A Work Project, presented as part of the requirements for the Award of a Master Degree in Management from the NOVA – School of Business and Economics.
COMMUNICATING SHARED VALUE: A COMMUNICATION PLAN FOR KNORR PORTUGAL
ANA MARGARIDA MOTA BATALHA DE OLIVEIRA N.º 24891 CAROLINA PEREIRA CRESPO CONFRARIA N.º 25187
A Project carried out on the Master in Management Program, under the supervision of: Afonso Mendonça Reis
COMMUNICATING SHARED VALUE: A COMMUNICATION PLAN FOR KNORR PORTUGAL
Abstract
This paper proposes an approach to communicating shared value for Knorr Portugal. By introducing the concept of Creating Shared Value and the benefits for a brand to embrace this philosophy, the importance and challenges of communicating this practice will be evident and addressed. The case of Unilever will be explored creating the framework to perform a brand analysis of Knorr. The respective issues will be outlined, converging into a communication plan which encloses six initiatives to be developed throughout the year. Ultimately, a set of recommendations are presented in order to fulfill the goal of changing consumers’ perception regarding the brand’s naturalness. Key words: Creating Shared Value, Knorr, Communication
Table of Contents Introduction
PART I- Creating Shared Value
1- Creating Shared Value: Distinction and Similarities with Corporate Social Responsibility 2- Creating Shared Value: Possible Paths
3- Creating Shared Value: Benefits
4- Creating Shared Value: The Case of Unilever PART II- Knorr Portugal: Brand Analysis 1- STEEPLE Analysis
2- Five Porter's Analysis
3- Brand Identity and Positioning 4- TOWS Analysis
5- Identification of Issues 6- New Consumer Journey
PART III- Communication Plan for Knorr Portugal 1- The 6Ms- General Level
2- The 6Ms- Granular Level 2.1. My Knorr Recipes 2.2. Knorr's Dream Meal 2.3. A Trip Through Our Nature 2.4. Knorr's Agenda
2.5 The Flavor Is In Our Nature 2.6. Dressings' New Dress
PART IV- Conclusion and Recommendations Limitations
EXECUTIVE SUMMARY
The motivation to write this paper is to leverage the Creating Shared Value practices in Portugal, studying and acting upon the case of the brand Knorr Portugal, of Unilever Jerónimo Martins. Creating Shared Value is gaining relevance as companies worldwide are acknowledging its benefits. Unilever is one of the most committed companies, however, the recent efforts leave margin for improvement. The purpose of this paper is therefore to improve Knorr Portugal's performance based on the existing sustainability practices. This purpose will be achieved through the creation of a communication plan that evinces the sustainability practices of the brand, besides tackling several other issues identified through an environmental and brand analysis. The environmental analysis was based on both a STEEPLE and 5 Porter's framework, brand identity followed Kapferer's approach and brand positioning Keller's. Finally, the communication plan was outlined taking in account the 6 Ms approach and Berger's STEPPS framework to increasing the potential of becoming viral.
The presentation of the Creating shared Value Concept and the three paths to achieve it enables to frame Knorr's Portugal practices within this philosophy. Creating Shared Value previews the alignment of business and social value through three different paths: recreating products and markets, enhance productivity in the value chain and cluster development. Knorr is redefining markets by adapting its products to society's needs. Productivity is also increased as a consequence of saving natural resources and the community of Alpiarça benefits from the economic growth instilled by the resource to local suppliers. The benefits of promoting innovation and the business's longevity are therefore attained. Nevertheless, restoring trust in business, attracting and retaining talent or investor's interest can still be leveraged by the effective communication of the creating shared value practices, through the building of a strong reputation for sustainability. The case of Unilever reveals how, at an international level, the company has already benefitted from the many positive effects. An analysis of the various initiatives places the Health and Well-being category as
the most successful in terms of creating shared value achievements, supported by the outstanding performance of the subcategory Nutrition. Knorr participates positively of this change by reducing saturated fat and salt levels, within the subcategory Nutrition and by the reduction of water in agriculture and sustainable source of ingredients, within Water Use and Sustainable Sourcing subcategories.
Four realizations lead to the need of communicating this practices. Firstly, "The perception of a company’s socially responsible behavior may be more important than the actual behavior itself" (Castanheira, Story and Hartig 2016). Secondly, according to a study performed by Knorr Portugal, key brand characteristics- flavor and quality- are associated by Portuguese consumers with sustainability. Thirdly, convenient solutions are more reliable from a consumer perspective if the consumer is aware of its ingredients, its natural source and the brand is trusted. Fourthly, and taking in account all the above mentioned, the low consumer perception of the sustainability practices of Knorr presents a great concern and a missed opportunity to grow business, consolidating creating shared value.
The desired communication entails a careful analysis of the brand and its environment. The more relevant key tendencies identified in the STEEPLE are the increase in the pace of life and consequent multi-task, making consumers attention more difficult to capture among the large amount of stimulus and information. Adding to this, the growth in the number of working women is exacerbating the need for convenience. In parallel, health concerns are a growing topic which come hand in hand with the trends of natural and local food, vegetarianism, veganism and other diets. Correspondingly, environmental issues are being responded in the area of sustainability and organic farming. Furthermore, the analysis reveals an economic recovery by Portugal. The Five Porter's Analysis reveals a strong position of Knorr Portugal at the national market. It presents private labels, bulk sales and exotic flavors facilitating regulation as threats. Contrarily, low
penetration on the market of gravy cubes and powders as well as the consumers' income growth are regarded as valuable opportunities.
Concerning brand identity, Knorr desires to project flavor, quality, convenience and naturalness as its key characteristics. These will be used as a base to draw the brand’s positioning and statement: according to Keller’s approach, the target of Knorr are people between 20 and 44 years old, mostly women, divided in social approval seekers, intense flavor seekers, new flavors seekers, convenience seekers and natural and convenient alternative seekers. The identified competitors were Maggi, and on a second level, Margão, Calvé and Guloso. The Points of Parity (POPs) with competitors include all being a brand of seasonings and instant food, providing a better taste to food. On the other side, Knorr stands out (POD) for its superior ingredients and consequently, providing the best flavor. Considering the internal and external factors identified through the previous analysis, the TOWS framework allows to conclude that altering the perception of the product as not natural, highlighting its quality sustainable ingredients, is the key to tackle the threat of preferring local and 100% fresh products whilst taking advantage of the growing preference for sustainable products. Innovation is the strength to face the threat of new flavors entering the market and private labels' premium lines while serving the opportunity of consumers' interest in new flavors.
Taking in account the previous analysis, the identified issues of Knorr all concern brand image. The brand has not been able to communicate its natural character, an important point of difference. This is aggravated by the opposing relation in the consumers mindset of convenience with naturalness and the preference to cook from scratch with fresh ingredients, problems which are reflected in the sales volume.
