Brazil is the greatest country in Latin America. The full total population of Brazil is 170 million. The south east part of Brazil gets the highest human population and then comes the north east region. The GDP and per capita of the south east is more than that of the north east of Brazil.
CONSUMER BEHAVIOUR
The consumer behaviour in brazil to the detergent market differs in the north east and the southern east of Brazil and it is depended on many affects. One of the impact is the communal influence.
Social Influences
North East Brazil
South East Brazil
Culture and sub culture
65% of the population are a mix of African and European roots and their lifestyles, rituals and prices reveal an African impact. Music and humour are the key elements of these culture.
Only 35% of the populace talk about an African influence whereas the others are the migrants from Europe. This part is the financial and the politics hub of Brazil.
Social class
More than half of the population fall in the reduced income category. The overall economy is heavily reliant on agriculture. It really is more labour intrinsic type of job. A lot of the ladies in the family are housewives.
Only 21% of the entire population land in the reduced income category and almost all of the women are from the working school.
Group Membership
Most of the women meet and wash their clothes in public laundry or pond in a group. Cleanliness as an issue of gossip, every woman have a tendency to keep their family clean to please the group.
Most women own a washer so self esteem and social status is given less importance.
The purchase behavior of a customer depends on various factors as shown in the diagram below. The social influences will be the subjective norms.
Apart from price of the detergent, the key qualities for the north east customers according to the search rankings are
Power of detergent
Its fragrance
The ability to remove stains without the need of soap and bleach
The dissolving vitality with the water
Packaging
Impact on colours
Whereas the southern eastern customers are habitual decision makers. They would want to use the same detergents that they are using unless they don't get any imperfections.
BRAND PLAYERS AND THEIR STRATEGIES
UNILEVER:
TOP BRANDS: Omo is the very best make of the stock portfolio and is recognized as a high quality at reduced position which is perfect for the top quality market. Omo has over fifty percent percentage of the full total market talk about in Brazil. Minerva is a medium quality product with low brand consciousness and second in market show. Campeiro is a well-known cheapest product but with a low top of the mind penetration. The prospective customers of Unilever were the high income segment. The highest profit percentage that Unilever produces is from the sales of Omo.
STRATEGY USED: By using brands like Omo Unilever was the market pioneer in Brazil and hence received the first mover advantages in the detergent sector. Unilever is the first choice on the market. It followed the strategy whereby it created the most desired market space in the brains of the consumers as seen by the Top-of-Mind-Awareness results. (Show 8)
Their main strategy is to advertise and boost the sales especially of Omo as the profits generated using their detergents shows a backbone for their extension in food and personal treatment categories. Unilever's main line of promotion was through the multimedia advertising. That is cost effective and regardless of the income, Brazilians are serious tv watchers.
POSITIONING: The many products of Unilever are positioned as per the product and its appeal. It's positioning runs from removal of stain through the elimination of the necessity of bleach (Omo) to providing pleasurable smell and softness (Minerva) to cost reduction (Campeiro)
DISTRIBUTION: Unilever got the daunting task of distributing to 75, 000 small outlets in the Northeast. Because of this it relied on its existing network of generalist wholesalers and sometimes also on secondary, smaller local wholesalers. This however increased their cost. It also had the choice of contracting with the specific distributors.
TOP BRANDS: Ace is of the superior quality and is still sold at a lesser price than its second brand. Through research and development, their strategy is always to enhance the price and the recognized quality of Daring and Ace which is at competition with Minerva and Omo respectively.
STRATEGY USED: P&G is market CHALLENGER which is aggressively seeking to increase its market share. It offers specific challenger strategies like VALUE PRICE GOODS AND SERVICES and IMPROVED SERVICES. The advertising is not so effective as the consumers don't possess much knowledge or a top of the brand recognition as compared to the other brands on the market.
POSITIONING: Like almost all of the products of Unilever their products are also positioned with respect to the aim for customers. Two of their main products are positioned very much like Unilever's products e. g. Daring and Pop whereas Ace is positioned as a superior whiteness source.
ASA
ASA is an area Brazilian brand and is merely popular in Northeast
TOP BRANDS: Invicto which is an basic level detergent as it is an inexpensive detergent and respected by its customers. It is a key rival of Campeiro and targets cost reduction across all measurements.
STRATEGY USED: They will be the MARKET NICHERS and have been serving a special segment of the market as a whole.
