Proctor & Gamble - Scope

Proctor & Gamble - Scope

Assignment on

Proctor & Gamble Scope

Course code: MKT 202

Course Title: Principles of Marketing

Semester: Fall 2011

Prepared for

Bashir Hussain

Senior Lecturer

BBA FacultyPrepared by

Ishan Debnath(ID:1120608030)

Md. Iftakhayrul Islam(ID:1120739030)

Muhammad Mosharraf Hussain(ID:1121048030)

Abdullah Al Masud(ID:1120303030)

Nazia Tarannum Ananna(ID:1120836030)

School of Business

North South University

November 20, 2011

Table of Contents

Background1Segmentation Method2Analysis of Target Market for Scope Mouthwash4Positioning of Scope5Marketing Mix6Product6Price8Place8Promotion9Conclusion9References:10

Background

Proctor & Gamble Co. is one of the leading consumer goods manufacturers in the world. By maintaining superior quality for the products since its inception in 1837, it has built very good market share and reputation in more than 140 countries in the world. Renowned and popular brands like Gillette, Head & Shoulders, Pantene, Scope, Pringles, Crest, Tide etc. are the products of this company. As of July 1, 2011, the company's operations are categorized into two "Global Business Units" with each Global Business Unit divided into "Business Segments" according to the company's 2011 Annual Report. The segments are Beauty segment, Grooming segment, Health Care segment, Snacks & Pet Care segment, Fabric Care & Home Care segment.

P&G has a dominant presence in Canada since its starting business in the country. One of the top Brand of P&G in Canada is SCOPE mouthwash, which was introduced in 1967. It is a green mint tasting mouthwash that provides bad breath protection. In 1970 Scope became the market leader in Canada and it held 32% share of the Canadian market for 1990. There are some mighty competitors in the market, such as Listerine, Cepacol, Listermint, Plax etc. But the major competitor for Scope was Plax, a brand by Pfizer Inc, which was launched in Canada in 1988 on a platform quite different from the traditional mouthwashes. The marketing plan of Scope mouthwash will be discussed in the following sections:New LogoOriginal Logo

Segmentation Method

Market Segmentation is a cornerstone of building successful and known marketing plans. It has been done by using different segmentation policy and variables like Geographic, Demographic, Psychographic and Behavioral. From the case, it can be seen that the Canadian mouthwash market can be segmented mainly by behavioral trends. The segmentation model of the Canadian mouthwash market is outlined below:

Figure 1: Market Segmentation VariablesGeographicThe case is about mouthwash market in Canada. Though sales and usage of mouthwash depend a little on country region, city or metro size, density or climate, these variables have not been used during segmentation process.Demographic75% of the Canadian households use minimum one brand of mouthwash per week as mentioned in the case. Though, it has not been mentioned about the usage of mouthwash by age, it can be assumed that usage will vary among adults and non-adults. So, Adults and non-adults are the two markets segments for Canadian mouthwash marketBehavioralUsage pattern has been used as a segmentation variable in case of the subject market as some people use mouthwash regularly on daily basis, some uses it weekly. So, the preferences and choice set of the two groups vary. Those who use it regularly, grow a stronger brand preference than the weekly users. In the Canadian mouthwash market, there are 4-5 dominant brands which offer different types of benefits to the customer. Customers choose their brand after matching with his/her needs and wants. Some wants combination of the benefits, for example, Scope offers great taste with protection against bad breath whereas Listerine offers protection against bad breath and prevents gingivitis and Plax offers removing of Plaque. The following table gives a view to the customerConsumer Sought BenefitsProduct Benefit OfferingsMarket Segments

Part of Basic Oral Hygiene (40%)*Getting Rid of Bad Breath (40%)*Kills Germs (30%)*Reduces Bad BreathKills GermsRemoves PlaqueGood for Preventing ColdsRecommended by Doctors/DentistsFights Bad BreathGood TasteKills Germs Recommended by DentistsRemoves Plaque

* According to the market research given in the case.demands and subsequent product offerings satisfying those demands. These product offerings leads to the market segments listed above. It can be seen from the table that the mouthwash providing maintenance of basic oral hygiene satisfies the demand of 40% consumers who are using mouthwash of any brands. So, different benefits sought by the consumer force the manufacturers to develop products with different attributes which will in turn satisfy different segments. The market can also be segmented with usage rate variable, in the case it has been said that in a market research it has been found that there are three types of users; Heavy Users (once a day or more), Medium users (two to six times a week), Light Users (less than once a week). The proportion of these three kinds of user is given in the figure 2. Figure 2: Segmentation using Usage Rate

By identifying loyalty status of the customers, segmentation can be done. Customers who have low loyalty to any brand needs special attention whereas customers with high loyalty to any brand needs good retention strategy. Hence, marketing approach to the customers will be different.

