ACKNOWLEDGEMENT
We would like to thank our Professor K.C Prakash for giving us the opportunity to enhance our knowledge on the subject. We are also grateful for his support and encouragement all throughout.We also thank our peer members who have enriched our knowledge with immense discussions on the topic.
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Company Profile
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Detailed description of the company
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Industry Profile
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4 P’s Analysis
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Competetive Anaysis
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Competitive Advantage
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Promotion Strategies
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Pricing Strategies
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Market Analysis
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Market Strategies
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COMPANY PROFILE
Three billion times a day, P&G brands touch the lives of people around the world. This is the company which is rooted in the principles of personal integrity, respect for the individual and doing what's right for the long-term. Before analyzing the company on various parameters let’s first have a view of the company profile. Procter & Gamble Co. (P&G, NYSE: NYSE : PG) PG) is a Fortune 500, 500, American multinational corporation based in Cincinnati, Ohio, Ohio, that manufactures a wide range of consumer of consumer goods. goods. It is a brand behemoth. The world's number one maker of household products courts market share and billion-dollar brands. As of 2008, P&G is the 6th largest corporation in the world by market capitalization and 14th largest US company by profit. It is 10th in Fortune's Most Admired Companies list (as of 2007). P&G is credited with many business innovations including brand management, management, the soap opera, opera, and "Connect & Develop" innovation. According to the Nielsen Company, Company, in 2007 P&G spent more on U.S. advertising than any other company; the $2.62 billion it spent is almost twice as much as General Motors, the next company on the Nielsen list. P&G was named 2008 Advertiser of the Year by Cannes International Advertising Festival. est company in the world in Fast Moving Consumer Goods (FMCG) industry. 3 |Page
It manufactures nearly 300 brands (such as: Ariel, Blend-a-Med , Bonux, Head&Shoulders , Pampers , Always, Fairy, Gillette , Wella) to nearly five billion customers, competing in 160 marketplaces. More than 130 000 employees in more than 80 countries worldwide work everyday to provide products of superior quality and value to the world's consumers. As the company’s global involvement, commitment and operations have grown, it h as continually analyzed and adapted the way it does business.
It is a company whose actions reflect its ethics and whose people live their values, As a “build from within” organization, it sees over 90% of our people start at an entry level and then progress and prosper throughout the organization. This means it invests heavily in talent, through training and development opportunities.
HISTORY William Procter , a candlemaker, and James Gamble, a soapmaker, formed distinct companies. The two men, immigrants from England and Ireland respectively who had settled earlier in Cincinnati, might never have met, had they not married sisters, Olivia and Elizabeth Norris. [6]
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Since both their industries used similar resources, the Panic of 1837 caused intense competition between the two and as a result it led to discord with the family. Alexander Norris, their father-in law decided to call a meeting where he convinced his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, a new enterprise was born: Procter & Gamble. The company prospered during the nineteenth century. In 1859, sales reached one million dollars. By this point, approximately eighty employees worked for Procter & Gamble. During the American Civil War , the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products. Once the war was over and the men returned home, they continued to purchase the company's products. In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. In the decades that followed, Procter & Gamble continued to grow and change. The company became known for its progressive work environment in the late nineteenth century. William Arnett Procter, William Procter's grandson, established a profit-sharing program for the company's workforce in 1887. He hoped that by giving the workers a stake in the company, they would be less inclined to go on strike. Over time, the company began to focus most of its attention on soap, producing more than thirty different types by the 1890s. As electricity became more and more common, there was less need for the candles that Procter & Gamble had made since its inception. Ultimately, the company chose to stop manufacturing candles in 1920. In the early twentieth century, Procter & Gamble continued to grow. The company began to build factories in other locations in the United States, because the demand for products had outgrown the capacity of the Cincinnati facilities. The company's leaders began to diversify its products as well and, in 1911, began producing Crisco, Crisco, a shortening made of vegetable of vegetable oils rather than animal fats. fats. In the early 1900s, Procter & Gamble also became known for its research laboratories, where scientists worked to create new products. Company leadership also pioneered in the area of market research, research, investigating consumer needs and product appeal. As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs. As a result, these shows often became commonly known as "soap " soap operas". operas".
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Throughout the twentieth century, Procter & Gamble continued to prosper. The company moved into other countries, both in terms of manufacturing and product sales, becoming an international corporation with its 1930 acquisition of th e Newcastle upon Tyne-based Tyne-based Thomas Thomas Hedley Co. Procter & Gamble maintained a strong link to the North East of England after this acquisition. In addition, numerous new products and brand names were introduced over time, and Procter & Gamble began branching out into new areas. The company introduced " Tide" Tide" laundry detergent in 1946 and "Prell "Prell"" shampoo in 1950. In 1955, Procter & Gamble began selling the first toothpaste to contain fluoride, fluoride, known as "Crest "Crest". ". Branching out once again in 1957, the company purchased Charmin Paper Mills and began manufacturing toilet paper and other paper products. O nce again focusing on laundry, Procter & Gamble began making "Downy " Downy"" fabric softener in 1960 and "Bounce" fabric softener sheets in 1972. One of the most revolutionary products to come out on the market was the company's "Pampers " Pampers", ", first test-marketed in 1961. Prior to this point disposable diapers were not popular, although Johnson although Johnson & Johnson had developed a product called "Chux". Babies always wore cloth diapers, which were leaky and labor intensive to wash. Pampers simplified the diapering process. Over the second half of the twentieth century, Procter & Gamble acquired a number of other companies that diversified its product line and increased profits significantly. These acquisitions included Folgers Coffee, Coffee, Norwich Eaton Pharmaceuticals, Richardson-Vicks, Noxell, Shulton's Old Spice, Spice , Max Factor, Factor , and the Iams Company, among others. In 1994, the company made headlines for big losses resulting from leveraged positions in interest rate derivatives, derivatives, and subsequently sued Bankers Trust for fraud; this placed their management in the unusual position of testifying in court that they had entered into transactions they were not capable of understanding. In 1996, Procter & Gamble again made headlines when the Food and Drug Administration approved a new product developed by the company, Olestra. Olestra. Also known by its brand name Olean, Olestra is a substitute for fat in cooking potato chips and other snacks that during its development stages is known to have caused anal leakage and gastro-intestinal difficulties in humans. Procter & Gamble has expanded dramatically throughout its history, but its headquarters still remains in Cincinnati. {Source, Ohio History Central.} In January 2005 P&G announced an acquisition of Gillette of Gillette,, forming the largest consumer goods company and placing the AngloAnglo-Dutch Unilever into second place. This added brands such as Gillette razors, Duracell, Duracell, Braun, Braun, and Oral-B to their stable. The acquisition was approved by the European Union and the Federal Trade Commission, Commission, with conditions to a spinoff of certain overlapping brands. P&G has agreed to sell its SpinBrush battery-operated electric toothbrush business to Church & Dwight. Dwight. It also divested Gillette's oral-care toothpaste line, Rembrandt. The deodorant brands Right Guard, Guard, Soft & Dri, Dri , and Dry Idea were sold to Dial [7] Corporation. Corporation. The companies officially merged October 1, 1, 2005. 2005.
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P&G's dominance in many categories of consumer products makes its brand management decisions worthy of study. [8] For example, P&G's corporate strategists must account for the likelihood of one of their products cannibalizing the sales of another. another.[9]
PURPOSE AND MISSION: The company has its mission statement as follows-: “We will provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.”
Values:
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P&G is its people and the values by which we live. P&G attracts and recruits the finest people in the world. It has built the organization from within, promoting and rewarding people without regard to any difference unrelated to performance. It acts on the conviction that the men and women of Procter & Gamble always will be their most important assets. Integrity Proctor & Gamble always tries to do the right thing.
is honest and straightforward with customers and employees
upholds the values and principles of P&G in every action and decision.
is data-based and intellectually honest in advocating proposals, including recognizing risks.
Passion for Winning Proctor & Gamble
Is determined to be the best at doing what matters most.
has a healthy dissatisfaction with the status quo.
Has a compelling desire to improve and to win in the marketplace.
Leadership The employees are all leaders in our area of responsibility, with a deep commitment to delivering leadership results.
The company has a clear vision of where it is going.
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The focus is on achieving leadership objectives and strategies.
Capabilties are developed to deliver the strategies and eliminate organizational barriers.
Trust There is mutual respect among the colleagues, customers and consumers,
Employees have confidence in each other's capabilities and intentions.
The company believes that people work best when there is a foundation of trust.
Ownership The organization accepts personal accountability accountability to meet the business needs, improve the systems and help others improve their effectiveness.
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DETAILED DESCRIPTION OF COMPANY P&G’s business is focused on providing branded consumer goods products. Their goal is to provide products of superior quality and value to improve the lives of the world’s consumers. They believe thiswill result in leadership sales, sales, profits and value value creation, allowing employees, shareholders and the communities in which they operate to prosper. Their products are sold in more than 180 countries primarily through mass merchandisers, grocery stores, membership club stores and drug stores. They continue to expand their presence in other channels including department stores, salons and “high frequency stores,”the neighborhood stores which serve many consumers in developing markets. They have on-the-ground operations in approximately 80 countries. They market environment is highly competitive, with global, regional and local competitors. In many of the markets and industry segments in which they sell their products, they compete against other branded products as well as retailers’ privatelabel brands. Additionally, many of the product segments in which they compete are differentiated by price (referred to as premium, mid-tier and value-tier products). Generally speaking, they compete with premium and mid-tier products and are well positioned in the industry segments and markets in which they operate — often holding a leadership or significant market share position.
Organizational Organizational Structure Our organizational structure is comprised of three Global Business Units (GBUs) and a Global Operations group. The Global Operations group consists of the Market Development Organization (MDO) and Global Business Services (GBS). Global Bussines Units Our three GBUs are Beauty, Health and Well-Being, and Household Care. The primary responsibility of the GBUs is to develop the overall strategy for our brands. They identify common consumer needs, develop new product innovations and upgrades, and build our brands through effective commercial innovations, marketing and sales. Under U.S. GAAP, the business units comprising the GBUs are aggregated into six reportable segments: Beauty; Grooming; Health Care; Snacks, Coffee and Pet Care; Fabric Care and Home Care; and BabyCare and Family Care. The following provides additional detail on our GBUs and reportable segments and the key product and brand composition within each. 11 | P a g e
Management’s Discussion and Analysis Effective July 1, 2007, the company's operations are categorized into 3 "Global Business Units" with each Global Business Unit divided into "Business Segments," according to the company's June 2007 earnings release. Beauty Care Beauty segment Grooming segment Household Care Baby Care and Family Care segment Fabric Care and Home Care segment Health & Well-Being Health Care Snacks, Coffee and Pet Care
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Beauty: We are a global market leader in beauty and compete in markets which comprise approximately $230 billion in global retailsales. Most of the beauty markets in which we compete are highlyfragmented with a large nu mber of global and local competitors.They are the global market leader in h air care with over 20% of theglobal market share. In skin care, we compete primarily with theOlay brand, which is the top facial skin care retail brand in the world.They are also one of the global market leaders in prestige fragrances,primarily behind the Gu cci, Hugo Boss and Dolce & Gabbanafragrance brands.
