Procter & Gamble in Europe

A roll-out launch

Group Two

Group Two Members

Jarinthon M997z225 

Rattaya M997z230

SonM997z209

HuongM997z226

ThaoM997z216

KhuongM997z212

Contents

Company & Background1

The situation in the USA2

The situation in the Europe3

Economic and Restriction 4

Conclusion5

Company Logo

COMPANY & BACKGROUND

Background P&G is the world’s biggest manufacturer of

packaged consumer goods and a global leader in health and beauty care products, detergents, diapers and food.

P&G was founded in the USA in 1837

In 1985 P&G bought the Richardson-Vicks company (Head&Shouders, Vidal Saaaoon, Pantene)

In 1987 P&G bought the German Blendax Group (Dental-care products)

Also, P&G celebrated its 150th anniversary. The company ranked as the second-oldest company among the 50 largest Fortune 500 companies.

Moreover, The company increased its presence in the European personal care category with the acquisition of the Blendax line of products. It was the largest international acquisition in company history.

In January 2005 P&G announced an acquisition of Gillette.

In 2005 Procter & Gamble operated on the markets of more than 160 countries and become the market leader in consumer goods company.

THE SITUATION IN THE USA

The situation in the USA

The USA shampoo market is highly fragmented, with a large number of suppliers and brands.

P&G was decided to introduce the BC-18 technology in the US market at the beginning of 1986 by replacing the brand Pert Plus.

Long-term Marketing goal: to take over the leading value position in the USA shampoo market.

Pert Plus was positioned as the shampoo that offered attractive hair in the convenient way.

The target group was to be all people. The source of business would also come from the group of people who did not use Pert or conditioner before.

Constant growth of the shampoo market is due to the increase in hair-washing ( out of the total population, 90% use shampoo).

Large price differences between premium and value brands.

Market share value in the first year is 5%.

Market share in the long-term is at least 10%.

It was positioned as the shampoo that offered attractive hair in a convenient way.

Marketing objective of Pert Plus: achieve a long-term 10% value share market leadership in the US shampoo market. For first year of lauch is a 5% value share.

Positioning Provide great-looking hair in the convenient way

Target group All people

Source of business New users

Pricing Premium-priced segment with a price premium up to 100% of the low-price market

- 10 Normal TV advertising

- Sample distribution

10% of households

- Display activities in

hypermarket

- Strong TV advertising,

- Sample distribution

60% of household

- Listing fund $4 million

- In 1987 Vol share 4 % and value

share 6.0 %.- In 1988 Vol share 4.5 % and value

share 6.3 %.

Pert Plus Introductory Activities

In the first 12 months

In the following 12 months

Result

THE SITUATION IN THE EUROPE

There was a steady increase in the shampoo market and the conditioner market.

But still below the 44% (had been reached in the USA) in the share of shampoo users who also used conditioner.

South European countries showed the most potential area like Great Britian, West Germany, France, Scandinavia, Benelux.

With Great Britation was a country having the strongest user share (42%).

Sizes and Shelf Prices, Shampoo, Europe, 1988 (DM)

West Germany Great Britain France Scandinavia Benelux

P&G BRANDS

Vidal Sassoon (200ml) 6.99 6.99 N/A 6.99 N/A

Pantene (200ml) N/A N/A 4.99 N/A N/A

Petrole Hahn (300ml) N/A N/A 2.99 N/A 2.99

Shamtu (400ml) 2.99 N/A N/A N/A N/A

Head & Shoulder (300ml) 5.99 5.99 5.99 5.99 5.99

COMPETITOR BRANDS

Timotei (Unilever) (200ml)

2.99 2.99 2.99 2.99 2.99

Nivea (Beiersdorf) (300ml)

3.99 N/A N/A 3.99 3.99

Schauma (Schwarzkopf) (400ml)

2.49 N/A N/A N/A 2.49

Palmolive (Colgate) (400ml)

N/A 2.49 2.49 2.49 2.49

Elseve/El Vital (L’Oreal) (250ml)

4.49 N/A 4.49 4.49 4.49

European Market

The European market was even more crowded than the US market in terms of the number of suppliers and brands available.

The differences of price between brands were well over 5 times for the same quantity.

