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8/10/2019 Procter Gamble Co the in Beauty and Personal Care (World)
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PROCTER & GAMBLE CO, THE IN BEAUTY ANDPERSONAL CARE (WORLD)
July 2014
8/10/2019 Procter Gamble Co the in Beauty and Personal Care (World)
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Euromonitor International PASSPORT 2BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Disclaimer
Much of the information in thisbriefing is of a statistical nature and,while every attempt has been madeto ensure accuracy and reliability,Euromonitor International cannot beheld responsible for omissions orerrors.
Figures in tables and analyses arecalculated from unrounded data andmay not sum. Analyses found in thebriefings may not totally reflect thecompanies opinions, reader
discretion is advised.
Procter & Gamble, despite
being the leading beauty and
personal care player, is los ing
ground due to not adapt ing to
market shif ts quick ly enough.
Going forward, its success wil l
depend on creat ing new
segments as it has lost groun d
to its key rivals .
ScopeSCOPE OF THE REPORT
Beauty and
Personal Care
US$454,132 million
Baby and Child-Specific Products US$15,936million
Bath and Shower US$39,152 million
Colour Cosmetics US$55,499 million
Deodorants US$22,147 million
Oral care US$43,110
Fragrances US$45,135 million
Hair Care US$77,075 million
Men's Grooming US$35,441million
Skin Care US$107,248 million
Sun Care US$9,487 million
Depilatories US$4,739million
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STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORYOPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
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Euromonitor International PASSPORT 4BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Procter & Gamble is the worlds leading beauty
and personal care company, accounting for an11% market share in 2013. Beauty is thecompanys second leading portfolio after home
care and more particularly laundry care. Withinbeauty, the company has wide coverage, but theleading categories include hair care (30% of totalsales), mens grooming (22%), oral care (16%) andskin care (9%).
It also has presence in home care, tissue andhygiene and consumer health. The company iscurrently undergoing rigorous restructuring with aview to streamlining its focus. To this end, it hasmade a number of divestments, including that ofsnack brand Pringles.
Procter & Gamble also has a wide regionalpresence in beauty and personal care withoperations in Asia Pacific, Western Europe,Eastern Europe, Latin America, Middle East and
Africa and North America. Procter & Gambles
largest regional operation is in North America, as aresult of its presence in the US, which accounts forover 20% of its global beauty sales.
11.0
11.2
11.4
11.6
11.8
12.0
0
10,000
20,000
30,000
40,000
50,000
60,000
2008 2009 2010 2011 2012 2013
%m
arke
ts
hare
Sa
les
(U
S$m
illion
)
P&G: Sales vs Market Share 2008-2013
Sales % Market Share
Key factsSTRATEGIC EVALUATION
Procter & Gamble Co, The
Headquarters: Cincinnati, Ohio, USA
Regional involvement:
Global
Category involvement:
Hair care, mens grooming,
oral care, skin care
World BPC value share(2013):
11.3%
World BPC valuegrowth (2012-2013):
3.7%
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Euromonitor International PASSPORT 5BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Procter & Gambles operating income for FY2013
improved over 2012, thanks to the wide-scalerestructuring the company has undertaken.
Traditionally, Procter & Gamble operated in themore premium tier of the pricing spectrum acrossall industries, which it justified through itsbreakthrough innovations, but at the onset of therecession when consumers downgraded tocheaper alternatives, the company lost some ofits customers. This coincided with its competitorsoffering increasing product sophistication atcompetitive price points, while Procter &Gambles own innovation pipeline slowed down.
Procter & Gamble acted fast, undertaking anumber of cost-cutting measures such asreducing marketing and other administrativeexpenses, resulting in improved margins.
In 2012 however, the company announced alarge- scale restructuring programme includingdivestments, job cuts, and commonmanufacturing and redesigning platforms. Thecompanys operating margin dropped in 2012 dueto restructuring costs, but picked up in 2013.
12,000
12,500
13,000
13,500
14,000
14,500
15,000
15,500
16,000
70,000
72,000
74,000
76,000
78,000
80,000
82,000
84,000
86,000
2009 2010 2011 2012 2013
Opera
ting
income
(US$m
illion
)
Ne
tsa
les
(US$m
illion
)
P&G: Net Sales vs Operating Income FYEnding June 2009-2013
Net Sales Operating Income
Contribution to Revenue FY2013
Beauty
Grooming
Health Care
Fabric Care and HomeCare
Baby Care and FamilyCare
Financial analysisSTRATEGIC EVALUATION
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Euromonitor International PASSPORT 6BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Timeline for P&Gs restructuring programmeSTRATEGIC EVALUATION
2016 Projected savings US$10 bilion
2014 Exits pet food and MDVIP (a personalised healthcare operator) Announces complete redesign of end-to-end supply chains involving consolidation ofoperations into multi-category sites
Converts to common manufacturing and technology platform, designs supply systems toallow for more online product customisation
Consolidates customer shipping and product customisation operations into fewer distributioncentres
Merges India, the Middle East and Africa into one IMEA region
Integrates Greater China, ASEAN, Australia, New Zealand, Japan and Korea as Asia Cuts 2,300 roles
2013 4,100 job cuts CEO Bob Macdonald resigns AG Lafley returns as CEO/AG Lafley reorganises P&G operations into four units: Global Baby, Feminine and Family Care;
Global Beauty; Global Health and Grooming; and Global Fabric and Home Care Reports to have saved US$1.2 billion, exits global bleach business
2012 1,600 job cuts Divests Pringles
2012 Announces restructuring programme including job cuts to deliver US$800 million in savings,US$6 billion in less expensive packaging materials and planned efficiency in supply chainand US$1 billion cut to marketing spending
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Euromonitor International PASSPORT 7BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
GBU - Global
Business Unit
Create, design, manufacture andmarket products
Focus of brand building at global,regional and local levels
Responsible for managing brandfranchise building resources
SMO - Sales and
Marketing
Operations
Responsible forselling, distribution,shelving, price andexecution and
merchandising.Selling resourcesconcentrated in theSales and MarketingOperations
P&G streamlines operations to enhance productivitySTRATEGIC EVALUATION
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Euromonitor International PASSPORT 8BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2011 2012 2013 2014
US$m
illion
P&G: Net Sales vs Operating Income for
First Nine Months FY2011-FY2014
Net Sales Operating Income
P&Gs restructuring programme appears to be
bearing fruit for the company with net sales andoperating income for the first nine months of fiscal2014 even higher than the same period in 2013.
