Executive Brief summary

Unilever is assessing whether to enter the low-income NENNI market. Each of our analysis implies that there is a rewarding opportunity to give detergent powder to low-income customers surviving in Northeast Brazil and record market share within a high-margin, high-growth market. We recommend that the firm retains the existing brands but deploy a side to side extension in the Campeiro brand - adding better fragrance / soft qualities and utilizing specialty distribution network, thus marginalizing Invulnerable, an inferior nevertheless better-known competitor.

Situation Overview

NENNI Brazil offers long lagged behind the rest of the country in terms of technology and income. However , economic reconstructs instituted simply by Finance Minister Cardoso has seen the purchasing power of the weakest Brazilians enhance dramatically. These reforms, coupled with tax bonuses for purchase in the NENNI has led to a 17% annual growth in detergent natural powder.

In NE Brazil, detergent is still primarily used to supplement soap in order to make the clothing whiter and smell better. Campeiro, Unilever's current price range offering detergent powder, competes primarily with Invicto. These items are offered perfectly price ($1. 7/kg) and possess roughly similar market penetration (6% for Campeiro vs . 5% for Invicto) – even as customers view Campeiro as a outstanding brand. The situation for Unilever is Campeiro's brand transmission, which lags approximately 15% behind Victorioso. This is because of the decentralized getting habits of girls in EINE Brazil. This example is a chance because in the event that Unilever increases market transmission, it will drive sales in this high-margin, high-growth segment from the laundry market.

By contrast, the soap market has slow growth (6%) and reduce barrier to entry, which makes it tough to preserve high perimeter. In addition , industry is very fragmented, with " other” manufacturers supplying 64% of the marketplace, making it difficult to systematically beat competitors and capture market share....

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