1. Should Unilever divert money from its premium brands to invest in a lower-margin segment of the market? Yes, I think so.
2. In the long run, what would Unilever gain and would it risk losing? Unilever will increase their 81% market share, and prevent attack from P & G. Unilever cannot only satisfy their low income consumers, but they can also maintain the consumers of OMO. They will gain expertise and can apply it to other categories. Financial analysts will praise them and top students will line up to work for them.
Unilever’s premium brand, OMO, will lose their consumers. It will lead to price competition. It also has bad effects on corporate reputation.
3. Does Unilever need to develop a new brand with a new value proposition or can it reposition its existing brands or use a brand extension? I will suggest developing a whole new brand, to distinguish the existing brands’ images from the new one, reducing the impacts of the new low-price brand on the existing premium brands.
4. What price, product, promotion, and distribution strategy would allow Unilever to deliver value to low-income consumers without cannibalizing its own premium brands too heavily? Price: low price with a whole new brand
Product: develop a third formula priced half-way between Minerva and Campeiro
Promotion: the key message is that this new formulation is better than Campeiro but with lower price, just considerable for ‘you’ ---- low income consumers
Place: use existing distribution channels