Analysis of Target Market for Scope Mouthwash

The mouthwash market of Canada was initially developed by Warner-Lambert with its pioneer brand Listerine. It was targeted to the consumers who want to get rid from bad breath with effective germ killing. It dominated the market until entry of Scope, the mouthwash from P&G. Though Listerine provided the above-mentioned features it tasted like medicine. Management of P&G sensed a chance to get into the market with creating a new segment by adding taste to the mouthwash. They adopted the undifferentiated marketing approach as the market was still new and there were not too many variants available for the users. In 1967, Scope entered the market by targeting the bad breath segment with adding mint taste to it. This first mover advantage gave edge to Scope which eventually leaded it to get the market leader position in 1976. To retain market share and to snatch some from Scope mouthwash, Warner-Lambert launched Listermint in 1977. Like Scope, it was a green, mint tasting mouthwash. This move from the company justifies the selection of market segment by P&G. As this market was getting a steady growth, the market segment had attracted other companies for putting a foothold. Targeting this segment was an ingenious idea as it wide opened a new segment for mouthwash market. If looked at figure-2, it can be identified that according to the mouthwash users, top 3 reasons for using mouthwash is to maintain basic oral hygiene (40%), to get rid of bad breath(40%), to kill the germs(30%). Though Scope claims to do the three, consumer perception to this was not favorable. In view of the consumers, Scope mouthwash performed below par than the competitors albeit according to perceptions removal of bad breath was the strength for this brand. As Scope served the basic protection against germs with giving a good taste for the users, consumers were satisfied with it. For this reason, it can be said that the target market selection was precise and accurate from the management.Scope mouthwash had a good run in the Canadian market for a long time, to be precise until the late 80s. But, the entrance of Plax caused the management of Scope to think again of their target market. By providing superior protection and removal of plaque, Plax created a new market segment for the mouthwash market with the idea of pre-brushing rinsing. This move from Pfizer, the owner of Plax gave Scope a tough fight for retaining market share. At that time, Scope had to think of product variants with differentiated marketing approach which will satisfy the demand of the evolving mouthwash market.Positioning of Scope

After targeting the desired and viable market segments, a company must decide on value proposition which will differentiate the product and attracts the customer of the targeted market segment. A products position is the way the product is defined by the consumers on the attributes of the product. Effective positioning of any product can simplify the buying process for the consumers. In the case, Listerine, the Warner-Lambert product was the first in the market and it was positioned as a therapeutic germ-killing mouthwash that eliminated bad breath. To have competitive advantage, Scope was positioned as a great tasting mouthwash that eliminates bad breath. P&G developed the positioning statement as Scope fights bad breath. Dont let the good taste fool you. The following figure demonstrate the positioning map for the mouthwash market of Canada and it also demonstrate different brands operating in the market with different positioning strategy. Fights Bad Breath and Kills GermsRemoves PlaqueGood Taste

ScopeListerineCepacolPlaxListermintColgate Oral Rinse

Figure 3: Positioning MapIn the positioning map, every circle with different colour represents a brand and the size of the circles demonstrates the relative market share of the brands. From the figure-3 it can be seen that there are six major brands in this market. It can also be noticed that, Scope and Listermint both operate in the same market with common attributes; both offer effective bad breath protection with good taste. Market share of Scope is almost three times of Listermint. On the other hand, Listerine and Plax both offer plaque removal. Additionally Listerine offers effective germ killing and bad breath protection and Plax offers 3 times more plaque removal ability with pre brushing. In short the positioning of Scope was in the right areas at the beginning which brought the brand the highest market share but with the advent of Plax with an extra attribute of removal of Plaque, management of Scope had to consider repositioning of the brand or start a new brand.

Marketing Mix

Marketing mix is the set of controllable, tactical marketing tool that consist everything a company can do to influence the demand for its product. The possible tools can be divided into four groups of variables known as the 4 Ps: Product, Price, Place and Promotion. In the following section, these variables will be discussed for P&Gs Scope Mouthwash.ProductProduct is the key element in the overall market offering. Marketing mix planning begins with building and offering that brings value to target customers. Product can be tangible or intangible; in this case it is a tangible product, Scope mouthwash. It can be classified as a convenience products as it is bought frequently with little planning and little shopping effort. The price of Scope mouthwash was not very high and it was available in most of the retail stores and drug stores. It was promoted mass level to reach widespread consumers. Scope (Original flavor)Scope Outlast

