Unilever Brazil | Dida L Susilo | 416093

Case Summary
As the largest country in Latin-America, Brazil is viewed as one of the favorable country for
home and personal care industry, such as Unilever. Unilever as one of the biggest
multinationals consumer goods company was trying to deepen their root in Brazils emerging
industry. Detergent industry was placed as Unilevers Brazil cash cow, thus Unilevers Brazil
Home Care Head, Robert Davidson, was challenged to keep the leading position and expand
their market share. He decided to ask Laercio Cardoso to lead the Everyman project in
Brazil. Cardoso was having his success through Nirma, one of Unilevers detergent brands in
India. Nirma is targeted the low-income consumer. The Everyman project was basically
has the same goals with Cardosos project in India, that is targeting the low-income
consumer. Cardoso then was lead into the decision to reposition the existing product or to
develop new product to conquer the low-income consumer market.
Industry Key Success Factors (KSF)
The External analysis using PEST and 5 Forces Analysis have been done to derive the key
success factors in this of the Fabric Wash industry in Brazil (Exhibit 1). The KSF are
mentioned as follows:
1. Brand knowledge and awareness Having the fact that almost half of the people in NE
were still illiterate, giving suitable approach may necessary to win the market.
2. Products that fulfill the needs of some social classes.
3. Usability of the product Less than 30% families in NE owned the washing machine. So a
product that can be used effectively in washing machine or when the women doing the
laundry by hands, would be highly advised.
4. High economies of scale Then it may lower the production cost and give best price to
consumer, while keeping it in a stable margin.
5. Distribution channel Low-income consumers were said not do their groceries in a big
supermarket like Walmart. They were preferred to buy their stuffs in small shop in their
area. Therefore, the ability to reach small distributors or retailers was become the KSF in
this industry.
Failure to conquer the low-income customers
The KSF might draw some reasons of why some low-price detergent brands in Brazil were
not able to get the low-consumer market.
1. Failed to get the picture or knowledge about the consumers washing habits
Most of the companies were driven by product-based rather that consumer-based. They
were only determined to sell good detergents at the reasonable price, and were not really
looking into what consumer actually needs and what consumer perceived towards their
products.. In NE, most of the women use it only because they wants the laundry to smells
good after washed it with laundry soap and bleached their laundry. So detergent is not
only the primary product they use to do the laundry.
2. Low brand equity
Exhibit 2 shows the brand knowledge and awareness ratings of the budget products are
very low. Low-income customers were mostly come from NE, where there are still 40%
illiterate inhabitants in NE. More efforts were needed by the company to approach this
type of customers, which may bring them to higher promotional cost. Giving a very low
price in the market, companies wouldnt have enough budgets to push the sales and
promotion.
3. Even if they are low-income customers, the people still wants to use high quality products
in a very affordable price.
The consumer perceived budget products are having low quality, which is not good
enough to fulfill the needs of the customers.
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Unilever Brazil | Dida L Susilo | 416093

