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Ad-lider Embalagens, SA: Marketing Research for Drawstring Trash Bags in Brazil
Introduction
In July of 2001, Lazlo Sved and his new partner, Emilio Figer, were going over the market research one more time. The two senior executives at Embalagens Ad-lider, SA (Ad-lider Packaging, Inc.) were carefully considering how the findings of the marketing research they had commissioned would impact the launch of their new drawstring trash bag product line named Climp Fecha Facil (Easy Close). See Appendix 5 for a picture of the product. They were looking for information about consumer preferences, consumer habits, and perceived competitive advantages that would impact pricing, product size, and distribution decisions. Having invested one million dollars for the new production machine, the two executives were anxious to get it right with respect to targeting and positioning, and creating value for the consumer. Lazlo was convinced that a successful launch of the Fecha Facil was of extreme importance. He believed that the current Ad-lider product mix would not bring satisfactory profits in the long term. He felt that Ad-lider needed to launch a new product that was different, modern, and offered the market a more favorable cost/benefit relationship than products currently on the market.

Brazils Population and Economic Stabilization

Brazil is one the worlds largest countries, covering an area of 8.5 million square kilometers. The country is divided into 24 states, two territories, and a federal district. The five regions of Brazil and their respective population sizes are presented in Appendix 1. Of Brazils 170 million population, almost 43% or 72 million, live in the Southeast. Brazils three largest metropolitan areas are all in the Southeast: Sao Paulo (20.2 million), Rio de Janeiro (12.15 million), and Belo Horizonte (5.3 million).1 In the mid-1990s, after a long period of high inflation and economic stagnation, the successful Brazilian economic stabilization plan, known as Plano Real, restored the purchasing power of the lowincome segment of the population. This upturn allowed many Brazilians to purchase consumer goods formerly inaccessible to them. As a result, during the second half of the 1990s, numerous segments of the economy, including several product categories, underwent fantastic sales growth. Brazilians categorized in the Social Class C group were the most benefited by this economic stabilization. The Brazilian Market Research Association, ABIPEME, developed a social class classification that was widely adopted by local researchers, marketers, and advertising agencies. The scheme
1

http://www.worddiq.com/definition/List_of_metropolitan_areas_by_population.

Copyright 2004 Thunderbird, The Garvin School of International Management. All rights reserved. This case was prepared by Professor Rosane Gertner, Pace University; Professors Dennis Guthery and Richard Ettenson, Thunderbird, for the purpose of classroom discussion only, and not to indicate either effective or ineffective management.

combined income, education, and material possessions to define five social classesA, B, C, D, and E. Classes A and B members possessed the highest levels of income, education, and purchasing power, and tended to be more sophisticated consumers. Classes D and E lacked purchasing power and struggled to afford even the most basic goods and services. Class C consumers have been described as typical workers in the lower middle class, and comprised 12.6 million Brazilian households. The 30% of Brazilian households classified as Class C accounted for 28% of Brazils total consumption. In contrast, Classes A and B made up 19% of Brazilian households and accounted for 52% of the national consumption. The lower classes D and E made up 51% of the households but accounted for only 20% of the national consumption.2 Another view of socioeconomic differences can be seen by examining income distribution. In 2000, the wealthiest 10% of Brazilians received 47% of the national income. The next 40% received 39.5% of the national income, while the bottom 50% of Brazilians received only 13.5%.3

Ad-lider Embalagens, SA
Ad-Lider Embalagens, SA was founded in 1970. The company, headquartered in the town of Tres Rios, Rio de Janeiro, is one of Brazils largest manufacturers of plastic bags and packaging. A commercial office is located in the city of Rio de Janeiro. The company controls Ad-lider Transportation, a trucking firm that distributes its products. The firm sells direct to large accounts and uses 43 specialized distributors to cover other accounts throughout Brazil. Sales by region vary greatly: the Southeast accounts for 50% of sales while the North and Northeast combined account for an additional 25%; the CentralWest and South account for 12% and 10% respectively. Total sales in 1998 were US$21 million and were forecasted to be in the US$2527 million range for 2001. The company had three divisions: commercial products, industrial products, and consumer products. The commercial division, which accounted for 52% of company income in 1998, had two primary lines, AD-ROLL and AD-SHOP. The AD-ROLL line consisted of plastic bags for produce and meat departments. The AD-SHOP line consisted of bags purchased by retailers as diverse as fashion boutiques and supermarkets for shoppers to carry purchases home. The consumer division sold three products for the consumer and commercial firms. Limp-OLixo, the primary product, was a line of household garbage bags, sold in rolls, with individual bag capacities from 15 to 100 liters. A second line, FREEZER, was sold to consumers for storing food in freezers. SACOS REFORCADOS AD-LIDER (reinforced bags) were sold to commercial firms such as hospitals, restaurants, and building maintenance companies. The industrial division had three product lines: an automated packaging line for manufacturers that packaged products, such as beans and rice, in plastic bags for sale to consumers; packaging materials to shrink-wrap pallets; and a line to bundle products together so as to eliminate the necessity of cardboard boxes.4

The Household Plastic Garbage Bag Market

In 1997, the Brazilian garbage bag market was estimated to move around 1.3 billion pieces and was valued at US$120 million.5 The product came in blue and black with capacity/sizes of 15, 20, 30, 50, 60 and 100 liters. The bags were packaged as rolls or folded. The rolled bags came in a plastic bag, and
2 3

