Home care division at unilever

Home c be division at unileverThis report tries to analyse a real important situation the Home Care Division at Unilever found itself during the late 1990s in brazil nut. Unilever, with an 81% securities industry share is the market leader in the purifying powder ancestry. This report is ground on the findings of project Ein truthman a market research carried out in Brazil in nightclub to understand the regional divide in terms of the income, culture, consumption pattern or usage of purifying powder between the consumers of North East and the South East realms of the country. The research also takes into account the competitors of Unilever in Brazil and also its sales and performance in the purifying market. And finally a recommendation is do on what would be the best selling system which the political party should adopt to penetrate into the largely undiscovered down(p)-income consumer segment in the Fabric wash business thereby expanding its market share and also increase the profitability for the company.The economic recovery of 1995-1996 was beneficial for the low-income consumers, which meant that the purchasing power of the poorest 10% of the population grew by 27% per course of study during the period. Our main focus remains on the two main regions of Brazil, the north-east and the Southwest, especially the demoralise income consumers of northeast of Brazil.Consumer behaviour is the process individuals or mathematical groups go through to select, purchase, use and dispose of goods, services, ideas or devour to sate their needs and desires. (Solomon, Marshall, Stuart, Barnes, Mitchell, 2009). The Decision to buy the detergent for a consumer in both(prenominal) the regions NE and SE is Habitual and hence lacks complexity. It is seen that the level of involvement of the consumer in the decision do process is very low. Also, the consumer is hearty aware of various commemorates of detergent or wash soap which are on offer in the market. Moreover, considering the fact that the risk associated with the purchase of the detergent or laundry soap is minimal, the consumer spends lesser time in evaluating or deciding the tick off of purchase.There are various influences which affect the ultimate choice of a consumer. In this case, the various categories of influences which are affecting the consumers choice while buying the detergent powder or laundry soap are shown in epithet 1There are various several(predicate) ways in which a consumer tends to internalise any available information to make an informed decision. The notice internal influences which are affecting the decision making of the consumers arePerception It sess be delimitate as the process of selection, organising and interpreting any information in form of sensation.The consumers perceive Omo as an sample detergent having all the qualities required to fulfil their backwash needs. According to the consumers as given in dis come together 5, an i deal detergent should demonstrate the following(a) qualities or aspectsPower of the detergent (its ability to clean and discolour the clothes with small quantity of product).Smell/Fragrance (Strong, pleasant smell associated with softening power and compassion to fabric and hands).Ability to remove stains without laundry soap or decolorizeThe ease with which the powder dissolves and absence of resi collectable (consistency and granularity of the powder).Interestingly, the perception regarding the usage of bleach also differs between the women of the Recife Northeast, where majority of the women pick outs using bleach later washing clothes to remove tough stains, whereas only 18% of the women in Sao Paulo atomic number 34 prefer doing so.Learning It can be defined as the change in buyer behaviour caused due to available information or experience.The consumers in general are well aware of the various marks of washing detergents and soaps available in the market. From the da ta given regarding Brand Knowledge, market penetration and Top of the mind sensory faculty in Exhibit 8 it is evident that the consumer across regions in Brazil have either the acquaintance or have seen or used unmatchable or all washing products at near point in time.Lifestyle Reflects the repute, tastes and preferences of people depending on their pattern of living which is determined by how they claim to spend their money, time and energy. The way the clothes are washed differs in both regions since the women in NE attach great value and take primp in keeping themselves and their families spotlessly clean whereas the women in SE consider it as daily chores, less important for self-esteem and social status. Another component influencing the choice of detergent or soap is the number of house casts which owns washing machine 28% in Northeast and 73% in Southeast.Social Class The rank or the status of the people or group in the society can be defined as a Social Class. People are considered to be in the same class who either work in same occupations, having similar level of incomes, or share similar tastes.Exhibit 2 highlights the social class composition in the Southeast and the Northeast of Brazil. The divide is evident with more than than 45% of the population in Southeast forming the top 3 Tiers (A, B, C) as compared to the Northeast where more than 53% of the total population form the bottom 2 Tiers (E+ E-). This is one of the major cerebrates for the difference in the consumption pattern of the detergent powder and laundry soaps in both the regions, although the penetration of both detergent