Caso Unilever

UNILEVER IN BRAZIL (1997-2007) Marketing Strategies for Low-Income Consumers 1. Unilever Brazil is looking for opportunities in the marketing of detergents to low-income consumers living in the Northeast of Brazil 2. The first phase of the project was the developing of field studies to understand the lifestyle, aspirations, shopping and laundry habits of low income consumers. The studiesprovided, among others, the following information: a. In the NE area only 28% of household own a washing machine ant The73% of women think that bleach is necessary to remove fat stains. b. In SE region 67% of families own a washing machine and 18% of women think that bleach in necessary to remove fat stains. c. In NE women scrub clothes using bars of laundry soap. Then they added a little detergent powderat the end primarily to make the clothes smells good. d. For NE women, washing clothes is one of more pleasurable activities of their week. e. The primarily low-income consumers on NE evaluate detergents in six key attributes:  Power of detergent.  Smell of the detergent.  Ability to remove stains.  Powder dissolution in water and absence of residues on the fabric after rising.  Consistencyand granularity of powder.  Packaging. f. The Brazilian fabric was market consists of two categories: Detergent powder and laundry soap. g. In 1996, NE detergent powder was a $106 million (42.000 tons) growing at 17%. The market share for this type of detergent is shown in the following table.

Detergent Powder Omo Minerva Campeiro Ace OTher P&G Invicto Others

Brand Unilever UnileverUnilever P&G P&G

Sold Price ($/kg) 3 2.4 1.7 2.4 2.3 1.7

NE Brazilian Market Paticipation (%) 52 17 6 11 6 5 3

h. The people have a good knowledge of brads. All of them are near 100%. i. The market penetration is near 97% for Omo; 90% for Minerva; 87% for Invicto; 70% for Ace; 65% for Campeiro; 46% for Bold and 37% Pop j. Omo and Ace are perceived high quality and high price; Minerva and boldare perceived high quality-low and Campeiro, Pop and Invicta are perceived low quality low price. k. In 1996, NE laundry soap was a $102 million (81.250. tons) growing at 6%. The market share for this type of detergent is shown in the following table:
NE Brazilian Market Paticipation (%) 19.1 6 6 63.6

Laundry Soap Minerva Bem-te-vi Flora Ace

Brand Unilever ASA Flora Fabril

Sold Price($/kg) 1.7 1.2 1.2 1.2

3. Robert Davidson, has to take a decision if Unilever has to go in the low-income detergent market. He is concerned about the profitability of this consumer segment and he knows that part of the new sales would be at expenses of Unilever`s existing Brands. At what cannibalization rate would Unilever star losing money. Also he is wondered whether Unilever had the right skillsand organization to compete in this market considering that inside Unilever are some people reluctant to undertake this market segment. 4. SWOT Analysis l. Strengths:  Huge knowledge of worldwide detergent market.  Huge knowledge in non low income Brazilian Market Consumers.  Their products are very well known in Brazil. m. Weakness:  Internal reluctance to aboard this market.  Possiblecannibalization  Loss of corporate reputation. n. Opportunities:  Strong economic Recovery beneficing particulary to Low-Income consumers.  17% growing rate of powder detergent.  Potential consumers 48 millions.  Become a leader low income consumers market o. Threatens  P&G or other companies will undertake this segment market.

5. Conclusions and recommendations There are at least threeoptions that Unilever Brazil Should considers: Do nothing Create a new product from scratch Develop a new formula priced half way between Campeiro and Minerva p. Do nothing has the disadvantage that Unilever will leave this market segment abandoned and others will explore it. In the other hand, and considering that Brazil is growing, the “low-income” people should change their position to “non...