Brazil Market Essay

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Unilever in Brazil

b) Impediments

Situation Analysis, Evaluation of Options and Recommendations

Situation Analysis of the Market

The Product Positioning

Options for the company

While attempting to increase its market share in the Northeastern part of Brazil, Unilever is faced with the problem of deciding on the most appropriate strategy for product, branding and marketing. They must consider factors such as the creation of the value proposition, the brand positioning of the new product, whether to create a new brand strategy for the new product or to continue with the old strategy, product characteristics so that it suits the needs of the customers, appropriate packaging for the new detergent, the pricing strategy, the promotional mix and the distribution channels to be established are the issues of decision making for the executive management of the company. The target market is a new market that Unilever is trying to enter which is composed predominantly of low income groups but with significant population.

Executive Summary

Recommendations

Having decided to venture into a new market segment that is located in the North Eastern part of Brazil, Unilever is faced with a problem that is common to most corporations. The company has made a detailed survey of the market and now needs to formulate a strategy for its marketing and production team for the new target market (Mullin, 2006). The target market consists of low-income groups of the region and the company wants to market a detergent. While the size of the targeted customer base is significantly large, the customers have distinctly different consumption and purchasing habits when compared to other market segments that the company operates in. By entering the low cost segment, the company wants to extend its market share of more than 75% is enjoys in the present regional market (Cadogan, 2009).The company is yet to market a detergent aimed specifically at the low income customers of the region. Proctor & Gamble with a market share significantly lower than that of Unilever, is the primary competitor of the company in this segment.

To address the choice of decision the suggestions for the company are:

The company should create a new brand position for the new product to be launched along with the creation of a new value proposition different form the brands of the company already present in the market (Getnet, 2008).

A new brand for the new product that has values for the target customers is to be created

A completely new product is to be manufactured that incorporates the characteristics according to the descending order of importance attached by the customers to detergents.

Competitive pricing strategy should be followed keeping in mind the disposable income of the customers (Mullin, 2006)

ATL promotions could to be done with emphasis on TV commercials

The specialized distribution channels is suggested for distribution

b) Impediments

The new product eating into the market share of the existing products of the company seems to be the most important issues of concern for a section of the senior management at Unilever in Brazil. However, this is just one of the problems for the management (Cadogan, 2009).

The impediments to the new marketing proposals are:

Value Proposition: the low-income groups of the target market are not included in the present brand positioning of the company detergents. The solution is creating a new 'value for money' position for the new product (Getnet, 2008).

Brand Strategy: the rumors about the company reducing the brand portfolio of the company means creation of a new brand might not be possible. A solution is to use any one of the existing brands of the company that is active in other parts of the globe but not in Brazil.

Product: investing in creating a completely new product. The solution is to make necessary but subtle changes so that cost of production is not significantly increased.

Price: impediment is to ascertain the right price that the customers would be willing to pay for a product that would be of a somewhat better quality than the rest of the market. The solution is to fix price taking into consideration the production costs and promotional costs but excluding the initial distribution costs (Mullin, 2006).

Promotion: the very high costs that is associated with ATL promotions. The solution is to restrict ATL promotions primarily to TV which would cut down on the costs of other outdoor promotions and concentrate more on point of sale promotions (Cadogan, 2009).

Distribution: impediment is the limited reach of the specialized distributors and their inability to serve a large market.

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The solution is to increase financial incentives to reach out to more customers which can be done by a policy of incentive according to point of sale reach (Getnet, 2008).

Situation Analysis, Evaluation of Options and Recommendations

The new target market for Unilever is the low-income group of people in the North Easter part of Brazil where the company wants to market a new detergent product. Consisting of a significantly high population, this market segment has been out of the reach of the company as far as its detergent powders are concerned. The selection of the appropriate and the best marketing strategies for the new target market with regards to the brand positioning, pricing of the new product, the quality and characteristics of the product, the promotional mix suited for the market and the distribution chain to be used are the major issues of decision making for the top executives of the company (Cluley, 2014).

Before the company decides on the strategies to be implemented, it is important for the company to understand the general business environment and the target market that the company plans to invest in. Information and analysis of the existing and possible future competition in the market, the general political environment and the economic environment of the new market and the usage and purchasing habit of the customers are also important consideration for strategy formulation. At this stage, it is pertinent to undertake a situational analysis for the company.

Situation Analysis of the Market:

Application of the 5C's theory and model for analysis to the market is to be conducted for the analysis of the new market and the general environment. The general market competition, the customers, the competition, political and economic situations and the company strengths are analyzed by this marketing tool (Iacobucci, n.d.).

Company analysis:

Product Line: Unilever has a number of brands of detergents in the Brazilian market. The product quality and the pricing of such brands range from the premium to the medium range.

The company sells both high priced brands like Ono as well as medium priced brands like Camperio. The company also manufactures and sells some laundry soaps in the North eastern region of the country where there is demand for the product (Cluley, 2014)

Image in the market: Being a company of international repute, Unilever enjoys a high rating in terms of brand image. The company produces quality products that are priced a little higher than the competitors. The image of the company is thus of one that charges a little more but provides the very best of quality in its products. In short, the image of the company is one of the highest value for money.

Technology and Experience: the company has been active in Brazil since 1929 and thus a considerable knowledge about the market and the products. The company is also technologically developed; as being a global company, it competes with other large companies through innovation and technology.

Culture & Goals: Unilever employs people from various backgrounds and cultures all across the globe and thus it can be assumed that the company has a predominantly multicultural background. At present, the company's goal is to increase its market share in the North Eastern part of the country in the detergent segment (Iacobucci, n.d.).

Customer analysis:

The general masses of Brazil are customers of the company and hence the customer base of the company is huge. The low-income group in the north eastern region of the country is the target customer base of the company at present.

The usage pattern of detergent in this region is unlike any other area of Brazil. The Customers in this region tend to use the detergent powders at the end of the washing process. Aim of such a behavior is cleaning but also primarily transfering a good smell form the detergent to the clothes. The customers use the detergents quite sparingly. However the customers are also in the habit of washing clothes of up to 5 days a week and hence can be considered to be heavy and regular users of detergent powders. This is primarily attributed to the stricter notion about cleanliness of the people of this region compared to other parts of the country (Cluley, 2014).

For the customers, the ability of the detergent powder to generate foam determines the power of the detergent to clean and is the prime driver for purchase. The smell form the detergent and the ability to remove….....

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