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Grooming: This segment consists of blades and razors, face and shave preparation products (such as shaving cream), electric hair removal devices and small household appliances. They hold leadership market market share in the manual blades blades and razors market on a global basis and in almost all of the geographies in which they compete. 14 | P a g e
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behind Mach3, Fusion, Venus and the Gillette franchise. Their electric hair removal devices and small home appliances are sold under the Braun brand in a number of markets around the world, where we compete against both global and regional competitors. Our primary focus in this area is in electric hair removal devices, such as electric razors and epilators, where we hold over 30% and over 50% of the male and female markets, respectively. Health and Well-Being Health Care: Care: They compete in oral care, feminine care, and pharmaceuticals and personal health. In oral care, there are several global competitors in the market, and theyhave the number two market share position at approximately 20% of the global market. They are the global market leader in the feminine care category with about one-third of the global market share. In pharmaceuticals and personal health, we have approximately one-third of the global bisphosphonates market for the treatment of osteoporosis under the Actonel brand. They are the market leader in nonprescription heartburn medications and in respiratory treatments behind Prilosec OTC and Vicks, respectively.Snacks, Coffee and Pet Care: In snacks, we compete against both global and local competitors and have a global market share of approximately 10% in the potato chips market behind our Pringles brand. Their coffee business competes almost solely in North America,where we hold a leadership position with approximately one-third of the U.S. market, primarily behind our Folgers brand. They have announced plans to separate our coffee business and merge it with The J. M. Smucker Company in a transaction that is expected to close in the second quarter of fiscal 2009. In pet care, they compete in several markets around the globe in the premium pet care segment,behind the Iams and Eukanuba brands. The vast majority of their pet care business is in North America, where they have about a 10% shareof the market.
Household Care Fabric Care and Home Care: Care : This segment is comprised of a variety of fabric care products, including laundry cleaning products and fabric conditioners; h ome care products, including dish care, surface cleaners and air fresheners; and batteries. In fabric care, they generally have the number one or number two share position in the markets in which we compete and are the global market leader, with approximately one-third of the global market share. Their global home care market share is about 20% across the categories in which they compete. In batteries, we compete primarily behind the Duracell brand and h ave over 40% of the global alkaline battery market share.Baby Care and Family Care: In baby care, they compete primarily in diapers, training pants and baby wipes, with over one-third of the global market share. They are the number one or number two baby care competitor in most of the key markets in which they compete,primarily behind Pampers, the Company’s largest brand, with annual net sales of approximately $8 billion. 16 | P a g e
Global Operations Market Development Organization MDO is responsible for developing go-to-market plans at the local level. The MDO includes dedicated retail customer, trade channel and country-specific teams. It is organized along seven geographic regions: North America, Western Europe, Northeast Asia, Central & Eastern Europe/Middle East/Africa, Latin America, ASEAN/Australia/India and Greater China. GBS provides technology, processes and standard data tools to enablethe GBUs and the MDO to better understand the business and better serve consumers and customers. The GBS organization is responsible for providing world-class solutions at a low cost and with minimal capital investment. Strategic Focus P&G is focused on strategies that it believes are right for the long-term health of the Company and will increase returns for shareholders. The Company’s annual financial targets are: • Organic sales growth of 4% to 6%. This is comprised of: ––3% to 5% pre-Gillette organic sales growth target, plus ––1% of growth acceleration behind revenue synergies associated with the Gillette acquisition. • Diluted net earnings per share (EPS) growth of 10% or better,excluding the net impact of Gillette dilution. • Free cash flow productivity of 90% or greater (defined as the ratio of operating cash flow less capital expenditures to net earnings). ––Capital spending at or below 4% of net sales annually. In order to achieve these targets, we focus on our core strengths of consumer understanding, branding, innovation, go-to-market capability and global scale and scope against the following growth areas: • Grow our leading brands in our biggest markets and with our winning customers. 17 | P a g e
• Shift our portfolio mix to faster-growing businesses with higher gross margins that are less asset-intensive. • Grow disproportionately in developing markets and with value conscious consumers. To sustain consistent and reliable sales and earnings growth in line with our financial targets, we have identified four key enablers: • Building a diversified and balanced portfolio of businesses, brands and geographies to deliver consistent, reliable top- and bottom-line growth. Their portfolio of businesses provides a unique combination of stability, scale and growth. They compete primarily in 22 global product categories and are a market leader in over two-thirds of these categories. In addition, addition, their portfolio includes includes 24 brands that generate over $1 billion in annual sales and 20 brands that generate between $500 million and $1 billion in annual sales. Combined, these 44 brands account for 85% or more of their sales and profits. These brands are platforms for future innovations that will drive sales growth, expand categories for retail customers and differentiate brands in the minds of consumers. Their geographic portfolio includes a healthy balance of developed and developing market businesses. Approximately 40% of sales are generated from the United States, our home market, and developing markets account for approximately 30% of sales.
• Investing in innovation and core P &G capabilities and strengths to enable us to reach more of the world’s consumers with quality, affordable products. This includes expanding our presence in markets and reaching more consumers where we are underrepresented,including value-conscious consumers. • Leveraging the Company’s organizational structure to drive clear focus, accountability and improved go-to-market capability. ––The GBU organizations leverage their consumer understanding to develop the overall strategy for our brands. They identify common consumer needs, develop new products and build our brandsthrough effective marketing innovations and product upgrades. The GBU is focused on winning the “second moment of truth” — when the consumer uses the product and evaluates how well the product meets his or her expectations. ––The MDO develops go-to-market plans at the local level, leveraging their understanding of the local consumers and customers.
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The MDO is focused on winning the “first moment of truth” — when a consumer stands in front of the shelf and chooses a product from among many competitive offerings. –– Global Business Services operates as the “back office” for the GBUs and the MDO, providing cost-effective world-class technology, processes and standard data tools to better understand the business and better serve consumers and customers. GBS personnel, or highly efficient and effective third-party partners, provide these services. • Focusing on cost improvement and cash productivity. Each organization is evaluated on its ability to support the Company’s financial goals and increase total shareholder return. This includes an evaluation of net sales growth, earnings growth, profit margin expansion and cash productivity. Our organizations are evaluated on their ability to generate cash, for example, by increasing productivity,I mproving capacity utilization, meeting capital spending targets and reducing working capital required to run the business.
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RESULTS OF OPERATIONS Net Sales Net sales increased 9% in 2008 to $83.5 billion behind 4% unit volume growth, a favorable 5% foreign exchange impact and a positive 1% pricing impact. Favorable foreign exchange resulted primarily from the strengthening of European and other currencies relative to the U.S. dollar. Price increases were taken taken across a number of of our businesses primarily to offset higher commodity costs. Mix had a negative 1% impact on net sales primarily due to disproportionate growth in developing regions, where selling prices are below the Company average. Each reportable segment posted year-on-year volume growth, with mid-single-digit growth in Fabric Care and Home Care, Baby Care and Family Care, Grooming and Health Care and low-singledigit growth in Beauty and Snacks, Coffee and Pet Care. Each geographic region posted year-on-year volume growth except Western Europe, which was down lowsingle digits due to the impact of divestitures.Excluding the impact of acquisitions and divestitures, every geographic region delivered year-on-year volume growth. Volume grew primarily behind initiative activity on key brands and continued double-digit growth in developing regions. Organic sales increased 5% behind organic volume growth of 5%, which excludes e xcludes the impact of acquisitions and divestitures. Each reportable segment posted year-on-yearorganic sales and organic volume growth.
Net sales increased 12% in 2007 to $76.5 billion. Sales were up behind 9% unit volume growth, including the impact of an extra three months of Gillette results in 2007. Organic volume increased 5%. Developing regions continued to lead the growth with double-digit increases for the year. All reportable segments increased organic volume for the year except the Snacks, Coffee and Pet Care segment. Higher pricing, primarily in coffee and Health Care, contributed 1% to sales growth. Product mix had no net impact on sales as a more premium product mix driven by the additional three months of Gillette resu lts in 2007 was offset by the negative mix impact of disproportionate growth in developing markets, where the average unit sales price is lower than the Company average. Favorable foreign exchange contributed 2% to net sales growth. Organic sales increased 5% versus 2006 with each reportable segment posting year-on-year growth.
Management and staff
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Current members of the board of directors of Procter & Gamble are: Alan Lafley, Clayton Daley Jr., Charles Lee, Ralph Snyderman M.D., Margaret Whitman, W. J. McNerney Jr., Lynn Martin, Johnathan Rodgers, Ernesto Zedillo, Scott Cook , Rajat Gupta, Patricia Woertz, and Kenneth Chenault. In 2007, the P&G's Canadian division was named one of Canada's Top 100 Employers, as published in Maclean's magazine, the only consumer products company to receive this honor.
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Procter & Gamble brands
24 of P&G's brands have more than a billion dollars in net annual sales and another 18 have sales between $500 million and $1 billion. Billion dollar brands Always is a brand of feminine hygiene products, including maxi pads, pantiliners (sometimes called Alldays), and feminine wipes. Ariel is a brand of washing powder/liquid, available in numerous forms and scents. Actonel is brand of Osteoporosis drug Risedronate co marketed by SanofiAventis. Bounty is a brand of paper paper towel sold in the United States, Canada and the United Kingdom Braun is a small-appliances manufacturer specializing in electric razors, coffeemakers, toasters, and blenders. Crest is a brand of toothpaste. Dawn is a brand of dishwashing detergent. Downy/Lenor is a brand of fabric softener. Duracell is a brand of batteries and flashlights. •
Fusion is a brand of mens wet shave razors, and is the quickest P&G brand to have reached $1 billion in annual sales Gain is a brand of laundry detergent and fabric softeners. Gillette is a safety razor manufacturer. Head & Shoulders is a brand of shampoo. High Endurance is a deodorant by Old Spice Ivory is a soap Nice 'n Easy is a hair color product. Olay is a brand of women's skin care products. Oral-B is a brand of toothbrush.
