The president of the Personal Care Division of Gillette, Bill Ryan, is currently faced by a conflict of strategies employed to market their products. Two products have been discussed to show the way the two strategies worked and what results they could manage. White Rain (shampoo and conditioner) launched in 1985 had a market share of 3% in 1986. Right Guard (deodorant) was restaged in 1983 and has a share of 6.5% currently which was declining over the years.
If we compare the marketing expense to sales ratio of Right Guard (table 1) we would realise that the ratio after the implementation of the “restage” is better than the projected figures in case of “no restage”. Unable to match the expectations, Right Guard is still having a healthy market share and is providing good revenues. On the other hand White Rain is still having a small (3%) market share and is yet to make any money. Thus it would not be justified to categorically put the system to blame.
|Forecast |1983 |1984 |1985 | |Sales |69.6 |82.1 |94 | |Direct Marketing Expense |22.8 |27.6 |36.3 | |marketing expense to sales % |32.75862 |33.61754 |38.61702 | | | | | | |Actual Figures |1983 |1984 |1985 | |Sales |72.3 |70.1 |68.2 | |Direct Marketing Expense |26.4 |21.4 |20.3 | |marketing expense to sales %...