P&G Korea Case Study
The main issue of the P&G Korea case is centered around the question of market share. P&G and Unilever are the two major market shareholders in the Korean detergent industry holding 80-85% of the total market share. The remaining 15-20% of the market is held by low-priced local Korean brands. There are no new markets either company can tap for further market share since most Korean households already use laundry detergent, making the market saturated. Other than peripheral chemical changes claimed to be “improvements”, there are no major innovations to be explored for product development or diversification. Per Ansoff’s strategic opportunities matrix, P&G and Unilever are both focused on Market Penetration,
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Despite the inconsistent changes in spending from year to year, P&G’s market share consistently increased between 1% and 2% every twelve months (see Figure 1). The question is, with Unilever’s actions in regards to marketing expenditures, is the 15% increase going to be enough to restart P&G’s upward growth of market share?
Figure 3:
Another option to consider is to increase the marketing budget beyond 15% as a direct response to Unilever’s marketing expenditure increase in 2006. This increase in marketing expenditure could also lead P&G to reach the recommended 120 GRP’s in television advertising. P&G could also use this extra advertising budget to strongly increase trade sales promotions in an attempt to balance out Unilever’s greatly increased trade sales promotions from the prior year.
Both of these options are a demonstration of classic Game Theory behavior, both companies increasing expenses in an attempt to regain market share. Figure 4 shows how this action/reaction in the battle for market share works. When Unilever markedly increased their marketing expenditures in 2006, the result was a loss of market share and profit for P&G. Therefore, without knowing if Unilever is going to continue with a strong budget for marketing in 2007, P&G’s natural response is to consider also budgeting a strong increase in expenditures to hold onto current market share and profits and possibly even increasing both. Of course, the additional
The biggest challenge that they face as a company is they do not have the room the increase expenditure by such a vast amount. Currently there is $3,675,000 in promotional dollars allocated as follows; sales and administration expense (995,000), cooperative advertising programs with retailers (1,650,000), consumer advertising (562,000) and trade promotion (467,000). adding the $225,000 increase in consumer advertising will not allow the 5% of expected sales for total promo expenditures. John Bott, the vice president of sales disagreed with the budget allocation and noted that sales expenses and administration cost were projected to be $65,000 in 2008. This led him to believe that an additional sales representative would be needed to service company accounts because 50 were being added. Therefore he estimated this addition would cost at least $70,000 including salary and expenses in 2008. Bott also stated that “That's about $135,000 in additional sales expense that have to be added to our promotional budget for 2008”
The second option is to concentrate marketing efforts on opportunities in the PCOs market. This option is much more realistic. With the firm’s established position in the PCOs market, this method is also the safest. The estimated additional cost for marketing efforts is $500,000. Since we are not provided with a statistic on Zoecon’s roach insecticides, the numbers from Zoecon’s flea insecticides sectors will be considered in our calculation (see Excel attachment). With the firm’s current return-on-marketing-expenses rate – $7.26 per dollar spent on marketing, Zoecon can increase its current market share by 1%, from 18% to 19%.
Probably increase marketing, promotional and expenses related to discounts in the subsequent year due to “Premier Vision” plan.
The Pillsbury Cookie Challenge is a case study written by Natalie Mauro under the supervision of Professor Allison Johnson. The case study creates an open discussion about what the marketing manager of the refrigerated baked goods category for Canada General Mills should do to revive his products. Ivan Guillen, the marketing manager, was faced with tough challenges. He was initially “…faced with the challenge of developing a strategy that would lead to improved business performance on his category” (Johnson and Mauro, p.1, 2011). To clarify, Guillen’s category is refrigerated baked goods (RBG), which means, this category is his marketing responsibility. The issue here is that “RBG was GMCC’s fourth largest category, and its performance over the past two years had been less than stellar” (Johnson and Mauro, p.1, 2011). It is important to note that GMCC stands for General Mills Canada Corporation. Pillsbury has enjoyed majority market share in the RBG category in Canada, however, recently, the market was experiencing only moderate growth. Guillen was disappointed that their goal of 5%-7% market growth was not being achieved mainly in the refrigerated cookie dough segment. To be exact, their volume growth for two years was flat and they were having difficulty reaching new households. There was a shift among consumer’s purchases, which Guillen was challenged to figure out why.