Reposition the existing brand or develop a new brand?
Having the insight of the facts of the research and some findings in the market from the case,
develop a new brand is my solution of this case. Reposition the existing brand may give an
advantage as it assumed that it would not increase the incremental marketing costs. In the
other hand, pick one of the three brands to be repositioned, may give some disadvantages:
1. Reposition Omo is perceived as a bad idea. Fabric-wash industry was looked as the cash
cow of Unilever Brazil. Unilever was lead in the detergent powder market in Brazil by
having 81% market share. Lowering Omos price will make a dilution of its brand image,
which may affect on decreasing sales.
2. Reposition Minerva is might be possible to do, as the brand is positioned between Omo
and Campeiro. Nevertheless, targeting the low-income consumer is mean that you have to
lower the products price, which may lead to lowering the margin. Besides, there will be
more cost to improve customers awareness of Minerva, as Exhibit 2 shows that theres a
huge gap between Omo and Minerva consumer awareness.
3. Reposition Campeiro would be a hard task, as the customer has already perceived it as
low-quality product far below Minerva (Exhibit 3).
Developing a new brand and positioned it between Minerva and Campeiro would be the
solution. Another reason is based on Simanis and Dukes Opportunity Map. This map shows
that fabric wash industry can be categorized as mature markets. The players in this industry
have invested a relatively lower amount of investment of their discretionary budget.
Moreover, there are two types of opportunity that company might be take: (1) changing the
consumer behavior; (2) developing a new product to adjust with consumer behavior (Simanis
& Duke 2014). The first option would be really hard to do, and need huge amount of
investment. Thus, the decision to deliver a new product is perceived as the best option in this
case. In the long term, the brand may replace Campeiro as the Unilevers detergent brand in
low-consumer market.
Developing Diverso
1. Segmentation
Budget customer will be the market segment for Diverso. Diverso is offering the solution
of customers who are doing their laundry using washing machine or by hand. This segment
was chosen following the fact that sales of laundry soap was high in the budget customer
segment. It will be suitable in use both in washing machine and using hands, as the response
of consumer washing habit in Brazil.
2. Targeting
In targeting the low-income customers, differentiated strategy will be applied. Diverso
means being different. Diverso offers the benefit to give convenience in use both in washing
machine or when doing laundry by hands. It will be effective as a stain remover, and give the
luxurious scents to the laundry.
3. Positioning
Positioning statement:
Diverso is a detergent powder brand for budget customer who admires the quality,
convenience, and affordable luxury in one package. Its your friend to remove the stain
in your laundry, offering you convenience in every ways of washing, and give you the
best washing experiences.
Marketing Mix
1. Proposition
The product that can be use in every ways of consumer washing habits, giving the quality
and luxury in a very affordable price.
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Unilever Brazil | Dida L Susilo | 416093

2. Product
Product formulation should be improved. The product might have quality lower than
Minerva as the effort to reduce the cost, in response to $0.10 additional cost because of
having a new product. However, quality of the product has to be maintained carefully.
3. Promotion
Having the fact that Unilevers detergent brand promotion cost allocation 70% for above
the line activities I suggest to gives more proportion in the below-the-line (BTL)
activities. BTL activities were considered to be able to give better approach for lowincome customers. Lack of literacy that 40% people in NEs have, will be easier to solve
in this kind of approach.
- Using a brand ambassador that suits the image of Diverso. Modern, active, and
humble woman will be preferred as the representative of Diverso. This figure have to
be able to communicate the Diverso benefits and encourage people to use the product.
She also has to be able to engage in Diverso BTL programs.
- Building the user-community. From the case we have the insight that women in NE are
mostly do their laundry in the public laundry, river, or pond. They perceived washing
as pleasurable activity. They use this times to socialize and communicating with others.
This become and opportunity to Diverso. By building user-community, Diverso will
be able to increase the awareness of the product. The loyal user will be turned into an
ambassador for their community, to influence others using Diverso.
- Hold an event to raise consumers engagement. Diverso user might be invited to join
a creativity forums to solve how to reuse and recycle the Diverso plastic packaging.
- TV commercial and radio as the media to spread the BTL activities. TV and radio
commercial can be used align with the BTL activities.
4. Packaging
The two types of packaging will be offered to the market. First is the usual cardboard
packaging, and the other one is the economist package. The economist package would be
in one-time-use-size (around 30 grams per sachet). It purposes to keep the quality and
keep the good form of detergent powder, and mainly is to reduce the cost. We might
calculate the cost prediction using the data from Minervas laundry soap package, which
lower than the cardboard packaging (Exhibit 4).
The image of the packaging of will show the combination of quality of detergent and
attracting the emotional appeal of customer. The main object would show the power of
detergent and the good smell of the product.
5. Place
Diverso will be used specialized distributors to reach all the traditional retail stores with
small number of checkouts. It will add $0.05 per kg on variable cost (Exhibit 5).
6. Price
The price of Diverso will set between lower than Minerva and higher than Campeiro
Formulation cost ($ per kg)
Packaging cost ($ per kg)
Promotional cost ($ per kg)
Variable cost (distribution)
Total cost
Margin
Wholesale price ($ per kg)

