Unilever in Brazil
b) Impediments
Situation Analysis, Evaluation of Options and Recommendations
Situation Analysis of the Market
The Product Positioning
Options for the company
While attempting to increase its market share in the Northeastern part of Brazil, Unilever is faced with the problem of deciding on the most appropriate strategy for product, branding and marketing. They must consider factors such as the creation of the value proposition, the brand positioning of the new product, whether to create a new brand strategy for the new product or to continue with the old strategy, product characteristics so that it suits the needs of the customers, appropriate packaging for the new detergent, the pricing strategy, the promotional mix and the distribution channels to be established are the issues of decision making for the executive management of the company. The target market is a new market that Unilever is trying to enter which is composed predominantly of low income groups but with significant population.
Executive Summary
Recommendations
Having decided to venture into a new market segment that is located in the North Eastern part of Brazil, Unilever is faced with a problem that is common to most corporations. The company has made a detailed survey of the market and now needs to formulate a strategy for its marketing and production team for the new target market (Mullin, 2006). The target market consists of low-income groups of the region and the company wants to market a detergent. While the size of the targeted customer base is significantly large, the customers have distinctly different consumption and purchasing habits when compared to other market segments that the company operates in. By entering the low cost segment, the company wants to extend its market share of more than 75% is enjoys in the present regional market (Cadogan, 2009).The company is yet to market a detergent aimed specifically at the low income customers of the region. Proctor & Gamble with a market share significantly lower than that of Unilever, is the primary competitor of the company in this segment.
To address the choice of decision the suggestions for the company are:
The company should create a new brand position for the new product to be launched along with the creation of a new value proposition different form the brands of the company already present in the market (Getnet, 2008).
A new brand for the new product that has values for the target customers is to be created
A completely new product is to be manufactured that incorporates the characteristics according to the descending order of importance attached by the customers to detergents.
Competitive pricing strategy should be followed keeping in mind the disposable income of the customers (Mullin, 2006)
ATL promotions could to be done with emphasis on TV commercials
The specialized distribution channels is suggested for distribution
b) Impediments
The new product eating into the market share of the existing products of the company seems to be the most important issues of concern for a section of the senior management at Unilever in Brazil. However, this is just one of the problems for the management (Cadogan, 2009).
The impediments to the new marketing proposals are:
Value Proposition: the low-income groups of the target market are not included in the present brand positioning of the company detergents. The solution is creating a new 'value for money' position for the new product (Getnet, 2008).
Brand Strategy: the rumors about the company reducing the brand portfolio of the company means creation of a new brand might not be possible. A solution is to use any one of the existing brands of the company that is active in other parts of the globe but not in Brazil.
Product: investing in creating a completely new product. The solution is to make necessary but subtle changes so that cost of production is not significantly increased.
Price: impediment is to ascertain the right price that the customers would be willing to pay for a product that would be of a somewhat better quality than the rest of the market. The solution is to fix price taking into consideration the production costs and promotional costs but excluding the initial distribution costs (Mullin, 2006).
Promotion: the very high costs that is associated with ATL promotions. The solution is to restrict ATL promotions primarily to TV which would cut down on the costs of other outdoor promotions and concentrate more on point of sale promotions (Cadogan, 2009).
Distribution: impediment is the limited reach of the specialized distributors and their inability...
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