SOUTHERN NEW HAMPSHIRE UNIVERSITY
Graduate School of Business
Program:
SNHU School of Business Graduate Program
Course Title : Marketing Strategies – MKT 500
Instructor: Jeannemarie Thorpe
Due Date: Monday, January 12, 2004
Submission Date: Monday, January 12, 2004
Type of Assignment: Case Analysis
Title of Assignment: Procter and Gamble, Inc. – 2nd Case Study
Student Name: Cevdet KIZIL
Student Phone #s: (603) 626 9302
Student E-mail: cevdetkizil@yahoo.com
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assistance I received in its preparation is fully acknowledged and disclosed within this document. For
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Monday, January 12, 2004
Date:
Procter and Gamble, Inc.
Scope
The problem for Procter & Gamble`s (P&G) “Scope” brand is that their share at
mouthwash market is slightly going down while a new brand called “Plax” launched by
Pfizer Inc. has gained a %10 market share in a very short time period which created a
situation that left “P&G”s management team in dilemma for how to respond.
P&G has some constraints to solve the problem (in fact, the situation is so
complex that for some, no problem and threat exist). First of all, if they introduce a new
product in the mouthwash market as a competitor against Plax; they are not sure if it will
be really innovative or it will focus on unmet consumer needs. Another limitation is that
introducing a new product to the market will cost a lot (even the test production costs
$20,000. Capital costs, marketing costs, delivery costs, inventory costs, ingredients costs,
packaging costs are other important costs which create concerns) and also will require an
effective strategic management. After that, the new product is very similar to Plax and
has no significant advantage except a better taste; on the other hand, sales department
thinks that for success, the product must be seen as unique. So, P&G can not be sure
about the future success of this product. Next, for the new product to gain reassurance,
patience is needed. This can only be achieved in the long period. Following this, the new
product will also reduce the sales of Scope. Additionally, P&G is not sure about the name
of the product too, will it be sold under Scope`s name or not? If sold under Scope`s name,
P&G thinks the new product can also cause the loyal customers to stop using Scope
because of the brand`s new image. Plus, another disadvantage for P&G will be that they
will always have to support the new product like Scope. On the opposite side, if P&G
doesn`t produce a new product, but tries to emphasize that Scope now fights plaque while
also still providing good breath via advertising, it will be very hard to create the two
images at the same time. Because P&G thinks consumers only receive one main message
at a time. Also, Scope`s new image can confuse the already existing customers. In fact, I
think there are some other hidden constraints. As an example, it`s beneficial that P&G
team has many ideas to solve the problem, but at the end, they can`t find the best answer
(idea) to solve the problem. In my point of view, the reputation of Plax, especially on
health issues of teeth is another important limitation for Scope.
Finally, according to me, P&G may have some potential alternatives to solve the
problem. As the initial step, they can think more for the U.S. market than the Canadian
market. Because they are already the leader in Canadian market while the U.S. market is
still led by Listerine. Then, P&G can implement a much more detailed marketing
research to have a better understanding on why their market share is going down while
Plax`s is increasing. Next, Plax does not have a good image at reducing bad breath. So, in
advertisings (T.V. , newspaper…etc.), they can focus on Plax`s this weak point. For
instance, on a T.V. commercial, they can show a guy losing his girlfriend because of bad
breath. Then, by reading the case carefully, we can see that Plax has other weak points at
financials (costs) and retail prices while Scope has advantage on both. So, P&G should
use this advantage wisely against Plax. For example, they can try to dominate the lowaverage income groups (markets) deeper which find the price of Plax high. Focusing
more on these groups (markets) can be really smart.