The case is about Unilever’s attempt to launch a detergent in Brazil, aimed at lower incomecustomers. The broader question is: Should Unilever Brazil (UB) divert money from its premiumbrands to invest in a lower-margin segment of the market?1. Let us first look at market opportunity. For this, we need to get a sense of the market size.a) What is the Total Available Market (TAM) in the North East region?b) We now define something called SAM, which is the Segment Available Market. It is that portion ofthe TAM that is reachable by you (e.g., a certain geography, a certain income level). How large wouldyou say SAM is?c) How attractive is the segment you have identified above? (Lots of factors could influenceattractiveness – purchasing power, penetration of existing products, ease of access.)d) Given a certain SAM, one can think of increasing sales by either increasing one’s market share interms of users (penetration of new customers) or in terms of usage (i.e., purchase rate percustomer). Which of these two routes is the more possible one for UB?2. As always, you need to have a good sense of the ‘margin arithmetic’ involved in the businessdecision. To that end:a) Compute the unit margin (i.e., $/Kg) for the existing set of products (Omo, Minerva detergent,Campeiro, Minerva Soap). You will find the required information in Exhibits 7, 10, and 13.b) What is UB’s average unit margin across all its products (ideally, you want to compute a weightedaverage, with the weights proportional to the volume sold)?3. Customer Analysis.a) Describe the new customers (North-East region) and contrast them with UB’s existing customerbase in the South-East. Make sure you list not just demographics (income, literacy) but alsobehaviour and attitudes towards laundry.b) What is the relative importance of various attributes to the customer? How well do variouscompetitors do on these attributes?4. Assume that UB has decided to go ahead and enter the North-East market. UB already has threedetergent brands with different positionings. This means they have 4 alternatives they can pursue: i)reposition Omo (e.g., a cheaper version for hand washing clothes, in a reduced package size); ii)reposition Minerva; iii) reposition Campeiro; iv) develop a new product which includes attributesthat North-East customers care about. Very briefly, make the case for one of these options.5. You are told that UB has decided to go with option iv) above. You now need to formulate amarketing mix (4 P’s) for the new product. Given the information in the case (combined with yourcreativity), suggest a Price, Product (i.e., what attributes to emphasise), Promotion (what do youwant to achieve, what message will you use, what media would work best), and Place (distributionchannels) that would best allow UB to create and capture value for low-income customers in theNorth-East region
