Executive Summary
Unilever is assessing whether to enter the low-income NE market. Our analysis shows that there is a profitable opportunity to offer detergent powder to low-income customers living in Northeast Brazil and capture market share in a high-margin, high-growth market. We recommend that the firm keeps the existing brands but deploy a horizontal extension of the Campeiro brand - adding better scent / softness and utilizing specialty distribution network, thereby marginalizing Invicto, an inferior but better-known competitor.
Situation Overview
NE Brazil has long lagged behind the rest of the country in terms of technology and income. However, economic reforms instituted by Finance Minister Cardoso has seen the
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rategy
We will target the following market:
• Customer: Low-income consumers in NE Brazil
• Company: Unilever
• Collaborators: Special store owners as low-income consumers do not shop in wholesale and get financing and advice from specialty owners
• Competitor: Invicto
• Context: Increasing purchasing power in NE and role of powder as fragrance / softening agents
Our value proposition to this segment will be: An affordable detergent powder with a “special touch.”
We will deploy the strategy as follows:
Tactics
• Products: “New and improved” Campeiro with enhanced smell and softness o Smell / softness is ranked second only to whiteness in perceived importance by consumers, but going after whiteness has potential to cannibalize OMO (see Action Rationale section for more details) o The added fragrance should be at a level just enough to set Campeiro apart from Invicto, but far enough from Minerva to prevent cannibalization
• Brand: Campeiro
• Price: Same price – whole sale of 1.7 / kg
• Distribution: Specialized distributors that can increase awareness of target audience at a lower variable cost than generalist wholesaler; specialized stores are significant influencers of target customer’s behaviors
• Incentives: Launch new Campeiro via specialized distribution as larger campaign to influence small shop owners; give away free samples to specialized store to promote awareness to small shops; use more point-of-purchase marketing as small shop owners are more
Different retailing businesses have very different distribution methods based on the types of product that they sell, some arguably more effectively than others.
In order to gain market shares through the low-income segment of the Brazilian market, Unilever should launch a new Detergent Powder brand at an affordable price, which could replace in the long-run Campeiro, its cheapest brand. However this strategy is not without any risks, since it can lead to the cannibalization of Minerva.
| Initiative: Efficiency and productivity is key in the companies to achieve their set out merged goals under BRF. Budget: Medium; Considering the amount of time it might take to combine data from both companies with different systems may result in a new system being built, requiring some investment by BRF. Business processes have to be picked and sorted into a new bracket from which optimization of results can be observed quarterly. Elimination of bad/negative business processes are key, and thus this will also require some investment by BRF to figure out. Thus, a good chunk of an investment needs to be made.
Brazil is the largest country in Latin America and the fifth in the world. Brazil's economy is the most powerful in the region and has a significant impact on world markets due to highly developed agriculture, mining manufacturing and services economic sectors. Brazil is the world's largest producer of coffee and sugar cane, and one of the largest exporters of agricultural products (Business Monitor International (BMI), 2011 1st Q, pp.47-48).
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Through SWOT analysis (Appendix 1), Lush has low market share but high grow rate. Lush’ position can be seen in Boston Consulting Group Matrix (Figure 1).
Brazil is rich in natural resources. It has some of the largest iron ore deposits in the world and is
Neutrogena uses a slow, more expensive manufacturing process to mold its fragile soap. In choosing this position, Neutrogena said no to the deodorants and skin softeners that many customers desire in their soap. It gave up the large-volume potential of selling through supermarkets and using price promotions. It sacrificed manufacturing efficiencies to achieve the soap’s desired attributes. (trade-offs that protected the company from imitators)
This presentation may contain forward-looking statements, including ‘forward-looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Further details of potential risks
MGT 6170-Marketing, Unilever in Brazil Case Study Perception: People in Brazil have expectation when buying the detergent. They
Since 2000, Brazil has significantly improved its economic performance. Strong global demand and high prices for its commodity exports resulting
Unilever (ULVR) PLC is a multinational corporation selling a broad range of products including foods, drinks and household and personal care products, based in the United Kingdom and the Netherlands. It owns more than 400 brands and operates in 190 countries around the world with its manufacturing plants in 70 countries. Unilever is a global company and it is a market leader in many countries around the world including the United Kingdom. The products that the company sells, consist of all human necessities and luxuries. It employs a transnational strategy which concentrate both on achieving global standard and adapting to local preferences at the same time. This strategy is the best of all which is one of the factors that help the company achieve its success.
A. Chanel No. 5 is one of the most prestigious scents in the world (J. Baughman (Ed.), 2001)
Utmost Care has been taken in the analysis of the brands. However, if you find any ambiguity kindly help us improve.
Respondents gave the least preference to ‘satisfaction’ for the value of the brand. (1) Sudhakar et. al. (2012) investigated the social causes for purchase of personal care products. They found that there was a significant influence of age in the purchase of categories of fairness creams. Here again, it was concluded that the chief social factors influencing purchasing decision for fairness creams were family, friends and neighbours, in that order. (4) Women use fairness creams in abundance and men have only recently started doing so recently. A. B. Junaid et. al. (2013) found that as the income level of female consumers is increasing their expenditure for cosmetic product is also increasing. We also found that there is an increase in the awareness as well related to cosmetic products. One major finding in our study tells us that these days female consumers prefer more of cosmetic products which are made from the natural ingredients in other words we can say that they prefer herbal cosmetic products. (8) S. S. Shimpi (2012) et. al. found that the usage of fairness creams was more in the higher income group with men. The variables influencing their preference texture of product, promised effects, previous usage experience and suitability to skin type are the key variables from the studied product attribute variables. (7)