The New Consumer Journey will provide the necessary guidance for the communication efforts to be effective. Considering the brand image issues which were identified, the analysis points to the evaluation stage as the phase to act upon, through a clear message which allows consumers to positively evaluate the brand and move forward to the buying stage. In consonance with the
STEEPLE analysis, the marketing strategy should be consumer-driven, thus the message simply facilitated for an autonomous and curious consumer to reach. Internet reviews and word-of-mouth are two of the strongest touch points in the evaluation phase.
In light of this, the first three initiatives, respond to the brand's perception issue more directly, acting on brand image. The Flavor is In Our Nature, following the growing trend of co-creation, instigates consumers to create a new and original bouillon enhancing the natural character of each ingredient. Knorr's Dream Recipe proposes a contest that will take place at the Portuguese sustainable farm and evince the naturalness of the cultivated ingredient, pepper. Through A Trip To Our Nature, Knorr will sponsor a trip to some of the sustainable farms in Europe so that the chosen bloggers can promote the brand’s benefits, as bloggers are an intermediary to which the consumer relates with and trusts more than cuisine professionals. My Knorr Recipes and Knorr's Agenda, promote customer's engagement and highlight the convenience character of the brand by facilitating consumers' life. The first puts available a customizable template where consumers own recipes or the website's might be recorded and printed. The second allows to organize the weekly meals in a customizable way and facilitates the buying process, having thus great potential for sales increase. In the case of Knorr'sAgenda, the facilitation may be more directly represented in a sales volume increase once it interferes with the buying process. Equally, Dressings' New Dress intends to tackle the sales volume issue by promoting sales in the buying process, as a complement. It presents a final recommendation of an expressive label for the products where it is applicable, through which the consumer can clearly identify which product fits a vegetarian/vegan diet and finds highlighted the percentage of the sustainable ingredients in the packaging.
All in all, to leverage the brand''s performance, Knorr should invest in the communication of its creating shared value practices, promoting a more positive evaluation of its products through word of mouth and internet reviews.
INTRODUCTION
This paper aims to promote the Creating Shared Value practices by presenting the concept, clarifying its benefits and finally leveraging those in the practical case of Knorr Portugal, by defining a communication plan, based in the analysis of the brand and its environment.
To communicate shared value, a clear notion of the concept and its benefits is essential. In the first section, an introduction to the Creating Shared Value concept will be attained by exploring the key differences and similarities with the Corporate Social Responsibility. This comparison allows the understanding of the strengths of the Creating Shared Value approach and thus how it represents a long-term solution for companies to prosper. It is further complemented with the enumeration of the three possible paths to achieve it and each implications. The benefits of creating shared value are highlighted in the third chapter, justifying the commitment t this practices and respective communication. Finally, the Creating Shared Value practices of Unilever will be analyzed, both at an international and national level. The nature and success of the initiatives will be scrutinized, in order to obtain a clear picture of the company's commitment to its sustainable living plan and the current results. In Portugal, a brief overview of the initiatives will reveal the outstanding character of Knorr's.
The second section is dedicated to perform the necessary analysis to evaluate the brand's environment, identity and positioning. A STEEPLE analysis will provide an overview of the market trends and conditions, being complemented by the industry's landscape through a 5 Porter's analysis. The brand identity and positioning, following Kapferer's and Keller's approach respectively, will enable the identification of the strengths, weaknesses, opportunities and threats faced by Knorr Portugal, schematized in a SWOT analysis. Finally, a comprehensive identification of the main issues will be outlined in order for such to be tackled by the communication plan. The new consumer journey will be used as a tool to improve the communication efforts' effectiveness, defining the focus of the communication plan.
In the third section, six initiatives are described. In consonance with the previous steps, they are mainly focused on digital tools, in bouillons as the most popular product and consumer development and engagement. Generally speaking, they aim to change consumers' perception, acting on brand image by raising awareness of the naturalness of the products' ingredients. Furthermore, the sales volume issue will be addressed.
All in all, the present report provides Knorr Portugal with communication suggestions which will not only improve the alignment with the international guidelines of sustainability and creating shared value but also, and as a consequence, the overall brand's performance.
PART I- Creating Shared Value
In order to communicate the shared value practices of a brand, it is paramount to have the understanding of the concept and the benefits it will bring. Hence, the first chapter of this section offers the distinction and similarities between the concept of Creating Shared Value and Corporate Social Responsibility in order to evince the advantages of the first in relation to the second. The second chapter further explains how shared value can be achieved, briefly presenting the three possible paths and closing this way the introduction of the concept. The third chapter will finally describe a large range of benefits which may arise from creating shared value and will justify the prevalence of such practices and its communication. Lastly, the case of Unilever will illustrate the relevance creating shared value is gaining in the business world and in this company in particular, creating the frame to analyze the case of Knorr Portugal.
1- Creating Shared Value: Distinction and Similarities with Corporate Social Responsibility Corporate Social Responsibility is still a very broad concept. It is often descriptive of the different practices instead of offering an universal definition of what is the actual responsibility of businesses towards society (Dahlsrud 2008). In an analysis of 37 different definitions by Alexander Dahlsrud, it was verified that the social, economic, environmental, voluntariness and stakeholder dimensions are the most referred. In fact, at least three of the mentioned dimensions are present in 97% of definitions. The diversity of combinations does not allow, however, to isolate a school of thought (Dahlsrud 2008).
Milton Friedman, winner of the 1976 Nobel Prize in Macroeconomics (Nobel Prize 2017), defended that "the business of business is business", that is, companies should focus in profit increasing as long as they do not commit deception or fraud, promoting "open and free competition" instead (Moratis and Cochius 2011). This definition reduces CSR to a minimum criteria, which is not common in literature, nonetheless, a valid perspective.
More altruistic views have been emerging since the early 50s. Howard Bowen may be considered the father of corporate social responsibility. Due to the low development of the business sector, the author reduced the term to "Social Responsibility" referring to a "social consciousness" of managers (Carroll, 1999). Nowadays, ISO 26 000 also prefers this nomenclature once the SR principles should apply to any type of organization besides companies.
