Unilever Brazil marketing strategy for low-income consumer
Unilever in Brazil Case Write Up
Unilever should launch new detergent powder to attract low-income detergent users in the Northeast Brazil. The company will be able to make use of its strong brand in launching the new product and also Unilever will be able to keep its profitability by positioning the new product into different segment from Unilever’s other products, OMO and Minerva.
The economic upturn by Plano Real brought the higher purchasing power for consumers in the Brazil and this has made the detergent powder market grow at 17%. In the detergent powder market, Unilever has three products, OMO, Minerva and Campeiro. While OMO and Minerva are perceived to have good quality and grasp substantial share in the market, Campeiro is perceived to be low-quality product, so Campeiro has just 6% market share. Unilever is concerned that its competitor like P&G may gain the substantial market share in low-income market, threatening Unilever’s detergent business in Brazil. In the short term launching new product helps Unilever expand its market share in low income market and boost up its sales and profit, and in the long term this will let the company be market leader in low-income market in the Northeast Brazil.
To steal share in low-income market, the new product should provide middle quality with low price. While consumers prefer cleanliness and smell, they don’t pay much attention to dissolving power and harm to colors. So while Unilever should maintain middle quality in highly preferred attributes in the new product, the company can decrease cost by reducing quality in some attributes which are not so important for consumers. By doing so, the new product can position itself in low price and middle quality, then Unilever will be able to steal share from Invico and Pop. The new product may take share from Campeiro, however the new product maintain the same margin with Campiro, so this cannibalization will not worsen the company’s profitability. The new
Unilever should launch new detergent powder to attract low-income detergent users in the Northeast Brazil. The company will be able to make use of its strong brand in launching the new product and also Unilever will be able to keep its profitability by positioning the new product into different segment from Unilever’s other products, OMO and Minerva.
The economic upturn by Plano Real brought the higher purchasing power for consumers in the Brazil and this has made the detergent powder market grow at 17%. In the detergent powder market, Unilever has three products, OMO, Minerva and Campeiro. While OMO and Minerva are perceived to have good quality and grasp substantial share in the market, Campeiro is perceived to be low-quality product, so Campeiro has just 6% market share. Unilever is concerned that its competitor like P&G may gain the substantial market share in low-income market, threatening Unilever’s detergent business in Brazil. In the short term launching new product helps Unilever expand its market share in low income market and boost up its sales and profit, and in the long term this will let the company be market leader in low-income market in the Northeast Brazil.
To steal share in low-income market, the new product should provide middle quality with low price. While consumers prefer cleanliness and smell, they don’t pay much attention to dissolving power and harm to colors. So while Unilever should maintain middle quality in highly preferred attributes in the new product, the company can decrease cost by reducing quality in some attributes which are not so important for consumers. By doing so, the new product can position itself in low price and middle quality, then Unilever will be able to steal share from Invico and Pop. The new product may take share from Campeiro, however the new product maintain the same margin with Campiro, so this cannibalization will not worsen the company’s profitability. The new