euromonitor. He adds that Reckitt's portfolio in niche, high-margin household categories such as stain removal - instead of slugging it out with Unilever in detergents - works in its favour too.

Supermarkets are less concerned about entering these categories because of their smaller scale, contends Atterby.

Marketing spend is another factor where Reckitt is outpacing Unilever. Although the latter spends almost twice as much on advertising, Reckitt's UK spend is increasing, while Unilever's is falling.

A spokeswoman for Reckitt says it focuses on 17 'power brands'. 'We're a fast-paced organisation; quick and direct. There are only a couple of layers between the UK marketing director and the chief executive,' she says.

Deboo believes that whoever takes over Unilever must drive Cescau's organisational reforms. He sees no problem with the strategy of keeping its food and household and personal care businesses together and supports its aggressive push into emerging markets.

Reckitt, with its recession-resistant products, so far seems to be weathering the downturn better than Unilever. It will be a brave soul who takes up Cescau's mantle, however, if a full-blown recession does indeed come to pass.

Reckitt Benckiser: Creating A Game-Changing Media Strategy

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Brandon Gutman, CONTRIBUTOR

In this Brand Innovator Spotlight, Marc Fonzetti, Head of Media at Reckitt Benckiser, proves how one individual can transform a large organization and shares his process in full detail.

Brandon Gutman: Tell me how your work at Reckitt Benckiser pushed you into the spotlight.Marc Fonzetti: In my first three years with the company, I was the head of digital, responsible for everything from our websites to our eCRM program to building our digital media footprint which was really my passion point.  It was tough coming from the pure play digital arena – where everyone believed in the power of digital as a medium – to a large corporation where digital was not yet in the core consideration set.  A few months into the job I knew I had my work cut out for me.  So, I started by listening to and learning from the marketers, ABMs and MDs, anyone who showed any interest who could be an advocate at some point.  What were their knowledge base, concerns and opinions of digital advertising?  What would it take to convince them to consider it and then prove to them that it worked?  Working with RB Global Media, we identified online video as the evolving media in the industry and a lot of white space in terms of being able to take a competitive advantage by using it.  Now that I had a focus, I went to work understanding the ecosystem, key players, personally meeting (along with my media agency) and sitting down to negotiate with dozens of online video providers, working with a new online video ad serving and auditing company (Telemetry) to develop systems that streamlined the delivery and reporting of dozens of partners into a single dashboard, and in general, leading the integration of Internet video with

traditional TV, a process that combines ongoing media research, highly accountable digital video measurement and a proprietary methodology to generate an iGRP and combine Internet video and TV GRPs.  This led to an Ad Age Media Maven Award in 2009 and ultimately a promotion in 2010 to my current leadership role within RB as Head of Media for RB North America.

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I’ve heard the term “change agent’ used to describe Marc Fonzetti from others in the industry; how did you get such a big global organization to change?I can summarize into a few key needs and steps:

1) Passion.  You cannot evoke great change alone; so know your passion will drive you, will be infectious and will get others to follow.

2) Vision.  Know your work and stay ahead of the curve.  Understand less about what new technology does and how it works but how does it facilitate business and work as yet another tool in your media and marketing arsenal.

3) Small wins.  Rome was not built in a day.  I started by appealing to ABMs and the lower tier of the org chart to get peer support and to learn their business.  Once confident there, I worked my way up the ladder, refining my story and offerings.  I made every opportunity to test count, by working with the media agency to develop strong plans and the research folks to make it measurable and accountable.  It’s hard to ignore strong results, no matter how small at first, when you have proof that you can scale!

4) Bridge the gap between media and marketers’ knowledge and language, especially with digital.  This is a tough one and is where the digital media industry has not done itself any favors in the past fifteen years.  Traditional media and digital media talk different languages, metrics, currencies and results.  Marketers need to think in big picture, big dollars and results such as short term sales and long term brand equity.  Digital media vendors and even agencies still talk in impressions, clicks, and engagement.  See the disconnect?  I make it my mission to be the “translator” at RB so marketing understands what the heck the digital guys are so excited about when it’s put in front of them as a proposal.

