Case Study of Hindustan Unilever Ltd.

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25 Feb 2020
Identification of problem
Unilever is one of the leading producers of packaged consumer goods. In Brazil, it holds 81%
of the market share in the detergent industry by providing detergent brands like Omo,
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Campeiro, and Minerva (Whitney, 2018). Among the total population of Brazil, 28% are low-
income consumers (Golubkina, 2019)). These populations have a per capita income of $2250.
Due to the availability of more free time, they wash clothes frequently and consider it as a
pleasurable activity. However, this segment of the population is completely neglected by
Unilever, thereby losing a major portion of customers from Brazil population.
Question 1: Should Unilever divert money from its premium brands to invest in a lower-
margin segment of the market?
The Unilever company should divert its money from the premium brand to the low priced
brand. It is because the low-income segment is not occupied by any of the giant detergent
companies in Brazil, therefore, it facilitates sufficient opportunity for Unilever to expand its
business in this segment. In this context, the brand should launch new products in the market
by targeting the low-income population without curving the existing premium brands (Pant,
& Ramachandran, 2017). In this way the company is able to capture a wider range of
customer base who are able to purchase premium or low-cost detergent, according to their
income level. This approach of Unilever to deliver value to the low income what pollution
will help in growing and maintaining its market share, thereby gaining competitive
advantage. However, Unilever should consider the low-income consumer behavior for
identifying their motivation as well as the decision-making process, prior to investing in a
low priced detergent.
Question 2: Unilever already has three detergent brands with distinct positioning. Does it
need to develop a new brand with a new value proposition or can it reposition its existing
brands or use a brand extension?
In the Brazilian detergent market, Unilever has three major brands in the detergent powder
section; Omo, Minerva and Campeiro. While, the laundry soap section, Unilever possesses
only a single brand; Minerva. Therefore, it is suitable that Unilever should reposition its
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