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Pampers is a brand of disposable diapers Pantene is a brand of haircare. Prilosec OTC is a brand of heartburn medicine co-marketed by AstraZeneca. Pringles is a famous brand of potato chips. Puffs is a type of facial tissue. Secret is a deodorant Tide is a brand of laundry detergent. Vicks is a brand of over-the-counter medicines Wella is a brand of hair care (shampoo, conditioner, styling, hair color). Whisper is a brand of pantyliners Manufacturing
Procter & Gamble manufactures its products across the globe. Manufacturing operations are based in the following geographies US Canada Latin America Europe China (31 wholly-owned factories) and other parts of Asia Africa
P&G LOGO The company received unwanted media publicity in the 1980s when an urban legend spread that their previous corporate logo was a Satanic symbol. The accusation is based on a particular passage in the Bible, Bible, specifically Revelation 12:1, which states: "And there appeared a great wonder in heaven; a woman clothed with the sun, and the moon under her feet, and upon her head a crown of twelve stars." Since P&G's logo consists of a man's face on a moon surrounded by thirteen stars, some have claimed that the logo is a mockery of the heavenly h eavenly symbol alluded
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to in the aforementioned verse, and hence the logo is Satanic. Where the beard meets the surrounding circle, a mirror image of the number 666 can be seen when viewed from inside the logo, and this has been interpreted as the reflected number of the beast, beast, again linked to Satanism. Also, there are two horns like a lamb that are said to represent the false prophet. These interpretations have been denied by company officials, and no evidence linking the company to the Church of Satan or any other occult organization has ever been presented. The company has sued and attempted to sue a number of companies like Amway and individuals who have spread rumors of this type, in some instances because they sell competitive products and have spread such rumors for the purpose of tarnishing P&G's image to increase sales of their own brands. As stated in one of the resulting lawsuits, the logo originated in 1851 as the symbol for their Star brand of candles. It was later altered to show the man in the moon overlooking 13 stars, which were meant to commemorate the original 13 colonies. colonies.[17] An example of one such rumor was the fabricated account that the president of P&G had appeared on a Saturday edition of The Phil Donahue Show. He declared that he was a Satanist and that the company's logo was w as Satanic. This rumor circulated despite the facts that the company's president has never made such a statement in public, had never appeared onPhil on Phil Donahue's Donahue's show, and that Donahue's show sho w never ran on Saturdays. Later variations of this rumor replaced the Donahue show with Geraldo Rivera's Rivera's show. show.[18] However, the continuous media coverage prompted P&G to adopt an entirely new logo consisting of just the letters P&G. In television commercials in China, the former P&G logo still appears at the end of each commercial, and up until 2004, it appeared at the end of each commercial in Japan.
Original Logo
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New Logo
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INDUSTRY PROFILE What are Fast Moving Consumer Goods (FMCG)? Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also in clude pharmaceuticals, consumer electronics, packaged food products, soft drinks, tissue paper, and chocolate bars. A subset of FMCGs are Fast Moving Consumer Electronics which include innovative electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems and Laptops. These are replaced more frequently than other electronic products. White goods in FMCG refer to household electronic items such as Refrigerators, T.Vs, Music Systems, etc. In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing industries in India. According to the AC Nielsen India study, the industry grew 5.3% in value between 2004 and 2005. Indian FMCG Sector The Indian FMCG sector is the fourth largest in the economy and has a market size of US$13.1 billion. Well-established distribution networks, as well as intense competition between the organised and unorganised segments are the characteristics of this sector. FMCG in India has a strong and competitive MNC presence across the entire value chain. It has been predicted that the FMCG market will reach to US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003. The middle class and the rural segments of the Indian population are the most promising market for FMCG, and give brand makers the opportunity to convert them to branded products. Most of the product categories like jams, toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as well as low penetration level, but the potential for growth is huge. The Indian Economy is surging su rging ahead by leaps and bounds, keeping pace with rapid urbanization, increased literacy levels, and rising per capita income.
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The big firms are growing bigger and small-time companies are catching up as well. According to the study conducted by AC Nielsen, 62 of the top 100 brands are owned by MNCs, and the balance by Indian companies. Fifteen companies own these 62 brands, and 27 of these are owned by Hindustan Lever. Pepsi is at number three followed by Thums Up. Britannia takes the fifth place, followed by Colgate (6), Nirma (7), Coca-Cola (8) and Parle (9). These are figures the soft drink and cigarette companies have always shied away from revealing. Personal care, cigarettes, and soft drinks are the three biggest categories in FMCG. Between them, they account for 35 of the top 100 brands. Exhibit I THE TOP 10 COMPANIES IN FMCG SECTOR S. NO. Companies Companies 1.
Hindustan Un Unilever Lt Ltd.
2.
ITC (Indian Tobacco Company)
3.
Nestlé India
4.
GCMMF (AMUL)
5.
Dabur India
6.
Asian Paints (India)
7.
Cadbury India
8.
Britannia Industries
9.
Procter & Gamble Hygiene and Health Care
10.
Marico In Industries
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Source: Naukrihub.com The companies mentioned in Exhibit I, are the leaders in their respective sectors. The personal care category has the largest number of brands, i.e., 21, inclusive of Lux, Lifebuoy, Fair and Lovely, Vicks, and Ponds. There are 11 HLL brands in the 21, aggregating Rs. 3,799 crore or 54% of the personal care category. Cigarettes account for 17% of the top 100 FMCG sales, and just below the personal care category. ITC alone accounts for 60% volume market share and 70% by value of all filter cigarettes in India. The foods category in FMCG is gaining popularity with a swing of launches by HLL, ITC, Godrej, and others. This category h as 18 major brands, aggregating Rs. 4,637 crore. Nestle and Amul slug it out in the powders segment. The food category has also seen innovations like softies in ice creams, chapattis by HLL, ready to eat rice by HLL and pizzas by both GCMMF and Godrej Pillsbury. This category seems to have faster development than the stagnating personal care category. Amul, India's largest foods company, has a good presence in the food category with its icecreams, curd, milk, butter, cheese, and so on. Britannia also ranks in the top 100 FMCG brands, dominates the biscuits category and has launched a series of products at various prices. In the household care category (like mosquito repellents), Godrej and Reckitt are two players. Goodknight from Godrej, is worth above Rs 217 crore, followed by Reckitt's Mortein at Rs 149 crore. In the shampoo category, HLL's Clinic and Sunsilk make it to the top 100, although P&G's Head and Shoulders and Pantene are also trying hard to be positioned on top. Clinic is nearly double the size of Sunsilk. Dabur is among the top five FMCG companies in India and is a herbal specialist. With a turnover of Rs. 19 billion (approx. US$ 420 million) in 2005-2006, Dabur has brands like Dabur Amla, Dabur Chyawanprash, Vatika, Hajmola and Real. Asian Paints is enjoying a formidable presence in the Indian sub-continent, Southeast Asia, Far East, Middle East, South Pacific, Caribbean, Africa and Europe. Asian Paints is India's largest paint company, with a turnover of Rs.22.6 billion (around USD 513 million). Forbes Global magazine, USA, ranked Asian Paints among the 200 Best Small Companies in the World Cadbury India is the market leader in the chocolate confectionery market with a 70% market share and is ranked number two in the total food drinks market. Its popular brands include Cadbury's Dairy Milk, 5 Star, Eclairs, and Gems. The Rs.15.6 billion (USD 380 Million) Marico is a leading Indian group in consumer products and services in the Global Beauty and Wellness space. Outlook
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There is a huge growth potential for all the FMCG companies as the per capita consumption of almost all products in the country is amis amongst the lowest in the world. Again the demand or prospect could be increased further if these companies can change the consumer's mindset and offer new generation products. Earlier, Indian consumers were using u sing non-branded apparel, but today, clothes of different brands are available and the same consumers are willing to pay more for branded quality clothes. It's the quality, promotion and innovation of products, which can drive many sectors.
The personal care sector of P&G is considered for this project.The Pantene shampoo is taken as a representative of this sector and it will be further analyzed on the varios parameters.
First of all let us have a look at the various competitors of P&G in this sector and that too in the shampoo product line The Brand that is selected selected for this analytical analytical report isPantene.We isPantene.We will analyze analyze the various competitors of P&G in the personal care segment.Some of them are Hindustan Unilever Ltd, Colgate Palmolive,ITC,Marico Industries,Dabur, For every company we have discussed only one product from the Hair Care segment in detail.
UNILEVER
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Unilever is a multi-national corporation, formed of Anglo-Dutch parentage that owns product brands in foods, beverages, cleaning agents and many of the world's consumer product brands personal care products. Unilever employs nearly 180,000 people [1] and had a worldwide revenue of almost €40 billion in 2005. Unilever is a dual-listed company consisting of Unilever NV in Rotterdam, Netherlands and Unilever PLC in London, England. This arrangement is similar to that of Reed Elsevier , and that of Royal Dutch Shell prior to their unified structure. Both Unilever companies have the same directors and effectively operate as a single business. The current non-executive Chairman of Unilever N.V. and PLC is Michael Treschow while Patrick Cescau is Group Chief Executive, who will retire at the end of 2008. Mr Paul Polman will succeed Patrick Cescau as Group Chief Executive. The company is widely listed on the world's stock exchanges
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History Unilever was created in 1930 by the merger of British soapmaker Lever Brothers and Dutch margarine producer Margarine Unie , a logical merger as palm oil was a major raw material for both margarines and soaps and could be imported more efficiently in larger quantities. In the 1930s the business of Unilever grew and new ventures were launched in Latin America. America. In 1972 Unilever purchased A&W Restaurants' Canadian division but sold its shares through a management buyout to former A&W Food Services of Canada CEO Jeffrey Mooney in July 1995. [4] By 1980 soap and edible fats contributed just 40% of profits, compared with an original 90%. In 1984 the company bought the brand Brooke Bond (maker of PG of PG Tips tea). In 1987 Unilever strengthened its position in the world skin care market by acquiring Chesebrough-Ponds, the maker of Ragú of Ragú,, Pond's, Pond's, Aqua-Net, Cutex Nail Polish, Pepsodent toothpaste, and Vaseline. Vaseline. In 1989 Unilever bought Calvin Klein Cosmetics, Fabergé, Fabergé, and Elizabeth Arden, Arden , but the latter was later sold (in 2000) to [5] FFI Fragrances. In 1996 Unilever purchased Helene Curtis Industries, giving the company "a powerful new presence in the United States shampoo and deodorant market". [6] The purchase brought Unilever the Suave and Finesse hair-care product brands and Degree deodorant brand. [7] In 2000 the company absorbed the American business Best Foods, Foods, strengthening its presence in North America and extending its portfolio of foods brands. In a single day in April 2000, it bought, ironically, both Ben & Jerry's, Jerry's, known for its calorie-rich ice creams, and Slim Fast. Fast . The company is fully multinational with operating companies and factories on every continent (except Antarctica) and research laboratories at Colworth and Port Sunlight in England; England; Vlaardingen in the Netherlands; Netherlands; Trumbull, Connecticut, Connecticut , and Englewood Cliffs, New Jersey in the United States; States; Bangalore in India Pakistan; Pakistan; and Shanghai in China.Its China.Its Indian arm is known as Hindustan Unilever Ltd. Hindustan Unilever Ltd. Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited , is India's largest consumer products company and was formed in 1933 as Lever Brothers India Limited. It is currently headquartered in Mumbai, India and its 41,000 employees are headed by Harish Manwani, the non-executive chairman of the board. HUL is the market leader in Indian products such as tea, soaps, detergents, as its products have become daily household name in India. The Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever Limited.
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The company was renamed in late June 2007 "Hindustan Unilever Limited". Introduction . The company focuses on efficient delivery to consumers with an improved supply chain, brand building initiatives and innovation, which has helped the company to sustain its leadership position in the overall FMCG category in India. It offers foods, beverages, home care, and personal care products. Its operations are divided into seven reportable divisions: soaps and detergents, personal products, beverages, foods, ice creams, exports, and other operations. The company derives 44.3% of its revenues from soaps and detergents, 26.6% from personal care products, 10.5% from beverages, and the rest from foods, ice creams, exports, and other products.
