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Strategies followed by Unilever

On the basis of the research study and marketing ideas different aspects have been discussed in the project as well as a new strategy which Unilever must adopt to target low-income consumers.

Marketing is an organizational function and a couple of process for creating, communicating and providing value to customers and then for managing customer relationships in ways that benefit the organization and its stakeholders.

Consumer Behaviour

The concentration of the marketing concept is to meet consumer's desires and needs and therefore we need to understand what those needs and needs are. Your choice process and action of people involved in buying and using products are termed their buying behavior - those who purchase products for personal or home use.

Types of Consumer Buying Behaviour

Consumer habit can be labeled into one of three broad categories:

Routine Response Behaviour: Behaviour occurring when buying frequently purchased low-cost, low-risk items that need little search and decision work.

Limited Decision-making: Behaviour occurring when buying products purchased only once in a while, that a average amount of information gathering and deliberation is needed.

Extensive Decision-making: Behaviour that occurs whenever a purchase involves unfamiliar, expensive, high-risk or infrequently bought products that the customer spends much time seeking information and looking at brands before deciding on the purchase.

The North-eastern Brazilian buyers/consumers fall under the second group of limited decision-making for purchasing detergent powders as they bought detergents mainly to help make the clothes smell good and their usage was less when compared with South-eastern consumers i. e. 11. 4kgs per season per buyer.

For laundry soap, the North-eastern consumers fall under the Regime Buyer's category as they used far more soap then detergents (Display 3). 53% of the full total inhabitants in NE plunged under the reduced income group and because of the small family budget they possessed few clothes which obligated those to buy laundry soap over the detergent powder as soap was cheap. They washed their clothes more frequently i. e. 5 times weekly (versus 3. 9 in SE).

Influence on Consumer Decision Making

A volume of different facets in consumer's life impact the buyer decision making process. The 3 factors are Friendly Influence, Internal Effect and Situational Effect which are classified in Appendix 1.

Social Affects:

Culture:

Culture is thought as the group of basis beliefs, perceptions, wishes and behaviors learned by a member of contemporary society from family and other important organizations. Brazil has a solid cultural influence in making decision, as with 1996, 65% (versus 30% in SE) of population in Northeast was of mixed African and Western source. Lifestyle, culture and religious beliefs all share African affect.

Internal Influences:

Attitudes:

It is thought as an individual's long lasting evaluation, thoughts and behavioral tendencies towards an subject or activity. The attitude of Northeastern women for cleaning clothes in Recife was different because only 28% of household used to clean their clothes in washing machine and the rest 73% of women used to scrub clothes using laundry cleaning soap bar. They looked at washing clothes as enjoyable activity, given that they cleaned their clothes at general population laundry, river or lake where they used to meet and speak to their friends. Whereas in Southeast 67% of families owned washing machine and washed clothes at home exclusively.

Personality:

Is the set of unique internal characteristics that constantly influence the way a person responds to situations in the environment; it also refers to the way people see themselves and the way people imagine others see them. People in North-east possessed a very high value attached to sanitation as it was the key topic of gossip and a sign of commitment to house-work. In South-east cleanliness was of less importance for communal status and self-esteem.

Lifestyle:

A lifestyle is a routine of living that determines how people choose to invest their time, money and energy and that shows their values, preferences and preferences. Since the income of Northeastern is low, they like to spend only on the detergent natural powder which satisfied their six capabilities (Exhibit 3).

Consumer-buying decision process

A major part of shopping for behaviour is the decision process used in making purchases. It has 5 steps as shown in Appendix 2:

Almost everyone in Brazil, including low-income people in North-east would want to buy Omo detergent natural powder, Unilever's flagship brand; but because of the rigid budget they could only find the money for to buy cheaper brands.

Consumers in Northeastern assessed detergent powder on the bases of six attributes and its important as shown in these stand, product OMO and Ace satisfies all the importance but was expensive. Daring and Minerva satisfies the majority of the importance in comparison of other 3 product.

Key Industry players in Brazil

The Brazil cloth wash market consist of two categories: detergent powder and Laundry cleaning soap which is aim for by many players such as Unilever, Procter &Gamble, ASA, Flora Fabril and smaller local companies. The below Pie diagram illustrates market catch of each player.

