Unilever free essay sample

Unilever should introduce a new, premium bar soap named Omo Luz for quality and value-conscious consumers, while lowering the price point of Minerva to reduce cannibalization and increase appeal to low to middle income segment in Northeast Brazil. In order to accomplish this mission and remain profitable, target primarily married low income women who value family and reputation; those who would otherwise buy PG brand detergent or a local brand. This new Omo product will be the best performing bar soap on the market, combining the familiarity of bar soap, the lack of residue and power of Omo detergent powder and the fragrant foaming experience that connote cleanliness, family love and pride. Background information Context – The Government stimulus program, Plano Real, has been a driver of the change in Brazil. The effects of improving the purchasing power of the poorest 10% of the population citizens and controlling inflation have primed Brazil for growth. We will write a custom essay sample on Unilever or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page However, macro-issues such as the cycles of economic stress and recovery, illiteracy and societal dependence on the business of agriculture are key market-expanding considerations for Unilever. Customers – 48MM people live in the NE. Women typically do the laundry in this region, and do so with pride and with a much greater frequency than in other parts of the country. The NE population has the lowest GDP per capita of any region in Brazil, despite increased purchasing power due to government aid. The consumers in the NE also tended to use more laundry soap than detergent powder as it is a much cheaper product. Competition – Proctor Gamble (PG) is the only other major player in the detergent market, and hold 15% of the market compared to Unilever’s 81%. Though PG does not offer a laundry soap product, the company is a key competitor because of their sheer size and marketing prowess. In the laundry soap market, Unilever’s Minerva brand competes only with local Brazilian companies and mom and pop stores. In both product categories, Unilever commands a substantial price premium to the competition. Collaborators –The existing network of generalist wholesalers and other secondary distributors who have access to the NE region and play a major role in product delivery. Potentially, contracts with specialized distributors could optimize point-of-purchase activity and relationships within the manufacturing industry. Company – Unilever is a global, $56B company that operates three divisions in Brazil. Detergents are sold from its Home Care business unit, which is the company’s â€Å"cash cow†. Historically, the company has not been successful in marketing to low-income consumers and also does not typically use small retail outlets for distribution of its products. Unilever was the first multinational corporation to enter the Brazilian market, and now has an 81% market share in the detergent powder category. Most of their customers for detergent powder currently come from the richer SE region, as low-income consumers in the NE were less able to afford Unilever’s premium brands. Market Size The detergent powder market in the NE is currently worth $106MM (42,000 tons), and is expected to grow by 17% next year to $124MM (49,000 tons). In this market, Unilever currently has an 81% market share in the detergent powder category with 3 brands of detergent powder – Omo (the market leader), Minerva and Campeiro. However, Unilever’s market share is 75% in the NE.