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Date Submitted: 06/10/2012 06:43 AM

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Yes, Unilever should enter the low-income market. 48 million people live in NE Brazil with a per capita income that is 65% lower than that of those in SE. Plano Real and recent investments by the government had boosted the purchasing power of the poorest 10 %, by 27% per year. The detergent market in the NE ($106 million) was growing rapidly (17% annually) while the bar market was equally large ($102 million) and growing, albeit slowly (6% annually). The penetration of detergent and bar was high (97%) and comparable to that of the affluent SE. Usage of detergent in NE was 28% higher that that of those in SE—this was attributed to the fact that NE consumers were poorer, had fewer clothes, but took great personal pride in cleanliness of their clothes and therefore washed frequently. Cleaning clothes was a social event not a chore—women in the NE had more free time and cleaning was done with other women at a communal public laundry, river or pond.

Although Unilever was a leader with its premium products it has failed to excite the low-income group: Campeiro detergent, targeted to the low-income population only accounted for 6% of the NE market share. The low-income bar market had no dominant players: Unilever’s Minerva led with only 19%. Total sales for all low-income brand detergents was only $12 million and with a low degree of penetrancy.

Our analysis of the detergent market in NE shows that of three predominant income segments (Table 2) the low income segment is the largest, untapped and fastest growing. All these are compelling reasons why Unilever must target the low income market. If Unilever, overlooks this market and continues to focus on the premium brands it may be soon fighting the Nirma wars!

Unilever has the following options:

1. Develop a cheaper version of the Omo—this is not ideal as Omo is perceived as a premium brand with a market share of 52% and has been embraced by higher-income families. A cheaper version will weaken Omo’s dominance as a...