Generally, the marketers design every product in three levels to add more customer value to each level. The levels are called as Core Customer Value, Actual Product and Augmented Product. These levels are discussed briefly below:

Core Customer ValueKillsbad breath bacteria and give fresh breath and the confidence to get closeActual ProductBrand Name: ScopeProduct quality is one of the marketers major positioning tools. P&G worldwide created a brand which ascertain and assure the customers about quality of its products. Scope is no exception to that. Since its inception, it never received any major complains regarding quality. At P&G, they dont compromise with quality as this is the major points for the brand awareness building and sales and after sales service. Products can be offered with various features to attract target customers. Features are the competitive tools for the marketers. Scope mouthwash had many features that made it a very attractive proposition for the customers seeking mouthwash solutions. Main feature of the product was bad breath removal and germ annihilation. In addition to that, Scope offered the mouthwash in various taste. Figure 4: Different taste of Scope

Style and design is another important ingredient of actual product. From the figures of the product, it can be seen that for every different taste the bottle has a different color. From which, consumer can get a feeling of the taste. Packaging is very important tool for marketers as it gives them the last chance to attract; grabbing attention, describing the product and making the sales. Packaging of the bottle was also very attractive as seen from the figures. Augmented Product:Scope offeres many tips related mouth health in its website. People who have query regarding improving their mouth health and reducing bad breath, the answer is there. It fulfills the demand of giving something extra with the product.

PricePrice is the only element in the marketing mix that produces revenue, all other incur cost. Price is one of the most flexible marketing elements. There are many ways to set the price of a product like value based pricing, cost based pricing, good value pricing, value-added pricing. Of these, management of Scope mouthwash used the cost based pricing approach as it is the most appropriate way to analyze the cost and then add a margin to ensure viable business operations. In case of Scope, cost based pricing was used to determine the optimum price for the market which can ensure good return. In this type of pricing, the cost for production of one unit is determined and after that adding some markup or profit to the cost, the price is set. The pricing strategy in this case was taken as market penetration strategy. As per the market research findings given in the case, Scope was sold at $41 per unit on an average at that time. Though retail price vary in different places of sales, both Listerine and Plax had the highest prices among other brands in food stores, whereas Scope, Listerine and Listermint had the highest prices in drug stores. From the retail price indices, it can be seen that price of scope is lower than all other brand except Cepacol in both retail stores and drug stores.PlaceThe supply chain management of scope had used two places to sell it, one is food stores and other is drug stores. As it is a convenience product, people would like to buy it from the food stores. On the other hand, it can act as a therapeutic product which can be found at any drug stores. From the market research findings, it can be seen that 65% of the sales went through the drug stores, whereas remaining 35% sales went through food stores. In analyzing the Canadian mouthwash market share the data showed that Scope had the highest market share among all brands, but there was a big difference in the share held by Scope in food stores 42%, versus drug stores 27%. Figure 5: Sales Place

PromotionPromotion is the last tool that helps a product to reach to the people. The main objective of promotion is to build communication with the customers who want to know about the products. Advertising, Sales Promotion, Personal Selling, Public Relations and Direct Marketing are the main tools for promotion. For promotion purpose, management of Scope used advertising in all kinds of media and Sales promotion through coupons and discounts on the products. In the year 1990, Scope spent $1.7 million which is the highest among the mouthwash brands. Sales promotion includes coupons for getting rebate in the price, sample mailing, bundled offer with other products etc.

Conclusion

In the above sections, the marketing strategy of scope mouthwash has been portrayed and analyzed. Segmentation of the market has been done by using the behavioral variable. Selection of target market was appropriate as it made them the market leader for a long period of time. Positioning of the brand has been done mainly on the basis of the weakness of the pioneer brand Listerine. In the marketing mix, product has been well designed in three levels which had been proved by consumer acceptance of the brand. Cost based pricing was used for setting the price and market penetration was the pricing strategy. Drug store and food store were the main places for selling of the mouthwash and for promotional purpose, advertisement and sales promotion was used. In brief, the marketing strategy used for Scope was a winner and it made them the leader of the market. But, as nothing is evanescent in the world, management of Scope had a very tricky situation at that time deciding whether to introduce new brand or adding features to this brand.

References:

Kotler, P., Armstrong, G., Agnihotri, P.Y. & Haque, E.U. (2011), Principals of Marketing: A South Asian Perspective, 13th Edition, Pearson Prentice Hall of India, New Delhi.Proctor & Gamble from http://en.wikipedia.org/wiki/Proctor_%26_Gamblehttp://www.pg.comhttp://www.pg.com/en_US/brands/all_brands.shtmlhttp://www.pg.com/en_CA/index.shtml8 | Page