TERM PAPER

[MGT101, Section:05]

Submitted To:
M. M. Baset Oli Mishkat.

Submitted By:
1.Mehenaj Sultana Bithy
ID: 2017-3-10-047
2.MD. Fahim Ahmed
ID: 2016-2-10-051
3.Ummay Habiba
ID: 2017-3-10-127
4.Meharin Adida
ID: 2016-1-10-104
5.Nourin Hoque
ID: 2016-3-10-106

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 TABLE OF CONTENT

Acknowledgement 3

Introduction 4

Summary 5-6

Answer of Question-1 6

Answer of Question-2 6-7

Answer of Question-3 7-8

Answer of Question-4 8-9

Answer of Question-5 9

Conclusion 10

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 ACKNOWLEDGEMENT

We wish to express our sincere gratitude to M. M. Baset Oli Mishkat, our

honourable faculty, for providing us an opportunity to do our Term Paper on this
case.

We have learned something new by solving this case study and we are very
thankful to our respectable faculty.

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 Introduction

In December 1999, British company Reckitt and Colman merged with Dutch company
Benckiser to form Reckitt Benckiser CEO Bart Betch developed a reputation for rapidly
product Innovation and industry leading profit margins by leading the company over 11
years. RB's top powerbrands are Dettol, Lysol,Strepsils, Veet, Airwick etc. RB’s top
competitors are P&G, Unilever, SC Johnson and Clorox. Since 1999 RBS share price
had risen from 3 pound to 31 pound by April 2011, and net revenues had increased
from 3 billion to 8.45 billion over the same period.

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 Reckitt Benckiser:Fast and Focused Innovation

Summary
Powerbrands:
RB's strategy was to focus on 19 power brandstotrain them how to well- produce the
product. The power brands typically achieved 60% gross margin however their brands
did not sale in such high volumes as PNG and Unilever products. Then RB launched
some highly successful product likeVanish. In 2010 they launched Aerial.
Constant, Fast Innovation:
RBtried to develop the power brands by reinvesting 12% to 13% revenues in new
product marketing. On average RB’s new revenues were 30% to 40% during the past
three years.RB’s goal was to launch a new set of innovationson each products in every
six months.The strategy of RB was to deliver 100 new products in every year.
FocusedInnovation:
RB focused on its innovations and investments on the powerbrands. Betch explained
that they only focus on 19 power brands not because they don’t like other brands but
because the power brands are in high growth categories. So they don’t invest much in
the other brands as they want to utilize the high growth opportunities.
RB always think about customer’s satisfaction. For example, RB has taken a decision to
make a medicine of cold and flu which can be dissolved or swallowed. So that they
could be satisfied by their own choice.
RB developed inventions from consumers, suppliers, managers, employees and even
competitors instead of lab. From 2000-2010, Reckitt introduced only one new
brandnamed Cillit bang. Betch said that it was very expensive to launch a new product
globally that’s why they were focusing on the inventions in their existing brands.
The RB Treatment:
RB treatment is RB's commitment to deliver fast and RB successfully accomplished this
commitment by its constant innovation which concentrated on powerbrands. For
example,RB launched Nurofen (pain reliever) thenit acquiredNurofen's parent company
Boots Healthcare International in 2005. Nurofen was astandard pain reliever which sold
well but had not seen any innovation for years. Then, market researchersrevealedan
opportunity. And by 2007, RB developed Nurofen Express which wasitsfast-acting
version.Laterit achieved awards andgrewNurofen market share in the category.
As RB was committed to ensure their products globally they introduced their power
brands to nearly 60-70 countries around the world till 2007, included Veet, Vanish,
AirWick. CillitBang, an entirely new brand that was introduced in 2005 got sold in

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around 70 countries during its first year on the market. Another example of RB's
commitment is Air Wick Freshmatic. They created an entirely new category rather than
traditional fresheners in spray cans. Four months after launching the product in UK, it
was being sold globally in 60 countries.

