Proctor And Gamble Scope
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Proctor and Gamble, Inc. Scope
Case Synopsis
Gwen Hearst, Scope Mouthwash Brand Manager for Procter & Gamble, Inc is preparing a three year strategic plan for Scope in the Canadian market. Her responsibilities focus on three central areas: maximize the market share, volume and profitability of the brand. She needs to develop a strategy to compete with a new market entry, Plax. Plax has targeted fighting plaque as a new benefit for mouthwash. In two years, Plax has gained 10% of the market and during a time when the market growth rate has been declining. The Scope brand has maintained a constant market share level with slight decline and still retains largest percentage of the market.
The strategic options include maintaining the status quo, introducing a new product already developed as either a line extension or flanker product, or develop new marketing plan for existing product. She has formed a team across company functions to address these issues and formulate a strategic plan.
Decisions to be Made
1) Should Scope maintain the status quo or seek new opportunities?
2) Should Scope reposition its current product or develop a new product?
3) Should Scope launch a flanker brand or introduce a line extension?
These decisions must be made in this order. Scope must first decide if it actually needs or wants to move forward with seeking new opportunities. If Scope wants to maintain the status quo, then no effort needs to be wasted in researching possible opportunities. If Scope decides to move forward it first must decide whether to reposition its current product or develop a new product, and if it develops a new product the question becomes whether to introduce a line extension or launch a flanker product.
Situational Analysis
Strengths, Weaknesses, and Key Competencies
Scope’s Strengths
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Proctor and Gamble is one of the most successful consumer goods companies in the world
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Proctor and Gamble known to provide products that fulfill consumer needs at superior quality and value
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Leader in Canadian market with 33 percent market share and market expanding
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Sales have been increasing for P & G in recent years. Although, the increase in net earnings by $1.3 billion, from $0.3 billion to $1.6 billion, between 1987 and 1990 seems somewhat unbelievable
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Known for great taste and giving fresh breath
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Has been the market leader in Canada since 1976
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Great strength in the food stores
Scope’s Weaknesses
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Market share decreased in 1990 from 33% to 32.3%
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Scope is known for taste and fresh breath, but the market is moving towards health-related mouthwashes
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Does not have the endorsement of any dental association
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Weaker performance than the competition in drug stores, the largest segment of the market
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Positioned in only one segment of the market (fresh breath and good taste)
Scope’s Key Competencies
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Great taste and makes breath fresh
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High quality and value of product
Opportunities, Threats, and Key Success Factors
Possible Opportunities are:
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New market segment opening in “prebrushing” mouthwash
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Consumers are becoming more interested with health related mouthwashes
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Opportunity to gain endorsement from Canadian Dental Association
Possible Threats are:
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Consumers are becoming more interested with health related mouthwashes
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Plax, a plaque fighting mouthwash, is quickly gaining market share
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Regulations of different health regulatory agencies
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Cannibalization of current product if a new product is released
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New product could result in lost shelf space
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Increasing competition
Key Success Factors are:
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Maintain current hold in market, the new opportunities should not harm Scope’s current position or market strength
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Do not confuse or scare away current customers
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Maintain the perception of high quality that Proctor and Gamble customers expect
Decision 1: Should Scope maintain the status quo or seek new opportunities?
Alternatives Analysis and Recommendations
a) maintain status quo:
Pros:
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Already market leader at 32.3% and total market growing
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Product offers superior quality and value as low cost to competitors
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Meets needs of consumers as indicated by market share and research (40% buy to get rid of bad breath, 20% for more confidence and 25% avoid offensive breath)
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Target market of fresh breath; cosmetic sector and Plax competition is focused on health benefits
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Avoids heavy regulatory requirements of health targeted product or even advertising
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Avoids cannibalization