Gazeta Mercantil, February 2002 Ibid. 4 http://www.adlider.com.br. 5 Datamark, The Brazilian Packaging Industry, 1996.
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the folded bags were packaged either in plastic or cardboard boxes. Smaller bags for the kitchen and bathrooms were also available. There were three national brands of garbage bag rolls: Limp-o-Lixo, Dover Roll, and Koleta. The manufacturers of these brands were Ad-Lider, Fort-Roll, and Colmag. These brands could be found in all major supermarket chains throughout Brazil. In addition to the national brands, there were regional brands and many supermarkets carried their own store brands. The three major national brands were sold directly to the largest supermarket chains. Wholesalers and distributors were used to distribute the product to smaller supermarkets, convenience stores, and other small retailers such as meat markets and fruit stands. The large supermarkets constituted the channel of largest growth in retailing. With regard to trash bags, the large supermarket chains tended to work with one leader brand and no more than two other brands. Some chains, like Sendas, Bom Preco, and Extra had their own private trash bag brands. In most retail stores, trash bags were located in the household cleaning products section. Typically, the bags were on the bottom shelf and, given the fact that many were rolls packaged in plastic bags, the area was often in disarray. Fort-Roll was the strongest competitor to Ad-lider. It was the manufacturer of Dover Roll, the market leader and a symbol of quality to many consumers. According to the Fort-Roll Web site, Dover Roll was targeted to Class A and B consumers. The company also had products targeted to Class C consumers.6

Market ResearchFocus Groups

In November of 1999, Ad-lider commissioned Sinergia, a well-respected market research firm, to conduct focus groups relating to the launch of the Climp Easy Close garbage bag. The focus groups were conducted on November 2425, 1999, in the cities of Rio de Janeiro and Sao Paulo. A total of three focus groups were conducted, two in Sao Paulo and one in Rio de Janeiro. In Sao Paulo, one focus group consisted of housewives living in apartments, and the other was of housewives living in houses. In Rio, the focus group consisted of housewives living in apartments. The objective of the research was to evaluate the acceptance of the new Easy Close garbage bag, to learn about packaging preferences, and to determine how the easy close (draw string) feature was perceived by garbage bag purchasers. Participants were selected from the A and B social classes. All participants were involved with household responsibilities, including supermarket shopping for the family, and all used plastic bags for garbage disposal. The profile of the Sao Paulo participants living in houses was married women, ages 2840, with children, and a minimum of a high school education. Some women were university graduates and had professional careers. The Sao Paulo participants living in apartments had the following profile: married and single women, ages 2839, most with a university degree. Most women in this group were professionals with careers in such areas as clinical psychology, education, nutrition, and small business. Their family income was comparable to the other Sao Paulo group. In both Sao Paulo groups, participants were drawn from geographically dispersed regions of the city. The Rio de Janeiro participants were mainly single and divorced women, ages 3242, with or without children, and with a high school education. A minority were professional women. Family
6

http://www.Dover Roll.com.br.
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income was comparable to the Sao Paulo groups, and the individuals were drawn from several areas of the city. Differences in lifestyles existed between participants from Rio and Sao Paulo. The Rio participants were active in exercise programs, with most belonging to a gym and/or regular sports participants or walkers. Almost none of the Sao Paulo participants were active in exercise programs. The Interview Guide for these focus groups is in Appendix 2.

Market ResearchIndividual Interviews in Test Market

The Climp Fecha Facil garbage bag was placed in Sendas Supermarkets in Rio de Janeiro during April June, 2001. Additional consumer research was conducted in MayJune of 2001 to: Determine the profile of the garbage bag purchaser (user) by gender Determine the frequency of garbage bag purchases by households Determine the relative market shares of major brands Determine the primary motivators/concerns with the purchase of garbage bags Determine how well the Climp Fecha Facil bag competed with the Dover Roll with-a-handle bag.

Purchase Intercept Interviews were conducted on seven consecutive Saturdays, AprilJune, 1999. All interviews took place in 29 Sendas Supermarkets. A total of 528 interviews were conducted, of which, 495 were considered valid. It is noted that during the time of these interviews, the brand Dover Roll was on sale for two weeks. During the final week of the research, the Limp-o-Lixo brand was on sale. The results of this research are presented in Appendix 4.

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Appendix 1

Brazilian Population by Region

Region Southeast South North Northeast Central West TOTAL

Population, Census 2000 72,297,351 25,089,783 12,893,561 47,975,416 11,616,745 169,872,856

% Region/Country Population, Census 2000 42.6% 14.8% 7.6% 28.2% 6.8% 100.0%

Source: http://www.terravista.pt/Enseada/1347/mapado.htm, viewed on June 01, 2004.

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Appendix 2 1.

Interview Guide for Garbage Bag Focus Groups

WARM-UP (5 minutes) Introduction to research process Presentation of the participants being interviewed: name, age, profession, civil status (married/not), kids, etc. Presentation of the theme of the research: cleaning material

2.

HABITS (10 minutes) The day-to-day activities of the family What are the activities of each member of the family; what is their day-to-day schedule? What they like and dislike (enjoy or not) to do Domestic activities Do they depend on maids/hired help (monthly or daily pay hire)? Level of interest in the home administration Involvement in domestic tasks, in what tasks, frequency and intensity Which are the domestic tasks that they most and least enjoy?

3.

