Consumer Segment in the Northeast
When reviewing the case of Unilever in Brazil, the company should consider targeting the low-income segment of consumers for several reasons. First, Brazil has experienced three decades of alternating periods of severe economic downturn and rapid economic growth (INSEAD, 2023). Nevertheless, since the 1990s, lower-income consumers have benefited greatly, as the buying power of the lowest 10% of the population has increased by 27% annually (INSEAD, 2023). As a result, the low-income segment in the Northeast represents a substantial market opportunity for the organization.
Moreover, the Northeast’s low-income community may have untapped room for market expansion and growth. As was mentioned in the case study, Brazil’s Northeast and Southeast have vastly diverse washing practices (INSEAD, 2023). Only 28% of families in Recife, Northeast, have washing machines, and 73% of women believe that bleach is required to remove fat stains (INSEAD, 2023). Consequently, Unilever has an opportunity to introduce products that are not only affordable but also safer to use, given the reliance of households on hand-washing clothes.
Evaluating Unilever’s Portfolio
The current brand list of Unilever is significant and encompasses various products. Unilever had 1,600 goods in its portfolio in 1996, comprising 45 influential detergent brands (INSEAD, 2023). The laundry detergent brands that are available in Latin America are depicted in Table 1.
In 1996, the corporation had three divisions: Lever, which handled home care, Elida Gibbs, which handled personal care, and Van den Bergh, which handled food (INSEAD, 2023). The business held an 81% market share in the Brazilian detergent powder industry in 1996, thanks to its three brands: Omo, Minerva, and Campeiro (INSEAD, 2023).
After a close examination of the company’s list of goods, rather than creating an innovative brand for a low-income segment, repositioning or extending the current brand should be considered. In the case of Unilever, extending the current branch could be the most beneficial approach. On the one hand, such a method can help mitigate the risks associated with new brands. On the other hand, it will allow the company to retain customer loyalty and recognition.
Table 1 – Unilever Detergent Brands in Latin America (Source: INSEAD, 2023)
Designing the Marketing Mix
The product that can be chosen for the low-income segment in the Northeast of Brazil is “Essenciais” Laundry Detergent by Unilever. The formulation of the laundry detergent will consider not only affordable ingredients but also those that are safe for use when washing by hand and in a washing machine. Moreover, the company might want to consider a concentrated formulation, which would enable smaller packaging sizes, lower prices, and reduced waste. Meanwhile, packaging will be designed with attention to its appealing appearance and practical, easy-to-handle form.
The next step to consider is Unilever’s pricing strategy. In the case of Northeastern communities of Brazil, a pricing strategy that aligns with the purchasing power of the low-income residents will need to be adopted. By offering packaged products with concentrated formulation, it will be possible to cater to the budget constraints of consumers.
At the same time, one should not forget to promote the product and explore ways to attract the attention of Northeastern communities. To raise awareness of new goods specifically designed for low-income households, cost-effective promotional channels can be employed. Here, the business will need to focus on such media as local community events, as well as TV and social media campaigns.
Finally, the distribution of “Essenciais” has to be paid attention to. For example, one approach that can be adopted is for Unilever to engage in partnerships with local retailers or small convenience stores. Another approach is to collaborate with non-governmental organizations to establish a distribution network in secluded areas.
Case Feedback
I would rate this case assignment ten out of ten due to its comprehensive nature and the way it effectively covers complex themes. For example, on the one hand, the case examines various aspects of marketing strategy, including brand portfolio and target market. On the other hand, the task successfully involves a framework of marketing mix design, which allows a student not only to understand the company’s goals but also to identify ways to cater to consumer needs and introduce a new product. As a result, I learned a great deal from the assignment, ranging from identifying marketing methods to developing strategic recommendations. It was invaluable for me to dig deeper into pricing strategies and brand management.
I would recommend this case assignment for future students. I believe it offers a practical and real-world scenario that any individual can practice. The assignment requires not only an application of one’s knowledge but also an involvement of critical thinking. Personally, I view this as an ideal opportunity for learners to engage in decision-making and develop actionable recommendations, while also deepening their understanding of the complex field of marketing. Overall, the task is crucial for advancing one’s skills and expertise, not only in academic areas but also in future professions.
Reference
INSEAD. (2023). Unilever in Brazil (1997-2007): Marketing strategies for low-income consumers [Case study].