The company has stated that it is on track with itsrestructuring plans. Its plan was to save US$800million via 5,700 job cuts, which it has also achieved.It has gone beyond its initial plan and cut a further2,300 roles in 2014. The company also stated that
through its restructuring it aims to save another US$1billion by increasing the efficiency of its supply chains.It has made good strides developing the efficiency ofits supply chains. It is in the process of redesigning itssupply chains to make them multi-categoryoperations, thus benefiting from greater synergy aswell as scale. Its greatest savings, however, isexpected to come from cutting back on expensive
packaging materials. It is not clear how far thecompany has gone with this strategy.
The next step is for Procter & Gamble is to increaseits investment in R&D since its innovation pipeline forcategories such as skin care is not very extensive.
Financial comparisons for first nine months of fiscal yearsSTRATEGIC EVALUATION
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Euromonitor International PASSPORT 9BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
STRENGTHS
OPPORTUNITIES
WEAKNESSES
THREATS
Procter & Gamble haswide global exposure.Its products are sold in180 countries throughwide-ranging distributionchannels including mass
merchandisers andgrocery stores.
Global exposure
Procter & Gamble hasstrong brands to itsname. The companyboasts 24 billion dollarbrands. It also claims 50leadership brands that
contribute 90% of itsoverall sales and profit.
Leading brands
Procter & Gamble stillemploys soft marketingtechniques, tapping intoemotive aspects,compared to its rivals,which are using hard
scientific facts toconvince consumers ofproduct efficacy.
Falling behind inmarketing trends One of the key issuesfor Procter & Gamble isthat market dynamicshave shifted, but itsmodel is yet to adapt tothese changes.
Not changing businessmodel
Procter & Gamble is theglobal leader in electrictoothbrushes. Withincreasing oral healthawareness and risingdisposable incomes inemerging markets, itstands to benefit in thelong run.
Electric toothbrushes
Gillette has strongpotential in mens skin
care given it is a brandmen strongly associatewith. With menincreasingly purchasingfor themselves, P&Gcan capitalise on thisbrand.
Mens skin care
While Procter & Gamblefaces strong competitivethreats frommultinationals, localplayers are alsoincreasing competitivepressure as they matchinnovations withcompetitive price points.
Local competition
Procter & Gamble is upagainst strongcompetition fromUnilever, LOralandColgate. In somecategories, Procter &Gamble is fast losingshares to these rivals.
Category competition
SWOT: Procter & Gamble Co, TheSTRATEGIC EVALUATION
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Euromonitor International PASSPORT 10BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Procter & Gamble has announced a US$10 billionproductivity programme to enhance the companysperformance. The programme includes funding top
line growth, ensuring consumer value propositionsare superior, overcoming macro headwinds anddelivering better bottom line growth.
Instead of launching new brands or makingacquisitions, the company focuses on extendingexisting brands into sub-ranges, eg Gillette Fusion
as part of its billion dollar brand strategy. It hasdiscontinued Max Factor in the US market. Thisrationalisation may save on costs but may limit thecompany from pursuing opportunities at both thepremium and economy ends as the companycrowds into the mid-range price segment.
To accelerate growth Procter & Gamble isimplementing three key changes, which it refers toas 40/20/10. The company aims to focus resourceson the 40 largest and most profitable businesses,accounting for 50% of sales and 70% of netearnings. The next change includes focusing onthe 20 most profitable innovations accounting formost of the portfolio revenue, and the third change
involves investing in 10 emerging markets mostcritical to the companys growth.
Procter & Gambles objective has been to focus onbillion dollar brands. The company has 24 billiondollar brands spanning across a number ofcategories including skin care and laundry carewith a strong global presence. The billion dollarbrands each generate between US$1 billion andover US$12 billion in revenue. According to thecompany, investing in the already well-established
billion dollar brands has a greater potential togenerate returns than brands with limited presenceand less familiarity.
Focus on core operations Focus on billion dollar brands
Brand rationalisation Improving productivity
Procter & Gamble focuses on core businessesSTRATEGIC EVALUATION
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STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORYOPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
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Euromonitor International PASSPORT 12BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
0
1
2
3
4
5
6
2008-2009 2009-2010 2010-2011 2011-2012 2012-2013
%y
-o-ygrow
th
Procter & Gamble vs Beauty and Personal Care Market 2008-2013
Beauty and Personal Care Procter & Gamble
Procter & Gambles global
beauty and personal caregrowth declines in 2011 acrossmost of its key categories. Inmature markets, consumers
trade down, while increasingcompetition in emergingmarkets means the companybenefits less from growth herethan some of its competitors.
In 2013, growth continues to fallas it lags behind the industry upagainst competition in all itsmajor markets. The companydecided to shift focus from
emerging markets to NorthAmerica, its home market wherecompetition has been building,from Unilever in hair care andLOralin colour cosmetics andskin care.
Despite the success of itsrestructuring programme in2012, Procter & Gamble faceskey challenges from majorcompetitors such as LOral,
Unilever and Colgate. Thecompanys brands are
overstretched and not in linewith the industry trends wherebrands are increasinglysegmented.
P&G trails behind global beautyCOMPETITIVE POSITIONING
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Euromonitor International PASSPORT 13BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
There was little movement among the worldsleading beauty and personal care manufacturersover the 2008-2013 period, with the top fourremaining entirely unchanged. However, in 2013-2014, there were some notable acquisitions, withLOral the most active in the top 10 purchasingMagic Holdings in China, Cheryls Cosmeceuticalsin India as well as professional skin care brandsCarita and Declor from Shiseido.
Market stability was also maintained by a uniformityof strategy among the leading players, with themajor players focusing on expansion in emergingmarkets, and, where possible, premiumisation.
