Proctor & Gamble Company (A)

Presented by:

Group A10

NEW BRAND INTRODUCTION 

90 % Of US household penetration to rise to 92% by 1990.

1. Signifies Saturated Market

2. Products in maturity phase.

3. Price competition high.

PRODUCT IMPROVEMENT  • Assuming an incremental market share of 3%.

• Product development will take 2 years.Share Increment 0.03 0.03 0.03

Volume 1.803 1.824 1.833

Revenue 31.01 31.55 31.89

Profits 3.72 3.78 3.86

Depreciation -6.67 -6.67 -6.67

Additional Mktg. -10

Net Effect -12.94 -2.88 -2.84

Total -18.67

JOY RESTAGE (NO SPOT) • Assuming an incremental share of 1% in next year.

Incremental share 0.01 0.005 0 0

Volume 0.598 0.3005 0 0

Revenues 10.2258 5.1686 0 0

Profits 1.227096 0.620232 0 0

COGS savings 3 3 3 3Additional

mktg -10

Net effect -5.7729 3.620232 3 3

NET 3.847328

MARKETING EXPENDITURE ON IVORY• Assuming that the effect of increasing spending on television advertising and price pack promotion on ivory will only have limited effect on market share.

INCREASED SPENDING ON IVORY

Incremental Share 0.01 0.005 0.005 0.005 0.005

Volume 0.594 0.299 0.3005 0.304 0.3055

Revenues 10.098 5.1129 5.1686 5.2592 5.3157

Profits 1.21176 0.613548 0.620232 0.631104 0.637884Additional

mktg -4

Net effect -2.78824 0.613548 0.620232 0.631104 0.637884NET -0.28547

RECOMMENDATION1. It is evident that over the span of next 5 years, all marketing investment choices except the

restage of JOY brand would result in a negative effect on P&G ‘s bottom-line.

2. Also, the competition in the form of sunlight brand has shown promising results in test

markets, thus making it imperative for P&G to act immediately to defend its market share in

the Performance segment.