Case Study: Ad-lider Embalagens, SA: Marketing Research for Drawstring Trash Bags

in Brazil

Course: Applied Business Research-6840

Instructor: Dr. Huma Amir

Submitted by: Anum Sadik

ERP Number:03159

Due Date: 18th September 2017

Executive Summary

Ad-lider, one of Brazil’s largest manufacturers of plastic bags and packaging, is on the verge

of launching the new product “Drawstring Trash Bags” in the market. Both the partners,

Lazlo Sved and Emilio Figer, are hopeful that the new product will outperform the already

saturated market and hence left no stone unturned to make the launch a success. They not

only invested $1 million in the production line but also engaged an eminent marketing

research firm “Sinergia” to carry out an extensive market research.

With the help of this research report both Lazlo and Figer, wanted to make the launch a huge

success by doing the right targeting, positioning and most importantly by creating a value for

the consumer that would convert into sustainable profits for the company. The current

product mix at Ad-lider was not considered a source of competitive advantage in the long run

and thus the successful launch of new product was even more essential.

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Problem at Hand for Ad-lider

The main problem faced by management at Embalagens Ad-lider can be divided into two

parts, long term and short term business objective for the Company.

Management Problem

Short Term Business Goal: Establishing the main features or attributes that are necessary for

a successful launch of a new product using the optimal combination of marketing mix. 

Long Term Business Goal: What should be Company’s strategy to have a sustainable source

of profits in the long run. Will Product line extension be a reliable strategy to maximise

profits in the long run? 

The crux of both these problems can be summed up as ensuring stable streams of cash flows

and maintaining profits for Embalagens Ad-lider as a group.

Marketing Problem

To determine consumer preferences, habits of consumer and perceived advantages that would

impact the launch of the product (including marketing mix combination of price, placement,

packaging and promotion).

Causes of the Problem faced by Ad-lider

The Company wanted to have sustainable profits, the current business portfolio was not a

source of competitive advantage and in turn stable profits in the long run. Only by extending

their current business and product line, Ad-lider will be able to have stable stream of cash

flows and thus viable source of profits.

Thus, too solve the current problems, the Company decided to carry out a marketing research

that would aid the management in better decision making. The main objective behind the

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research was to find out what should be the marketing mix combination (price, placement,

product and promotion) for successful launch of a new product. How the consumers will

respond to the new easy Close Packing Garbage bag and the perception of customers to this

new added feature in garbage bags.

To carry out the market research the company used both qualitative and quantitative methods.

For qualitative research three focus groups were carried out (two in Sao Paulo and one in Rio

de Janeiro) from participants of Social Class A and B. The participants selected all had

household responsibilities, that included supermarket shopping for the family and all these

participants used plastic bags for garbage disposal. 

Through the market research it was find out that the two urban cities differed widely in terms

of the size of the trash bags employed, frequency of use, packaging and colour preferences.

For instance, the preferred colour in Sao Paulo was black, as it was considered more durable

than the blue ones. Whereas, in Rio de Janeiro the consumers preferred blue garbage bags

over black garbage bags. One reason for this was that black garbage bags were rarely

available in super market and secondly black ones were more associated was for large

quantities of garbage. As far as prices were concerned Sao Paulo had more price conscious

customers as compared to Rio de Janeiro customers. Price and quality mattered for these

customers more.  

As far as the quantitative research is concerned, Climp Fecha Facil garbage bag was placed in

Sendas Supermarkets in Rio de Janeiro for market testing and purchase intercept interviews

were conducted.

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Summary of Research Findings

Key Implication Action

Learning
Color Dark colour bags were synonymous Ad-Lider should go with bags that

with resilience, durability and are dark in colour. Green bags are

strength. Black was the preferred a great option too as it was well

colour in Sao Paulo. In Rio de Janeiro received in the market. However,

the consumers preferred black company should never go for light

garbage bags. or transparent bags.

Garbage bag segment. Top of the great opportunity to increase

minds brands are very few and brand equity and recognition

customers take some time to recall the through a combination of ATL

brands that they use. and BTL activities.

Advertisements and sales

promotion can be used to increase

customer awareness about the new

easy to close bags.

cost demanded by the consumers. product to be successful. Since

Price was the prime factor under garbage bags are low involvement

consideration when buying among product price is the prime

different brands in Sao Paulo. consideration during a purchase

decision.
Placement Three major brands of garbage rolls. Ad-Lier will have to use its strong

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 Easily found in all supermarket existing network with retailers and

chains. However, some supermarkets super market so that they push the

were only stocking one or two top new easy closing bags. Also, this

leading brands. Moreover, some might mean that Ad-Lier must

supermarkets also started their own offer higher margins to its

brands of trash bags. Typically placed retailers.

with house cleaning products and

were not given a place of high

visibility.
Packaging Garbage bags were either packed as Ad-Lier has a great opportunity to

rolls in plastic bags or were folded in seize the economy and super

cardboard or plastic boxes. However, economy packaging market. More

consumers were not aware of volume would mean more profit

economy and super economy for the Company.

packing.

Alternate Path for Ad-lider

 The colour of the trash bag will play a significant factor in increasing the brand

awareness, the Company should go for a colour that is clutter breaking and from the

darker shades like orange or red. Since black and blue are already readily available in

the market introducing the garbage bag in the same colour will not be able to generate

much interest and thus recognition.

 Since perceptions play an important role in consumer behaviour therefore the

Company can price its product above the market. A higher price is usually associated

with higher quality thus the Company will be able to create an image of high quality

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 product company.

Way Forward for Ad-lider

 The Draw String Trash Bags in the initial phase should only be introduced in the sizes

of 50Litre to 100Litre. The smaller SKU of 15Litre and 30Litre will not be feasible,

because people will not be willing to pay a premium for it. Moreover, for small

quantities of waste people were even utilising supermarket plastic bags like bathroom

and kitchen garbage. Also use of the supermarket plastic bag was higher in Sao Paulo

than in Rio. 

 Brand recognition and loyalty is already low in this product category. Therefore,

effective consumer engagement activities should be carried out to not only increase

brand awareness but also to generate interest in the product. Both ATL activities like

TV promotions and BTL activities like sampling and sales demonstrations should be

carried out to promote usage. Moreover, this will lead to word of mouth promotion

which will further improve brand awareness.

 Both the product performance and imagery should be highlighted in the brand

communication.  The element of “Performance" will define how string trash bags will

meets the customers' needs. "Imagery" on the other hand will describe how the new

garbage bags will meet the need of customers on a social and psychological level.  

 Retails promotion should be carried out for the draw string trash bags. This will not

give the much-needed visibility to the brand but also increase consumer awareness

about the benefits and advantages of this product. Additionally, this will result in

increasing the brand equity which will result in a sustainable source of profits in the

long run.

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Reference:

1. Building Customer based Brand Equity: A Blueprint for creating strong brands by

Keven Lane Keller