Mitchell Jackson

Unilever Case
Aside from price, low-income consumers in the Northeast (LI-NEs) evaluate
detergents on six main factors. The factor they value the most is the power of the
detergent (24%, Exhibit 5), specifically in regards to its ability to clean and whiten
clothes keeping in mind that a small amount be used. The second most important
attribute is the detergents smell (20%, Exhibit 5), and consumers usually relate a strong,
pleasant smell to the ability to make the clothes feel soft. The third factor LI-NEs really
care about is the detergents ability to get out tough stains without having to use laundry
soaps/bleach (16%, Exhibit 5).
Yes, Unilever should target LI-NE consumers. One of the biggest reasons is that the
Plano Real legislation has made this market more attractive because the purchasing
power of the low-income consumers of Brazil is increasing. These low-income
consumers are largely located in the NE (2,250 GDP, Exhibit 1), so there is a huge
opportunity for Unilever because market share in this region is below its national average
(75% < 81%). Both markets for detergent powder and laundry soap are growing, by 17%
and 6% respectively, which is a great reason to want to increase market share. Talking
about the detergent market specifically, there are large barriers to enter which is great for
Unilever except that P&G and smaller local companies pose a threat. P&G also has great
global R&D resources and they are already starting to compete directly with Minerva and
Omo. Another reason is the detergent market is Unilevers cash cow and is helping to
fund its other two growing segments in Brazil. One con may be lower profit margin but
we have proven that these are well worth it in terms of shutting out competitors in a
monopolistic competitive market. There is also concern over the cannibalization rate if a
new product were launched. These concerns are not needed; as OMO and Minerva are
highly regarded by their consumers (Exhibit 8/9) and consumers clearly see the premium
benefits of the product (+70% Omo TOM awareness).
In order to properly serve the LI-NE consumer segment, a new brand must be made
that delivers what these consumers value most. To start, the two lowest priced Unilever
brands must be examined, Campeiro and Minerva. The Minerva brand does its job
in targeting consumers that value softness and smell. Appealing to these consumers
emotionally, Minerva dominates its P&G competition, Bold. Minerva has 100% brand
knowledge and a very high market penetration at approximately 90% (Exhibit 8) so
repositioning it to attract LI consumers seems to be a ludicrous task since the product is
bought regularly and enjoyed. Repositioning the product will also just confuse
consumers and possibly hurt its 17% market share. On the other hand creating an
extension of OMO or Minerva is also frightening because that will most likely promote
cannibalization of the parent brand. Campeiro has great brand knowledge as well
(Exhibit 8), however it tested very badly in the three most important attributes of
detergent (Exhibit 5). It will be hard to reposition a product to dominate the LI-NE
segment if the majority of consumers know about the product (99%) and are already
displeased with its value. In the end, extending or repositioning Campeiro would save
introductory marketing and development costs, but these savings do not outweigh the
disadvantage that Unilever would put itself at by using an inadequate products brand
name.
In order to make a product that these LI-NE consumers can afford/delivers value,
a new formula should be crafted. The new formula should focus on 2 of the 3 most

Mitchell Jackson
Unilever Case
important attributes, cleanliness /whitening and ability to remove stains (Exhibit 5). I
would assign a 5 to both of these categories and hope they are up to par with Minerva in
these attributes. Since Minerva already markets based off of Smell/Softness, this
attribute can take a back seat, and I would give it a 3.5. Packaging importance would be
a 2-3. Attractive packaging and imagery would be good for a new product launch and
would make sure Brazilians do not write it off as cheap. Money should be save on the
last two attributes and I would rate them anywhere from a 1-2, as they are the least likely
to turn off customer.
We are told LI-NE consumers shop do not shop at large supermarkets, thus for the
new product to flourish it must reach the 75,000 smaller outlet stores in the NE. Using
these distributors will be cheaper at $.05 per kg, as opposed to $.10 per kg that wholesale
distributors charge (Exhibit 13). There is also less Skus delivered, allowing for better
shelf space, merchandising, and point of sale activity. The partnership will also allow
free data flow, which could be used in other LI regions that Unilever operates in. The
main con of using these specialized distributors is that they require exclusive rights to
distribute all of Unilevers detergent products. Choosing to contract might cause OMO
and Minerva to lose market share. If this were the case, Unilever would have no choice
but to go with the wholesale distributors.
The new product should be priced at $2.00; most importantly it needs to be
between Minerva and Campeiro prices. The profit margin will be approximately $.20.
Pricing it at $2.00 allows for LI consumers to afford it and hopefully convinces
consumers that buy cheaper products to spend slightly more for increased value. This
price will be extremely competitive with similar brands, as P&Gs main two products are
$2.40 and $2.50. Omo should remain at $3.00, because of its large brand equity and its
recognition as the top product (best TOM awareness). Minerva should also keep its
price or could even increase slightly (.10-.20) as it is currently dominating its counterpart
Bold by 13% market share. Campeiro could possibly move to a plastic container that
way it can lower its price to $1.50. With the new product appealing to LI consumers who
desire value, it would be beneficial if those trying to wash their clothes in the cheapest
manner could afford Campeiro. This price cut could help Campeiro dominate its
segment, specifically over Invicto and local brands.
The new brand has to overcome the low-income = low quality stigma in order
to flourish. We are told that washing clothes in the NE is enjoyable, and that women take
pride in the cleanliness of their families clothes, so the promotion should focus on how
the new brand benefits to their lifestyle, not just the price. Another challenge is the LINE consumers illiteracy rates are 40%. The advertising and promotions should focus on
imagery and stay away from long, confusing messages. The focus should be on the
whitening and cleaning power, translating to a happy and stress-free lifestyle for the
family. The first purchase is extremely important, so getting the specialized distributors to
do point of purchase marketing and trade promotions is important. These strategies
should make up approximately 40% of the budget. The rest of the budget should be used
on advertising and above the line marketing. We are told the majority of Brazilians watch
and enjoy television regardless of social class, so this should be the main tool.