The P&G community consists of nearly 98,000 people working in almost 80 countries worldwide. What began as a small, family-operated Soap and Candle Company now provides products and services of superior quality and value to consumers in 140 countries. Scope was introduced in 1967 by Procter & gamble, which is one of the most successful companies in the world. P&G philosophy is to provide superior quality and value that best fills the needs of the consumers; it was recognized as a leader in the Canadian packaged goods industry. P&G Canada has five operating divisions, organized by product category. The divisions and some of their major brands are: 1- Paper products: Royale, Pampers, Always
2- Food and beverage: Crisco, Pringles, and Sunny Delight.
3- Beauty care: Head & Shoulders, Pantene, Cover Girl, Max Factor. 4- Laundry and cleaning: Tide, Cheer, Mr. Clean, Cascade.
5- Health care: Crest, Scope, Vicks.
Each division has its own brand management, sales, finance, product development and operations line management and was evaluated as a profit center. Gwen Hearst, Scope Mouthwash Brand Manager for Procter & Gamble, Inc is preparing a three year strategic plan for Scope in the Canadian market. Her responsibilities focus on three central areas: maximize the market share, volume, and profitability of the brand. She needs to develop a strategy to compete with a new market entry, Plax. Plax has targeted fighting plaque as a new benefit for mouthwash. In two years, Plax has gained 10% of the market during a time when the market growth rate has been declining. The Scope brand has maintained a constant market share level with slight decline and still retains largest percentage of the market.
In studying the current situation and preparing for a strategic plan, Gwen Hearst reviewed the available information and surveys for the mouthwash market and Scope. Her research showed that 75% of Canadian household use 1 or more mouthwash brands. The company’s market research revealed that users could be segmented into “heavy” users that comprised 40% of all users, “medium” users that comprised 45% of all users, and “light” users that comprise 15% of the user market. The company also researched the factual reasons of consumers for using mouthwash. The results showed that people used mouthwash for basic hygiene, to get rid of bad breath, kill germs and many other minor reasons. Also surveys of mouthwash user’s image of the major brands were conducted, based on several attributes such as, reducing bad breath, killing germs, removing plaque and others. Plax achieved a strong image on removing plaques and healthier teeth and gums, whereas scope scored a weaker image on those attributes. In analyzing the Canadian mouthwash market share the data showed that Scope had the highest market share among all brands, but there was a big difference in the share held by Scope in grocery stores 42%, versus drug stores 27%. Competitive data were also collected for advertising expenditures, and the results were that most of the advertising expenditures were of the leading brands Scope, Listerine and Plax accounting for 90% of all advertising. As for the retail prices, both Listerine and Plax had the highest prices among other brands in food stores, whereas Scope, Listerine and Listermint had the highest prices in drug stores. And in comparing Scope market share between Canada and USA, the results showed that Scope in Canada takes 33% of the market share, while USA Scope’s market share of 21.6% came after Listerine, where Listerine held 28% of the mouth wash market share in America.
The Canadian mouthwash market is expending at a rate of 5% per year and plague-fighting segment consists of 10% of this market. As of the time of the case Plax is the only player in the segment. The key issue is what strategy should P&G adopt to capitalize in this emerging market.
When Plax entered the market in...