Unilever in Brazil(1997-2007)
Marketing Strategies for Low-Income Consumers
Consumer Behavior Solomon(2009) defines consumer behavior as “Consumer behavior is the process individuals or groups go through to select, purchase, use and dispose of goods, services, ideas or experiences to satisfy their needs and desires”(p.148). While speaking about the consumer behavior in Brazil it is important to show the demographics based on many factors like literacy, population, lifestyle in Northeast and Southeast regions. Hence the consumer behavior is different in both the regions. Northeast Region: The importance for cleanliness and to make clothes smell good has lead to growing penetration of the detergent powder portrays a cultural influence on the consumers buying behavior. The various reasons that the consumers mentioned for using detergent powder is described in Exhibit1. Attribute Importance, Brand Positioning, And Consumer Expectations in the North East
Exhibit 1 Source: - Unilever Research
Cleanliness which has a 24% importance helps to determine the motivation of the consumers; they believe that cleanliness is part of their social status; it also caters to their need for being part of the society. Only 28% household own a washing machine and the rest 72% household‟s washing attitude (behavior) is to scrub the clothes with laundry soap and then add bleach to remove tough stains and only add a little detergent powder at the end to make the clothes smell good. So their perception about detergent powder is that it is only for good smell. In the NE, people consider washing clothes as more of a leisure activity because the activity is generally taken up outdoors (physical environment), in the nearby ponds where people can socialize amongst each other. This is an important aspect of the culture of NE, which differentiates it from the people of SE, as the social needs (Maslow‟s hierarchy of needs theory) of the people are reflected in cloth-washing activity. The influences of mother in the decision making process is substantial in the case of detergents(FMCG).Moreover the frequency of washing clothes is higher as they believe that cleanliness of clothes reflect on the responsibility taking behavior of the mother. Low income consumers were attached to boxes and regarded anything else as good for only second-rate products. Omo is positioned specifically to be used in washing machine which shows that it is targeted for the people belonging to a higher social class.
Southeast Region: The lifestyle of people of this region is better than NE which is evident from the 67% of households owning a washing machine. The washing attitude is more using a machine than hand wash. Hence the consumption of detergent powder is more as against NE. Their learning from the washing experience is that hard stains are not cleaned in a washing machine in spite of using the most expensive and best product. So they need to use laundry soaps for cleaning the tough stains on collars. This behavior has led to an 88.7% penetration of laundry soaps.
Players and brands in Brazil and their strategy: Unilever is the leading player in the detergents industry with a market share of 81%, with the detergent division in the cash-cow phase (as outlined in the BCG growth-market share matrix), helping the company generate funds to fuel the growth of its upcoming segments of home-care and personal-care products, which were still at a nascent stage. The market structure could be considered as a duopoly, with Unilever and P&G as the major players in the organized market. The market has been broadly categorized into the detergent powder and the laundry soap segments. The former is predominantly used in the SE part, while people in the NE used it in
little quantity to make the fabric smell good. Hence, the growth of this segment was comparatively higher (stood at 17% against 6% for laundry soaps). The entry barriers were quite high for the detergent powder...
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