UNILEVER IN BRAZIL u

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A case of Marketing Strategies for Low-

Inc,0m1e Consumers 1

GraupNo:.4 ESCP Eu1rope

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•AIHI&HEI SHARMA
• DlSl6ENDU e •
• M P!NCN411'.DDY
, SJMAN CHAIIM:80RTY
·•TA PAS KUIIIAR IIIZIJII DIR

lnlilrnallonaJ Mltk«lna c.e ,., Unll8'Mr In Brun

Abou t Unilever and the target seg1ment in Brazil
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• Un1ilever is o:ne ol l.h e WOlild's top makers of RXJE U lfl I II I

countries and
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packaged consumer goods 0 pe,r1atln g 11111 190

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• Have e large brand po1rtfalla of over 400 I ' I
brands under two divisions . ~ 1 V
- Foods and Home & Personal care. ~ . 6 1 .. ·,i' •

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firms With Nestle and Kraft- Gum i'l"! El:

• Tlhe worl,d':s secan d
largest Packaged •
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consumer goods company ~hind Pr1oc1er

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Gamble.
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- l!1 1 • ~ u Cl

• Tlhe main success 'faCl or ol die company Is • I

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PONDS ~,c,. .
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the constant locus on 1 l1

n novative prtlduct
devel upn Ienls
2. 1nll'rniu 10nm Markil Ina ,c11e ~ Unllavar in erul'I
High Success in the ,overall Brazilian
Detergent Powde,r and Laundry Soap Market u
g.a,_.

!Brand P'GrtfOIID

• Oma (powder pr,emium brand)

• Minerva (sold as powder & laundry soap) 1

• campelra (cheapest powder brand)

81 % market share in detergent powder category

Vs. 15% market share ot P&G. the next biggest

oompalitor

3 lln1Brna1 lonal Matkalng Clle ,., Un11avar in Brazlll

Low- Income Consumers in Northeastern Brazil U
Consti'lute a Large but very Specific Customer Segment i.,.;,_
Damograplhlc Backgraund
• 48 mllllon low-income consumers
• 28% of BrazH'.s total popula,tion
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• 400/o illiterate
• Per capita income of $ 2,250
• 53o/o live on less than t\ND minimum wages

Laundry and Deterge,nt Use Patterns

• Clothes washed frequently due to few·
doth es and more tim e 1

• Pleasurable activity (washirJd in a public

laundry" river, or pond.: maeti1g and chatting
with friends)

4 I1n■rna1 lonal Marketing Clle ... Un11avar in Bral I

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• a 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?

1nk!rna1lor,aJ Markalna C81e .., Un11aver In l!!I rul1

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• Unilever enjoys the market: leadership witih181o/o 0f 1

mark.et s.ha1re in detergent powder category,

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• There i.s. n0 other way to grow other t·han

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expa,nding into new segments.

• The competiti'on from P&G is a threatening one, in
view of 'their formidable R & D a1nd marketing 1

expertise.
• With a growtlh rate of 17% the detergent 1 market is
a swiftly growing and lucrative on1e.
• Hence it is imperative that Un1i1ever enter the
market of low in come cons umers.
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8- fnlt!rna1 lanaJ Matkalna case .. Un11avar In El rul1

 IMIPLICAT l~ONS OF ENTERING THE NEW
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MA,RKET SEGMENT

1' lnlarna11anaJ Markltlna case . , Un11aver In Brun

Short-Term Implications u
• Entering a ,new market segme·nt implies that money
has to be invested for setting up infrastructure and
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facilitating marketing activities. This ca,uses the

diversion of funds earmark.ed for the premium brands • 1

,affectin.g their ptomoti0 nal activities.

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• llhe positive side of su1ch a. move is that Unilever can

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obtaii1n first mo[ver advantage in a fast growing m,arket 1

and this momentum, if utilized effectively can bolster

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thei:r 1
ma.rke't leadership in this category~
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e 1rnarNUlcnaJ Matkalna case . . Un118\'8r In eran

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Long-Term l1
mplications
• By employing the right strategy, a whole new class
of cons umer seg ment will be 0 pened up for
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U1nilever.
• A suitable positioning of the p:roduct in the
perception map wi II ensure that the new product 1

does n ol cannibaliz.e the market of the ·f:lagship

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bran d, Omo.
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B rn1trna1 anal Matk«lna case ,., Un118'Mr In l!I run

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• Q 2 a. Eval uate Unilever's cu1

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nren't b1
rand
portfolio.

lnlarna11onaJ Markfllna case . , Un11aver In Brun

Current Brand Po irtfolio 1 1
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U!llli1 _tac

.s:ma
.. P.-.mun prmhEI
•·USP II hl\lhJ l!IW, lllitf·10
irllrllCIVIIHI. .
- ~ rnshsl~ae ,i ll:531g

Detem11tPowdar
- Market worth $108 mn
.. Growing at 17%
,....,.
- ~ ~ l y ;t.qmr
Uln1ilever i1n - 3 maja r mmpeltars
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- USP iri ls abiily lo di!:um• e. rri'J I

.. 1~ nwkat ...,. . ■I G ..4'1Q
BrazHian Fabric I
Wash Mank,at
Glma•m
- Che ill)Dil
. liJ USP I taqalad. - ~
1irc141
-- Rflllrul,.,•• • 11.'Mlg

Laundry Soap
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- Market rth $102 mn ll:JID'I
··Grwtlng al 6%, lj"'-~~.J ., Cosi:.p,wtja y wltt, lh■ lacal blSJ!dl
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- 'llft lllllket 1h1ua. Ii 11. - I

- Many lo&aJ a,mpetliblS

11 1n1ama1bnaJ Matk1tlna case ... Unllaver In Brun

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• a 2 b) Is a new brand necessary to serve the
low-income segment or could Unilever
reposition one of its existing brands or simply
liaunch a brand extens1 ion?