CLEANING MATERIAL/GARBAGE BAG (30 minutes) Presentation of the theme Now we are going to talk a bit about cleaning materials, about supermarket purchases, and the utilization of some of those products. Cleaning equipment/products that they utilize the most; what contributes in those choices Who decides the cleaning products to be purchased, with what frequency (weekly, twice a month, monthly), and where they purchase? Behavior in relation to the storing/disposal of garbage Do they purchase garbage bags? Ultimate utilization of plastic garbage bags (other than for the disposal of garbage) How do they tend to store/dispose of domestic garbage and what do they utilize for storing/disposing of the many types of house garbage: kitchen garbage, the office/library, the bathroom, the garden, maids bathroom, etc.? If a garbage bag is not used, what is used and why? If they have already used garbage bags but no longer do, why did they stop using them and what factors encouraged them to go back to the plastic garbage bags? If they use garbage bags, in what proportion for what type of garbage? What are the characteristics of the garbage bags used in relation to thickness, color, size, brand, etc.? In relation to the purchase of the garbage bag Who decides and purchases the garbage bags, with what frequency (weekly, twice a month, monthly), and where do they purchase them? What are the decisive factors that define the purchase of the plastic garbage bags; what do they value at the time of purchase: brand (which), price, quality, packaging, thickness, etc.? Satisfaction with the garbage bags they currently use In relation to domestic garbage Who is usually responsible for the storing/disposing of each type of garbage? What are the biggest problems noticed during the usage of the garbage bags? For how long does the stored garbage remain inside the house/apartment? Garbage destination: after storing the garbage, what is its destination (does it go to a definite place, await the garbage man, or is it collected by apartment employees)?

4.

THE GARBAGE AND ITS ENVIRONMENT (10 minutes) Since we are talking about garbage, I would like to know from you all about the garbage and its environment. The groups perception in regard to the garbage and environment/impact on the environment

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 In relation to the recycling of garbage, do they know of any program and what is the groups stand on such a topic (are they compromised or not, do they believe in the programs success, etc.)? 5. MARKET/COMPETITION KNOWLEDGE (20 minutes) Perception of the several existing plastic bag products; how they see the products on the supermarket shelves (exposure, visibility, attractiveness) What are the brands they know? Images Characteristics Strong and weak points Closure Size, thickness, and color Preference Packaging: economy and super economy Preferences What are the preferences? What is the relationship between price and quality? What are the similarities and differences among the brands? 6. IDEAL PACKAGES (10 minutest) What is the ideal package; expectations? 7. ANALYSIS OF THE PROPOSED NEW PRODUCT (30 minutes) Packaging: show the box packaging and plastic packaging, alternately, among the groups Reactions Understanding of the product through the package Perception/image that is sent Presentation of the new garbage bag Reactions Likes and dislikes Relationship of presented packaging and product What do they most like and dislike? Noticed benefits and advantages Use expectation and finality Perception of the product in a kitchen: aesthetics, functionality, and hygiene Again, presentation of the product in both box and plastic packaging Preference between them Strong and weak points of each Transmitted image Roll vs. folded Economy and super economy packaging Knowledgeknow what it is? Do they purchase it or not? Ideal quantity of garbage bags by package Price Compare the packages present in the marketrelationship of price between them; how is the price? Would they pay more for the new bag? How much? Present quantities of the plastic bags in super economy packages of 30L (50 units), 50L (50 units) and 100L (25 units): are they willing to pay more for packaging and less for bag/relationship (single price and total)? 8. COLOR (5 Minutes) Present the colors and question preferences and why

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PRESENTATION OF THE REMAINING PRODUCT LINE (10 Minutes) Depending on the disposition or the progress of the group, the other plastic garbage bags will be presented to them to quickly verify: Reactions Utilities Likes and dislikes

10. END OF THE SESSION AND THANK YOU

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Appendix 3

Analysis of Garbage Bag Focus Groups

INTRODUCTION The qualitative research was performed on November 24 and 25, 1999, in the cities of Sao Paulo and Rio de Janeiro. The objective of such research was to evaluate the acceptance of the new garbage bag Fecha Facil, and learn about the packaging preferences and the perceptions of housewives in relation to the closing system of the new product. In Sao Paulo, the research base consisted of two groupsone of housewives and one of apartment-wives, and in Rio, one group of apartment-wives. The groups were made up of housewives (and apartment-wives) of A and B classes, who were involved with domestic activities and responsible for the supermarket purchases and usage of plastic garbage bags. THE DAY-TO-DAY ACTIVITIES OF THE HOUSEWIVES Similarities were found in the day-to-day activities of the women interviewed. Their days were hurried, the women were quite involved with the administration of the household, with the education/schooling of children, with the shopping, and, additionally, some of them had long commutes in their professional activities. The majority of the interviewees had some type of help for domestic activities, be it two to three times a week or live-in maids who worked six days per week. In households where the maid did not work daily, the housewives performed some of the daily routines like cooking, cleaning the house, and laundry. The housewives liked to cook but disliked house cleaning and ironing. It is clear that none of them found gratification with their domestic duties. Many times these necessities were imposed upon them. Interestingly, the housewives from Rio de Janeiro took care of themselves physically, they were members of a gym, did sports, and walked. In Sao Paulo, with rare exception, this daily routine was not part of the lives of interviewed housewives. In Sao Paulo, the housewives were more demanding of their maids and themselves in regard to the home: The girl that works at home is good, but she [does] not [do the work] exactly the way I like itso what I think is out of place or was not done right to my liking, especially in the cleaning part, I will go and do it (house dweller, Sao Paulo). In reference to the monthly shopping for cleaning materials, the majority of the time, these were purchased by the housewives. In Sao Paulo, it was very rare when a husband became involved in this process. It was also noticed that younger couples in Sao Paulo were becoming involved together in the supermarket shopping. In Rio, the husband or boyfriend was more involved in the decision about which product was to be purchased than in the actual shopping. However, some men did the shopping and even decided on what to purchase. I am very attentive, since we have a big family. I know the right quantity that needs to be purchased and what is needed. I practically make all the decisions, but my husband loves the supermarket (apartment dweller, Rio). My boyfriend loves the supermarket. He gives me hints, he keeps talking and I keep buying (apartment, Rio). It can be noted that some housewives were loyal to some brands, like Bom Bril (steel wool), Omo (clothes detergent), and Sadia (chicken, pasta). The women were more rational with the purchases, while the men were more curiousthey liked to experiment without regard to price. The supermarket part is all mehe helps, who decides is me, he likes to experiment more. He buys, I control (apartment, SP). Important Factors in the Purchase Decision for Cleaning Material Especially for the women interviewed who live in houses in Sao Paulo, practicality was the most important factor in the purchase decision for disposable and cleaning materials. They also admitted that advertisement influenced them when purchasing.