powder and the laundry soap is al or so the same. Majority of the population in the north-eastern region use a lot more soap and less detergent as compared to their counterparts in the southeast. Another very interesting fact to note is the frequency at which the clothes are being washed in both the regions. The washing of clothes in the Northeast happens m ore oftentimes as compared to the Southeast since the low income group of Northeast have fewer clothes to wear.In the family 1996, the detergent powder and the washing soap market in the Northeast of Brazil was worth a whack $208 million and growing. As shown in Figure 2 there are 3 key players in the fabric wash market in Brazil with Unilever, the market leader with an 81% market share, close behind is PG with a 15% share in the market and the remaining 4% of the market is captured by local anaesthetic Brazilian companies.The market can be broadly classified based on the vitrine of washing products offered.The detergent powder industry which sells around 42,000 tons of washing powder in the Northeast is growing at an exceptional rate of 17% per annum. And the dominance of major multinationals like Unilever and PG has been because of the capital intensive nature of the of the manufacturing process requiring massive manufacturing and RD costs. Following are some of the key playe rs in the market.Unilever Unilever has been a governing force in the detergent powder market in the Northeast with a 75% market share. With a 52 % market share Omo is the most popular and the most dominant brand of detergent powder in the Unilever stable. Minerva is the only brand offered by Unilever in both the detergent powder and the laundry soap with a market share of 17% and 19.1% respectively. And finally Campeiro holds 6% of the total detergent powder market.PG Although PG entered the Brazilian market in 1988, it has come a long way in becoming the south most successful manufacturer with a 15% share in the detergent powder market. The capital reason for this success can be given to the large amount spend on making manufacturing improvements in the businesses acquired by PG to develop better products for the Brazilian market and the RD and marketing expertise is a straight off threat to Unilever. Ace is its the flagship brand which has 11% market share, a direct competitor of Omo with features like splendid whiteness, dirt removing capability and fabric protection is priced at 2.35/Kg. Followed by the other brands offered by PG viz. emboldened competing against Minerva and with focus on softness sells at 2.50/Kg and Pop is an alternative for Campeiro selling at 1.70/Kg together occupies 6% of the detergent powder market.Others Invicto owned by local Brazilian company ASA with 5% share of the market which competes against Campeiro is sold at 1.70/Kg. The remaining 3 % of the detergent powder market is shortly being held by local Brazilian companies.The Laundry soap market in the Northeast of Brazil is equally big as compared to the detergent powder industry with revenues of $ 102 million, selling around 8,125 tons per year however its addition rate at just 6% is far slower than its couple. Unlike the detergent powder market where Unilever and PG were the dominant forces, this market is being dominated by brands manufactured by local Brazilian comp anies surprisingly PG offers no products in this segment. As shown in Exhibit 7 the local companies hold a major chunk 69.6% of the market share (including others and Flora). Bem-te-vi is extremely popular and is positioned with emphasis on traditionalistic and regional values targeting the low income consumers of Northeast holding 11.3% of the market. Minerva which is the only Unilever brand is considered to be one of the best laundry soaps with an impressive total share of 19.1%.Marketing Mix Strategies help in identifying how a companys marketing would accomplish the objectives by using the following factorsIt is a strategic planning method used in evaluating the Strengths, Weaknesses, Opportunities and Threats involved in a business. The details of the SWOT psychoanalysis for Unilever are evident in Figure 4.5.1 Growth StrategyUnilever fabric wash products enjoy immense respect and recognition across various regions of Brazil due to its diverse range of products, dependable i n-house marketing capabilities and excellent advertising campaigns. However, the ignorance and indecisiveness in adopting a system to tap in the huge potential of the low income group of Northeast has been an area of concern for the company. The Product-market Growth Matrix in Figure 5 helps us analyse various growth strategies and identify the most suitable dodging the company should follow to expand their current market.New Products vivacious Products Product EmphasisNew MarketsExisting MarketsMKT EmphasisExtension of the current ledger entry level brand Campeiro is the most ideal strategy and hence we need to adopt the Product development strategy model. The untested product would be rightly called Campeiro Dazzle. We bequeath further analyse and discuss the targeting, segmentation and positioning strategy which Unilever should follow to achieve its goals.The STP strategy in Northeast for Campeiro Dazzle would be influenced by the following variablesSegmentationDemographicMo re than 53% of the population, approximately 26 million in the Northeast lives on less than two minimum wages. Illiteracy rate at 40% is very high.Psychographic Bleach is very important to remove fat stains. Washing clothes has a symbolic value for the women and they