Procter & Gamble in
Europe
A roll-out launch
Designing and Managing
Services
Group 3 - Members
My M987Z247
Eli M987Z254
Ocha M987Z212
Fernando M987Z257
Loan –
M987Z234
Joice M987Z224
Outline
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Company’s History
Vision and Promise
Company’s Value
P&G Social Responsibility
Product
Company’s Achievement
Company’s Top Competitors
The BC-18 in USA Market
Target Group
Long-term Marketing Objectives in EU Market
1st Year Marketing Objectives in EU Market
Price
Short-term Objectives
Long-term Objectives
Product Development
Promoting and Advertising
Media Tools
Company’s History
• On October 31, 1837, Procter & Gamble (P&G) was founded by the two
brothers in law William Procter and James Gamble. P&G began as a small,
family-operated soap and candle company.
• As their purpose to provide products and services of superior quality and
values. In 1858-1859, sales reached $1 million. By this point,
approximately 80 employees worked for Procter & Gamble.
• During the American Civil War, the company won contracts to supply
the Union Army with soap and candles. In addition to the increased
profits experienced during the war, the military contracts introduced
soldiers from all over the country to Procter & Gamble's products.
• In the 1880s, P&G began to market a new product, an inexpensive soap
that floats in water.
• In 1887, William Arnett Procter, William Procter's grandson, began a
profit-sharing program for the company's workforce.
• In 1911, P&G’s products began to be diversified producing Crisco, a
shortening made of vegetables oils rather than animal fats.
• In 1920s and 1930s, the company sponsored a number of radio
programs those became commonly called soap opera.
Company’s History
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In 1930, P&G was becoming an international corporation with its acquisition
Thomas Hedley Co., based in England.
In 1946, The company introduced “Tide” laundry detergent.
In 1947, P&G produced “Prell” shampoo.
In 1955, Procter & Gamble began selling the first toothpaste
In 1957, the company purchased Charmin Paper Mills and began manufacturing
toilet paper and other paper products.
In 1960, Procter & Gamble began making “Downy” Fabric Softener and "Bounce"
fabric softener sheets in 1972.
In 1961, One of the most revolutionary products to come out on the market was
the company's “Pampers”.
Procter & Gamble acquired a number of other companies that diversified its
product line and significantly increased profits. These acquisitions included Folgers
Coffee, Norwich Eaton Pharmaceuticals, Richardson-Vicks, Noxell, Shulton's Old
Spice, Max Factor, and the Iams Company, among others.
In 1994, the company made headlines for big losses resulting from leveraged
positions in interest rate derivatives, and subsequently sued Bankers Trust for
fraud; this placed their management in the unusual position of testifying in court
that they had entered into transactions that they were not capable of
understanding.
Company’s History
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In 1996, Procter & Gamble again made headlines when the Food and Drug
Administration approved a new product developed by the company, Olestra. Also
known by its brand name Olean, Olestra is a lower-calorie substitute for fat in
cooking snacks that during its development stages is known to have caused anal
leakage and gastrointestinal difficulties in humans.
In January 2005 P&G announced an acquisition of Gillette, forming the largest
consumer goods company and placing Unilever into second place. This added
brands such as Gillette razors, Duracell, Braun, and Oral-B.
P&G agreed to sell its SpinBrush battery-operated electric toothbrush business to
Church&Dwilight. It also divested Gillette's oral-care toothpaste line, Rembrandt.
The deodorant brands Right Guard, Soft & Dry, and Dry Idea were sold to Dial
Corporation. The companies officially merged on October 1, 2005.
In 2008, P&G branched into the record business with its sponsorship of Tag Records
as an endorsement for Tag Body Spray.
On August 24, 2009, the Irish-based pharmaceutical company Warner Chilcott
announced they had bought P&G's prescription-drug business for $3.1 billion.
Vision and Promise
The Vision
• Be, and be recognized as, the best
consumer products and services
company in the world.
The Promise
• More than three billion times a day,
P&G brands touch the lives of people
around the world. And P&G people work
to make sure those brands live up to
their promise to make everyday life just
a little bit better.
Company’s Values
Consumer
P&G
Brands
P&G
People
P&G Values:
Integrity
Leadership
Ownership
Passion for winning
Trust
P&G brands and P&G People are the foundation of P&G success, P&G
People bring the values to life as we focus on improving the lives of the
world’s consumers.
P&G Values
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P&G corporate governance follow some values
that allow the company’s employees to have a
good environment in their workplace, Such as:
Integrity: We always try to do the right thing.
