Unilever in Brazil Marketing Strategies for Low-Income Consumers I would recommend that Unilever launch a sub-brand of OMO detergent powder in Brazil and target it on low-income Northeast consumers. Let’s name it “OMO Scrub”. This recommendation was evaluated on the basis of the following factors: I. Gaining market position
Unilever can gain market share by stealing market share from laundry soap, especially the market share of other brands. In current detergent powder market, Unilever products have occupied 75%. Therefore, attracting customers from current detergent powder market may result in cannibalization. Another 11% market share of detergent powder is occupied by Ace who differentiated itself as Whiteness. Therefore, it is difficult for Unilever to succeed in steal market share from Ace. The detergent powder market is almost saturated, unwise to target.
II. Customer Value and Brand Positioning
By contrast, laundry soap market, with no giant competitors, is where Unilever can steal market share from. As shown in Exhibit 1 and 2, the targeted customers are low-income northeast Brazil people, and they do washing manually. They mostly scrub clothes using bars of laundry soap because of lower price and only add a little detergent powder at the end primarily to make the clothes smell good. If the new detergent powder can satisfy them with low price, good smell, and keep the function of soap that is stains removing and dissolve power, it’s very likely that they will switch to detergent powder from soap. In addition, as an extension of OMO, one of Brazil’s top brands, strong ability of stains removing, OMO Scrub can more easily attract target customers than having a new brand. By doing so, it’s not likely to cannibalization because the targeted customer groups have big gap of price preference.
The gross margin analysis (Exhibit 3) shows that detergent powder of Unilever have gross margin of 15%-22% on average. By estimation (2nd...
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