Procter & Gamble in Europe
A roll-out launch
Wolfgang Breuer and Richard Kohler
Group 4
Outline
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All about P&G
Introduction strategy in Europe
Marketing objective
A ‘roll-out’ launch
Media and promotion budget
Cost vs revenue implications
History
1837
31 October
– founded by Alexander Norris (an
American), William Procter (a British candlemaker) and
James Gamble (an Irish soapmaker)
1880s
Late
– significant increase in amount of sales,
number of employees and variant of products
1920s – 1930s – started to sponsoring radio
programs -> soap operas
1930 – acquired Thomas Heldey Co. (England based)
Jay
History (cont.)
1990s
Late
– acquisition of more companies (Folgers Coffee,
Norwich Eaton Pharmaceuticals, Richard-Vicks, Noxell, Shulton’s Old
Spice, Max Factor & Iams Company
1994 – sued Bankers Trust for fraud after having the advantage
in interest rate derivatives
January
2005 – acquired Gillete
2009
August 24,
– Warner Chilcott (Irish-based company)
announced buying P&G’s prescription-drug business
Jay
Company Profile
Robert A. McDonald
Chairman of the Board,
President and Chief
Executive Officer
Giovanni Ciserani
President – Western Europe
Switzerland is headquarters
of P&G Western Europe,
the umbrella for the US
giant's operations in the UK,
Germany, France, Italy,
Spain, Greece, Scandinavia
and other markets
P&G’s Organizational
Structure
Jay
Profit Sharing
Jay
2010 Financial Caption
• Net sales increased
3% to $78.9 billion
• Unit volume
increased 4% versus
prior year
• Net earnings
decreased 5% to
$12.7 billion
Jay
Introduction Strategy in Europe
Criteria for brand name selection
• According to the market research the consumer were willing to
pay the equal price for the selected product (Vidal Sassoon,
Shamtu, Pantene, Pert Plus).
• The BC-18 technology would be introduced by the existing
brand in a new quality.
Luck
Introduction Strategy in Europe (cont.)
Positioning
The shampoo will provide greatlooking hair in a convenient way
Target group
All people
Sources of business
New users
Pricing
Premium-priced up to 100% of
the low-price market leader
Packaging
Using the existing US bottle for
Pert Plus would not require any
lead time
Luck
Marketing Objective
• Get into European market by establishing identity
of the brand and positioning itself as easy, timesaving everyday use of the product under the
product concept of 'wash & go'.
• Need to educate the market in the use of conditioners
further. And new hair care technology ‘BC-18’ which can
combine shampoo and conditioner within one product
and it has the same effect as using shampoo and
conditioner separately.
– TV spots
– Display activities in the supermarket
– Handing out free samples
Praew
Long-term Marketing Objective
Creating value-based market share of their
brand :
– build strong awareness brand
– brand loyalty
• “bring your old shampoo and conditioner, then get the
newest Pert plus Product for free” campaign.
• Attractive advertising and sales promotion to boost
Praew
A ‘roll-out’ launch
• P&G should focus upon West Germany, Great
Britain, France, Scandinavia and Benelux:
– Southern European countries have quite an
underdeveloped conditioner market compared to
the USA.
– 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.
Chien
A ‘roll-out’ launch (cont.)
• The decision criteria :
– 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.
– In France, sales volumes for conditioners only
make up 10% of those for shampoos, and France
should follow in the second year to avoid
competitors' me-too products to be introduced in
those markets.
Chien
A ‘roll-out’ launch (cont.)
– 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.
Chien
Media and Promotion Budget
• Affordable Method
– a method used often by a small business, which
they think they can afford
• Competitive Parity
– a method which they try to keep their
promotional spending comparable to the
competitors’ spending level. This method is
designed to keep a brand in the minds of
consumers.
Ralph
Media and Promotion Budget (cont.)
• Objective and Task Method
a method whereby marketing managers
determine:
• What they want to accomplish (objectives) with
their communication,
• What activities (commercials, sales promotions,
publicity, and etc.) are necessary to accomplish the
objectives,
• How they conduct a research to figure out how
much the activities, tasks, and cost in order to
develop a budget.
Ralph
Cost vs Revenue Implications
• In the first year, there are some losses to be
expected, especially Vidal Sassoon.
– In West Germany, Vidal Sassoon 200 ml
incurred loss by Deutschmarks 7.75 per 2.5
litres
– In Great Britain, Vidal Sassoon 200 ml
incurred loss by Deutschmarks 0.25 per 2.5
litres
– In Scandinavia, Vidal Sassoon 200 ml
incurred loss by Deutschmarks 1.75 per 2.5
litres
• The other product (e.g. Shamtu, Pantene
and Head & Shoulders) was profitable in
Europe
Mega
Cost vs Revenue Implications (cont.)
P&G surely need the modification for the loss
incurred in the first year. In order to enter the
local market entries, they should:
– Aware of any new technology developed for hair
product -> keep R&D activity
– Create an interesting packaging with a premium
price -> European like stylish design
– Applied consumer test before launch new product
in Europe -> strong vs weak brand image
Thank You