Literature grew exponentially in the former decades. In the 60s, Keith Davis defined CSR as “businessmen’s decisions and actions taken for reasons at least partially beyond the firm’s direct economic or technical interest” (Carroll, 1999). Harold Johnson puts forth the view of businesses as having multiple objectives besides profit maximization. The same author drew the “Iron Law of Responsibility” pointing to the proportional relation between social power and social responsibility (Carroll 1999). In 1979, Thomas Zenisek reinforced the need to match “business ethic” with "societal expectations" (Carroll 1999). In the same year, Carroll added that “The social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time” (Moratis and Cochius 2011), proposing the "pyramid of CSR". The economic component is at the bottom of the pyramid, sustaining the legal, ethic and philanthropic categories, in this precise order although "each is to be fulfilled at all times", the firm acting as "a good corporate citizen" (Carroll 1999). In 1997, Elkington named the 3Ps (people, planet and profit) as essential for a business to survive and prosper, underlying the need for them "to go hand in hand" (Moratis and Cochius 2011). In 1984, Peter Drucker had drawn the attention for the importance of facing social responsibilities as business opportunities, reinforcing that profitability and responsibility were "compatible notions" (Carroll 1999). ISO 26 000 reinforces, "(...) implementing CSR is not about companies engaging in charity; on the contrary, it is about companies actively pursuing their self interests but in the process creating value for society.". Despite the growing presence of social responsibility concerns in the business world, the legitimacy of business in the eyes of society suffered a gradual decline. The capitalistic system is thus under
severe criticism. The increased awareness of social problems did not match the image of profitability associated to businesses, which were therefore perceived as being "prospering at the expense of the broader community" (Porter 2012).
In light of this, in 2011, Michael Porter and Mark Kramer introduced the Creating Shared Value idea aiming a repositioning of businesses within society. In the long run, the opposing objectives of these groups are not sustainable, once those are continuously affected by one another. The authors suggest "creating economic value in a way that also creates value for society by addressing its needs and challenges." thus "reconnect[ing] company success with social progress" (Porter and Kramer 2011). Creating Shared Value is therefore a combination of creating social value with creating business value (Bockstette and Stamp 2016). Addressing a social problem through a business model may be the source of a firm's competitiveness (Porter 2014), enabling an innovation and productivity boost, which will lead to financial success (Porter 2014). For these reasons, social issues should be faced as significant market opportunities (Porter 2014) and social value might therefore leverage economic performance instead of constraining it (Porter and Kramer 2011). In this sense, Creating Shared Value largely surpasses the goal of "doing social good" which CSR entails (Porter and Kramer 2011).
Nevertheless, this will only be possible if the social responsibility of business ceases to be a marginal concern. As a matter of fact, it must be integrated in the core activities of a firm, in order for it to provide the greatest economic benefit and ensure this efforts will perpetuate. Every company decision should be taken from a creating shared value perspective, making it part of the firm's strategy and value proposition (Porter and Kramer 2011). CSR attempts to respond to external pressures to behave like a good citizen, having a defined budget as a boundary for activities which are usually subordinated to personal preferences (Porter and Kramer 2011). The available budget and CSV agenda are therefore of a broader scope than the CSR's, once CSV integrates the company's top priorities thus having access to the overall resources (Porter and Kramer 2011). It is
generated in a joint effort with the community as opposed to a citizenship and philanthropist mere obligation performed by the company to obtain the community's approval.
Creating Shared Value implicitly advocates a new model for economic development. A "collaborative process" aligns governments, businesses, social sector and other institutions efforts (Porter 2014). Government should reformulate regulations envisioning the instilment of private sector social solutions, as opposed to implementing common operations' regulations and benefiting of tax payments (Porter 2014). It is also responsible by te development of "public goods that make an efficient economic system possible". (Beal, 2014) such as quality infrastructure, which may sustain CSV initiatives and promote business action, catalyzing social change (Porter 2012). NGOs might achieve a wider implementation scope by partnering with companies to scale social solutions (Porter 2014), minimizing the effects of the decline in traditional funding flows (Porter 2012). Foundations may invest in collaboration with companies, NGOs and governments, supporting new forms of creating social impact. In the same line, competitors can partner in order to improve the business environment (Porter 2012).
All in all, the necessary level of commitment and the alignment of the different parties' objectives are key to enable the achievement of a greater social impact. The next chapter will describe how, in practice, it is possible to create shared value.
2- Creating Shared Value: Possible Paths
Three different paths lead to shared value creation. Firstly, products and markets can be reconceived. New segments, defined by their specific social needs, may be served. If society's "needs, benefits and harms" (Porter and Kramer 2011) are incorporated in the firm's products they will logically better serve the public as well as becoming more attractive, thus more profitable. This mindset will reinforce the vision for new trends, promoting innovation and allowing the company to evolve in perfect synchrony with its target and environment.
Secondly, productivity in the value chain might be increased. The value chain is dependent on the natural resources and quality of the workforce available. As a consequence, long-term profitability will be relying on environmental and work conditions that should be improved by the company. This includes rethinking processes, distribution, packaging, natural resources usage, safety, promotion opportunities, wages or even supporting intervenients along the supply chain to improve their processes themselves (Porter and Kramer 2011).
Finally, shared value may arise from local cluster development. Clusters will benefit the communities they are situated in by promoting economic growth, through a productivity, innovation and competitive landscape boost. In fact, regional unique features are a recognized source of competitive difference and actually determine the type of clusters (Porter 2014). Those points of difference should be enhanced while weaknesses should be minimized in order to compete with other clusters (Porter 2014). At a second level, education and equality improve as open and transparent markets arise and locals are employed under fairer conditions. The buying power of the community will therefore increase and demand will be created. Suppliers also benefit from incentives for quality and efficiency.
Notwithstanding, there is a wide range of arguments for a company to pursuit the social innovation intrinsic to creating shared value, all as relevant as the already mentioned. In the following section those advantages will be enumerated and explored in greater depth.
3- Creating Shared Value: Benefits
Shared Value is a continuous source of innovation, enabling businesses to identify market trends and opportunities, thus evolving along with the society they operate for and where they operate in. However, social innovation is not only a benefit itself, but also a pillar for the following benefits. In line with the previous analysis, there is a very parsimonious motive for companies to invest in social good. The truth is, if social problems are not addressed, there will be no business in the
future. For instance, a weak economy leads to low purchasing power thus a limited demand. Satisfied communities and governments are also more supportive of businesses.
This last topic leads us to underline a very striking issue which was already briefly discussed: restoring trust in business is essential to its activity. According to the WEF, the decline of the public levels of trust is a declared concern among managers (Social Innovation A Guide To Achieving Corporate And Societal Value 2017). Porter and Kramer point various points of interdependence between businesses activities and society. However, noteworthy to highlight is the asymmetry of this relation, being businesses "subject to societal control" (Beal 2014). Basically, "The avoidance of social responsibility leads to gradual erosion of social power" (Carroll 1999) and businesses need a "license to operate" in order to avoid oppressive regulation.
Equally, environmental problems and resource scarcity will deeply affect the longevity of the business by potentially harming future supply needs. Not only is the world population growing significantly, expecting to reach 8 billion in 2024, but also its demand for business transparency and sustainability practices has increased. Therefore, thinking and acting upon such issues is thinking and acting strategically (Social Innovation A Guide To Achieving Corporate And Societal Value 2017).