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Price, practicality, and quality are fundamental attributes for the housewives and they understand quality as that which works; that one is good and efficient; that is the product that does what it really promises. THE KEEPING/STORAGE OF GARBAGE In general, the storage of domestic garbage was done with plastic garbage bags (of varied sizes, in blue or black color), other than utilizing grocery plastic bags from the supermarkets (this was especially done in apartments). Behavioral Differences of Those Living in Apartments versus Those Living in Houses Regarding the Storage of Garbage 1. Apartments In relation to the storage of garbage, there was a noticeable difference between the apartment residents in Sao Paulo and the ones in Rio de Janeiro. The difference was basically in the color of plastic bags that the housewives utilized. In Sao Paulo, there was a predominant usage of the black color, as it was perceived as more durable than the blue bags. In Rio de Janeiro, the black color was not present/available in the domestic market, and therefore the blue color was associated with garbage bags. When the black garbage bag was utilized, it was for large quantities of garbage (100 L bags) for professional use or by the demand of the condominium. However, in both cities, supermarket plastic bags were also used for small garbage such as bathroom and kitchen garbage. It is worth mentioning that use of the supermarket plastic bag was higher in Sao Paulo than in Rio. The question of cost, more so in Sao Paulo, was not clearly noticed as a factor for the usage of the supermarket plastic bags, but the end purpose of the bag was clear: it was used to be thrown away. The priority in my house is the small plastic bags. What I am going to do with [them]? Throw [them] away? When I run out, I have the garbage bags (apartment, SP). In Rio, the usage of the supermarket plastic bag was more closely associated with its ease of closing due to its handles. The garbage bag needed to have a precise measurement of space so that I can tie it. [The garbage bag manufacturers] havent had this idea yet. Why do we love the supermarket plastic bag? Because it has ears. We love that (apartment, Rio). Brands and Capacities of the Garbage Bags Used by the Residents of Apartments Sao Paulo Brand: Curiously there was no recognition of a brand in Sao Paulo. Only the brand Sacolimp was recalled, with a lot of uncertainty and resistance, by only one interviewee. Another interviewee mentioned a certain garbage bag with the little straps. Capacity: In regard to the sizes, there were 20L, 30L, 40L, 50L, 60L, and 100L. I use the 30L and 50L bags for bottles and kitchen garbage. In the bathroom, I use a supermarket bag. Now I look at price (apartment, SP). Rio de Janeiro Brand: In Rio, the Dover Roll brand was quickly mentioned and remembered by nearly all interviewees. At first, an interviewee said, I use that one of 30L, of the small roll and the little strap, when she was quickly interrupted by another interviewee introducing the Dover name to the group, which was the brand most purchased by the participants. Capacity: It was also noticed that there was a certain uniformity of usage in relation to the capacities: 15L, 30L, and 50L. I always use the Dover Roll. I use the 50L for the kitchen and the 15L for the bathroom. Of all the ones I have used, it is the one that least rips (apartment, Rio). Sanito was another brand name mentioned in Rio, preferred by only one participant. I use the blue (Sanito)[it] is more resistant, and stronger than the others, it doesnt rip with such ease. Sanito is a bit darker, and I prefer the bag; I think I have grown accustomed [to it] (apartment, Rio). 10 A12-04-0031

The importance of a strong garbage bag was clear in Sao Paulo as in Rio. In Rio, where the Dover brand was the most well known, when stimulated to relate its strong and weak points, they said: Its practical Hygienic Has a thing to tie Its in a rollDover Rollalready comes rolled, its the only one.

