Marketing push pays off for Reckitt

Posted by Sara | Marketing | Wednesday 6 April 2011 4:57 am
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Marketing Push pays off for reckittReckitt Benckiser, the household goods giants, said a major marketing drive paid off after annual profits lifted 23 per cent to £1.9billion last year.

Well-known brands including Nurofen and Strepsils performed strongly after it increased media spending to 11.1 per cent of all revenues, according to Reckitt.

From Dailymail.co.uk:

Highlights of the year for Reckitt included strong sales of Dettol as swine flu fears caused a surge in demand for anti-bacterial and virus products – helped by the marketing drive as the firm also benefited from cheaper advertising rates during the recession.

Revenues across the health and personal care division increased 14 per cent to £2.08billion. It is hoping for further growth though product launches this year, including the introduction of Strepsils in tube packaging and the launch of its Lysol no-touch hand soap system.

The group said its strong showing reflected good performances across its 17 so-called ‘powerbrands’, which also include Cillit Bang and Vanish.

The firm, which traces its roots back to 1823, was formed by a merger of Reckitt & Colman and Benckiser in 1999.

Shares were more than 2 per cent higher today.

This was despite Reckitt disclosing that the uncertain timing of generic competition to its Suboxone heroin substitute in the United States meant it would not provide targets for total group revenues in 2010.

Keith Bowman, an equity analyst at Hargreaves Lansdown Stockbrokers, said: ‘Reckitt has again delivered profits at the high end of analyst forecasts, although uncertainties going forward continue to build.

‘Whilst a trusted formula of product innovation and heavy advertising is driving sales, the loss of a key patent and likely generic competition for the company’s pharmaceutical offering is providing some caution.’

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