12. 1nk!rna11onaJ Mark1tlna cae . , Un11ner In l!!lrun

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8 rand extension Vls Bran1d re1
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position ing
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• In case o·f a brand repositioning , ca.mpeiro will be

the suitable candidate,
• However, the customer perception of cam1peir0 as 1

a low q1uality product ma:y affect the repositioning

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e.xercis"e.
• Introducing a brand extens,ion , backed by suitable!
product promotion will enable the company to
successt·u1 lly position the prod1uct among the target
Customers
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• 'l he pro;posed positio1 ning of the product is depicted 1

below:
13 11 n■rnaJ lcnaJ Matkil:lna Clile ... Ur1la\'8r In Brun
211
I Oma

i!iliil) ACl

t
-
Dehl

f 1~1 -

.;1 t ii,"11 1,

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Price lndax 111

14, ln1Brna1 lanaJ Matka:Jna case . , Ur11aver In I! ral1

• a 2 c) If you judge that a new brand is
necessaryi write its positioning statement
and choose its name among Unilever's
worldwidel bra.,nd names.

15 11n1arna1 lanaJ Markalna C81e .., Un11ner In Brun

P0,sltioning Statement
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Who1we are
- M,ajar manufaclurars fn Food,, Homa care and Personal c:ara

• What business are we looking

- NE Bra2H1an fabrtc Wash Market

• Who1is the Target Market

- Lew income groups of INE BrrazU

• Neecl er the 'Target Market

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- A Dete'rgent powder(tilke Omo) a·t an affolidable ~

:utce wilh beHe.r·
characteristics lhan de lergenl!s: Hke Campeiro
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., Competitors
- llnvic:ro • Pop" Campetro

., ThaUSP
- The C1eaning1abillty comparable to a Lau..:Jry soap

18 mn11trna11ona1 Mltkltlng case ,., unnavar In eru11

Positioning Slatement
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"For the customers] who tr·eats cleanline[s:s 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."

17 mn■rna1lonaJ Matk«lng cae,., Ur118'Mr in ! run

• Q 3. Design the marketing-mix. Choos,e
ltl bll1ec 1ves,
th_- e price,, prlomoti!110n (o_ 1· • 1

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
Brazi I.

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1 1nmrnaJ lonaJ Markalna case ... Unllawr in erazn
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Features of Nolrtheast Brazil u
,. ,48 million people living in the Northeast of Brazil
• 40°/o of population are illiterate
• Northeast ha,ve a disl1 inct culture and historyl mixed Africans
and European origins,.
• In th1e Northeast only 2810/a of households own a wa.shing 1

machine.
• 73°/o of women thl nk tihal bleach is necessary lo remove fat 1

stains
,. NE scrub c:lothes using bars of laundry soap. Then add bleach
and add only,small amount of d,etergent powder at the end lo
smell nice.
,. Clothes are washed more frequently in the NE
,. NE view washing cl.otrhes as on,e 0 1the more pleasurable
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activil'i 8S of·1heir week.

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ln■rna1 lcnaJ Matkalna case ,., UfilMMr In l!I raz.11

Attributes desired in a Detergent u
u--an--
• Low inlcome consumers of NE evaluate detergents on 6
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attributes along wiith priceM

• Perceived pOllVer of detergent(aJbility 1o cleran & whiten
clothes with slmaU amount of detergent)1 wh1ich is often
judged by amount of foam produced
• Odour of the washed ·fabric.
• Ability •Of rem0ve stai1RS without the need for laundry soap
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and bleach~
• Ease with whi•ch powder dissolves in the Wiater and whether
it leaves any residue on1the fabliic.
• Packing must be of box ty'pe. Plastic sachets imply th at the
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product is second rate.

• Impact on colours lea.st important:.
20 ln■rna1 lonaJ Markalna Clle ... Ur118'Mr In l!I razn
Desired Marketing Mix u
Market Mix - 4 Ps
,. Product-Quality to be bette,r than Cape·iro and to be sold in
boxes of multiple types & size,s. Product to form easy talher
and shou rd produce foam when dissolved in water. It should
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also have a pleasant smell.

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,. Price- l:deally betw een Minerva and Capeiro.

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,. Place~ The existing distribution channels may not be of

much use. IMa·y look into highly specialized dis1ributorsl wh0 1

have knowledge and access of ~hie packets where the '.tow

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income consumers reside.

• Promotion~ promotional activities to take place in mass
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media as well a.s in the areas where the target customers

res,ide.
2.1 1n1ern1Jlar1aJ Matkalna case ,., un11aver In erul1
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 Canel usions u
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• Unilever to lau,nch a brarnd extensicn1

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targeted at lower income customers.

• Distribution channels may be modified to
efficiently reach the target seg me,nt
• Sufficient funds may be allocated to the
project, to gain the first mover advantage
and to sustain tihe ma mentu m~
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I ftlE.rlfl EU lei nL11 Mlatke Ing Cm a - U1

rrtllcvar tn Brazl I