How are you continuing to evoke change in your larger role and responsibility for integrated media?Just as I walked into RB four years ago and re-wrote the digital plan, I basically did the same thing with the entire media strategy for 2011.  In my first nine months as Head of Media, I changed media agencies, managed my first TV upfront, utilized new strategic media planning tools and research and basically tore up the previous media strategy and plans for RB.  Of course, it was a little easier and happened a lot quicker this time because I now have the support and trust of upper management.  Have a look at the Kantar Media competitive reports a few months into 2011 and you’ll see what I mean!

How do the advertising and media industries need to evolve in the next few years?When it comes to the complex things we are facing as a global community today: a down economy, uncertain future, constantly evolving technologies, consumers taking control, media fragmentation, measurable-everything and commoditization of ‘non creative ideas’ (to borrow the term from Randall Rothenberg, CEO of the IAB), too many businesses are confused, overwhelmed and tend to go back to what they know.  It’s my job at RB and the media industry’s as a whole to make all of the good bits of this change understandable and actionable.  I’m not saying we turn everything into GRPs but that may be step 1.0.  We need common metrics and currencies across more ‘sexy media’ such as social media, search and mobile applications.  We need to determine how an engaged eyeball is different from a passive eyeball.  This needs to happen throughout the entire process from  truly integrated planning, to buying, to establishing success criteria & metrics, to research and, of course, when talking to marketers and executive management.  Last but not least, digital creative development, process and comparison to traditional (TV/Print) also needs a bit of work as that is the glue that ties the media together…but that’s for another day.

Reckitt's 'Power Brands' Strategy Pays Off ByElaine Wong

July 29, 2009, 12:00 AM EDT

Advertising & Branding

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If the most recent round of earnings is any indication, the recession still hasn’t let up on packaged goods companies. Kimberly-Clark, which owns Huggies and Cottonelle, for instance, said net sales fell 5.6 percent to $4.7 billion in its second quarter. Procter & Gamble, which is scheduled to report fiscal year fourth quarter earnings next week, saw net sales decline 8 percent to $18.4 billion in the third quarter. Wall Street is keeping an eye on another—albeit smaller—packaged goods company: Reckitt Benckiser. The maker of Lysol and Mucinex in the U.S. today (Wednesday) reported a 20 percent

increase in second quarter sales to 1.9 billion pounds ($3.1 billion); profits were up 31 percent to 310 million pounds ($507.5 million). The increase, the company claims, was fueled by innovation and marketing investments behind its 17 global “power brands.” Reckitt has unleashed new product extensions like Spray ‘N Wash Bright & White, Resolve Deep Clean Powder and concentrated versions of its fabric care brand, Woolite. Rob de Groot, executive vp of North America and Australia, said there is a lot of room for growth. (Reckitt is a $40 billion company, compared to P&G at $83.5 billion.) The company has an opportunity to increase its presence in the U.S.—such

as with the rebranding of Electrasol to Finish, and growing the Mucinex brand, which has only tapped into 25 percent of the U.S. population. De Groot (pictured) talked with Brandweek about Reckitt's strategy and why it's working despite the economic slump.

BRANDWEEK: Reckitt Benckiser has been posting consistently strong quarterly earnings, as larger rivals like Procter & Gamble and Unilever have taken a hit from the recession. What’s your strategy for growing brands—and sales—in tough times?ROB DE GROOT:  It’s a good set of results that we’re happy to give to the outside world. It is something to be glad about. It’s also confirming the strategy that we’ve had for the last 10 years. It’s a very focused strategy. We have 17 power brands that we focus on as a company. [Eleven of those 17 power brands are in North America, including Clearasil, Calgon and French’s.] And it’s very focused on those power brands and fueling those power brands with investments. It’s something we’ve done differently than other players, which is to continue to invest and focus on our [core] brands in tough times.

The [strategy] is two parts: [The first is innovation] and [second] is investment, or money to communicate to consumers. We’re moving away from a world where we split marketing and sales and trade. We’re talking very much about our consumers and they have different touch points with which they get their information from: There is TV, Internet and in-store, of course. One of the things we started a few years ago is to communicate—360 degrees, as we call it—with consumers and we try to touch them at different moments of the day at different moments of their life. And so, our investment towards the consumer has been more multi than single point and the number of connections we have with consumers is much higher than before.

