Megan Eisenbrown, Juliet Levine,
Hillary Pond and Rachel Woloszynski
Agenda
Introduction
Industry Structure
Advertising Strategies
Analysis & Recommendations
Why Soaps & Detergents?
Regularly and
frequently
purchased products
Brand loyalty to
household products
Key players stand
out
High advertising-tosales ratio
Soap & Cleaning Compound Manufacturing in the
United States
Industry Overview
 Definition: Substances that
loosen and remove soil from a
surface for personal hygiene,
sanitization or cleaning clothes,
linens, and furnishings.
 Major products:
 Soaps and detergents, polishes
and other sanitation goods,
surfactants and finishing agents
 Major functions:
 Prepare, manufacture, and
package cleaning compounds
Soaps & Detergents Overview
Product Segmentation by Percent of Industry Revenue
25%
40%
Laundry Detergent
Soap
15%
Dishwashing Detergent
20%
Other
Soaps & Detergents Overview
Product
Laundry
Detergent
Soap
Dishwashing
Detergent
Producer Cost
•Ingredient costs are 3540% of wholesale price
Consumer Cost:
Average Retail Price
$5
•Labor costs absorb 20% of
total costs
$2.50
•High initial capital
expenditures for plants and
technology
$2
Demand Drivers
World Price of Crude Oil
Per Capita Disposable Income
Drive/stifle
industry
growth
Demand Drivers
FY13: The increase in per capita disposable income is expected to
drive growth in the industry in 2013.
International Trade
Expansion
Opportunity
Core Market
Industry exports generate $8.6B annually, or 15.4% of industry revenue.
International Trade
Market Segmentation
 Soaps and
detergents are sold
directly from the
wholesaler to
commercial
businesses and
through retail
outlets for the
everyday, average
consumer
Commercial Sales
• Food Service
Establishments
• Healthcare Providers
• Lodging Establishments
Household Sales
• Supermarkets and Mass
Merchandisers
• Convenience Stores
• Independent Retailers
Market Segmentation
Major Market Segmentation (2013)
2%
12%
34%
14%
17%
21%
Supermarkets and
Mass Merchants
Independent Retailers
Food Service
Establishments
Healthcare Providers
Lodging Establishments
Barriers to Entry
High
Competition
Medium
Concentration
Government
Regulation
High Capital
Costs
Factors affecting entry
High
Marketing
Costs
Mature Life
Cycle
Overall difficulty of entry: Medium
Competitive Landscape
 Companies: 1,964
Procter & Gamble
 Major Players: 4
S.C. Johnson
20%
 HHI: 541.71
Colgate-Palmolive
10%
Ecolab
59%
6%
Other
6%
“The top 50 companies hold about 90% of the market.”
-FirstResearch
Major Players
Procter & Gamble
Market Share: 19.6%
• FY12 Profits: $10.7B
• 5-Year Growth Rate: 3.4%
• Brands: Tide, Cascade,
Charmin, Crest
Ecolab
Market Share: 5.9%
• FY12 Profits: $3.2B
• 5-Year Growth Rate: 6.7%
• Brands: Ecolab
S.C. Johnson
Market Share: 9.5%
• FY12 Profits: $15.2B
• 5-Year Growth Rate: 2.9%
• Brands: Pledge, Glade, Windex,
Ziplox
Colgate-Palmolive
Market Share: 5.7%
• FY12 Profits: $3.1B
• 5-Year Growth Rate: 2.4%
• Brands: Colgate Toothpaste,
Irish Spring, Palmolive
Industry Trends
 Employment
 Fewer workers due to increased automation
 Decrease in production costs
 Emerging Markets
 The U.S. market is stagnant
 Increased of acceptance of products and per capita income
in undeveloped nations
 Increasing Regulation
 Further the green movement within the industry
Strategies and Analysis
Product Differentiation
Differentiated Packaging
Cross Promotion
Online Advertising & Social Media
 Add pictures
Informative
Ad Characteristics Observations
• Frequency of Characteristics Mentioned: High
• Average Number of Characteristics Mentioned: 3
• Common Trends: cleaning power, concentration
• Frequency of Characteristics Mentioned: Medium
• Average Number of Characteristics Mentioned: 2
• Common Trends: freshness, clean boost, scent
• Frequency of Characteristics Mentioned: Low
• Average Number of Characteristics Mentioned: 0-1
• Common Trends: clean, color enhancement
Sales Promotion
YouTube
Celebrity Endorsement
http://www.youtube.com/watch?v=fxVUPe2
nQj8
Humor Advertising
Comparative Advertising
Sustainability Initiative
Social Responsibility
Sponsorships
Brand Loyalty
“That’s my Tide. What’s Yours?”
