Admark’s Weblog

On Reckitt’s “different” strategy

Posted on: November 20, 2008

Adage points to a good piece on how package-goods company Reckitt outperformed heavyweights like Unilever, P&G. Some snippets –

Globally, Reckitt has posted 10% organic sales growth so far this year,
besting all peers. And in the past five years, it has beaten all
competitors with average organic sales growth of 8% and net profit
growth of 17%, according to data from the company based on Credit
Suisse analysis.

Surprising if that is, then consider this –

The company spent nearly 90% of its media dollars on TV last year.

Half of improvements in gross margin get invested in increased
marketing spending, said Mr. de Groot, and the other half drops to the
bottom line.

Even as some competitors cut or slowed marketing spending amid a
turbulent economy, rising private label and high commodity costs in
recent quarters, Reckitt didn’t. Its spending in July and August
(excluding outdoor) was up 10.8% from a year ago, according to TNS
Media Intelligence, and spending through August puts it on pace to
increase its 2007 outlay of $402 million by about 10% for the year.

And the results say –

Since January 2007, Reckitt’s all-outlet share of household categories has risen five points, to 29%, Mr. de Groot said.

The company culture –

The nine people on the company’s global executive committee come from
seven countries, as do the top 10 U.S. managers. The top 400 managers
(those getting options and restricted shares) come from 50 countries.
And of the top 50 global managers, 79% work outside their countries of
origin, and 95% have had at least one global transfer.

Instructive piece – do read.

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