Palmolive Case Analysis

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PMPC
BA 115 A

Case Title:
Palmolive Naturals shampoo: Connecting with the Consumers

Point of View:
Ms. Gigi Alvarez
Senior Product Manager of Palmolive Shampoo

The Problem:
Ms. Gigi Alvarez, senior product manager of Palmolive Shampoo, need to prepare marketing plan for Palmolive Shampoo in five days to be presented to the Marketing Review.

Objective:
To prepare a marketing plan for Palmolive Shampoo in five days to be presented to the Marketing Review.

Areas of Consideration:
1.)Company Background
The present company, Colgate-Palmolive, is an $8.0 billion consumer products company that serves people around the world with well-known brands that make consumers’ lives healthier and more enjoyable. Truly global in scope, its sales come from its international operations. The company focuses on five core businesses: Oral Care, Personal Care, Household Surface Care, Fabric Care, and Pet Nutrition. Now, it has become a leading marketer if not a leader in most product categories it competes in. The parent company has research and development (R&D) operations in Piscataway, New Jersey, but it also established a regional R&D base in the Philippines.

2.)The Shampoo industry
In 1996, there were three major shampoo manufacturers in the Philippines.The category leader was Procter and Gamble with five shampoo brands (Pantene, Rejoice, Head & Shoulders, Ivory, and Vidal Sasson), Unilever (Sunsilk, Lux, and Organics), and Colgate-Palmolive (Palmolive Naturals, Palmolive Optima, and Gard). The three manufacturers control about 91 percent of the shampoo market. More than one hundred other shampoo brands compete for the remaining nine percent. The shampoo industry was long dominated by Colgate-Palmolive and Unilever. Colgate-Palmolive was very strong during the 1960’s-1970 while Unilever took over the leadership briefly during the late 1970’s. Procter and Gamble entered the shampoo market by introducing Prell, quit the market and then re-entered the market through Rejoice in the late 1980’s. Palmolive was still the brand leader nationwide because of good distribution and popular pricing. However, in Metro Manila, Procter’s Pantene was number one in some studies. Procter with five shampoo brands became the shampoo category market leader in 1995.

3.)Marketing Mix Elements
In 1996, there were five variants of Palmolive Naturals Shampoo each catering to a specific hair type. Palmolive Naturals utilized a translucent plastic bottle with a label and full fliptop cap. Each had unique label and closure cover.Palmolive Naturals is the mass market shampoo of Colgate-Palmolive and was positioned as a shampoo made from natural ingredients that are hiyang (roughly translated, compatible). In 1990, Palmolive Optima 2-in-1 shampoo plus conditioners was launched with a hair scientist demonstrating the conditioning benefits of the shampoo to hair. Colgate-Palmolive also had a strong antidandruff shampoo brand in Gard.Product life cycles for shampoo brands are becoming shorter and “news” about a brand must be had at least every two years.Just recently, Procter and Gamble started importing shampoos from its subsidiary in Thailand. Colgate-Palmolive and Unilever continued to manufacture shampoo in the Philippines. Colgate-Palmolive had a good distribution system that matched the capabilities of its two competitors. Its relationship with its wholesalers and big retailers was quite strong. Allowances and trade support were adequate and competitive. Wholesalers and big retailers then supply the smaller account, mostly sari-sari (provision) storeowners. To win the shampoo war the brand must have extensive coverage. To make a brand ubiquitous it must be carried by the sari-sari stores. However, company support for the small sari-sari- stores was weak and some regions in Visayas and Mindanao have poor coverage. Palmolive Naturals was priced 5 to 10 percent lower than Palmolive Otima and other brands of Procter and Unilever. The...
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