Question Answer

1. What is that Reckitt Benckiser is doing?

Ans: Reckitt Benckiser is a mergedglobal consumer goods company. Theyhave 19
Powerbrands. They are implementing their strategy to roll out the Powerbrands globally.
Reckitt Benckiser is very keenly implementing their strategy. They are taking survey
from consumers instead of laboratory. So that, they could bring new changes among
the products according to consumer’s need. So that their share price and net revenues
could increase. They are focusing on innovations and investments on their
powerbrands. The most important fact behind RB’s successis that they know the
impacts of every steps.They said, they are not focusing much on other brands. They are
focusing on only the powerbrands because the powerbrands are in high growth
categories. RB’s aim is to launch a new setof innovations on each products. They are
trying to deliver a hundred new products a year. In 10 years, RB launched only one
entirely new brand. So that, they could focus more on the powerbrands. They were
gaining more profits from the powerbrands. RB is trying to introduce their powerbrands
globally. From 1999 they introduced their most of the powerbrands globally such as
Vanish, Airwick, Veet, Cillit Bang etc. They spread their powerbrands to nearly 60/70
countries till 2007. They are creating better business by implementing some strategies.
RB has many product lines such as healthcare, fabric care,etcface care, antiseptics
etc.It is not very easy to do a successful business. But Reckitt Benckiser is doing so by
evaluating and understanding customers needs. Even they have also innovated from
their competitors. They have competitive partners, such as Unilever, P&G, SC
Johnson,Clorox. RB was committed to ensure their product globally. RB made sure
that they keep the commitment by ensuring their products to spread outin many
countries. Till 2007, they have made their products available in almost 60 to 70
countries. For example, stain remover Vanish, cleaning products likeLysol,
Harpick,Cillit Bang dishwasher Finish, antiseptics Strepsils andNurofen. They have
shown how successfully implementing the strategies can make better business and
better livelihoods.

2. How are they executing this strategy?

Ans: The stated strategy was to focus on its 19 Powerbrands in high-growth categories
and nurture these brands with innovation and media spending before rolling them out
globally. RB had invested heavily in categories that the larger fast-moving consumer

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goods companies bypassed and viewed these categories as areas where there was not
only room for market-share growth but also for category growth. For example, RB
launched the highly successful stain-remover product Vanish that was similar to
mainstream washing detergent powder and liquids, whereas competitors Unilever and
P&G battled on price, differentiated enough to require a separate purchasing category.
Once RB developed or acquired a Powerbrand, it differentiated the brand through
continual, fast innovation and strong reinvestment of revenues into marketing efforts.
RB invested typically 12%-13% of revenues into new product marketing for
Powerbrands. They invested as much as the industry average. RB drove category
growth through innovation, meeting consumer needs and increasing market share
within that category. RB aimed to launch a new set of innovations on each product
every six months. Throughout its product line, RB’s strategy was to deliver 100 new
products a year. RB sought to constantly bring new offerings to the consumer, and to
describe via focused media campaigns and in-store promotions what had changed and
how the consumer benefitted. They always rely on speed to create and define new
sectors, which grow entire categories.
RB charged a premium price for delivering better solutions to time-pressed,
convenience-seeking consumers. RB always determined to develop innovations from
consumers, suppliers, managers, employees, and even competitors.

3. What are trade-offs?

Ans: A trade-off is a situational decision that involves diminishing or losing one quality,
quantity or property of a set of design in return for gains in other aspects. The concept
of a tradeoff implies a tactical or strategic choice made with full comprehension of the
advantages and disadvantages. A trade-off is where one thing increases and another
thing decreases. And it also means the most preferred possible alternative. It involves a
sacrifice that must be made to get a certain product or experience.
In the case of Reckitt Benckiser: fast and focused innovation, we have seen that they
are making many trade-offs or many compromises to grow their business. They do not
only think about their business, they think for society too. They contributed a lot to India
for better sanitization. As the global leader of health, hygiene and home, they are
changing things for better as they think it is their responsibility. They are aimed to
improve the lives of the general people and those who work with them in any capacity
and to making a difference in communities around the globe.
They contributed a lot for society’s and environment’s betterment. RB’s CEO says that
they cannot think more about business and less about society. He added, “Our
company purpose is about healthier life happier home. There is no trade off and when
there is no trade off it is a win-win.”

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The global challenges the world faces today are complex and universal. RB is
addressing those challenges by focusing the efforts of their people and products where
they can make a difference: energy demand, raw material and deforestation, water
scarcity, waste creation, hygiene and the difference they can make to their consumers
and communities around the world. They recognized the impact they made, and they
are constantly changing and improving the way they manufacture and design their
products to build a better future.
RB have compromised many things for their powerbrands to roll out globally.
Theycompromised launching new brands because it takes more time. Rather they
contributed to the powerbrands so that those powerbrands could be highly nurtured for
international roll-out.

