From: Gwen Hearst
To: Managementcc: VP of Product Development
VP of Sales
VP of Market Research
VP of Finance
VP of Advertising
Subject: Scope Marketing Strategy
The current strategic efforts for the Scope brand are successful, but a competitive threat has brought about concerns as to whether Scope can continue to be profitable in the marketplace. An emerging segment of prebrush rinse users has created questions as to whether the Scope brand should consider this segment as a viable target. The Scope brand has consistently focused its efforts on the benefits of great taste and fresh breath, while the competition in the emerging segment currently is focused on a plaque-reducing benefit that has not been previously seen in the marketplace.
Although concerns as to whether Scope should reposition its efforts in the marketplace to offer this added plaque reduction benefit are understandable, it is important to note that Scope has been a successful market leader for the past several years. At this time, it would not be wise to change our strategy and reposition the product, add a line extension, or create a new product because these options are not consistent with our brand image. Scope has been able to provide a product of great value to consumers that helps to reduce bad breath and also has a good taste. This is what our customers have come to know and expect from Scope, and these expectations should continue to be met.
Therefore, at this time we should continue with our existing strategy for our three-year plan. We will stay true to the Procter and Gamble philosophy and to the Scope brand, and we will continue to dominate the growing mouthwash market. Our efforts should be concentrated on increasing the market share of our existing brand in order to capitalize on profits and remain a viable competitor in today’s marketplace.
Procter and Gamble, Inc.’s Scope
•Procter and Gamble is one of the most successful consumer goods companies in the world. •The company is known for providing products of exceptional value and quality. •Marketing efforts take place in 140 countries, and the total net earnings for 1990 were $1.6 billion. •In Canada, the market had $1.4 billion in sales and $100 million in net earnings. Consumer brands led in most of the categories in which the company competed. •Procter and Gamble has 5 major operating divisions: paper products, food and beverage, beauty care, health care, and laundry and cleaning. •Each division had its own brand management, sales, finance, product development, and operations line management groups. •Each also has a brand manager assigned a particular brand, and the Scope brand manager was Gwen Hearst.
The Canadian Mouthwash Industry
There are many factors to consider in the mouthwash industry: •Mouthwash can be classified as a perishable consumer good that is purchased relatively frequently. •Competition is increasing with the introduction of new brands and products, which shows that the market is growing substantially. •From 1975 to 1987, the mouthwash market grew 3 percent a year on average and spiked to 26 percent in 1987. From 1987 to 1990, the growth rate had declined to 5 percent, indicating a gradual maturation of the market. By 1976, Scope commanded the market lead. •The mouthwash market began with Warner-Lambert’s Listerine, which was positioned as a germ-killing product that also eliminated bad breath. •Scope was also positioned as a bad breath killer, but was differentiated itself from Listerine because it also had a good taste.
The Scope Market
•75% of Canadian households used one or more mouthwash brands 3 times per week on average (per adult household member) •By the end of 1990, Scope held 32.4% market share, a slight decrease from the 33.0% it held in the two years previous. oExhibit...