Renova Toilet Paper Marketing Case

During the second half of our trading period we focussed massively on the private label market and found our niche there. We had realized that the minimum cost of the product wins the market share so we started experimenting with S/Q Ratings and percentage of superior materials to come up with the best product with the least cost price. Adding minimum profit margin to the cost price we were able to seize a massive chunk of the private label market. Attached are a few snapshot highlighting our success in that market.

In order to gain market shares through the low-income segment of the Brazilian market, Unilever should launch a new Detergent Powder brand at an affordable price, which could replace in the long-run Campeiro, its cheapest brand. However this strategy is not without any risks, since it can lead to the cannibalization of Minerva.

All segments are critical for the implementation of our company’s strategy because we chose to be broad cost leaders. Cost leaders maintain a presence in all market segments by focusing on low production costs and competitive pricing. With that in mind, one segment is considered to be slightly more important than the others: the low end segment. We will compete in every market segment, but this is one of the most important due to the fact that price is the main consideration of the buying criteria at 53% importance. Our costs will be much lower than our competitors which translates into a lower market price for this product, which is ideal for our customers.

Brand competitors and the diversity of choice that is available to consumers, puts brands under pressure to offer high quality products and service, excellent value and a wide availability (Clifton et al., 2009). Brands must differentiate themselves from the competition and create an unforgettable impression.

Scope, a green mint tasting mouthwash, was positions as a great tasting mouth refreshing brand that provided bad breath protection. It is the first brand that offers both effective protection against bad breath and a better taste than other mouthwashes.

The main target market for the company is people of 15 and over years of the age, who represent healthy and luxurious lifestyle, and appreciate high quality product. Such people are mostly representatives of business who loves take care of their health and body: regular work out in gym, yoga, SPA, aroma therapies etc. Those people demonstrate elegant style in everything, starting from a coffee what they drink and finishing a shampoo or hand lotion what they use. Bright example of such group of customers can be those who prefer Starbucks coffee to Tim Horton’s one.

This gain value and addresses a key decisive achievement factor in the industry (Grant,2010). As position is important to offer convenience and a deep assortment, An extra unique intangible resource would be their brand representation and customer loyalty, this is vital since it can attract or attract consumers and it could be necessary to build the brand image .

As a manufacture of private label personal care products, Hansson Private Label, Inc. has a considerable amount (28%) of market share in its specific industry. However, private labels as a whole constitute less than 19% in the entire personal care industry. Therefore, growth of HPL depends on the growth of the industry and more importantly the growth of private label component within the industry. In terms of the personal care industry, market growth will not improve significantly in the future. As proven in the past four years, unit volumes in the industry increases less than 1% in each year and the dollar sales growth was only driven by modest price increases. Therefore, the opportunity for private labels

To understand the role of H-E-B’s Own Brands, we need to understand the role of private labels to a retail store. Retailers manufacture carry private brands since retail gross margins in the private labels are relatively high. Retailers are able to realize cost advantages since they do not have additional advertising and distribution costs associated with private labels. In addition to increasing profits, store brands help to attract and retain customers. Retailers however need the critical procurement revenue from national brands for ad space and displays on stores and hence need to maintain a balance between their Own Brands and national brands.

Since an increasing number of people focus on brand names instead of product, brands become important elements for customers to choose products (Carroll, 2008). When customers trust the brand, the benefits for the manufactures are generated. In the first place, brands can be used by products as the tool to identify and differentiate themselves from various products. Secondly, brands are helpful for companies to build a competitive advantage (Bick, 2009). Therefore, organisations take more attention to branding.

The Procter & Gamble has vast differentiated products due to its innovation culture. This is not just the invention of new products and services, but the ability to systematically convert ideas into new offerings that alter the very context of the business (Charan, 2008). The product differentiation allows the P&G to charge premium price for its products and assists to capture market share from its rivals by increasing the product demand.

The Big 3 had high advertising to sales ratios of 10-14%, also deterring entry, because average first year advertising cost for a new brand was over $20 million. We can conclude that total costs related to producing private label products are lower than new branded products. Private label products can offer greater margins to grocers and still sell at lower prices. They have a considerable competitive cost advantage over the new branded products.

Unilever is assessing whether to enter the low-income NE market. Our analysis shows that there is a profitable opportunity to offer detergent powder to low-income customers living in Northeast Brazil and capture market share in a high-margin, high-growth market. We recommend that the firm keeps the existing brands but deploy a horizontal extension of the Campeiro brand - adding better scent / softness and utilizing specialty distribution network, thereby marginalizing Invicto, an inferior but better-known competitor.

The first alternative is to reduce price in the entry–level paper to compete with private labels. From the case, it indicated that the retailer’s margin are 20%. Also this target customers are already driven by big companies such as Procter & Gamble and Kimberly-Clark, who can generate higher operational efficiencies as a result of their large global business. In addition, lowering the price would not consist with the value of the Renova brand as a pioneer in the product innovation field. Firms should consider not to overinvest in the area that wouldn’t reveal its strengths and generate revenue. Ultimately, to do so would have negative impact on brand image and make it difficult to implement long-term goal.

For SF, the other problem is that the company has developed many new products are not considering the desires of customers. SF might need a market research to know the customers need which will help the company to adjust their decision. SF needs a full market research to understand customer needs, which will help companies adjust their decisions. In addition, a good market research can help maximize corporate profits, increase sales, and expand the market. For a profitable company, producing unwanted products is pointless. As a priority target, the customer's willingness is important for the company's better development. Although a lot of SF’s new customers require discount pricing, SF is worried about their brand image will get erode. As a company focused on "the high level market", this move is much more clever, because the company will maintain its market value and its reputation. Mirror & Smoke stated that “ The idea of branding is to make sure that you create a positive experience and back it up with quality processes and technology.” (n.d.). As the company which already has brand value, it is easy to ruin it, but it is difficult to get it back. The customer will always choose the brand which they think is good. Discount pricing might get more