Procter & Gamble in Europe A roll-out launch Group Two

Group Two Members Jarinthon M997z225 Rattaya M997z230 Son M997z209 Huong M997z226 Thao M997z216 Khuong M997z212

Contents Company & Background 1 The situation in the USA 2 The situation in the Europe 3 Economic and Restriction 4 Conclusion 5

Company Logo COMPANY & BACKGROUND

Background  P&G is the world’s biggest manufacturer of packaged consumer goods and a global leader in health and beauty care products, detergents, diapers and food.  P&G was founded in the USA in 1837  In 1985 P&G bought the Richardson-Vicks company (Head&Shouders, Vidal Saaaoon, Pantene)  In 1987 P&G bought the German Blendax Group (Dental-care products)

 Also, P&G celebrated its 150th anniversary. The company ranked as the second-oldest company among the 50 largest Fortune 500 companies.  Moreover, The company increased its presence in the European personal care category with the acquisition of the Blendax line of products. It was the largest international acquisition in company history.  In January 2005 P&G announced an acquisition of Gillette.  In 2005 Procter & Gamble operated on the markets of more than 160 countries and become the market leader in consumer goods company.

THE SITUATION IN THE USA

The situation in the USA  The USA shampoo market is highly fragmented, with a large number of suppliers and brands.  P&G was decided to introduce the BC-18 technology in the US market at the beginning of 1986 by replacing the brand Pert Plus.  Long-term Marketing goal: to take over the leading value position in the USA shampoo market.

 Pert Plus was positioned as the shampoo that offered attractive hair in the convenient way.  The target group was to be all people. The source of business would also come from the group of people who did not use Pert or conditioner before.  Constant growth of the shampoo market is due to the increase in hair-washing ( out of the total population, 90% use shampoo).  Large price differences between premium and value brands.

 Market share value in the first year is 5%.  Market share in the long-term is at least 10%.  It was positioned as the shampoo that offered attractive hair in a convenient way.

 Marketing objective of Pert Plus: achieve a long-term 10% value share market leadership in the US shampoo market. For first year of lauch is a 5% value share. PositioningProvide great-looking hair in the convenient way Target groupAll people Source of businessNew users PricingPremium-priced segment with a price premium up to 100% of the low-price market

- 10 Normal TV advertising - Sample distribution 10% of households - Display activities in hypermarket - Strong TV advertising, - Sample distribution 60% of household - Listing fund $4 million - In 1987 Vol share 4 % and value share 6.0 %. - In 1988 Vol share 4.5 % and value share 6.3 %. Pert Plus Introductory Activities In the first 12 months In the following 12 months Result

THE SITUATION IN THE EUROPE

 There was a steady increase in the shampoo market and the conditioner market.  But still below the 44% (had been reached in the USA) in the share of shampoo users who also used conditioner.  South European countries showed the most potential area like Great Britian, West Germany, France, Scandinavia, Benelux.  With Great Britation was a country having the strongest user share (42%).

Sizes and Shelf Prices, Shampoo, Europe, 1988 (DM) West GermanyGreat BritainFranceScandinaviaBenelux P&G BRANDS Vidal Sassoon (200ml)6.99 N/A6.99N/A Pantene (200ml)N/A 4.99N/A Petrole Hahn (300ml)N/A 2.99N/A2.99 Shamtu (400ml)2.99N/A Head & Shoulder (300ml)5.99 COMPETITOR BRANDS Timotei (Unilever) (200ml) 2.99 Nivea (Beiersdorf) (300ml) 3.99N/A 3.99 Schauma (Schwarzkopf) (400ml) 2.49N/A 2.49 Palmolive (Colgate) (400ml) N/A2.49 Elseve/El Vital (L’Oreal) (250ml) 4.49N/A4.49

European Market  The European market was even more crowded than the US market in terms of the number of suppliers and brands available.  The differences of price between brands were well over 5 times for the same quantity.

