Unilever In Brazil

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Problem Unilever is facing a decision about whether it should divert money from its premium brands to target the lower-margin segment of low-income consumers in Brazil. Analysis There are three issues that Unilever must take into consideration in deciding the reasonableness of the market entry. First of all, even though the Brazilian economy has been successful since the Plano Real Project in 1994 and will be very promising in the future, Unilever doesn’t have a single product for the low-income consumers in the Northeast (NE) market. Additionally, it will be facing a severer competition in the Southeast (SE) market due to P&G’s aggressive investment in R&D and local companies’ growth. Second, Unilever should consider a wide variety of differences between the NE market and the SE market. Low-income consumers in the NE have a unique washing custom and preferences in detergents, thus Unilever can’t make a success in the NE market if it simply introduces to the area a product that is very popular in the SE market. And finally, a marketing strategy should also be carefully discussed. Thus far, Unilever has built a good reputation in Brazil by offering high-quality products. Bringing a cheaper yet lower-quality product to the market may suffer serious damage to its corporate image, and cause the cannibalization of existing its brands. Recommendation Based on these considerations, the best decision for Unilever would be to introduce a completely-new and innovative detergent powder under the name of a new brand. The new product can be multi-functional detergent power that a consumer can use either as a substitute for laundry soap or for a washing machine, and it should be available only in the NE area. This strategy can successfully deal with the issues Unilever may face. First, the new product will contribute to not only the increase of sales in the NE area

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