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Procter and Gamble: Scope
Transcript of Procter and Gamble: Scope
Chistopher Stephens Procter and Gamble, Inc: Scope
Alternative Courses of Action
Case Questions Case Summary Problem Definition 3 C's Company Competitors Customer OUTLINE Procter and Gamble's Background Company Philosophy
P&G markets it's products in over 140 different countries
Net earning of $1.6 billion in 1990
Canadian subsidiary contributed $1.4 billion in sales and $100 million in net earnings
Between 1987 and 1990, worldwide sales of P&G increased by $8 billion Statement of Purpose and Strategy (highlights) "We will provide products of superior quality and value that best fill the needs of customers"
"We will concentrate our resources on the most profitable categories and on unique important Canadian market opportunities"
"We will continuously stay ahead of competition while aggressively defending our established profitable businesses against major competitive challenges despite short-term profit consequences" Alternative Courses of Action The problem that P&G and Gwen Hearst faces is how her product, Scope, should respond to Pfizer's new product, Plax. Gwen's proposed solution/strategy needs to ensure the continued profitability of her brand, Scope. Proposed Recommendation Gwen Hearst became Scope's brand manager in 1988
Scope held a 32% market share in 1990
Since it's introduction in 1988, Plax had gained a 10% market share of the product category and posed a threat to Scope
Scope and Plax offer two different competitive advantages Company-SWOT Competitor Customer Case Questions 1-Describe the significant changes that have occurred in the Canadian mouthwash market in the past three years.
2-How would you evaluate the performance of Scope over the past three years?
3-What are the pros and cons of the options available for Scope (in detail)? S W O T Strengths Weaknesses Current Market leader by 15.7% from closest competitor
Strong Brand Name
One of the most successful consumer goods companies worldwide
One of the Highest Ad expenditures
Product Distribution in over 140 countries First mover advantage into a new segment
Claims to remove 3 times more plaque than brushing alone
Premium pricing in drugstores
Strong consumer perceptions of the advertised benefits Weak market share compared to scope
Rather new product
Have had trouble proving claim that Plax "removes up to three times more plaque than brushing alone
Not perceived as having a good taste Can be divided into 3 different segments consisting of "heavy users, medium users, and light users"
The most important reasons why customers use mouth wash are: Part of their oral hygiene = 40%
Gets rid of bad breath = 40%
Kills germs = 30%
Makes them feel more confident = 20%
To avoid offending others = 25% *Multiple reasons Allowed Absence of a readily available product option
Developed a pre-brushing rinse that does not work better than Plax
Weak perceived Image Emerging market segments with health benefits
Room to grow Scope's consumer perceptions
Adjust current image to convey hidden benefits(Scope reduces plaque better than brushing alone) Change current image to compete with Plax
Invest in R&D to produce a new competing product
Change Scope's current formula to compete with Plax and offer the product under a somewhat different name such as "Scope Plus"
Do nothing at all
Invest in R&D, develop a product that competes very strongly with Plax, and wait to release into a target market to see how the "pre-brushing" rinse market develops Competitors rapid growing market share
Plax commending a higher price in food stores and a premium in drugstores
Lack of information on the competitor's product Invest in R&D, develop a product that competes very strongly with Plax, and wait to release into a target market to see how the "pre-brushing" rinse market develops THE END Thank you
for Listening Opportunities Threats Strengths Weaknesses