Another key concern in terms of a firm's performance is the acquisition and retention of talent. In a volatile, uncertain, complex and ambiguous world, it is more trustworthy to rely on the company's own resources rather than defining a competitive advantage based on the market or industry's structure. As Mckinsey confirms a shortage in the pool of skilled workforce, it becomes increasingly important to retain the best employees in order to gain and sustain competitive advantage (Castanheira, Story and Hartig 2016). The nature of social responsible activities influences the organizational attractiveness from a workforce perspective. The group of politics affecting the so-called internal stakeholders, such as employees, managers and shareholders, will naturally have greater impact when considering a job offer, as it affects the working conditions directly.
Furthermore, CSR shows positive results in loyalty, motivation and productivity (Castanheira, Story and Hartig 2016). On the other hand, social responsible activities focused on "protection of the environment, community development, sustainability and philanthropic activities" (Castanheira, Story and Hartig 2016), which will have a direct effect on consumers, community and suppliers, the external stakeholders, "influenced ratings of organizational attractiveness only when mediated by reputation" (Castanheira, Story and Hartig 2016). Employees search for the reinforcement of their identity through a fit between the company's reputation and "core personal values" (Castanheira, Story and Hartig 2016), being meaning and purpose one of the top priorities of employers (Castanheira, Story and Hartig 2016). Moreover, reputation provides stakeholders with a tool to judge products, linking reputation with quality (Castanheira, Story and Hartig 2016). Nevertheless, applicants only take corporate social performance into consideration when they have a certain range of employment opportunities to choose from (Castanheira, Story and Hartig 2016). Being creating shared value initiatives more deeply embedded in the firm's identity and behavior than common social responsibility activities, it is expectable for them to have an enhanced or at least the same level of impact. Another internal stakeholders' group increasingly concerned about the firm's social behavior are the investors. Investors take in account the competitive advantage generated by creating shared value as an indicator of "superior performance" (Porter 2012) and sustainability. Socially friendly companies are therefore preferred by long-term investors due to the diminished risks of poor financial performance. Noteworthy is the fact that the more "consistent, integrative and appropriate" the firm's social efforts, the greater effect they will have in a firm's financial performance thus the more investment it will attract. (Cox, Brammer and Millington 2004). Nevertheless, stronger willingness to invest should be unlocked with improved shared value metrics (Porter 2012).
3- Creating Shared Value: The Case of Unilever
Companies around the world, including in Portugal, are increasingly aware of the benefits of creating shared value which were described above. Paul Polman, Unilever’s C.E.O., highlights the “unprecedented level of engagement from the private sector” verified at the Paris Agreement meetings in 2015 (UNFCCC 2017). The debate envisioned a global framework to enforce the UN Sustainable Development Goals through collective action, as advocated by the Creating Shared Value concept. The case of Unilever will therefore provide a practical overview of the business reality in what concerns to Creating Shared Value both at an international and national level.
Unilever International has been leading comprehensive changes in the way business is conducted, introducing its renovated vision and purpose of “make sustainable living commonplace” (Unilever Global Company Website 2016). This summarizes the objective of simultaneously enhancing the positive social impact and diminishing the environmental footprint while growing business.
In consonance with the Creating Shared Value concept, Unilever states the absence of trade-off between sustainability and profitable growth. The company defends that a sustainable business can contribute to the company’s success in four ways (Mobilising Colective Action 2016). Firstly, it unlocks growth potential. In one hand, the renewed perspective of the products and operational methods triggers innovation. On the other hand, sustainability no longer serves a niche. According with internal studies, 54% of consumers are motivated to purchase sustainable brands at a fair price. In fact, the sustainable living brands have outperformed the remaining portfolio by developing 30% faster and accounting for half of the 2015 company's growth (Unilever Global Company Website 2016). Secondly, and consequently, stakeholders' relationship will be reinforced, the business being regarded as more valuable to the society of which every stakeholder is part of. For instance, the status of Graduate Employer of Choice in the consumer goods sector was granted to Unilever in 2015, taking in account the options of university students of 34 different countries. Thirdly, this mindset represents less risk associated with the sourcing of raw materials and climate change, as not
preserving nature may affect suppliers’ performance. Lastly, a sustainable business can also be a way to reduce costs making a better use of the available resources. Until 2015, the sum of costs avoidance resulting from CSV policies had already achieved 600 million euros (Mobilising Colective Action 2016). This vision is materialized in the Unilever Sustainable Living Plan (USLP), which is considered to be the guide for every company behavior throughout the value chain ("We All Have A Part To Play In Building A Brighter Future" 2017). It embraces all the brands and geographical locations of Unilever.
The course of action is separated into three main areas: Health and Well-Being, Environmental Impact and Livelihoods, further divided into nine subcategories subordinated to its specific objectives. Appendix 1 schemes the sustainability structure. An overview of the three main areas allows us to understand a greater incidence, with a higher volume of initiatives, on Environmental Impact (47), followed by Enhanced Livelihoods (17) and Improving Health and Well-Being (16). Notwithstanding, accessing the success levels, the area which is meeting more adequately its aims is Health and Well-being (56,25% success), enclosing the most successful subcategory, Nutrition (70%). Knorr impacts positively by reducing salt levels and saturated fat. Fairness in the workplace, is the second most successful subcategory, showing the commitment of the company to create a truly compelling work environment for its employees. Inclusive Business (0%) and Opportunities for Women (16%) are however the least successful, thus being the Livelihoods also the least successful sustainability area. The remaining 6 subcategories reveal Sustainable Sourcing (39%) and Waste (33%) to be on the right track, despite the more humble success rates till the present. Knorr highly contributes for the success of the sustainable Sourcing category achieving "92% of the top 13 vegetables and herbs purchased from sustainable sources by end 2015, up from 59% in 2012" (Unilever Global Company Website 2016). Health&Hygiene (33%), Greenhouse gases (25%) and Water Use (20%) show similar performance to the latter referred subcategories, however, the results are not so motivating once each of this subcategories includes one initiative
which is already off-plan. Paul Polman, Unilever's C.E.O., explains that despite the improved efficiency of the factories, the greatest challenge is to decrease the environmental impact produced by the consumption of the products (Mobilising Colective Action 2016). Consumers' use of the product accounts for 61% of Unilever's footprint, followed by a significant weight of raw materials (29%). The remaining 10% are distributed by manufacture (2%), distribution (2%), retail (5%) and disposal (1%) activities (Mobilising Colective Action 2016).
To illustrate Unilever’s commitment, Knorr, Dove, Skip, Lipton and Hellmann’s, the company’s five biggest brands, all became sustainable living brands meaning that each "must have integrated sustainability into both its purpose and its products", granting a social benefit "while its product contributes to at least one of the goals of Unilever Sustainable Living Plan” (Mobilising Colective Action 2016).
