A brief outline of the company

[***Ad-Lider Embalagens, SA was founded in 1970, headquartered in the

town of Tres Rios, Rio de Janeiro, which is one of Brazils largest
manufacturers of plastic bags and packaging***]
A commercial office is located in the city of Rio de Janeiro. The company
controls Ad-lider Transportation, a trucking firm that distributes its products.
The firm sells direct to large
accounts and uses 43 specialized
distributors to cover other
accounts throughout Brazil. Total
sales in 1998 were US$21
million and were forecasted to be
in the US$2527 million range
for 2001. The commercial division,
which accounted for 52% of
company income in 1998, had two primary lines, Limp-OLixo, the primary
product, was a line of household garbage bags, sold in rolls, with individual
bag capacities from 15 to 100 liters.


Ad-Lider, one of the Brazils largest manufacturers of plastic bags and
packaging, wanted to launch a new drawstring trash bag product line named
Climp Fecha Facil. The company had already invested one million dollars for
the new production machines. So, the two senior executives of the company
were anxious about the successful launch of the product. For this reason they
conducted a test marketing research where they were specifically looking for
preferences, habits of the consumer which would effect on the pricing, product
size, and distribution decisions of the product. Lazlo Sved and Emilio Figer
were conducted this market research in July 2001. They also wanted to know
that their investing decision would be right in targeting, positioning and
creating value of the product. As their current product mix would not bring
satisfactory profits in the long-term, they were hoping that new product line of
different, modern and favorable cost of the product would help them to
capture market share and could make profit for the company.

Sales of Ad-Lider
[***The firm sells direct to large accounts and uses 43 specialized
distributors to cover other accounts throughout Brazil***]
Sales by region vary greatly: the Southeast accounts for 50% of sales while
the North and Northeast combined account for an additional 25%; the Central-
West and South account for 12% and 10% respectively.

The product line of Ad-Lider
The company had three divisions:
Commercial products,
Industrial products,
Consumer products.

The commercial division
It accounted for 52% of
company income in 1998, had
two primary lines, AD- ROLL
and AD-SHOP. The AD-ROLL
line consisted of plastic bag and
the AD-SHOP line consisted of bags purchased by retailers used at fashion
boutiques and supermarkets for shoppers to carry goods home.

The consumer division
The consumer division sold three products for the consumer and commercial
firms. Their primary product was a line of household garbage bags, sold in
rolls. Second was FREEZER and the third was reinforced bags, which were
sold to commercial firms such as hospitals, restaurants, and building
maintenance companies.

The industrial division
The third division had three product lines: an automated packaging line for
manufacturers, packaging materials and cardboard boxes.

From the 1998 perspective sales of the commercial division accounted for
52%. It had two primary lines named AD-ROLL, which consisted of plastic
bags for produce and meat departments, and AD-SHOP consisted of
shoppers bags purchased by retailers. On the other hand, consumer division
sold three products for the consumer and commercial firms, which were Limp-
O-Lixo, Freezer and Sacos Reforcados Ad-Lider. The primary and most
popular product Limp-O-Lixo which consisted 48.12% of total market share
used as household garbage bags from 15 to 100 liters where as FREEZER
was sold to consumers for storing food in freezers.

Moreover, SACOS REFORCADOS AD-LIDER, which was reinforced bags,
was sold to commercial firms such as hospitals, restaurants, and building
maintenance companies. The industrial division had three product lines.
Those were automated packaging line for manufacturers that packaged
products to sell consumers; packaging materials to shrink-wrap pallets and
bundle products together to eliminate the necessity of cardboard boxes.
These vast three-product line showed diversified and customized vision of the
company.

The Country and its economic condition
[***Brazil is one the worlds largest countries, covering an area of 8.5
million square kilometers. The country is divided into 24 states, two
territories, and a federal district***]
After a long period of high
inflation and economic
stagnation, during the mid
1990s the successful
Brazilian economic
stabilization plan, known as
Plano Real, restored the
purchasing power of the
low-income segment of the
population, which resulted
fantastic sales growth. The
Brazilian Market Research
Association, ABIPEME,
developed a social class classification that was widely adopted by local
researchers, marketers, and advertising agencies. The scheme combined
income, education, and material possessions to define five social classesA,
B, C, D, and E. Classes A and B members referred as the higher class with
the best of everything, classes D and E lacked referred as the lower class and
class C consumers have been described as typical workers, the lower middle
class, and it comprised of almost 12.6 million Brazilian households. It was
seen that Classes A and B made up of only19% of Brazilian households and
accounted for 52% of the national consumption. The lower classes D and E
made up 51% of the households but accounted for only 20% of the national
consumption.