Procter & Gamble has been finding itself in the faceof mounting competitive pressure. It hastraditionally operated at higher price points,
justifying it on the basis of ground breakinginnovations, but now its rivals are matching similar
product features at competitive price points but alsomaintain a more segmented portfolio. Procter &Gamble is now aiming to boost its innovationpipeline, but following the economic downturn, itsmargin has been narrowing, further adding to thechallenge.
Little movement at the topCOMPETITIVE POSITIONING
Global Leading Beauty and Personal Care
Companies 2013
Rank Company2013 %growth
2013 %share
1Procter & Gamble Co,The
3.7 11.3
2 LOralGroupe 4.8 9.7
3 Unilever Group 7.8 8.1
4 Colgate-Palmolive Co 6.2 3.8
5 Beiersdorf AG 6.2 3.0
6 Este Lauder Cos Inc 7.6 2.9
7 Johnson & Johnson Inc 4.8 2.8
8 Avon Products Inc -2.7 2.4
9 Shiseido Co Ltd 0.3 2.1
10 Henkel AG & Co KGaA 3.8 1.8
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STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORYOPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
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Euromonitor International PASSPORT 15BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
In terms of regional expansion, Procter & Gamble finds itself facing a dilemma. North America is thecompanys key regional market, but like many of its rivals it decided to pursue emerging market growthmore strongly. However, it found its home ground coming under increasing competitive attacks. Unileverexpanded its hair care presence, LOralexpanded in skin care and colour cosmetics and Colgatethreatened its oral care shares in North America. Subsequently, Procter & Gamble decided to shift focusfrom emerging markets to North America.
While this happens, Procter & Gamble is losing ground in emerging markets, where competitive pressure isnot just coming from multinationals but also local players. For example, in China local skin care players aregaining strong ground thanks to increasing product sophistication which they can offer at competitive pricepoints due to more relaxed government regulations. Procter & Gamble needs to adopt an appropriatestrategy that will allow it to address competition in both North America and other emerging markets.
Asia Pacific
AustralasiaEastern Europe
Latin AmericaMiddle East & Africa
North America Western Europe
-1
0
1
2
3
4
5
6
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000
%
CAGR2013-2
018
Market size 2013 (US$ million rsp)
Procter & Gamble Co, The: BPC Presence 2013 and Growth Prospects 2013-2018 by Region
Note: Bubble size represents company share of category in 2013, range displayed: 8.9-16.4%
Dilemma in developed vs emerging market expansionMARKET ASSESSMENT
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Euromonitor International PASSPORT 16BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Procter & Gamble has faced challenges in most of its key beauty categories. While its innovation pipelinehas been slow in recent years, impacting its market share globally, the company appears to be removedfrom key market trends. Leading beauty players including LOral and Unilever have been operating highlysegmented portfolios across the pricing spectrum and age groups. For example, Unilever operates anumber of brands in regular and salon-inspired hair care in different pricing segments. TRESemm is in themass segment among the salon-inspired brands and Sunsilk is its counterpart in the regular segment. Doveis the more premium range in the regular hair care category and Nexxus in salon-inspired hair care. Procter& Gamble, on the other hand, only operates one key brand in each category, diluting them across the widerpricing spectrum, ranging from mass to masstige. With a diluted brand image and less innovative features,higher pricing proves detrimental for the company.
Baby and Child-Specific Products
Bath andShower
ColourCosmetics
Deodorants
Depilatories
Fragrances
Hair Care
Mens Grooming
Oral Care Skin Care
Sun Care
0.0
0.5
1.01.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
-20,000 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000
%
CAGR2013-2
018
Market size 2013 (US$ million rsp)
Procter & Gamble Co, The: BPC Presence 2013 and Growth Prospects 2013-2018 by Category
Diverse presence across beauty industryMARKET ASSESSMENT
Note: Bubble size represents company share of category in 2013, range displayed: 0.2-32.5%
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STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORYOPPORTUNITIES
BRAND STRATEGY
OPERATIONS
RECOMMENDATIONS
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Euromonitor International PASSPORT 18BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
P&G Hair Care Value Sales Breakdownby Region 2013
AP NA
WE LA
EE ME&A
Aus
P&G Hair Care Value Sales Breakdown byCategory 2013
Shampoos
Conditioners
Colourants
Styling Agents
Salon Hair Care
Other
Hair care is Procter & Gambles largest beauty and personal care category, and shampoos comprises morethan 50% of its total sales, with conditioners accounting for a further 20%.
Asia Pacific is Procter & Gambles largest regional market, accounting for approximately 30% of its globalhair care sales. Sales in Asia Pacific mostly stem from China, accounting for nearly 60% of its Asia Pacifichair care sales. Procter & Gamble has deep penetration in shampoos in China, controlling over 40% of themarket. It is only in China where it has greater coverage across the pricing tiers through three key brandsRejoice, Head & Shoulders and Pantene. Rejoice is a mass-market brand, while Head & Shoulders ispositioned as a more specialised brand targeting dandruff. Pantene has smaller shares than these two andsits in the upper pricing tier. North America and Western Europe make up some 40% of P&Gs global haircare sales, followed by Latin America at 20%. Unlike China, Procter & Gamble does not have as strong a
presence in the mass hair care segment in the other regional markets.
Hair care is largest beauty portfolio for P&GGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 19BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
P&G hair care share loss in key marketsGEOGRAPHIC AND CATEGORY OPPORTUNITIES
0
5
10
15
20
25
30
35
%m
arke
tva
lues
hare
P&G Hair Care Market Share Movements by
Category 2008/2013
2008 2013
0
5
10
15
2025
30
35
40
AP Aus EE LA ME&A NA WE
%m
arke
tva
lues
hare
P&G Shampoo Market Share by Region2008/2013
20082013
Globally, Procter & Gamble lost 70 basis points inhair care market share over 2008-2013. However,while it managed to gain 20 basis points in marketshare for shampoos, it lost share in bothconditioners and colourants, its second and thirdleading categories, respectively.
Conditioners and colourants have been sufferingfrom a slow innovation pipeline and subsequentlyfalling behind its competitors. Hair oil has becomevery popular as a conditioning format, but Procter
& Gamble entered the category after its keycompetitors. In hair colourants, rival LOralsGarnier Olia has been a breakthrough in massretail channels given its ease of application andusage of oil for pigment penetration.
