Octawati
Buntaran
M987Z249
OUTLINE
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COMPANY BACKGROUND
BC-18 IN USA MARKET
MARKETING OBJECTIVES
PRODUCT POSITIONING
PRICING STRATEGY
ROLL-OUT LAUNCH
MEDIA PLANNING
MARKET DEVELOPMENT
RECOMMENDATION
COMPANY BACKGROUND
• 1837: William Procter and James Gamble
merged their companies to Procter & Gamble
• 1937: P&G sales reached $230 million
• 1980: Sales reached $10 billion
• 1987: P&G ranked as the second oldest
company among the 50 largest fortunes
• 1998: P&G is a great American company which
revenue accounts $ 37 billion
• 1999: Durk Jager became the Chairman,
President, Director.
• 2000 : A.G Lafley becomes President and Chief
Executive.
• 2005 : Procter & Gamble operated on the markets of
more than 160 countries.
• 2006 : The P&G – based company employs 138,000
people and reported revenue of $68.22 billion.
BRAND MANAGEMENT SYSTEM
Business
objective
Brand management
team – a group of
usually three or
four people
Strategies and
Marketing plans
Advertising
copy & media
Sales
promotion
activities
Package design
& product
improvement
projects
Cost saving
o Today Procter & Gamble is:
 Biggest manufacturer of packaged
consumer goods
 Global leader in health and beauty
care products.
o Procter & Gamble´s should:
 Provide “superior total value”
 Meet “basic consumer needs”
o A closer coordination was needed
especially for new brands
o Euro-Brand Team Meetings were
introduced
o Euro-Balancing: “ As much
standardization as possible, as little
localization as necessary”
The BC-18 In USA Market
• In 1986 , P&G most important shampoo brand
was losing market share , then The Company
introduced BC-18 technology that enables
consumers to wash and condition their hair
using only one product -Pert Plus shampoo,
which quickly becomes one of the leading
worldwide shampoo brands.
SHAMPOO MARKET
US
highly fragmented, with a
large number of suppliers
and brands
EU
Even more crowded due to
different nationalities
Relatively large price
different
The gap between top and
bottom price classes even
bigger than the US market,
which meant value-based
market share of a shampoo
brand is very important
Constant growth mainly due
to increase of hair washing,
the growth of conditioner
market is driven by new user
Steady growth, but
conditioner market is still
undeveloped compare with
US
Competitor able to imitate
P&G innovative product &
marketing strategy, preempted them in national
market
BRAND BUILDING STRATEGY
• With superior product technology as the foundation
(BC-18), the second phase is to convert products into
brands and penetrate EU market.
• Brand is the nucleus of sales and marketing activities,
generating increased awareness and loyalty when
managed strategically.
• There are several alternatives for P&G to consider, with
the concept “Euro-balancing”, they started to launch
BC-18 with “as much standardization as possible, as
little locaization as necessary”.
POSSIBLE ALTERNATIVES FOR BRAND NAMES
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).
Relaunched
Existing
Brand
-PanEuropean
name
- Local
brand
name
New
brand
name
• Process when existing product change or modified key elements in its marketing mix without
materially change its target market (Vidal Sassoon).
• Advantage: Make use of existing market, strengthen brand communication, maximizing efficiency
across countries.
• Disadvantage: should only use when that brand become old fashion and loosing market share, if not
will be a waist of money and efforts.
• Advantages:
• Refers to the sense of brand identification with Europe ,The prefix pan implies that the identity applies
throughout Eu, so the brand will approach EU market easier.
• easy to adapt to cultural, easy to remember
• understand and approach customer in deeper level
• Disadvantage: Lack of distinctive with old products and competitor products
• Advantages:
• Distinctive with old ones, suggest new product’s benefit and qualities. (Pert Plus)
• Disadvantages:
• need new promotion campaign and time to make sure reach the market place first
• Base on the analysis above, branding should be
though from a European perspective. When a
brand is successful, the company could launch
that brand name on another potential market.
Following the success of Pert Plus in the US
market, P&G could introduce BC-18 into the
European market.
• Profitability of the new product and time of
penetrating should also be considered.
• P&G can also make use of the category it has
built up and save the money that it would
otherwise have to spend to create brand
awareness of a new name and offering also for
R&D cost.
P&G MARKETING OBJECTIVE
• Procter and Gamble Corporation, set their own
objectives is to provide products of superior total
quality and value that improve the lives of the
world's consumers.
• It has resulted in strong commitment to research to
create product that are demonstrably better than
others.
• P & G's main target is to focus on work in
order to be the best seller in this global
market.
-Leadership : which is applied in the areas of
responsibility and commitment
-Ownership : P&G’s policy allows everyone to
be contributed more to the success of the
firm as if it's his own business
LONG TERM MARKETING OBJECTIVE
• Achieve a long term 10% value share market
leadership in the European shampoo market
• Increase brand identity of P&G because the
value-based market share of a shampoo brand
is very important
• Add more brands with BC-18 Technology
• For the 1st year specific objective is 5% value
share
• P&G understands, better than most, that the path
to long-term success is forged through the
efforts, talents and skills of its global workforce.
