Consumer behaviour in Brazil

Consumer behaviour in BrazilBrazil is the largest country in Latin America. The total population of Brazil is 170 million. The south einsteinium part of Brazil has the highest population and then comes the north east region. The GDP and per capita of the south east is more than that of the north east of Brazil.CONSUMER BEHAVIOURThe consumer behaviour in brazil to the purifying grocery storeplace is different in the north east and the south east of Brazil and is depended on many molds. One of the influence is the well-disposed influence.Social InfluencesNorth East BrazilSouth East BrazilCulture and sub culture65% of the population are a flow of African and European origins and their lifestyles, rituals and values apportion an African influence. Music and humour are the key elements of their culture.Only 35% of the population share an African influence whereas the rest are the migrants from Europe. This part is the financial and the political hub of Brazil.Social classMore tha n half of the population tumble in the low income category .The preservation is heavily dependent on agriculture. It is more labour intrinsic type of job. Most of the women in the family are ho theatrical rolewives.Only 21% of the entire population f all told in the low income category and most of the women are from the working class.Group MembershipMost of the women meet and wash their habilitate in public laundry or pond in a free radical. Cleanliness being an issue of gossip, every woman tend to keep their family clean to please the group.Most women own a washing machine so self esteem and social status is given little importance.The purchase behaviour of a customer depends on heterogeneous factors as shown in the diagram under. The social influences are the subjective norms.Apart from price of the detergent, the important attributes for the north east customers as per the rankings arePower of detergentIts fragranceThe ability to remove stains without the need of soap and bleachThe dissolving power with the waterPackagingImpact on coloursWhereas the south easterly customers are habitual decision makers. They would prefer to use the same detergents that they are use unless they dont get any flaws.BRAND PLAYERS AND THEIR STRATEGIESUNILEVERTOP BRANDS Omo is the top shuffling of the portfolio and is considered as a high tone of voice at a premium position which is for the high end trade. Omo has more than half percentage of the total market share in Brazil .Minerva is a medium quality carrefour with low grunge awareness and back up in market share. Campeiro is a well-known cheapest harvest-tide but with a low top of the mind penetration. The target customers of Unilever were the high income segment. The highest profit margin that Unilever generates is from the sales of Omo. scheme USED With the help of brands want Omo Unilever was the market pioneer in Brazil and hence got the first promoter advantage in the detergent sector. Unilever is the LEADER in the market. It followed the strategy whereby it created the most desirable market space in the minds of the consumers as seen by the Top-of-Mind-Awareness results. (Exhibit 8)Their main strategy is to advertise and increase the sales especially of Omo as the profits generated from their detergents proves a backbone for their working out in food and personal care categories. Unilevers main line of promotion was through the media advertising. This is cost potent and irrespective of the income, Brazilians are avid television watchers. localization The unhomogeneous products of Unilever are positioned as per the product and its appeal. Its situation ranges from removal of stain by eliminating the need of bleach (Omo) to delivering pleasant smell and softness (Minerva) to cost reducing (Campeiro)DISTRIBUTION Unilever had the daunting task of distributing to 75,000 small outlets in the Northeast. For this it relied on its existing nedeucerk of generalist wholesalers and som etimes also on secondary, smaller local wholesalers. This heretofore increased their cost. It also had the option of contracting with the specialized distributors.PROCTER GAMBLETOP BRANDS wizard is of the superior quality and is still sold at a subvert price than its second brand. Through research and development, their strategy would be to improve the price and the perceived quality of Bold and Ace which is in competition with Minerva and Omo respectively.STRATEGY USED PG is a MARKET CHALLENGER which is aggressively trying to extend its market share. It has specific challenger strategies like VALUE PRICE GOODS AND SERVICES and better SERVICES. The advertising is not very effective as the consumers dont deplete much knowledge or a top of the brand awareness as compared to the other brands in the market.POSITIONING Like most of the products of Unilever their products are also positioned depending on the target customers. Two of their main products are positioned interchangeabl e to Unilevers products e.g. Bold and Pop whereas Ace is positioned as a superior whiteness source.ASAASA is a local Brazilian brand and is only popular in NortheastTOP BRANDS Invicto which is an entry take detergent as it is a low cost detergent and valued by its customers. It is a key competitor of Campeiro and focuses on