Arya Pradipta

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Unilever in Brazil (1997 – 2007)

What I learn from the case is that Laercio Cardoso wants to penetrate Unilever’s detergent brands to low-
income consumers in the Northeast Brazil. According to the case, Northeast Brazil is, in general, far less
developed than Southeast Brazil. 40% of the population in Northeast Brazil are illiterate and 53% of the
population lives on less than two minimum wages (social classes E+ and E-). The economy in the NE was mostly
rural and heavily dependent on agriculture. Lifestyle, culture, and religion in the NE are influenced by Africans.
The way clothes are washed in the NE is also different, where bleach is necessary and people scrub clothes
using bars of laundry soap. Detergent is used only for fragrance. Since most people there are low-income
consumers who own fewer clothes and have more free time, clothes are washed more frequently. Women
there see washing clothes as a moment for socialization and symbolize cleanliness of clothes as a dedication to
their family. Interestingly, people in the NE are proud to keep themselves and their families clean despite their
low income.
Northeast consumers evaluate detergents by six key attributes, but three most important are the
perceived power of the detergent that is often judged by the quantity of foam, the smell of detergent, and the
ability to remove stains.
From the Unilever’ market position, it is a leader in the detergent powder category in Northeast Brazil,
with around 75% of total market share of Omo, Minerva, and Campeiro. In the laundry soap category, Minerva
is the biggest top player with nearly 20% of market share, yet the market is still dominated by local Brazilian
companies.
From my point of view, there are two strategies to increase market share and product use for people in
Northeast Brazil:
1. Invest more on Minerva’ Brand and Marketing Strategy. I think it is no need to build a new brand
from scratch since Minerva itself has a good base market in both of detergent powder and laundry
soap category. It provides the need to use laundry soap for the people in NE. Moreover, it is perceived
to have good quality over price and belongs to Northeast Brazil’ brand knowledge and market
penetration. Since it not yet belongs to NE people’ top of mind (only around 15% of NE people),
Unilever should boost it through marketing campaign related to NE culture in hope that better top of
mind leads to higher product consumption and better sales. According to the case, people in NE Brazil
loves to socialize in public washing activities and very proud of their cleanliness. Therefore, Minerva
can focus on social or community marketing campaign and highlight attributes of how strong its
product to remove stains. I think the key to success in the Northeast Brazil is how strong the product
attaches to culture and daily behaviour of people there, thus Minerva can design its brand and
marketing strategy related to that. If Minerva could get a closer attention, it is easier to promote or
sell complementary products (cross-selling marketing), in hope to educate NE people to use detergent
more, such as Minerva laundry soap is complemented by Minerva detergent powder.
2. To cope with NE people’ limited buying power, it might be a good decision for Unilever to launch a sub
brand of Minerva detergent powder that is cheaper and focus more on what is needed from people
in NE, for example Minerva Lite or Minerva Eco. People there love to use bleach and laundry soap
more than detergent powder, however as I said before in the first strategy that if Minerva’s brand and
marketing strategy could attach with culture and behaviour of people there, it is easier to promote
another product. The attribute of Minerva Lite or Minerva Eco can focus on fragrance since low-
income people use laundry soap and bleach as a base to wash clothes. To make it cheaper, attributes
that can be sacrifice might be dissolving power and packaging, means that dissolving power can be
reduced by little and packaging can be made simpler.
To conclude, by having effective Minerva’s Brand and Marketing Strategy that target culture and behaviour
of people in the Northeast Brazil as well as launch a cheaper version of Minerva detergent powder, Unilever
can boost its sales in that region. There is no need to launch a new brand because it is costly and might be
ineffective. Omo’ market penetration is already great, but it might be too expensive to target low-income NE
people. Meanwhile, Campeiro has segmented low-income people, but the data says that it does not yet have a
good market share, perceived lower in market penetration and top of mind awareness than that of Minerva,
and still perceived as expensive compare to quality it provides. Thus investing in Campeiro’ marketing strategy
is not yet effective and might cost more to target people in NE, compared to if Unilever invest in Minerva.