To that end, the company is committed to
offering training and development opportunities
to its employees throughout their
careers. By maintaining and
supporting P&G’s learning
management system,
MARKET RESEARCH DATA
PRODUCT POSITIONING & CONCEPT
• Product positioning: Easy, time-saving,
everyday use to achieve an attractive hair in a
convenient way
• Product concept: high quality product with
premium price segment
TARGET GROUP
- All peoples
- Focus on some markets:
• West Germany
• Great Britain
• France
• Scandinavia
• Benelux
PRICING STRATEGY
MEDIA AD (TV,
RADIO,
MAGAZINES)
-
Production cost
COST
ADDITIONAL
PROMOTIONS
(HYPERMARKET,
CONSUMER
COMPETITION,
WHEEL OF
FORTUNE)
SAMPLE
DISTRIBUTION
(SAMPLE COST,
DISTRIBUTION
COST)
TRANSPORTATION
COST
Sizes and Shelf prices, shampoo,
Europe, 1988 (DM)
PRICING STRATEGY & PACKAGING
• Placing product in the premium priced segment.
• To maintain production at 50%, suggested
production cost should be:
– 22DM / SU3 for small bottle
– 20DM/ SU3 for larger bottle
• Packaging:
– Lead time to develop 200ml bottle: 12 months
– Time to develop 250ml bottle: underway, 6 months
So P&G could together have many prices/package to
catch more customer needs.
ROLL-OUT LAUNCH
Companies' long-term survival depends upon
their replacement of existing products with
new ones and / or launching new products in
a new environment.
Roll-out means the launch of a new product on a
region by region basis as opposed to a
national introduction.
To enter the European market, P&G should undertake
a roll-out launch.
Because the European market compared to US
market was more complex and the conditioner
market was relatively undeveloped (less than 44%)
compared to US which had already been reached.
Also the rollout is intended to minimize the risk and
to reduce the investment in production and
marketing.
•
Great Britain (MSU 7,500)
•
West Germany (MSU 4,500 )
•
France (MSU 2,000)
•
Scandinavia (MSU 1,700)
•
Benelux ( MSU 1,500)
Volume* = MSU ( Million of Service Units)
Restrictions
Available production capacity 2,000 MSU for 1st year increased to 4000 MSU in
second year and 8000 MSU in 3rd with additional 500 MSU in case of
difficulties with 6 months advance notice. Also development of new 200 ML
bottle would need 12 months however using existing US bottle of Pert Plus
(425ML) would not require any lead time.
Exhibit 6 Europe1988
West Germany
Volume (MSU)
Value (TDM)
4,500
230,000
Projected Volume MSU
Calculated as per previous 650
Demand for 1989
Projected Value (TDM)
33150
1989
Great Britain
7,500
250,000
France
Scandinavia
2,000
100,000
1,700
85,000
Benelux
1,500
60,000
1090
290
250
220
55590
14790
12750
11220
MEDIA PLANNING
• Setting media objectives in light of marketing
and advertising objectives
• Developing a media strategy for implementing
media objectives
• Designing media tactics for realizing media
strategy
• Proposing procedures for evaluating the
effectiveness of the media plan
Media Planning
1. Media Objectives
– Target Audience
• Demographics : Urban and semi urban
• Psychographics:
– Beauty conscious
– Regular users of basic consumer needs
– Benefits- Quality, Economy seeker
– Product and Brand Usage
• Product Usage : heavy users
• Brand usage : brand loyal
Media Planning (Cont’d)
1. Media Objectives (Cont’d)
– Communication Goals
• to what degree the target audience must be exposed to
(and interact with) brand messages in order to achieve
advertising and marketing objectives.
a) support of sales promotion activities
b) for reminder advertising for a mass market product, and
c) to win from severe competition.
The purposes are to make the target audience recall the
product, persuaded and leads to purchase
2. Media Strategy
– Media Types
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Television
Radio advertising
Print advertising (newspaper, magazines, etc)
Online advertising
Billboard advertising
Mobile billboard advertising
In-store advertising
Covert advertising
Celebrities
2. Media Strategy (Cont’d)
– Media Types selection
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Television
Radio advertising
Print advertising (newspaper, magazines, etc)
Online advertising
Billboard advertising
In-store advertising
Covert advertising
Celebrities
Budget for Media Planning
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
MARKET DEVELOPMENT
The company try to enter a new environment,
Europe, with their existing products, BC-18.
Although the shampoo market and the
conditioner market is steady growth in Europe
market, it was still relatively undeveloped.
To get attention (brand awareness) and interest
from public, company has to do promotion
activities.
COST AND REVENUE IMPLICATION
Europe wide introduction programme : First
year
• Revenue : low to moderate
 Sales number, sales amount : low
• Cost : high
 Promotion cost : high
There is any loss expected in the first year.
RECOMMENDATION
Following the success of Pert Plus in US market,
P&G decided to introduce the product in
European market.
Since it’s important to get wide market share,
it’ll be better if P&G serves product
differentiation with different price range.
Value-based market share of a shampoo brand
was very important.