In 1957 OMO, the countries first detergent, was launched and grew to be Unilever’s most successful brand commanding 52% of the market share. Completing the detergent portfolio are Minerva, which is sold as both soap and detergent powder and Campeiro, their price based brand. Together the Unilever portfolio commands 81% of the market. Upon review of the company’s strategic options positive economic forces in Brazil have presented Unilever with the viable option of pursuing the low income consumer market.
Currently their price based brand Campeiro is priced affordably but does not meet low income needs for perceived product attributes and as such only retains 6% of the market. Management are concerned this presents a chink in Unilever’s armour presenting an opportunity for Proctor and Gamble to attack and grow in this segment. Unilever had fallen victim to this strategy in India whereby a low priced detergent “Nirma” was developed and targeted at low income consumers and quickly gained 48% of the market. 3 2 Brazil Brazil is a country with a population of approximately 170m.
It’s predominately split into two regions, the northeast with a population of 48m and the southeast with a population of 73m. The northeast and the southeast regions vary greatly with regards to a number of issues related to the detergent and soap markets. Firstly income and education levels vary, as do cultural values and norms. A Pest analysis of the North East can highlight some of the implications of these differences. Political – N/A Economic – Brazil is said to have experienced cycles of recessions and recoveries over the past 30 years.
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The country made a significant economic leap with the Plano Real which saw the introduction of a new currency, the Reais which controlled inflation leading to a boom that particularly benefitted low income consumers boosting their purchasing power by 27%. However, while Brazil’s per capita income was €4420, this was significantly lower in North Eastern Brazil at €2250 reflecting the developmental and economic divide between North and South. Socio-Cultural – The illiteracy levels in North Eastern Brazil are high above the national average at 40% which will impact communication and promotional strategies.