Case solution for the problem faced by Unilever in Brazil in detergent powder category

1. UNILEVER IN BRAZIL
SUBMITTED BY: GROUP B2
SANCHITA GARG
SHAURYA DWIVEDI
SIDDHARTH RASTOGI
SUMIT SINGH

2. SITUATION ANALYSIS
ANALYSING CUSTOMERS Product key attributes:
• Cleanliness, whitening,
productivity
• Smell and softness
• Ability to remove stains
• Dissolving power
• Packaging
• Harm to colours
• Low income consumers in Northeast
region
• Consider it as a pleasurable activity
• 28% household own a washing machine
• 73% women think bleach is necessary to
remove fat stain
• Frequency of washing clothes- 5 times a
week

3. COMPANY
Strengths
Pioneer of consumer goods in Brazil
Market leader in detergent powder with
81% market share
•Deep pockets and expertise
Weaknesses
Less experience about approaching low
income customers
Lack of proper distribution channels
Opportunities
Detergent market segment in North-
east was growing at the remarkable
annual rate of 17%
Getting access to the 75,000 small
outlets
Threats
Losing market to competitors( P&G,
local manufacturers)
SWOT Analysis

4. COMPETITORS
• P&G: Distant second player, 17.5% market share
• Local manufacturers
COLLABORATORS
• Supermarkets- Wal-Mart, Carrefour
• Generalist wholesaler, specialized distributors

5. CONTEXT
• Since it is labour intensive, women see it as an indicator of dedication of a
mother
• Subject of gossip
• Feel proud about cleanliness of clothes
• Purchasing power of poor growing because of Plano Real
• Government’s provision to provide tax incentives to companies

6. PROBLEM STATEMENT
• Should Unilever target low-income consumers in Detergent Powder segment in
NE Brazil?
• If No, Why?
• If yes, Why and How?

7. WHY “YES”?
• Expansion is a key factor to remain market leader and increase market capital
• Capturing or take over of LIC by P&G and local manufacturers
• To build strong distribution channel
• To gain expertise in LIC segment to target other categories and other countries
106
124
145
170
199
102 108 115 121 129
1996 1997 1998 1999 2000
Revenue forecast of washing products (in millions)
Detergent Laundry soaps

8. RELAUNCHING
• Relaunching Campeiro as
‘Campeiro Nossa’
• Maria’s statement: I would love to
buy Omo but I can afford cheaper
local brands
WHY?

10. BRAND STRATEGY
PRODUCT
• Campeiro Nossa- Detergent
having qualities of Campeiro
and additional attributes from
Minerva
• New packaging strategy-
Small plastic sachets for one
time use and medium size
cardboard packings
Pleasant
smell and
softness
Improved
whitening
strength
Campeiro
Nossa
Powerful
stain
removal

11. PLACE
Criteria Generalist Wholesaler Specialized Distributors
Reach Wide Focused- specific to LIC
Portfolio Focused on top 3
brands in many
categories
All brands from
Unilever will be focused
upon
Customers Supermarkets Traditional retail stores
(targeting 75000 small
outlets)
Variable cost $ 0.10/kg $ 0.05/kg

12. PROMOTION
• Use of television ads targeting the LIC in NE region
• Media advertising- 80% above the line and 20% below the
line
• Push strategy- Taking the product to the customer
• Pull strategy- Getting the customer to come to you

13. PRICE
Value (in dollars/kg)
Formulation cost 1.15
Packaging cost 0.30
Promotional cost 0.30
Profit 0.25
Wholesale Price 2.00
Profit from distribution channel 0.05
Packing Packaging Cost
Campeiro- current pack (1 kg) 0.35$/kg
Campeiro Nossa- plastic packs 0.245$/kg
0.105$/kg Savings

14. CANNIBALIZATION EFFECT
Detergent Market 1996 1997 1998 1999 2000
Campeiro Market
Share with New
Product(%) 6 5 4 2 0
Market
Cannibalisation(%) 0 17 33 67 0
Campeiro
Nossa(%) 0 2 4 6 10
Profit from
Campeiro without
new Product($) 630000 737100 862407 1009016 1180549
Profit from
Campeiro with
new Product($) 630000 614250 574938 336339 0
Profit from
Campeiro($) 0 294840 689926 1210819 2361098
Profit from
repositioning 0 171990 402457 538142 1180549