Monday, October 01, 2012

Unilever and reverse engineering - or should it be reverse innovation

WARC today has more details of Unilever's intention to introduce products created for developing countries (code for poor) into the developed world (code for getting poorer).

A spokesperson for the company said: "We have 'reverse-engineered' products from D&E [developing and emerging] markets - where we have big, long-established businesses - starting with a price point that people can afford and then working our way backwards along the supply and manufacturing chain to make sure that we can make it a profitable business model."

In Spain, Unilever already sells Surf detergent in packs offering five washes, and in Greece it offers mashed potatoes and mayonnaise in small packages. Both of these markets are among those hit hardest by the ongoing eurozone crisis.

The FMCG firm has also launched low-cost brands of tea and olive oil for the euro markets.
Readers of this blog will know that I have for a couple of years been talking about the ultra-fragmentation of the European (and US) markets and how we will soon have companies selling two distinct sets of brands. One for the luxury end and the other for the poorer masses.

I am not sure about this term reversed engineering. I think it should be called reversed innovation as described in the excellent book 'Reversed Innovation: Create Far From Home, Win Everywhere' by Vijay Govindarajan. Dick Stroud

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