unilever case presentation
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Unilever in BrazilTRANSCRIPT
UNILEVER IN BRAZIL
International Marketing Case - Unilever in Brazil1
A case of Marketing Strategies for Low-Income Consumers
Group No: 4 ESCP Europe• ABHISHEK SHARMA• KRISHNENDU C G• M PENCHAL REDDY• SUMAN CHAKRABORTY• TAPAS KUMAR MAZUMDAR
About Unilever and the target segment in Brazil
International Marketing Case - Unilever in Brazil2
• Unilever is one of the world’s top makers of packaged consumer goods operating in 190 countries and
• Have a large brand portfolio of over 400 brands under two divisions
- Foods and Home & Personal care.
• Unilever is one of the world’s top three food firms with Nestle and Kraft-
• The world’s second largest packaged consumer goods company –behind Procter & Gamble.
• The main success factor of the company is the constant focus on innovative product developments
International Marketing Case - Unilever in Brazil3
High Success in the Overall Brazilian Detergent Powder and Laundry Soap Market
Brand Portfolio
• Omo (powder premium brand)• Minerva (sold as powder & laundry soap)• Campeiro (cheapest powder brand)
81% market share in detergent powder category
Vs. 15% market share of P&G, the next biggest competitor
International Marketing Case - Unilever in Brazil4
Low- Income Consumers in Northeastern Brazil Constitute a Large but very Specific Customer Segment
Demographic Background• 48 million low-income consumers
• 28% of Brazil‘s total population• 40% illiterate• Per capita income of $ 2,250• 53% live on less than two minimum wages
Laundry and Detergent Use Patterns• Clothes washed frequently due to few
clothes and more time• Pleasurable activity (washing in a public
laundry, river, or pond; meeting and chatting with friends)
• Q 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?
International Marketing Case - Unilever in Brazil5
• Unilever enjoys the market leadership with 81% of market share in detergent powder category.
• There is no other way to grow other than expanding into new segments.
• The competition from P&G is a threatening one, in view of their formidable R & D and marketing expertise.
• With a growth rate of 17% the detergent market is a swiftly growing and lucrative one.
• Hence it is imperative that Unilever enter the market of low income consumers.
International Marketing Case - Unilever in Brazil6
IMPLICATIONS OF ENTERING THE NEW MARKET SEGMENT
International Marketing Case - Unilever in Brazil7
Short-Term Implications
•Entering a new market segment implies that money has to be invested for setting up infrastructure and facilitating marketing activities. This causes the diversion of funds earmarked for the premium brands , affecting their promotional activities.
• The positive side of such a move is that Unilever can obtain first mover advantage in a fast growing market and this momentum, if utilized effectively can bolster their market leadership in this category.
International Marketing Case - Unilever in Brazil8
Long-Term Implications
• By employing the right strategy, a whole new class of consumer segment will be opened up for Unilever.
• A suitable positioning of the product in the perception map will ensure that the new product does not cannibalize the market of the flagship brand, Omo.
International Marketing Case - Unilever in Brazil9
• Q 2 a. Evaluate Unilever’s current brand portfolio.
International Marketing Case - Unilever in Brazil10
Current Brand Portfolio
International Marketing Case - Unilever in Brazil11
Unilever in Brazilian Fabric Wash MarketDetergent Powder- Market worth $106 mn
- Growing at 17%- 3 major competitors
Omo- Premium product
- USP is having high ability to remove stains- 52% market share at $3/kg
Minerva- Relatively cheaper
- USP is its ability to dissolve easily- 17% market share at $2.4/kg
Campeiro- Cheapest
- No USP , targeted at low income group- 6% market share at $1.7/kg
Laundry Soap- Market worth $102 mn
- Growing at 6%- Many local competitors Minerva- Competing with the local brands
- 19% market share, at $1.7/kg
• Q 2 b) Is a new brand necessary to serve the low-income segment or could Unilever reposition one of its existing brands or simply launch a brand extension?
International Marketing Case - Unilever in Brazil12
Brand extension V/s Brand repositioning• In case of a brand repositioning , campeiro will be
the suitable candidate.• However, the customer perception of campeiro as
a low quality product may affect the repositioning exercise.
• Introducing a brand extension , backed by suitable product promotion will enable the company to successfully position the product among the target customers
• The proposed positioning of the product is depicted below:
International Marketing Case - Unilever in Brazil13
International Marketing Case - Unilever in Brazil14
Per
ceiv
ed
Qua
lity
Price Index
• Q 2 c) If you judge that a new brand is necessary, write its positioning statement and choose its name among Unilever’s worldwide brand names.
International Marketing Case - Unilever in Brazil15
Positioning Statement• Who we are
– Major manufacturers in Food, Home care and Personal care
• What business are we looking– NE Brazilian Fabric Wash Market
• Who is the Target Market– Low income groups of NE Brazil
• Need of the Target Market– A Detergent powder(like Omo) at an affordable price with better characteristics than
detergents like Campeiro
• Competitors– Invicto , Pop, Campeiro
• The USP– The Cleaning ability comparable to a Laundry soap
International Marketing Case - Unilever in Brazil16
Positioning Statement
“For the customers who treats cleanliness 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.”
International Marketing Case - Unilever in Brazil17
International Marketing Case - Unilever in Brazil18
• Q 3. Design the marketing-mix. Choose the price, promotion (objectives, 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 Brazil.
Features of Northeast Brazil• 48 million people living in the Northeast of Brazil• 40% of population are illiterate• Northeast have a distinct culture and history, mixed Africans
and European origins.• In the Northeast only 28% of households own a washing
machine.• 73% of women think that bleach is necessary to remove fat
stains• NE scrub clothes using bars of laundry soap. Then add bleach
and add only small amount of detergent powder at the end to smell nice.
• Clothes are washed more frequently in the NE• NE view washing clothes as one of the more pleasurable
activities of their week.
International Marketing Case - Unilever in Brazil19
Attributes desired in a Detergent• Low income consumers of NE evaluate detergents on 6
attributes along with price.• Perceived power of detergent(ability to clean & whiten
clothes with small amount of detergent), which is often judged by amount of foam produced
• Odour of the washed fabric.• Ability of remove stains without the need for laundry soap
and bleach.• Ease with which powder dissolves in the water and whether
it leaves any residue on the fabric.• Packing must be of box type. Plastic sachets imply that the
product is second rate.• Impact on colours least important.
International Marketing Case - Unilever in Brazil20
Desired Marketing MixMarket Mix - 4 Ps• Product-Quality to be better than Capeiro and to be sold in
boxes of multiple types & sizes. Product to form easy lather and should produce foam when dissolved in water. It should also have a pleasant smell.
• Price- Ideally between Minerva and Capeiro.• Place- The existing distribution channels may not be of
much use. May look into highly specialized distributors, who have knowledge and access of the pockets where the low income consumers reside.
• Promotion- promotional activities to take place in mass media as well as in the areas where the target customers reside.
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• Unilever to launch a brand extension targeted at lower income customers.
• Distribution channels may be modified to efficiently reach the target segment
• Sufficient funds may be allocated to the project, to gain the first mover advantage and to sustain the momentum.
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Conclusions
Merci Beaucoup