Brands in the Personal Care category The personal care product family or category is further sub-divided into seven categories: Personal Wash: Lux Liril Hamam
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Lifebuoy
Breeze Dove Rexona Pears
Laundry: Surf Excel Rin Wheel Sunlight Hair Care: Sunsilk Naturals Clinic 34 | P a g e
Deoderants: Axe Rexona Skin Care: Fair & Lovely Ponds Aviance Vaseline Oral Care: Pepsodent Close Up Cosmetics: Lakme Sunsilk Launched in 1964, Sunsilk is the largest beauty shampoo brand in the country. Positioned as the 'Hair Expert', Sunsilk has identified different hair needs and offers the consumer a shampoo that gives her the desired results. The benefits are more compelling and relevant since the variants are harmonised in terms of the product mix - fragrance, colour and ingredients are all well linked to cue the overall synergy. The range comes in premium packaging and design. The accent is on "It knows you, and hence knows exactly what your hair needs". brand of hair care products for women produced by the Unilever group. It was launched in 1954 in the United Kingdom. By 1959, it was available in eighteen different countries worldwide. Currently, Sunsilk products are available in over 50 countries throughout Asia, The Middle East, North Africa and Latin America, where is known as Sedal. In Brazil, this brand is known as Seda.
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Old Campaign
In the early years, Sunsilk focused much of its marketing attention on gaining international presence. To do this, they targeted different market segments or countries with specialized products designed to address hair "issu es" of each culture. For example in the UK, the core benefit in the 1960s was shiny hair. High interest internationally led to a dramatic decline in support in the United States and UK. Because of this, many years went by with little or no advertising which caused the brand to be viewed as targeted at older women. Although this was not Sunsilk's intention the outcome was inevitable. During the 1980s a push viewed by many Unilever insiders as "last-ditch" was made to revitalize the brand in Australia followed by other countries [1]. The advertising featured Beverly Hills stylist Dusty Fleming and although this was successful in Australia the impact on the brand in the UK was catastrophic. By 1991 the former No1 shampoo product was delisted in the UK. Because of the brand loyalty among older users, combined with almost a generation of non-use, Sunsilk found it very difficult to gain market share and attract a younger audience. A new campaign was launched to recruit younger users. To do this, products also needed rejuvenating. Sunsilk decided that in addition to segmenting markets country by country, they should also segment by hair type within each market. The new products focused on hair color, texture, feeling, dryness, etc. The updated Sunsilk campaign, "Get Hairapy", followed the same strategy, marking a bold move towards users in their 20s and upwards said to be in their "quarter-life crisis". The target audience was also defined as single, fashion-conscious, working women who economized when looking good: women "on-the-go". The new product lines, which feature product threesomes include: Anti-Flat, AntiPoof, Hydra TLC, Straighten-Up, De-Frizz, No Major Issues, ThermaShine, Beyond Brunette Color Boost (Auburn tones and non-highlighted brunette colorers) and Blonde Bombshell (all over blondes and highlighters). Sunsilk also updated its website to reflect its realigned image. The new site, www.gethairapy.com, www.gethairapy.com, became the main focus of the campaign. Commercials and print ads encouraged direct response via the website which included a "get hairapy" blog.
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The blog is written by "The Hairapy Guys", a trio of young men with " Queer Eye for the Straight Guy" appeal. The aim of the Hairapy Guys is to act as lifestyle specialists with thoughts and tips on hair care, dating and other typical twenty-something issues. The blog tagline is "help you laugh away your hair and life problems". The myspace account attracts as many as 18,000 subscribers. The Hairapy Guys have also been incorporated into various television shows such as “the Best Week Ever” where they engage in celebrity gossip, “Flavor of Love” with 30-second promos on the hairstyles of the would-be girlfriends, and fashion shows on the E! channel.
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Life Can't Wait
Sunsilk’s latest campaign, Life Can’t Wait, aims to inspire women all over the globe to live their lives to the fullest. To launch Sunsilk’s campaign the brand unveiled their Life Can't Wait advertisement during the Super Bowl XLII on February 3 2008. The founding idea behind the campaign is that hair can dramatically alter a girl’s mood and actions. The philosophy behind it is that by taking appearance into their own hands, girls are equally taking positive steps towards being more in control of their life: “Hair On= Life On” The Life Can't Wait campaign features three of the world's most iconic women; Madonna, Shakira and Marilyn Monroe, who all symbolise the power of expression and making life happen. Spanning four continents and fifteen countries, the campaign showcases these universal icons and reveals significant and life-defining moments in their lives: moments which inspired them to discover themselves, their identities and their always-evolving styles. Sunsilk is targeting young women across the world, giving them the opportunity to share with each other their own life stories fitting the Life Can’t Wait theme – of how they have thrown caution to the wind and taken a chance which resulted in a life changing experience! The US were first to launch Life Can't Wait, and have hosted an event where girls with great hair shared their life can't wait stories. Girls from the USA voted for their winner, a DJ from California named Tatiana. Background to the campaign Created by DeGrippes Gobe in Paris, the Life Can't Wait campaign was born from the global insight that hair, more than any other physical attribute, plays a crucial role in a girl's power to transform and express herself. Research conducted in six countries with 3,000 women revealed the universal truth that twenty-something women find having "good" hair can be a trigger for seizing opportunities. The Sunsilk Global Survey was carried out by Sunsilk in Thailand, India, Brazil, USA, Russia and Mexico between August and September 2007. One finding from the research was that ‘eight out of ten girls (84%) worldwide had missed out on something good – such as a pay rise or a blind date – because they didn’t have the confidence to act instantly and take risks.
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ITC LIMITED ITC is one of India's foremost private sector companies with a market capitalisation of nearly US $ 19 billion* and a turnover of over US $ 5.1 Billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by BusinessWorld and among India's Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week. ITC has a diversified presence in Cigarettes, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business, Packaged Foods & Confectionery, Information Technology, Branded Apparel, Personal Care, Stationery, Safety Matches and other FMCG products. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery.
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As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market". In his own words: "ITC believes that its aspiration to create enduring value for the nation provides the motive force to sustain growing shareholder value. ITC practices this philosophy by not only driving each of its businesses towards international competitiveness but by also consciously contributing to enhancing the competitiveness of the larger value chain of which it is a part." ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities, effective supply chain management and acknowledged service skills in h oteliering. Over time, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India.
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ITC's Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). The Company's 'e-Choupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers th rough the power of the Internet. In ternet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach. ITC's wholly owned Information Technology subsidiary, ITC Infotech India Limited, is aggressively pursuing emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business process outsourcing. ITC's production facilities and hotels have won numerous national and international awards for quality, productivity, safety and environment management systems. ITC was the first company in India to voluntarily seek a corporate governance rating. ITC employs over 25,000 people at more than 60 locations across India. The Company continuously endeavors to enhance its wealth generating capabilities in a globalising environment to consistently reward more than 3,75,000 shareholders, fulfill the aspirations of its stakeholders and meet societal expectations. This overarching vision of the company is expressively captured in its corporate positioning statement: "Enduring Value. For the nation. For the Shareholder."
Brands in Personal Care: TC launched an exclusive line of prestige fine fragrances under the Essenza Di Wills brand in mid 2005. The Essenza E ssenza Di Wills range of perfumes reinforces ITC’s tradition of bringing world-class products to Indian consumers to enrich the quality of their lives. Essenza Di Wills embodies a fine balance between the classic and the contemporary. The brand personifies exclusivity, innate style, sophistication and magnetism. The Essenza Di Wills line has been developed with the assistance of French perfumery experts to give it the mystique and premium luxury quality that go with the best of international brands.
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Inizio , the signature range under Essenza Di Wills captures the very essence of attraction between a man and a woman with its two distinct lines - Inizio Femme (for women) and Inizio Homme (for men). The women's fine fragrance revolves around 'Floral Fruity Musky' notes while the men's fine fragrance is centered on 'Oriental Woody Fruity' notes. The bath and body care products share the same olfactory signature of the fine fragrances, to offer a harmonized grooming experience.
he latest addition to the Essenza Di Wills portfolio is the Aqua range for men (Aqua Homme) that offers a distinctive and fresh aquatic fragrance. The Aqua range includes an After-Shave Lotion, a Deodorant, a Hair & Body Shampoo and a Bathing Bar.
Essenza Di Wills has significantly enhanced its brand salience in the lifestyle space by being the associate sponsors of the Wills Lifestyle India Fashion Week, the country's most premier fashion event that brings together the leading designers of the country. The Essenza Di Wills fashion line , specially designed for the brand by one of India’s leading designers, Varun Bahl, received high appreciation at the Spring-Summer show in September 2007. Essenza Di Wills W ills is available at Wills Lifestyle stores, select John Players stores and select premium outlets.
In September 2007, ITC launched Fiama Di Wills , a premium range of personal care products comprising shampoos, conditioner, shower gels and soap. This premium range is a unique blend of nature and science that promises gentle effective care. It is an outcome of 4 years of extensive researc iama Di Wills Shampoos developed in collaboration with Cosmetech Labs Inc., USA, offers a range of five variants. Each of these is designed to deliver a specific hair benefit to the consumer : Everyday Mild (with extracts of Thyme & Juniper) is a gentle caring shampoo suitable for daily use. Aqua Balance (with extracts of Magnolia Blossoms & Watercress) is a gentle moisturizing shampoo ideal for dry, dull hair.
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Volume Boost (with extracts of Rosemary & Sage) is a gentle volumizing shampoo ideal for thin, limp hair. Silky Strong (with oils of Macadamia Nut and Babassu) helps make hair smooth, silky and strong and is ideal for weak, damaged hair. Shine in Style (with extracts of Chamomile and Green Tea) makes hair shiny and manageable, easy to style and is ideal for dull to normal hair. Each of these shampoos can be complemented with Fiama Di Wills Polishing Drops conditioner. This gentle conditioner enriched with Avocado Oil and Burdock extract promises to make hair shiny, soft and smooth. It also gives the additional benefits of UV protection as it contains Sunflower Seed extract, which is a natural UV absorber. The Fiama Di Wills product line also consists of a 3-variant range of transparent shower gels which are unique as they come with suspended beads: • Mild Dew (enriched (enriched with soft beads, beads, peach and avocado extracts) is for soft, moisturized skin. • Clear Springs (enriched with jojoba beads, sea weed and lemongrass extracts) is for clear healthy skin. •
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Exotic Dream (enriched with glitter beads, bearberry leaves and black currant extracts) is for stimulating freshness.
The Fiama Di Wills range of soaps has been launched under the sub - brand SkinSense. The first variant to be introduced in this range is Soft Green. This is a gentle caring soap, which helps enhance retention of skin proteins making skin look beautiful and youthful. Between February and June 2008, ITC expanded its personal care portfolio with the launch of Vivel Di Wills and Vivel brands. Vivel Di Wills, a range of soaps, and Vivel, a range of soaps and shampoos, cater to the specific needs of a wide range of consumers. Backed by consumer insights, these ranges offer the unique value proposition of providing the multiple benefits of Nourishment, Protection and Hydration in every single product. Thus providing, the ever-discerning consumer, complete care. The Vivel Di Wills range is available in two variants. Its unique carton pack has been developed by ITC's design team to provide a novel consumer experience. • Vivel Di Wills Sheer Radiance Radiance is enriched with Olive Olive Oil, to provide skin lustre to make it radiant. • Vivel Di Wills Wills Sheer Crème is enriched with Shea Butter, to moisturize skin to make it soft and supple.
