Caso P&G

Topics: Marketing, Brand management, Brand Pages: 7 (1291 words) Published: November 17, 2013

Caso P&G

Año: 2013

What principles guide promotion planning at P&G for the light duty liquid detergent category (LDL)? Before analyzing H80, it is important to study the broader picture. First of all, America’s Light-Duty Liquid Detergent (LDL) is a very mature and steady market. The market’s annual growth is forecasted at a very low 1%. The market has already grown, it is highly competitive and product offers are saturated. This means there’s a low maneuvering angle for an out-of-the-box brand. The product is a necessity due the natural need for detergent for daily dish washing, except for those who use automatic dish washers. The purchasing cycle is quite low between three and four weeks: the customer has a frequent need to replenish this product at least once per month. The case doesn’t specify much about customer loyalty, but it is very common to stick to one brand and keep repurchasing it. There is also no comment on price oriented customers and product switching, which pose a threat on product continuity. P&G is the dominant brand and boasts a very solid 42% market share and has stronger competitive advantages. Another difference with its competitors is that P&G invests mor resources in advertising and less in promotions than its competitors. While P&G sells 50% of its products with some kind of deal, competition has 75%.

Although P&G has the biggest share in the market, it manages three different brands in LDL trade. Each brand has satisfies a specific customer need, hence having a deeper reach.
Ivory
Dawn
Joy
Market Share (%)
15,5
14,1
12,1
Market Position
1 (leader)
2
3
Customer Need
Regular detergent. Market Leader
Performance (superior grease-cutting)
Shiny dishes and fewer specs after dish washing
Promotion strategy
Build loyalty (continuity) and trial among younger population Trial and coupons
Has the lowest trial budget, but it will suffer a moderate increase

What factors should Garner consider when developing a promotions plan for H80? ​The main reason why P&G has developed H80 is to satisfy an unsatisfied customer need. Amongst customers, the toughest task in dish washing is burnt food removal, a basic need that is not fulfilled by current brands. This need begs for a high performance LDL. H80 is expected to capture this segment’s core, reaching heavy LDL users and more specifically large family moms. A market research has defined this segment as the most well defined segment in LDL, making target identification and advertisement strategy much simpler. ​H80 has a great product differentiation: extremely high performance. Another advantage is that the liquid is homogeneous and does not need shaking before using and has a very nice perfume. On the down side, H80 feels slightly gritty to the touch which may offer some resistance in some consumers. The formula contains a mild abrasive which in turn can deflect people that are focused on skin care. One of the biggest drawbacks is that H80 requires the user to change use habits because the liquid is concentrated and needs some dilution. ​Cannibalization is a key problem that must be analyzed. As explained above, the LDL market is steady, saturated and highly competitive. A freshly launched brand will encounter a high degree of resistance and will certainly diminish other P&G LDL products. Cannibalization is expected at a 40% and H80 market share is targeting 11%. Although cannibalization is quite high, the other 60% will be captured from non P&G LDL products and increasing genuine market share. Ivory, Dawn and Joy will have to adapt quicly their strategies to protect their market share. The cannibalized market share on P&G LDL products and H80 genuine market share is tabulated below: Year

Ivory
Dawn
Joy
H80 (geniune)
1982
0
0
0
0
1983
0,8
1
0,9
4,3
1984
1,3
1,6
1,3
6,8
1985
1,3
1,6
1,3
6,8
1986
1,3
1,6
1,3
6,8

​Cannibalization on P&G LDL products is depicted below:

​These results are...
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