Marketing Strategy
Assignment 2

Unilever in Brazil

Team 89

1) Are there any dangers for Unilever in starting to focus on low-income consumers? And, if there are, how can the risk be mitigated ?

It is obvious that there are dangers for Unilever in starting to focus on low-income consumers in this case. There are two sides of dangers that Unilever is facing, on the one hand is the threats to possible profitability; on the other hand is the threats to Unilever brand.
Threats to possible profitability

The first threat is the residents in the Northeast are lack of disposable income. It is mentioned in the case that the per capita income is $2,250 in the Northeast compared with $6,600 in the Southeast. It became a problem for Unilever when making the decision because if the residents do not have enough money to afford the product, then introducing new product will definitely become a failure. It is also mentioned that Unilever does not obtain sufficient knowledge of low-income consumers. It can be a threat because Unilever does not know the target group well which may causes some problems. In order to fix this problem, it is recommended the company should do a marketing research. Similarly, Unilever has no experience of implementing such a marketing strategy for this segment before. So it is better to formulate a proper marketing mix which perfectly aims to solve the problems.
The second threat is there are already other products exist in the low-end market. For instance, Campeiro is owned by Unilever and occupies 6% of detergent market. Pop is also a product positioned to low income consumer which is owned by the biggest competitor P&G. Meanwhile, there is a brand named Invicto which can be seen as the key competitor of Campeiro. These three brands all focus on cost reduction across all dimensions; therefore they have become the main