Download - P&G Value Pricing
Presented ByErnest Sundar
Shyam.ASojan Jose
Sreehari.S
Case Objective• Value pricing strategy - reduce coupon promotion,
distribution channel and increase advertising.
• Long term changes in pricing and promotion
strategy due to value pricing.
• Brand loyalty and customer & competitor response.
• Impact of market share.
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Light Duty Liquids ( performance, mildness, low price)
Competitors – Colgate Pamolive & Level brothers
P&G Products in case
Coffee (roasted, decaffainated, instant)
Competitors – General Food Corps, Nestle Co.
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Improve Logistical efficiency (price pack, swings in price and
production)
Increase brand loyalty in short and long term run – cut coupons and
deals, boost product and brand awareness with technology and value
message
Create strong brand franchise by creating strong consumer loyalty
Goals of Value Pricing
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Contrarian strategy as against competitors – increase in
promotion (15%) and decrease in advertising (20%)
Marketing and Pricing decision
ORG - Toothpaste Market Review ~1993 6
How to increase market share while increasing profit.
How much to reduce in list price of products.
Smaller cut in price is less risky restoring price parity with
competitors.
Bigger cuts would reduce customer credibility there by
impacting brand loyalty.
Conclusion
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Both products had significant marketing plans which could
have positive impact on the company.
Time available was very less to experiment/market test or
perform detailed data analysis.
P&G had to go with the both products’ proposal on list
prices and budget changes with certain risks and success
depending on sales force and customer’s action.
Recommendation
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P&G’s value pricing is a major policy change affecting
brand and successful by measures of profit (short term)
P&G, a company that traditionally measured success by
volume (market share) its value pricing strategy had a
large enough adverse impact. (long term)
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