Procter and Gamble, Inc.
The problem for Procter & Gamble`s (P&G) “Scope” brand is that their share at mouthwash market is slightly going down while a new brand called “Plax” launched by Pfizer Inc. has gained a %10 market share in a very short time period which created a situation that left “P&G”s management team in dilemma for how to respond.
P&G has some constraints to solve the problem (in fact, the situation is so complex that for some, no problem and threat exist). First of all, if they introduce a new product in the mouthwash market as a competitor against Plax; they are not sure if it will be really innovative or it will focus on unmet consumer needs. Another limitation is that introducing a new product to the market will cost a lot (even the test production costs $20,000. Capital costs, marketing costs, delivery costs, inventory costs, ingredients costs, packaging costs are other important costs which create concerns) and also will require an effective strategic management. After that, the new product is very similar to Plax and has no significant advantage except a better taste; on the other hand, sales department thinks that for success, the product must be seen as unique. So, P&G can not be sure about the future success of this product. Next, for the new product to gain reassurance, patience is needed. This can only be achieved in the long period. Following this, the new product will also reduce the sales of Scope. Additionally, P&G is not sure about the name of the product too, will it be sold under Scope`s name or not? If sold under Scope`s name, P&G thinks the new product can also cause the loyal customers to stop using Scope because of the brand`s new image. Plus, another disadvantage for P&G will be that they will always have to support the new product like Scope. On the opposite side, if P&G doesn`t produce a new product, but tries to emphasize that Scope now fights plaque while also still providing good breath via...
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