Procter & Gamble in Europe
A roll-out launch
Group Two
Group Two Members
Khuong
M997z212
Thao
M997z216
Jarinthon
M997z225
Rattaya
M997z230
Huong
M997z226
Son
M997z209
Contents
1
Company & Background
2
The situation in the USA
3
The situation in the Europe
4
Economic and Restriction
5
Conclusion
COMPANY & BACKGROUND
Company Logo
Background
 P&G is the world’s biggest manufacturer of
packaged consumer goods and a global leader in
health and beauty care products, detergents,
diapers and food.
 P&G was founded in the USA in 1837
 In 1985 P&G bought the Richardson-Vicks
company (Head&Shouders, Vidal Saaaoon,
Pantene)
 In 1987 P&G bought the German Blendax Group
(Dental-care products)
 Also, P&G celebrated its 150th anniversary. The
company ranked as the second-oldest company
among the 50 largest Fortune 500 companies.
 Moreover, 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.
 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.
THE SITUATION IN THE USA
The situation in the USA
 The USA shampoo market
is highly fragmented, with a
large number of suppliers
and brands.
 P&G was decided to
introduce the BC-18
technology in the US
market at the beginning of
1986 by replacing the
brand Pert Plus.
 Long-term Marketing goal:
to take over the leading
value position in the USA
shampoo market.
 Pert Plus was positioned as the shampoo that
offered attractive hair in the convenient way.
 The target group was to be all people. The source
of business would also come from the group of
people who did not use Pert or conditioner before.
 Constant growth of the shampoo market is due to
the increase in hair-washing ( out of the total
population, 90% use shampoo).
 Large price differences between premium and
value brands.
Market share value in the first year is 5%.
Market share in the long-term is at least
10%.
It was positioned as the shampoo that
offered attractive hair in a convenient
way.
 Marketing objective of Pert Plus: achieve a
long-term 10% value share market
leadership in the US shampoo market. For
first year of lauch is a 5% value share.
Positioning
Provide great-looking hair in the
convenient way
Target group
All people
Source of business
New users
Pricing
Premium-priced segment with a
price premium up to 100% of
the low-price market
Pert Plus Introductory Activities
In the first
12 months
In the
following
12 months
- Strong TV
advertising,
- Sample
distribution
60% of
household
- Listing fund
$4 million
- 10 Normal
TV advertising
- Sample
distribution
10% of
households
- Display
activities in
hypermarket
Result
- In 1987 Vol
share 4 %
and value
share 6.0 %.
- In 1988 Vol
share 4.5 %
and value
share 6.3 %.
THE SITUATION IN THE EUROPE
 There was a steady increase in the shampoo
market and the conditioner market.
 But still below the 44% (had been reached in
the USA) in the share of shampoo users who
also used conditioner.
 South European countries showed the most
potential area like Great Britian, West
Germany, France, Scandinavia, Benelux.
 With Great Britation was a country having the
strongest user share (42%).
Sizes and Shelf Prices, Shampoo, Europe, 1988 (DM)
West Germany
Great Britain
France
Scandinavia
Benelux
Vidal Sassoon (200ml)
6.99
6.99
N/A
6.99
N/A
Pantene (200ml)
N/A
N/A
4.99
N/A
N/A
Petrole Hahn (300ml)
N/A
N/A
2.99
N/A
2.99
Shamtu (400ml)
2.99
N/A
N/A
N/A
N/A
Head & Shoulder (300ml)
5.99
5.99
5.99
5.99
5.99
Timotei (Unilever)
(200ml)
2.99
2.99
2.99
2.99
2.99
Nivea (Beiersdorf)
(300ml)
3.99
N/A
N/A
3.99
3.99
Schauma (Schwarzkopf)
(400ml)
2.49
N/A
N/A
N/A
2.49
Palmolive (Colgate)
(400ml)
N/A
2.49
2.49
2.49
2.49
Elseve/El Vital (L’Oreal)
(250ml)
4.49
N/A
4.49
4.49
4.49
P&G BRANDS
COMPETITOR BRANDS
European Market
The European market was even more
crowded than the US market in terms of
the number of suppliers and brands
available.
The differences of price between brands
were well over 5 times for the same
quantity.