Unilever Portugal
At a national level, Unilever Portugal follows the international guidelines advanced by Unilever International. However, taking in account the particularities of the national context, important differences arise in the number and character of initiatives. In Portugal, most of the brands are considered brands with a purpose, not sustainable living brands. Lipton Portugal for instance, inspired by the mindfulness philosophy, has just launched a national campaign under the theme "Awake", to alert for the necessity to take a moment to live the present and be aware of the people surrounding us, promoting mental health. Dove is focused on self-esteem issues, engaging through campaigns such as “Real Beauty”, and more recently, “True Beauty Touches the Heart”. A viral video was released as well as more interactive contents such as the "Me" book, both a diary and a guide to leverage self-esteem. Olá presents strong initiatives towards a creating shared value direction. Olá Portugal has developed “Academia Olá”, a project to tackle the unemployment issue in two fronts. In one hand, Olá subsidizes new selling points for unemployed people who apply to open a selling point. On the other hand, it provides young adults with the opportunity to receive
formation, monetary compensation and, if the best at a national level, a three-month internship in exchange of a marketing strategy plan and its execution for Olá's selling karts. This increases and diversifies the points of sales of the product at a low cost. Hence, this initiative aligns profit with social impact. However, the latter example are is not fully embedded in the respective business model yet.
Hence, the most striking case of CSV within Unilever Jerónimo Martins is Knorr Portugal, once it serves its customers with natural products composed by sustainable ingredients. The productivity increase associated to sustainable practices such as reduced water consumption in farming is characteristic of the Creating Shared Value ideals. Knorr's pepper production is concentrated in Portugal, in a farm located in Alpiarça, Santarém. Knorr is therefore incorporating sustainability practices in its business model, recreating markets and products to better fit society's needs, creating a vision for innovation and promoting community development in Santarém.
Despite of the social impact intrinsic to the business model, "The perception of a company’s socially responsible behavior may be more important than the actual behavior itself" (Castanheira, Story and Hartig 2016), as far as profit shall be aligned with social impact and the more stakeholders are aware of such social efforts, the greater impact (Cox, Brammer and Millington 2004). Knorr Portugal has performed a sustainability survey which concluded that Portuguese consumers associate sustainable vegetables with more flavor and quality, key characteristics of the brand, a higher nutritional value and also a higher price, which would justify a premium. In parallel, the study finds that convenient solutions benefit of a greater trust if the consumer is aware of the ingredients, their natural source and if there is confidence in the brand. Notwithstanding, Knorr's Portugal team revealed the low consumer perception of this aspects of the brand. In this sense, an effective communication plan is essential not only to leverage brand's performance and thus consolidate the brand's commitment to its social purpose, but also to instigate a wider and deeper range of social benefiting practices both inside the company and within the national business environment.
PART II- Knorr Portugal: Environment and Brand Analysis 1- STEEPLE
Companies must acknowledge markets and consumers' behavior by the analysis and forecast of new trends, so to stay relevant in a world of constant change. An overview of the current trends follows. Social (Sociocultural)
Time scarcity is a core concern, aggravated by the growing size of cities which dictates longer commuting. The daily journey is now full of stimulus, mainly advertising, forcing brands to be more disruptive to receive consumers' attention. In parallel, working hours have augmented with the necessity to prove indispensable (Euromonitor 2016) and women are increasingly assuming their role in business (Dunlop 2009). Household convival is thus diminished, creating a demand for convenience and practicality in order to enjoy it (“Packaged Food in Portugal - Industry Overview” 2016).
As a consequence of the above mentioned trends, mindfulness gains relevance. Consumers show the need to reflect and be self-conscious. Brands like Lipton and Kit Kat are promoting this "break moment". Healthier habits are part of this self care and construction ("10 tendências globais sobre consumidores | Marketeer" 2016). Natural, seasonal and local food is being preferred by the consumers. (centromarcarelatorio.pdf), as long as not compromising taste. Fat-free, gluten free and salt reduced products are trendy. There is also an increased consumption of organic, vegan and vegetarian food. A study by Knorr Portugal shows that Portuguese consumers associate organic and sustainable products with higher quality and health benefits. Herewith, new business models of organic supermarkets are expanding and occupying the new empty spot on the natural/healthy segment. For instance, Bio and Maria Granel are sucessful in Lisbon, and the GO NATURAL chain,owned by SONAE MC, is recently spreading. (Durães, 2016) The consumer identification with these brands enables a stronger emotional connection, as they are perceived as more transparent and trustful, as opposed to international brands such as Knorr.
Technological
The five big technological tendencies according to IDC are big data, cloud, mobility, business intelligence and social media. The challenge for business will therefore be the deeper integration of these digital tools. (relatoriotecnologia.pdf). In consonance with time scarcity issues, the abundance of information should be by helping consumers to find information with strategic value, access data from different sources and explore algorithms. ("Top 10 Technology Trends for 2016 - Forbes", 2016). As communications get more embedded, customer service is at a distance of one click to help with any doubts, both on website and apps. (Ripton, 2016)
The health and food areas are naturally taking part of these developments. Shopping online is evolving along with safer and simpler payment methods such as Google Pay, Paypal or MBNet. Technology can be used by consumers to receive info and recommendations on what to eat in each meal, measuring quantities of calories per meal/day, ingested fats, counting steps and joggings, teaching exercises in the gym or at home, and other sports-related activities. (Nunes & Pereira, 2016). Hellman’s, created the possibility for the consumer to see in real time and through their smartphones their food being farmed and harvested, responding to the mentioned social trends. It is expected that companies will invest more in IT in order to maintain and increase its competitiveness as IT is now not only a way to do business, instead, it supports the entire business. (relatoriotecnologia.pdf).
Economical
Portugal is in the process of an economic recovery. Real GDP grew 1.5%; this is justified by the increase of the internal demand, particularly of the private consumption. In fact, in the first trimester of 2016, Portugal showed the greatest increase in consumption of the UE. ("Quebra do investimento castiga economia", 2016), being internal demand is expected to grow 1.7% from 2016 to 2018 (Boletim Económico 2016) . In 2016, for the first time in three years, the Fast Moving Consumer Goods (FMCG) market grew in volume and value ("ANIL - Kantar e Centromarca lançam
'Marcas+Consumidores'", 2016), leveraged by the Home Care and Fresh Food Categories. Economic activity is thus expected to grow at a moderate level in the period of 2016-2018 (Boletim Económico 2016).
