LAHORE SCHOOL OF ECONOMICS

MARKETING STRATEGY

ASSIGNMENT NO: 1
ASSIGNMENT TOPIC:
Unilever in Brazil Marketing Strategies for Low-Income Consumers
MBA 2
SECTION: A

NAMES:
Adnan Babar
Ahmad Butt
Ali Yar Khan
Mehak Najam
Waleed Abrar

SUBMITTED TO: Dr. Aamir Khan

Overview:
Organizations always want to target the high income groups because of the promise of
high profit margins. But in this race to target the higher strata of the economy they forgo
the opportunities provided by the lower income groups. The low income group
constitutes a major part of the economy and, although, the profit margins are low, there
are opportunities that can be availed by organizations.
The case has divided (geographically) the Brazilian market into two major segments
Southeastern consumers and Northeastern consumers. The consumption and buying
behaviors of both these segments vary. The southeastern consumer has high buying
power, high literacy rates, majority have washing machines at home, they view clothes
washing as a chore, they prefer detergent (over soap). The northeastern consumer
attaches high value to cleanliness, washing activities are a source of pleasure for them as
well as social interaction, majority do not own washing machines and clothes washing is
an activity that requires effort, they use washing soap more than southeastern consumers
because of low prices, price is a major deciding factor for the northeastern consumer.
Consumer expectations in the Northeast:
The northeastern consumer bases their decision to buy detergent on 6 basic attributes of
the detergent. The most important attribute is cleanliness and the ability to whiten clothes.
Consumer gave this attribute importance of 24%. The second most important attribute for
the consumer is the smell and softness qualities that the detergent offers. They gave this
attribute an importance of 20%. The next important attribute is the ability to remove
stains with an importance of 16%. Following is the packaging with an importance of 13%
and finally no or little harm to colors with an importance rating of 11%.
Detergents in the market:
-

OMO Under the brand name of Unilever, it is one of Brazils top brands. It has
market penetration of 97% and awareness of 72%. Price per KG is $3. It is
available only in the detergent category. It has sales up to $55.2 million. OMO has
52% market share.

Minerva Under the brand name of Unilever, it has market penetration of 91%
and awareness of 16%. It is available in both detergent and laundry soap category.
The detergent is priced at $2.40 and has sales up to $17.6 million. The laundry
soap is priced at $1.70 and has sales up to $19.4 million. Minerva has 17% market
share in the detergent category and 19.1% share in the laundry soap category.

Campeiro Under the brand name of Unilever, it has market penetration of 66%
and awareness of 4%. It is the lowest priced brand in Unilever detergent category
and is prices at $1.7. Sales amount to $6.05 million. It is available only in the
detergent category. Campeiro has 6% market share.

Ace Under the brand name of P&G. Sales upto $11.8 million and priced at
$2.35. It is available only in the detergent category. Ace has 11% market share.

Bold Under the brand name P&G. Sales upto $5.35 million and priced at $2.50.
It is available only in the detergent category. Bold has approximately 3% market
share.

Pop Under the brand name of P&G and is priced low at $1.70. It has sales up to
$1.4 million but focus on cost reduction, thus, can cater well to the northwestern
segment. It is available only in the detergent category. Pop has approximately 3%
market share.

Invicto Owned by ASA and has sales upto $5.20 million and is priced at $1.70.
It is available only in the detergent category. Invicto has 5% market share.

Bem-te.ve It is a traditional Brazilian laundry soap brand and is priced at 1.15

What decisions need to be made?

Arguments for targeting the lower income segment:

There are no further growth opportunities for Unilever in the Brazilian market,
and catering to this underrated segment seems like the next probable step for the
organization.

With the right strategy low income groups are ready to pay for brands they like or
which offer high value.

If the strategies applied to this case are successful, Unilever can benefit by
applying them to their other products as well.

P&G might cater to this segment which will give them an edge.

Detergents are a high involvement product for the target segment and if properly
implemented the company can use this trait to their advantage.

Arguments against targeting the lower income segment:

These income groups offer lower profit margins.

Cash from premium brands would have to be invested to implement the new
strategy that might not promise high cash returns.

The new strategy might result in cannibalization.

If this target group is catered to the corporate reputation of Unilever might be

Our team thinks that Unilever should target this particular segment. The northwestern
consumer is more involved with the product when compared to the southwestern
consumer. They position the brands by Unilever as high quality brands and like using
them, but because of monetary restrictions are unable to purchase them. For them the
consumption experience is more detailed and complex. The Brazilian women from this
segment enjoy the activity of washing clothes as it provides hem with an opportunity of
socializing. They also place high importance on hygiene and are more aware and
sensitive in comparison to the southwestern consumer.

The following strategies can be adopted by them to target the northeastern consumer:
-

Create a new low price detergent that would target the specific needs of the target
customer

Create a new low price laundry soap that would target the specific needs of the
target customer

Promote their existing laundry soap offering (Minerva)

Lower the price of their current cheapest brand (Campeiro) which would cater
specifically to the lower income group

Our team thinks the best strategy that the company should adopt is promote and redesign
their existing low priced brand that is Campeiro. Rather than focusing their energy on
producing a new product they should tailor their existing one to better meet the
expectations of the target segment.
Product The new product should be available in large packaging which would reduce
the overall cost. The packaging should be simple and not much should be spent on it
because consumers do not place high importance on packaging. The packaging can be
plastic which would further reduce the cost. Part of the formulae of Minerva should be
added to Campeiro so the end product adds more value to the customer experience and
gives added benefits.
Price Campeiro should reduce their price. Currently it is priced at $1.7. the price should
be reduced to $1.4 so it gets the attention of the consumers and with the increase in sales
the customers can see the change in product. As the prices of the rest of the brands would
remain the same it would not have an impact on the company image.
Promotion The change in price should be highlighted first and foremost. The attribute
that should be dominant in the promotional activities is whitening and cleaning
capabilities of the detergent. Television is the best medium as the target segment is fond
of watching it. Ads can be placed at the sites where the northwestern women go to wash
the clothes in groups.
Distribution Unilever should contract with specialized distributors who would get
exclusive rights to sell the detergent. The current Unilever distribution strategies do not

cater to the specific needs of the target segment. Specialized distributors would be the
best way to get the product to the target segment.