Laundry Detergent in Brazil

Arshad | Ashref | Cancio | Nisce

Long Term Strategic Implications

Unilever should target the low income segment of consumers

in northeast
New Brand

Low Income Segment?

Proper advertisement will create a positive word of mouth

Short Term Financial Implications

Strong Presence
Low Barriers to entry In 1996 Detergent powder market was $106m Growing rate 17% annually 75 % of Market Share OMO $3

Minerva $2.46 Camperio $1.71

Contract with specialized distributers

Long Term Financial Implications

Larger Volume = Higher Sales = Better Income
The creation of a new line that targets the lower

income market can significantly affect Unilever in a positive way.

Altough, this proves to be effective, later on, the

customers in the high income segment might opt for the new brand instead.

Unilever Brand Protfolio

Detergent Powder OMO

Market worth $106 million Growth rate 17%

Unilever in Brazalian NE Detergent & Laundary Soap Market

MINERVA
CAMPERIO MINERVA SOAP

Laundary Soap
Market Worth $ 102 Million Growth Rate 6%

Portfolio of Detergents
OMO
Higher Margin Product High Ability to remove stains 52 % marketshare Price $3/kg

Minerva

Cheaper than OMO Easily dissolvable and forming ability 17% Market share Price $ 2.4/kg

Campeiro

Cheapest Product Targeted at low income consumers 6% Market Share Price $ 1.7/kg

Question

Is a new brand necessary to serve the low income segment or could Unilever reposition one of its existing brands or simply launch a

brand extension

New Brand: Low Income Segment

New Brand can serve the needs of low income by delivering

something cheaper than OMO & better quality than Camperio.

Scientist can find new formula to make the detergent at low

cost.
Totally new cost effective packaging can be designed.

New Brand: Low Income Segment

New & Better marketing campaign can be started to target

the right market.

All

the customers preferences can be taken into consideration according to the demand of low income segment.

PRODUCT: New laundry soap

Why laundry soap?
Lower entry barriers compared to laundry powder Relatively easy to produce from fats and oil More affordable to produce Penetration is 96.6% per year Consumption is 20.4kg/buyer/year Common practice in NE Brazil is hand-washing clothes Clothes are washed more frequently than in SE (5 times a week VS 3.9 times a week)

PRODUCT: New laundry soap

1. productivity indicator: quantity of foam
2. strong, pleasant smell indicator: softening power 3. stain removal w/o the use of bleach and laundry soap

4. dissolving power absence of residue

5. Packaging
Sachets 30% of the price of cardboard

Cardboard preferred by low-income consumers

6. Harm to colors fading of colors

PRODUCT: New laundry soap

1. Maintain a strong productivity since the aim is to make an effective but affordable product
2. Provide a mild, pleasant smell different from Minervas

3. Stain removal attribute should be included

4. Dissolving power does not need to be that strong 5. Packaging will be in plastic packs 6. Harm to colors is not a priority

Price
BRAND Minerva POSITIONING Leverages brand equity as a detergent powder in the laundry soap market PRICE 1.70 MARKET SHARE 19.40

NEW BRAND Bem-Ve-Ti

Effective but affordable

Multi-uses (perceived to kill bacteria)

1.35
1.15

11.45

Place
Generalist Wholesaler Advantages Wide reach mid-sized/large Specialized Distributors 20 to 40 SKUs extensive point-of-purchase activity (target market is dependent on advice from brand users/salesperson) better, more trusted relationship with store owners Variable cost is $0.05/kg Focused reach Portfolio focuses on all brands from a manufacturer in small categories

Disadvantages Hundreds of SKUs Supermarket-type customers (low-income consumers dont often go to supermarkets) Variable cost is $0.10/kg

Place

Specialized Distributors would be better during the starting point of the product since the type of store and the word of mouth situation is parallel to the needs of the target market. It is also more affordable to sell in retail stores.

Promotion
Sales
Belowthe-line 40% Abovethe-line 60%

Above-the-line (Media advertisements) can reach a wider audience Below-the-line (Point-of-purchase, etc.) more effective in convincing consumers to buy the product

Do not use same promotions of other Unilever brands or else customers might get confused and the market share of the companys brands will be cannibalized. Promote the product as complete, effective, but still affordable.