Environmental
Environmental issues are an upcoming topic, also leading to the trend of organic farming and eco practices. Various organizations, such as Unilever through the Knorr brand, have incorporated sustainability concerns in their practices. NGOs have an active role raising awareness, such as Greenpeace through its palm oil campaign which induced changes in Unilever, P&G and other multinationals modus operandi. The economic model of "Community Supported Agriculture” has been gaining ground both national and internationally. Consumers pay in the beginning of each growing season for a share of the anticipated harvest. Once harvesting begins, they periodically receive shares of production. Quality is valued over quantity and diversity over intensive plantation (Nunes & Pereira, 2016) . The proximity between the producer and the community supports the rapid expansion of the model. Furthermore, new organic farmers are engaging in the direct sale of products and eco tourism. For instance, “Herdade do Freixo do Meio” has open days where promotes open activities among their curious visitants.” (Nunes & Pereira, 2016).
Political
The Portuguese General Health Department created the National Programme for the Promotion of Healthy Eating in 2012, to contradict the obesity, cardiovascular disease, cancer and diabetes prevalence as national main causes of death. The ageing population also represents high health costs, being prevention is thus more adequate solution. Therefore, various awareness campaigns have been launched (Euromonitor, 2016). Political intervention in agriculture has also been leveraging companies' modernization, young farmers and small investments through programmes such as PRODER (Rural Development Program) and subsidies granted by Rede Natura ("Apoios Agricultura - que subsídios pode pedir?" 2016). AGRO subsidies focusing on sustainable
development of rural territories environmentally, economically and socially, promoting competitiveness ("Quadro Comunitário de Apoio III - Programas Operacionais - AGRO" 2016). Knorr could beneft from this programmes when psrtnering with farmers, however, the major contribution would be the creation of a new market.
Legal
According to the EU legislation, organic products have to be legislated and verified by recognized Control Organisms, being mandatory to have specific labels and the place of origin. ("Certificação Produtos Biológicos" 2016). In Portugal, DECO is the responsible entity for ensure standards are met, protecting consumers' interest. SGS is in charge of certifications and highlights that the "compliance with regulations" increase the brand's value " by preserving environment and satisfying demand from organic products.” ("Certificação Produtos Biológicos” 2016).
Ethical
Capitalistic consumption habits induce a rebellion against an exacerbated way of living. Therefore, consumers' awareness for the social and environmental efforts of brands is growing. Moreover the easy access to information and social media usage gave voice to consumers. There is a growing demand for transparency from companies (“Packaged Food in Portugal - Industry Overview” 2016) and ambiguous, superficial messages may decrease a company’s brand equity. Valuing and responding to the topics which are relevant for consumers is therefore essential.
2- Five Porter's Analysis
An overview of the five forces which shape the industry landscape will provide the understanding of the strengths and weaknesses faced by the packaged food category, and the sauces, dressings and condiments category in particular. In terms of competitive rivalry, Unilever consolidated the 4th position in the ranking of Packaged Food, achieving a 7% share value. The leader market share in 2016 was 10,25%, held by Sonae Modelo Continente Hipermercados SA followed by Jerónimo Martins- Distribuição de Produtos de Consumo Lda (8,48%) and Lactogal- Produtos Alimentares
SA (7.26%). The categories which have contributed the most to the maintenance of Unilever's position were Ice Cream and frozen desserts (62,4%), Soup (60%) and Sauces, Dressings and Condiments (21,4%), all in which Unilever ranks first. This is mainly due to the marketing efforts which lead to a strong brand recognition, namely of Magnum, Cornetto and Knorr brands (“Packaged Food in Portugal - Industry Overview” 2016). Indeed, the Sauces, Dressings and Condiments category is growing and forecasted to continue the positive evolution, particularly in the gravy cubes and powders segment, due to the still low penetration in the Portuguese market. Knorr was the undoubting leader of bouillon, holding 77% share and being the only brand with chicken, meat and vegetable flavours. In spite of not attaining the highest sales volume, it ranks as the second most successful category in terms of profit, under the umbrella of packaged products (“Sauces: Company/Brand Shares, Distribution” 2016). In order to recover from the general share decline witnessed during the peak of the economic crisis, branded products largely invested in price promotions. This scenario helped stimulating sales of branded products and brands were able to steal value share from private label (“Sauces, Dressings and Condiments in Portugal - Category Briefing”). Nevertheless, private labels are fighting this tendency by making premiums out of their products and invest in improved formulas, presenting still a threat. Selling points such as Jumbo, Go Natural or Celeiro are following the trend of selling in bulk, which does not benefit brands either. National brands as Guloso, Ferbar, Compal Insignia also remain competitive (“Sauces, Dressings and Condiments in Portugal - Category Briefing” 2015). In light of the previously stated, Unilever faces low competitive rivalry in the category of Sauces, Dressings and Condiments, more specifically due to Knorr's gravy cubes and powders where it holds a dominant position by showing clear quality differences in relation to its competitors, providing unique flavors.
In one hand, the high number of players and their respective well-established position, as well as the grounded knowledge and experience of the main brands, prevent the threat of new entry. Nevertheless, it is expectable that the European legal environment will open to innovative flavors
such as dehydrated insects, which might affect the market structure. In fact, in line with the economical recovery, the selling of premium products is expected to increase, as well as the commercialization of healthier and more nutritive products, which represents a clear opportunity. Therefore, the threat of new entry can be regarded as low to medium (“Sauces, Dressings and Condiments in Portugal - Category Briefing” 2015). Knorr obtains the right ingredients for its products in its "Farms of Reference", widely spread in Europe. This farms are run by skilled farmers who search for new sustainability practices, assuring the quality of the ingredients. The expertise of the very limited number of suppliers is therefore tightly linked with the quality of Knorr's products, being essential and difficult to replace. However, the strict terms of agreement and large quantities supplied determine strong, long-term relationships. Thus, the power of suppliers is low to medium. Knorr faces a medium threat of substitutes. Products such as olive oil and groceries such as onions and garlic are very commonly used and more aligned with the trend of cooking from scratch. Moreover, a convenient and delicious meal can be bought at a take-away, a restaurant, or more closely, home delivery. Finally, the size of the customer base will be a determinant criteria shaping the industry. According to Euromonitor, the income growth will be reflected in increased sales volume within the sauces, dressings and condiments category, due to a larger consumer reach. Taking into account that Knorr is not a niche brand, but a brand for the masses, the client base does not hold significant power. Moreover, the alternatives are still limited, despite the above mentioned opportunities for both premium and private label brands. Hence, the buyer power is low.
3 - Brand Identity and Brand Positioning 3.1. Brand Identity
A comprehensive picture of the brand will bring some insights about which branding objectives need to be addressed and which type of communication plan should be activated. A path to achieve the necessary understanding will be outlined, starting with the general aspects of the brand, a succinct brand inventory and brand identity and brand positioning, following Kapferer's approach.
