Reckitt & Colman is trying to cut costs, faced by declining market share across its range of household brands, by ditching dozens of UK and international advertising agencies and centralising its 75m worldwide account into McCann-Erickson.
The multinational household products company is concentrating on its key brands and developing new markets.
It is expected to announce today (Wednesday) initial plans to put five of its 14 global product categories into McCann-Erickson’s hands – lavatory care, air fresheners, hard surface cleaners, mainstream pharm- aceuticals and insecticides.
Saatchi & Saatchi in the UK is one of the biggest losers. It was awarded a 10m European account from Reckitt last May and handled such brands as Harpic, Airwick, Haze, Wizard Airfresh and Mr Sheen.
As part of an ongoing restructure Reckitt will focus on three core areas: pharmaceuticals, household and toiletries, which led to the September 1994 purchase of US company L&F Household from East Kodak for more than 650m. In May last year, it sold its food and drinks unit to Unilever for 250m.
However, the company’s share prices last year dropped and profits were below what had been forecasted, sparking speculation that the 75m centralisation is an attempt to save money.
Reckitt brands lost market share. In the household cleaner market Reckitt’s overall share has dropped from nine per cent in 1992 to 7.3 per cent by volume in 1994, according to Nielsen. Air freshener Airwick has also lost a significant share falling from 23 per cent to ten per cent over the past three years according to Datamonitor figures.
Other agencies being axed in-clude: BST BDDP, TBWA, Co wan Kemsley Taylor, and media shop TMD Carat International.
It is understood the household product Jeyes is the only account which McCann will have to resign.
The Reckitt pharmaceutical business will be run by McCann in Manchester, to avoid conflict with Crookes Healthcare and Nurofen.
Saatchi’s last work will be the 2m launch of Harpic Two-in-One bleach.