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Unilever Defeats Competitors with Thrifty Ad Spending

26 Aug, 2009 Response This Week

NEW YORK – Unilever ended a streak of flat-to-negative volume last quarter with a 4-percent growth in organic sales and 2-percent growth overall, reports

The third largest package-goods company trails Proctor & Gamble Co. and Nestle, but both are struggling to combat the effects of the recession. “Unlike some of the competitive set, we have invested in [advertising and promotion] and spent behind our brands and innovation, and that has given us the growth,” said CEO of Unilever Paul Polman.

Ironically, Polman was once in the running to lead the top two companies on different occasions, yet was overlooked by executives. “This growth is coming from innovations [and marketing],” said Polman. “That’s quality growth.”

Though Unilever outshined its competitors in the second quarter, it was only by a small margin, as Nestle reported 3-percent organic growth, followed by P&G with a 2-percent increase in organic sales.

Some analysts predict Unilever will become more aggressive on pricing, which could block the “quality growth” Polman addressed, but the CEO says that it is a bad idea and the company has no plans of doing so. The company is currently preparing to launch P.F. Chang’s frozen entrees in the U.S., targeting consumers who are eating out less yet still want restaurant quality food.

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