Conversely, the handle (as a closing system) and the roll, previously cited as strong points, were factors that displeased the housewives. When its time to close the bag its horrible. It has that handle, its horrible when you tie a stronger knot [and] it breaks. The handle should be stronger (apartment, Rio). When its time to detach it out of the roll, if you are in a hurry, it doesnt cut, it rips (apartment Rio). When the Rio group was asked what made Dover different from the other bags, the answers were the color and the handle. They noticed the Dover color blue was more milky and resistant (strong). Purchase Definition/Decision When the groups of apartment residents in both Sao Paulo and Rio de Janeiro made purchases, the purchase decision in Sao Paulo was more price conscious. Therefore, the question of strength became secondary (they wanted price with quality). In Rio, price was not cited very much, since the choices were basically defined by the usage habits of certain brands. For example, Dover was perceived as the bag that was closer to the housewives necessities: it was not transparent, it was resilient, and it had a closing system (however inefficient it may have been). 2. HousesSao Paulo Since garbage collection was not performed daily, the large 100L black bags were sometimes used. These were purchased at mass merchandisers or from door-to-door salesmen. Rarely were 100L bags purchased in the supermarket. According to the group interviewed, garbage bags purchased in the supermarket were perceived as poor quality. I used to purchase black bags in the supermarket, but due to [their] bad quality, I started to purchase [them] in the warehouses. The black bags are cheaper, their quality is better (house, SP). The garbage man comes three times a week, therefore I use those 100L black bags; for the house, I use the little plastic bags (house, SP). In regard to the brand of the black bag, there wasnt one specific preference. The housewives believed that there was no specific brand that was of better quality, and that they only came with a guarantee from the manufacturer. I buy it from a supplier. I am tired of changing brands, now I only buy from them (house, SP). The 100L black bags served as storage for the other house trash that generally was bagged in the blue trash bags. However, it was clear that if there was a smaller black bag in the market, I would use all black. The black color was associated with good quality. Black is good! The thickness of the black is better, you cant see the garbage, [the black bag] is more resistant (house, SP). The garbage bags used inside the house, such as those in the kitchen and bathroom, are used similarly in apartments. The 20L and 30L blue bags were used as the supermarket bags werefor the kitchen sink (in smaller proportion in comparison to the apartments). However, in Rio, it was a bit different; there was a higher usage of black bags of smaller capacity (60L) sold at mass merchandisers or by salespeople. In relation to the blue bags, they informed: the blue is horrible, and not even that little thing is strong, the supermarket bag is much better. When asked What little thing? they answered, the little strap/handle that it has for us to tie it. Sincerely, the blue garbage bags, in my opinion, I wont even buy (house, SP). The issue of price was hardly brought up. Strength was the main factor for the housewives interviewed. Another issue that was mentioned by the group, in relation to the 100L black bags, was the difficulty in closing it due to its thickness. The only inconvenience is that its difficult to close it. Ive even purchased rubber bands for it (house, SP).

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One of the interviewees mentioned having bought a different garbage bag from all the others, and how she liked it and was hoping to find it again in the supermarket. When its characteristics were explained, the other participants of the group quickly asked for the brand and place where they could purchase it. (The housewives welcomed third party referrals.) The bag has a border as though it is folded over, its green, and I pull the sides and close. There is no need to tie the mouth. Brand Recognition Upon asking the interviewees for brand names of garbage bags, it was with great difficulty that they cited Pro-Lixo, So-Lixo, Pra-casa, Nips, and So-Limpo. Difficulties with Storing the Garbage The task of storing the garbage was acknowledged as not easy by the interviewees. When they lived in houses, there was the necessity of having to handle big bags of 100L, which were normally black and difficult to close. When they lived in apartments, and normally the black bags were not used, they handled blue bags, which in their opinion were weak and ripped easily. They mocked: When we need to move the garbage, what woman doesnt wonder whether the bag will leak or rip! (apartment, RJ). This was an issue dealt with on a daily, every other day, or two- or three-day basis, depending on whether the routine garbage removal took place in a house or an apartment. PURCHASE OF GARBAGE BAGS When the housewives went shopping, they experienced a lack of package imaging along with disorder in the shelves and aisles of the supermarkets. This was a unanimous perception. They (the garbage bags) are well hidden, generally completely disorganized and mixed. They are usually on the bottom shelf with the cleaning products, and the blue bag always stands out (SP and RJ). I think that is why nobody remembers the brands (apartment, SP). Regarding the exposure of garbage bag products in the supermarket, housewives had a suggestion to facilitate the decision process at the time of purchase: We look and have no idea of the size. The supermarket should display the sizes of the bags. 1. Market Knowledge Brands There were numerous brands of bags in the markets, but were the brands known by the housewives? Did they purchase by the brand? In Rio, the housewives were more in tune with the garbage bag market than the purchasers in Sao Paulo. Quickly and without hesitation, some participants of the group identified the Dover Roll brand, followed by Sanito and Lixito. The similarities of these bags are that they are all blue; the differences are in the texture, or in other words, in the resilience. Interviewees were requested to associate specific words to the brands, and they responded: Lixito was associated with the word fragile; Dover Roll with roll; and Sanito to cleanliness. The housewives of Sao Paulo, initially a little shy and quiet, ended up citing Saco Limpo, Pro Limpo, and Pro Lixo. They were not able to clearly define the similarities, differences, or even the preferences between the brands. I prefer the one with the drawing of the little man. There are many confusing packages, because generally there is only printing on the front. The housewives of houses in Rio selected, without much conviction, Modeplast, So Lixo, Pralixo, and Vulcao, but were unable to distinguish between them. Some distinguished the products by the packaging, If it is a good package it gets attention. 12 A12-04-0031

