service market

FINAL PROJECT

Service & Direct Marketing

Project Report on Phoenix Group of Companies

Submitted by:Umair Iqbal 12464

Submitted to:Dr. M.A.K.Chishti

Date: 05th May 2013

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ACKNOWLEDGEMENTS

First of all we would really like to thank the Almighty Allah who gave me the strength to work on the report and to complete the report on time without any hurdles. We would also like to thank our teacher who gave us the confidence and guidance on every step of our research. This project helps us know more about Service & Direct Marketing and have insights on the Service Marketing techniques used by the company for its products

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Table of Contents

Content Page noExecutive Summary 4

Chapter # 1 Procter & Gamble – A brief HistoryP&G History 5Company’s Purpose 5Company’s Commitment 6Company’s Principles 6

Chapter # 2 SWOT Analysis of Procter & GambleSWOT Analysis of Procter & Gamble

7

Strengths 8Weaknesses 8Opportunities 9Threats 9

Chapter # 3 Background of failed product CAMAY SOAPFailed Product description and details

10

Product Failure in Pakistan 10Competitors Analysis of Pakistani Market

11

Chapter # 4 Market SizeMarket Segmentation 12Targeting 13Product Pricing 13

Chapter # 5 Reasons for Failure of Camay SoapHigh Consumption 14Product for all types of skins 14Inappropriate Distribution Channel

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Chapter # 6 RecommendationsChapter # 7 Conclusion

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EXECUTIVE SUMMARY

Camay was beauty soap. It was a scented body and hand soap which was available in different fragrances. Camay gradually lost its popularity and market share because of customer complaints regarding the soap’s high solubility and consumption; therefore it was not a suitable product for the consumers especially for Pakistani consumers who give great importance to the benefit derived in relation to the price they have paid and budget conscious class of consumers. Its different scents haven’t even contributed much to its popularity.

Another major factor behind the failure of the Camay soup was that it failed to position itself as a product for all type of skins and consumers didn’t accepted it as a suitable product for different types of skins such as dry, oily or sensitive skins which is give utter importance by consumers while selecting the soup.

Furthermore, the target audience was not identified correctly and the product was marketed as a product for all while its features are more suited for the teenagers and kids especially women who are conscious about their skin health. Camay soap also lacks the moisturizing element which is an essential content of soap as the environment in Pakistan is mostly dry and humid and skin requires moisturizers to moist the skins and keep them healthy.

Pricing of the product also contributed towards the failure of the product as comparative price of the soap was not inline with the industry trend and better soaps were available were available at comparatively low prices thereby influencing customers attitude not to buy the product as the consumers pay for the benefit the perceive they would derive from the product after all CUSTOMERS DOES NOT PAY FOR THE PRODUCT, THEY PAY FOR THE SOLUTION.

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Chapter 1

Procter & Gamble – A brief History

Procter & Gamble Company (P&G) is a Fortune SCO, American global corporation based in Cincinnati, Ohio, that manufactures a wide range of consumer goods. As of 2008, P&G is the 6th largest corporation in the world by market capitalization and 14th largest US Company by profit. P&G was ranked 10th in the “Fortune's Most Admired Companies” in 2007. P&G is credited with many business innovations including brand management, the soap opera, and "Connect& Develop" innovation.

According to the Nielsen Company, in 2007 P&G spent more on U.S. advertising than any other company; and spent US$ 2.62 billion which was almost twice as much as General Motors, the next company on the Nielsen list. P&G was named 2008 Advertiser of the Year by Cannes International Advertising Festival.

Three billion times a day, P&G brands touch the lives of people around the world. P&G’s corporate tradition is rooted in the principles of personal integrity, respect for the individual and doing what's right for the long-term.

Company’s PurposeP&G provides branded products and services of superior quality and value that improves the lives of the world's consumers, now and for generations to come. As a result, consumer rewards the Company with leadership sales, profit and value creation, allowing the P&G people, the shareholders and the communities in which they live and work to prosper.

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Company’s Commitment

Improving the lives of consumers worldwide is about more than just great products. It’s about taking responsibility for improving the communities around the world through the work Company do, as a Company and as individuals forming the Company.

Company’s PrinciplesP&G show respect for all individuals. The interests of the company and the individual are inseparable. Vie are strategically focused in our work. Innovation is the cornerstone of our success. Vie are externally focused. We value personal mastery. Vie seek to be the best. Mutual interdependency is a way of life.History

In 1837, Procter and Gamble was founded in Cincinnati by William Procter, a candle maker, and brother-in-law Gamble, a soap maker. Their joint venture started one of the most influential companies in all American industry. The company's first product was Ivory soap, introduced in 1879.For generations, Procter and Gamble has been built by scientists and consumer researchers; the latter finding out what the public needs and wants are, and the former improving upon old products or inventing new ones to match the identified needs and desires.

Several products were developed during the time period when William Procter's son, William Alexander Procter, took over the company (1890-1907.) William Cooper Procter began working in the company in 1883 and served as president of the company from 1907-1930. During this era, the company's sales rose from US$20 million to US$ 200 million. This was a period of rapid growth in which the company built several plants: five in the United States, one in Canada, and one in England.

