Procter & Gamble in Europe

A roll-out launchWolfgang Breuer and Richard Kohler

Group 4Chien Jay Ralph

Luk Mega Praew

Outline• All about P&G• Introduction strategy in Europe• Marketing objective• A ‘roll-out’ launch• Media and promotion budget• Cost vs revenue implications

History

31 October 1837 – founded by Alexander Norris (an American), William Procter (a British candlemaker) and James Gamble (an Irish soapmaker)

Late 1880s – significant increase in amount of sales, number of employees and variant of products

1920s – 1930s – started to sponsoring radio programs -> soap operas

1930 – acquired Thomas Heldey Co. (England based)

Jay

History (cont.)

Late 1990s – acquisition of more companies (Folgers Coffee, Norwich Eaton Pharmaceuticals, Richard-Vicks, Noxell, Shulton’s Old Spice, Max Factor & Iams Company

1994 – sued Bankers Trust for fraud after having the advantage in interest rate derivatives

January 2005 – acquired Gillete

August 24, 2009 – Warner Chilcott (Irish-based company)

announced buying P&G’s prescription-drug business

Jay

Company Profile

Robert A. McDonaldChairman of the Board, President and Chief Executive Officer

Giovanni CiseraniPresident – Western Europe

Switzerland is headquarters of P&G Western Europe, the umbrella for the US giant's operations in the UK, Germany, France, Italy, Spain, Greece, Scandinavia and other markets

P&G’s Organizational Structure

Jay

Profit Sharing

Jay

2010 Financial Caption

• Net sales increased 3% to $78.9 billion

• Unit volume increased 4% versus prior year

• Net earnings decreased 5% to $12.7 billion

Jay

Introduction Strategy in Europe

Criteria for brand name selection• According to the market research the consumer were willing to

pay the equal price for the selected product (Vidal Sassoon, Shamtu, Pantene, Pert Plus).

• The BC-18 technology would be introduced by the existing brand in a new quality.

Luck

Introduction Strategy in Europe (cont.)

Luck

Positioning The shampoo will provide great-looking hair in a convenient way

Target group All people

Sources of business New users

Pricing Premium-priced up to 100% of the low-price market leader

Packaging Using the existing US bottle for Pert Plus would not require any lead time

Marketing Objective

• Get into European market by establishing identity of the brand and positioning itself as easy, time-saving everyday use of the product under the product concept of 'wash & go'.

• Need to educate the market in the use of conditioners further. And new hair care technology ‘BC-18’ which can combine shampoo and conditioner within one product and it has the same effect as using shampoo and conditioner separately.– TV spots– Display activities in the supermarket– Handing out free samples

Praew

Long-term Marketing Objective

Creating value-based market share of their brand :– build strong awareness brand – brand loyalty • “bring your old shampoo and conditioner, then get the

newest Pert plus Product for free” campaign. • Attractive advertising and sales promotion to boost

Praew

A ‘roll-out’ launch

• P&G should focus upon West Germany, Great Britain, France, Scandinavia and Benelux:– Southern European countries have quite an

underdeveloped conditioner market compared to the USA.

– Because of "a steady growth of the shampoo market and the conditioner market" and statistics show an increase in hair washing, Europe is the attractive market to undertake a ‘roll-out’ launch.

Chien

A ‘roll-out’ launch (cont.)

• The decision criteria :– The share of shampoo users who also use

conditioners reaches almost US standard in Great Britain, with 42%.

– Germany has the second best user share, followed by Scandinavia and Benelux, where conditioner consumption is almost equal.

– In France, sales volumes for conditioners only make up 10% of those for shampoos, and France should follow in the second year to avoid competitors' me-too products to be introduced in those markets.

Chien

A ‘roll-out’ launch (cont.)

– A consumer test in Europe proved that the original US bottle for Pert Plus was the most appealing compared to the alternative products varying in brand name, size and price.

– 28% would definitely buy it and 70% considered it to be very convincing and relevant.

– Thus introducing BC-18 into the European market would be rather uncomplicated, this can be seen in the expected sales exhibit, where sufficient production capacity is guaranteed.

Chien

Media and Promotion Budget

• Affordable Method– a method used often by a small business, which

they think they can afford• Competitive Parity– a method which they try to keep their

promotional spending comparable to the competitors’ spending level. This method is designed to keep a brand in the minds of consumers.

Ralph

Media and Promotion Budget (cont.)

• Objective and Task Methoda method whereby marketing managers determine:

• What they want to accomplish (objectives) with their communication, • What activities (commercials, sales promotions,

publicity, and etc.) are necessary to accomplish the objectives, • How they conduct a research to figure out how much

the activities, tasks, and cost in order to develop a budget.

Ralph

Cost vs Revenue Implications• In the first year, there are some losses to be

expected, especially Vidal Sassoon.– In West Germany, Vidal Sassoon 200 ml

incurred loss by Deutschmarks 7.75 per 2.5 litres

– In Great Britain, Vidal Sassoon 200 ml incurred loss by Deutschmarks 0.25 per 2.5 litres

– In Scandinavia, Vidal Sassoon 200 ml incurred loss by Deutschmarks 1.75 per 2.5 litres

• The other product (e.g. Shamtu, Pantene and Head & Shoulders) was profitable in Europe

Mega

Cost vs Revenue Implications (cont.)

P&G surely need the modification for the loss incurred in the first year. In order to enter the local market entries, they should:– Aware of any new technology developed for hair

product -> keep R&D activity– Create an interesting packaging with a premium

price -> European like stylish design– Applied consumer test before launch new product

in Europe -> strong vs weak brand image

Thank You