The Vivel range of soaps is available in four variants:• Vivel Young Glow Glow is enriched with with Vitamin E and Fruit Infusions which help in providing youthful glow to the skin. • Vivel Satin Soft is enriched with Vitamin E and Aloe Aloe Vera which help the skin feel beautifully soft. • Vivel Sandal Sparkle Sparkle is enriched with Sandalwood Sandalwood Oil and Active Clay which helps in providing clear skin. • Vivel Ayurveda Essence is enriched with multiple Ayurvedic Ingredients which help protect skin from germs and harsh environment, keeping it healthy and beautiful.
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The Vivel range of shampoos is available in three variants:Vivel Shine & Glow is suitable for dull to normal hair and is enriched with Green Tea Extract and Conditioners. It adds shine to hair. Vivel Soft & Fresh is suitable for dry to normal hair and contains Extra Conditioners and Soya Protein. It makes hair soft and fragrant. Vivel Volume & Bounce is suitable for oily to normal hair and contains Jojoba Oil and Conditioners. It adds volume and bounce to hair. In the popular segment, ITC has launched a range of soaps and shampoos under the brand name Superia. Superia Soaps enriched with natural ingredients give radiant glowing skin. Superia Soaps are available in four variants : 1 Fragrant Flower: with the fragrance of Rose & Lavender . Oil 2 Soft Sandal: with the fragrance of Sandal & Almond Oil . 3 Natural Glow: with Neem & Coconut Oils . 4 Healthy Glow: with Orange Oil .
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Superia shampoos with triple conditioners and natural ingredients bring a natural shine to hair. Superia shampoos are available in two variants: Shiny Black with Triple Conditioners and the natural goodness of Hibiscus & Brahmi extracts. Vibrant Green with Triple Conditioners and the natural goodness of Amla & Arnica extracts. Another addition to the Superia shampoo portfolio, Superia Maxi Protect Active Health shampoo contains Dandruff Fighter along with Vitamins & Soya Protein. It fights multiple types of dandruff causing germs and leaves hair & scalp feeling clean & healthy.
DABUR
Dabur India Limited is India's leading FMCG company with interests in health care, personal care and foods. Dabur has a history of more than 100 years and the company has carved a niche for it self in the field of Ayurvedic medicines. The products of Dabur are marketed in more than 50 countries worldwide. The company has 2 major strategic business units (SBU) - Consumer Care Division (CCD) & Consumer Health Division (CHD), and 3 Subsidiary Group companies - Dabur Foods, Dabur Nepal and Dabur International. Dabur International has 3 step down subsidiaries - Asian Consumer Care in Bangladesh, African Consumer Care in Nigeria and Dabur Egypt.
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The origin of Dabur can be traced back to 1884 when Dr. S.K. Burman started a health care products manufacturing facility in a small Calcutta pharmacy. In 1896, as a result of growing popularity of Dabur products, Dr. Burman set up a manufacturing plant for mass production of formulations. In early 1900s, Dabur entered the specialized area of nature based Ayurvedic medicines. In 1919, Dabur established research laboratories to develop scientific processes and quality checks. In 1936, Dabur became a full-fledged company with the name Dabur India (Dr. S.K. Burman) Pvt Ltd. Dabur shifted its operations to Delhi in 1972. Dabur became a Public Limited Company in 1986 and Dabur India Limited came into existence after reverse merger with Vidogum Limited. In 1992, Dabur entered into a joint venture with Agrolimen of Spain to manufacture and market confectionary items in India. In 1994, Dabur raised its first IPO. In 1998, day to day running of the company was handed over to professionals. In 2000, Dabur achieved a turnover of Rs 1000 crores. In 2005, Dabur acquired Balsara. Dabur crossed $ 2 billion market cap in 2006.
Some of the well-known brands of Dabur are: Amla Chyawanprash, Hajmola, Lal Dantmanjan, Nature Care, Pudin Hara, Babool Toothpaste, Hingoli, Dabur Honey, Lemoneez, Meswak, Odonil, Real, RealActiv and Vatika.
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VATIKA SHAMPOO
The natural shampoo that conditions conditions from deep within, within, while gently cleansing and nourishing your hair. Created by the Vatika Expert with a perfect perfect balance of of natural ingredients like henna, green almonds and Shikakai. Unlike chemical shampoos that are harsh, Vatika is mild on your hair, leaving it soft, silky and radiant, with the gentle and caring touch of nature.
More then Vatika basic care,vatika dandruff shampoo is popular.
For persistent dandruff problem, Vatika Anti-Dandruff Shampoo is the natural choice. This herbal treatment is completely safe and cures dandruff from within. Enhancing your hair’s natural beauty, without damaging or making it
Vatika Anti - Dandruff Shampoo uses the natural goodness of lemon and henna. Cleaning and curing difficult dandruff, while conditioning the hair to give it body and strength.
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CAVIN KARE
Success is a journey not a destination. CavinKare began with a young mind choosing the road less taken. In 1983 with a single product, CavinKare started out as a small partnership firm. The Company that began its journey as Chik India Ltd was renamed as CavinKare Pvt. Ltd (CKPL) in 1998. With innovative Entrepreneur C.K. Ranganathan at the helm, CavinKare emerged into a successful business enterprise. Smart marketing and clear product positioning not only ensured CavinKare's growth but also helped the company broaden its product portfolio extensively. The company now markets ten major brands. Over the years, CavinKare has achieved a competitive edge with sound understanding of mass marketing dynamics. The company offers quality Personal care (hair care, skin care, home care) and Food products borne out of a keen understanding of consumer needs and keeping up company's the values of innovation inn ovation and customer satisfaction. Today, CavinKare, having established a firm foothold in the national market, is increasing its popularity in the international arena. A dedicated Research & Development centre, equipped with latest equipment and technologies, constantly supports the various divisions in their endeavour. The Company, which primarily relied on contract manufacturing for many years has now set up its own world class plant at Haridwar to cater to the demand of both domestic and international market. CavinKare has touched a turnover tu rnover of over 5000 million INR in 2007-2008. The Company has employee strength of 976, an all India network of 1300 Stockists catering to about 25 lakh outlets nationally. CavinKare's astute professionalism, innovative products and consistent quality are results of its significant corporate practice. CHIK SHAMPOO
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Just a mention of Chik Shampoo today gives rise to varied perceptions. To the rural and semi urban population of India, it is the preferred daily shampoo. To the market and its players, the second largest selling shampoo in the country. To the competition, a case study in competitive strategy In a highly competitive FMCG category that seemed impenetrable to most marketers. Chik Shampoo identified a humongous opportunity in rural and semi urban India and created waves with its entry into these markets. Combining innovative sachet packing, strategic pricing (At Re.1 and 50p) and a strong and motivated distribution distribution network, Chik Shampoo Shampoo transformed the very nature of shampoo packaging and usage.
THE CHIK PROMISE
With a tropical climate round the year, it is indeed a difficult task to maintain hair softness and shine. Added to this, tangled hair has come to be the most common complaint to girls and women. The Research and Development team at CavinKare recognized softness and manageability to be the key issues in the maintenance and nourishment of hair. This paved the way for a unique formula – Active Double Conditioners that cut across age, sex and loyalists of other shampoos to adopt Chik Shampoo. Further, 50 | P a g e
extensive communication targeted at the rural and semi urban masses showcased the possibility of soft and manageable hair. The iconic Chik Girl in every Chik Shampoo commercial treated her hair with the shampoo and demonstrated with atmost ease and confidence her ability to untangle her hair with just a single motion of running her fingers through her hair. Her testimonial signature Yun Kiya Ho Gayal has come to be a popular phrase amongst both girls and women today. THE CHIK USER
Chik Shampoo has always targeted both, girls and women in rural and semi urban India. The brand has gained their their confidence and become become a household name by catering to their continuously evolving requirements and preferences. preferences .
Chik Shampoo has always targeted both, girls and women in rural and semi urban India. The brand has gained their confidence and become a household name by catering to their continuously evolving requirements and preferences.
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4 P’S ANALYSIS OF PANTENE PRO-V PRODUCT: Clearly, Shampoo is more than just shampoo when P&G sells it. P&G’s great success in the rough-and-tumble shampoo sh ampoo world comes from developing an innovative product concept. An effective product concept is the first step in marketing-mix planning. Philip Kotler defines product as Anything that can beoffered to a market for attention, acquisition, acquisition, use or consumption consumption that might satisfy a -want or need. It includes physical objects, services, persons,places, persons,places, organizationsand organizationsand ideas. Product planners need to think about the product on three levels. The most basic level is the core product, which addresses the question: What is the buyer really buying?
Theodore Levitt has pointed out that buyers 'do not buy quarter-inch drills; they buy quarter-inch holes'. Thus when designing products, marketers must first define define the core of benefits that the product will provide to consumers. The product planner must next build an actual product around the core product. Actual products may have as many as five characteristics: a quality level, features, styling, a brand name and packaging.
product is more than a simple set of tangible features. Consumers tend to see products as complex bundles of benefits that satisfy their needs.
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Source: Philip Kotler European Edition We will now discuss our product Pantene under the following heads: Form:
It is available in the both premium bottle pack as well as satchets. FEATURES: The Pantene has whole range of shampoos shampoos with different features. features. These are Volume Care, Smoothing Care, Care, Color Care, Curl Care and Basic Care, anti – dandruff, anti-hair fall etc.
SIZE OF PACKAGE Available in 100 ml,200 ml and 400 ml sizes BRAND: 53 | P a g e
Pantene Pro-V continues to create a line of products that transforms dull, dry, limp hair into healthy, shiny hair. Their slogan: “Hair so healthy, it shines!” Each of the pro-vitamin essentials has been formulated to meet a special hair care need, in particular panthenol.
Pantene has recently been awarded “Asia’s favorite Shampoo” in the Readers Digest Super Brands Survey.
Pantene is currently facing issues with intense competition, but their unique ProVitamin ingredient makes hair strong and healthy. “P&G is now one of the world’s largest beauty companies” (P&G Annual report). P&G states that Pantene is the world’s largest hair care brand and that it grew in double digits over the last twoyears. P&G claims that this success is due in part to their unsurpassed hair conditioning technology. The global retail hair care market is a $34 billion industry. P&G has annual sales of more than $4.5 billion with leading brands like Pantene. Pantene’s position in the market is by attribute, claiming “Hair so Healthy it Shines” and their latest is a hair care challenge saying, “Healthier Hair in just 10 Days. Guaranteed.” Pantene uses price to slightly separate itself from its in-store competitors. The price for Pantene products is slightly higher, identifying it as a better product. Pantene is also positioned around the product user. It has recently done commercials with actresses like Katrina Kaif,Sushmita Sen,Lara Dutta.” Lastly Pantene is positioned by the competitor. It is perceived as a product that maintains great hair and according to the sales figures it is perceived as a better product by consumers.
