Procter and Gamble

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Procter & Gamble, Inc.

Company Background
Scope is a major brand in the health care division of Procter & Gamble, Inc. that has historically competed on the basis of delivering fresh breath and killing germs. Scope was the first brand to compete with both protection against bad breath and better taste, and entered the mouthwash market in 1967 to compete with Listerine. After company market research in 1990, Scope managers could see that in Canadian households mouthwash was used on average three times per week. Results concerning market share information showed Scope’s shares were higher in food stores rather than drugstores. In the Canadian market mouthwash companies must pass through 2 regulatory systems. The Health Protection Branch (HPB) is the government body that declares a product to be “drug status” or “cosmetic status”. A product that is considered drug status affects a bodily function like preventing cavities, and cosmetic status products just enhance. If the product is considered a drug product the HPB will inspect packaging, formulas and advertising at a much more stringent level than cosmetic products. Scope is currently listed as a cosmetic product. The Canadian Dental Association will put its seal on products that manufacturers volunteer to have them inspect. For a mouthwash product to obtain this CDA seal, the product must protect against plaque or gingivitis. Currently Scope does not have the seal from CDA. Problem

The problem to delineate in this case is to prepare a 3 year business plan for the Procter & Gamble mouthwash business (Scope brand) that will address the new competitive threats while simultaneously managing its brand that customers have come to recognize and prefer. The three-year plan should be prepared to create a strategy that will enforce a continued profitability for Scope. Emerging threats, in addition to similar mouthwash products, include the new pre-rinse, Plax, that claims to reduce plaque by rinsing before brushing. In the past Scope’s marketing plan was based on the fact that mouthwash products on the market competed on the basis of fresh breath and killing germs. With the addition of a plaque fighter, Scope and other mouthwash products must be cognizant that the plaque fighter market share is growing, which means a demand exists for this type of product in the current market. Gwen Hearst, Brand Manager for Scope, has been tasked with making this decision and striking and accord with all parties involved. P&G has a precedent that they will not launch a product unless they were fulfilling some unmet consumer need. Since Plax is already meeting the plaque fighting need, a dilemma exists as to whether a new product for P&G would be the best option for competing with the new plaque fighter products. Scope managers put together a team of experts from around the company to come up with the best options. To summarize input from various departments involved: Product development offered that they had developed a product that is very similar to Plax, with the exception that it tastes better. Sales noted that product packaging must be unique to get consumer attention. Market research suggested that a new product might cause an uncertain amount of cannibalism of Scopes sales. Finance added that a pre-brushing rinse would create higher revenue numbers because it sells at a higher price per unit, but capital costs would be extensive to add a new line, so overall profitability is still in question. Purchasing suggested that ingredient costs would rise and packaging costs would rise as well. The advertising agency favored a line extension but cautioned that current consumers might be confused by an added ingredient or benefit. After all departmental inputs, Scope managers must create a profitable 3 year plan to satisfy all areas of Scope and P&G brand management and service strategy and ultimately obtain the buy-in of senior management. Strategies to Consider

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