cost reduction crossways all dimensions.STRATEGY USED They are the MARKET NICHERS and consecrate been serving a special segment of the market as a whole.POSITIONING Positioned like Campeiro i.e. as a low priced productSWOT OF UNILEVER IN brazil-nut tree (AS PER CASE)PRESENT SITUATIONUnilever is the pioneer of consumer goods industry in Brazil and a exculpate leader in the detergent powder category with an 81% market share achieved by brands like Omo, Minerva and Campeiro. The Brazilian fabric wash market consists of two categories detergent powder and laundry soap. It faces a huge threat from PG and hence Unilever should look into tapping the niche markets b efore its competitors entry into themSTRENGTHSDetergent market pioneer in Brazil. then gained the first mover advantage which proved very favourable for its successUnilever is a strong brand in itself and has wide acceptance for its products all over the worldHave a wide range of brands i.e. have a strong brand portfolio which caters to different market segments. For e.g. Omo is more technology oriented, Minerva clings to its stimulated appeal and is a traditional brand, Campeiro focuses more on cost reductionThey are innovative and customer centric in their approach. E.g. introduction of 4 in the altogether variants of Omo. Each of them have different properties targeted at specific needs of customersDetergents will always remain the currency cows for UnileverWEAKNESSDifficult to make a selection with respect to cost effectiveness between the Generalist Wholesaler and Specialist Distributor since both could prove to be equally useful in its own way and once selected very hard t o reverseVast difference in distribution of social classes in the Southeast and Northeast. So similar strategies and products will not have the same result and might also vary vastly from the expected result especially in the NortheastIts brand Campeiro is perceived to be low on quality since it is also low pricedHigh availability of substitute productsOPPORTUNITYTap the niche market i.e. the uninfluenced low income sector before the competitors penetrate thereChange the positioning of detergents in the minds of the Northeasterners so as to increase the use quantitativelyMake use of the high frequency of washing tendency in the Northeasterners which would improve product sales in this areaOmo has the highest Top-of-Mind-Awareness amongst the Northeasterners (approximately 70%). This can be used as a way to generate awareness about Unilevers other brands and also for the product which needs to be directed to the lower income consumer segment (exhibit 8)Improvement in Brazils overall economic performance thereby improving the purchasing power of the natives and especially the lower income consumersAdopt appropriate strategy targeted at the lower income group so that Unilever successfully manages to tap all the classes of peopleIntroduction of more technology based and innovative products like OmoTHREATSRapid growth and improvement of PGs RD and marketing expertiseNortheasterners manner of using detergents is different from the Southeasterners. As per this logic the use of detergents is less with the NortheasternersPreference of laundry soap over detergent powder in the Northeast. This would pose a challenge to the lower income consumer segment product which the company wishes to marketCompetitor brands like Bold, Pop and Invicto are direct competition to Minerva and Campeiro with regards to quality and priceThere is almost equal market penetration of the competitors brands with Unilevers brands. For e.g. Invicto, Ace, Campeiro (penetration in the range of 60-80 %)Introduction of local products by smaller companies with better distribution footing war with other giants like PGUNILEVER IN BRAZILAs given in the case study, Unilever in Brazil has a strong 81% market share by means of its three brands Omo, Minerva and Campeiro. Question at hand isWhether or not to market detergents to lower income consumers in Northeastern Brazil andHow to go about itThe lower income segment isnt tapped by any of the giants of the detergent industry hence it provides opportunity to the company for growth in this segment. Also there is a need for good products matching the flagship brand Omo combined with affordability as clearly seen by the example stated about Maria Conceio.TREND IN BRAZILAs per case study it is known that Northeasterners believe bleach is a must for removal of stains detergent powder is used only to make the clothes smell good. For the Northeasterners cleanliness is perceived as important despite of their low income survival. Cleaning of clot hes for them is also seen as a measure of dedication of the woman of the family. Hence the challenge is to change few age old perceptions and yet successfully make a mark in the lower income segment. For this Unilever will have to exchange the laundry soap users into an Omo class user. This is a long term strategy but yet a feasible one.WHY CHOOSE LOWER INCOME companyEnter lower income group segment before PG penetrates thereDetergent market in this segment will always be a cash cowNeed gap analysis shows that there is an existing need for good detergents in this marketIMPLICATIONS OF MOVESHORT TERM IMPLICATIONS First mover advantage, shift of