Butter Beater

Executive Summary

This case describes the difficulties that different country managers for Unilever confronted while trying to establish central direction over international / Pan European product development, positioning, and sales. It documents the rollout of a new spread alternative, "Krona", and how its strategy failed to balance cross country cultural differences and product perceptions, as well as biases of Unilever country managers.

At the time of the case, Unilever was anxious to centralize management to improve its economies of scale by leveraging fixed investments in brands, new product development, and manufacturing capabilities. It positioned itself to maintain a centralized management model while not sacrificing their core strength of local responsiveness. The new organization forced country managers to be concerned with the diversity of other countries' tastes and needs in the developing and marketing of new products. This was a distinct contrast to the previous culture.

Coping with this diversity across countries to create a Pan European brand was difficult. Internal frustrations at Unilever created barriers of communication as country managers were frustrated by their loss of autonomy and an increased burden of international coordination of strategies. Country managers lacked the motivation, knowledge, and cross cultural understanding needed to effectively cross-market and roll-out a new product within each county.

A global approach to a new product kept development and country managers from focusing on consumer variances rather than similarities in consumption habits. General differences toward types of food and consumption varied greatly across Europe. For example, German consumer concerns centered on food safety, environmental impact, and natural products, whereas French consumers valued traditional cooking, pleasure/taste, and healthy eating.

The end result was a conflict of cultural issues within the company and a deteriorating concern...