Procter & Gamble has also lost market share inshampoos across all regions with the exception ofLatin America and Asia Pacific, but even within
Asia Pacific it lost market share in its largestmarket, China. On the other hand, Procter &Gambles share growth in hair care emerged fromnew growth frontiers including India and Indonesia.In Latin America, the company is benefiting fromintroducing its latest innovations such as Pantene
Age Defy.
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Euromonitor International PASSPORT 20BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
It is not just a slow innovation pipeline that isimpacting Procter & Gambles market share in haircare, but also because its hair care portfolio is lesssegmented in terms of pricing coverage incomparison to its key hair care rival Unilever.
Shampoos can be broadly classified as regular,anti-dandruff, salon-inspired and organic/natural.Both Procter & Gamble and Unilever havecoverage in these hair segments, but Unilever haswider pricing coverage in each of these segments
than Procter & Gamble. For example, underregular retail brands, Unilever has Dove in theupper pricing tier and Sunsilk in the lower tier, butProcter & Gamble has Pantene in the upper tierand no significant coverage in the mass segment(with the exception of Rejoice, which is mostlyconfined to China). Similarly, under salon-inspiredbrands, Unilever has coverage ranging from mass
to premium, but Procter & Gamble is confined topremium and mid-market.
With wider coverage across the pricing spectrumacross the broad shampoo classifications, Unileverhas been able to refine its offerings to suitconsumer needs more closely.
0.0
0.1
0.2
0.3
0.4
2008 2009 2010 2011 2012 2013
%m
arketva
lues
hare
P&G vs Unilever Market Share inShampoos in Developing and Emerging
Markets 2008-2013
Procter & Gamble Unilever
For example, from Unilevers hair care portfolio, aconsumer is able to select an affordable salon-inspired brand, a product range that has proved tobe very successful with consumers as they areperceived as good value for money. In addition, abrand portfolio covering a wider expanse of pricingtiers allows for greater flexibility in developingpresence across emerging markets. For example,Unilever is able to offer Dove, TRESemm andSunsilk to cover consumers with wider variety of
needs and affordability as opposed to Procter &Gamble which can mainly offer Pantene.
P&G shampoos less segmented than rivalsGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 21BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
There is limited scope for Procter & Gamble to fill the pricing gaps in its hair care portfolilo. The mid-pricetier of the regular retail shampoos market is not widely covered by any key players. Procter & Gamble,through Pantene, is present in the upper tier, while Unilever is present through Dove. On the other hand,Unilevers mass brand is Sunsilk. There could be a potential for Procter & Gamble to develop presence inthe mid-price market, but there are competitive challenges from affordable salon-inspired brands such asTRESemm. Procter & Gamble was astute in introducing more sophisticated ranges such as Pantene AgeDefy to help add value to Pantene and further distinguish it as an upscale mainstream retail brand. With anageing population in its key regional markets North America and Western Europe, Procter & Gamble canexpect to benefit from its ranges targeting mature women, but this would not be as beneficial in emerging
markets with younger populations.
Too late to fill the gaps in shampoos portfolioGEOGRAPHIC AND CATEGORY OPPORTUNITIES
Mainstream
Pantene
Rejoice(China)
Anti-Dandruff
Head &Shoulders
Salon-Inspired
VidalSassoon
Aussie
Natural/Organic
ClairolHerbal
Essences
Mainstream
Dove
Sunsilk
Anti-Dandruff
Clinic/
Clear
Salon-Inspired
Nexxus
TRESemm
V05
Natural/Organic
Organics
Price rangeProcter & Gamble UnileverHigh
Low
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Euromonitor International PASSPORT 22BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Affordable salon-inspired brands have been performing well as seen withTRESemm, whose value pack sizes combined with its salon heritagehave been received with considerable enthusiasm in the market.Subsequent to its acquisition of Alberto-Culver, Unilever had introducedTRESemm in various emerging markets including Brazil, Thailand, Indiaand Indonesia, where the brand has been doing very well.
Given TRESemmsgood performance, the question is, should Procter &Gamble focus on mass-market salon-inspired ranges? Procter &Gambles Aussie is a similar range to TRESemm, although Aussie is
more niche. Aussie is based on unique Australian ingredients which claimto have effective properties for deep conditioning.
Given that TRESemm has already established a strong position in themarket, the competitive barriers are high, but Procter & Gamble can use
Aussie to further tap into the salon-inspired natural/organic hair caresegment and highlight the brands unique ingredients from Australia to
emphasise the brands efficacy.
Beauty manufacturers are increasingly relying on scientific terms such as
keratin shampoos/conditioners or active ingredients to draw consumerattention as well as convince them of product efficacy. Aussie doeshighlight its unique Australian ingredients, but could use the concept tophrase something similar to keratin - shorter and sounding novel andscientific.
Create a new segment in salon/organic hair careGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 23BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Fragrance
+
Other HairBenefits
Procter & Gamble is tapping into opportunities in dry shampoos. Itlaunched a new range - Herbal Essences Naked Collection. Theproducts are infused with a mint scent that lasts long after showering,capitalising on the sensorial trend in hair care.
The star product under Herbal Essences Naked Collection is its dryshampoo. In line with all other products in the range, it focuses on thescent experience, but also claims to be based on new tapioca pudding-based dry shampoo technology, which claims not to leave aconcentrated white circle on the head.
Dry shampoo under the Herbal Essences Naked Collection is aninteresting innovation since scent-infused products offer strongpotential in the dry shampoos category. Dry shampoos still comprisesa small fragment of the total hair care market, but the category hasgood growth potential as the products are being positioned as for usein conjunction with wet shampoos not only as a time saving option, butalso to protect hair from frequent exposure to surfactants in wetshampoos.
Dry shampoos, however, still face the challenge of matching the samefresh feel of wet shampoo. The Naked Collections dry shampoo hasan edge here since the mint-infused smell can add to the fresh feel.Most shampoo brands, including TRESemm, Dove and Garnier, nowhave a dry shampoo range, but the olfactory claim is not as distinct asthe Herbal Essences Naked Collection dry shampoo.
P&G taps into sensorial aspects of dry shampoosGEOGRAPHIC AND CATEGORY OPPORTUNITIES
.
.