investment of money in low price brand from premium brandsLONG TERM IMPLICATIONS Market leader in low income detergent market, without a shift in Omo customers the new brand will be able to attract lower income customersWHAT SHOULD BE DONE?There are various options with Unilever. Namely,Launch a new product in the market targeting the lower income consumer without cannibalizing its own premium brands extensively Reposition one of its existing brandsHave a cheaper version of Omo/MinervaCarry out an extension of one of the existing brandsI believe that Unilever in Brazil should carry out PRODUCT LINE EXTENSION. herewith they should introduce an additional item in the same product category. Unilever should have an extension of its brand Minerva severalised Minerva occur (similar to Omo Progress which removes difficult stains without bleach and laundry soap). Minerva Progress should be positioned between Omo and MinervaPROSThe positioning of product between Omo and Minerva will help gain visibilityCan promote positively using Unilevers brand nameGood market penetration of Minerva as a brand1CONSMinerva as a brand is perceived to be a medium quality brand with less Top-of-Mind-Awareness2Fierce competition with PG brands like Bold and AceWHY EXTENSION OF MINERVANot possible to have a low cost product under the Omo brand si nce this would confuse the consumers about the original Omos credibilityLaunch of a new product will not be cost effectiveHaving an extension of Campeiro might not be successful due to the original image of the brand as a cheap quality brand move of any of the top brands might confuse the consumers and Unilever might lose its loyal customersMinerva having a good market penetration can perform well if the positioning for the extended product is done appropriately. Also as per Exhibit 8 the consumers in the Northeast have good knowledge about the Minerva brand (rated second after Omo). Hence the company should capitalize on this fact and thereby build a route to tap its lower income segment by using the brand name.A MARKET RESEARCH SHOULD BE CARRIED OUT TO UNDERSTAND THE RANGE IN WHICH THE CUSTOMERS WOULD BE WILLING TO SPENDMARKETING MIX OF MINERVA farePRODUCTA new formula should be produced to match the requirements of the customers and at the same time not increasing the costProduc t should have attributes as per requirement of the lower income segment especially cleanliness, whitening and productivity3Along with price the product should match the six key attributes important to this segment. Formulation should have more emphasis on stain removing capability while keeping Minervas original features intact like perfume and softnessThe product should be make available in various sizes and types. This would be apt for customers who do not use a large quantity of product per month. This would also give a notional feeling to the customer of having spent lessUse of packaging other than cardboard boxes e.g. plastic sachetPRICEThe price of the product should be low-cost for the lower income consumersThe company is increasing the cost on formulation and nullifying it by cutting down on packaging chargesThe product should be such that it is priced less than Omo and Minerva itself but a little more than CampeiroUnilever should adopt PENETRATION PRICINGfor its product whe reby the profit margin for Unilever would be less but it would maximize unit sales and increase market share in this segmentAdoption of penetration pricing would also discourage the competitors entryAlso initially Unilever can have an INTRODUCTORY PRICE for the product which would encourage people to purchase the productSUGGESTION Unilever can also get into backward integration to reduce its cost thereby managing to produce low priced productsPLACEUnilever should sell its products at all places in the NortheastSince the big shopping malls are perceived to be pricy it should display its products at local storesUnilever should display Minerva Progress along with Omo. This is because Omo itself has a good image that even this product will be highlighted to all the customerspublicityProduct should not be advertised as a product meant only for the low income group since this might create a negative outcome about the companyMedium like hoardings, radio, television should be usedAbove th e line promotion should be emphasized on more than below the line advertisingSales promotion activities should also be carried out heavily which are directed at the customersDISTRIBUTIONIntensive distribution should be used to make the product available extensively in all the retail outletsTo target the lower income segment Unilever should adopt the Specialized Distribution rule as given in Exhibit 13PUSH STRATEGYInitially a push strategy should be used wherein the product is pushed at the customers and made widely available to them. Then depending on the demand forecasts a push-pull strategy should be used.POSITIONINGFRAME OF REFERENCE DetergentsPOINT OF DIFFERENCE whole tone with affordabilityPOSITIONING Attribute and benefit positioningSTATEMENT THE MORE THE BETTER OR THE LESSER THE BETTER.WE GIVE YOU BOTH MORE QUALITIES FOR LESSER PRICEperceptual MAP200MINERVA PROGRESSOMO2000100ACEBOLDPERCEIVED QUALITYPRICE INDEX100CAMPEIROPOPINVICTOMINERVA= UNILEVER= PG= ASA