The Demand for household plastic bag
[***In 1997, the Brazilian garbage bag market was estimated to be
around 1.3 billion pieces and was valued at US$120 million***]
The product came in blue and black with capacity/sizes of 15, 20, 30, 50,60
and 100 liters. The bags were packaged as rolls or folded. The rolled bags
came in a plastic bag, and the folded bags were packaged either in plastic or
cardboard boxes. Smaller bags for the kitchen and bathrooms were also
available.

The national brands of trash bags
[***There were three national brands, which could be found in all the
major supermarket chains throughout Brazil***]
The three major national brands were sold directly to the
largest supermarket chains. Wholesalers and distributors
were used to distribute the product to smaller
supermarkets and other small retailers such as meat
markets and fruit stands. With regard to trash bags, the
large supermarket chains tended to work with one leader
brand and no more than two other brands. Fort-Roll was
the strongest competitor to Ad-lider. It was the
manufacturer of Dover Roll, the market leader and a
symbol of quality to many consumers. According to the
Fort-Roll Web site, Dover Roll was targeted to Class A
and B consumers. The company also had products
targeted to Class C Consumers.

Competitors of Ad-Liders
[***There were two national brands except Ad-Lider whose were the
main competitors for the company. But Fort-Roll was the strongest
competitor among them, which was the manufacturer of Dover Roll***]
According to some consumers it was also counted as the market leader and a
symbol of quality. As Dover Roll targeted not only Class A and B but also
Class C consumers, it was threat for Ad-Lider who only targeted class A and
B. Other than these two national brands, there were regional brands and
supermarkets own brands, which were also accounted as competitors for Ad-
Lider.

Objectives of market research
[***For marketing research the main task is to prepare the objectives of
the research which includes broad research as well as the some brief
specific research***]
Sinergia was a well-known and respected market research firm. Ad-Lider
commissioned Sinergia to conduct a research on focus groups in November
1999. The objective of this research was to evaluate the acceptance of the
new Easy Close garbage bag. Here they actually focused on the preferences
of the consumers, and their expectation and acceptance level of the new
product. It was necessary to know before the launch because a successful
integration of launch needed full blow.

Focus group on market research of close garbage bag
[***The research was basically done on two states named Rio de J aneiro
and Sao Paulo***]
Between the two states, in Sao Paulo they were focused on housewives living
in apartments and houses. On the other hand, in Rio they were focused on
only housewives living in apartments. In both cases they did not focus on
male participants. In addition 74.14% buyers of the trash bags were women.
Moreover, participants were selected from the social class A and B not from
other social class. Thats for the result might be misleading. Nevertheless, all
participants were involved with household responsibilities and they were all
the users of plastic bag for disposing garbage.

Difference of participants of market research in Sao Paulo
and Rio de Janeiro
[***In Sao Paulo the participants were married women under the focus
group of participants living in houses. The participants all were aged
like 28 to 40 years and having children. And the minimum educational
level was high school for this focus group***]
Focus group participants for living in apartments were married and single
women whose ages were between 28 to 39 years. These groups mostly were
highly educated with a university degree. In addition, most women of these
groups were professionals with careers like in clinical psychology, education,
nutrition, and small business. This career management reflected that their
family income was comparable to the family who lived in houses. As a result
the research would show the same purchasing level for both groups with
diversified customers.

Moreover the participants of the focus group living in the apartments in Rio de
Janeiro were mainly single and divorced women whose ages were within 32
to 42. The qualifications of these group was having children or not and had a
high school graduation similar to the housewives of Sao Paulo who living in
the houses. In here some minority women were traced as professional
women. It reflects that their family income was comparable to the Sao Paulo
groups. The most difference in lifestyle of the two states were the participants
of Rio were more active than Sao Paulo as they were going to gymnasium,
sports participants or walkers where other group did not.