The NE market for Laundry cleaning soap was very fragmented as shown in above diagram where in fact the top four players only acquired 38% of market talk about. Unilever Minerva brand is a innovator with 19%. Unilever's main opponents were local Brazilian companies and biggest rival was ASA, which gained 11% share by its brand Bem-te-vi.

Unilever catches Market show by 75% in Detergent powder in NE which is below its nationwide average. Omo is its dominant brand by 52% talk about, Minerva has 17% share and Campeiro has 6% show. Whereas P&G has second highest offering brand i. e. Ace with 11% market share. P&G's market talk about is just a little above its nationwide average and captures 17. 5% of overall market talk about.

Current Market Strategy

Unilever was coping with 3 products in detergent market and targeted to different income group (concluded according to Show 2 and price in Display 10) as shown in Unilever brand profile

If we compare Unilever's product with Boston Consultancy Group Growth-Share Matrix, Omo is a 'Cash Cow' because it has highest market talk about and low market expansion. Whereas Campeiro is a 'Dog', since it offers low market show and low progress rate. Minerva seems to be a 'Problem Child'.

Unilever Brazil was utilizing their 'Cash Cows' as a gasoline for growth of food and personal attention divisions. As per my understanding they also needs to take an advantage of their cash cow to boost their dogs if possible and Children Problem.

P&G was the second player with 15% market talk about in the detergent market. They were working with 3 different products geared to different income group as shown in their brand profile below, where Daring and Ace is their global brands.

I think they didn't type in the laundry soap market, since it was too fragmented.

SWOT Analysis

The below SWOT evaluation will understand the Unilever's Power, Weaknesses, Opportunity and Dangers:

Strengths

Unilever had control position in the detergent natural powder with 75% of market talk about. Omo, Minerva and Campeiro are ranked 1st, 2nd and 4th respectively in conditions of market talk about (Exhibit 7).

Detergent powder market in North-east is growing at remarkable total annual rate of 17%.

Unilever brands in detergent natural powder are well known and perceived by Brazilians. As shown in Show 3, most of Brazilians in North-east have either seen or have attempted one of Unilever's brands i. e. 97. 2% of consumer bought at least once per year. Also Show 8 provides information that Unilever brands acquired high brand recognition, knowledge and penetration in NE in 1996.

Detergent remained the cash cow of Unilever Brazil, providing petrol for development in other sectors.

Weaknesses

Unilever were facing a large distribution issue in the North-east as its detergents are not present on racks in approximately 75, 000 small shops. Northeastern were not fond of heading to big stores such as Wal-Mart or Carrefour where Unilever use to market its brand but prefer heading to small local stores.

No attention was paid to Low-income segment and its traits.

Opportunities

Brazil had a strong economic recovery, which was particularly beneficial to lower-income group and their purchasing vitality grew by 27% per year.

If Unilever aim for the tiny local shops to sell their products, it'll be a great source of income and can also improve up their market share.

In 1990's, federal government and local governments started providing tax incentives to companies investing in the North-east region, because the economy in the North-east was predominantly rural.

Threats

The real hazards is P&G as they are drawing on worldwide R&D and marketing knowledge which is shutting up and can harm on low-income portion.

Strategy for low-income group

Unilever's top management is getting excited about concentrate on the low-income portion surviving in the Northeast region of Brazil. Since Unilever does not have any experience in working with low income group, this is an extremely new market for Unilever and anticipated to that they can't use their current or traditional strategy to market low-income group. You will discover 48 millions of people living in Northeast of Brazil, where 40% of individuals are illiterate with the average per capita income of $2, 250.

Unilever shouldn't change its strategy for current products. To be able to gain market show in the course of targeting low-income portion they have got three options:

Repositioning Minerva

Re-launch Campeiro

Develop a fresh brand

The marketing costs for these 3 options are as follows:

Option 1: Repositioning Minerva

This option has no cost of marketing as Minerva is already available in the market and in your brain of individuals, but it has a negative area as it is not perceived as a good quality product. Repositioning of the product might take the product further down and might drop its market show. This may also give an top hand to its competitors.

Option 2: Re-launch Campeiro

This option is less expensive and inadequate as Campeiro has an extremely bad image in peoples mind as the quality is low and product is perceived to be cheap. It'll be very difficult to improve people's brain and belief to improve the image of Campeiro.

Option 3: Develop New Brand

This is a little costly but effective, as a fresh product will create a fresh image in peoples mind if marketed correctly.