Leadership: clear vision of where we are going
Ownership: All the employees act like owners,
treating the company assets as their own.
Passion for winning: determined to be the best.
Trust: respect for colleagues, customers and
consumers.
Company’s Purpose
• We will provide branded products
and services of superior quality
and value that improve the lives
of the world’s consumers, now
and for generations to come.
• As a result, consumers will
reward us with leadership sales,
profit and value creation,
allowing our people, our
shareholders, and the
communities in which we live and
work to prosper.
Company’s Principles
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We Show Respect for All Individuals
 We believe that all individuals can and want to contribute to their fullest
potential.
 We value differences.
 We inspire and enable people to achieve high expectations, standards and
challenging goals.
 We are honest with people about their performance.
• The Interests of the Company and the Individual are Inseparable
 We believe that doing what is right for the business with integrity will lead to
mutual success for both the Company and the individual. Our quest for mutual
success ties us together.
 We encourage stock ownership and ownership behavior.
• We are Strategically Focused in Our Work
 We operate against clearly articulated and aligned objectives and strategies.
 We only do work and only ask for work that adds value to the business.
 We simplify, standardize and streamline our current work whenever possible.
Company’s Principles (cont’d)
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Innovation is the Cornerstone of Our Success
 We place great value on big, new consumer innovations.
 We challenge convention and reinvent the way we do business to better win in
the marketplace.
We are Externally Focused
 We develop superior understanding of consumers and their needs.
 We create and deliver products, packaging and concepts that build winning
brand equities.
 We develop close, mutually productive relationships with our customers and
our suppliers.
 We are good corporate citizens.
 We incorporate sustainability into our products, packaging and operations.
We Value Personal Mastery
 We believe it is the responsibility of all individuals to continually develop
themselves and others.
 We encourage and expect outstanding technical mastery and executional
excellence.
Company’s Principles (Cont’d)
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We Seek to be the Best
 We strive to be the best in all areas of strategic importance to the Company.
 We benchmark our performance rigorously versus the very best internally and
externally.
 We learn from both our successes and our failures.
Mutual Interdependency is a Way of Life
 We work together with confidence and trust across business units, functions,
categories and geographies.
 We take pride in results from reapplying others’ ideas.
 We build superior relationships with all the parties who contribute to fulfilling
our Corporate Purpose, including our customers, suppliers, universities and
governments.
P&G Social Responsibility
• Being a company that provides
products of daily life, must take
care of the social responsibility,
in two main points. (Customers
and it’s employees)
• Providing branded products and
services of superior quality and
value that improve the lives of
it's consumers.
• Giving a good workplace
environment.
Product
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Air Fresheners
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Febreze Air Fresheners
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Antiperspirants
&Deodorants
Old Spice
Secret
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Baby & Child Care
Charmin
Children's Pepto
Clearblue Easy
Dreft
Luvs
Pampers
Pampers Kandoo
Pampers UnderJams
Puffs
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Batteries
Duracell
Body Wash & Soap
Camay
Ivory
Olay
Old Spice
Safeguard
Zest
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Colognes
Old Spice
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Cosmetics
CoverGirl
Max Factor
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Dish Washing
Cascade
Dawn
Ivory
Joy
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Feminine Care
Always
Tampax
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Hair Care
Aussie
Head & Shoulders
Herbal Essences
Infusium 23
Pantene
Product (cont’d)
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Hair Color
Clairol
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Health Care
Align
Braun
Clearblue Easy
Metamucil
Pepto-Bismol
Prilosec OTC
Vicks
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Household Cleaners
Bounty
Febreze Air Fresheners
Mr. Clean
Swiffer
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Laundry & Fabric Care
Bounce
Cheer
Downy
Dreft
Era
Febreze Air Fresheners
Gain
Ivory
Tide
Oral Care
Braun
Crest
Crest Glide
Crest Whitestrips
Fixodent
Gleem
Scope
Oral-B
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Paper Products
Bounty
Charmin
Puffs
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Pet Nutrition
Eukanuba
Iams
Snacks
Pringles
Product (cont’d)
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Prestige Fragrances
BALDESSARINI
BOSS
BOSS SKIN
bruno banani
ESCADA
Ghost
Giorgio Beverly Hills
HUGO
LACOSTE
NAOMI CAMPBELL
PUMA
Rochas
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Shaving
Braun
Gillette Fusion
Gillette M3Power
Gillette SatinCare
Gillette Venus
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Skin Care
Braun
Gillette Complete
Skincare
Olay
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Small Appliances
Braun
Company’s Achievement
Company’s Achievement
Company’s Achievement
Company’s Achievement
Company’s Achievement
Company’s Top Competitors
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Industries Where The Procter & Gamble Company Competes:
– Personal Care Products
– Business Services
– Commercial Cleaning & Facilities Management Services
– Consumer Products Manufacturers
– Cleaning Products
– Food
Analysis of Competitive Landscape of P&G:
Demand is driven largely by demographic shifts, particularly trends in population and age, working
women, race and ethnicity, household size, and levels of disposable income. The profitability of
company depends on a good product mix and efficient operations. Large distributors are
advantaged by bulk purchasing and economies of scale in distribution. Smaller companies can
compete effectively by specializing in organic, natural, or kosher products or focusing on a
geographical area.
