As per the case study, two types of consumers from Brazil have been projected, who are demographically different. Major variations exist between these areas (North Eastern region and the South Eastern region) in conditions of culture, riches and needs that impact the consumer behavior to a larger extent.
Illiteracy in SE region is less when compared with NE.
21% of the SE populace lives on less than two minimum pay when compared with NE where this percentage is really as high as 53%.
Economy and political power is well established in SE region where as in NE region; overall economy is mainly rural and mainly agrarian.
Pshycographic factors are widespread.
Having said that, these factors change the buyer behavior in buying any sort of product as the reduced income households would become more sensitive to the purchase price factor. Hence, the region of amount in this examination is NE region as SE is very developed and stabilized.
To begin with, the consumer behaviour with respect to NE region is typically habitual decision making as detergent natural powder is a product that can be used in day today life and therefore, the level of engagement is low.
The decision making process was suggested by Solomon et al. (2009)
Dirty clothes have to be hand cleaned as only 28% of the homes had washing machine.
The aim to use the detergent is to make the clothes smell good, therefore, it is utilized in small amounts.
Exhibit 3(according to the research study) also potray's that NE region used less detergent than SE region, however; the regularity of cleaning clothes in NE was greater than SE. Therefore, the penetration of detergent natural powder is same in both places.
40% of the NE population is illiterate, so assumption from the research study is that, apart from television, person to person publicity is predominent as women in NE rinse clothes approximately five times weekly in a general public laundary which is more like a gathering place.
Evaluation of Options
Evaluation of detergent is based on the following attributes
Ability to clean and whiten the clothes with small quantity of product.
Smell of the detergent is directly proportional to softening ability of the detergent and gentelness to fabric and hands.
Stain removing capability without the utilization of laundary cleaning soap and bleach.
Ease with that your natural powder dissolves in drinking water and lack of residue on the textile after rinsing.
Packaging - distinctive, simple and recognizable, easy to open up and protection against humidity.
Impact of colors was minimal attribute for these consumers.
Analyses of the exhibits in the case study discloses that Omo brand has all the required attributes which is quite popular among the NE consumers. However, most them could not find the money for to buy Omo.
Since, the product is not complicated and can be used in day today life, taking a look at the constarints available in the NE region, low income consumers do not have a choice to get the best at low price. So, assumption is the fact each goes by whichever detergent powder comes in the market according to their budget. Therefore, post purchase eveluation rarely plays a significant role.
Analysis of affects on consumer habit with regard to detergent powder:
Perception: Price, Quality (Cleanliness, Smell, Stain removal potential, regularity and granularity of the powder, product packaging and least choice was the effect on colors) are the key aspects.
Motivation: According to the case study, ladies in the North East region perceive sanitation of the clothes as an indication of dedication towards their families and doing laundry is an integral part of their social status and self-esteem. (Maslow's Hierarchy of needs)
Learning: Mostly through television offers and word of mouth publicity as most the population was illiterate.
Attitude: Show 5 shows the acceptance of brand predicated on customer evaluations. It implies that Unilever's Omo brand was the very best quality brand (Cognitive attitude) however; some NE households could not manage to buy.
On the other hand, SE women consider doing laundry as part of their everyday activity and utilization of detergent is less very important to self-esteem or public status.
Group Influence is predominant in NE region as cleanliness is becoming part of these culture and public class.
The market players
Unilever: THE CORPORATION has established itself in personal good care division, home health care division and the meals industry in Brazil.
P&G: According to the Brazilian market, P&G will not manufacture laundry soap and has a competitive growth in detergent powder market.
ASA: The biggest rival for Unilever in manufacture of laundry cleaning soap. Its brand Bem-te-vi holds 11% of the market show whereas Unilever's Minerva brand has 19% of the market share.
Local Brands (Flora Fabril): There have been other companies with 1% of the marketplace show except Flora Fabril which keeps 6% of the market share.
Unilever and Procter and Gamble are the key industry players in Brazil.
Unilever is a $56 billion company harboring over 300, 000 employees in 150 countries. They have about 1600 brands worldwide including 45 key detergent brands. Detergent powder division has been flourishing and has catered help the establishment of home care and attention and personal division of Unilever. The business started its operations in 1929 in Brazil and effectively had order over 81% of talk about in the Brazilian market (NE region) by 1996. Interpreting the graphs from the case study, it is clear that Unilever is the most popular brand among the list of consumers in Brazil. They have three brands as follows
Omo - 52% (Most popular brand across all categories)
Minerva- 17% (Available as both detergent powder and laundry cleaning soap)
Campeiro - 6% (The least expensive make of Unilever)
Quanto - This was migrated towards Ace
Odd Fases - This is moved towards Bold
Pop - This brand was looked after as is.
*Ace and Striking are the two global brands of P&G.
P&G has only 15% of the share in the Brazilian detergent market. However, it includes rich R&D unit as well as extensive marketing skills worldwide. Its potential risk in the long-run to Unilever is quite clear.
Strategies accompanied by the main market players
Mergers and Acquisition: A straightforward and smart way to eliminate competitors on the market.
Multiple Segment specialization: The firms developed products for each and every segment of population.
Brand Expansion: Show 10 from the case study uncovers that Unilever got launched four brand extensions. No information is provided about brand extension by P&G, however; studies also show that P&G also is convinced in brand extension concept.
Multibrand strategy: Both company's make several brands in the same product category. The theory is to ensure that consumer needs are satisfied and at the same time compete against specific challengers.
