Unilever in Brazil Low Income Essay

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UNILEVER MEMO
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.

With 81% of market shares in Brazil, Unilever is the leader of the Detergent Powder market. It owns three brands in Brazil: Omo, Minerva and Campeiro. Omo is the top brand of the portfolio and perceived as a high quality at a premium position. Minerva is a medium quality product with low brand awareness. Campeiro is a well-known cheapest product but with a low top of mind penetration. In order to
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In term or product, Unilever should develop this new brand by modifying the formula of Campeiro and thus meet the expectations of cleanliness and fresh aroma of the low-income consumers. Even if consumers prefer cardboard boxes, the new brand will be sold in a plastic sachet since the packaging does not count a lot in the decision criteria process. This new brand should be priced at 1.8. (see Exhibit 2) just a little bit above Campeino price to show the quality of the new product. Unilever will have to maintain low margin for its new brand to reach its target but can reach profitability with high volumes of sales. In term of promotion, Unilever should position its new brand as a very effective product which can be used in everyday life. Advertising should show the satisfaction of a consumer while washing it clothes. In term of communication expenditure, a 70% below the line should be used since we are targeting the low-income segment. Besides it will cost less money to Unilever. The packaging has to be very simple and be different in term of color with the ones of Omo and Minerva. Finally Unilever will sell this new brand in the specialized distributors since it is the distribution channel where low-income consumers shop.

I assume that our new brand will be well welcome by the low-income consumer and that Unilever will have a 13% margin. We could have also repositioned Campeiro but it is too well known for being a cheap

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