Market Shares, Shampoo, Key Brands, Europe, 1988(volume (value) share in %)

West Germany Great Britain France Scandinavia Benelux

P&G BRANDS

Vidal Sassoon 0.5 (1.3) 1.1 (3.6) N/A 1.0 (2.4) N/A

Pantene N/A N/A 1.0 (2.1) N/A N/A

Petrole Hahn N/A N/A 3.0 (2.1) N/A 0.6 (0.6)

Shamtu 11.0 (6.3) N/A N/A N/A N/A

Head & Shoulder

1.1 (1.7) 6.5 (12.0) 1.1 (1.6) 1.0 (1.4) 2.9 (5.4)

COMPETITOR BRANDS

Timotei (Unilever)

5.0 (5.7) 8.5 (11.8) 4.9 (5.2) 7.5 (7.8) 3.8 (5.3)

Nivea (Beiersdorf)

9.0 (9.2) N/A N/A 2.5 (2.3) 4.4 (5.5)

Schauma (Schwarzkopf)

21.0 (10.0) N/A N/A N/A 7.0 (4.1)

Palmolive (Colgate)

N/A 4.6 (2.7) 12.3 (5.4) 7.0 (3.0) 18.2 (10.6)

Elseve/El Vital (L’Oreal)

3.3 (4.6) N/A 4.5 (5.8) 6.5 (8.2) 5.0 (8.4)

The Challenges In European Market

In 1988, BC-18 decided to introduce in European Market.

But there were 3 questions need to deal: - The first question was that “what brand

name to introduce the product in the individual European Market”.

- The second question was that “whether a 200 ml bottle would be accepted by European Market like in the USA”.

- The third question was about price at premium pricing.

Products Used for European Market Testing

European potential product: Vidal Sassoon.

US brand: Pert Plus.

Two national brands established in their domestic market: Pantene and Shamtu.

Price And Packaging

Just tested on only two brands:

- One from the lower price segment.

- Another brand from high-quality product concept.

Consumer Test, Europe, Results (%)

Vidal Sassoon

Wash & Go

Shamtu 2 in 1 “silkiness and bounce”

Pantene “Perfect care”

Pert Plus Wash & Go

Product concepts

4.99DM/200 ml

4.99DM/200 ml

4.99DM/250 ml

4.99DM/200 ml

5.99DM/200 ml

4.99DM/200 ml

“Would definitely buy”

29 20 27 28 17 28

“Is very new”

41 40 41 39 40 40

“Is very convincing and relevant”

70 73 72 73 72 70

Results

The high quality brand concept would allow the product to command a premium price.

An opportunity existed to use an established brand.

Consumer testing showed no significant difference between the brands, allowing for the Pert Plus brand to be introduced.

Media Plan

T argeted on West Germany and Great Britain.

B ecause of the market sizes of using shampoo and conditioner and awareness of the consumers.

Media Plan for 1st Year

Strongly using TV and Print Ad focus on the benefit of “2 in 1 formula” and the convenience to use the shampoo.

Give sampling and make activities at public places such as subway station, Central Park, etc.

Media Plan for Following Years

I ntroduce the product to other European count ries such as France ,Scandinavian and

Benelux with using the same activities as West Germany and Great Britain.

Create a new TVC and Print Ad.

Create a special activities for brand awareness.

Promotional : Discount on product and give premium goods.

ECONOMIC and RESTRICTIONS

Economic

Cost structure of existing P&G shampoo brands as a template for BC-18 cost planning.

Producing the new product were relatively easy to estimate:- Whole European market in England.

- Use the available 200ml or 250ml bottle.

- Work capacity of 50%.

Restrictions

To determine costs it was necessary to consider the varying advertising and support budgets in the individual countries.

The available production capacity.

Lead times for alternative pack sizes and designs.- The development of a new 200 ml bottle would

take a lead time of 12 months.- Using the existing US bottle for Pert Plus would

not require any lead time.

CONCLUSION

Conclusion

Creating and launching new brands at record pace; establishing leadership positions in the more important developing markets of the world.

Strengthening its relationship with the retail customers; and use of information technology as a strategic tool.

Establish collaborative relationships like strategic alliances with key material suppliers.

In P&G's business technical know-how is changing rapidly. Therefore, strategy-critical activities are R&D, marketing and product innovation and getting new products onto the market quickly.

P&G should focus in strengthen its core competencies in marketing and R&D to sharpen its performance and rises them to the rank of distinctive competence in order to get competitive advantage over competitors.