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"'he BusIness School ~or the v Vorld •
Unilever in Brazil (1997-2007):
Marketing Strategies for Low-Income Consumers
Overall winner of the 2008 European Case Clearing House Awards •
Winner of a 2007 European Case Clearing House Award in the category "Marketing" •
Winner of the European Foundation for Management Development Case of the Year Award 2004 in the category "Marketing"
case was prepared by Pedro Pacheco Guimaraes, INSEAD MBA 2003, and Pierre Chandan, Associa te Professor of Marketing at INSEAD, as the basis for class discussion rather than to illustrate either effective or ineffec tive handling of an administrative situation.. We thank Laercio Cardoso and Robert Davidson from Unilever Brazil for m aking this c ase possible. We also thank Fernando Machado (INSEAD MBA 2(03). Mauricio Mitte lman (INSEAD PhD Student) , Weima Bezarra (RB distributors, Ceara. Brazil) , and Luea Lattanzi (INSEAD Executive MBA 2004) for their comments. Copyright © 2007 INSEAD N.B.: To ORDER COP~ OF INSEAD C AS ES , SEE DE:I'AW! ON BACK C OVER. COPIES MAY NOT BE MAD E WITHOUT PERMISSION. Db".,...... by occl>. \II! .nd USA
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Aller three successful years in the Personal Care division of Unilever in Pakistan , Lacrcio Cardoso was contemplating an attractive leadership position in China when he received a phone call from the head of Unilever's Home Care division in Brazil, his native country. Robert Davidson was looking for someone to explore growth OPPOrtunillCS in the marketing of detergents to low-mcome consumers Iivmg in the Northeast of Brazil. An alumnus of INSEAD's Advanced Management Programme, Laercio had joined Unilevcr in 1986 after graduating in business administration from Funda~ao Getulio Vargas in Sao Paulo. He thus had the seniority and marketing skills that were necessary for the project. More importantly, he had never been involved in the traditional approach to marketing deterg nts and, having witnessed the success of Nirma I III India. he was acutely aware of the threat posed by local brands targeted at low-income consumers . For this project, named "Everyman", Laercio assembled an interdisciplinary team including Marcos Diniz from Sales, Antonio Conde from Finance, and Airton Sinigaglia from Manufacturing. The first phase of the project involved extensive field studies to understand the lifestyle, aspirations, shopping and laundry habits of low-income consumers. It was during one of these trips that Laercio met Maria Conceic;ao, picttrred on the cover page in her home in Fortaleza, wbere she lived with ber daughter, Elizangela, 19 (shown on the right with two of her four children). Like almost everyone in Brazil, Maria told Laen:io that a1thougb she would love to buy Orno, Unilever's flagship brand, her tight budget meant that she could only afford cheaper local brands. Back at Unilever' s headquarters in Sao Paulo, Laercio prepared for an important meeting with Davidson to decide whether the company shouJd change the way it marketed its detergent brands to low-income conswners in the Northeast lncreasing detergent usage by Maria and the other 48 million predominantly low-income consumers in Brazil's Northeast was crucial for Unilever, given that the company already had an 81% share of the detergent powder category . However, many in the company believed that a large multinational like Unilever should not fight in the lower-end of the market, where even small, local entrepreneurs with a lower cost structure struggled to break even. How could one justify diverting money from Omo to invest in a lower-margin segment? Deciding to...
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