Test market research of Climp Fecha Facil
[***Before the launch of Fecha Facil the company wanted to conduct
second market research during May J une of 2001. Though the product
had already placed in Sendas Supermarket in Rio during from April
2001, they initiated this additional consumer test market research to
determine the profile of garbage bag purchaser by gender, frequency of
garbage bag purchases by households, the relative market shares of
major brands***]

It also determined the primary motivators or concerns with the purchase of
garbage bags and how well the new product competed with the Dover Roll
with-a-handle bag. On the other hand, Purchase Intercept
Interviews were conducted on seven consecutive
Saturdays, AprilJune 1999. Moreover, all interviews took
place in 29 Sendas Supermarkets. Within total 528
interviews 495 were considered valid because they did not
fulfill the other criterion. Besides that, Dover Roll was on
sale for two weeks when the interviews were taken. Even
more, the Limp-o-Lixo brand was on sale in final weeks of
conducting research. This indicates that before entering
the market Fecha Facil faced the competition not only with
other national brands but also with its existing brand
products.

Interview guideline for market research of Climp Fecha Facil
[***Ad-Lider had conducted market research for the successful launch of
Climp Fecha Facil. For this reason they followed a specific guideline so
that they can acquire most of the information regarding the consumers
preferences and the market demand of the products***]
At first they tried to warm up the interview session to the consumers so that
they could have a great introduction. In here they mainly focused on how they
would conduct the research and what type of product development they
wanted to came in the market. Besides this the interviewer also asked about
the name, age, profession, civil status, kids etc of the interviewee to attract
the attention of interviewee. After that, interviewer asked about the habits of
interviewee. Here they mainly focused on day to activities of their family, what
they wanted to do and not, daily domestic activities they needed to do. They
also asked about the dependence of maids in household chores, and whether
the participants were enjoying the work or not and many others question
related to domestic chores. Then interviewer moved the topic to cleaning
materials to the participants whether they were user of this product or not.
After giving the introduction of the product interviewer asked interviewee who
would take decision about purchasing, what type of products attracted them
most, how much time they bought it and many other related questions. They
also asked about the consumers behavior regarding storing and disposal of
garbages, what will make them happy and what was their expected product
criterion from the manufacturer, etc. The interviewer not only focused on
individual product but also asked consumer about the competition of the
product, what brand they preferred most, what was their ideal package in
terms of their perception. They also took information about what were the
special changes and additional requirements consumers were looking for in a
new product if it was entered into the market like color, size, quality and
maximum price they wanted to pay for the product and so on. The interviewer
also took the feedback and reaction of the consumers so that the research
would be successful and would imply in real situation.

Focus Group for the trash bag in Brazil
[***In earlier period of November 24 and 25 a qualitative research had
done by Ad-Lider to evaluate the acceptance of new garbage bag Fecha
Facil and to know about packaging preferences***]
They conducted this market research on Rio de Janeiro
and Sao Paulo. In here they took two focus groups, one
was residents of apartments and another was residents of
houses. Most cases it was seen that the purchaser of
garbage bags were female. According to research almost
74.14% female took decision or purchase the products. So,
the company targeted only housewives for their research.
Now, the difference of perception and purchasing decision
of housewives were analyzes both in Rio de Janeiro and Sao Paulo.



Similarities of regular activities of housewives
[***By the interview it was found that there were similarities among the
housewives***]
Most of them were hurry, quite involve in household chores and administration
of houses like the schooling of children, shopping. After that some of them
were professionally involved in other activities. As Rio people were more
active than Sao Paulo, it was also reflected in women participation in
professional jobs at this state.

Dependents on Maid
[***For the domestic work, most of the housewives took help from
permanent maid or from temporary. If housewives did not take help of
maid, had to perform some of daily duties like cooking, cleaning and
laundry by own***]
They actually liked to cook but disliked cleaning the whole houses and for this
reason they tried to avoid it. Besides this as the housewives of Rio was more
outgoing, loved to take care of own physics, more dependent on maids. On
the other hand, housewives of Sao Paulo were more demanding from their
maids. But it was not possible for maid giving exactly the same services what
housewives wanted. As a result, household works were not separated from
the life of housewives.

