Unilever- Brazil

Marketing Strategies for low Income

Consumers

feel good, look good

and get more out of life

Abhishek Sagne
ICFAI Business School
Hyderabad

CONTENTS
Introduction to case.
Brazil- Economy and
customer demographics.
NE and SE Contrast.
Brazilian fabric wash market.
Brand and Marketing Strategy
Product Mix.
Conclusion.

Introduction
Project Everyman
Interdisciplinary team
sales, finance,
manufacturing
Extensive studies to
understand Brazilian
market demographics.
Preparing to enter the
low income North-East
market varied opinion.

Brazil- Regional
Differences

Brazil- largest country in Latin AmericaPopulation of 170 million people.

Geographically divided into two clusters
NE & SE.
NE states of Brazil- colonized by
Europeans.
Famous for sugarcane & cocoa
Plantations.
NE economy is predominantly rural and
remained heavily on agriculture.
40% Population is illiterate.
In 1996, 65% population was of mixed
African & European culture.
In contrast, SE states were developed
later in 1880s.
So, the Economic and Political power
rooted in SE region.
SE states are famous for coffee
Plantations.
15% Population is illiterate.

Brazil- Regional Differences

Last 3 decades- Brazil has experienced cycles of deep
recession and Strong economic recovery.
GDP Growth- 8.1% / year during 1970s and only 2.6% during
1980s.
In 1994, Introduction of new currency ( Reais, R$)
In1996, Brazils per capita income was $4420.
In SE per capita income -$6600
In NE per capita income-$2250.

Brazil- Washing Techniques

North East

South East

In Recife(NE) only 28%of

households own a washing m/c
and 73% women think bleach is
necessary to remove stains.

In Sao Paolo(SE) 67% of

families have washing m/c &
18% women think bleach is
necessary to remove fat stains.

Women here scrub clothes

using bars. Then they add
bleach to remove stains & little
detergent at the end to make
clothes smell good.

Women here mix detergent and

softener in the washing m/c and
bleach only to remove tough
stains.

Frequency of washing cloths is

5 times a week.

Frequency of washing cloths is

3.9 times a week.

Considered as most pleasurable Most women wash clothes at

activity as they often wash
home.
clothes in public laundry, river or
ponds.

Brazil- Washing Techniques

North East

South East

Cleanliness of cloth is It is much less

considered as a
Important.
indicator of dedication
of mother to her family.
They use lot more
soap and less
detergent.

As they have washing

m/c, they use more
detergents.

They are proud that

they keep themselves
& their families
spotlessly clean
despite their low
incomes.

As most women have

washing m/c, It is
much less important
for the self esteem and
social status

How do North Eastern consumers

evaluate Detergents?

Along with price, Low income consumers evaluate

detergents on six key attributes:
Perceived Power of detergent.
Smell of Detergent.
Ability to remove stains.
Ease with which the powder dissolves in water.
Packaging.
Harm to colors.

Unilever Brazil- At a Glance

Unilever- US$65 Billion Company(HQ-Ldondon).
3 Lacs Employees In more than 150 Countries.
In 1996, Portfolio of 1600 brands worldwide and
including 45 key detergent brands.
Brazil- started Operations in 1929 and opened First
plant to manufacture Sunlight Soap.
Omo - Unilevers most successful brand was
launched in 1957.
Acquired CIA Gessy Industrial for Personal care
brands in 1960.
Food Operations initiated in 1970.

Unilever Brazil- At a Glance

In1996, 3 Divisions
Lever- For Home care.
Elida Gibbs for personal care.
Van der Bergh for foods.
In 1996 leader in Detergent market
with 81% market share. Achieved with
3 brands viz;
Omo- Detergent powder and a favorite
brand.
Minerva- Only Brand to be sold as
detergent and laundry soap.
Campeiro- Unilevers cheapest Brand.

Brazil Fabric wash Market

Unilevers Plan - Low Income Consumers.
The Brazilian fabric wash Market consist of two
Categories: Detergent powder and laundry soap.
Major competitors were: Procter and Gamble,
and other Local detergent manufacturers.
Procter and Gamble started operations in Brazil
in 1988. Brands were :Quanto (Now Ace).
Odd Fases (Now Bold)
Pop- Low price brand.
P&G had a market share of 15% in Detergent
market.
Threat was from P&Gs marketing expertise
across the world and their formidable R&D.