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Euromonitor International PASSPORT 24BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
P&G Mens Grooming Value Breakdownby Subcategory 2013
Men's Razors and Blades
Men's Pre-Shave
Men's Post-Shave
Men's Toiletries
Mens grooming: High priority but men go from shaving to savingGEOGRAPHIC AND CATEGORY OPPORTUNITIES
31.0
31.5
32.0
32.5
33.0
33.5
34.0
2008 2009 2010 2011 2012 2013
%m
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P&G Mens Grooming Global Market
Share 2008-2013
Within beauty and personal care, mens groomingis a high priority category for Procter & Gamble, asindicated by the company separating it frombeauty to form a stand-alone division in order tobe able to provide a more in-depth focus.
Globally the company is the leading player inmens grooming with over 30% of value sales,thanks to mens razors and blades, in which it hasan unrivalled position.
Despite its strong position in mens grooming, itsshare has been steadily declining. There are twokey reasons for this. The first is that it does nothave sufficient price coverage in mens razors andblades and the second is that it is not fully tappinginto the potential of mens toiletries.
The companys position in mens razors andblades comes mainly from its positioning in themid-price tier, but consumers have been graduallytrading down. Procter & Gamble has responded tothis with a breakthrough innovation, the FusionProGlide with FlexBall, but it is yet to be seen ifprice-conscious consumers will upgrade,particularly in the face of several cheaperalternatives..
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Euromonitor International PASSPORT 25BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Within mens grooming, mens razors and blades
accounts for 75% of P&Gs total mens grooming
sales. Globally, it is by far the leading player in thecategory, accounting for 66% of global market value.
Between 2008 and 2013, the companys share in
mens razors and blades has been sliding. This is not
so much due to competition as it is to market trends.In Western Europe and North America, whichtogether make up nearly 50% of the global mens
razors and blades market, men appear increasinglyless interested in paying too much for razors andblades, particularly in light of the economic downturn.Related to their reduced willingness to pay is thecurrent vogue for the stubble look, leading to lessfrequency in shaving.
Cheaper alternatives are also appearing. Bic, a muchcheaper brand, recorded growth of 6% in North
America and Western Europe combined, comparedto a 1% decline for Gillette in these regions, over2008-2013. In addition, private label has seen greaterpenetration, while subscription to sites such as DollarShave Club and Automated Men also offer cheaperalternatives.
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Top Three Players in Global Mens
Razors and Blades 2008-2013
Procter & Gamble Co, The
Energizer Holdings Inc
St Bic SA
Male consumers trade down to cheaper razors and bladesGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 26BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
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Men'sToiletries
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Mens Grooming Breakdown by Shaving vsToiletries 2013 and % CAGR 2013-2018
Skin Care
Hair Care
Deodorants
Bath and Shower
Razors andBlades
Pre-Shave
Post-Shave
% CAGR 2013-2018
In 2014, the companys new launch Fusion ProGlidewith FlexBall, which it claims is based on ground-breaking technology, is still a launch in the upperpricing tier. Its design claims to effectively shave thehard-to-reach contours of the face with amanoeuvrable handle that offers better grip and moreprecise control.
The question is how successful is this product likely tobe? In light of consumers downgrading to cheaper
alternatives, the answer would appear not to belaunching more premium products, but instead offeringconsumers products at lower price points.
An ongoing issue with Procter & Gamble has been itslack of presence in the lower pricing tiers across allcategories. The company boasts of its ground-breaking innovations to justify premium pricing, but thismay not bear fruit in mens shaving due to target
consumers strong propensity to save.
Procter & Gamble could increase its focus on mens
toiletries, which has much higher growth prospects inCAGR terms, but has also surpassed the market sizefor mens shaving.
P&G continues to launch in premium shaving segmentGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 27BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
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Mens Grooming Forecast Growth byCategory by Region 2013-2018
Men's Toiletries Men's Shaving
Mens skin care a potential category for P&GGEOGRAPHIC AND CATEGORY OPPORTUNITIES
0
2,000
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ize
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illionrsp)
Mens Grooming Market Size Breakdown
by Region 2013
Men's Toiletries Men's Shaving
Procter & Gamble has the option of tapping morevigorously into all categories under mens toiletries
including deodorants, skin care, hair care and bathand shower. Mens toiletries sales now equal those of
mens shaving in most regions, but in Asia Pacific
mens toiletries is larger than mens shaving.
Furthermore, projected growth for mens toiletries is
also higher across all regions.
Deodorants is the largest category, but skin care is
projected to be the fastest growing one with an 8%CAGR over 2013-2018. In both mens skin care anddeodorants, P&G faces steep competition. In mens
deodorants, Unilever is the market leader controllingnearly 40% of the market, followed by Procter &Gamble, with 10% of the market. In mens skin care,
LOralcontrols 20% and Beiersdorf another 13%.While it would be harder to penetrate deodorants due
to the strong dominance of Unilever due to both itsbrand credibility and wider pricing coverage, Procter& Gamble has stronger prospects in skin care due tothe perception of Gillette being a mens brand
compared to LOral Paris which is generally
associated as a female brand.
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Euromonitor International PASSPORT 28BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
A drawback for Gillette could be that it speaks less tofemale consumers than a brand such as LOralParisand this is considered an important factor given thatmens toiletries are often picked up by their femalepartners.
However, this practice appears to be changing as mentake more interest in grooming and are now moreactively involved in the purchasing process.Traditionally, this market was under-represented withproducts that men could connect with, but niche brands
such Bulldog are gradually changing the scene. Bulldogand King of Shaves specialise in mens toiletries withdedicated and targeted formulations and brandingmessages.
Gillette, as one of the leading brands in the mensgrooming category, could capitalise on this trend. Itcould consider launching lines with targeted maleformulations more vigorously. It could further tap into
the digital media, particularly in terms of marketing suchproducts. Moreover, there are strong opportunities in
Asia Pacific, particularly in China, with the regionprojected to lead absolute growth in mens skin careglobally. This could also provide a much-needed boostto the companys overall skin care category sales.