POSITIONING: Positioned like Campeiro i. e. as a low priced product
SWOT OF UNILEVER IN BRAZIL (ACCORDING TO CASE)
PRESENT SITUATION:
Unilever is the pioneer of consumer goods industry in Brazil and a specific head in the detergent natural powder category with an 81% market talk about achieved by brands like Omo, Minerva and Campeiro. The Brazilian fabric wash market consists of two categories: detergent powder and laundry cleaning soap. It faces an enormous danger from P&G and therefore Unilever should consider tapping the niche market segments before its competition entry into them
STRENGTHS:
Detergent market pioneer in Brazil. Hence gained the first mover benefit which proved very favourable for its success
Unilever is a solid brand in itself and has huge acceptance for its products all around the world
Have an array of brands i. e. have a solid brand portfolio which suits different market sections. For e. g. Omo is more technology focused, Minerva clings to its psychological appeal which is a traditional brand, Campeiro centers more on cost reduction
They are impressive and customer centric in their way. E. g. advantages of 4 new variants of Omo. All of them have different properties targeted at specific needs of customers
Detergents will usually remain the money cows for Unilever
WEAKNESS:
Difficult to produce a selection with respect to cost effectiveness between the Generalist Wholesaler and Specialist Distributor since both could prove to be equally useful in its way as soon as selected very difficult to reverse
Vast difference in syndication of social classes in the Southeast and Northeast. So similar strategies and products will not have the same final result and may also vary greatly from the expected final result especially in the Northeast
Its brand Campeiro is recognized to be low on quality since it is also low priced
High availability of substitute products
OPPORTUNITY:
Tap the market i. e. the untouched low income sector prior to the rivals penetrate there
Change the placement of detergents in the imagination of the Northeasterners to be able to improve the use quantitatively
Make use of the high rate of recurrence of washing propensity in the Northeasterners which would improve product sales in this area
Omo has the highest Top-of-Mind-Awareness among the Northeasterners (about 70%). This can be used in an effort to generate awareness about Unilever's other brands and also for the merchandise which must be directed to the low income consumer portion (display 8)
Improvement in Brazil's overall economical performance thereby enhancing the purchasing electricity of the natives and especially the low income consumers
Adopt appropriate strategy targeted at the low income group so that Unilever effectively manages to touch all the classes of people
Introduction of more technology based mostly and impressive products like Omo
THREATS:
Rapid progress and improvement of P&G's R&D and marketing expertise
Northeasterners manner of using detergents is different from the Southeasterners. As per this logic the use of detergents is less with the Northeasterners
Preference of laundry soap over detergent natural powder in the Northeast. This would pose an effort to the low income consumer portion product which the company hopes to market
Competitor brands like Bold, Pop and Invicto are immediate competition to Minerva and Campeiro with regards to quality and price
There is nearly equivalent market penetration of the competitor's brands with Unilever's brands. For e. g. Invicto, Ace, Campeiro (penetration in the range of 60-80%)
Introduction of local products by smaller companies with better distribution
Price conflict with other giants like P&G
UNILEVER IN BRAZIL
As given in the case research, Unilever in Brazil has a solid 81% market share through its three brands: Omo, Minerva and Campeiro. Question accessible is
Whether or never to market detergents to lessen income consumers in Northeastern Brazil and
How to start it
The lower income section isn't tapped by the giants of the detergent industry hence it offers opportunity to the business for growth in this section. Also there is a need for good products complementing the flagship brand Omo coupled with affordability as clearly seen by the example mentioned about Maria Concei‡Јo.
TREND IN BRAZIL:
As per case study it is known that Northeasterners believe bleach is a must for removal of staining; detergent powder is used only to make the clothes smell good. For the Northeasterners cleanliness is regarded as important despite of their low income survival. Cleaning of clothes for the coffee lover is also regarded as a measure of devotion of the girl of the family. Hence the challenge is to change few time old perceptions and yet effectively make a make in the low income segment. Because of this Unilever will have to convert the laundry soap users into an Omo class user. This is a permanent strategy but yet a possible one.
WHY CHOOSE LOW INCOME GROUP:
Enter low income group segment before P&G penetrates there
Detergent market in this portion will always be a cash cow
Need gap research shows that there can be an existing dependence on good detergents in this market
IMPLICATIONS OF MOVE:
SHORT TERM IMPLICATIONS: First mover edge, change of investment of money in good deal brand from superior brands
LONG TERM IMPLICATIONS: Market head in low income detergent market, without a switch in Omo customers the new brand can attract lower income customers
WHAT OUGHT TO BE DONE?