Ultimate purchasers of trash bag
[***Housewives made majority of the time monthly shopping for cleaning
products. It was vary rare when a husband was involving in this
process. But in younger couples in Sao Paulo were involved in
supermarket shopping. But in Rio, husbands or boyfriends was more
involved in decision making of purchasing products***]
Some men did involve in purchasing and making decision. But the ultimate
purchasers of cleaning products were female though their husbands,
boyfriend loved supermarkets. Moreover, it was seen that some women were
loyal to one brand while purchasing. After analyzing it was found that women
were more rational where man were more curious about trying a new product
regardless of price.

Factors influenced in purchasing decision
[***The most important factor in purchasing cleaning products was
purchase decision. And it was mostly found in houses of Sao Paulo***]
Advertisement was one of the influencing factors of purchasing decision. Price
was the practical and quality is the fundamental attributes for making
purchase decision. Some of the housewives understood quality as it was
working or not. And they preferred that product which is good and efficient.
Last of all, the promises of products to work were referred as quality. So, if a
new product may fulfill these requirements at a time according to housewives
they would buy the product.


Color preferences of consumers
[***It was found that color preferences varied from states to states as
well as residents in apartments to houses***]
In Sao Paulo, there was a predominant usage of the black color as it
perceived more durable than the blue bags. In Rio de Janeiro, the black color
was not available in the domestic market. And therefore the blue color was
associated with garbage bags. There was a perception that black bags more
used for large quantity. Similarly, the residents of houses like more black one.
Their perception for black bag was quality. Some residents also said that
black bags were cheaper but the quality was better. Somewhere blue bag was
used for storing. However black bag was more preferable than blue one
regardless of residents live in houses or apartments.

Size preferences of consumers
[***Size of the trash bag was another important factor for purchasing
decision***]
In regards to size in Sao Paulo residents of apartments used 30 L and 50 L
bags more for bottles and kitchen garbage though there were 20 L, 30 L, 40 L,
50 L, 60 L, and 100 L bags available. But in Rio residents were more used 15
L, 30 L and 50 L bags. In Rio, residents of houses were the highest user of
black bags capacity of 60 L. In addition, 20 L and 30 L blue bags were used
as the supermarket bags. but for all sectors it was found that everyone
preferred 100 L black Bags for storing of huge garbage.

Perception difference in brands
[***It was surprising that there was no brand recognition among the
residents of apartments of Sao Paulo. But among the residents of Rio
brand recognition had been found a little bit***]
They somewhat easily named Dover Roll which had little strap and found in
30 L size. Besides the residents of apartments, housewives living in houses
recognized the name of trash bags. Those were Pro-Lixo, So-Lixo, Pra-casa,
Nips and So-Limpo. From the above research it was not clear which brand
was more preferable to the consumers.

Preference of garbage use among consumers
[***Besides the size, color it was important that in what type of work
consumers wanted to use garbage bag. In both cities, supermarket
plastic bags were used for small garbage such as bathroom and kitchen
garbage. But the use supermarket plastic bag was higher in Sao Paulo
than in Rio***]
In Rio, the usage of the supermarket plastic bag was more closely associated
with its ease of closing due to its handles. Some participants said that the
purpose of using trash bag was to throw away the garbage from the houses
and for that they prefer handle in trash bag. Residents of houses used
garbage bag in the house like in kitchen, bathroom.

Quality preference of consumers
[***Quality was the most important factor for purchasing products.
Whether some person gave more importance on it or some did not. The
importance of a strong garbage bag was clear in Sao Paulo as in Rio***]
Consumers actually preferred strong, thicker garbage bag because it
provides high hygienic quality and closing facility in a roll. For this reason
some used Dover Roll as they offered these services to its customers.
Conversely, consumers liked handling as a closing system in a roll but they
faced lots of problem for that. Sometimes it was found that the quality of black
bags in supermarkets was not good enough. And for that reason they were
looking for warehouse bags as they offer better quality. Moreover, consumers
understood better quality means of thickness of the product.


Problems faced regarding storage of garbage
[***From most of the trash bag consumers, it was found that they faced
problems regarding quality and closing system. Some said that it was
horrible to close when the bag was in full***]
In addition, if the bag had handle teeing the bag with stronger knots was
difficult because the handle was then broken down. Furthermore, it was found
that detaching handle in hurry time was difficult because it then didnt cut but
ripped. Without handle carrying 100 L bag created difficulties for the
consumers. For that reason they had to use blue color bag. Because of the
poor and weak quality sometimes consumers faced problem like it ripped
easily.