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Mens Skin Care Market Size 2013 andForecast Growth by Region 2013-2018
Market Size 2013 % CAGR 2013-2018
Gillette suitable for mens skin careGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 29BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Skin care is Procter & Gambles fourth leading beauty and personal
care category, accounting for 9% of its total BPC sales in 2013.Procter & Gamble has been losing share in skin care due to a numberof factors, although the overriding factor is the gradual shift in marketdynamics, which Procter & Gamble appears to have been slow toadapt to.
P&Gs relatively slow innovation pipeline has been blamed for its loss
in market share, but this is not entirely true. Its most recent launchOlay Regenerist Luminous claims to be based on ground- breaking
technology. Its skin-energising technology claims to boost matureskins cellular bioenergy. The line comprises facial moisturiser andeye cream. Prior to Olay Regenerist Luminous, Olay launched anOlay BB cream and then a CC cream. It also has a sophisticatedrange of targeted products including Olay Regenerist Advanced Age-Defying Eye Roller, which claims to instantly reduce eye puffiness,and Regenerist Anti-Ageing Lip Treatment, which is said to moisturiseand visibly reduce the appearance of lip lines. It also has a skin care
device similar to LOralsClarisonic, but sold at a much lower pricepoint and launched before LOralacquired Clarisonic. It has a kitwhich combines the device and Olay skin perfecting cleanser. Theseranges should have been sufficient to help the company make greaterstrides in skin care market share, but its portfolio seemscomparatively less segmented than its competitors.
4.3
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Procter & Gamble Skin CareMarket Share 2008-2013
P&G slow to address shift in skin care dynamicsGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 30BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
The skin care market is becoming increasinglysegmented along age groups, consumeraffordability and price points, which are againinterrelated.
LOralmaintains three distinct divisions acrossthe pricing tiers. Garnier is at the mass level,LOralParis is a mid-price brand and then it hasa range of premium brands. Higher concentrationof ingredients is found in the premium brands,which are targeted at older and more mature age
groups, but lower proportions of the sameingredients are also available in the mid-pricebrand LOral Paris at more affordable pricingpoints. Garnier, on the other hand, is targeted ata younger age group and often combines multiplefunctions.
Procter & Gamble mainly competes through onebrand, Olay, in skin care across the mass pricing
spectrum, which dilutes the brands image.Consequently, even though Olay has a range ofproducts targeting a wide spectrum of agegroups, it is not as distinct as LOralsbrands.Overall, it appears LOralhas a greater varietyon offer for more diverse groups.
Greater segmentation in skin care portfolio neededGEOGRAPHIC AND CATEGORY OPPORTUNITIES
Price
FunctionalityAge
Product Segmentation
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Euromonitor International PASSPORT 31BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Procter & Gambles loss of market share in skin care also
reflects its inability to create the same marketing hype asenjoyed by some of its key competitors.
LOralwas a pioneer in popularising the serum format andthe BB cream trend. In addition, short and scientific termssuch as active ingredients and/or active molecules help to
draw attention, while making their brands seem equallyconvincing as the more descriptive explanation of thescience behind the technology. LOralspackaging around
consumer segmentation also helps to add to the hype. Forexample, LOralsSkin Perfection Magic Touch Instant BlurCream, targeted at a younger age group, is packaged in apink box - the packaging clearly communicating to younggirls. On the other hand, Revitalift, designed for more maturegroups, is packaged in red - which carries more gravity andweight attracting older age groups. In addition, a number ofworld-renowned actors have been appointed to represent
the brand. LOralscommercials are more hard hitting. While Revitaliftuses terms such as Triple Power, Olay employs Your Best
Beautiful. At a time when skin care is taking on a more
advanced scientific form, hard-hitting catchy phrases arelikely to strike a chord with consumers over softer terms.
Not enough hype around skin care offeringsGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 32BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Some 30% of P&Gs global skin care sales comefrom the worlds leading skin care market, China,
but it is increasingly losing share to otherplayers.
China is a lucrative market for all skin caremanufacturers, leading to extreme competitivepressure. While the growing competitivepressure is not news, the changing competitivelandscape deserves some attention.
Previously, competition came mainly fromforeign multinationals, but now local players arealso gaining ground in terms of productsophistication, albeit positioned at morecompetitive price points due to more relaxedgovernment regulations for local companies.Moreover, consumers in the lower pricingsegments also prefer local brands since they canidentify with them more closely. This shift in
Chinas competitive landscape is not only makingit necessary to have more clear segmentationalong pricing lines, but also to create strongermarketing buzz and brand excitement tocommunicate the brands distinct and nichepositioning in comparison to rival brands.
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P&G vs LOraland Leading Local Players
in Skin Care in China 2008-2013
L'OralGroupe
Procter &Gamble Co,The
Jala (Group)Co Ltd
ShanghaiJahwa UnitedCo Ltd
ShanghaiInoherbCosmeticsCo Ltd
Shifting dynamics in Chinas competitive landscapeGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 33BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
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P&G vs Colgate: Market Share Gain inOral Care 2008-2013
Colgate-Palmolive Co Procter & Gamble Co, The
Oral care more successful for P&G but falling behind rivalsGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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P&G vs Colgate: Market Share in OralCare 2008-2013
Colgate-Palmolive Co Procter & Gamble Co, The
Oral care is one of Procter & Gambles moresuccessful categories. In 2013, Procter & Gamble
recorded 5% growth in oral care, second highest forthe company after deodorants, which grew by 7.5% inthe same year.
Despite oral care performing well in comparison to thecompanys other categories, it was lower incomparison to other key oral care players, namelyColgate and Unilever, recording growth rates of 8%and 6%, respectively.
Procter & Gamble marginally lost share in global oralcare, while Colgate and Unilever both recordedpositive market share growth. While Colgate gained 60bps in market share, Unilevers market share grew by10 bps. This reflects how well the players performedregionally. Colgates growth was predominantly drivenby emerging markets, while Procter & Gambleappears to be focusing on developed markets.
While Colgate gained market share in Asia Pacific,Australasia and Eastern Europe, Procter & Gamblegained share in Latin America, North America andWestern Europe, with Latin America the only emergingregional market in which the company recordedpositive share growth.
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Euromonitor International PASSPORT 34BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Given market share shifts, it appears that both P&G andColgate are streamlining their regional focus in the faceof intense global competition. Regional priority for eachof the companies is linked to the regional balance oftheir oral care portfolios. While North America andWestern Europe combined account for more than 50%of P&Gs global oral care sales, for Colgate this is a
much lower proportion.
