Unilever In Brazil

Unilever in Brazil

Marketing Strategies for Low-Income Consumers

Group Members: •Aditee Thale •Abhishek Jain •Vishal •Vivek Ganatra •Prachi Ranjan •Satyajeet Sahu

Brazil: Overview & Regional Differences •Largest country in South America •170 million people living predominantly in two clusters , Northeast & Southeast. •Per capita income was $4420 in 1996 as compared to $380 in India. Differences in lifestyle:

• Northeast region has an African influence and is mainly agrarian. Only 28% of the population has a washing machine • Southeast was developed by the Europeans later and is the main hub of activity. Washing machines are more popular here.

Brazilian Fabric Wash Market Unilever • It is a US$56 billion company headquartered in London & Rotterdam. • Started in1929 and till 1996 it had 81% of market share in brazil. • Detergent division was the cash cow providing fuel for other division like home care & personal care. • Popular brands- Omo , Minerva , Campeiro.

Pro cte r & Gam ble • It is a US$ 40 billion company headquartered in Cincinnati. • Started in Brazil in 1988 and had 15% of market share. • Popular Brands- Quanto , Odd fases , Pop

Market Structure

Marketing Mix • Product • Product attributes • New Formula • Packaging

• Price • Re-pricing of all three brands • Dilemma of correct price- not too high or not too low!

• Promotion • Product to be placed on the map quickly to break even • Avoid advertising as ‘ Product of low income group’ • Simple message, but in sync with the product • Choice of media for advertising • BTL activities • Reach and cost

• Distribution • Inability to reach to smaller outlets, reducing reach to low income group who do not visit supermarkets much. • Use of generalist wholesalers

Challenges• Brand Positioning and Marketing • Internal resistance • Belief that lower income market should be left alone as they have no money any way • P&G threat in the most vulnerable market • Fear of creating impression of abandoning premium brands in promotions • Loosing next generation brand

Market Share in Northeast(1996)

Detergents

Value proposition • Value proposition appropriate • Each brand serving a different market segment. • Catering to consumers’ needs across stratas • But a potential market is there to be exploited

Marketing Strategy • Introduce an extension of Minerva – named Minerva White • With more cleaning power while retaining the fragrance, with less emphasis on softness • Tentative cost : $1.75 / kg (i.e. without changing the cardboard packaging)

• Cost break-up: Formulation cost : $0.99 Packaging cost : $0.35 Promotional cost : $0.35 Distribution cost : $0.05 Total cost : $1.74

Marketing Strategy (contd) • Targeting the top two wanted attributes by consumers : Cleanliness and Smell • Capitalizing on the ‘perceived quality’ of Minerva • Positioned as a tough but fragranced detergent • Employ Specialized Distributors