Advertising & Promotion
Procter & Gamble (B)
Light Duty Liquid Detergents
May 16, 2009
1.What factors and policies guide promotion planning for the LDL’s? i)Budget Allocation:
The LDL managers of Ivory Liquid, Dawn, and Joy spend about half of their marketing budget in advertising and with a lower share on promotion. This is different from the strategy of Colgate & Lever, who spends a higher percentage on promotion. The marketing budget for H-80 is $60 million for the first year, which includes $18 million on advertising, $37 million on promotion, and $5 million of miscellaneous marketing expenses.
ii)Scheduling of LDL Promotional Events:
The groups generally work together to avoid simultaneous promotion of 2 or more of the company’s LDLs to maintain sufficient level of attention of the sales force and the trade. Each brand participated in at least 5 events annually. Exhibit 1 lists the number of planned promotions by type for the 3 brands in 1983.
iii) Advertisement for New Brands:
P&G generally does not advertise a new brand until it had achieved 70% distribution, which the H-80 group expected to be 6 weeks after introduction. Exhibit 2 in the appendix illustrates the media weight for H-80 in its initial year.
iv)History, Experience, & Sales Advice:
The sales department at P&G had provided several guidelines in the areas of trade allowance, timing of special packs promotions, and methods to maintain distribution level in stores.
2.What factors must Mr. Garner consider in developing the H80 promotional program? i)Goals & Constraints
First and foremost, Garner must select the promotional mix that would: 1)Remain within its budget of $37 million.
2)Satisfy the estimated market share of 7% (4.2 million cases). 3)Allow some degree of scheduling flexibility with other LDLs of P&G.
The product benefit offered by H-80 belongs to the performance segment. If comparative advertising is used, for instance, the H-80 should be compared to competing brands in the high-performance that belongs to Colgate Palmolive Company, and the Lever Brothers, but away from other brands of P&G such as Dawn.
To emphasize that H-80 is a higher-performance LDL that can provide superior cleaning compared with other LDLs and can also be diluted with water for general dishwashing, Garner should select smaller sizes for sampling and special packs since smaller volume may convey the impression that consumers can use less to clean the same amount of dishes as they do using other detergents.
iv)P&G’s LDL Promotion Calendar 1982:
Garner should exam the promotion Calendar for the Ivory Liquid, Dawn, and Joy to select the most appropriate months for promotion based on the months and type of promotion offered (Exhibit 1). Furthermore, he should also account for the estimated volume growth and launch schedule of those brands; Joy, for instance, is expecting a 10% growth with its new improved formula that is scheduled for launch in September. Judging from the calendar, H-80 should definitely schedule a promotion in August because it would not result in conflict with other P&G brands. The 5 months of March, April, June, October, and December may also be considered given that there will be only 1 other promotion via other P&G LDL brands in these months.
v)Promotion Strategies of other P&G LDL brand:
Unlike Ivory Liquid, the primary strategies of Dawn and Joy had focused on the offensive tactics of inducing trial amongst new users rather than on continuity of purchase. As a new product, H-80’s primary promotion strategy would also be on encouraging trial amongst new users. Therefore, Garner should discuss with the brand managers of Dawn and Joy to determine that given the offensive strategy of H-80 for its introduction Dawn and Joy should switch to a more defensive approach such as encouraging...