Name: Muhammad Areeb

19P01954
Section C1
Unilever in Brazil

Instructor: Dr. Aamir Khan

Topic: Marketing Strategy – A Comprehensive View

Case: Unilever in Brazil: Marketing Strategies for Low-Income Consumers

Assignment for MBA 2020

 Unilever in Brazil

Assignment for MBA 2020

                    
1. a) What are the decisions Laercio Cardoso faces in the case? b) What is the dilemma
he faces? c) Why is Fernanda so upset?
Answer: Decisions:
Laercio has to make the decision that what could be the value positioning of new
product for targeting lower income segment, should Unilever change its current
marketing strategy and brand strategy, what could be the ideal position and marketing
mix (product, place, promotion and price), should they go for product extension or
reposition its cheaper brand.
Fernando is upset because he has to justify the divert money from OMO to invest in low
margin brand. In his opinion, that consumer going for same product as OMO at half
price would negatively impact the OMO growth sustainability. He is also worried that
cannibalization of the high margin sales with lower margin one. He was worried about
the message to the global investment community this move would send out, about
Unilever not focusing on its premium brand which would further deter talented brand
managers, who wanted to work for premium brands, to not come on board
2. How would you position the (new) product?
 The proposed brand extension would provide the low income segment with a
product that offers not just affordability but also, unlike other players in the low cost
detergents segment, supreme quality and efficiency, creating a unique place for the
brand. Given the new lower price. The brand would move up on the consumer
perception scale and cross the 45-degree line. The value for price would increase and
it is expected that the sales would too.

3. Assume that the top management and Laercio decide to go for the low-income market in
the Northeast of Brazil. Also assume the price (i.e. WP – see case) has been decided by
the top management and Laercio to be 50% of OMO.

a) What is the “product”? Design it.

Campeiro with same quality and lower price will be relaunched in a plastic
packaging. It will carry the slogan along the lines
b) What is its name? (I.e. choose a brand name/brand extension etc. for it)
We have decided to go for a relaunch of Campeiro

c) What promotion policy will you adopt?

45% for point of purchase advertising,
55% Media Advertising targeted towards most viewed channels in NE
 d) Calculate: i) the cost of the product ii) the margin (for the price mentioned above)
based on the cost calculated by you. You must use your knowledge of costing.
Detergent $/KG Sales FC PCK PC Total
OMO 3 55.12 1.65 0.35 0.35 2.35
Minerva 2.46 17.6 1.4 0.35 0.3 2.05
Campiero 1.7 6.05 0.9 0.35 0.2 1.45

Using Campiero with plastic packaging

FC 0.9  
PKG 0.15  
PC 0.2  
Total 1.25    

Set price 50% of

OMO 1.5
Margin 0.25

Card board cost 0.35

plastic cost 0.15
 The total cost of campeiro with plastic packaging would be $1.25.
 Selling price would be $1.50.
 Total revenues from the existing share would be $5,338,235.
 Total costs for the same would be $4,448,528.
 Total profits would be : $889,707. A 650% increase from what they are currently
making from Camperiro.

4. Should Laercio and the top management be worried about cannibalization? What
measurable guidelines should Laercio have in mind in deciding whether or not he has not
cannibalized other brands by launching his product for the low-income market?
Answer: Top management should be considering 100% cannibalization after the
relaunch of their existing product Campeiro. As the packaging will be changed and in
start the old existing product may face a decline but eventually it gain more market
share i.e. more than 6%. Low-income market is targeted so sales could be the
measurable guideline for this relaunched product Camperio.