However we feel that this strategy also has several weaknesses. Compared to the first option presented by the VP of Advertising, we would still need to advertise that our product is coming down in price. If we don’t advertise, the consumer is still going to be drawn to our competitors because they will remain unaware of the new parity in pricing. Also, if we
As marketing manager of the RBG business, Ivan Guillen must propose a solution to repair Pillsbury refrigerated baked goods (RGB)’s business performance. Since the refrigerated-cookie product line consisted of 62% of RBG’s unit sales and over 75% of the company’s profits, Guillen found it appropriate to alter this segment in the market. Proposing this idea to GMCC would require Guillen to consider all the challenges he faces. Guillen will have to discover a strategy to increase household penetration since it has fallen to 24% in the past few years. The lack in market penetration has
Proctor and Gamble-Scope is faced with a very important decision, they need to prepare a marketing plan for P&G’s mouthwash business for the next three years. They want to know how they are going to be able to
Support: As a % of revenue, the SG&A expense has decreased from 21% to 11% from 1996 to 1997, that’s aggressive considering the marketing activities the company carried out. This is associated with the year in which the company introduced a new product. Such years involve large expenses.
In order to gain market shares through the low-income segment of the Brazilian market, Unilever should launch a new Detergent Powder brand at an affordable price, which could replace in the long-run Campeiro, its cheapest brand. However this strategy is not without any risks, since it can lead to the cannibalization of Minerva.
If Clorox does not restructure its portfolio mix and increase revenue contribution from the growing markets, it faces the risk of losing sales and its position in those markets. Using its current resources, Clorox needs to determine how to allocate those resources among its current brand portfolio. Equally important is determining whether to invest in new product lines or brands. Clorox also has to decide whether to expand into international markets or focus strictly on expanding its market share across its brands in the primary U.S. market. Asian, South American, and European markets offer potential for growth but the cost of expanding into these markets and the limited availability of financial resources pose concerns with respect to international expansion. Focus on growth versus profitability is another important strategic decision that needs to be addressed. Clorox projects flat sales for 2011, which is not a positive indicator for investors’
If we analyze the numbers now we see that there are small changes, by the end of the first year, in Q4 we get $15.2m instead of $15.1, a subtle change but still a faster result. The market share is 6.46% in Q3 instead of 6.40%. This way we can get results faster. However, I would not recommend the advertising manager to do this as it gives a poorer end result. By the end of the third year we get a result of $57.1m in profit where we made $57.2m if we weight short term the same as long term. Also the final market share is 7.65% instead of 7.66%, a small change albeit, but still no reason to choose scenario 3 over scenario 2.
P&G need to work hard and do more research and development in order to produce higher quality, more innovative, and more unique in products in order to answer consumer’s need and compete with those major world brand competitors.
This report is based on the ‘L’Oreal: Expansion in China’ case study. L’Oreal is a successful French cosmetic company that involved into many different international markets. This report will discuss how L’Oreal gets into the Chinese cosmetic Market and the strategic to develop their brand in the Chinese market. L’Oreal acquires two famous Chinese cosmetic brands which are Yue-Sai and Mininurse. It is in order to entrance the market quickly and sales the most suitable products. The aim of this report is to define the challenge L’Oreal has been faced. Then it describes how L’Oreal managing their strategic in Chinese market. In addition, it gives an accommodation which could help L’Oreal overcoming these challenges.
After a period of declining sales for Allround, we increased the advertising budget to be consistent with our competitor’s budget. We decided to be very consistent with our strategy over the ten periods; however, in hindsight we should have implemented a more dynamic strategy that factored in the changing
By increasing successful and ideal operations and strengthening relationships with their customers, companies existing in this market diminish the significance of threat over newly accepted competitors. Toothpaste companies are still growing strongly, therefore additional firms are trying to enter the market to benefit from the increasing profits. However, most toothpaste companies have already made their name and their customers stay loyal to their brand, therefore it is hard to get into this market. With toothpaste being such a popular item and an essential in households,