Garbage bags in supermarkets
[***Going to shopping housewives faced lots of problem regarding
purchase of trash bag. There was lack of packaging. Moreover, disorder
of shelves and aisles of the supermarkets were made confusion among
the availability of the products***]
Trash bags were all hidden, completely disorganized and mixed most of the
time with other products. Even more, they were placed on the bottom shelf
with the cleaning products. Most of the time blue bags were out of the market.
For this reason consumers could not recognize the brand. There was no size
measurement facility at the supermarket while purchasing trash bag.

Recognition of brands
[***There were numerous brands of bags in the markets but not every
one running well and recognized by consumers. In Rio, the housewives
were more in tune purchasing garbage bag than Sao Paulo. For this
reason it was difficult to find brand loyalty among the consumers***]
After asking some consumers could recognize some of the brand like Dover
Roll, Sanito and Lixito. Though these bags were similar in natures and color of
blue, were differing in texture, resilience. From the consumer perspective
Lixito was associated with fragile, Dover Roll with roll, and Sanito to
cleanliness. The other brands were recognized by the housewives of Sao
Paulo were Saco Limpo, Pro Limpo, and Pro Lixo and in Rio were Modeplast,
So Lixo, Pralixo, and Vulcao. But between the brands, consumers could not
clearly define the similarities, differences, or even the preferences. Because
of poor packaging and brand on products, consumers could not recognize the
brand as well. So, actually packaging system affected the recognition of brand
in regarding purchase.

Resilience and important preferences
[***Resilience of trash bags implied the toughness and flexibility of
storing garbage. For this reasons it was a fundamental factor in
choosing garbage bags. And it had a perception that a good quality and
strong bag would have weight***]
This attribute was valued more by the people of Rio de Janeiro, since in Sao
Paulo. They found that black bag implied more strength. Though resilience
was important for the housewives of houses, the norm was in using blue one.
If they decided to buy, the purchaser had determined it already. So, the
important issue for this focus bag was the choice of purchasing trash bag for
the type of usage.

Capacity was the first issue for purchasing products from the point of view of
some consumers. And resilience and price also affected the purchase
decision also. Though closing aspect was not mentioned as a main aspect of
purchasing but it affected the purchasing decision also. Color and
transparency had also affected in purchasing decision. Because they both
were related with privacy issue and it was a important issue. Nobody wanted
show what type of garbage was being thrown outside.

Expected requirements from Ideal garbage bag
[***From the consumers point of view basically the ideal garbage bag
needed to had the qualification of easy closing system, resilience with a
different color from the others existing products***]
In Sao Paulo, an efficient closing system was expected from both houses and
apartments residents. Because it was very difficult to close strongly a 100L
black garbage bag. Resilience followed closely in importance after the closing
feature, which was followed by the color and capacity of the bag. In Rio, color
and resilience came before the closing attribute. However, ideal bad needed
to have in different color so that it could easily identify from the others and
gave above benefits within a low price. Overall, the ideal bag needed to have
a closing system, be resilient, opaque and not too clear.


Reaction of showing the dreamed Ideal garbage bag
[***After pulled out the similar of consumers expected bags the reaction
of them was pretty much similar. They were excited to see that kind of
product. Because it fulfilled almost the entire criterion what they
expected from the trash bag having the facility of easy closing,
carrying the garbage***]
Furthermore ideal bag fulfilled the expected texture, size, and quantity of bags
inside packaging. And the package had information table by which consumers
easily could make their choices. From every aspect it fulfilled the expectation
of both states consumers. But some consumers said that it was too big for
using outside and too big for using inside. If the company would come up with
different sizes of the ideal bag, consumers would be more satisfied. Because
it fulfilled the closing preference of Sao Paulo and brand name of Climp for
the residents of Rio.

Preference on plastic and box packaging
[***As the company wanted to come up with two packaging system
plastic bag and box, they showed it to the focus groups. The plastic
packaging was shown to the house group of Sao Paulo and apartment
group of Rio. And box packaging was shown only to the apartment
group in Sao Paulo***]
The residents of Sao Paulo both consumers liked the box packaging because
it is more practical, pretty, different and easy to take out the bags from the
packet where it was difficult to pull out from the plastic packaging system.
Furthermore, some residents preferred plastic system because it associated
with low cost where box seemed more expensive. But while it was said that
both had same price, most of them preferred to buy box though it was for
small packaging. In Rio the reaction was just negative. The consumers
preferred plastic packaging system because box was associated with more
expensive, could wrinkle and got wet and too chic. They did not like to shift
their preferences from roll to another one. So, the reaction for the participants
were varies from state to state. There was no specific way out of the situation
if they considered this represented the whole market.