Market Shares, Shampoo, Key Brands, Europe, 1988
(volume (value) share in %)
West Germany
Great Britain
France
Scandinavia
Benelux
P&G BRANDS
Vidal Sassoon
0.5 (1.3)
1.1 (3.6)
N/A
1.0 (2.4)
N/A
Pantene
N/A
N/A
1.0 (2.1)
N/A
N/A
Petrole Hahn
N/A
N/A
3.0 (2.1)
N/A
0.6 (0.6)
11.0 (6.3)
N/A
N/A
N/A
N/A
1.1 (1.7)
6.5 (12.0)
1.1 (1.6)
1.0 (1.4)
2.9 (5.4)
Timotei
(Unilever)
5.0 (5.7)
8.5 (11.8)
4.9 (5.2)
7.5 (7.8)
3.8 (5.3)
Nivea
(Beiersdorf)
9.0 (9.2)
N/A
N/A
2.5 (2.3)
4.4 (5.5)
21.0 (10.0)
N/A
N/A
N/A
7.0 (4.1)
N/A
4.6 (2.7)
12.3 (5.4)
7.0 (3.0)
18.2 (10.6)
3.3 (4.6)
N/A
4.5 (5.8)
6.5 (8.2)
5.0 (8.4)
Shamtu
Head &
Shoulder
COMPETITOR
BRANDS
Schauma
(Schwarzkopf)
Palmolive
(Colgate)
Elseve/El Vital
(L’Oreal)
The Challenges In European Market
 In 1988, BC-18 decided to introduce in
European Market.
 But there were 3 questions need to deal:
- The first question was that “what brand
name to introduce the product in the
individual European Market”.
- The second question was that “whether a
200 ml bottle would be accepted by
European Market like in the USA”.
- The third question was about price at
premium pricing.
Products Used for European Market Testing
European potential product: Vidal
Sassoon.
 US brand: Pert Plus.
 Two national brands established in
their domestic market: Pantene and
Shamtu.
Price And Packaging
Just tested on only two brands:
- One from the lower price segment.
- Another brand from high-quality
product concept.
Consumer Test, Europe, Results (%)
Vidal
Sassoon
Wash & Go
Shamtu 2 in 1
“silkiness and bounce”
Pantene
“Perfect care”
Pert Plus
Wash & Go
Product
concepts
4.99DM/20
0 ml
4.99DM/20
0 ml
4.99DM/2
50 ml
4.99DM/20
0 ml
5.99DM/20
0 ml
4.99DM/20
0 ml
“Would
definitely
buy”
29
20
27
28
17
28
“Is very
new”
41
40
41
39
40
40
“Is very
convincing
and
relevant”
70
73
72
73
72
70
Results
The high quality brand concept would
allow the product to command a premium
price.
An opportunity existed to use an
established brand.
Consumer testing showed no significant
difference between the brands, allowing
for the Pert Plus brand to be introduced.
Media Plan
Targeted on West Germany and Great
Britain.
Because of the market sizes of using
shampoo and conditioner and
awareness of the consumers.
Media Plan for 1st Year
Strongly using TV and Print Ad focus
on the benefit of “2 in 1 formula” and
the convenience to use the shampoo.
Give sampling and make activities at
public places such as subway station,
Central Park, etc.
Media Plan for Following Years
 Introduce the product to other European
countries such as France ,Scandinavian and
Benelux with using the same activities as
West Germany and Great Britain.
 Create a new TVC and Print Ad.
 Create a special activities for brand
awareness.
 Promotional : Discount on product and give
premium goods.
ECONOMIC and RESTRICTIONS
Economic
Cost structure of existing P&G
shampoo brands as a template for BC18 cost planning.
 Producing the new product were
relatively easy to estimate:
- Whole European market in England.
- Use the available 200ml or 250ml bottle.
- Work capacity of 50%.
Restrictions
 To determine costs it was necessary to
consider the varying advertising and
support budgets in the individual countries.
 The available production capacity.
 Lead times for alternative pack sizes and
designs.
- The development of a new 200 ml bottle would
take a lead time of 12 months.
- Using the existing US bottle for Pert Plus would
not require any lead time.
CONCLUSION
Conclusion
 Creating and launching new brands at
record
pace;
establishing
leadership
positions in the more important developing
markets of the world.
 Strengthening its relationship with the
retail customers; and use of information
technology as a strategic tool.
 Establish collaborative relationships like
strategic alliances with key material
suppliers.
 In P&G's business technical know-how is
changing rapidly. Therefore, strategy-critical
activities are R&D, marketing and product
innovation and getting new products onto the
market quickly.
 P&G should focus in strengthen its core
competencies in marketing and R&D to sharpen
its performance and rises them to the rank of
distinctive
competence
in
order
to
get
competitive advantage over competitors.