ROLL-OUT LAUNCH
Chang
M987Z221
Van
M987Z256
Gift
M987Z225
GROUP 8
Steve
M987Z229
Martin
M987Z208
• P&G Background and product lines
• Branding and Positioning
• Local Market Needs: US & Europe
• Marketing Strategy and
Innovation
• The BC-18 Product
Development in US& Europe
market
• Solution to differ US& Europe
• Concerning point of P&G Spending
• P&G – A roll out launch
• Conclusion & Suggestion
• Question and Answer
P & G Company Background
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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”
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•
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P & G Company Background
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•
•
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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
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–
–
–
–
–
–
–
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 selfaffirmation.
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 Germany
Great Britain
France
Scandinavia
Benelux
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
Baby care
Actonel
Pampers
Didronel
Dodot
Metamucil
Luvs
Peptobismol
Vicks
Crest
Blend-a-mend
PUR
Feminine
care
Always
Alldays
Tampax
Whisper
Beauty
care
Olay
Safeguard
Pantene
Pert Plus
Max
Factor
Cover Girl
Camay
Zest
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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 Innovation Cont’d
• 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
Media spendings, shampoo, Europe, 1988
West
Germany
Great
Britain
France
Scandinavia Benelux
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
Timotei (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
P&G brands
Vidal Sasson
Patene
Petrole Hahn
Shamtu
Head&Shoulders
Competitor brands
N/A: product is not offer in this country
Local Market Needs:
US & Europe
US Market
At 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 Market
Europe 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
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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
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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 launch
Question 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 strategies
Euro-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 panEuropean 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 and
strengthens 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 Europe
Since there is "a steady growth of the shampoo market and the
conditioner market" and statistics show an increase in hair washing
• The countries order
West 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!!!