The analysis points out the prevalence of Red Ocean market in Brazil. In order to focus on low income consumer's development of blue ocean strategy from the persisting red ocean market is advisable. (Modified from -Overview by Wayne R. Martin on 'Kim, W. C. and R. Mauborgne. 1999')
SWOT analysis for Unilever
Develop an affordable version of Omo brand.
Repositioning strategy can be applied to Minerva.
Re-launch Campeiro to low-cost brand
Launch an extension of the prevailing brand
Develop an totally new brand.
However, several above mentioned options may well not be feasible. For instance,
Since Omo is a superior quality product, company cannot take a risk of developing a cheaper version as it might lead to misunderstanding related to the merchandise among the list of consumers and brand image may get tarnished.
Though the repositioning of Minerva would be less costly but since Minerva is identified to be of medium quality, repositioning it may well not be well received and probably lower its market share from 11% to a lesser level, which will in-turn pave way for P&G products (Ace and Bold) that are recognized of high quality than Minerva.
Further, converting or re-launching Campeiro to a low-cost brand would be expensive as it is regarded as a low cost and poor product. Changing its image to a much better quality will need a longer period.
Developing a new product may again be a costly affair.
"It really is more important to do what's strategically right than what's immediately profitable. " - Kotler 2000
Considering the SWOT research, North Eastern region certainly has an opportunity for a large growth, in order to make an impact Unilever should create customer-oriented market and not a competitor focused market.
The Press strategy (more regarding, promoting the product to the buyer)
The Draw strategy (Attracting the consumers focus on the product)
Create a new brand
Re-launch a brandname from the existing portfolio
The cost and R&D for a new brand would be highly expensive so that it is feasible to work with the already existing brand which is established in the neighboring country with similar needs and culture.
Exhibit 6 from the case study reveals set of various detergent natural powder brands of Unilever prevalent internationally. A detergent can be determined which is between Omo and Campeiro. For example, Rin(Asia), Ala or Nevex. (Latin America)
Available in two sizes 1Kg and 500 grams in attractive plastic bottles.
Its price is affordable than both Omo and Campeiro. Considering the product packaging and formulating costs, Ala may cost anywhere which range from $1. 4 to $1. 6 as a wholesalers price.
A hypothetical examination (based on present cost brand), the tentative cost would be around $1. 74/Kg.
Total Cost: $1. 73 which is rather affordable.
Unilever's communication forte is above-the-line strategy (70%). Emphasis should be on below-the-line which is just 30%. Focus should be on meticulous instore special offers and awareness of the merchandise through supplementary locations in the tiny outlets.
Promotion of the product via T. V or billboards should be extended on massive size. Though the NE region has predominant illiteracy, advertising through advert on T. V would become a good medium for creating awareness of the product. For example: The advertisement of Tide is easy and expressive. A consumer (irrespective of the literacy rate) can connect himself to the goal of the ad.
An easy, identifiable yet progressive packaging would make it easier for the consumers to identify the merchandise.
Unilever should perform an exclusive and specialized circulation in all the small stores in NE region.
*This product should also be targeted at the SE market where 20% of the populace comes in the 'E' category.
Three Unilever brands in the detergent market have 75% of the talk about in combination. Any extra brand from Unilever would definitely create cannibalization.
There's a need to update the laundry cleaning soap users to detergent powder users and the key to this change would be WASHER.
A consumer will feel the need of using detergent to the maximum, when he has a washer otherwise he will continue with the traditional ways of cleaning clothes.
The strategy of creating awareness ought to be the first move and allow consumers know the advantages of owning a washer in terms of the time, sanitation and prestige. Along with the campaign for washing machines the Ala detergent powder should be earned focus.
Every good care must be studied not to injure the sentiments of the buyer by using the term 'Low Income'
Unilever may use tag collection like
Ala: "Go through the desired cleanliness for less".
Apart from the ATL program, a BTL campaign should also be triggered so as to capture every segment for marketing the merchandise. In the stores, discount scheme can be suggested which will improve the sales (due to the fact low-income individuals are price very sensitive. )
For example: Buy 1 Kg of Ala and get a discount of x%.
Unilever should collaborate with the best washer dealers to market their product combined with the Unilever's products. Therefore, whenever a customer buys a washing machine, owner would recommend him to make use of the Unilever's detergent products.
In addition to this, Unilever can use its brand image and portfolio to pressurize the store manager to acquire exclusivity in the detergent powder section. This may leave no choice to the buyer and they'll have to buy Unilever products. (The Apprentice_Series_6_Beach accessory, 2010)
After the promotion, next crucial level is Distribution. It is clear from the case study that Unilever products are absent in almost 75000 outlets. Rigorous distribution needs to be implemented. This can be achieved by working with specialized marketers or have their set of distributing vans browsing the stores and proposing the Unilever brand.
If the shopkeeper is unable of producing all the brands of Unilever due to the price, then atleast Ala and Campeiro should be advertised to be sold.
*If Ace exists in small stores then all the three brands of Unilever can be posted as the positioning of Ace is comparable to Minerva.
It is clear that manufacturing a whole new product for the low-income consumers may be fairly expensive. In my opinion, producing the already existing brand from Unilever's stock portfolio will be a good idea and Unilever can make investments an appropriate amount in the advertising of this brand into the Brazilian market and get the end users attention by producing plastic containers for saving the detergent powder.
To have a good idea on circulation, promotion, rates strategies; refer http://hubpages. com/hub/Management-Tutorial
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