“Get Irresistibly Fresh”
“It’s All Good”
Brand Equity
P&G Goodwill
Goodwill (2012)
In Billions
Procter & Gamble
Colgate-Palmolive Co.
Johnson & Johnson
53.773
2.5
22.424
Goodwill (Billions)
62
60
58
56
54
52
50
2012
2011
2010
2009
2008
Comparing the Top 3 Companies in the Industry
Dollars Spent (Billions)
Total Advertising Expenditure by Company
10
9
8
7
6
5
4
3
2
1
0
Colgate-Palmolive Co.
Johnson & Johnson
Procter & Gamble Co.
Advertising-to-Sales Ratio
12
Ad-to-Sales Ratio
10
8
Colgate-Palmolive Co.
6
Johnson & Johnson
Procter & Gamble Co.
4
2
0
Analyzing Raw Data
Spending per Media Type
Dollars Spent (Millions)
45
40
35
30
Church & Dwight Co
Inc
25
Procter & Gamble Co
20
Vestar Capital
Partners Inc
15
10
5
0
Cable TV
Network TV
SLN TV
Dollars Spent (Millions)
Spending per Network
10
9
8
7
6
5
4
3
2
1
0
Church &
Dwight Co Inc
Procter &
Gamble Co
Vestar Capital
Partners Inc
ABC
CBS
MTV
NBC
UNIVISION
Percent of Overall Spending
Spending per Program Type
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
Church &
Dwight Co Inc
Procter &
Gamble Co
Vestar Capital
Partners Inc
Advertising Expenditure by Product
Dollars Spent (Millions)
80
70
60
50
40
30
20
10
0
All
Gain
Tide
Dollars Spent (Millions)
Spending per Network
10
9
8
7
6
5
4
3
2
1
0
All
Gain
Tide
ABC
CBS
MTV
NBC
Univision
Percent of Overall Spending
Spending per Program Type
0.20
0.18
0.16
0.14
0.12
0.10
0.08
0.06
0.04
0.02
0.00
All
Gain
Tide
Spending per Week Day
12%
13%
14%
SUN
15%
MON
TUE
WED
THU
15%
15%
FRI
SAT
16%
Dollars Spent (Millions)
Spending by Day Part
80
70
60
50
40
30
20
10
0
Ad Spending on Primetime
Spending on Total Ad
Product Prime Daypart Spending
Percent of
Total Spending
on Prime
All
$8,228,173
$19,878,160
41%
Gain
$3,719,908
$8,898,499
42%
Tide
$29,486,556
$67,277,102
44%
Ad Observations: Key Findings
All
• High frequency of
characteristics
• Limited to no
comparative
advertising
• No celebrities, humor,
or emotion
• Demographic: children
Gain
Tide
• Repetition of the
word “Freshness”
• References to “that
other stuff” in indirect
comparison
• Money back
guarantee
• Humor was evident in
almost all cases
• Library of
commercials was
extensive
• Humor and emotion
was evident in almost
all cases
• Demographic: parents
• “That’s my Tide.
What’s yours?”
Ad Observation: Spanish Demographic
Industry and Advertising Analysis
Investment
Barrons
Procter & Gamble Co
Advertising Strategy
Exploring
less
saturated
markets
globally
Promoting
sustainable
side
Expanding
the target
demographic
Innovation
Questions?