The more interesting story, however, is in Latin America,
which holds greater weight in terms of regional sales forColgate in comparison to Procter & Gamble, but Procter& Gamble is aggressively pushing into this region.
Procter & Gamble is capitalising on rising disposableincomes in Brazil, the largest oral care market in theregion. In 2012, it introduced a new range of oral careproduct under its brand Oral B and appointed theleading model Gisele Bndchen as the brand
ambassador. This has proved successful for thecompany, contributing to its share gain in the market. Onthe other hand, Colgates more economy brand Sorrisohas lost share, clearly indicating that Brazilianconsumers are looking for more sophisticated productsfor their oral care regimen.
Colgate Oral Care Value SalesBreakdown by Region 2013
LA
AP
WE
NA
EE
ME&A
Aus
P&G Oral Care Value Sales Breakdown
by Region 2013AP
Aus
EE
LA
ME&A
NA
WE
Western market focus takes away P&G growth from oral careGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 35BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
In order to beat its rivals in oral care globally, P&Gneeds to develop a stronger presence in otheremerging markets. In Asia Pacific, Eastern Europe andLatin America, Procter & Gamble forms a distantsecond to Colgate and in the Middle East and Africa itranks number four. With the exception of Latin
America, Procter & Gamble lost share in all theseregional markets.
One common problem for Procter & Gamble is that it is
positioned as more premium and hence lessaccessible to consumers with lower affordability.Combined with this, in some markets, such as China,local competitors are also coming up with oral careproducts with more sophisticated functionality. In somemarkets, Colgate has region-specific brands, such asDarlie, accessible to consumers with lower affordability.
The question for Procter & Gamble is what would form
an appropriate strategy to expand in emergingmarkets. It does not have the option of including a newmass brand, given the cost implications. It can continuewith further segmentation offering more closelytargeted benefits to justify its premium positioning, butalso take advantage of higher pricing margin.
Focusing on targeted benefits to help P&G oral careGEOGRAPHIC AND CATEGORY OPPORTUNITIES
P&G vs Colgate in Oral Care: Share and
Ranking by Region 2013
ColgateProcter &Gamble
Region % share Rank%
shareRank
AP 24.2 1 11.4 2
Aus 46.0 1 14.2 3
EE 27.0 1 19.0 2
LA 51.1 1 16.3 2
ME&A 25.8 1 14.2 4
NA 18.1 2 33.7 1
WE 19.1 1 18.9 2
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Euromonitor International PASSPORT 36BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Procter & Gamble also has the option of taking a long-term view on emerging market oral care. Procter &Gamble is the global leader in electric toothbrushes, which it can capitalise on.
With ever-growing oral health awareness globally, there is a good opportunity for electric toothbrushes,which are designed to cleanse bacteria more effectively, preventing tartar and plaque.
Penetration of electric toothbrushes is higher in Western markets due to higher affordability, but there areopportunities for further growth with consumers upgrading from manual toothbrushes. In emerging markets,higher cost is a deterrent, but with increasing disposable incomes more consumers could be expected toupgrade in the long run.
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Market Size 2013
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Toothpaste ManualToothbrushes
ElectricToothbrushes
Mouthwashes/Dental Rinses
BatteryToothbrushes
DentalFloss
DentureCare
ToothWhiteners
MouthFresheners
%C
AGR2013-2
018
Va
luesales
(US$m
illion
)
P&G Oral Care Presence 2013 and Growth Prospects 2013-2018 by Category
2013 % CAGR 2013-2018
Long-term potential for electric toothbrushesGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 37BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Mouthwashes/dental rinses is a category that offers greater prospects in the near future. The globalforecast, at over 4% CAGR, for mouthwashes/dental rinses is the highest among the oral care categories.
Increasing oral care awareness is expected to drive growth as consumers adopt a multi-care routineincluding brushing, followed by mouth rinsing. While they are well established in North America, sales areexpected to grow in Western Europe as well as other emerging markets. Unlike electric toothbrushes,mouthwashes/dental rinses are affordable in addition to their claims of addressing oral care issues withgreater effectiveness than simply brushing.
Johnson & Johnson is the global leaderwith Listerine, but the brands marketshare has fallen as its parent focuses onother divisions. Procter & Gamble is thesecond leading player, but its marketshare remained static, while Colgate, thethird leading player gained share in 2013.P&Gs presence in this category revolvesprimarily around North America. It wouldbenefit from expanding its presence inother emerging markets.
While there are competitive barriers inemerging markets, the category is still inits nascent stage. Good productdevelopment and effective marketingcampaigns could help to overcome suchcompetitive barriers.
Long-term potential for electric toothbrushesGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Absolute Value Growth (US$ million) 2013/2018 % CAGR 2013-2018
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Euromonitor International PASSPORT 38BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
P&G targets Middle East & Africa for colour
cosmetics
Potential for Olay in bath and shower
Colour cosmetics is one of Procter & Gamblessmaller BPC categories, accounting for 6% of itsglobal BPC value sales. The companys presence
in colour cosmetics derives primarily from NorthAmerica, contributing over 40% of its global colourcosmetics sales. The companys leading brand is
Cover Girl, a mass brand. It also owns Max Factor,another mass brand, which was withdrawn from
the US in 2009, and SKII, a premium brand,present mainly in Asia Pacific.
In 2013, Procter & Gamble lost 10 bps in globalcolour cosmetics market share. This was mainlydue to loss of market share in North America,where it faces strong competition from LOralinvesting in both product development and
marketing. While Procter & Gamble faces intensecompetition in its key market, it is building share inthe Middle East, with strong growth prospects inpercentage terms. It is using Max Factor to driveshare; a good move given the brands heavy
coverage, which sits well with regional tastes.
Bath and shower is another smaller category,accounting for 4% of P&Gs total BPC sales globally;
with China accounting for more than 30% of its globalsales in the category, followed by the US, contributingover 20%.
In terms of regional prospects, Procter & Gamble iswell placed since absolute growth in the category will
be driven by the US and China. Procter & Gamble hasa well-segmented portfolio offering a wide range ofbrands.
