Why P&g and Unilever Wanted to Cut the Number of Brands to a Core Few

Each company had its own reasons to explain why it decided to discontinue the amount of brands. Nonetheless, there may be some basic reasons which become barriers for every company and make them stop their business operation on some brands.

1. No demand for those products

The first-rate mission of business always sells goods as much as possible. However, some products did not attract attention in the market and could not gain companies any revenues. It means some products could not convince customers that these goods are able to fulfill in three basic benefits which are functional, economic, and psychological. Therefore, these brands might be rejected by the market because they are no longer stay in consumers’ demand. That leads to lots of goods in stock of P&G and Unilever which increase costs pressures for storage while they cannot help companies to increase sales. Consequently, these products should be stopped producing.

2. No profitability as well as potential growth in future

A product always spends the product life cycle which consists of marketing introduction, growth, maturity, and decline.

There are some products that whose revenues cannot cover all costs. Moreover, they also have no potential growth in future although companies spend more costs and time for the market introduction stage which could be about one year to three years. If P&G and Unilever still try to promote these products, they will waste capital, labor and time. In business, wasting labor and time are the same meaning with losses. Accordingly, they are really necessary to cut down brands that cannot support effectively for business or gain profit.

3. No integration to mutual business strategies of the whole company in future.

The board of management of P&G and Unilever often establishes periodical meetings to plan business strategies for the whole companies. Policies might change over time and have different priorities on business at each period. Some products existed long time ago, so its image and messages which it represented might not be suitable with new goals and missions of companies anymore. It means keeping these products may become barrier for introducing new products to customers because they might be attracted on familiar products a lot and ignore new products. Moreover, selling these old products might have negative influences on sales of other potential products which gain a huge profit for P&G and Unilever.