Proctor & Gamble Scope Case Analysis

Topics: Marketing, Product differentiation, Brand management Pages: 6 (1242 words) Published: December 13, 2013
MARKETING 675

Proctor and Gamble – Scope Case Analysis

10/18/2012


Industry
This mouthwash market was initially developed by Warner-Lambert being pioneered by brand Listerine. In 1977 Warmer-Lambert launched Listermint mouthwash as a direct competitor to Scope. Before 1987 the mouthwash market was continuously growing on average of 3 percent per year, in 1987 the market experienced a 26 percent increase after the introduction of new flavor. In 1976 Scope was the leader in the Canadian market. Problems

Proctor and Gamble-Scope is faced with a very important decision, they need to prepare a marketing plan for P&G’s mouthwash business for the next three years. They want to know how they are going to be able to capitalize on the emerging market segment within the rinse category that focused more on “health-related benefits” than the traditional breath strategy of Scope. If the company does pursue this there are several concerns that they have. How should P&G respond to the newest competitor in the mouthwash market? What strategy should be pursued for scope in the future to ensure continued profitability? Decision Questions:

1.What action, if any, should Proctor and Gamble (P&G) take as a mitigating strategy against Plax in the mouthwash market in Canada? 2.How can Scope maintain its current position in the Canadian mouthwash market? Decision Tree

Whether to add new ingredients so that they can position Scope as a plaque fighting mouth wash •Whether to launch a new product line and risk cannibalization, to compete with their competitors, such as Plax •Whether to do nothing and continue with their breath strategy

Current Market Position of Scope in the Canadian Market
Scope is the current market leader among mouthwash products used in Canada. Scope’s benefits are advertised as prevention of bad breath and as a good/pleasant tasting product. The product is green in color with a pleasant mint taste. Between 1989 and 1990, Scope held approximately 32.5 percent of the Canadian mouthwash market. The closest competitor was Listerine with approximately 16 percent of the market. About 40 percent of people who use mouthwash indicate the primary reason is to get rid of (or avoid) bad breath. Scope is priced below the average cost of competitors in the mouthwash market. The Health Protection Board (HPB) classifies products into two groups, 1) drug status and 2) cosmetic status. Because Scope does not actually affect a body function (i.e. prevents cavities or plague), HPB places Scope in the cosmetic status category. Scope has not been recognized by the Canadian Dental Association (CDA) as a product that fights against cavities or against gingivitis/plague. Scope Competitors

Market Share of Canadian Mouthwash Industry
Major brands% units
Scope32.5
Listerine16.1
Listermint9.8
Cepacol10.6
Plax10.0

Scope competitors and their 1990 share of the Canadian mouthwash market include Listerine – 16.6%, Listermint – 10.6%, Cepacol – 10.3%, Colgate oral rinse – 0.5%, Plax – 10.0%, Store Brands – 16.0%, Miscellaneous other Brands - 3.7%. Listemint is a direct competitor since it also claims to be good tasting and to fight bad breath. Mouthwash Market Segmentation

Breath focused brands, fresh breath-Scope, listermint
Health related benefits, plaque fighter- Plax , Cepacol, Listerine, Colgate Situation Analysis: The Market
Mature market
Sales increasing but at a decreasing rate
Market still large enough to warrant interest
Market responds to innovation (ex. Flavored mouthwashes, pre-brush rinses) •65% of sales in drugstores, 35% in food stores
But…scope sells better in food stores vs. Drugstores which points to how consumer views the brand (good tasting but not health-related) •Retailers are the key distribution channel and competition for shelf space is increasing •P&G’s reputation and existing retail networks would support new initiatives...
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