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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