Unilever case presentation

UNILEVER IN BRAZIL
International Marketing Case - Unilever in Brazil1
A case of Marketing Strategies for Low-
Income Consumers
Group No: 4 ESCP Europe
•ABHISHEK SHARMA
• KRISHNENDU C G
• M PENCHAL REDDY
• SUMAN CHAKRABORTY
•TAPAS KUMAR MAZUMDAR

About Unilever and the target segment in Brazil
• Unilever is one of the world’s top makers of
packaged consumer goods operating in 190
countries and
• Have a large brand portfolio of over 400
brands under two divisions
- Foods and Home & Personal care.
• Unilever is one of the world’s top three food
firms with Nestle and Kraft-
• The world’s second largest packaged
consumer goods company –behind Procter &
Gamble.
• The main success factor of the company is
the constant focus on innovative product
developments

High Success in the Overall Brazilian
Detergent Powder and Laundry Soap Market
Brand Portfolio
• Omo (powder premium brand)
• Minerva (sold as powder & laundry soap)
• Campeiro (cheapest powder brand)
81% market share in detergent powder category
Vs. 15% market share of P&G, the next biggest
competitor

Low- Income Consumers in Northeastern Brazil
Constitute a Large but very Specific Customer Segment
Demographic Background
• 48 million low-income consumers
• 28% of Brazil‘s total population
• 40% illiterate
• Per capita income of $ 2,250
• 53% live on less than two minimum wages
Laundry and Detergent Use Patterns
• Clothes washed frequently due to few
clothes and more time
• Pleasurable activity (washing in a public
laundry, river, or pond; meeting and chatting
with friends)

• Q 1) Should Unilever target the low-income
segment of consumers in the Northeast?
What are the short-term and long-term
implications of the decision?

• Unilever enjoys the market leadership with 81% of
market share in detergent powder category.
• There is no other way to grow other than
expanding into new segments.
• The competition from P&G is a threatening one, in
view of their formidable R & D and marketing
expertise.
• With a growth rate of 17% the detergent market is
a swiftly growing and lucrative one.
• Hence it is imperative that Unilever enter the
market of low income consumers.

IMPLICATIONS OF ENTERING THE NEW
MARKET SEGMENT

Short-Term Implications
• Entering a new market segment implies that money
has to be invested for setting up infrastructure and
facilitating marketing activities. This causes the
diversion of funds earmarked for the premium brands ,
affecting their promotional activities.
• The positive side of such a move is that Unilever can
obtain first mover advantage in a fast growing market
and this momentum, if utilized effectively can bolster
their market leadership in this category.

Long-Term Implications
• By employing the right strategy, a whole new class
of consumer segment will be opened up for
Unilever.
• A suitable positioning of the product in the
perception map will ensure that the new product
does not cannibalize the market of the flagship
brand, Omo.

• Q 2 a. Evaluate Unilever’s current brand
portfolio.

Current Brand Portfolio
Unilever in
Brazilian Fabric
Wash Market
Detergent Powder
- Market worth $106 mn
- Growing at 17%
- 3 major competitors
Omo
- Premium product
- USP is having high ability to
remove stains
- 52% market share at $3/kg
Minerva
- Relatively cheaper
- USP is its ability to dissolve easily
- 17% market share at $2.4/kg
Campeiro
- Cheapest
- No USP , targeted at low income
group
- 6% market share at $1.7/kg
Laundry Soap
- Market worth $102 mn
- Growing at 6%
- Many local competitors
Minerva
- Competing with the local brands
- 19% market share, at $1.7/kg

• Q 2 b) Is a new brand necessary to serve the
low-income segment or could Unilever
reposition one of its existing brands or simply
launch a brand extension?

Brand extension V/s Brand repositioning
• In case of a brand repositioning , campeiro will be
the suitable candidate.
• However, the customer perception of campeiro as
a low quality product may affect the repositioning
exercise.
• Introducing a brand extension , backed by suitable
product promotion will enable the company to
successfully position the product among the target
customers
• The proposed positioning of the product is depicted
below:

Perceived
Quality
Price Index

• Q 2 c) If you judge that a new brand is
necessary, write its positioning statement
and choose its name among Unilever’s
worldwide brand names.

Positioning Statement
• Who we are
– Major manufacturers in Food, Home care and Personal care
• What business are we looking
– NE Brazilian Fabric Wash Market
• Who is the Target Market
– Low income groups of NE Brazil
• Need of the Target Market
– A Detergent powder(like Omo) at an affordable price with better
characteristics than detergents like Campeiro
• Competitors
– Invicto , Pop, Campeiro
• The USP
– The Cleaning ability comparable to a Laundry soap

Positioning Statement
“For the customers who treats cleanliness a
way of life, Campeiro Plus appeals as a
detergent powder which gives a better
cleaning power at much less effort than the
similar priced competitors.”

• Q 3. Design the marketing-mix. Choose
the price, promotion (objectives,
message and mix), product (formulation
and packaging), and distribution that
will allow Unilever to create and capture
value for low-income in the Northeast of
Brazil.

Features of Northeast Brazil
• 48 million people living in the Northeast of Brazil
• 40% of population are illiterate
• Northeast have a distinct culture and history, mixed Africans
and European origins.
• In the Northeast only 28% of households own a washing
machine.
• 73% of women think that bleach is necessary to remove fat
stains
• NE scrub clothes using bars of laundry soap. Then add bleach
and add only small amount of detergent powder at the end to
smell nice.
• Clothes are washed more frequently in the NE
• NE view washing clothes as one of the more pleasurable
activities of their week.

Attributes desired in a Detergent
• Low income consumers of NE evaluate detergents on 6
attributes along with price.
• Perceived power of detergent(ability to clean & whiten
clothes with small amount of detergent), which is often
judged by amount of foam produced
• Odour of the washed fabric.
• Ability of remove stains without the need for laundry soap
and bleach.
• Ease with which powder dissolves in the water and whether
it leaves any residue on the fabric.
• Packing must be of box type. Plastic sachets imply that the
product is second rate.
• Impact on colours least important.

Desired Marketing Mix
Market Mix - 4 Ps
• Product-Quality to be better than Capeiro and to be sold in
boxes of multiple types & sizes. Product to form easy lather
and should produce foam when dissolved in water. It should
also have a pleasant smell.
• Price- Ideally between Minerva and Capeiro.
• Place- The existing distribution channels may not be of
much use. May look into highly specialized distributors, who
have knowledge and access of the pockets where the low
income consumers reside.
• Promotion- promotional activities to take place in mass
media as well as in the areas where the target customers
reside.

• Unilever to launch a brand extension
targeted at lower income customers.
• Distribution channels may be modified to
efficiently reach the target segment
• Sufficient funds may be allocated to the
project, to gain the first mover advantage
and to sustain the momentum.
Conclusions

Unilever case presentation

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