Proctor and Gamble Case Analysis

Tyler Liu

MK4900 4:00

Procter & Gamble, Inc Case Analysis

I. Situation Analysis

        A. Industry

1. Listerine was the leading mouthwash in the Canadian market until Scope was introduced.
2. Scope was positioned as a mouthwash that not only eliminated bad breath, but was great-tasting and mouth-refreshing
3. As of 1990, the total industry retail sales have reached $68.6 million.

        B. Company: Proctor and Gamble

1. Procter & Gamble is considered one of the most successful consumer goods companies in the world.
2. The Company markets its brand in over 140 countries.
3. Their purpose is to provide branded products and services of superior quality that improve the lives of the world’s consumers.’
4. P&G Canada has five operating divisions by product category: Paper, Food and beverage, Beauty care, Laundry and cleaning, and Health products.

        C Trends:

        1. Consumers are looking for mouthwash that not only give you great breath, but cleans teeth.

2. In 1990, 75 percent of Canadian household used one or more mouthwash brands, and, on average, usage was three times per week for each adult household member.

II. Problem

        A. Alternative 1: Do Nothing

                1. Advantages

                        i. Maintains familiarity in brand without confusing consumers.

                        ii. Keeps business stability short term

                2. Disadvantages

i. Suffers the risk of declining market share and risk of segmentation.

                        ii. Sales will continue to decrease 2% yearly.

        B. Alternative 2 : Improving Scope product

                1. Advantages

1. Maintains current consumer base from switching to new or substitute products.
2. Product development will generally protect the P&G business.
3. Avoids adding risky costs when launching a new product to the market.
4. Change perception of Scope product as healthier brand.

                2. Disadvantages

1. May potentially confuse loyal customers that purchase original Scope.
2. Market research states that adding reassurances takes time for a consumer to accept and try a new product.
3. CDA approval may effect introduction of improvements.
4. Advertising may be difficult to communicate benefits of improvements effectively.
5. No additional volume.

C. Alternative 3: Introducing a new product line