GiftM987Z225

ChangM987Z221

VanM987Z256

SteveM987Z229

MartinM987Z208

GROUP 8

ROLL-OUT LAUNCHROLL-OUT LAUNCH

• P&G Background and product lines

• Branding and Positioning

• Marketing Strategy and Innovation

• Local Market Needs: US & Europe

• The BC-18 Product Development in US& Europe market

• Solution to differ US& Europe

• Concerning point of P&G Spending

• Conclusion & Suggestion

• P&G – A roll out launch

• Question and Answer

P & G Company Background• P&G was founded by William Procter and James Gamble in the USA in

October 31st 1837.• Procter and Gamble (henceforth to be called P&G) is an international

supplier of consumer goods.• Procter & Gamble started as The Charmin Paper Company, producing

paper towels and tissues until the union of the two enterprises in 1957. As a “joined force” with Procter & Gamble, they produce and market the softest and most popular bath tissue in the retail industry – Charmin. Today, with operations in over 80 countries, P&G holds the largest and strongest brand portfolio of any consumer products good company in the world with a focus on products that offer “Everyday Solutions”.

• It is a “global leader in health and beauty care products, detergents, diapers and food”.

• P&G’s presence in the hair care market in the U.S has been strengthened by innovative technology BC-18 and the replacement of an old brand “Pert” with “Pert Plus” – a mild shampoo with a fully effective conditioner

• P&G brands are inspired to understand the needs, desires and aspirations of men and women and by their commitment to R&D and collaborative external research.

• They are dedicated to building brands that excite, delight and deliver. One of the most basic principles is that P&G products should provide “Superior total value” and should meet “basic consumer needs”

P & G Company Background

• In 1900s P&G begin to make Factory outside US (Canada and Europe)• In the 1931 P&G pioneering in introducing a formalized Brand

Management System (BMS).• In 1985 P&G bought the Richardson-Vicks Company (Strengthen its

Health & Beauty Care Div)• 1986: The company developed a new technology that enabled

consumers to wash and condition their hair using only one product. Pert Plus/Rejoice shampoo quickly became one of the leading worldwide shampoo brands.

• In 1987 P&G celebrated its 150th anniversary. P&G bought the German Blendax Group (dental-care products). The company ranked as the second-oldest company among the 50 largest Fortune 500 companies. The company increased its presence in the European personal care category with the acquisition of the Blendax line of products. It was the largest international acquisition in company history.

P & G Company Background

• In 1988, following the success of Pert Plus in the US market, P&G decided to introduce BC-18 into the European market.– The market of the shampoo and conditioner in Europe was

growing; there was an evidence of increase hair washing.– P&G initial focus was upon West Germany, Great Britain, France,

Scandinavia and Benelux.– With respect to the number of suppliers and brands, the European

market was even more crowed than the US market.– The most important competitors for P&G were Unilever, Colgate

and L’Oreal.– The top and bottom price class was even bigger than the US

market. Between brands there were price differences of over 5 times for the same quantity.

• In January 2005 P&G announced an acquisition of Gillette.• In 2005 Procter & Gamble operated on the markets of more than 160

countries and become the market leader in consumer goods company.

P&G commitment

Product lines• Personal and beauty

– Antiperspirants and deodorants

– Body wash and soap– Colognes– Cosmetics– Feminine care– Hair care– Hair color– Oral care– Prestige fragrances– Shaving– Skin care

• Health and wellness– Health care– Oral care

• House and home– Air freshners– Batteries– Dish washing– Household cleaners– Laundry & fabric care– Paper products– Small appliances– Snacks

• Baby and family– Baby and child care

• Pet care and nutrition– Pet nutrition

Laundry detergent

• Tide provides “fabric cleaning and care at its best.” It’s the all purpose family detergent that “gets to the bottom of dirt and stains to help keep your whites white and your colors bright.”

Dishwashing detergent

• Gain, originally P&G’s “enzyme” detergent, was repositioned as the detergent that gives you “great cleaning power and the smell that says clean.” It “cleans and freshens like sunshine.”

Prestige Fragrances

Anna Sui rocks your fantasy!

It's all about having fun and discovering your inner rock 'n' roll fairytale princess!

Anna Sui stands for unique and distinctive prestige fragrance signatures, products that make an emotional connection and strike a deeper chord with the young consumer in her ongoing desire for self-affirmation.