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PRICE: As mentioned above the 200 ml bottle was available for Rs 98 and 100 ml for Rs 51.But very recently Pantene had reduced the prices and now the same 200 ml bottles are available for Rs 89 and and 100 ML FOR Rs 41. P&G has basically adopted Geographical pricing strategy for Pantene.They have set different prices for Pantene in different countries.This is a very good strategic method as it captures the local conditions as well as purchasing power of the local population. When Pantene launched Lively Clean,it adopted Promotional Pricing for it and launched it at an introductory in troductory price of R78 for 200 ml bottle It has also introduced Bundle Pricing where it has clubbed two or more products and sold them at a reduced price.But this strategy has not been very successful as it eroded the premium image of the Shampoo and gave the impression of desperation of the company.
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Around 2 years back in 2006 P&G reduced the rates of Pantene by 16%. By By this way what P&G did was cutting its bottle's premium over sachets. At the same time P&G is reducing the price gaps between its own brands. While Pantene and Head & Shoulders were sold at nearly similar price points, bringing down Pantene prices placed it between Rejoice (Rs 39 for 100 ml) and Head & Shoulders (Rs 64 for 100 ml) and thereby segment P&G's shampoo brands at different price points. This strategy is known as Product Line Pricing. Very recently Pantene has changed its pricing approach and experimented with Value Pricing Strategy. In this Procter & Gamble made dramatic and long-term changes in its pricing and promotion strategy during which it boosted advertising while simultaneously curbing its distribution channel deals (in-store displays, trade deals), and significantly significantly reducing its coupon promotions. It is interesting to note that P&G's value pricing strategy regarding Pantene is quite a misnomer. During this period many stores were switching to EDLP (every day low pricing) policies, which meant that consumers would save on their overall purchase without having to deal shop. In contrast, P&G strategy essentially was a disguised price increase; coupons were cut by 50%, which contributed to an increase in the customer's price paid by 20%. It is possible that P&G lowered their wholesale price, but the retailer only enjoyed higher margins and did not pass the savings on to the customer. Another possibility is that retailers lowered retail prices consistently, following P&G's decrease in wholesale price, but once promotional trade deals are factored in those everyday lower wholesale prices did not result in a lower total price paid. For example, if P&G's old price was Rs20, but gave deals of Rs15, at which price 90% of purchases were made, the wholesale price equaled Rs15.7 (.90*15 + .10*20). If P&G set a "Value Price" point of Rs18, but 100% of purchases we were made at that price, the retailer enjoyed no cost savings-only a cost increase. If P&G had truly offered price cuts their results may have been much different.
PROMOTION:
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The promotional strategy of Pantene is highly highly useful and effective. effective. Using magazine magazine print advertisements and commercials allows for the opportunity to segment their advertisements by specific magazines, specific TV shows, and specific time slots. These strategies provide Pantene with the opportunity to wisely advertise to their target audience.
• Pantene’s use of advertising with different ethnicities, hair types, and ages has proven to be a critical factor because they are now developing specific hair care line for different types of ethnicities; they were voted Asia’s number one shampoo, and they are a highly marketable product in Europe.
• Without promotion this brand would be relatively unknown and its popularity would not be near what has been established with promotion. Many times when a consumer sees a product in the store that they have not heard of they will browse over it and choose a product they know. Consumer and market knowledge are prevalent because Pantene and P&G are built around what consumers want.
○
Public Relations is a large aspect of the P&G/Pantene promotional mix. Proctor & Gamble does things like raising funds for children who suffer from malnutrition in India and Pantene recently put on the “Condition for a Cause” campaign, donating money to heart disease research. Sales Promotion is also alarge factor for Pantene, they use marketing and business techniques to try and improve consumer’s lives. They are always finding new and better ways to reach their consumers and between their PR campaigns and advertising they are constantly appealing to consumers and causing them to trust Pantene. Personal selling is not an aspect of Pantene’s promotional selling and it would not be wise to incorporate it. Personal selling often comes off as a sleazy salesman’s cheap and last minute effort. Pantene’s print and TV advertisements are enough for Pantene to bring in new customers and frequently remind its loyal customers that it is still in the stores and going strong. Personal Selling would also be a pricey move that would hinder rather than aid Pantene’s efforts. Lastly, advertising is an enormous part of Pantene’s promotional mix. Without the current advertising strategies and past ones as well, Pantene wouldn’t be the widely known and the highly used brand that it is today.
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The distributor needs to be aware of the brands state in the market, they should have information on the product in order to decide if they want to be associated with that product and if so, they will need to know enough about the product to aid customers in finding a shampoo that is best for the them. The The idea idea would would be to establ establish ish a relati relations onship hip with as many many retail retailers ers as possible to make the brand the recommended one. Consumers need to know as much as possible about the product. They do not want to feel as if the company is hiding something from them and they want to be able to trust the products they are using. Information like the ingredients, different products the brand carries, efforts made by the brand to help others and humanity are all factor factors s that that could could affect affect a sale. sale. Distri Distribut bution ion as much much inform informati ation on as possible is a good idea for the company.
•
The purpose in using aspects of the promotional mix is to build brand equity, brand awareness, awareness, and frequently frequently put our advertiseme advertisements nts and name into the public to be seen. The frequency in which the ads are seen is as important as the message we are providing.
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•
Pantene also gives out free samples to anyone. When visiting their website there will be a small box of information about samples to the right, when the online visitor clicks on that they will find that if they provide Pantene with information about themselves they will be sent free samples. Pantene has recently run out of free samples and leads the consumer to an apology page which in turn directs the consumer to the page for their most recent sweepstakes.
•Endorsers: global celebs like Hollywood stars Kirsty Alley, Rachel Hun ter, Liv Tyler, Angie Everhart and Kelly Lebrock, among others have endorsed Panteen In India, Sushmita Sen, Katrina Kaif, Bipasha Basu, Shilpa Shetty, Sonali Bendre and Simone Singh are among the brand ambassadors.Lara Dutta is the most recent celebrity who has got associated with the brand.A noticeable thing about pantene advertisements is that always Asian women are shown who have thick,long,dark hair.
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• In response to the change in appearance and types of product Pantene has said that this change was for the better and it is easier than ever to choose which product is best for the individual consumer. Simply pick the Pantene version that names how you want your hair to look: Volume Volume Care, Smoothing Smoothing Care, Color Care, Curl Care and Basic Care.
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Each collection includes a shampoo, conditioner, treatment and styling products that helps the consumer achieve their unique look. Not only did they change their products to match the consumer’s desired style, they claim to have improved their technologies.
• Pantene also claims that its products have ingredients that set it apart from the competition. They state that each line of products in their collections has the right combination to give customers the benefit that is “spelled out in the name of the product.”
• Validity: “We conduct extensive scientific research and laboratory testing, as well as in-home and clinical testing, to make sure our advertising claims are factual. Because of the competitive nature of our business, though, we're unable to provide details to individuals about the specific research we perform.”
• Hair care companies are building on the desire for women to maintain a young, natural, and fresh look. Marketers are also beginning to key onto teenage girls more. Girls ages 15-19 increased sales 6.9% from 1995- 2001.
• Pantene’s promotional tactics are ideal and we feel they are approaching the target audience well.
PLACE: distribution): refers to how the product gets to the customer; for Placement (or distribution): example, point-of-sale placement or retailing. retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.
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Pantene has an undoubtedly amazing design & distribution channel and this can be supported by the fact Pantene is one of the most easily available available brands in the industry. In 1998-1999. Pantene launched global corporate restructuring program called Organization 2005, and made several changes in structure, work work processes and culture culture to generate greater stretch, innovation innovation and speed to help its its products reach the the market faster. Pantene retails through Spencers,Reliance Fresh,More,RPG group and wide variety of Kirana stores spread all over the country.
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COMPETITIVE ANALYSIS OF PANTENE Competitors are an essential part of any product’s scheme of operations.The strategies adopted by competitors decide the operation plans for the product.So,it becomes important to analyze the competitors on the basis of all the criterias. But scope of this project limits us to the competitive analysis based on the 4 P’s frame work.The main competitors for Pantene are Sunsilk from HUL,Fiamma Di wills from ITC,Halo from Colgate Palmolive and Vatika from Dabur India Ltd.
Competitive analysis based on:
PRODUCT: In October, 1998 Pantene extended its product line and announced that Pantene Pro-V would be renamed Pantene Ultra-V due to a revamped formula and package.
In response to the change in appearance and types of product Pantene has said that this change was for the better and it is easier than ever to choose which product is best for the individual consumer.
Pantene has named it products in a way way that they represent how you want your hair to look: Volume Care, Smoothing Care, Color Care, Curl Care and Basic Care. Each collection includes a shampoo, conditioner, treatment and styling products that helps the consumer achieve achieve their unique look. Not only did they change their products to match the consumer’s desired style, they claim to have improved their technologies.
Pantene also claims that its products have ingredients that set it apart from the competition. They state that each line of products in their collections has the right combination to give customers the benefit that is “spelled out in the name of the product.”
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Pantene claims to conduct extensive scientific research and laboratory testing, as well as in-home and clinical testing, to make sure their advertising claims are factual. Pantene claims to have competitive advantage on the basis of its generics and its innovations. It has Pro Vitamin B-5 B-5 with conditioning conditioning capabilities capabilities and P&G has based its promotion on this basic ingredient only.
Comparison of various shampoos on the basis of product attributes
Product attributes
Volume Boost
Conditioni ng
Smoothi ng
Curl care
Anti Hair Fall
Color care
Basic Care
care Pantene
y es
y es
yes
y es
Recentl y launch ed
y es
y es
Sunsilk
y es
y es
no
no
y es
no
y es
Fiamma Di Wills
y es
y es
yes
no
no
no
y es
Dabur Vatika
y es
y es
yes
no
no
no
y es
Chik Shampoo
no
y es
yes
no
y es
no
y es
We can see that Pantene surely has an edge on the other players in the market in the features of product.It product.It has got many many variants as compared compared to the players in the market.It has come up with a big line up of shampoos ranging from Basic Care for normal hair to curl care for hair with heavy curls.Then there is a shampoo for people 65 | P a g e
with color hair.Apart from this they also provide anti hair fall and anti dandruff shampoo. But if we see the shampoo line up of other competitors we can see that no other competitor is present in all the categories at one go. Out of all the competitors only Sunsilk by Unilever gives it a close fight.
Price: Before analyzing the prices first lets have a look at the prices of players in the market:
Product/size
100 ml
125 ml
200 ml
250 ml
400 ml
Pantene
Rs 47
N.A
Rs.89
N. A
Rs.155
Sunsilk
N.A
Rs.50
N.A
Rs 98
Rs 150
Fiamma di wills
Rs.50
N.A
Rs 112
N. A
Rs158
Dabur Vatika
Rs. 46
N.A
Rs.100
N. A
Rs.142
Chik
Rs 46
N.A
Rs 86
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Rs 144
As we can see that the ,main competitor of Pantene in terms of prices are Sunsilk,Fiamma Di Wils,Chik ,Dabur Vatika etc. The competitors who sell for a cheaper price include Vatika for 100 ml,Chik for all 100 ml,200 ml and 400 ml,Sunsilk for 400 ml. We can see that though P&G has adopted value pricing strategy for Pantene,its prices are still a notch higher then that of its competitors. Its main competition is from Sunsilk which belongs to same premium segment and we can observe that Sunsilk Sun silk is placed at better prices as compared to Pantene. We can see that 100 ml of Pantene is available in Rs 47 whereas at almost same price we get 25 ml more of sunsilk(125 ml for Rs. 50) In the 400 ml category,Pantene is the second most expensive shampoo after Fiamm Di Wills wich is launched only 6-7 months back.
