Unilever Brazil

5Cs Situation Analysis

Consumer Needs:
1. Market size and growth:
In 1996, detergent powder was a $106M (42,000 tons) market in NE, growing
at an annual rate of 17%. The laundry soap market was 102M (81,250 tons),
growing at an annual rate of 6%.
<Barriers to entry>
2. Market segments:
Market segment consisted of low income NE population in Brazil who
primarily use laundry soap for washing followed by detergents for cleaning
tough stains.
3. Benefits that consumers are seeking:
Although the consumers would love to buy Omo, her tight budget meant that
she could only buy cheaper local brands.
4. Retail channel:
Consumers purchase the product from small local kirana shops since they
offer credit facilities.
5. Consumer information source:
Television because of its high penetration rate, recommendations by the local
shops
6. Buying process:
Thoughtful cost considerations
Company Resources:
1. Product line:
Unilever has a 19.1% share with Minerva in its laundry soap category and
75% market share in its detergent powder category. In the detergent powder
category, its flagship product Omo is perceived highly on both price and
quality indices. Minerva ranks well mid-way on both perceived price and
quality indices, while Campeiro ranks low on both.
2. Image in the market:
Unilever has been known to mostly cater to high and medium income
population categories, and has traditionally kept out of low-income consumer
groups, fearing its brand image in the local and global market and investor
communities.
3. Technology and experience:

Unilevers research team possesses technical know-how to manufacture

products as desired by the business division. However, it hasnt had much
experience with low-income consumer group.
4. Goal:
To increase its penetration to low-income consumer group in detergent or
laundry soap categories, depending on which one is more profitable
Competitor Vulnerabilities:
1. Actual or potential:
P&G is the next biggest market share holder in the detergent powder
segment; however, it lies far behind Unilever. It is difficult for a new player to
enter this segment since it has a high barrier to entry because of high fixed
costs of production. It is likely that P&G will launch its own low-income brand
in due time, and Unilever must act before it is too late.
On the other hand, the laundry soap segment is fragmented with small local
brands with no competitor holding a significant chunk of the market. Barriers
to entry are low, and most companies struggle to keep its profit margin.
2. Strength and weaknesses of its competitors:
The laundry soap market category is highly fragmented with local brands
mostly fighting on price.
The detergent powder category is mostly dominated by Unilevers existing
product Omo, P&Gs Ace being far behind.
Collaborators:
1. Distributors:
Unilevers existing generalist distribution caters mostly to malls and
supermarket consumers, and they dont have a high outreach for local
small shop owners. However, they can try to reach out to those stores for
an additional variable cost.

Possible Questions for Unilever:

1. Should Unilever change its current marketing and branding strategy? Could it
reposition its existing cheaper brands such as Minerva and Campeiro or
should it launch a new brand?
2. If it is launching a new brand, what would be its ideal marketing and
positioning strategy?
3. At what cannibalization rate would Unilever start losing money?
4. Did Unilever had right skills and organization to compete in this market?
5. What would Unilever gain and what would it risk if things went wrong?
6. Is positioning of the existing brands ideal? Would it be really necessary to
develop a new CVP?
7. Could Unilever use a brand from its international portfolio of existing brands?
8. If Unilever went ahead with Campeiro, would it deliver the benefits that low
income consumers wanted?
9. Minervas formula might be too expensive in case a new brand is launched.
What would be the ideal formula for the new brand if it decides to launch it?
10.What would be the right packaging type and size?
11.How would the new brand be priced?
12.Should Unilever use coupons or other means to reduce the cost of the
product for low-income consumers?
13.Should it change the price of Omo Minerva and Campeiro?
14.How should Unilever communicate its new strategy to consumers? What is
the mode for marketing that it would use?
15.What should be the key message for marketing?