William Cooper Procter was a pioneer in many labor relation reforms. Procter and Gamble became the first American company to give half holidays on Saturdays and set up a profit- sharing plan in the same year. Company policy was reworked in 1920, and all the employees were guaranteed 48 weeks of work per year. Other firsts includes a disability pension plan, a life insurance plan, and employee representation on the Board of Directors.

Today, P&G; goods are found in 98 percent of all American households. With additional products are sold worldwide, from the Arabian Peninsula to Argentina to Indian subcontinent, the company remains committed to marketing superior products.

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Chapter 2

SWOT Analysis of Procter & Gamble

P&G is a Global Company reaching with business expanded to 82 countries. A specialized company with a singular, steadfast focuses on the advancement of skin care and other consumer goods around the globe. It has a very strong global brand image. Since products of P&G have been used for more than 150 years, thus the brand loyalty among its buyers does exist and there is a strong bond between the customers and the Company.

P&G's goal is simple, improving the quality of human life by providing high quality, safe and effective FMCGs (fast moving consumer goods), therefore making life easier for so many people around the globe.

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Strengths:

The biggest strength of P&G as a company is having vast range of skin care product line including creams, lotions, shampoos, liquid cleansers and etc.

It has a very strong brand name.

Due to its strong brand repute, P&G has a huge customer base.

The customers of P&G are extremely brand loyal and have less tendency of switching on to some 0ther brands.

P&G are always bringing inn ovation s to sustain its customer base.

Weaknesses:

The major weakness of P&G is being less innovative than its major competitor Unilever.

Some of the P&G products have failed in certain geographic areas, as the research for those products is not conducted in all the geographic areas where the product has to be sold. For example, Oil of Olay failed in Pakistan, Camay failed here as well.

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Opportunities

Some opportunities include the unexplored areas in the markets where P&G can sell its product.

One of the opportunities for P&G is to invest in the segment for children.

Another opportunity for P&G is to introduce food and beverages for Pakistani market, keeping in view the tastes and preferences of the people here.

Threats:Unilever is the biggest threat for P&G as that is the most aggressive competitor of P&G.With the advent of new FMCG providers in market with less priced products, people in markets like Pakistan where due to inflation customers can switch on to other low price products.

As P&G is operating globally therefore the regulations of Government in different geographical areas may affect the policies of P&G.

As the world economy is going through the unprecedented economy crisis that may prove to be a threat for all the businesses being operate d globally

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Chapter 3

BACKGROUND OF FAILED PRODUCT CAMAY SOAP

Failed Product description and details:

Camay was rich, creamy beauty soap. Camay was available in different fragrances. Camay was the name of a scented hand and body soap, made by Procter & Gamble. It was first introduced in 1926 and marketed as a “white, pure soap for women" as many soaps of the time were colored to mask impurities. Camay's slogan for many years was "Camay: the soap for beautiful women." It was later replaced with "For your most beautiful complexion at every age."

Camay is still produced, however many stores in the United States and Pakistan do not sell it anymore, as it has fallen out of popularity in recent years. Since it is still quite popular abroad, in the U.S. it is often found at immigrant-oriented ethnic stores. For many years, Camay was a major sponsor of the soap opera Search for Tomorrow.Camay Soap was introduced in the USA in 1926 and in the UK in 1958. It was one of the first -beauty soaps marketed in post-World War II in Britain. The brand was seen as a luxurious and exclusive soap, which provided the ultimate in feminine glamour. In those early days, Camay became renowned for its use of exclusive French perfumes, its pink color and its rich lather. The name Camay was derived from the bars own cameo stamp. "Camay" was coined from the French word, "came e," which means cameo, the jewel.

Product Failure in Pakistan:Camay was introduced in Pakistan. Extensive advertisement was done for the products. The soap was introduced with different scents to ensure variety. But Camay became unsuccessful in coping up with the expectations of the customers. Therefore it was failed.

One of the complaints of the customers was that Camay was highly soluble soap, due to which it was consumed highly and was not a cost efficient product. Camay failed to compete with Lux, Capri, Dove, Imperial leather etc. Even different scents of the product

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were unable to contribute to its success. Customers were unable to accept such soap and ultimately P&G had to face a decline in the growth stage of Camay.

Competitors Analysis of Pakistani Market:

Leading Soap Brand Market ShareLifebuoy 35%Lux 25%Safeguard 15%Others 25%

Chapter 4

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Market Share

Lifebuoy35%

Lux25%

Safeguard15%

Others25%

Lifebuoy Lux Safeguard Others

Market Size

In order to understand the market size, we need to have insights about the meaning of market segmentation, targeting segments and pricing strategies which are the variables which determine the positioning of the product and market size.MARKET SEGMENTATION

To get a product or service to the right person or company, a marketer would firstly segment the market, then target a single segment or series of segments, and finally position within the segments

Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behavior. The world is made up from billions of buyers with their own sets of needs and behavior. Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior. Such a group is known as a 'segment'.