BW:  Does it help to be the “smaller” competitor? That is, consumers in the U.S.—while they may know Lysol, Spray ‘N Wash and Woolite—aren’t as familiar with the Reckitt brand. Is that a disadvantage in any way?RG:  Consumers are not buying companies, they are buying brands. First

and foremost, we fuel our brands with investments rather than the corporate brands. At the same time, we also address our corporate brand identity, but that is to a very focused and targeted audience.

[And so, like I was saying,] consumers are shopping for brands in these tough times, but they are also coming back to strong brands because they don’t want to take any risks. They don’t want to buy something, try it out and then find it doesn’t work. Consumers going back to strong brands in tough times is something we’re seeing happening [right now].

BW:  Reckitt recently launched a campaign to raise awareness of its new corporate brand identity, “RB.” (Havas’ Euro RSCG and Omnicom Group’s OMD, both in London, collaborated on the effort.) How has that campaign been aiding both corporate and brand awareness thus far?RG:  It’s too early to tell . . . We just launched it. But we don’t have the pretension that the whole world is going to know [who] RB or Reckitt Benckiser [is]. It’s clearly [targeted towards] investors, but they already know [who we are]. But we also try to target very much the [younger professionals], which is much more of our strategy: To make sure people know who has been the winner in the market for the last five years and that we’re actually a slightly different company from a recruiting standpoint and it might be fun to work here. That is the heart of the campaign. BW:  In March, Reckitt announced it was shifting $20 million in TV advertising dollars to online. How has that initiative been paying off?RG:  It’s too early to say, “This is the best move ever.” Or, “It’s working better than other [strategies we’ve tried].” Toward the end of the year, we’ll have made up our minds over where we’ll invest more and where we’ll do something different. This is looking at Reckitt not as a whole, but brand by brand. It’s very different if you’re speaking to a Clearasil consumer than to someone who’s dealing with Spray ‘N Wash or one of our other brands.

BW: How big of a threat is private label in the categories Reckitt plays in?RG:  Private label is active. It’s growing actively in the market, and in the U.S., in particular. But the Reckitt portfolio grows faster in market share than private label. Yes, private label is picking up, but not at our expense at this point in time.

BW: Lysol, one of Reckitt’s biggest

brands in the U.S., saw a direct lift in sales as a result of the H1N1 “swine flu” virus. Has public concern over that pandemic largely gone under the radar or do you expect it to heat up again as we enter cold and flu season?RG:  Lysol is one of the brands consumers are going back to. It’s also been compensating for a very soft flu season at the beginning of the year, which was good news—because it meant less people were ill—but for the Lysol franchise, it helped compensate for that. We’ve also not exploited [the H1N1 pandemic] in our commercials, which, as a company, we don’t want to do. [This outbreak] is serious. The No. 1 thing we should do as a company is educate our consumers, which we’ve done with different touch points. It’s not about saying, “Lysol kills the swine flu. Go out and buy this product.” 

[Regarding whether H1N1 has fallen off consumers’ radars,] I don’t think this is the case worldwide. The [number of] incidents [is] lower in the U.S., but the opposite is true in Europe. We are ready for when it comes back, but as I said, we will not exploit this in our communication. Everything we do will be very much in line with what the CDC [Centers for Disease Control and Prevention] is doing—which is educating and giving consumers the right advice.

BW:  Any marketing strategies/campaigns you’ve tried recently that were an instant hit that you’d like to share?RG:  Finish is a fantastic example of how to create loyalty. We rebranded it from Electrasol to Finish. At the same time, we launched Finish Quantum in the U.S. That is gaining share in the market and shows extensive high loyalty. 

I think we should also be happy with the continued success of Mucinex. There is less of a new factor on that brand, but it has so much mileage to grow into the future. Despite being No. 1 in the market right now, it has only reached 25 percent of the consumers that it can reach. So you will see with [new] campaigning and packaging we’re taking it to the next level in the coming six months.