For the housewives of Sao Paulo, there was no difference or similarity with the blue brands; they were usually considered the same and of equally poor quality. Packaging Despite the preference of packaging in rolled bags, the housewives from Sao Paulo are not big purchasers of them, especially since, in the market, the black bag (which was most used), came folded, not in rolls. With regard to the packages, no comments were made about the terms economy or super economy garbage bags in either Rio de Janeiro or Sao Paulo. When asked, participants seemed not to know even one supplier, or the significance of such packaging. When even further stimulated, the response was: Its that one that comes with more and you pay less. Its the size of the bag. It means I am not going to use so many bags for the amount of garbage I haveI am going to use less. It was confirmed that these terms were not part of the daily lexicon of the housewives. 2. Important Aspects for Purchase For all the interviewees, resilience was a fundamental factor in choosing garbage bags. When deciding, we know if the bag is of good quality and [strong], by its weight. This attribute was valued more by the people of Rio de Janeiro, since in Sao Paulo, strength was identified with black bags. In Rio, where the blue bags were basically the norm, the differentiating factor was mainly based on the question of strength. As per the group, there were blue bags that were more resilient and others that were not. Resilience was necessary to the Sao Paulo housewives who resided in houses, but this factor was not verbalized as the first factor responsible for the purchase. The moment they decided to use black bags, it had already been determined that resilience was important, as they knew the black bag was synonymous with it. As per them, price was chosen as the deciding factor of the purchase. For all the Sao Paulo housewives living in apartments, a garbage bag with ideal capacity/size was the primary factor in their purchase decision, although the question of resilience, once again, affected their purchase decision, together with the price: I see capacity first. Its not worth purchasing it if is not the right size. In conclusion, resilience, size of the garbage bag, and price were important factors in the choosing of a garbage bag. The closing aspect of the bag was important; however, the participants did not mention it as a main factor. It is clear that an efficient closing system would have helped the housewife considerably. Whether it was transparent or not, other than being connected with the resilience of the garbage bag, color was also associated with privacy. A Sao Paulo apartment housewife was decisive in bringing attention to the color as an important factor in her choosing of garbage bags: A clear garbage bag is like transparent clothestakes away the privacy (apartment, SP). THE NEW GARBAGE BAG As previously brought to attention, there was no garbage bag that completely satisfied the demands and necessities of the housewives. But what would be the ideal garbage bag? What would its specifications be? 1. The Ideal Garbage Bag Basically, the ideal garbage bag would need to be something easy to close, resilient, with a different color from the others. In Sao Paulo, in both groups, an efficient closing system was expected. The words handle to close were used many times. With the house group, this was an even more relevant attribute; after all, the closing of a strong, 100L black garbage bag is not an easy task, as has been mentioned. Resilience followed closely in importance after the closing feature, which was followed by the color/opacity.

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In Rio, color and resilience came before the closing attribute. It was mentioned that Dover had the best closing method. Another color for the bag would have been ideal (mentioned by the group), as a way to differentiate the bag from the others. But they wanted a product of quality with low price. In conclusion, the ideal bag needed to have a closing system, be resilient, opaque and not too clear. 2. Packaging Appearance (Plastic and Box) Right after the participants defined the ideal garbage bag, a package was displayed with the goal of understanding the product through this package. In all three groups, without exception, the reaction was of pleasant surprise and gratitude for having designed a bag similar to the ideal one. They exclaimed: This [is] it, look at the garbage bag! Very interesting, you pull, [it] closes, and you tie it (Sao Paulo and Rio, apartments). They made a product exactly the way we were talking (referring to the ideal bag, RJ apartments). If it was in the shelves I would take it (house, SP). The bag is elegant, big, and the closing is great (house, SP). It was observed that the participants defined, through the packaging, the closing system with a handle and the way to carry the bag when filled. However, generally, they focused on the color of the bag, the texture, size, and quantity of the bags inside the packaging. In other words, they insisted in analyzing the package, not by the concept of the bag, but by the information described on it. And they always made the movement of closing with the hands, showing how to close it. The drawstring was the big differentiating factor of the product. Curiously, in Sao Paulo, the first reference was made to the Easy Close (Fecha Facil), opposite from in Rio, where the first reference was to the brand name, Climp. You can close with the handles and carry it by the handle (house, SP). I thought it was [too] small for the outside and [too] big for the inside of the house. If there were other sizes I would buy it (house, SP). The Packaging Preferences: Box or Plastic The plastic packaging was shown to the house group of Sao Paulo and apartment group of Rio. The box packaging was shown only to the apartment group in Sao Paulo. Sao Paulo Curiously in Sao Paulo, with both groups, there was a division in preference in relation to the box packaging and the plastic packaging. Those that chose the box noticed it as more practical and pretty. The plastic packaging doesnt work. The bag comes rolled inside; to take it out, one needs to take the entire roll out, pull, and store the entire roll again (apartment, SP). The box is different, its more [common] in the supermarket, its a differentiator, it is easier to take the bags out (apartment, SP). Those that chose the plastic packaging also depicted it as practical, but what determined their preference was the perception of the box as being more expensive. Those that preferred plastic argued that what was important was the ability to see the product. When showing the packagesplastic and boxwith the same price, there was a slight tendency to favor the box, especially with the apartment group. The interviewee residents of houses did not perceive the drawstring bag as appropriate for large capacities. Almost always, they referred to the new bags simply for the use of small quantities of garbage. Rio de Janeiro The cariocas (native residents of Rio) did not accept the box, saying that it was more expensive, could wrinkle, and get wet. The box is a darling, but for the everyday, the other is better. The box is too chic (apartments, RJ). Rio interviewees were more used to using the garbage bags that came in a roll, like Dover, and rejected any change with the packaging.

