Syndicate 7

Bernadeta Pramudya - 29119055

Dwi Lestari - 29119059

Muhammad Arkan Ariel Saputra - 29119117

Muhammad Afin Romli - 29119152

COMMUNITY

Political

 Brazil has experienced cycles of deep recession and strong economic recovery. GDP
grew by 8.1% per year during 1970s but only 2.6% per year during 1980s (stagnation
and hyperinflation). This cause an unstable political enviorement.
 Fernando Henrique Cardoso Introduced new currency (the Reais) and succeded in
controlling inflation.
 Federal and local governments started tax incentives to companies investing in the
North East region
 The economic and political power of modern Brazil is firmly rooted in the Southeast
region.

Economic

 Per capita income was only $2250 in North East (comparable to Peru or Jamaica)
 Economy in the North East predominantly rural and remained heavily dependent on
agriculture.

Technological

 40% of population in the Northeast are illiterate

Social

 First region of Brazil to be colonized by Europeans who brought large numbers of

West Africans to work as slaves on sugar cane and cocoa plantations
 Lifestyle, culture, and religion all share African influences
 Music and humour are key elements of their culture
 Popular parties like Carnival “Forro Festivals” and Maracatu” bring millions of
people onto the streets.

COMPANY

How is Unilever performance in Brazil market?

In 1996, Unilever was a clear leader in the detergent powder category in Brazil, with
an 81% market share achieved with three brands: Omo (one of Brazil’s favorite brands
across all categories), Minerva (the only brand to be sold as both detergent powder and
laundry soap), and Campeiro (Unilever’s cheapest brand).
What Unilever should do in order to be competitive in low-income consumers segment?

In order to be competitive in low income consumers segment, unilever has its three brands that
have achieved the most market share. So with that low income approach, Unilever need to
extend or reposition its existing cheaper brands, Minerva and Campeiro, or it will be a
necessary to develop a new brand. If still using the existing brands, the consequences is part of
the new sales would come at the expense of Unilever’s existing brand so the company should
subsidiarize its percentage of new sales coming from other Unilever brands.

Customer :
Unilever targeting low- income customers.

Advantage
Being leader trend in selling detergent product for low income consument.
Positioning their new detergent product to customer and keeping loyal customers to their
current product.

Disadvantage
Risking their money investment and their quality products to premium brand into low brand.

Low Income Customer into Product Characteristic :

Product attributes :
Packaging size (boxes and multiples types/sizes), Power of detergent
End benefit :
Clean and whiten clothes

Value added
Function :
The ability to remove stains without the need for laundry soap and bleach. consistency and
granularity of the powder. Impact on colours (fading).

Emotional and Symbolic value :

Pleasing smells, gentle to fabric and hands and quantity of foams. Product that has a good and
easy to read packaging like protective against humidity.

MARKETING STRATEGY

Segmentation

Low income Customers in Northeast Brazil

Targeting

Detergent consumers of low income customers

This target is potentially to Unilever for dominancing market of LI-NE customers. As long as
Unilever can increase the promotion and improving distribution channel to cut the cost .
Positioning

Positioning analysis for brand Campeiro, Pop, Invicto

1. Low price

It is one of the key factors in the low income segment that based on price index.

2. Aspirational

People in North East want their clothes to be clean and smell good. This perceived power of

the detergent (it is ability to clean and whiten clothes with small quantity of product), which is

often judged by the quantity of foam it produces. They want simple package.

3. Value

Value is one of the distinctive elements that differentiate brands between each other.

Low Aspirational Value

Brand Price

Campeiro Same Customers expectation higher Use local language. Its name evokes

than competitors the countryside and fields

Pop Same In between Campeiro and -

Invicto

Invicto Same Lowest than competitors Name means undefeated. Only

popular in the Northeast

Low Price

Pros : All of the brand offer the same price

Cons : Campeiro is Invicto direct competitor because they offer better product with

same price. Campeiro has 6% of the market share compared to Invicto 5%.

Meanwhile Pop is still far below those two.

Aspirational

Pros : Campeiro is the best product in the low segment market. It is because of their ability
to make good product far beyond other competitor.

Cons : -

Value

Pros : Invicto sell better value that represent North East people

Cons : Campeiro use a local language for their brand that North East people use

MARKETING MIX

Product

Why Minerva Campeiro’s formulation is not suitable to LI-NE?

Minerva contains detergent powder and laundry soap.

What innovation Unilever made for LI-NE consumers? What attributes should be
proposed?

Detergent powder that could remove stains, softness, strong pleasant smells. Formula and
packaging size.

Price

How Unilever determine pricing for LI-NE?

Choosing the wholesale price (the price paid by retailers), setting price between Minerva and
Campeiro’s price.
Promotion

What promotion strategy used by Unilever to convince low income consumers trying the
new product, ALA? How the message is communicated?

Giving free sample and getting buy-in from small store owners. Using primarily media
advertising.

Place

Explain distribution strategy for ALA. What’s the challenge to go for this strategy?

Small stores, existing network of generalist wholesalers.

Unilever rely its distribution on its existing network of generalist wholesalers but sometimes
smaller local wholesalers can reach all stores. So, they have to give contract to dozens of
specialized distributors in forms of exclusive rights to sell all Unilever detergents in certain
areas

Competitor

What company to be the highest threat in low-income consumers segment?

Procter & Gamble (P&G) is the biggest threat for Unilever in the Detergent Industry
competition. Although, currently the company is a distant second player with only a 15% share
of the Brazilian detergent market compared with the Unilever’s 81% market share achieved,
P&G Brazil committed to splash on the formidable R&D budget and collaborate with
marketing expertise of the company worldwide. In the segmentation of consumers living in
the Northeast of Brazil, P&G’s has a three (3) brands namely, Ace, Bold, Pop. According to
the attribute Importance, Brand Positioning, and Consumer Expectations in the Northeast
(Exhibit 5), the two P&G's brands are nowhere near the best Unilever’s product (OMO) for the
most desired attribute for detergent product and compete with the Minerva’s Unilever. In the
NE, P&G’s market share is slightly above its national average (17.5%). Ace is the third highest-
selling brand with an 11% market share. As it matter, the things that how Unilever decision to
explore growth opportunities in the marketing of detergents to low-income consumers living
in the Northeast of Brazil.