take pride in keeping their family clean. Considered to be one of the pleasurable activities of the week, hence washing in public laundry, river or pond is considered to be an opportunity to meet and chat with friends.Behavioural Clothes are washed frequently (5 times a week in Recife).Target marketing strategySince Omo and Minerva is already targeted towards the High and position income group respectively, the late Campeiro Dazzle will be focusing on the low income consumer segment in the Northeast using Differentiated targeting strategy.PositioningSuccess of Target marketing strategy is contingent on the identification and selection of most appropriate market segment.Keeping the current positioning of the 3 detergen ts (Omo, Minerva and Campeiro) unchanged our primary focus would be to strategically position the new Campeiro Dazzle. The ideal positioning of Camperio Dazzle should be such that it falls between Minerva and Campeiro which fits it in the top left quadrant above the perceived eccentric and Price index 100.Unilever can establish Campeiro Dazzle as one of its most sought after and affordable BRAND of CHOICE for the low income consumers by developing a Marketing Mix as mentioned belowThe most important concern internally at Unilever Brazil is the issue of cannibalisation of existing bounteousness brands like Omo or Minerva due to shift in strategy following the introduction of the new brand extension Campeiro Dazzle. The concern I believe is a legitimate one and if things do go aggrieve as feared by many, the results could be devastating for Unilever and could tarnish its image as being the best and most dependable, inviting competitors like PG to take maximum advantage of the situ ation and eat into Unilevers market share across regions in Brazil.The level of income, however, is the key factor which would avoid any such adverse situation since our new brand is targeted at the low income consumers of the northeast and is not positioned to compete against Omo and Minerva which is targeted at the high income and middle income consumers respectively.Extension of the entry level brand Campeiro is justifiable considering the time and cost constraints faced by Unilever. The process of creating and introducing a new brand involves immense RD, marketing advertising and distribution costs and will also take a long time to develop and Unilever cannot afford at this point in time since its main rival PG has the potential and the expertise to capture the massive detergent low income consumer market by either extending or repositioning one of its own existing products.Based on the Segmentation, target marketing, positioning and marketing riffle strategies discussed earli er, it is strongly recommended that Unilever follows a quick growth strategy (3 year) to capture maximum market share of the low income consumers in the northeast by getting them to use Campeiro Dazzle.The Bottom-up budgeting technique would be most ministrant since the new strategy requires Unilever to spend more on the promotion of Campeiro Dazzle Push strategy in the first 3 years of its introduction. This would be gradually reduced in the fourth and fifth year once the product eats into the market share of the competitors and demand for product increases Pull Strategy. Push strategy Unilever can follow the same 70/30 ratio for ATL BTL communication which it does currently. Emphasis should be more on ATL because of its high reach and low cost-per-contact especially TV advertisements hoardings (Knowledge about the availability of the new product). On the other hand BTL techniques like in-store promotions and improved visibility of the product in the small stores. The biggest fa ctor that can contribute to an instant success of Campeiro Dazzle is if Unilever builds confidence in its secondary, small local wholesalers and specialized distributors by running a high incentive/commission through sales programme. This is one primary reason why 0.50 cents/k.g has been earmarked towards promotional cost. Resulting in our products reaching 75,000 small outlets where most of the low income consumers shop. Pull Strategy forward motion is one of the most important and inseparable part of the marketing mix. However for Unilever, assuming the success and the fire acceptance of Campeiro Dazzle over the first three years by the low income consumers the promotion strategy would then have to shift to improve the profit margin. This would be a challenge considering the fact that reverse of the distribution channels is difficult. However, increasing demand for Campeiro Dazzle amongst low income consumers due to effectiveness, high brand value and recognition (thanks to a ne w TV promotion/advertisement by a well cognize celebrity or a popular music band which would act as a stimulant) will force the retailers to respond to this demand by stocking more Campeiro Dazzle in their stores.ConclusionThe aforementioned analysis clearly indicates that the existing detergent products and the strategy adopted by Unilever to capture the market share and satisfy the needs of the low income consumers hasnt been very successful. Project Everyman, however, has come as a ray of hope for the company helping it understand the enormous potential of this group of consumers. The implementation of the new strategies mentioned in this report would surely help Unilever to expand its market share and profitability and most importantly help them implement this business model to gain success in other developing economies of the world and immense respect in the industry.