Unilever Brazil: Case Write-Up on Marketing Strategies for Low-Income Consumers
1.Should Unilever target the NE segment? Is the segment attractive and can Unilever compete? What are the pro’s and con’s?
According to the Unilever Brazil case, Unilever already had an 81% share of the Brazil detergent market which far exceeds than its strong competitor Procter& Gamble’s 15% share. However, it is facing a real threat that P&G Brazil may draw on worldwide R&D and marketing expertise is closing up and will attack in low-income segment in the Northeast of Brazil. What’s more, there is no other way to expand Unilever Brazil in detergent market and growing number of small local brands targeted at low-income consumers simultaneously. Within the increasing usage of detergent powder, as a result, focusing on the low-income consumers in the Northeast of Brazil gives another way to boost Unilever’s market share. As shown in Exhibit 1, appropriate 48 million people in Northeast which account for 28% of the national population. A large number of women in Northeast washed clothes more frequently than the Southeast since they own fewer clothes and have more free time. Moreover, many women in this area view washing clothes as a pleasurable activity and prefer to wash clothes in a public laundry, river or pond where they can chat with their friends. This huge potential market and detergent use patterns may assist Unilever to get more profit. Considering the remarkable annual growth rate of 17% in detergent market and high barriers to entry, there are few companies to compare with Unilever. In this situation, detergent powder market is highly lucrative for Unilever. Nevertheless, beside some advantages in Brazil’s Northeast market, a couple of problems may follow naturally. Certainly, part of the new sales would come at the expense of Unilever’s existing brands. Attracting the consumers of new product while does their premium Omo will remain its...
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