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Date: 07/02/19

Hassaan Ahmad | 18-3081 | MBA ’18 Cases in Management Section “B”

Assignment

Unilever in Brazil (1997 – 2007)

1. Should Unilever target the low-income segment of consumers in the Northeast? What
are the possible financial and/or strategic implications of your decision?

Yes. Unilever should target low-income segment of consumers in the Northeast region. There is
a lot of potential in the northeastern market of Brazil as the market is untapped with a certain
consumer segment. As the people in the northeastern region have lesser clothes and more time
available, they wash their clothes more frequently. According to the information in the case
28% of the population of the consumers in Brazil belong to the low-income segment which
makes up about 48 million people while the per capita income is USD 2,250. In order for
Unilever to grow even more, it needs to acquire new market segments. With increasing
competition with competitor brands like P&G Unilever needs to make a decision fast although it
has a market share of 81%.

By implying the right strategy in an effective way and gaining the first mover advantage
Unilever will be able to open up to a whole new market segment and will enable itself to
explore more opportunities in different product lines.
2. Based on the current brand portfolio, is it necessary to launch a new brand
particularly for the low-income segment or could Unilever reposition any existing
brand or simply launch a brand extension? What will you suggest and why?

To capture a new market share, the company will need to make a heavy investment in the
targeted market. The company will put its revenues at risk as the cost factor associated with the
investment is high. Camperio is perceived as a low-quality brand by the consumers while
Minerva has consumer affection associated to it and is a costly brand so it makes it unsuitable
for the low-income consumers. This leaves us with Camperio being the suitable brand as it
already has low cost associated to it and other than that the risk is low and also the cost of
introducing the product and promoting it will also be low.

3. Propose the marketing mix [strategy] i.e. Product, Pricing, Distribution and Promotion
strategies for the low-income segment of this market. Basically, be in the driving seat
and give a thorough marketing plan with whatever information is available to you.

a. Product
The product sizes should vary like ranging from 250 grams to 1000 grams packaging.
b. Pricing
The price of the product should range from 1.7$/kg to 2.5$/kg so the consumers find the prices
unique keeping in mind the quality of the product.
c. Placement
Unilever should try to focus on supplying to small stores using a smart and well-coordinated
distribution channel as people in the northeaster region tend to shop from small stores near
their homes rather than going far to bigger stores.
d. Promotion
Unilever should focus on its primary goal to make this strategy successful which is to provide
the best quality of the product at a very low cost.
Additional question:

Will you target low-income rural areas of Pakistan? Your brand already sells there, but in
lower quantities. Yes/No.

Yes, the company should target the low-income rural areas of Pakistan. The rural areas of
Pakistan have huge potential for profits. If these areas are not targeted first then other
competitors will take this advantage and attain the first mover competitive advantage although
there might be existing some local brands but with a good strategy those obstacles will be
taken care of. As the company already has some presence in that market the best action to be
taken is to reposition the current existing brand in a way that people become more aware of
the brand and its features so that the sales volumes become higher.