By: Stefan Petre, Jerzy Blaszkiewicz, Matthew Colletti, and Zachary Ross
Introduction
• Gwen Hearst- Brand Manager
• Needs new strategy to compete with Plax
• 3 things they should consider– should develop a new product– improve the existing one– do nothing
Situation AnalysisStrengths
• People who use Scope believe it gets rid of bad breath. This is one of the most important reasons people use mouth wash.
• In 1990, Scope had acquired 32.3% of the Canadian mouthwash market.
• Since the introduction of Plax in 1988, Scope’s market share has only gone down 0.7%; Colgate Oral Rinse has gone down 64%, Listermint down 30%, and Cepacol down 22% which means that Plax has mostly taken away market share from other competitors but not really from Scope. Weaknesses
• Scope is perceived to be average or less than average in consumer perception by anyone who uses mouthwash.
• People who use Scope believe it is only above average at reducing bad breath.
Situation AnalysisOpportunities
• Line extension• New product line under different name• Add plaque-reduction claims to Scope
Threats• Plax is positioned around fighting plaque which is a new benefit in
the market• There are indications that other brands, such as Listerine, are also
going to promote the benefit of fighting plaque• Plax has a strong perception of promoting healthy teeth and gums
from brand users and all mouthwash users. Basic oral hygiene and getting rid of bad breath are the most important reasons consumers use mouthwash.
Proctor and Gamble Goal
• Provide branded products and services of superior quality and value that improve the lives of the world’s consumers for now
and the next generation
Alternatives
• Produce a line extension• Add new product under a different
label• Stay put with existing product
Our Choice - Product Extension Line
• Advantages– Open up to a new
market of consumers– Extend our market share– Satisfy customer wants
• Disadvantages– High initial costs– Extensive research– Competition
PriceScope 1990 Financials $(000) $/Unit Product Line Extension Adjustments $/Unit Product Line ExtensionNet Sales 18,150 41.25 41.25 45.10Ingredients 3,590 8.16 + 2.55 (+/- 50%) 10.71 10.71Packaging 2,244 5.10 + 0.30 5.40 5.40Manufacturing 3,080 7.00 7.00 7.00Delivery 1,373 3.12 +1 4.12 4.12Miscellaneous 1,122 2.55 2.55 2.55Cost of Goods Sold 11,409 25.93 29.78 29.78Gross Margin 6,741 15.32 11.47 15.32
10 Liters 1 LiterScope Original 41.25 4.125Scope Line Extension 45.10 4.51
Plax 65.09 6.509
Product
• The new Scope• Same benefits as original scope just with
plaque fighting technology• Breath stays fresher longer• Give you the confidence to get even closer
Place
• Food stores, drug stores, and wholesale clubs• Focus more on the drug stores• Be able to take away from some of the market
segment from Plax
Promotion
• Focus on a pull marketing strategy
• Advertise– trial-size displays setup
in major drug stores chains
– coupon mailings– samples for dental
associations and offices– initial price reductions – television commercials
?? Questions ??