It has extended Olay in bath and shower, althoughpenetration is still limited. As seen with Dove, Procter& Gamble has the potential to further extend Olay inbath and shower as a brand specialising in skin care.
Procter & Gamble could use Olay bath and shower to
market in India, projected to be the third leadingmarket to drive growth in this category. Unilever,however, dominates India with nearly 50% marketshare mainly through Lux. Procter & Gamble couldbreak into this market with Olay, but needs to be quicksince Dove is growing rapidly.
Competitive barriers for colour cosmetics and bath and showerGEOGRAPHIC AND CATEGORY OPPORTUNITIES
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Euromonitor International PASSPORT 40BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Gillette is Procter & Gambles leading beauty and
personal care brand and the worlds number two
BPC label. It is one of the companys billion dollarbrands, with sales of US$12 billion in 2013. Gilletteis among Procter & Gambles most diverse brands
in terms of geographic profile. It ranked numberone in every regional mens grooming market in
2013.
The US is P&Gs leading market for Gillette,
followed by Brazil. Given that the Brazilian marketis set to lead growth in mens grooming over 2013-2018 this puts the Gillette brand in a veryfavourable position.
The Gillette brand is positioned as mass, howeverProcter & Gamble has been branching out topremium mens grooming with the Art of Shaving,
which it launched in the UK in 2011, but with
product sophistication increasingly found undermass brands, premium brands face intensecompetition. To this end, the focus is more onGillette, which has expanded into skin care, haircare, deodorants and fragrances in addition to itsmost recent launch Fusion ProGlide with FlexBall.
Gillette Regional Breakdown 2013
Asia Pacific Australasia
Eastern Europe Latin America
Middle East and Africa North America
Western Europe
Gillette enjoys broad geographic reachBRAND STRATEGY
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Euromonitor International PASSPORT 41BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Pantene is Procter & Gambles leading hair care brandand the worlds number two hair care label. It is one of
the companys billion dollar brands, with sales of US$5billion in 2013.
Pantene has been something of a problematic brandfor Procter & Gamble in recent years, due in part to anoverweight portfolio and confusion over its positioning.Moves to push the mass brand upmarket have beenundermined by significant price cuts in core markets.
In recent years, Procter & Gamble has been trying torevive the brand. It relaunched the brand with improvedformulation and packaging in 2012. In 2011, Procter &Gamble switched to plant-based PET for its PanteneNature Fusion bottles to maintain a consistent naturalimage for the brand. The Nature Fusion range wasrolled out in 2011 and 2012 to new markets includingThailand. In 2012, it launched Pantene Age Defy formature hair, which it also introduced in Brazil.
The brand relies heavily on celebrity brandambassadors including most recently US actressZooey Deschanel. In keeping with Procter & Gamblesglobal aspirations however, it has also enlisted Indianpersonalities such as Padma Lakshmi. 0
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Pantene Global Hair Care MarketShare 2011-2013
Procter & Gamble aims for more premium image for PanteneBRAND STRATEGY
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Euromonitor International PASSPORT 42BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Olay is one of Procter & Gambles billion dollar beautyand personal care brands, with sales of US$3.7 billion
in 2013. It generates over 85% of its revenue in skincare, where it is the worlds number three brandunderpinned by its number two position in facial skincare.
The brands strong exposure to skin care provides astrong base for innovation, and has met with notablesuccess through anti-ageing extensions, such asRegenerist, Definity and Pro-X Intensive previously. In
2014, it launched Olay Regenerist Luminous based onskin-energising technology designed to boost matureskins cellular bioenergy. The line comprises facialmoisturiser and eye cream. Olay, however, is comingunder strong competitive pressure in key markets suchas China, where its competitors are expanding theirdistribution coverage through distinctive brandsincluding that of parapharmacies/drugstores.
Procter & Gamble has begun to leverage the strengthof the Olay brand in other key brands. It launched theVenus & Olay razor in a high-profile marketingcampaign. It also continued to extend Cover Girl withOlay as part of the Simply Ageless line, but theseremain limited.
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Olay Global Market Share in Skin Care2011-2013
Procter & Gamble looks to cross-category branding for OlayBRAND STRATEGY
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STRATEGIC EVALUATION
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Euromonitor International PASSPORT 44BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
P&G emerging market manufacturing sites by country 2013OPERATIONS
Western Europe:Turkey
Eastern Europe:Russia, Czech
Republic, RomaniaAsia Pacific:China, India,Philippines, Vietnam
Middle East and Africa:Egypt, Lebanon,Morocco, Saudi Arabia
Latin America:Argentina, Colombia,Mexico, Brazil,Guatemala, Peru,Venezuela
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STRATEGIC EVALUATION
COMPETITIVE POSITIONING
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Euromonitor International PASSPORT 46BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
Create new segments Scientific overtones in its marketing messages
While Procter & Gamble is losing ground due to itslack of coverage in the mass segment, slowinnovation pipeline and outdated marketingmessages, it has the opportunity to create newsegments by combining some of the existingmarketing segments. For example, while it wouldbe harder for Procter & Gamble to compete withUnilever in salon-inspired hair care segment, it can
market Aussie as a salon-inspired natural/organicbrand.
Given the strong competitive pressure in most ofthe categories in which it competes, a significantpart of its future growth trajectory will depend oncreating new segments.
The companys marketing messages are also notin line with current trends. It continues to tap intothe emotive aspects of product experience usingphrases such as Your Best Beautiful for Olay or
Be Strong and Shine for Pantene, while its rivalsare turning to more hard-hitting scientific terms toconvince consumers of product efficacy. Forexample, LOralrefers to active ingredients and
Unilever makes use of keratin as part of productclaims.
This is in line with the sophistication that beautycategories are increasingly assuming. Procter &Gamble would benefit from using similar short andcatchy, but scientific terms as part of its marketingstrategy.
In need of greater alignment with market dynamicsRECOMMENDATIONS
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FOR FURTHER INSIGHT PLEASE CONTACTOru Mohiuddin
Senior AnalystBeauty & Personal Care
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Euromonitor International PASSPORT 48BEAUTY AND PERSONAL CARE: PROCTER & GAMBLE CO
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