The BC-18 In USA Market
• In 1986 The Company develops a new
technology that enables consumers to
wash and condition their hair using only
one product. Pert Plus/Rejoice shampoo
quickly becomes one of the leading
worldwide shampoo brands. (BC-18).
• The USA shampoo market is highly
fragmented, with a large number of
suppliers and brands.
• To Refresh the shampoo market Pert Plus
was divided to launch with BC-18 Tech.
• Long-term Marketing goal: to take over
the leading value position in the USA
shampoo market.
The BC-18 In USA Market (cont.)
Marketing Objectives:
• 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.
The BC-18 In USA Market (cont.)
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 %.
Target Groups
- All peoples
- Focus on some markets:
• West Germany
• Great Britain
• France
• Scandinavia
• Benelux
Long-term Marketing Objectives in
EU Market
• Take over the European market.
• Increase brand identity of P&G
because the value-based market
share of a shampoo brand is very
important.
• Add more brands with BC18
Technology.
• Understand well the EU market &
competitors.
1st Year Marketing Objectives in EU
Market
Increase market share in:
 High share of conditioner
market: West Germany, Great
Britain, Scandinavia &
Benelux.
 Underdeveloped conditioner
market: France (sale volume:
10% of shampoo
consumption) & Southern
European countries.
Price
• Research indicates in Europe there are large price
differences among hair care products. P&G has
decided that it should place the new shampoo in the
premium-priced segment; this is done in order to
keep up the image of the shampoo as a high quality
and innovative product. P&G should charge premium
price in each country - to be sold for 4.99 DM for the
200 ml bottle and for 5.99 DM for the 250 ml bottle
in all the countries which had had been accepted
during the consumer tests. The company cannot
charge a price very few people can afford, this will
also not be profitable for the company.
Short-term Objective
The aim of P&G is to become a leader in the European market
of two in one hair products:
• To attract new European customers who never used
conditioner and customers from competing brands to shift
to the use of conditioner and/or shampoo to BC-18.
• To exert a pull on the population in order to create a new
market niche inside the shampoo market and encourage
the people to use the new BC-18.
• To establish brand loyalty as this will encourage customers
to continue buying the product and will enable them to
become more familiar with the range of products available
at P&G.
Long-term Objective
• To establish a market share
that will expand and gain in
recognition.
• To increase steadily the
market share of the market
in Europe.
• To ensure that the company
benefits from revenues and
strengthens its position as a
market leader.
Product Development
• BC-18 technology would offer the European consumers 'Great
looking hair in a convenient way.
• By introducing a single brand name for its potential market,
P&G does not have to create new marketing campaigns for
targeted countries.
• The company is able to use the brand name of "Vidal
Sassoon", which is an already well-known brand name in the
United Kingdom, West Germany and Scandinavia and fits to
the criteria mentioned above. It is in the upper market
segment and has the established image of a high quality
product; it would compliment the new BC-18 product.
Product Development
• Selling its product right away by using the U.S. bottle size of
200ml is a good opportunity for the company as it will be able
to see how the market is reacting to the new product and
whether sales are reaching expectations.
• Design a construction of a new 250ml bottle should
nevertheless start right away and it should be introduced as
soon as possible to be able to reap in the benefits of
economies of scale.
• This is constructive as once the new bigger bottles (250ml) are
designed P&G can run a promotion campaign for Great Britain
and West Germany indicating that consumers can now get
50ml or 25% more.
Promotion and Advertising
• The promotion campaign will aim to underline and emphasize
positive aspects of the new shampoo and conditioner use.
• Advertising campaigns explain the advantage conditioner use
in general (this will increase conditioner use), and highlight
the products practicality.
• Using the background voiceovers changing according to
language of the county, elements can be changed through the
means of air-brush computer software. This will allow the
company to cut down on promotional costs.