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Packaging Elements Two box packagings were displayed (green and blue) with different design elements. Preferences for aspects of color, design, attractiveness, exposure, and clearness were studied. The apartment residents in both Sao Paulo and Rio de Janeiro responded similarly to the different suggested changes, although there was no consensus. Some preferred the blue box; others, the green box. However, it was noticed that there was a tendency to mix the boxes, e.g., drawing one as the other, and mixing up the colors from one to the other. But there was a consensus with the 50L size, which was more clearly identified as appear[ing to have] 50 bags quantity. The Fecha Facil (Ease Close) in the blue package was thought to be more attractive. Some suggestions from the interviewees were: I would put the entire [amount of ]garbage [that] can fit inside [on the outside] I would put the capacity inside of the garbage [bag] Put that the bag has a bigger capacity, because it closes from the top, therefore you use more bag. As for the house group, a certain confusion of preferences was noticed. There was not one tendency; they mixed both packages in an antagonist manner from the other two groups. It was not the new amenities that prevailed; they mixed the colors. They preferred the same design but had mixed preferences on the colors: Its the blue in the green design. Its the green in the blue design. Agreement was found with the attention of the Fecha Facil (Easy Close) as in the other two groups: The Fecha Facil is what will make you want to know what it is. 3. The Presentation of the Garbage Bag Climp Fecha Facil After analyzing the packages, garbage bags with the Fecha Facil system were distributed. The objective was to evaluate whether the presented product had been well described in the packages. The group members appeared to be curious, and when the bags were distributed, the first reaction was to test the handles. As the bags were empty, some of the reactions were negative/contrary: I was under the impression that when you pull, they come together by themselves (apartment, SP). But in both apartment groups, there was one participant who explained how the handles worked and their efficiency when the bag was filled with garbage, which was automatically accepted by the other participants. Once again, the color was very much related to resilience. When they were shown darker bags with handles, they associated them with a better texture, and when they tried the clear bag, the first reaction was weak bag. When motivated to analyze the other aspects of the bags, the apartment groups automatically favored the side stitching. The house group of Sao Paulo reacted well to the new product, its practical, appears to be hygienic, but they did not associate its use outside of the house, or in other words, with the 100L size. They would only use the bags of 50L with the Fecha Facil system. The Perception of Resilience Prevails [It] is not [resilient]; if only [it] had the thickness of the black one!!! What if its full? Will the handles manage? (house, SP). The package gives the impression [that] the bag [is] better, from the packaging that [it] comes in, we have the idea that [it] is pretty [resilient], and that is not what it feels like (the presented baghouse, Sao Paulo). For the house participants, closing the 100L resilient black bag was difficult if it was full of garbage, as already mentioned. Therefore, it can be expected they would appreciate the closing system if the bag was perceived as resilient. They were tired of choosing garbage bags and were loyal to their door-to-door supplier. They must be certain of its strength. They viewed the new bags as hygienic and practical, even beautiful, but would purchase them only if they were dark and resilient, since the ones presented were clear and transparent. Bags with darker colors, I wouldnt think twice; [they] would be adopted at my house.

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The questions from the participants were constant. They wanted to know the price, the sizes/capacity of the bags, the color. They appeared to be anxious for the answers. If it has an affordable price, that would be wonderful, it will be the most purchased bag in the market (apartment, Rio). Independent from the price, I would buy it, I [would] like to try [it] (apartment, SP). 4. Advantages of the New Garbage Bag Asked what advantages or benefits were noticed in the new garbage bags when compared to the ones already on the market, they quickly responded, the closing of the bag. To close the garbage and not let it leakand to be able to carry it. [The garbage bag} is not Bom Bril (steel wool pad), but it has 1001 utilities. Participants were disposed to purchasing the bag because of the drawstring closing feature; however for the majority, the actual purchasing was related to the price: I would certainly purchase it, depending on the price. If the price is more, I wont purchase. The garbage bags with Fecha Facil offered other uses mentioned by the participants, such as the storing of sheets, shoes, dirty clothes, towels, books, or clothes that they dont use anymore. And better, it can be hung. 5. The Price It can be clearly noted that there were different price perceptions between Sao Paulo and Rio. This difference basically existed in the groupings of existing garbage bags in the market, in other words: In Rio, the existing plastic garbage bags were divided into two groups: The majority of the plastic bags in the market were simple and weak Dover Roll were more milky, thick, and had a closing system (wings/ears) In Sao Paulo, there was no differentiation. Blue bags were perceived as all weak and with weak handles. Housewives did not believe that the handle could be a differentiator. The groups are: The blue bags The black bags Classifying them in the order above, the following variety in price was found: Sao Paulo The price of a new garbage bag should not differ much from the blue bags, or be much more: The housewife residents in apartments would pay the same as for Dover, even though it had a different closing system. The housewives of houses admitted to be willing to pay a bit more than for Dover. Rio de Janeiro The comparison of price was with Dover, the bag acknowledged by the group as the one of better quality. They admitted a willingness to pay a certain value/premium over Dover. In any case, the participants from both groups believed the bags to be too expensive, especially the blue ones, since they were not considered to be worth what they paid for them. In relation to the black bags, there was not much of a complaint regarding its price. However, there was a preference stated for a green color as it was perceived as prettier and different and easier to find on the shelf. With regard to color vs. resilience, darker colors were stated as better, since the darker bags appeared to be more resilient. This perception was even greater in Sao Paulo. In Rio, there was no distinction; both colors could be resilient. OTHER BAGS Even showing the Tie Tie (bags with tiesplastic or twistums) and the Handle Tie (bags like supermarket plastic bags with handles), the preference was still the bag with handle (drawstring).

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For the Tie Tie, some interviewees believed the bag to be more resilient under the weight of the garbage and that it would be cheaper. As for others, they believed the method to be more complicated due to the number of edges. For the Handle Tie, the perception was the same as of the Tie Tie: there were those that liked it and those that did not. They believed it that it would be cheaper than the drawstring.

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Appendix 4 1.

