Ad lider

Ad-lider Embalagens, SA:
Marketing Research for
Drawstring Trash Bags in Brazil
Introduction
In July of 2001, Lazlo Sved and his new partner, Emilio Figer, were going over the market research one
more time. The two senior executives at Embalagens Ad-lider, SA (Ad-lider Packaging, Inc.) were carefully
considering how the findings of the marketing research they had commissioned would impactthe
launch of their new drawstring trash bag product line named Climp Fecha Facil (Easy Close). See Appendix
5 for a picture of the product. They were looking for information about consumer preferences,
consumer habits, and perceived competitive advantages that would impact pricing, product size, and
distribution decisions. Having invested one million dollars for the new production machine, thetwo
executives were anxious to “get it right” with respect to targeting and positioning, and creating value for
the consumer.
Lazlo was convinced that a successful launch of the Fecha Facil was of extreme importance. He
believed that the current Ad-lider product mix would not bring satisfactory profits in the long term. He
felt that Ad-lider needed to launch a new product that was different,modern, and offered the market a
more favorable cost/benefit relationship than products currently on the market.
Brazil’s Population and Economic Stabilization
Brazil is one the world’s largest countries, covering an area of 8.5 million square kilometers. The country
is divided into 24 states, two territories, and a federal district. The five regions of Brazil and their
respective populationsizes are presented in Appendix 1. Of Brazil’s 170 million population, almost
43% or 72 million, live in the Southeast. Brazil’s three largest metropolitan areas are all in the Southeast:
Sao Paulo (20.2 million), Rio de Janeiro (12.15 million), and Belo Horizonte (5.3 million).1
In the mid-1990s, after a long period of high inflation and economic stagnation, the successful
Brazilian economicstabilization plan, known as Plano Real, restored the purchasing power of the lowincome
segment of the population. This upturn allowed many Brazilians to purchase consumer goods
formerly inaccessible to them. As a result, during the second half of the 1990s, numerous segments of
the economy, including several product categories, underwent fantastic sales growth.
Brazilians categorized in theSocial Class C group were the most benefited by this economic
stabilization. The Brazilian Market Research Association, ABIPEME, developed a social class classification
that was widely adopted by local researchers, marketers, and advertising agencies. The scheme
1 http://www.worddiq.com/definition/List_of_metropolitan_areas_by_population.
2 A12-04-0031
combined income, education, and materialpossessions to define five social classes—A, B, C, D, and E.
Classes A and B members possessed the highest levels of income, education, and purchasing power, and
tended to be more sophisticated consumers. Classes D and E lacked purchasing power and struggled to
afford even the most basic goods and services. Class C consumers have been described as typical workers
in the lower middle class,and comprised 12.6 million Brazilian households. The 30% of Brazilian
households classified as Class C accounted for 28% of Brazil’s total consumption. In contrast, Classes A
and B made up 19% of Brazilian households and accounted for 52% of the national consumption. The
lower classes D and E made up 51% of the households but accounted for only 20% of the national
consumption.2
Another view ofsocioeconomic differences can be seen by examining income distribution. In
2000, the wealthiest 10% of Brazilians received 47% of the national income. The next 40% received
39.5% of the national income, while the bottom 50% of Brazilians received only 13.5%.3
Ad-lider Embalagens, SA
Ad-Lider Embalagens, SA was founded in 1970. The company, headquartered in the town of Tres Rios,
Rio de...