There are various options with Unilever. Specifically,
Launch a fresh product in the market targeting the lower income consumer without cannibalizing its premium brands extensively -
Reposition one of its existing brands
Have a cheaper version of Omo/Minerva
Carry out an extension of 1 of the existing brands
I assume that Unilever in Brazil should perform PRODUCTS EXTENSION. Hereby they ought to introduce an additional item in the same product category. Unilever should have an expansion of its brand Minerva called Minerva Progress (a lot like Omo Improvement which gets rid of difficult stains without bleach and laundry cleaning soap). Minerva Progress should be positioned between Omo and Minerva
PROS:
The placement of product between Omo and Minerva will help gain visibility
Can promote favorably using Unilever's brand name
Good market penetration of Minerva as a brand
CONS:
Minerva as a brand is identified to be always a medium quality brand with less Top-of-Mind-Awareness
Fierce competition with P&G brands like Bold and Ace
WHY Expansion OF MINERVA:
Not possible to have a low priced product under the Omo brand since this might mistake the consumers about the original Omo's credibility
Launch of a new product will never be cost effective
Having an expansion of Campeiro is probably not successful because of the original image of the brand as an inexpensive quality brand
Repositioning of the top brands might confuse the consumers and Unilever might lose its dedicated customers
Minerva developing a good market penetration can perform well if the positioning for the prolonged product is done appropriately. Also according to Display 8 the consumers in the Northeast have good understanding of the Minerva brand (rated second after Omo). Hence the company should capitalize on this fact and thus build a route to tap its low income segment by using the brand name.
A GENERAL MARKET TRENDS SHOULD BE CARRIED OUT TO UNDERSTAND THE RANGE IN WHICH THE CUSTOMERS WILL BE WILLING TO SPEND
MARKETING MIXTURE OF MINERVA PROGRESS:
PRODUCT:
A new formula should be produced to match certain requirements of the clients and at the same time not increasing the cost
Product must have attributes as per requirement of the low income section especially cleanliness, whitening and output
Along with price the product should match the six key features important to the segment. Formulation should have more focus on stain removing capacity while keeping Minerva's original features intact like perfume and softness
The product should be produced available in various sizes and types. This might be apt for customers who do not use a sizable quantity of product monthly. This might also give a notional sense to the customer of having put in less
Use of presentation other than cardboard boxes e. g. vinyl sachet
PRICE:
The price of the merchandise should be affordable for the lower income consumers
The company is increasing the price on formulation and nullifying it by cutting down on packaging charges
The product should be so that it is priced significantly less than Omo and Minerva itself but a little more than Campeiro
Unilever should take up PENETRATION PRICINGfor its product whereby the profit margin for Unilever would be less but it could maximize unit sales and increase market share in this segment
Adoption of penetration charges would also discourage the competition entry
Also primarily Unilever can provide an INTRODUCTORY PRICE for the merchandise which would encourage people to get the product
SUGGESTION: Unilever can also get into backward integration to lessen its cost therefore managing to create inexpensive products
PLACE
Unilever should sell its products by any means places in the Northeast
Since the top shopping malls are perceived to be expensive it should screen its products at local stores
Unilever should screen Minerva Improvement along with Omo. This is because Omo itself has a good image that even this product will be highlighted to all the customers
PROMOTION
Product should not be advertised as a product meant only for the low income group since this might create a negative impression about the company
Medium like hoardings, radio, television set should be used
Above the collection advertising should be emphasized on more than below the lines advertising
Sales campaign activities should also be completed heavily which can be fond of the customers
DISTRIBUTION:
Intensive distribution should be used to make the product available extensively in all the retail outlets
To target the low income section Unilever should adopt the Specialized Syndication method as given in Display 13
PUSH STRATEGY:
Initially a push strategy should be used wherein the merchandise is pressed at the clients and made widely available to them. Then depending on demand forecasts a push-pull strategy should be used.
POSITIONING:
FRAME OF Research: Detergents
POINT OF DIFFERENCE: Quality with affordability
POSITIONING: Feature and benefit positioning
STATEMENT: A LOT MORE THE BETTER OR THE LESSER THE BETTER. WE OFFER YOU BOTH; MORE Attributes FOR LESSER PRICE!
PERCEPTUAL MAP:
200
MINERVA PROGRESS
OMO
200
0
100
ACE
BOLD
PERCEIVED QUALITY
PRICE INDEX
100
CAMPEIRO
POP
INVICTO
MINERVA
= UNILEVER
= P&G
= ASA