Purchase Intercept Interviews

Consumer Data Purchases by gender: Women 71.72% Men 28.28% During the study, it was discovered that 8.57% of the men who purchased garbage bags bought the ones that their wives had asked for, so a more accurate proportion was: Women 74.14% Men 25.86%

2. Market Data: Purchases The percentage of garbage bags in rolls, with and without handles, was calculated: Garbage bags in rolls 81.21% Garbage bags w/handles in rolls 18.79% The brand share of garbage bags in rolls was calculated: Limp-o-Lixo* 48.12% Dover Roll 19.05% Koleta** 18.30% Sendas 14.53% *All Limp-o-Lixo were considered in this line: super-economy and multi-use **All Koletas were considered in this line: super-economy, sink/bathroom, condominium, and black. Garbage Bags with Handles in Rolls: Climp Fecha Facil 88.17% Dover Roll with handle 11.83% Brand Share of Major Brands: Limp-o-Lixo 38.79% Dover Roll 15.35% Climp 16.57% Koleta 14.75% Sendas 12.32% Dover Roll with handle 2.22% The table below shows the brand preference, in accordance with the gender of the consumer: Sex Female Male Climp Dover Roll 18.31% 17.18% 12.14% 10.71% Dover Roll w/handle 2.25% 2.14% Koleta Limp-o-Lixo 14.08% 39.44% 16.44% 37.14% Sendas 8.74% 21.43%

Market Share by Manufacturer: Ad-Lider Embalagens, SA 55.35% Fort-Roll Ind. Com. Exp. Ltda. 29.90% Colmag Dist. Com. E Ind. Ltda. 14.75% Sales by Capacity of Bag Only the 15, 30, 50, and 100 liter bags were analyzed; other types, such as bath and sink bags, were not considered: 15 Liters 8.68% 30 Liters 22.49% 50 Liters 35.31% 100 Liters 33.52%

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The following table shows the percentage relative to the sale of each brand, by size. Size/Product 15 Liters 30 Liters 50 Liters 100 Liters Climp Dover Roll 20.45% 11.37% 16.67% 13.16% 17.32% 27.19% 15.88% 10.59% DR w/handle 1.75% 1.68% 3.53% Koleta 11.37% 11.40% 14.52% 14.12% Limp-o-Lixo 34.09% 35.09% 34.64% 50.00% Sendas 22.72% 21.93% 10.05% 5.88% Total 100% 100% 100% 100%

This table shows the percentage of each brands sales relative to the size. Size/Product Climp 15 Liters 10.46% 30 Liters 22.09% 50 Liters 36.05% 100 Liters 31.40% Total 100.00% Dover Roll 6.49% 19.48% 50.65% 23.38% 100.00% DR w/handle 18.18% 27.27% 54.55% 100.00% Koleta 7.35% 19.12% 38.24% 35.29% 100.00% Limp-o-Lixo 7.43% 19.80% 30.69% 42.08% 100.00% Sendas 15.87% 39.68% 28.58% 15.87% 100.00%

Periodic Purchases: The following is an analysis of periodic purchases. In case of a different period, it was considered as the closest to it. Weekly 2.12% Every 15 days (twice a month) 22.08% Monthly 71.76% Every two months 4.03% The following table shows the percentage of total bags purchased, relative to the brand, for each period. Period/Product Climp Dover Roll Weekly 10.00% 0.00% Twice a month 20.19% 5.77% Monthly 16.57% 18.93% Every 2 months 5.26% 21.05% DR w/handle 10.00% 0.96% 2.66% 0.00% Koleta Limp-o-Lixo 20.00% 20.00% 6.73% 56.73% 15.09% 34.62% 36.85% 31.58% Sendas 40.00% 9.62% 12.13% 5.26% Total 100% 100% 100% 100%

Note: The weekly purchase was performed by males 66.67% of the time. In this table, the percentage is shown by period of sale for each brand. Period/Product Weekly Twice a month Monthly Every 2 months Total Climp Dover Roll DR w/handle Koleta Limp-o-Lixo Sendas 1.27% 9.09% 2.99% 1.09% 7.14% 26.58% 8.11% 9.09% 10.45% 32.07% 17.86% 70.88% 86.49% 81.82% 76.12% 63.58% 73.21% 1.27% 5.40% 10.45% 3.26% 1.79% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

From the data collected, it was also possible to find a middle period for the repetition purchase of each brand, better displayed below: Average Time between Purchases Climp 26.01 days Limp-o-Lixo 25.92 days Dover Roll w/handle 26.55 days Sendas 26.21 days Dover Roll 30.41 days Koleta 30.88 days

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Purchase Motivator
Motive/Product Geral Climp Brand 27.68% 8.54% Price 15.15% 1.22% Benefit Cost 13.94% 4.88% Quality 12.93% 17.07% Practicality 10.71% 59.76% Strength 5.66% 2.44% No opinion 5.05% 4.88% Promotion 4.44% Purchase by order 2.42% No defined brand 0.61% Sink 0.61% Color 0.20% 1.22% Do not place much weight 0.20% First purchase 0.20% Garbage bag is not so important 0.20% 100.00% 100.00% Dover Roll 55.26% 3.95% 25.00% 1.32% 5.26% 3.95% 5.26% DR w/handle Koleta Limp-o-Lixo Sendas 45.45% 31.51% 30.73% 1.64% 18.18% 10.96% 4.69% 90.16% 9.59% 28.65% 18.18% 6.85% 11.46% 3.28% 18.18% 0.52% 26.03% 3.65% 8.22% 5.73% 9.90% 1.37% 3.65% 1.37% 1.04% 4.11% 1.64% 1.64% 1.64% 1.64% 100.00% 100.00% 100.00% 100.00%

100.00%

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Appendix 5

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