Preferences in packaging elements
[***After displaying green and blue color bag with different design
elements to the interviewees, reaction had varies in focus groups. Here
consumers examined the preferences of color, design, attractiveness,
exposure and clearness***]
The residents of apartments in both cities responded to the changes. Some
preferred blue, some preferred green. Surprisingly there was a tendency to
mix up the boxes with colors. But it appeared that blue package was more
attractive and some participants gave suggestion about it also. But house
groups liked to mix both packages in antagonist manner like they wanted blue
bag with green design, green with blue design. But overall they liked the
changes.


Evaluation method of Climp Fecha Facil
[***After analyzing the packages, garbage bags with the Fecha Facil
system; it was distributed to the consumers to evaluate the expectation.
Though it had been well described in the packages, all consumers liked
to test the handles***]
As the bags were empty, participants could not realize how much would it
hold and how the handle would work. After showing the process participants
agreed the efficiency. Again, the color was very much related to resilience.
When they were shown darker bags with handles, they associated them with
a better texture, and when they tried the clear bag, the first reaction was weak
bag. Some suggested to product with side stitching. However the house group
of Sao Paulo reacted well to the new product as practical, hygienic but they
mentioned size of 50 L as a problem.

Resilience of Climp Fecha Facil
[***Some interviewee argued that resilience would be most in thicker
ones. From the presentation and packaging system it seemed that bag
would provide better quality and resilient. Some argued about color with
quality. They preferred darker one for usage***]
If the company could provide the product, they would switch of from the door
to door supplier. Another thing would be important for the purchasing of bag
was price, size and capacity. If all of the above qualifications were fulfilled and
price was affordable for the consumers they would like to try it.

Advantages of Climp Fecha Facil
[***The first advantage of Fecha Facil was the better closing system
from other existing bags. The best feature of the product was it would
be easily closed without leaking and consumers could easily carry it by
the handles***]
The critical site was the price. If it was affordable the new product could grab
the consumers attention more. Another feature of the product was it could
use in storing of sheets, shoes, dirty cloths, towels, books or cloths which was
not usable and they could hang it as well. Without good and attractive feature
it could not attract the market and for this reason features were important
issue in purchasing and making purchase decision.

Price expectation of Fecha Facil from consumers
[***Price was the important determinant of purchase. There were
different price perceptions between Sao Paulo and Rio. This difference
basically existed in the groupings of existing garbage bags in the
market***]
In Rio the existing garbage bags were simple and weak or the competitor
product of Dover Roll were more milky, thick, and had a closing system of
wings or ears. On the other hand in Sao Paulo, there was no differentiation
only blue bags were perceived as weak with weak handles. However,
housewives did not believe that the handle could be a differentiator of existing
blue and black bags.

Though having additional features in Fecha Facil, consumers were willing to
pay differently. In Sao Paulo the participants of apartments would pay the
same as for Dover where participants of houses were liked to pay a bit more.
But in Rio the participants were liked to pay more for compensating additional
features of the product. In controversy, some argued that products would be
too expensive and doubted about the price they were willing to pay would be
worthy or not. However, there was a preference stated for a green color as
perceived as prettier, different and easier to find on the shelf. With regard to
color vs. resilience, darker colors were stated as better as it appeared to be
more resilient.

Tie Tie Bag
[***For the better market research, interviewer was also showed tying
system to the interviewee where the bags could be tie with plastic or
twist-ums. But still consumers were liked the handle bag***]
Besides, some interviewees believed the bag would be more resilient under
the weight of the garbage and would be cheaper. But some believed that the
method would be more complicated due to the number of edges. For the
Handle Tie, the perception was the same and there were two controversies
also and it seemed that would be much cheaper than the drawstring. Finally,
with too much controversy and expectation Climp Fecha Facil would be a
competitive product if the company could launch the product successfully.
And then competitors had to be in scare.