Procter & Gamble— Scope
44 CASE 26
s Gwen Hearst looked at the year-end report, she was pleased to see that Scope held a 32 percent share of the mouthwash market for 1990. She had been concerned about the inroads that Plax, a prebrushing rinse, had made in the market. Since its introduction in 1988, Plax had gained a 10 percent share of the product category and posed a threat to Scope. As brand manager, Hearst planned, developed, and directed the total marketing effort for Scope, Procter & Gamble’s (P&G) brand in the mouthwash market. She was responsible for maximizing the market share, volume, and profitability of the brand. Until the entry of Plax, brands in the mouthwash market were positioned around two major benefits: fresh breath and killing germs. Plax was positioned around a new benefit—as a “plaque fighter”—and indications were that other brands, such as Listerine, were going to promote this benefit. The challenge for Hearst was to develop a strategy that would ensure the continued profitability of Scope in the face of these competitive threats. Her specific task was to prepare a marketing plan for P&G’s mouthwash business for the next three years. It was early February 1991 and she would be presenting the plan to senior management in March. COMPANY BACKGROUND Based on the philosophy of providing products of superior quality and value that best fill the needs of consumers, Procter & Gamble is one of the most successful consumer goods companies in the world. The company marketed its brands in more than 140 countries and had net earnings of $1.6 billion in 1990. The Canadian subsidiary contributed $1.4 billion in sales and $100 million in net earnings in 1990. It is recognized as a leader in the Canadian
packaged goods industry, and its consumer brands lead in most of the categories in which the company competes. Between 1987 and 1990, worldwide sales of P&G had increased by $8 billion and net earnings by $1.3 billion. P&G executives attributed the company’s success to a variety of factors, including the ability to develop truly innovative products to meet consumers’ needs. Exhibit 1 contains the statement of purpose and strategy of the Canadian subsidiary. P&G Canada has five operating divisions, organized by product category. The divisions, and some of the major brands, are: 1. Paper products: Royale, Pampers, Luvs, Attends, Always 2. Food and beverages: Duncan Hines, Crisco, Pringles, Sunny Delight 3. Beauty care: Head & Shoulders, Pantene, Pert, Vidal Sassoon, Clearasil, Clarion, Cover Girl, Max Factor, Oil of Olay, Noxzema, Secret 4. Health care: Crest, Scope, Vicks, Pepto Bismol, Metamucil 5. Laundry and cleaning: Tide, Cheer, Bounce, Bold, Oxydol, Joy, Cascade, Comet, Mr. Clean
Each division has its own brand management, sales, finance, product development, and operations line management groups and is evaluated as a profit center. Typically, within each division a brand manager is assigned to each brand (e.g., Scope). Hearst was in the Health Care Division and reported to the associate advertising manager for oral care, who, in turn, reported to the general manager of the division. After completing her business degree (B.B.A.) at a well-known Ontario business school in 1986, Hearst had joined P&G as a brand assistant. In 1987, she became the assistant brand manager for Scope and in 1988 she was
This case was written by Professor Gordon H. G. McDougall and Professor Franklin Ramsoomair of Wilfrid Laurier University as a basis of classroom discussion. Reprinted by permission of the authors.
Procter & Gamble-Scope
CASE 26 Procter & Gamble— Scope
EXHIBIT 1 A Statement of Purpose and Strategy Procter & Gamble, Canada We will provide products of superior quality and value that best fill the needs of consumers. We will achieve that purpose through an organization and a working environment which attracts the finest people; fully develops and challenges our...
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