Procter and Gamble Is One Term Paper
- Length: 9 pages
- Sources: 5
- Subject: Business - Advertising
- Type: Term Paper
- Paper: #33606514
Excerpt from Term Paper :
The company is permanently spending considerable amounts on R&D to innovate its products and on advertising to maintain the brands awareness high. Shareholders are more satisfied than ever after Procter's recovery in the late 1990s, early 2000. But they did not encourage much the recovery process because it took almost two years and they were expecting a fast recovery process.
Currently there are over 100 Pantene products. Pantene shampoo has 25 products in the supermarket shelves to cover all types of customer needs. In terms of sales, the brand has had a "blockbuster" evolution. It was introduced in the market about 10 years ago and it has been reinvented since maintaining a top market share. Pantene, the shampoo is actually the leader in this market, followed by Elseve from L'oreal. Overall, Elseve product line is better positioned in the market, having a larger market share for all hair care products: shampoo, conditioner, 2 in 1, treatment and hair styling.
A recent study (Mediapost, 2007) shows that Pantene's market share in the 18-24 age group is 23%, in the 25-34 age group is 25% and in the 35-44 age group is 22%. Pantene shampoo is doing very well in all age segments, including that of 65 and above.
Its permanent repositioning is based on global market studies about consumer behavior. The results pointed out that most women think they have hair problems and they associated hair health with shine. Pantene Pro-V products are advertising shine as their strong point and all Pantene hair products are preoccupied with getting a healthy hair aspect.
Two competing products from the same market have been chosen to compare them with Pantene and determine its strong points, weakness points, opportunities and threats: Dove and Elseve.
Pantene is the market leader in the shampoo market by the sales volume ($ and units). The hair care line sales value is over $3bn/year and 2000 bottles are sold every hour;
The product line is very diversified covering all types of hair;
The shampoos are complemented by conditioners, just as diversified;
The consumer has a high brand awareness
The product reached its maturity stage, so the average manufacturing costs are decreasing;
P&G suppliers are distributing the products to a large number of supermarkets, which means that the products have a wide coverage.
P&G has not entered the professional hair care market, as opposed to L'Oreal. Because of that Elseve enjoys more credibility than Pantene from the customer;
Innovation rhythm is slowing down because the product reached the maturity level;
Elseve's products line covers both Pantene and Head & Shoulders products. Customers that are attached to Pantene brand may find their shampoo choice narrower because of that.
The product offer for low income consumer is quite reduced
Enter the professional hair care market, like L'Oreal with its product line L'Oreal Professional;
Innovate products for low income consumers.
Supermarkets developing their own brands similar to Procter's, but a considerably lower price;
Tough advertising competition, which may erode the company's market share.
Product. Currently, the Pantene product line includes 25 types of shampoo, 23 types of conditioner, 9 types of 2 in 1 products, 14 types of hair treatment (including creams and masks) and 37 styling products (including frizz control serum, gel, hair spray, cream, milk and lotion). The shampoos come in 2 types of bottles: medium (250 ml) and large (400 ml) and the rest of the products come in one type only, the standard one.
Price. Pantene is positioned as a medium priced product, just like Dove from Unilever, Elseve from L'Oreal, Nivea from Nivea and Fructis from Garnier. The product doesn't have professional line available in hair saloons, so there is no highly priced product in this Pantene line.
A while ago, in some regions with low income consumers, such as India, P&G resorted to a price cut strategy for Pantene products, leaving Head & Shoulders' prices untouched. This measure was taken because the market price for similar products went down and the company had to keep up with the competition. However, soon after the company launched a whole new product line for Pantene, withdrew the old products from the market and continued to sell at medium price as before the price cut war.
Promotion. Pantene is the world's best sold hair care product and one of the most advertised as well. P&G organizes annual hair contest to promote this product and participates in a large number of events, such as beauty contests and hair styling contests. The shampoo's mottos changed a lot from the 1990s' "don't hate me because I'm beautiful." The latest one is called "Everybody got their something."
The new market trends are towards colorful packaging and a wide range of tropical perfumes. P&G is thinking to arrange these products in the supermarket shelves by category: healthy look, therapeutic and ethnic.
Place - distribution. At the world wide level, L'Oreal is the leading company in the cosmetics industry. To compete with this giant, P&G slowly acquired other companies that had a significant market share in this industry, such as Wella.
A while ago, P&G launched a Pantene shampoo product for African women. The company is facing true challenges when is targeting market niches with its products, which is why a part of the production is local. However, the distribution system in global and is part of on integrated high tech system meant to provide cost and time savings.
The product is present in supermarkets, drugstores, pharmacies, kiosks, corner stores and so on. Basically, any shop that sells beauty products has a Pantene product.
Colgate-Palmolive corporate website:
Mediapost (2007), http://publications.mediapost.com
Procter and Gamble corporate website:
Sasi Group (2006):
Unilever corporate Website: http://www.unilever.com/
PANTENE STUDY CASE
The numbers show a dramatic change in Eastern Asia, high change in South-Pacific Asia and substantial change in Europe and Japan.
Even though the highest growth rates are in poor countries, this fact is synonym with in increase in the demand for consumer products.