Minerva
1.4
0.35
0.3
2.05
0.35
2.4

Diverso
1.15
0.15
0.35
0.05
1.70
0.30
2

Campeiro
0.9
0.35
0.2
1.45
0.25
1.7

Unilever Brazil | Dida L Susilo | 416093

Bibliography
-. (2012). What is the STP Process?. Available: http://www.segmentationstudyguide.com/stpprocess/what-is-the-stp-process/. Last accessed 17th November 2014.
Arthur Thompson, 2009. Crafting & Executing Strategy: The Quest for Competitive
Advantage: Concepts and Cases. 17 Edition. McGraw-Hill/Irwin.
Hanlon, A. (2013). The Segmentation, Targeting and Positioning model. Available:
http://www.smartinsights.com/digital-marketing-strategy/customer-segmentationtargeting/segmentation-targeting-positioning-model/. Last accessed 17th November 2014.
Pedro Pacheco Guimaraes, 2007. Unilever in Brazil (1997 2007). INSEAD.
Simanis, E; Duncan, D. (2014). Profits at The Bottom of The Pyramid. Harvard Business
Review. October 2014 (-), 86-93.

Unilever Brazil | Dida L Susilo | 416093

Exhibit 1. External Analysis
PEST Analysis
POLITIC
Not mentioned in the case, but can be assumed as having a relatively minor effects to the cases in hand.
ECONOMY
Plano Real was brought Brazil to reshape their economy after the three-decades recession. Increasing consumers
purchasing power.
Lagged in income per capita, between SE (around $6,600) and NE (only around $2,250).
SOCIO-CULTURAL
Theres a gap in literacy between SE and NE (still 40% inhabitants in NE were illiterate).
TECHNOLOGY
Only 28% of households in NE own washing machines, while in the SE 67% of families own it.

Five Forces Analysis for Fabric Wash Market Industry

Detergent Powder
Competitive Rivalry
HIGH

Bargaining Power of Suppliers

MODERATE

The remarkable growth rate at 17% because

of the Plano Real

Threats of New Entrants

HIGH
Threats of Substitutions
HIGH

Manufacturing process is capital

intensive

Two big players in this industry, Unilever and

P&G were shared competitive percentage of
market share

Most of the process and materials were

produced and hold locally

Bargaining Power of Buyers

HIGH
Shown by competitive market price that the
producer offers and several types of products
they offer in serving all the social classes.

Laundry Soap
Competitive Rivalry
LOW

Bargaining Power of Suppliers

LOW

Slow growth rate at 6%. Selling at the lower

price than detergent.

Threats of Substitutions
HIGH

Threats of New Entrants

LOW
Soap is easy to produce, require less
high-tech machine

Low involvement products, lower price than

the detergent
Many brands compete in this industry

The primer material in soap is the animal fat,

was produced largely in Brazil

Bargaining Power of Buyers

MODERATE
Only two big products in the market
The top 4 companies in this industry only
owned 38% of the market

Unilever Brazil | Dida L Susilo | 416093

Exhibit 2. Brand Knowledge, Market Penetration, and Consumer Awareness of
Major Detergent Brands in Brazil

Source: Unilever in Brazil (1997-2007) Case Study, INSEAD, 2007



Exhibit 3. Perceived Quality and Perceived Price of Major Detergent Brands in
the Northeast, Brazil, in 1996

Source: Unilever in Brazil (1997-2007) Case Study, INSEAD, 2007

Unilever Brazil | Dida L Susilo | 416093

Exhibit 4. Key Information of Detergent Powder and Laundry Soap Brands in
Brazil

Unilever Brazil | Dida L Susilo | 416093

S = Sales ($ million), WP = Wholesale price ($ per kg), i.e., the price at which the retailer buys the product, FC
= Formulation costs ($ per kg), PKC = Packaging costs ($ per kg), PC = Promotional costs ($ per kg).

Source: Unilever in Brazil (1997-2007) Case Study, INSEAD, 2007

Exhibit 5. Key Differences between Generalist Wholesalers and Specialized
Distributors in Brazil

Source: Unilever in Brazil (1997-2007) Case Study, INSEAD, 2007