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Running head: CASE STUDY ANALYSIS 0
Case Study Analysis
Name
Institution
Unilever in Brazil
Abstract: Statement of the Problem
The management of the firm seeks to examine and make a decision concerning the modification of marketing methodologies of detergent labels to customers organized as low income or not. Currently, the organization has obtained 81% of the detergent operations industry share . Nonetheless, most rival firms think that Unilever, because of its global characteristic should not venture into low-income platforms since small organizations survive by operating in these market domains (Corbett, McWeeny, & Walsh, 2012) . However, if Unilever makes a final decision of penetrating the low-income environments then the need to address certain questions connected to product positioning, labeling, and marketing arises.
In responding to such a question, the Unilever management needs to analyze its present labeling and marketing strategy. Additionally, absolute label marketing and positioning should be identified for customers in segments of low income. After detailed and substantial research by Unilever management, the firm noticed that the Northeastern people of Brazil prefer OMO, Unilever’s forerunner brand. Sadly, with the people’s low income they could not afford the brand.
Unilever in Brazil-Market Analysis
Unilever’s history in the country of Brazil is of a long time and age. The firm has been triumphant in profitability terms in the South American nation. After launching its fist item , the firm obtained 52% of the business share and when added to the brands of Minerva and Campeiro, it sums up to 81%. Through examining and assessing probable development in the market of Brazil , Robert Davidson focused on exploring chances of expansion in the detergent market to consumers of low payment living in the Northeast of Brazil. Even with availing the brand of Campeiro with affordable prices, the organization only managed a mere market share of 6% . Moreover, the firm faces competition from companies like Gamble and Proctor which are contemplating expanding their businesses to low payment areas .
The nation of Brazil covers approximately half of the area that is near the Atlantic Ocean. The South American country divides into the north and south regions. Regarding the soaps and detergents, they are distinct from each other since clothes washing cultures are discrepant in the two regions. This is because the education level of both customers differs. People from the South are literate in comparison to those from the North. Therefore, differences in culture is another variable that distinguishes consumers in the two areas.
Alternative Solutions
Consumer Patterns in Low Payment Northeastern Area
Before venturing into any business operation area, it is significant that a company comprehends the behavior of customers to better apply marketing methods. Marketing to areas of low pay is an essential task but is often ignored by organizations. Customers from the North-eastern area possess distinct perspectives than their South-eastern region counterparts. Low payment customers wash clothes more compared to southern consumers since they own fewer clothes than people with high incomes. Hence this provides a chance for Unilever to target customers who utilize a substantial amount of soap in a week.
Competitors
Proctor and Gamble acquired local brands and shifted them to international labels. Even though P&G is a relatively small and new contender, the firm’s access to the knowledge of marketing proves it to be an imposing one. The formidable stand of the Unilever firm in the South promotes the likelihood hence , the organization P&G will shockingly takeover the North region. Local competitors give less competition for some reasons . First, they do not possess the potential and materials to compete with Unilever concerning the expenditure in the markets. They also tend to be preservationists who offer poor quality products at low prices. However, this can be a problem for Unilever if these local firms take advantage of consumer information and low-cost structure.
Customers and Product Attributes
The major concern regarding customers is that areas of low payment are large and extensive. Then again, the main factor that makes a few global companies target low pay customers is that managers usually lack crucial information concerning low-income areas (Hilst, 2015). It is important to comprehend that product attributes together with final advantages that are necessary for low-pay buyers when purchasing soap. The fundamental function of low paying customers is the need for soap which just cleans their clothes. Additionally, the foam quantity that a detergent produces attracts customers of low pay. While Southern customers prefer less soap that removes stains since they apply bleach in completing their tasks.
End Benefits
Constantly, customers of low payment locations contemplate more on expenditure compared to higher-income customers. The low pay customers are usually well-informed when it comes to costs and often make fewer impulse purchases. Budget obligations keep them off stock-piling, regardless of the potential of easier unit costs when purchasing in bulk. Price buyers have the belief that all labels are similar, and the only discrepancy is the price. Moreover, low-income customers love national labels because of emotional value, functionality, and enthusiasm. For instance, U.S. and Western Europe shoppers buy private brands even though they can afford a more extortionate label.
Preferred Solution and Recommendation
Market Attractiveness of North Eastern Region
Unilever needs to emphasize the low pay market in the NE region for several reasons. In the country, the company has an 81% market share which prompts them to find out more business growth routes. Additionally, there is a risk of passage by local rivals Proctor and Gamble which may utilize the first mover benefit and pursue customers of low-income areas before them. A beneficial operations methodology for low pay markets in Brazil can be applied as a desirable strategy to increase returns for specific requirements in the market. Moreover, restructuring the chain value for such areas is necessary to accomplish accessibility and competitiveness. Lastly, Unilever should tailor the provision to specific requirements of the operations, build a marketing mix, and initiate awareness to gain value.
References
Corbett, C., McWeeney, D., S. Walsh. (2012). Unilever in Brazil (1997–2007)‘Marketing Strategies for Low-Income Consumers’. Retrieved 13 November 2019 from https://www.researchgate.net/profile/Vittorio_Boccanera/publication/301286520_Unilever_in_Brazil_Marketing_Strategies_for_Low_Income_Consumers_1997-2007/links/570f6ca008aed4bec6fdfe4b.pdf
Hilst, B. (2015). Marketing Essentials for Targeting Low-Income Consumers. 12 November 2019 from http://www.bopinc.org/updates/blog/marketing-essentials-for-targeting-low-income-consumers
Resource links that could be used:
http://www.myucwest.ca/library/index.php?id=141
https://www-statista-com.ezproxy.myucwest.ca/
https://www-portal-euromonitor-com.ezproxy.myucwest.ca/portal/magazine/homemain
https://clients1-ibisworld-com.ezproxy.myucwest.ca/?u=Z6kJF5qfZEQ=&p=PlGSZD3aa5HxjMKz4tyD9Q==