Knorr is a German brand of dehydrated soup mixes and condiments, acquired by Unilever in 2000. Its available ranges and lines include from seasons to bouillons and prepared food, varying in a country basis. Besides being one of Unilever living brands and one of the five top most growing brands of Unilever, Knorr is Unilever’s biggest-selling brand. In Portugal, the brand is present through seven ranges - caldos (bouillon), temperos (spices), sopas (prepared soups), spagheteria (prepared pasta) massas chinesas (noodles), puré (puree) and molhos (sauces). It is leader in the category of sauces, dressings and condiments, with a market share of 15.6% in 2015 (Euromonitor 2016a). The range achieving the best results were gravy cubes and powders ("Packaged Food in Portugal - Industry Overview" 2016). The active product development allows a wide variety in each range, counting with several flavors. Knorr is the only player in the category offering chicken, meat and vegetable flavors.
Kapferer defines brand identity as “the facets of brands uniqueness and value” (Kapferer 2008). Those facets range from the physical, relationship, customer reflection, personality and culture to self-image, constituting an identity prism to be analyzed (see appendix 2). Regarding the physical facet, the most salient features are undoubtedly the green color, dominant in the packaging, the red handwritten letters of the logo and finally the cubic shape of the best-seller product in Portugal. The brand’s relationship is the counterpart the brand desires to offer to its users. Knorr focuses in three main benefits: flavor, convenience and, following the tendencies, naturalism, allowing busy consumers to enjoy and share tasty, easy meals with natural, quality ingredients. The forth facet of brand identity, customer reflection, is the image the consumer desires to see projected when using the brand. Knorr's consumers wish to declare their concern to offer the best flavor when preparing a meal, in spite of their busy lives. Personality are the human traits which the brand would possess if personified. Knorr would be intense, as the brand is a risk-taker always pursuing the best flavor. It is joyful and practical, as it aims to provide good moments around the table without stress or time waste. The convivial moments and sustainability concerns also suggest generosity. Therefore, the
brand transmits authenticity and an active attitude to create a positive impact, both in the lives of the closer circle and society in general. A brand’s culture is the most critical part of its identity, as it is stated in its definition: “(…) a set of values feeding the brand’s inspiration” (Kapferer 2008), unique and non-transmittable. In general, Knorr aims to provide flavor, convenience and quality to cooking, using natural ingredients for balanced and rich meals that fully satisfy its consumers ("Produtos Knorr - Nutrição e Sabor" 2016). In light of this, the first pillar of Knorr's culture is flavor as "that is the difference in a meal (...); each piece should be amazing”. ("A Marca - Sabor que Faz a Vida Melhor" 2016). Convenience is a common characteristic of this category of product, nevertheless, one of the most striking characteristics, deeply embedded in its identity and thus in the brands' culture. Quality is also a basic principle for Knorr, assuming as a commitment "offering high quality products, supported in a philosophy of sustainability". This quality stems from “A passion for good food goes right back to Knorr’s earliest days” ("About - Knorr" 2016), which will be transmitted to consumers through the best products and ingredients that will provide an enjoyable meal. Knorr is committed to include nutritional ingredients in the products commercialized ("About - Knorr", 2016) . The brand is therefore people-oriented. Innovation and sustainability are final pillars essential to sustain the brand. Knorr heavily invests in R&D, counting with the " knowledge and specialties" of a team of 286 chefs "to develop amazing recipes" ("Knorr Portugal" 2016) and the skilled "farmers of reference". In terms of sustainability, Knorr is integrated in Unilever’s USLP. Accordingly, the brand follows the established guidance in Unilever Sustainable Agriculture Code (USAC), developed featuring registered ONGs, Rainforest Alliance, Roundtable on Sustainable Palm Oil (RSPO) and Fairtrade. ("O que faz os nossos vegetais sustentáveis?", 2016). Suppliers and farmers are asked to implement sustainable processes together with the producers with the goal of reducing and recycling packaging, decrease gases emissions, and improving the quality of the products used. ("A Marca - Sabor que Faz a Vida Melhor", 2016). Lastly, self-image, which is defined by Kapferer as “(…)the target’s own internal mirror” (Kapferer2008 186). In the end, it is
what managers expect consumers to feel when purchasing and/or using the brand. Thus, a customer of Knorr is expected to be content for providing the ones he/she loves a tasty meal whilst not wasting time. One way to express this would be “I feel/I am satisfied that my food expresses my best effort”, and also “I am happy that I am giving my friends/family a tasty, delicious dish with the best natural ingredients, without compromising our health or spending hours in the kitchen”.
Conclusively, Knorr’s identity points first for taste, convenience, quality and naturalness. Taking this into account, it is now necessary to see how Knorr presents itself in the market to its target and competitors. This analysis is done in the brand positioning elaborated next.
3.2. Brand Positioning
Positioning, “the act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s minds”, enables a better alignment of the marketing and communication strategy with the brand, once it clarifies the reasons to purchase and use it (Keller 2013, 80). The challenge is to understand what would be most beneficial position to the firm. Following Keller’s approach, brand positioning is divided into (1) who the target consumer is, (2) who the main competitors are, (3) how the brand is similar to those competitors, and (4) how the brand is different from them. Each topic will be further explored.
1. Main target
To reach a target market, it is first required to define and segment a market and then, decide which segment(s) the product is targeting. A market is, according to Keller, “(…) the set of all actual and potential buyers who have sufficient interest in, income for, and access to a product.” (Keller 2013, 79). Knorr (bouillons) plays in the market of sauces, dressings and condiments, being designed for home cooking. Market segmentation divides the market into different groups of homogeneous consumers who have similar needs and consumer behavior (Keller 2013, 79). A consumer-oriented segmentation, which includes geographic, demographic and psychographic segmentation, and a behavioral segmentation will be performed. Geographically, Portugal is a rather small and
homogeneous country. Knorr's available ranges only vary according to population density, not selling less popular products where there is less demand. Geographic segmentation is therefore irrelevant. Demographic segmentation considers variables such as age, gender, educational level and occupation. (Keller 2013, 191). Knorr Portugal targets young adults and adults, between the age of 20 and 45. Bouillons specifically, target over 25 to 45 years-old. However, interests and habits are more valued by the brand, which prefers less static segments. Hence, occupation is quite relevant: Knorr targets students, young adults starting their working life, working family members and finally and more specifically, professional chefs. Nevertheless, very significant differences arise within each of the referred segments. Psychographic segmentation is therefore essential as it relates to values, opinions, activities and lifestyle. At this stage, Knorr is targeting people which are busy, working and active people but also sociable and cuisine affectionates, enjoying to be with family and friends and to cook despite of the several responsibilities.
