‘Things should be made as simple as possible, but not simpler.’ - Albert Einstein.
For most people Tupperware usually conjures up quaint images of the 1950s’ suburban domesticity, with ‘home parties’ hosted by housewives in the U.S. and across the world. The company’s success has been based on a simple word-of-mouth model of direct sales and marketing, relying on trusted relationships between women.
The 65 years old Tupperware Brands Corporation started selling premium lightweight, non-breakable food storage, cookware and serving items with its eponymous air and water-tight cover. It has subsequently extended its product range to include kitchen gadgets or high-end stainless steel pans, and its brands now also include children’s educational toys, gift items as well as beauty and skin care products.
While its direct-sales model, with an estimated 3 million consultants globally, is often considered the ancestor of social networking (with the Tupperware hosts embodying the so-called influencers), the company is in the process of becoming, yet again, another precursor for most Western companies when it comes to their emerging markets strategies. For the 7th year running, Fortune has recently ranked Tupperware as one of the world’s most admired companies in its sector, particularly for its global competitiveness. In 2013, it generated US$2.7 billion in sales across 100 countries, 65% of which was from emerging markets (and expected to rise to 80% in five years). Overall, emerging market sales increased 14% for Tupperware in 2013 as Brazil, China, Turkey, and Indonesia posted double-digit gains in sales, also joined by Mexico in the most recent first quarter. In 2013, Indonesia replaced Germany as the company’s number-one market.
Looking at its emerging markets strategy, Tupperware’s success seems to stem from few key basic principles:-
1. Support from the leadership team at headquarters which is committed to an ambitious emerging markets strategy and gives its local teams full support. Tupperware’s CEO Rick Goings is known to spend 70% of his time on the road to ensure that emerging markets receive a large share of attention and support, under the corporate strategy and through product development.
2. Enter new markets based what is truly core to the business, bringing in the weight of the global organisation as well as resources, innovation and learning from other markets. In the case of Tuppwerware, this is obviously kitchenware and direct sales. In India, the appeal of its kitchenware was so great that it has converted consumer behavior from using the traditional metal food containers to plastic ones, catered to local food habits. In emerging markets, the concept of having Tupperware parties, where women share recipes, cooking advice and health tips while meeting a prospective agent fitted perfectly the social values, expressed through the extensive use of social networks and word-of-mouth. The direct sales model has also helped to empower women, a large but generally unused skills pool in emerging markets, to earn their own money and develop their entrepreneurial skills.
3. Adapt the international product portfolio to the local habits and lifestyle. Tupperware’s innovations for the India market for example include the ‘roti keeper’, the ‘masala (spice) box’ and a ‘multi-cook’ product. The company has also changed its usual subtly coloured global product range to bright colours and prints with Indian thematic designs. It also offers limited-edition products, as well as hampers, to celebrate the many local festivals such as the Hari Raya Idul Fitri in Indonesia.
4. Tailor global business models to local operating models. Tupperware’s direct sale model has proved very popular in countries such as the Philippines, Indonesia or India which lack a well developed retail infrastructure, particularly outside cities. However in some countries such as China, the small size of urban homes was not conducive to a typical Tupperware party. Tupperware has therefore developed a model of little storefront – a place where the neighborhood comes for Tupperware parties and cooking demonstrations. There are now more than 4,000 of those throughout China.
5. Adapt marketing, but without loosing the global brand cachet. Tupperware’s branding of ‘good quality but expensive’ has evolved into an emerging markets branding of ‘premium mass at an affordable price’ backed by a lifetime warranty, thereby establishing itself as an ‘aspirational’ brand for the emerging middle class households. Its marketing efforts have included multiple initiatives such media tie-ups, advertorials, partnerships, tie-ups with top brands such as Samsung, P&G or American Express, or nutrition workshops for school children. Although its focus to date has been on urban areas, it plans to develop its presence in rural areas once it has built a strong hold in smaller cities and towns.
6. Understand how the local players make money at very low price points, and reassess the entire business model including pricing strategy, product mix, the raw materials used, the type of packaging, etc. In emerging markets, Tupperware has localised its pricing strategy to penetrate price-sensitive consumer segments and maintains lower costs by producing locally, but without compromising on quality and its premium image. In India, the company uses a locally-developed blow molding technique as a cheaper substitute to its usual premium production process for its new Eco Bottle. It has become one of its best-selling products and a classic example of reverse innovation, being now exported to Europe and the U.S. As a result, Tupperware is now present at different price points – from the imported product range such as Ultimo for the growing class of urban elite, to the blow moulded bottles for the price-sensitive customers just entering the middle class.
7. Create strong local leaders through programs that attract, develop and nurture local talents and empower them to tailor offerings for domestic markets, while keeping in line with a high-level global strategy. Thanks to training and personal development, its South Africa’s top-selling consultant is turning over US$14 million of products each year. The company also organises the ‘She Can, You Can’ campaign with events where women are invited to share stories and motivate others to join the brand’s sales force. Every year some of these women are recognised and rewarded for their significant achievements in selling these world class products. Tupperware also grooms rising stars for global leadership positions. The current MD of India is an Indian national who joined Tupperware in 1997 and rose through the ranks, ultimately heading marketing for Scandinavia and the Baltics, before taking over the top job in India in 2005.
8. Maintain long-term commitment and resist the temptation of pulling back in tough times. Tupperware has stayed the course in India since 1996, confident that India would become one of its fastest-growing emerging markets, a vision that has now become a reality. The recent global recession and consequential slowdown in Asia has led more women to join the company's sales force to supplement family income, boosting sales.
With an ambitious strategy fully supported by leadership, focusing on its core, adapting the product portfolio to cater for local needs, evolving its marketing and distribution strategies without losing focus on its core brand identity, capitalising on local talent and staying committed to meet the potential of growing markets, Tupperware has charted a successful strategy for emerging markets.
by Christelle Espinasse - inSTRATEGIA