Market Shares, Shampoo, Key Brands, Europe, 1988 (volume (value) share in %) West GermanyGreat BritainFranceScandinaviaBenelux P&G BRANDS Vidal Sassoon0.5 (1.3)1.1 (3.6)N/A1.0 (2.4)N/A PanteneN/A 1.0 (2.1)N/A Petrole HahnN/A 3.0 (2.1)N/A0.6 (0.6) Shamtu11.0 (6.3)N/A Head & Shoulder 1.1 (1.7)6.5 (12.0)1.1 (1.6)1.0 (1.4)2.9 (5.4) COMPETITOR BRANDS Timotei (Unilever) 5.0 (5.7)8.5 (11.8)4.9 (5.2)7.5 (7.8)3.8 (5.3) Nivea (Beiersdorf) 9.0 (9.2)N/A 2.5 (2.3)4.4 (5.5) Schauma (Schwarzkopf) 21.0 (10.0)N/A 7.0 (4.1) Palmolive (Colgate) N/A4.6 (2.7)12.3 (5.4)7.0 (3.0)18.2 (10.6) Elseve/El Vital (L’Oreal) 3.3 (4.6)N/A4.5 (5.8)6.5 (8.2)5.0 (8.4)

The Challenges In European Market  In 1988, BC-18 decided to introduce in European Market.  But there were 3 questions need to deal: - The first question was that “what brand name to introduce the product in the individual European Market”. - The second question was that “whether a 200 ml bottle would be accepted by European Market like in the USA”. - The third question was about price at premium pricing.

Products Used for European Market Testing  European potential product: Vidal Sassoon.  US brand: Pert Plus.  Two national brands established in their domestic market: Pantene and Shamtu.

Price And Packaging  Just tested on only two brands: - One from the lower price segment. - Another brand from high-quality product concept.

Consumer Test, Europe, Results (%) Vidal Sassoon Wash & Go Shamtu 2 in 1 “silkiness and bounce” Pantene “Perfect care” Pert Plus Wash & Go Product concepts 4.99DM/20 0 ml 4.99DM/2 50 ml 4.99DM/20 0 ml 5.99DM/20 0 ml 4.99DM/20 0 ml “Would definitely buy” “Is very new” “Is very convincing and relevant”

Results  The high quality brand concept would allow the product to command a premium price.  An opportunity existed to use an established brand.  Consumer testing showed no significant difference between the brands, allowing for the Pert Plus brand to be introduced.

Media Plan  Targeted on West Germany and Great Britain.  Because of the market sizes of using shampoo and conditioner and awareness of the consumers.

Media Plan for 1 st Year  Strongly using TV and Print Ad focus on the benefit of “ 2 in 1 formula ” and the convenience to use the shampoo.  Give sampling and make activities at public places such as subway station, Central Park, etc.

Media Plan for Following Years  Introduce the product to other European countries such as France,Scandinavian and Benelux with using the same activities as West Germany and Great Britain.  Create a new TVC and Print Ad.  Create a special activities for brand awareness.  Promotional : Discount on product and give premium goods.

ECONOMIC and RESTRICTIONS

Economic  Cost structure of existing P&G shampoo brands as a template for BC- 18 cost planning.  Producing the new product were relatively easy to estimate: - Whole European market in England. - Use the available 200ml or 250ml bottle. - Work capacity of 50%.

Restrictions  To determine costs it was necessary to consider the varying advertising and support budgets in the individual countries.  The available production capacity.  Lead times for alternative pack sizes and designs. - The development of a new 200 ml bottle would take a lead time of 12 months. - Using the existing US bottle for Pert Plus would not require any lead time.

CONCLUSION

Conclusion  Creating and launching new brands at record pace; establishing leadership positions in the more important developing markets of the world.  Strengthening its relationship with the retail customers; and use of information technology as a strategic tool.  Establish collaborative relationships like strategic alliances with key material suppliers.

 In P&G's business technical know-how is changing rapidly. Therefore, strategy-critical activities are R&D, marketing and product innovation and getting new products onto the market quickly.  P&G should focus in strengthen its core competencies in marketing and R&D to sharpen its performance and rises them to the rank of distinctive competence in order to get competitive advantage over competitors.