Procter and Gamble

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Group 2 Section C 5th Oct 2010
Procter & Gamble Company

Situation Analysis: P&G is strongly positioned Light-Duty liquid detergent(LDLs)category. The LDL market can be segments on the basis of 3 benefits performance, mildness and price sensitivity. P&G has 3 products: Joy (Performance,12.1%),Ivory(Mildness,15.5%)and Dawn(Performance,14.1%). Wright is looking into the possibility of volume growth in terms of one of the three options: a)Introduction of a new brand (b)product improvement on existing brand (c)increased market expenditure on existing brand. Market opportunity:

The table shows the existing players and their market share in million cases. Per unit revenue of case is 850 million / 59 million cases: $14.4 per case.

Product\Segment Vol| Mildness| Performance| Price Sen|
P&G Joy|  | 7.139|  |
P&G Ivory| 9.145|  |  |
P&G Dawn|  | 8.319|  |
Lever Lux| 1.829|  |  |
Lever Dove| 1.829|  |  |
Lever Sunlight|  | 0.413|  |
C&P Pamolive| 6.962|  |  |
Dermassage| 2.065|  |  |
Others|  | 4.897|
Other LDLS| 16.402|
Total Segment Market| 21.83| 20.65| 22.42|

The market is expected to growth at a modest rate 0.6% with the percentage share of each category remaining almost stable Mildness(37%), Performance(35%), Price(28%). Evaluation of options:
1) Launch of H-80: Although this option has the advantage of fulfilling the need of customer for LDL which would remove tough-baked food, the initial investment required is $80 million. The expected return from this product assuming that it will get 60% of share from competitive brands is $3.1152 million. Moreover the projected growth rate in the performance segment is stagnant. This option would also cannibalize the growth and existing market share of Dawn which is performing well in this segment. Dawn also satisfies the benefits which H-80 provides. More than 85% of customers were satisfied with the performance of...
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