Case
study
Members:
06国贸6班
韩文静 黄敏玲 黄雅斯 黄泳佩
3
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P&G was one of the first packed goods
companies to go pan-European .Already in the
early 1980s the American company had
established a pan-European focus in its R&Deffort and a system of “lead counties” for panEuropean product roll-outs .
The Pert Plus shampoo is a good example of
the company’s pan-European drive .The case
incorporates the market research information
that typically is available for decision making and
includes production cost data and completive
comparions.
QUESTION 1
How attractive is the panEuropean market for Pert Plus
in terms of demand potential?
Competition?
Any cannibalization
problems?
******* ANSWER: *******
P&G is an international supplier of consumer goods 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 decided to introduce BC-18 in
Europe. Traditionally, the European market is highly
competitive the main rivals are Colgate, Unileaver, and
L'Oreal. The European market is segmented (i.e. value
based) and sensitive to price changes (i.e. elastic
demand).The introduction of the new product BC-18
brings with it a new marketing strategy for the company.
In order to make a valued choice the 4P's of marketing
have to be considered.
***********************
BC-18 technology would offer the European
consumers 'Great looking hair in a convenient
way'. Currently P"G are practicing a strategy
called "Euro-Balancing" , it entails the concept of
standardizing to the maximum and
implementing localization only where necessary.
By introducing a single brand name for its
potential market, 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.
***********************
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. In instead of
"Pert Plus", the European name could be "Vidal
Sassoon Plus", the logo could look like the image
bellow. Research indicates in Europe there are large
price differences among hair care products. It can
enforce the competitive strength of P&G. Although it
hasn’t face the cannibalization problems. It still
prepare for it .
QUESTION 2
What competitive advantages does
Pert Plus have? Disadvantages? Any
country of origin effect?
• P&G is an international supplier of consumer
goods 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'- the technology,“2-in-1” for shampoo
and conditioner in one wash, was new to the
market and had been developed in the P&G
research lab.
• Advantages: easy, time-saving,
and convenient everyday use of
the product .
• Disadvantages: more expensive.
• No country-of origin effect.
QUESTION 3
Which countries are the
leading markets in Europe?
What are the advantages or
disadvantages of entering a
leading market first?
ANSWER:
The southern European
countries, such as West
Germany, Great Britain,
France, Scandinavia and
Benelux, are the lead
markets in Europe.
*********************
• Entering a leading market first enable
the brand to determine the most
consumers' real interst in the product
from the outset so that it could
develop sales and acquire market
information in the Pan-Europe
market.Also it could build a clear and
reconizable image in the target
market.
*********************
• However,it was not easy that a new
brand enter a new,lead market.With
respect to the number of suppliers
and brands,the European market was
more fragmanted than U.S.
market,undoubtedly a function of the
different nationalities.The most
inportant competitors for P&G were
Unilever,Colgate and L'Oreal.
QUESTION 4
What does the marketing research
tell about the price and positioning
decision for Europe? Brand choice?
Should the BC 18 technology be
introduced with a pan European
name, or with local brand names, or
even with a mixture of both
approaches?
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.
P&G is to become a leader in the
European market of two in one hair
products. The first year objective is to
attract new European customers from
competing brands to shift to the use of
shampoo to BC-18. The aim is 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. In effect BC-18 technology serves
the core need of washing hair and therefore
it has to compete with the different national
brands which are often well established.
As I see, the BC-18 technology should
be introduced with a mixture of both
approaches—with a pan-European name
and local brand names. If we just
introduce with a pan-European name is
bad for the promotion of the BC-18.
Local names sound approachable.
People are likely to accept them. But if
we just use local names we will have
some problems in selling them in the
whole Euro. So the best way is using both
of them.
QUESTION 5
Given the economic
data, what is your
recommendation for
launch strategy?
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Let’s take Britain and as example. The markets in
Europe are highly fragmented therefore, P&G cannot
expect the same market shares in every country. The
company should take into account the existing brands,
their markets in every country and the conditioner use in
every country. Great Britain: P&G must aim to attack
Timotei's marketing leader position while maintaining
their customer base of Head & Shoulders. As Head
&Shoulders is more specific and known for its antidandruff ingredients, this should be possible. The
company should try to gain 4.5 % volume market share
in the first year and increase it to 5 % in the second year,
regarding to the high use of conditioner in Great Britain.
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Country Great Britain W. Germany France
Benelux Scandinavia
Market share (volume)4.5 - 5 %3 - 3.5 %2.5 - 3
%3.5 - 4 %4 - 4.5 % Since there is "a steady
growth of the shampoo market and the
conditioner market" and statistics show an
increase in hair washing, a roll-out launch is
recommended in Europe.
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The end
thank you