Media Tools
• The media plans for the different years show a
higher media spending on sampling and TV
advertising in the year of introduction to
convince customers of the superiority of the
new product and to explain its new technology.
• TV advertising, at the beginning, is to introduce
the product and to gain a significant market
share in the first year. It should also be used to
maintain the growth of market share in the
second year but can be reduced in the third year
when the product reaches its mature stage.
Answering the Question
Question #1
What are the main issues to be considered in
balancing a pan European introduction strategy
with local market needs?
• The possible alternative brand name’s strategy:
it’s lucid for the company to choose line
extension method, in that the company can coast
on the goodwill that it has built up in the
category and save the money that it would
otherwise have to spend to create brand
awareness of a new name and offering.
Answering the Question
Question #1
• What is the Long term Marketing Objective: Is a
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.
Answering the Question
Question #2
First-year marketing objective as a part of short term business strategy is
implemented to accomplish the long-term goals. It has to encourage:
– Measurability which provides clarity (one of the most powerful forces in business
leadership) for the business units involved.
– Priority-Centric which considers over budget and resources.
– Understandability which make it pretty self-explanatory.
– Acceptability which are consistent with preferences and own vision of business
units.
– Motivating
– Flexibility which should be adaptable to unforeseen changes in the business
environment.
– Link to Long-Term Objectives which help business units gain traction and
momentum in the process of accomplishing long-term goals.
– Achievability which is closely tied to motivation. If an objective cannot be
achieved, employees will burn out quickly move on to a company where they can
thrive.
Answering The Questions
Question # 3
Would you undertake a ‘roll-out’ launch, and if so in what country order?
What are the decision criteria for this order?
• Because of "a steady growth of the shampoo market and the conditioner
market" and statistics show an increase in hair washing, Europe is the
attractive market to undertake a ‘roll-out’ launch.
• Southern European countries have quite an underdeveloped conditioner
market compared to the USA., therefore, P"G should focus upon West
Germany, Great Britain, France, Scandinavia and Benelux
• The share of shampoo users who also use conditioners reaches almost US
standard in Great Britain, with 42%. Germany has the second best user
share, followed by Scandinavia and Benelux, where conditioner
consumption is almost equal. Therefore, it is advisable to introduce BC-18
simultaneously in these two countries.
Answering The Questions
Question # 3
• In France, sales volumes for conditioners only make up 10% of those for
shampoos. The introduction in Scandinavia, Benelux and France should follow
in the second year to avoid competitors' me-too products to be introduced in
those markets.
• A consumer test in Europe proved that the original US bottle for Pert Plus was
the most appealing compared to the alternative products varying in brand
name, size and price. 28% would definitely buy it and 70% considered it to be
very convincing and relevant. Thus introducing BC-18 into the European
market would be rather uncomplicated, this can be seen in the expected sales
exhibit, where sufficient production capacity is guaranteed.
Answering the Questions
Question #4
Taking the country with the highest priority, which principles would you use
in order to budget media spending? Set out a rough media plan for the first
twelve months, with proposals for promotion activities in the first year. How
should media and promotion activities be budgeted for the following years?
• We assume that the P&G had a plan to launch the new shampoo product
in Hawaii. The proper media plan and advertising is the best tool to give
information about product. The company should increase the budget on
advertising cost. They have to use both printed and electronic media to
reach mass customer.
 Reach and frequency are key media terms used more in broadcast than in print.
Reach is the total number of people exposed to a message at least once in a set
time period, usually four weeks.
 Frequency is the average number of times those people are exposed during
that time period. To make reach go up, you buy a wider market area. To make
frequency go up, you buy more ads during the time period.
Media Plan
• January - December
1. Promotion
- from flyer (brochure, small leaflet)
- from street banner
- from held up activity
2. Advertising with media
- Print media NT 20,000 (estimated figure)
- Radio NT 30,000 (estimated figure)
- Television NT 40,000 (estimated figure)
- internet NT 15.000 (estimated figure)
3. Promotion activities:
P&G will introduce the brand to make people in Hawaii aware about the
brand. P&G also will hold some activities, related with health,
environment, or government to gain public awareness and build image of
the company. The activity like seminar or support sport activities.
Answering The Questions
Question # 5
Examine the cost and revenue implications of the Europe-wide introduction
program. Is there any loss to be expected in the first years? Does this require
a modification of the order of local market entries?
• As can be seen in the expected sales exhibit, P&G has losses over the first
two years. 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.
• In the third year, all countries, however, will make profits and the company
will break even with a total profit of 16.248.900 DM
• It is easily to see that the strategies of P&G prove to be effective to the
order of local market entries.