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Posted: September 12th, 2023
Expanding Market Share in Low-Income Markets
Expanding Market Share in Low-Income Markets: Unilever’s Launch of a New Detergent in Northeast Brazil
Introduction
Unilever is a multinational consumer goods company with a strong presence in the Brazilian detergent market. However, the company faces competition from rivals like Procter & Gamble (P&G) seeking to gain share in the growing low-income segment. This paper analyzes Unilever’s plan to launch a new detergent powder targeted at low-income consumers in Northeast Brazil. The new product aims to expand Unilever’s market share and profitability by positioning itself differently than existing brands like OMO and Minerva.
Economic Growth Drives Detergent Market Expansion
Brazil experienced strong economic growth in the 1990s following the Plano Real currency stabilization program (Brito, 1998).1 This boosted consumer purchasing power and spending. As a result, the detergent powder market grew at an annual rate of 17% during this period (IBGE, 2022).2 Unilever holds a leading position in the market but faces threats from competitors seeking to penetrate the low-income segment.
Unilever’s Existing Product Portfolio
Unilever currently markets three detergent powders in Brazil – OMO, Minerva, and Campeiro. OMO and Minerva are perceived as higher-quality products with good cleaning performance that have achieved substantial market shares (Euromonitor, 2020).3 However, Campeiro has only a 6% share due to its reputation as a lower-quality brand (Nielsen, 2022).4 This opens an opportunity for rivals like P&G to gain share in the expanding low-income segment.
Planned New Product Positioning
To preempt competition and expand its reach, Unilever plans to launch a new detergent powder targeted at low-income consumers in Northeast Brazil. The product will aim for middle quality at a lower price point than OMO and Minerva by reducing attributes less valued by price-sensitive customers (Brito, 2016).5 Specifically, it will maintain performance on cleaning ability and scent but offer less on factors like dissolving power and color protection. This balanced value proposition is expected to allow Unilever to gain share from both Invico and P&G’s Pop brand in the low-income segment.
Potential Impact and Conclusion
If successfully launched, Unilever’s new detergent powder could significantly boost its sales and market share in Northeast Brazil in both the short and long-term. It would position the company as the leader serving low-income consumers while maintaining profit margins. Overall, the new product launch represents a smart strategy for Unilever to defend its leadership position and profitability against growing competition in Brazil’s expanding detergent market.