Behavioral segmentation divides buyers according to their knowledge, attitudes, uses, or responses to a product. The occasions when the product is used will "help firms build up product usage.” (Keller 2013, 196). In the case of Knorr, most consumers use its sauces and condiments while cooking dinner, a daily activity or cooking lunch, more commonly at weekends. In terms of usage rate, Knorr's consumers are medium users, once bouillons and condiments are purchased once a week or every two weeks, and bouillons are sold in packages of 8 units, giving an average consumption of less than one unit per meal, if we consider seven dinner meals (all the week) and two lunch meals (at weekends). Finally, consumers may be divided according to the different benefits that they seek in Knorr. Five segments are being targeted: 1) Social approval seekers 2) Intense flavor seekers 3) New flavors seekers 4) Convenience seekers 5) Natural and convenient alternative seekers.
2. Main Competitors
The main and most direct competitor for Knorr is Maggi. Although its reduced market share, (7.1% in the category of sauces, dressings and condiments in 2015, according to Euromonitor 2016a) Maggi covers the same categories as Knorr with little differences. The Nestlé’s owned brand positions itself as a reference brand in the culinary world, aiming to help families improving their lives through simple ideas and solutions for daily meals. According to the website, “To make that experience more interesting, MAGGI provides to its consumers a wide range of products with creative, contemporaneous and above all, delicious. Our mission is to provide to you and to the ones you care about practical, balanced and nutritious meals.” (“Maggi” 2016). Indirect competitors arise when considering the categories where the products are inserted. Knorr’s product type level is reduced to bouillons, as previously justified. The product category level is sauces, dressings and condiments. In these categories, Margão, Calvé and Guloso are relevant competitors. The product class level is packaged food, being Knorr competing with, for instance, prepared meals or processed meat and seafood. At a benefit level, Knorr is competing with products that provide flavor, such as olive oil brands and groceries (such as onion), less time-consuming ways to obtain a meal as take-away services, services which enable to socialize while enjoying a meal, namely restaurants. The latter are also competitors when looking for new tastes. Natural and convenient alternatives for a tasty meal are also available at Go Natural stores, for instance. In spite of labeled as indirect, these competitors are worth considering, once they can become severe threats.
3. Points of Difference (POD)
The point of difference of Knorr to its main competitors, offering the same type of product (bouillons) Objectively, by looking at both brands slogan and image overall, it is visible that Knorr is targeting consumers with medium and medium-high income, whilst Maggi as a simpler image and a lower price (Meat bouillon 16 units – Knorr 2,89€, Maggi 2,49€ - continente online), thus targeting lower-income consumers. Maggi is also more traditional, being its main target families,
while Knorr has developed a more innovative strategy. Besides, while Knorr is best known for its bouillons in the Portuguese market, Maggi is more linked to noodles and soups.
Comparing each competitor’s competitive advantage, it is visible that Maggi focuses more on being easy and quick, while Calvé is linked only to flavor, but not to nutritional value. Margão focuses to flavor, naturality and being more imaginative, because it allows for a bigger customization of dishes, as one chooses the amount and type of spices, whilst Guloso chooses to focus on freshness of ingredients and local products. Overall, Knorr is different as it is positioned according to the high quality of ingredients which is translated into the best flavor combined with the benefit of naturalness.
4. Points of Parity (POP)
Knorr is similar both to its direct and indirect competitors as its purpose is to season food and provide it with a better taste, in a fast and convenient way.
Positioning Statement: For young adults and working adults, starting to live alone or already starting/with a family, who like to prepare tasty food for a friends’ dinner or a regular family meal, always putting first taste and quality and the naturality of ingredients [target]. Knorr is a brand of seasonings and instant food [frame of reference], that provides food a better taste/tasty food, in a fast and convenient way [points of parity], made with the superior ingredients that translate into the best flavor [points of difference/promise of consumer benefits]. This is true because of Knorr’s innovative culture, as it is continuously investing in R&D to provide the best products and processes to reach them, the skilled team of 286 chefs that work together with the brand to provide the best flavors and recipes to consumers, the high quality standards of farms and processes enabling to excel in nutrition and to honor the commitment to include nutritional ingredients in its products [reasons to believe].
4- TOWS Analysis
The performed analysis of the market, industry and the brand itself, allows an holistic comprehension of the major strengths and weaknesses, as well as the opportunities and threats which are relevant to take into consideration when defining a communication plan. Applying the dynamic SWOT approach, a combination of the internal (SW) and external forces (OT) reveals how opportunities and threats can be faced through the existing strengths and taking weaknesses into account. To begin with, the strength of innovation shows as key to the opportunity of consumers' interest in new flavors, specially when associated with the income growth trend. The high recognition which enables the comfortable position as market leader in most of its product ranges, is a strength which is leveraged mainly due to the flavor and convenience association. However, the innovation and quality ingredients aspects are still less visible strengths. If those were enhanced, it could tackle not only the threat of private labels' premium lines and new flavors entering the market by but also diminish the weakness of being perceived as not natural. Weaknesses wise, if the perception of not being natural was altered, the preference for sustainable products would be a suitable opportunity for the brand and, on the other hand, the threat of preferring local and 100% fresh products would could be tackled through the demystification of the product characteristics. Strengths: market leader; high recognition; flavor; convenience; innovation; quality sustainable ingredients
Weaknesses: perception of not natural
Opportunities: growing preference for sustainable products; income growth; consumers interest in new flavors
Threats: new flavors entering the market; bulk selling; private label; preference for local and 100% fresh products
5- Identification of Issues
Taking in account all the above mentioned factors and Knorr's feedback, four deficiencies were identified. First of all, despite the environmentally sustainable practices, which dictate a natural and responsible product, Knorr has not been able to communicate this point of difference. This issue gains relevance when considering that the confidence in the type of product sold by Knorr is largely dependent on the knowledge of its ingredients and the trust in their natural source (Unilever Sustainability Study, 2016). Convenience is still not compatible with naturalness in consumers' minds. The misconception about the product characteristics might also affect its consumption in relation to a second issue: the Portuguese preference for 100% fresh products and to cook from scratch. The understanding of dehydrated ingredients as maintaining the same properties through an ancient and non-artificial process could positively contradict the mentality of 100% fresh products as more adequate for a fine diet. Finally, this products are not of a frequent purchase which represents an issue in terms of sales volume. All in all, the issues faced by Knorr can be linked to the concept of brand image. According to Keller, brand image is the “consumers’ perceptions about a brand, as reflected by the brand associations held in consumer memory.” (Keller 2013). Even though brand image is on the receiver’s end and thus, cannot be fully controlled by the brand, an effective communication of Knorr's quality might be the key to overcome this issue. An analysis of the issue from the New Consumer Journey perspective will enable the understanding of how to achieve the desired communication effectiveness.
6- The New Consumer Journey
In order to determine solutions for the issues listed and develop a relevant strategy, it is pertinent to think of the consumer buying process. Several approaches have been developed in the last decades, being the most recent the New Consumer Journey, which “broadly describes how people move from initially considering a product or service to purchasing it and then bonding with the brand. (Edelman and Singer 2015). The new journey was born to take into consideration the access to