Segmentation is a form of critical evaluation rather than a prescribed process or system, and hence no two markets are defined and segmented in the same way. There are many ways that a segment can be considered. For example, the auto market could be segmented by:

By geography

Such as where in the world the product was bought our product would be customized for Asian skin types. It would be a local product available only in Pakistan, developed especially to work wonders on the Asian skin type.

By Psychographics

Such as lifestyle or beliefs People with a certain lifestyle would want to buy an expensive medicated soap not every Tom Dick and Ham/ would do that. Thus our segment ft considered psycho graphically would target people whose beliefs and attitudes are shaped by popular culture and they fall prey towhat the television says pretty easily.

By socio-cultural factors

Such as class does play a part in the acceptance of such products in your life. People from the upper class and upper middle class would be ready to buy our soap because it is not acceptable to people with a low income to splurge on such luxuries as medicated soap.

By demography

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Factors such as age, sex, and so on are considered. Mostly females are conscious about their skin, and males do not usually use products with the stereotypical 'beauty attached to it.

TARGETING

Targeting is the second stage of the segment, target, positioning process. After the market has been separated into its segments, the marketer will select a segment or series of segments and 'target it/them. Resources and effort will be targeted at the segment. It is like looking at a dartboard or a shooting target. You see that it has areas with different scores - these are your segments. Aiming the dart or the bullet at a specific scoring area is targeting.

PRODUCT PRICE

One of the most important decisions in marketing is the price. This is because price is believed to have impact on sales volumes. If the price is too high and the market is competitive, sales may be correspondingly reduced. Main reason for the importance of price is that it is one of the main variables that determine the profit. The profit per unit is equal to the price less the total cost of producing that unit.

Profit = Price - Cost

Chapter 5

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Reasons for Failure of Camay Soap

High Consumption

Major reason behind the failure of the Camay soap in Pakistan was that it was not a cost efficient product and was highly soluble and since it was consumed quickly, the consumers failed to apprehend the cost they paid for the benefit they perceived they would derive from the product.

Product for all types of skins

Another reason for the failure of the product was that it failed to cater the different requirements of the consumers and tried to market the soup as brand for all types of skins. While in market, soaps were available for different types of skins such as oily, dry and sensitive. This led to the consumers diverted away to other products marketed specifically for them.

Inappropriate Distribution Channel

A distribution channel is defined as:

Elements of the system of delivery of merchandise to customers from the manufacturer or wholesaler, in retailers, brokers, and shipping companies; also includes discussions of store merchandising and cross- merchandising.

The distribution system refers to the entire marketing process, and not just the physical product distribution. It is a set of interdependent groups and individuals concerned with transferring specific goods or services from the original producer or supplier to the final user or consumer.

Distribution channels are essentially sets of relationships where the parties involved have to:• Know each others aims, policies and procedures• Be aware of their planning horizons and management styles• Be willing to accept tasks as well as impose them on 0thersThe most effective distribution channels are those where the distributor's interests are made to coincide with the producer's interests. Before any commitment is made, the producer needs to be certain of the distributors business aims, attitudes and customer franchise.It pays to remember that your distributors are customers too, and have the option to buy elsewhere. Distributors may take on some or all of the tasks involved in getting

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goods or 5er/ices from the producer’s door to the consumer's threshold. Transferring part or the company's image to the distributor implies that decisions taken by the middleman must be reviewed and should be of a long-term nature.

P&G failed to market the product to the teenagers and kids who are conscious about the skin and give due importance to the manner in which they are attracted to the products. P&G relied heavily on its brand image and 150 years of existence without understanding the attitudes of the Pakistani target market and failed to understand their requirements.

Pricing Strategy

P&G adopted market skimming strategy for the product and tried to recover the investment made during early stages of the product life cycle in Pakistan. While other soups with meeting the needs of the consumers were readily available in the market, Camay Soap failed to penetrate the market and had to reset the price as demand declined significantly.

Chapter 6

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Recommendations

It is recommended that product should be re-launched and target market should be identified. Different variants for different types of skins is a good option and is highly recommended as the industry trend is such that. For e.g. Lux soup have range of soaps to cater for the different types of skins.

Furthermore, the clinical aspects and the benefits of the products should be highlighted and should be spread in such a way so as to attract teenagers and women segment as they usually influence the buying pattern of household items and are more concerned with the beauty products.

Packaging should be made attractive and more inclined towards targeting the big segments.

Furthermore, pricing strategy should be reworked and market penetration strategy should be adopted for the re-launched product. A market survey should be carried out and price should be set as such level so as to attract the low to medium income class as they are the biggest segment in the country.

Furthermore, research should be carried out to overcome the major problem of the high solubility which is the biggest cause of the failure of the product.

Chapter 7

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Conclusion

P&G certainly has the potential to re-introduce the product and capture good market share and have ample resources to revamp and market there product and by implementing the recommendations suggested in Chapter 6, there is a high probability that Camay Soap will become a major beauty soap product in Pakistan.

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service market

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