Brazil Detergent Market

Detergent Market:
In 1996, detergent powder-$106
Million (42000 tons) market in NE at
a 17% growing rate.
Barriers: High capital Investment.
Unilevers Market share is 75%
which comprises of
Omo-52% share.
Minerva-17% share.
Campeiro-6% share.
P&G Market share is 17.5% which
comprises of
Ace-11% share.
Invicto-5% share.

Brazil laundry Soap Market

In 1996, Laundry soap
market- $102 Million
(81250 tons) market in
NE at a 6% growing rate.
Barriers: low as
compared to detergent
but difficulty in perfuming.
Unilevers Minerva -19%
share.
Local manufacturer-ASABem-te-vi- 11% market
share.
Flora Fabril- 6% share
P&G does not make
laundry soap.

Key information of detergents in

Brazil Market
Brand

Packaging

Positioning

Key Brand
facts

Key Data

Cardboard
Pack: 1Kg &
500g.

Removes stains with

Low quantity of
product, thus
reducing need for
soap or bleach.

Unilever
Owned
Brazils top
brands.
Market
pioneer.

Sales:$55
million.
WP:$3/kg

Cardboard
Pack: 1Kg &
500g.

Emotional appeal.
Delivers pleasant
smell and softness to
clothes.

Traditional
brand of CIA
Gessy
Industrial.
Acquired by
Unilever in
1960.

Sales:
$17.60
million.
WP:
$2.40/kg

Key information of detergents in

Brazil Market
Brand

Packaging

Positioning

Key Brand
facts

Key Data

Cardboard
Pack: 1Kg &
500g.

Price brand.
Focus on cost
reduction across all
dimensions valued by
customers.

Acquired by
Unilever from
Henkel in
1984.

Sales:
$6.05
million.
WP:
$1.70/kg

Cardboard
Pack: 1Kg &
500g.

Offers superior
whiteness. Removes
dirt and protect the
fabrics.

Acquired by
P&G from
Bombril in
1996 as
Quanto.

Sales:
$11.80
million.
WP:
$2.35/kg

Key information of detergents in Brazil

Market
Brand

Packaging

Positioning

Key Brand
facts

Key Data

Cardboard
Pack: 1Kg &
500g.

Key competitor of
Minerva with a
similar positioning.
Focus on softness.

Acquired by
P&G from
Bombril in
1996 as
Odd Fases.

Sales:
$5.35
million.
WP:
$2.50/kg

Cardboard
Pack: 1Kg &
500g.

Price brand with

small sales in NE.
Focus on cost
reduction.

Acquired by
P&G from
Bombril in
1996.

Sales:
$1.40
million.
WP:
$1.70/kg

Key information of detergents in Brazil

Market
Brand

Packaging

Positioning

Key Brand
facts

Key Data

Cardboard
Pack: 1Kg &
500g.

Entry level
detergent.
Key competitor of
Campeiro. Focus
on cost reduction.

Owned by
ASA.
Only popular
in NE.

Sales:
$5.20
million.
WP:
$1.70/kg

The big dilemma

Whether to enter a low
income market.
Diverting money from
premium brands.
Threat of cannibalization.
Fear of loss of image and
reputation
High risk.

Brand and Marketing

Strategy
Should the basic marketing
and branding strategy be
changed to accommodate
new product and market ?
Reposition/extend existing
brands or introduce new
brand ?
Ideal marketing mix and
positioning ?

More strategy
Value proposition
- New
- Existing
Brand strategy
- Develop new brand
- Draw from Unilevers
international portfolio

Marketing Mix
Product :
Product formulation
Key attributes retained
Superfluous attributes
eliminated
Fragrance selection
Froth creation

Price
Critical decision
Avoiding cannibalization
Re-pricing existing
brands
Value pricing
Striking the right balance

Promotion
Objective of
communication
Key message
Image creation
Accurate positioning
Resource allocation
Medium of
communication

Packaging
Size of unit packages
Image balancing
Use of sachet
Point of purchase displays

Distribution
Small shop the key
medium
Distribution structure
Cost of distribution is
significant and hard to
reverse.
Retail credit a key
market feature

Personnel
Local staff
Retail representatives
Recruit, train, maintain
quality personnel

Conclusion
Understanding the North-Eastern
market
Decision to enter market
Strategic business unit
Implementing accurate strategies
Growth planning
Market segmentation
Acquisitions
Test marketing