Anna Sui packaging is the epitome of the brand's identity and the key driver of the brand's success. Anna Sui Fragrances are highly addictive, sought-after collectibles.

Anna's designs tell powerful stories that captivate, inspire and raise the wish to make these charming, magical dreams your own.

Target groups

• All peoples• Focus on some markets:

West GermanyGreat BritainFranceScandinaviaBenelux

Brand management system (BMS)

• The P&G’s legendary organizational characteristic.• “Our brand is our bond with consumers. When we succeed, we convert a trademark into a Trustmark, and another P&G brand becomes a valued and trusted member of the household.” (John Lafley, President & CEO, P&G). • Creates a marketing organization based on competing brands managed by dedicated groups of people.• BMS consist of Several BM team with 3 or 4 person for each team.• The BM team objectives are planning, developing, and directing their brand in its market.

Fabric & Home care

Ariel

Tide

Fairy

Dash

Bonux

Lenor

MR Clean

Food & Beverages

Nutristar

Sunny Delight

Pringles

Crisco

Jif

Olean

Folgers

Health care

Actonel

Didronel

Metamucil

Peptobismol

Vicks

Crest

Blend-a-mend

PUR

Baby care

Pampers

Dodot

Luvs

Feminine care

Always

Alldays

Tampax

Whisper

Beauty care

Olay

Safeguard

Pantene

Pert Plus

Max Factor

Cover Girl

Camay

Zest

• P&G has long represented the "many brands" side of the spectrum with its large portfolio of consumer products brands.

• 4 possible brand alternatives:

- A Brand which already present in the US and several European markets, had so far shown a certain European potential (Vidal Sassoon)

- The US brand Pert Plus, unknown in the European.

- The two other alternatives were national brands firmly established in their domestic market (Pantene and Shamtu).

Positioning

Easy, time – saving, everyday use of the product. P&G products provide “superior total value” and meet “basic consumer needs”

P&G Goals

• The short-term objective of P&G is to establish a market

share that will expand and gain recognition

– P&G will aim to increase steadily the market share of

the market in Europe

– Penetrate into new geographical territories

• The long-term is to ensure that the company benefits from

revenues and strengthens its position as a market leader.

Marketing Strategy

• International Supplier for consumer goods. The company determine its market strategy by shaping the brand name and the product identification. • Knowing that women would be the primary target market for the product also shaped the tactics that Procter & Gamble used in its promotional strategy.• Procter & Gamble, undertook market research before launching its own product in this category, and used the research to make decisions about the marketing mix as well as its marketing strategy and tactics.•P&G is design to innovate consistently and successfully in every part of business

Marketing Strategy Cont’d

• Target all kind of product segmented people• Premium priced segment and low priced segment• Long term marketing goal is to take over the leading value position in the US market• In 2007 P&G spent more on U.S. advertising than any

other company: $2.62 billion • Develops Sale promotion• Advertising : sponsored• Packaging: Manages package design and package size • Brand Alternative• Initiates cost saving

P&G Innovation

• Increasing the pace of innovation at P&G is one of the key to faster growth, greater business vitality

• P&G compete in nearly 50 product categories (laundry products, toothpaste, paper towels, personal cleansing, cough and cold, bone disease therapies, snacks, diapers, cosmetics and many others)

• P&G innovation focuses on both existing and entirely new products

• P&G's unique innovative capability is based on three key characteristics:– A deep understanding of consumers, their habits and

product needs– Capability to acquire, develop and apply technology

across P&G's broad array of product categories– The ability to make "connections" between

consumers' wants and what technology can deliver

P&G Innovation Cont’d

Media spendings, shampoo, Europe, 1988

West Germany

Great Britain

France Scandinavia Benelux

P&G brandsVidal Sasson

Patene

Petrole Hahn

Shamtu

Head&Shoulders

1000

N/A

N/A

4000

3000

3000

N/A

N/A

N/A

3000

N/A

0

3000

N/A

2000

1000

N/A

N/A

N/A

800

N/A

N/A

0

N/A

2800

Competitor brandsTimotei (Unilever)

Nivea

Schauma (Schwarzkopf)

Palmolive (Colgate)

Elseve/El’Vital (L’Oreal)