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Promotion:
The latest campaign from the stable of Pantene is Shine Pantene. Pantene. With this campaign they have positioned themselves on the stand that their product is the best for providing shine to hair.To strengthen this Shine Campaign they have modeled their bottles as Pearly White. Sunsilk on the other other hand have modeled their bottles in the form of a Lady’s figure.They figure.They have targeted the Psychology of women and the structure of their bottles gives the same impression that this shampoo is made for the women and suits their needs the best.
•
•
Pantene’s use of advertising with different ethnicities, hair types, and ages has proven to be a critical factor because they are now n ow developing specific hair care line for different types of ethnicities; they were voted Asia’s number one shampoo, and they are a highly marketable product in Europe.Compared Europe.Compared to this all the other shampoos(fiamma di willis brands and they don’t have the advantage advantage of ,Chik,Vatika)are ,Chik,Vatika)are home grown brands the global operations of P&G. Pantene has also associated itself with many charitable events as well as Beauty Contests and many movies functions. Among all the competitors only Sunsilk has the resources to promote itself through personal relations.Rest of the brands are just local players in this respect. Personal selling is not an aspect of Pantene’s promotional selling and it would not be wise to incorporate it. Personal selling often comes off as a sleazy salesman’s cheap and last minute effort. Pantene’s print and TV advertisements are enough for Pantene to bring in new customers and frequently remind its loyal customers that it is still in the stores and going strong. Some of its competitors like Cavin Kare have used this strategy also at the primary level. Many A grade celebs have associated themselves with Pantene whereas with Chik there are no n o popular celeb associated.A B grade movie actress Riya sen is the brand ambassador of Vatika and a newcomer like Deepika Padukone is now the amabassador for Fiama si willis.Pantene is really a power house if we talk in terms of the celebrity power.
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Place: distribution): refers to how the product gets to the customer; for Placement (or distribution): example, point-of-sale placement or retailing. retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales. Pantene has an undoubtedly amazing design & distribution channel and this can be supported by the fact Pantene is one of the most easily available available brands in the industry. In 1998-1999. Pantene launched global corporate restructuring program called Organization 2005, and made several changes in structure, work work processes and culture culture to generate greater stretch, innovation innovation and speed to help its its products reach the the market faster. Pantene retails through Spencers,Reliance Fresh,More,RPG group and wide variety of Kirana stores spread all over the country. Among the competitors only P&G has a distribution network comparable to that of Pantene as its is also a global biggie.Other companies are still trying to catch up with these companies.
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COMPETITIVE ADVANTAGE Under the marketing concept, companies gain competitive advantage by designing offers that satisfy target-consumer needs better than competitors offers. They might deliver more customer value by offering consumers lower prices than competitors for similar products and services, or by providing more benefits that justify higher prices. Marketing strategies must consider the strategies of competitors as well as the needs of target consumers. Some of the main points that constitute the competitive advantage of P&G in general and Pantene in specific are: P&G is one of the largest FMCG companies in the world. Its main competition is with Unilever which has almost equal presence in the world. Procter and Gambles sales as of November 21st, 2003 reached $44,776 million. Below are some of the company’s key statistics for the year 2007
. Source:P&G annual report,2007
Pantene is known worldwide. It was the best selling hair care line in 1995. Pantene is known to create healthy, shiny hair.
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It has Panthenol or Pro-Vitamin B5 which has the qualities to make hair shiny and strong. It has a very ver y strong distribution network.Wal Mart. K-mart,Spencers,Reliance Fresh,More etc are among its retailers.Apart from these it hasn’t neglected the small stores or Mom and Pop stores. They are equally important important component of of its supply chain and distribution network. It is cheaper than other elite brands(Estee Lauder,L’oreal,Revlon,Salons) but always counted among the good brands in the market.
P&G has one of the largest advertising expenditures in the whole world.Following is the Proctor& Gamble’s advertising expenditures: In 1998 P&G’s advertising expense reached $3,801 and dropped a little to $3,639 in 1999. From 1999 to 2002 the advertising expenditures level off from 3,600 to 3,780. In 2003 advertising expenditures rose from 3,773 to 4,373. Out of this, expenditure on Pantene was $1342. P&G is known for its innovation.It has a large diverse portfolio of products.It has got several awards for innovation and that comes alive into its Pantene product range as well. Pantene ‘s customer base is also its very significant competitive advantage.It targets women and girls and they constitute its loyal customer base. Pantene has a good Brand Equity and there are always new kinds of hair types that it markets to. P&G intends to build brand equity by developing distinctive products that stand for something and that have a definite position in the market. They want to communicate the products benefits as compared to the competitor, with a brand that is so amazing, appealing, and reliable that the consumer begins to trust the brand.
As per the report by Wachovia Corporation on Economics,Pantene is the most favored brand worldwide.This gives a boost to its image and strengthens it further. “Pantene Pro-V care collections are formulated to meet the styling needs of people from all ethnicities.All the customers can gain personalized guidance from the experts at the website.
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Pantene appeals to a wide variety of nationalities, and not all nations feel the same about hygiene as the American culture. Many women may find choosing the right shampoo a limited-decision making process and other an extended decision-making process. All women are different and with extensive reach Pantene strives for it is difficult to pinpoint one concept.
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PROMOTIONAL STRATEGY The promotional strategy of Pantene is highly highly useful and effective. effective. Using magazine magazine print advertisements and commercials allows for the opportunity to segment their advertisements by specific magazines, specific TV shows, and specific time slots. These strategies provide Pantene with the opportunity to wisely advertise to their target audience.
• Pantene’s use of advertising with different ethnicities, hair types, and ages has proven to be a critical factor because they are now developing specific hair care line for different types of ethnicities; they were voted Asia’s number one shampoo, and they are a highly marketable product in Europe.
• Without promotion our brand would be relatively unknown and its popularity would not be near what has been established with promotion. Many times when a consumer sees a product in the store that they have not heard of they will browse over it and choose a product they know. Consumer and market knowledge are prevalent because Pantene and P&G are built around what consumers want.
• Public Relations is a large aspect of the P&G/Pantene promotional mix. Proctor & Gamble does things like raising funds for children who suffer from malnutrition in India and Pantene recently put on the “Condition for a Cause” campaign, donating money to heart disease research. Sales Promotion is also a
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large factor for Pantene, they use marketing and business techniques to try and improve consumer’s lives. They are always finding new and better ways to reach their consumers and between their PR campaigns and advertising they are constantly appealing to consumers and causing them to trust Pantene. Personal selling is not an aspect of Pantene’s promotional selling and it would not be wise to incorporate it. Personal selling often comes off as a sleazy salesman’s cheap and last minute effort. Pantene’s print and TV advertisements are enough for Pantene to bring in new customers and frequently remind its loyal customers that it is still in the stores and going strong. Personal Selling would also be a pricey move that would hinder rather than aid Pantene’s efforts. Lastly, advertising is an enormous part of Pantene’s promotional mix. Without the current advertising strategies and past ones as well, Pantene wouldn’t be the widely known and the highly used brand that it is today.
• The distributor needs to be aware of the brands state in the market, they should have information on the product in order to decide if they want to be associated with that product and if so, they will need to know enough about the product to aid customers in finding a shampoo that is best for the them. The idea would be to establish a relationship with as many retailers as possible to make the brand the recommended one. Consumers need to know as much as possible about the product. They do not want to feel as if the company is hiding something from them and they want to be able to trust the products they are using. Information like the ingredients, different products the brand carries, efforts made by the brand to help others and humanity are all factors that could affect a sale. Distribution as much information as possible is a good idea for the company.
• The purpose in using aspects of the promotional mix is to build brand equity, brand awareness, and frequently put our advertisements and name into the public to be seen. The frequency in which the ads are seen is as important as the message we are providing.
• Pantene also gives out free samples to anyone. When visiting their website there will be a small box of information about samples to the right, when the online visitor clicks on that they will find that if they provide Pantene with information about themselves they will be sent free samples. Pantene has recently run out of free samples and leads the consumer to an apology page which in turn directs the consumer to the page for their most recent sweepstakes.
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•Endorsers: global celebs like Hollywood stars Kirsty Alley, Rachel Hun ter, Liv Tyler, Angie Everhart and Kelly Lebrock, among others have endorsed Panteen In India, Sushmita Sen, Katrina Kaif, Bipasha Basu, Shilpa Shetty, Sonali Bendre and Simone Singh are among the brand ambassadors.Lara Dutta is the most recent celebrity who has got associated with the brand.A noticeable thing abouth pantene advertisements is that always Asian women are shown who have thick,long,dark hair.
• In response to the change in appearance and types of product Pantene has said that this change was for the better and it is easier than ever to choose which product is best for the individual consumer. Simply pick the Pantene version that names how you want your hair to look: Volume Volume Care, Smoothing Smoothing Care, Color Care, Curl Care and Basic Care.
Each collection includes a shampoo, conditioner, treatment and styling products that helps the consumer achieve their unique look. Not only did they change their products to match the consumer’s desired style, they claim to have improved their technologies.
• Pantene also claims that its products have ingredients that set it apart from the competition. They state that each line of products in their collections has the right combination to give customers the benefit that is “spelled out in the name of the product.”
• Validity: “We conduct extensive scientific research and laboratory testing, as well as in-home and clinical testing, to make sure our advertising claims are factual. Because of the competitive nature of our business, though, we're unable to provide details to individuals about the specific research we perform.”
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• Hair care companies are building on the desire for women to maintain a young, natural, and fresh look. Marketers are also beginning to key onto teenage girls more. Girls ages 15-19 increased sales 6.9% from 1995- 2001.
• Pantene’s promotional tactics are ideal and we feel they are approaching the target audience well.
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PRICING STRATEGY Procter & Gamble is a giant in household products, and the company which defined many marketing strategies we now take for granted. It was the first company to advertise nationally direct to consumers (in 1880) and it literally created the concept of "soap opera" by sponsoring radio r adio and television dramas targeting women. Other inventions included the first Fluoride-based toothpaste ( Crest), the revolutionary synthetic detergent Tide, and the first disposable nappy, Pampers. P&G found life in the first years of 21st century more difficult than it may have expected, with earnings below expectations and a series of management shake-ups as a result of under-performance. The group got back on track during 2002 with the purchase of Clairol and Wella and a renewed focus on core products. Following dynamic performance in 2003 and 2004, P&G demonstrated the strength of its recovery with the announcement in 2005 that it had agreed a deal to acquire legendary personal care products rival Gillette. Advertising Age estimated global measured advertising expenditure of $8.5bn in 2006, making P&G th
Procter & Gamble made dramatic and long-term changes in its pricing and promotion strategy for Pantene during which it boosted advertising while simultaneously simultaneously curbing its distribution channel deals (in-store displays, trade deals), and significantly reducing its coupon promotions. It adopted value pricing strategy strategy wich further influenced influenced its future future marketing decisions.