Taking under consideration the Pros and Cons of all 3 options as mentioned above, I would strongly claim that Unilever should launch a new brand known as 'Sun-Light' detergent natural powder at an affordable price. The new brand would be placed between Minerva and Campeiro on perceptual map as shown below:

In the long run this new product would replace Campeiro. The reason behind this is the fact, since the purchasing vitality of the 10% of the poorest people has increased by 27% per yr (anticipated to increase), the consumer would wish to switch to Unilever's new product.

The Ansoff matrix helps in determining growth that can be integrated through marketing strategies. As shown in Appendix 3, Unilever's tactical objective falls under Product development which reveals intense progress.

Market Mix

Unilever should choose another market mix, to focus on Low-income group. Every internet marketer must generate a marketing mixture that satisfies the clients in the targeted portion. The main components of market combine are shown in Appendix 4.

Product

Unilever should create a new solution which is cheaper than Minerva but better than Campeiro. The brand new method should be developed which satisfies all the six traits (Exhibit 5) and also fits in consumer's budget. The expense of formulation should be half-way between Minerva and Campeiro; so I assume that it should be $1. 00 per kg (Show 10). The presentation must be very simple and become different in term of colour with those people of Omo and Minerva. Choosing the right product packaging size and type is also very essential. According to the research in Display 5 packaging is given 13% importance, since Low-income consumers were mounted on boxes the expense of presentation will be identical to before $0. 35per kg (Exhibit 10).

Price

The most significant decision for Unilever was to decide the wholesale price. According to my computation shown in below stand, on basis of the info available in Display 10, low cost price should be $1. 75 per kg. Also it's cheaper than the competitor's (Ace) price which is $2. 35 per kg. This will encourage consumer to buy our product and can circumvent cannibalization of Minerva.

Promotion

There are two type of strategy that can be considered: 'Press' versus 'Yank' strategy as shown in Appendix 5. The promotional mix is affected by if the company selects a press or a move strategy. Some small companies only use thrust strategies; some direct marketing companies only use pull strategies. However, some large companies use the mixture of both.

Unilever should use the pull strategy. In short-run will have to use the combination of both thrust and pull to make a promotion combination. Unilever will have to maintain low-margin because of its new brand in order to achieve profitability with towering levels of sales. Unilever can permeate the marketplace by issuing free examples in small plastic sachet around 10g during the launch of the product and focus on 30% BTL, as this might be cheaper and can also give a chance to people to try their new product. If ladies in North-east are comfortable by using plastic sachet then Unilever can transition its product packaging from cardboard to plastic material sachet in future which will help them save 30% of their cost on product packaging. This can support Unilever to position its new brand as an extremely successful product that can be used in everyday's life. 70% above the collection should be used as this is a minimal cost-per-contact and high reach advantage, as all Brazilian irrespective of income, were enthusiastic about watching television. Advertising should aim for low-income group by visiting them and acquiring live washing of their clothes the slogan should be "Sun-light will make your clothes stand out", this will raise the consumer satisfaction and also motivate the buyer.

Distribution

Unilever could count on its existing network of generalist wholesalers for reselling Omo and Minerva whereas they must sell 'Sun-Light' through particular distributors because it is the distribution route where low-income consumers normally purchase their goods. In long run Unilever can build-up a deal with a large number of specialized distributors who get exclusive to sell all Unilever brands. This can help Unilever to develop the ability to disperse their products through 75, 000 small stores.

Conclusion

I presume that the new product will be welcomed by the low-income consumer. Once the product is launched and is up-running, the new product should fall under STAR category in the Boston Consultancy Group Matrix, as it will have high market share as well as higher market development.

Appendix 1: Effect on Consumer Behaviour

Appendix 2: Consumer Buying Decision Process

Appendix 3: Ansoff Matrix

Appendix 4: Marketing Mix

Appendix 5: Draw and Push strategy

Push strategy means a advertising strategy that calls for using the sales force and trade promotion to push the merchandise through channels. The producer stimulates the merchandise to wholesaler and the he promoted to merchants, and sellers promotes to consumer.

Pull Strategy means a promotional strategy that demands spending a whole lot on advertising and consumer promotion to build up consumer demand. If the strategy is prosperous, consumers will then demand the merchandise from channel users, who will in turn demand it from providers.

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