4. What happens if competitors imitate your strategy?

Ans: Competitors will always be present in almost any Industry they can enter. Even
pioneers will eventually come face to face with new entrants that will eventually evolve
as close competitors if not guarded.
At some point in time, Most especially when Reckitt Benckiser is starting to gain the
lead, they will come across competitors who lack their own ideas to the point that their
price strategy is to just copy the thing offer and how offer customer. In the case, Reckitt
Benckiser had some competitors who went and copied all their materials online-from the
seminar titles down to spelling errors. This is most common when competitors start to
recognize RB’s strength. With the hope that by copying RB’s strategies , they would
also receive the same benefits that RB are getting.
However, competitors have to understand that the most destructive effects is if they let
RB react emotionally and be distracted. They have a lot of things to do and it starts with
forgetting about them copying and instead think of ways to make sure that despite their
imitation, then RB come still come out on top.
First,take imitation as a compliment. It is a sign that RB consider what competitors are
doing as supreme over their less than creative ways. RB have to protect their market
share if they want to grow in their Industry. Remember that no matter how good
competitors are in copying. They can never duplicate:
 Customer loyalty
 Skills of team
 Plans that have not yet been implemented (innovations)

In term of customer loyalty, RB should provide loyalty of frequency perk to customer

and constantly satisfy their wants by way of quality customer service, product
customizations and product variety.

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In term of quality, Remember that part of the process of develop value, RB need people
who possess the required skills and experience. No matter how observant they are in
studying their products they would never be able to copy something that is dependent
on the skills of the people who are part of the production process.
Innovating is the best way to counter the effects to imitation. By periodically improving
product or service quality, imitators will always be left behind. From customer
feedbacks, check if there are thing that customer want to be added to next line of
product.

5. What are the lessons for Consumer Package Goods Management? Or what
have you learned from this case?
Ans: Reckitt Benckiser is one of the successful company in the global market. The
profile of RB shown by this case. We have learned some strategies from the case. RB
develop a reputation for rapidly product innovation and industry leading profile margins
by leading the company. They have brought new products to the market day by day.
They focus only some specific products. Their goal was launch 1 new product in every 6
months. The strategy of RB was to deliver 100 new products in every year. They try to
do something innovative for the company. They focus on specific products and train
them to became product qualified. They respectively launched highly successful product
such as Dettol, Lysol, Strepsils, Veet, Airwick etc. Despite their opportunity, they do not
focus on other brand because of their brand is more high growth categories. Also, do
not invest for other brand for utilize high opportunities. They develop brand quality by
reinvest revenue. Launch a product globally and try to invention on their existing
product. They think about customer satisfaction. Develop invention from customers,
suppliers, managers, employees, even competitors instead of lab. They committed to
deliver product very fast and successfully accomplished this commitment by its constant
innovation which concentrated on powerbrand. They contribute new product in a short
time. They processed according to plan very skillfully. They have come forward with
their target properly. RB’s powerbrand is their successful brand. They focus on its
innovation and investment on the Powerbrand. They are committed to providing safe
and sustainable consumer products. Sustainability is an integral part of the product
innovation process.
RB’s strategies are very organized. We have learned a lot of things from it, that we have
to do something innovative. Reinvest revenue for develop ta brand. Need to focus on
some specific product. We need to do a clear strategic plan. We have learned that how
a company gradually increase their market globally and many other sides.

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 Conclusion

Reckitt Benckiser have spread out internationally very quickly. Their successful
research, development and potential made them highly successful. They have also
faced many ups and downs but they never stopped innovating and researching. RB
competed with large companies like Uniliver, SC Johnson. They have set their vision
and purpose for achieving their targets. In many cases we see that newly grown brands
often takes much time to be introduced internationally. But Reckitt Benckiser have set
an example that how companies can roll-out their products globally by taking right and
effective steps. All their 19 powerbrands are very much successful. Those are being
sold in high amounts in many countries. RB’s CEO Bart Betch has led the company
over 11 years and made a reputation of leading profit margins. We have a lot to learn
from their strategy.

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