THE SCENARIO In the early 1990's Procter & Gamble made dramatic and long-term changes in its pricing and promotion strategy. Procter & Gamble (P&G), a leading consumer packaged goods producer, instituted a "value pricing strategy" during which it boosted advertising while simultaneously curbing its distribution channel deals (instore displays, trade deals), and significantly reducing its coupon promotions.
THE DETAILS
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What inspired P&G to initiate this value pricing strategy? First was logistical efficiency. P&G was concerned with the cost of administering promotions, and the effect of up-and-down swings in demand on the production system. Second, P&G was concerned with the impact of promotions on brand loyalty, fearing that on one hand they attracted "cherry-picking" bargain hunters who could care less about the brand, and on the other hand they weakened the loyalty of their core customers. It is also thought that one of the prime architects of the strategy, senior executive Dirk Jager, personally disliked coupons with a passion. These factors inspired P&G to break with standard marketing practices. As a result, over the course six years (1990 through 1996) P&G reduced its coupon expenditures by over 50%, reduced its distribution channel deal expenditures by 20%, and increased its advertising expenditures by 20%. This was truly a contrarian strategy as during the same period general market trends showed an increase in promotion (deals and coupons) by 15% and a decrease in advertising by 20%. What were the goals of value pricing? First, it sought to improve efficiency. The administrative and production costs for promotions, deals, and coupons were becoming increasingly expensive and cumbersome for P&G, distributors, and retailers. Second, since the theory was that coupons and deals only invited brand switching and destroyed brand loyalty, cutting back on deals should leave P&G with a stronger brand franchise. And to top it off, coupon fraud was also growing at this time with supposed nefarious links to organized crime and terrorist funding. Cutting back on coupons would obviously sever th is link. From 1990 -1996, the net price paid by consumers of P&G products increased 20.4% (due to the decrease of coupons use by 54.3%, and reduction r eduction in price cuts). Meanwhile P&G increased advertising by 20.7%, and decreased chann el deals by 15.7%. What was the competitive reaction? During the same time period, the overall competition's (including companies such as Colgate, Unilever, and Gillette) net price paid increased 10%, advertising increased 6.3%, deals increased 13.1%, and coupons decreased 171%. Of the three competitors, only Gillette lowered prices and it increased coupons use by 127.6% -- far more than Colgate. Overall, the competition did not completely cooperate with P&G, but neither did it take full advantage in a mad grab for market share.
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What was the total impact on P&G? P&G's Value Pricing Strategy showed no change in share of requirements or category usage, but it did end up with a reduced penetration rate, which declined 16%. This was because the cut in promotions resulted in fewer consumers buying P&G brands, and neither the cut in promotions nor the increase in advertising had any appreciable effect on SOR. Overall, P&G's market share decreased 16%. Although P&G lost market share, it is possible that its profits remained stable or even increased. It lost 16% of share, but made up for this through increased prices 20%, a lower cost of good sold, and efficiencies in production. However, the increase in advertising expenditures may have wiped out most of the cost savings. Despite gain or loss in profitability, P&G lost their strategic and esteemed position as the market leader in the consumer packaged goods industry. Traditionally, P&G had a sharp focus on market share leadership as the ultimate metric of succesand yet for the first time since the 1950s, Colgate overtook P&G's Crest as the market leader. What happened to P&G's theory that price promotions reduce loyalty? Was this myth or fact? Analyzing P&G's value pricing strategy shows that promotion cuts decreased penetration but did not dramatically increase loyalty. So, P&G's initial beliefs were myths indeed. Additionally, increasing advertising had little effect on market share. Why? When you are the market share leader the effect of advertising is diminished. Market share leaders already have high awareness levels, and unless your advertising provides new compelling reasons to buy (usually rooted in innovative product differentiation) What was the effect of the competitive response? The competitors reacted to P&G's strategy in a way that cushioned P&G's loss - the competition could have destroyed P&G, but P&G's losses were mostly self-inflicted. Of the competitors, Gillette was the only one to take a contrarian strategy and was fairly successful. What do you do about sharp competitors like Gillette? As we saw recently, P&G decided to buy this one.
In sum, sustained cuts in promotion result in lost share in the long run. Sustained mass advertising expenditure increases for mature, high share brands do not pay off in the long run. Mass advertising is better suited for immature, low share brands. Finally, competitors may not "eat your lunch" if a company chooses a strategy that makes them vulnerable. The competition likely faces the same challenges as your company and may follow suit with policy changes.
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Market modeling is a powerful tool. Response modeling entails using mathematical models to translate the rich market environment into mathematical equations in an effort to quantify the impact of marketing initiatives. Modeling competitive market response to major policy changes is important to understanding the long-term results of those policy changes. The next major challenge for marketers is predicting, in advance, how the market will react to future policy changes. When a major policy change is implemented, it fundamentally changes the market; the rules of the game are changed. Therefore, it is inherently inaccurate to predict the results of major policy changes based on historical data because appropriate data does not exist. It is interesting to note that P&G's value pricing strategy is quite a misnomer. During this period many stores were switching to EDLP (every day low pricing) policies, which meant that consumers would save on their overall purchase without having to deal shop. In contrast, P&G strategy essentially was a disguised price increase; coupons were cut by 50%, which contributed to an increase in the customer's price paid by 20%. It is possible that P&G lowered their wholesale price, but the retailer only enjoyed higher margins and did not pass the savings on to the customer. Another possibility is that retailers lowered retail prices consistently, following P&G's decrease in wholesale price, but once promotional trade deals are factored in those everyday lower wholesale prices did not result in a lower total price paid. For example, if P&G's old price was $20, but gave deals of $15, at which price 90% of purchases were made, the wholesale price equaled $15.7 (.90*$15 + . 10*$20). If P&G set a "Value Price" point of $18, but 100% of purchases wewere made at that price, the retailer enjoyed no cost savings-only a cost increase. If P&G had truly offered price cuts, their results may have been much different.
THE BIG PICTURE The insights into P&G's grand experiment demonstrate to us the importance of promotional pricing, and the diminished power of mass advertising for high share players. Analysis of P&G's value pricing strategy allows us to see how major longterm policy changes, not short-term marketing mix changes, affect market share and competitors' reaction. Studying P&G's value pricing strategy offers the unique opportunity for marketers to analyze major policy changes, obtain clearer understanding of how marketing mix changes affect brands, learn about long-term impacts of marketing changes, and inform future policy decisions. And it is also important to note that success can be measured more than one way. In essence, the P&G grand experiment may have been successful when measured by profits, and at the time those profits were being used to invest in new innovations. However, for a company that traditionally measured su ccess by volume (market share) its value pricing strategy truly had a large enough adverse impact on share that it was eventually abandoned. Some broad strategies were also adopted for Pantene.They are:
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P&G has basically adopted Geographical pricing strategy for Pantene.They have set different prices for Pantene in different countries.This is a very good strategic method as it captures the local conditions as well as purchasing power of the local population. When Pantene launched Lively Clean,it adopted Promotional Pricing for it and launched it at an introductory in troductory price of R78 for 200 ml bottle It has also introduced Bundle Pricing where it has clubbed two or more products and sold them at a reduced price.But this strategy has not been very successful as it eroded the premium image of the Shampoo and gave the impression of desperation of the company.
MARKET ANALYSIS AND STRATEGIES ADOPTED BY P&G FOR PANTENE Market Analysis:
• Market size: size: As far as market share is concerned P&G was 15.4% higher than its nearest competitor. In 1999 P&G recorded a market share value of 30.1%. From all the graphs we found, P&G continues to grow to 43,337 million in net sales, 5,186 million in net earnings and 3.69 in net earnings per share all in 2007. Pantene is in the mature stage of the product life cycle. With all the new products and product developments, it is likely that itcould elevate back to the competitive stage.
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MARKETING STRATEGIES When visiting www.pantene.com the viewer will find a list of countries worldwide; each web visitor is expected to select their country in order to be taken to a Pantene web page corresponding with their country and language).. Pantene has recently added two new hair care lines to target to a more diverse group of women. In July 2003 Pantene launched laun ched its “Pantene Long Black” line specifically for Indian women whose culture values hair as a beautiful feature on a woman. The formula darkens each strand uniformly from root to tip through intense moisturizing as well as reducing damage. Pantene has recently been awarded “Asia’s favorite Shampoo” in the Readers Digest Super Brands Survey. Also on the shelf next to the pearly white Pantene has sponsored many Beauty Contests and Bollywood events. And T.V programs like NACH BALIYE 4 .
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It is also associated with many corporate social initiaitives like Indian Heart Association for “condition for a Cause. It has come up with many offers for women where in they can meet a celebrity and get pampered like one. Pantene markets to women and girls. They market to all ages, races, social classes, and economic standings. On Pantene’s website there is a list of frequently asked question. The customers can become the member of the Pantene family and can have their log in ids using which they can access the website and also make use of all the facilities available There is also a feature of expert’s advice on the website where users can seek solutions for all of their hair problems. Their retailers are stores like, Wal-Mart, K-Mart,and Target worldwide and Reliance Fresh.Spencers,More etc in India Pantene can be found in all sorts of discount stores, drugstores, and supermarkets Apart from this they have h ave adopted Value Pricing strategy at different times to adjust with the local conditions and purchasing power parity of the country.In this Procter & Gamble made dramatic and long-term changes in its pricing and promotion strategy during which it boosted advertising while simultaneously simultaneously curbing its distribution distribution channel deals (in-store displays, trade deals), and significantly reducing its coupon promotions. promotions. It is interesting to note that P&G's value pricing strategy regarding Pantene is quite a misnomer. During this period many stores were switching to EDLP (every day low pricing) policies, which meant that consumers would save on their overall purchase without having to deal shop. In contrast, P&G strategy essentially was a disguised price increase; coupons were cut by 50%, which contributed to an increase in the customer's price paid by 20%. It is possible that P&G lowered their wholesale price, but the retailer only enjoyed higher margins and did not pass the savings on to the customer. Another possibility is that retailers lowered retail prices consistently, following P&G's decrease in wholesale price, but once promotional trade deals are factored in those everyday lower wholesale prices did not result in a lower total price paid. For example, if P&G's old price was Rs20, but gave deals of Rs15, at which price 90% of purchases were made, the wholesale price equaled Rs15.7 (.90*15 + .10*20). If P&G set a "Value " Value Price" point of Rs18, but 100% of purchases we were made at that price, the retailer enjoyed no cost savings-only a cost increase. If P&G had truly offered price cuts,its sales would have been more.
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P&G has a dubious pricing strategy.In india sometimes they adopt the premium pricing and at other times they change it to value pricing.This creates confusion in the mind of customer. Our recommendation is that Pantene should stick to one strategy and develop on it. Fluctuating prices have chances to affect the mind of customers negatively.This should be avoided. P&G should keep up the efforts of bringing in more and more innovative products.This is because ultimately nothing works for a company more than its products. Some rumors about the presence of wax in Pantene shampoo affected the market.Such rumors should be severly severly dealt with as they affect affect the brand loyalty as well as market share. There were some reports which said that Pantene tests its product on animals which ultimately proves fatal to them.This created a big problem for Pantene by the environmentalists.This project recommends Pantene to go more herbal and environment friendly as it affects the company’s image in the long run. Pantene is still not much known in the semi urban India.Stress should be be laid on the promotion of Pantene in the interior of country as well.
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