6500

8000

10500

N/A

5000

6500

N/A

N/A

4000

N/A

3000

N/A

N/A

4000

7000

3000

2000

N/A

1000

2000

1500

1000

N/A

1000

2000

Total 80000 80000 60000 60000 50000

N/A: product is not offer in this country

Local Market Needs: US & Europe

US MarketAt the time the market for shampoo was very profitable as 90% of the population uses shampoo, the conditioner market however shows less then half the results of the shampoo market and the main purchaser being new users. There are many companies competing in the shampoo market often with more than 1 brand to offer (P&G for example)

Europe MarketEurope market is diversified, the shampoo market is steadily growing, although the conditioner purchase is less than 44%. This is the reason why the focus was mainly to the following countries: West Germany, Great Britain, Scandinavia, Benelux, and France. France being a special case as France was also counted in the underdeveloped conditioner market. Being a continent consisting of many different countries, the competition is even more numerous than the US market

The BC-18 Product Development in US and Europe Market

US Market

The original idea of the BC-18 technology was to gain market share. At the time the major shampoo brands of P&G were losing market share, and the company came out with an ingenious idea to offer a 2 in 1 shampoo and conditioner all wrapped up in one package, this being an innovation at the time was a total success in the US market.

Europe Market

Seeing the success in the Market, the company decided to try it out in the Europe market. The BC-18 technology was applied on a number of brands belonging to different price segment.

Solution to differ US and Europe Market

• Two different models for US and Europe were adopted, as US market was more homogenous, a nationwide brand and product division management was adopted. Western Europe is a heterogeneous market with different languages, culture and laws therefore a decentralized model was adopted.

• United States • The organizational model was developed on two key dimensions: functions and

brand. Brand manager has responsibility for profitability and matching company strategy with product category. Brand manager has access to strong divisional functions. It was more product centric and costlier. There was competition within brand managers and this was the era when max product innovation took place.

• In 1987 structure was changed and functional units were centralized. Brands would be managed as components of category portfolios by category general manager, to whom both brand and functional managers would report. Each business unit has it’s own sales, product development, manufacturing and finance functions. To retain the functional strength a matrix reporting structure was set up whereby functional leaders report directly to their business leader and also have reporting relationship to their functional leadership. Again product managers were more powerful and responsible for profit and loss, matrix structure create ambiguity as man can’t serve two masters. Interdivision communication improved.

Solution to differ US and Europe Market• Western Europe• P&G organizational model developed along three key dimensions: Geography ,

function , brand. The result was a portfolio of self- sufficient subsidiaries led by country GM with local market expertise. New technologies were sourced from US , tested in local R&D and manufactured in each country. there was high product launch time and sometimes it was as high as 14 years !

• In 1963 , the European Technical Center (ETC) in Brussels was establish to act as centralized R&D and process-engineering unit. ETC develop products and manufacturing process that country managers could choose to adapt and launch in their own countries.

• Problems in Europe: Corporate R&D were completely disconnected from US operations. European functional organizations were also in isolation from US counterparts. Un standardized , sub-scale production was expensive and unreliable. Country R&D were expensive to maintain.

• By early 1980s , An attempted was made to promote cross-border cooperation and focus was shifted from country management to product-category management. Headquarters at Brussels encouraged formation of regional committees and eliminate needless product variations. The strategy was successful and Entire Europe was divided into three sub regions, whose leaders were given secondary responsibility for coordinating particular product category across the entire continent. Country GMs were replaced with multiple country product-category GMs who report to the division VPs.

Concerning Point of P&G Spending

Focusing on cost improvement and cash productivity. Each organization is evaluated on its ability to support the Company’s financial goals and increase total shareholder return. This includes an evaluation of net sales growth, earnings growth, profit margin expansion and cash productivity. This organization are evaluated on their ability to generate cash, for example, by increasing productivity, improving capacity utilization, meeting capital spending targets and reducing working capital required to run the business.And also through promotion in media or advertising campaign, P&G consider to be cost effective and deliver the message properly.

Conclusion

P & G is a global leader in health and beauty care products, detergents and food.

P&G has a lot of experience in international operations. The new acquisitions of companies that are leader in

the market of health and beauty care products in Europe.

They have a specific brand management team; this team assumes the responsibilities for its brand.

