P&g Case Work

BACKGROUND AND PROBLEM DEFINITION

Scope a green, mint-tasting mouthwash is a leading brand of the health-care division of P&G

It has 32% of the market share in the mouthwash category. But due to the increasing market share of Pfizers new product Plax , what P&G must do to maintain Scope competitiveness and increase its market share.

MARKET AND INDUSTRY ANALYSIS

During 1980’s companies change their product idea. Before 1980’s the strategy was “bad breath” & Listerine introduced that it “was a therapeutic germ killer and eliminate bad breath”. In 1987 many companies introduced new features to their product. That means every one tried to make their product unique. Every brand tried to add something extra to attract the customer resulting more market share.

A current survey says that 75% of Canadian household use mouthwash. Total market can be categorized as user & non user. Users are three types Heavy users (once per day or more), medium users (two to six times a week), & light user (less than once week).

There are some users who like to use mouth wash for fresh breath & some those want to use mouth wash to prevent plaque & cavity. There is some other group those who don’t like the medicine taste in the mouth wash

Regarding the distribution channels, Scope is mostly selling in food stores and that is why their share in food stores is 42%, while in drugstores 27%, and approximately 65% of all mouthwash sales went through drugstores

EVALUATION OF ALTERNATIVE COURSES OF ACTION (EXHIBIT 2 & 3)

1) Maintain status quo (EXHIBIT 1)

To achieve the break-even P&G has to sell 333052 units of Scope.

Pros

• Avoids risk of strategies backfiring and avoid consumer confusion

• Maintain business stability in short-term

Cons

• Sales may decline due to rapid growth of market segmentation

2) Extend the product line under Scope name (EXHIBIT 2)

Gross Profit = 2282

Pros

• Penetration of a new market segment

• Long-term profit maximization