Procter & Gamble in Europe A roll-out launch Wolfgang Breuer and Richard Kohler

Group 4 Chien Jay Ralph Luk Mega Praew

Outline All about P&G Introduction strategy in Europe Marketing objective A ‘roll-out’ launch Media and promotion budget Cost vs revenue implications

1920s – 1930s – started to sponsoring radio programs -> soap operas History 31 October 1837 – founded by Alexander Norris (an American), William Procter (a British candlemaker) and James Gamble (an Irish soapmaker) Late 1880s – significant increase in amount of sales, number of employees and variant of products 1920s – 1930s – started to sponsoring radio programs -> soap operas 1930 – acquired Thomas Heldey Co. (England based) Jay

History (cont.) Late 1990s – acquisition of more companies (Folgers Coffee, Norwich Eaton Pharmaceuticals, Richard-Vicks, Noxell, Shulton’s Old Spice, Max Factor & Iams Company 1994 – sued Bankers Trust for fraud after having the advantage in interest rate derivatives January 2005 – acquired Gillete August 24, 2009 – Warner Chilcott (Irish-based company) announced buying P&G’s prescription-drug business Jay

Company Profile Robert A. McDonald Chairman of the Board, President and Chief Executive Officer Giovanni Ciserani President – Western Europe Switzerland is headquarters of P&G Western Europe, the umbrella for the US giant's operations in the UK, Germany, France, Italy, Spain, Greece, Scandinavia and other markets P&G’s Organizational Structure Jay

Profit Sharing Jay

2010 Financial Caption Net sales increased 3% to $78.9 billion Unit volume increased 4% versus prior year Net earnings decreased 5% to $12.7 billion Jay

Introduction Strategy in Europe Criteria for brand name selection According to the market research the consumer were willing to pay the equal price for the selected product (Vidal Sassoon, Shamtu, Pantene, Pert Plus). The BC-18 technology would be introduced by the existing brand in a new quality. Luck

Introduction Strategy in Europe (cont.) Positioning The shampoo will provide great-looking hair in a convenient way Target group All people Sources of business New users Pricing Premium-priced up to 100% of the low-price market leader Packaging Using the existing US bottle for Pert Plus would not require any lead time Luck

Marketing Objective Get into European market by establishing identity of the brand and positioning itself as easy, time-saving everyday use of the product under the product concept of 'wash & go'. Need to educate the market in the use of conditioners further. And new hair care technology ‘BC-18’ which can combine shampoo and conditioner within one product and it has the same effect as using shampoo and conditioner separately. TV spots Display activities in the supermarket Handing out free samples Praew

Long-term Marketing Objective Creating value-based market share of their brand : build strong awareness brand brand loyalty “bring your old shampoo and conditioner, then get the newest Pert plus Product for free” campaign. Attractive advertising and sales promotion to boost Praew

A ‘roll-out’ launch P&G should focus upon West Germany, Great Britain, France, Scandinavia and Benelux: Southern European countries have quite an underdeveloped conditioner market compared to the USA. Because of "a steady growth of the shampoo market and the conditioner market" and statistics show an increase in hair washing, Europe is the attractive market to undertake a ‘roll-out’ launch. Chien

A ‘roll-out’ launch (cont.) The decision criteria : The share of shampoo users who also use conditioners reaches almost US standard in Great Britain, with 42%. Germany has the second best user share, followed by Scandinavia and Benelux, where conditioner consumption is almost equal. In France, sales volumes for conditioners only make up 10% of those for shampoos, and France should follow in the second year to avoid competitors' me-too products to be introduced in those markets. Chien

A ‘roll-out’ launch (cont.) A consumer test in Europe proved that the original US bottle for Pert Plus was the most appealing compared to the alternative products varying in brand name, size and price. 28% would definitely buy it and 70% considered it to be very convincing and relevant. Thus introducing BC-18 into the European market would be rather uncomplicated, this can be seen in the expected sales exhibit, where sufficient production capacity is guaranteed. Chien

Media and Promotion Budget Affordable Method a method used often by a small business, which they think they can afford Competitive Parity a method which they try to keep their promotional spending comparable to the competitors’ spending level. This method is designed to keep a brand in the minds of consumers. Ralph

Media and Promotion Budget (cont.) Objective and Task Method a method whereby marketing managers determine: What they want to accomplish (objectives) with their communication, What activities (commercials, sales promotions, publicity, and etc.) are necessary to accomplish the objectives, How they conduct a research to figure out how much the activities, tasks, and cost in order to develop a budget. Ralph

Cost vs Revenue Implications In the first year, there are some losses to be expected, especially Vidal Sassoon. In West Germany, Vidal Sassoon 200 ml incurred loss by Deutschmarks 7.75 per 2.5 litres In Great Britain, Vidal Sassoon 200 ml incurred loss by Deutschmarks 0.25 per 2.5 litres In Scandinavia, Vidal Sassoon 200 ml incurred loss by Deutschmarks 1.75 per 2.5 litres The other product (e.g. Shamtu, Pantene and Head & Shoulders) was profitable in Europe Mega

Cost vs Revenue Implications (cont.) P&G surely need the modification for the loss incurred in the first year. In order to enter the local market entries, they should: Aware of any new technology developed for hair product -> keep R&D activity Create an interesting packaging with a premium price -> European like stylish design Applied consumer test before launch new product in Europe -> strong vs weak brand image

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