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INTRODUCTION TO CASE

Deciding to target low income consumer

Whole market is divided in NE & SE

81% share in detergent market

key industrial players

Threat by local brands (Nirma case)

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NORTH-EAST BRAZIL

low income people

cleanliness

more use of soaps

frequently washing

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SOUTH-EAST BRAZIL

Good income people

Use washing machines

more use of detergent

non frequent washing

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OBJECTIVE1. DRIVE TO FOCUS ON THE LOW INCOME GROUP

2. NORTH EAST BARZIL CUSTOMERS EVALUATED THE DETERGENT ON

5 ATTRIBUTES

PERCEIVED POWER

SMELL

REMOVING STAINS

EASY TO DISSOLVE

PACKAGING

IMPACT ON COLOURS

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KEY PLAYERS IN BRAZIL

1. UNILEVER US $ 50 BILLION, HQ in London &

Rotterdam(Netherlands)

Started Operations in 1929 in Brazil

Omo is its first succesfull Detergent Brand in Brazil

Has a market share of 81% Brands Like Omo,Minerva & Campeiro(Low Price) under

its belt

2. PROCTOR & GAMBLE

US $ 36 BILLION, HQ In Cincinati Started Operations in 1988

Has a market share of 15%

Brands like Quanto, Odd Fases, Pop(Low Price)

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THREAT

The main Threat of Unilever was the P&G candraw its worldwide R&D to penetrate into the LowIncome Group of NE Brazil where Unilever was

Vulnerable.

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Laundry Soap

In 1996, the NE market for laundry soap bars was as large as thedetergent powder market ($102 million for 81,250 tons), but growingat a slower rate (60/o). The barriers to entrv were lower in the laundry

soap market than in the detergent powder market. One of thelimitations of laundry soaps is that animal fat tends to leave the

clothes yellow. They are also difficult to perfume because the basehas a very strong smell. Laundry soap was sold at a much lower price

than laundry detergent powdersThe NE market for laundry soap was very fragmented. As shown in

Exhibit 7, the top four players have only 38% of the market. Unilever'sMinerva brand is the leader with a 19% market share, selling to

retailers at $1.7 per kg (a41% discount relative to Omo). P&G did notmanufacture laundry soap. Hence Unilever's main competitors were

local Brazilian companies. The biggest competitor was ASA. Its brand,Bem-te-vi. had I l% of the market and sold at $1.2 per kg. The otherplayers were even smaller local companies with no more than l% of

the market each (except for Flora Fabril,which had 60/o of the laundrysoap market).

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Decision making process

Having 81 % of market share , to grow needsome new market, and low income group is

a major market to cover.

But major problem of entering in lowsegment is loosing brand name.

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Brand & marketing strategy

To fulfill the low income group demandand making brand strategy as a separatebrand.

For value proposition is it necessary tomake the product cheaper and make lowincome group customer aware about that.So it is necessary to make a different

value proposition.

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Marketing mix

Product- different formulas can be utilizedfor producing a medium quality productwhich can give superiority on existing local

brand and making different packing sizeand volume.

Price- to attract the customer it is

necessary to give some extra benefits tothe customer like coupons, 1 buy get 1free.

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Promotion-

low end product - through retailersregular product- media advertising.

Distribution- appropriate distribution

channel.