P&g Case Analysis

P&G Case Analysis

Group 1, Section B

The product positioning, benefit segmentation and consumer behavior in a frequently purchased product category

The LDL market segmentation for Procter & Gamble is based on three main product features. Performance describes the product’s chief cleaning benefit, mildness describes the gentleness on hands, and price provides the benefit of low cost. P&G positioned its three LDL brands very in a different way. Ivory is positioned to appeal to females, primarily middle-class mothers, who enjoy the benefit of younger looking hands. Advertisements portray a mother/daughter comparison to illustrate this youthful appeal. Its creamy-white colour and light scent relates this LDL to the Ivory bar soap, which consumers identify for its mildness. Dawn is positioned purely as a performance LDL for those who seek better grease-cutting abilities. By allocating most of the marketing budget towards coupons, this brand seeks early-adoption by new consumers in hopes of promoting brand loyalty among households. Joy is the original LDL manufactured by P&G, and is positioned as a reliable and identifiable option due to its unique yellow color and fresh lemon scent.

What should P&G do with H-80? What should P&G do with the existing brands?

After studying the company and industry information, we propose that Procter & Gamble should implement product developments on an existing brand. As a successful, established and performance brand mainly recognized for its grease-cutting abilities, Dawn is the favored brand for performance improvements. The improvement of an existing brand will involve roughly $20 million in capital costs, comparable to those required to introduce a new brand. However, while a new brand would require more than $60 million in marketing expenditures, a product improvement requires only $10 million. Additionally, a new brand introduction would need two years, plus another year in a test market, while a product improvement needs at most two years. Though this is longer than the time necessary to gain approval for better marketing expenditures, it will likely result in significantly larger growth. We identify that projected trends show the performance segment will continue growing in category volume, while the mildness and price segments will either decrease or remain constant. Dawn will be reformulated with H-80 constituents