Adopt to new local cultures to meet the customer needs is a basic approach to launch a new product to a new market.

In a roll out launch, we have to emphasize on New Product Development and Product Life-Cycle Strategies

Suggestion

• P&G should adjust its European brand strategy and allow local adoptions in its marketing mix. The European brand building strategy is lacking the local adaptation required to achieve market leadership and is out performed by its competition.

• Core competitive activities such as research and development, product formulation, and competitive positioning should be made in a more centralized model. Market specific activities such as product package sizing and pricing, should be made in a country by country basis to adjust for specific customer’s behavior, competitive situation, and distribution structure.

P&G - A Roll out launchQuestion 1

• The main issues to be considered in balancing a pan-European strategy with local market needs– The name to use for the new product– Bottle size to be used– To market the brand as Pan European or regional– How to price the product– Where to produce and production capacity– Promotion

• The possible alternative brand name strategiesEuro-Balancing → the concept of standardizing to the maximum and implementing localization only where necessary

P&G - A Roll out launch• The BC-18 technology should be introduced with a mixture of pan-

European name and local brand name.

• The BC-18 should be introduced as a new single brand name for its potential market.

• In instead of "Pert Plus", the European name could be "Vidal Sassoon Plus"

• The possible criteria for the decision above :

– With a single brand name, P&G does not have to create new marketing campaigns for targeted countries.

– The European market is heterogeneous, multicultural and multilingual; therefore, the name chosen for the shampoo should have to no connotations in a particular language's history or religion. Moreover, the name should be easily pronounceable in each culture.

P&G - A Roll out launch

• The longer ̶ term marketing object :

continuation of the short-term objective (establish a market share that will expand and gain in recognition).

• The alternative possibilities in relation to issues of positioning, target groups, sources of business, pricing strategy and packaging

Penetration into new geographical territories. It would ensure the company benefits from revenues andstrengthens its position as a market leader.

P&G - A Roll out launch

Question 2

• The first ̶ year marketing objective- to attract new European customers who never used conditioner- To attract customers from competing brands to shift to the use of

conditioner and/or shampoo to BC-18.

• The relate to the long ̶ term marketing objective :

to create a new market inside the shampoo market and encourage the people to use the new BC-18.

P&G - A Roll out launch

Question 3

• We will recommend to undertake a ‘roll ̶ out’ launch in EuropeSince there is "a steady growth of the shampoo market and the conditioner market" and statistics show an increase in hair washing

• The countries orderWest Germany, Great Britain, France, Scandinavia and Benelux.

• The reason available production capacity

P&G - A Roll out launch

Question 4

• For country with the highest priority, to budget media spending, we would use TV advertising and household sampling.

- First year → introduction to convince customers of the superiority of the new product and to explain its new technology.

A TV add should have two parts :

- underlines the easy way to use and the perfect hair - should explain in a more scientific but understandable

way the effects shampoo and conditioner have on your hair

P&G - A Roll out launch

• The same advertising campaign can be 'reused' in all targeted.

• European markets with background voiceovers changing according to language of the country, elements can be changed through the means of air-brush computer software e.g. the background.

• This will allow the company to cut down on promotional costs

- Second year → to maintain the growth of market share. Sampling will go down to 10% but should be raised again for the new marketing cycle when decline begins.

- Third year → TV advertising can be reduced when the product reaches its mature stage.

In the third year, all countries will make profits and the company will break even point.

P&G - A Roll out launch

Question 5

• According to the table profit, there are any loss in the first year, for West Germany, Great Britain, and Scandinavia.

• Those happened because in the first year, they spend many for media and promotion cost.

• Great Britain and Germany are already profitable after the first year but with the introduction in the other countries in the second year, the gain in Great Britain and Germany will not compensate the losses of the first year and the losses due to the introduction in those countries.

The cost and revenue implication of the

Europe wide introduction program

The results of consumer test shows that more than 70% says BC-18 brands were very convincing and relevant, around 40% says its very new, and 25% would definitely want to buy the products.

Taking into account the data provided in the case, it would be profitable for the company to produce its shampoo on the larger size bottle than the smaller size as it cost less. Also producing in a large amount will cost less due to the special production technology. Exhibit 12 shows loss in all 200 ml products, naturally the company will avoid loss by focusing on larger package size shampoo that generates profit.

Thank

you!!!