Procter Gamble in Europe A Roll-out Launch

1. Procter & Gamble in EuropeA Roll-out Launch Group 1 Presentation

3. Hello Europe, meet Pert Plus This case is about Proctor & Gamble’s plan to introduce their new shampoo + conditioner into the European market This shampoo blend found quick success in America after being launched in 1986 Rapid success of the product led P&G to launch the product into the European market

4. Hello Europe, meet Pert Plus Launching the product in Europe would require more than just placing the product on store shelves Close co-ordination was required to launch new brands to ensure they reached the market-place first Competition were close on their heels A European perspective would be required to meet the diverse needs of cosumers

5. Hello Europe, meet Pert Plus P&G would use the concept of “Euro-balancing” Rather than Europe wide standardization, this concept would allow for some localization when necessary. As market conditions vary widely within Europe, this was a major concern for the Euro-Brand Team

6. American market vs. Europe American Hair care Market Europe Hair care Market America 90% of people use shampoo Highly fragmented market with many suppliers and brands Large price differences between premium and value brands Europe Steady growth of market with increased hair washing 44% of shampoo users also used conditioner South European countries showed the most promise Great Britian West Germany France Scandinavia Benelux

7. European Market The European market was even more crowded than the US market when considering the number of suppliers and brands available. Price differentials between the premium and value based market segments were extreme, placing extra importance on the value-based market segment.

8. European Market Testing Initial testing in the European market showed a positive response to the time saving attribute of Pert Plus. The high quality brand concept would allow the product to command a premium price. An opportunity existed to use an established brand, so research was done to compare positioning statements of Pert vs. existing brands like Pantene and Shamtu Consumer testing showed no significant difference between the brands, allowing for the Pert brand to be introduced, thereby reducing the cost.

9. Discussion Questions The following five questions are selected from the case study. As instructed, these questions will help with the roll out strategy recommendations.

10. Question 1 What are the main issue to be considered in balancing a Pan-European introduction strategy with local market needs?

11.  Should BC-18 technology be introduced with a pan-European name, or with local brand names, or even with a mixture of both approaches? Should a new brand be created, or should an existing brand be re-launched in a new quality? What are possible criteria for that decision? Our group recommends using Pert Plus brand as the product name of BC-18 in pan-European market. With consideration : Product Identification Customer can easily indentify the brand if they happen to know Pert Plus brand before.

12. Product Acceptance New product under a known brand name are accepted and adopted more easily. Shopping Efficiency Speeds up the buying process and make repeat purchases easier by reducing search time and effort. ( Ferrell and Hartline ; 2008 )

13. What is the longer-term marketing objective? Reduced Costs Heavy promotion by the manufacture reduces the marketing costs of the merchant that carries the brand. Build-In Loyalty Manufacturer brands come with their own cadre of loyal cutomers. Less Risk With an established brand it makes easier to penetrate a new market, since it proven in previous market and has became one of the leading shampoo product in US market. ( Ferrell and Hartline ; 2008 )

14. What are the alternatives possibilities in relation to issues of positioning, target groups, source of business, pricing strategy and packaging? Positioning : Pert Plus will provide great-looking hair in a convenient way. Target Group : All people. Source of Business : New users and loyal consumers. Pricing : slightly higher than premium price product in Europe ( higher than US 5.99 / 250 ml ). Packaging : provides 400 ml and 250 ml to give option to the customer based on their needs.

15. Question 2 How would you specify the first-year marketing objective? How does this relate to the longer-term marketing objective?

16. First year objective The first-year marketing objective is to establish the brand identity in European countries. Additionaly, European customers should also be introduced to conditioner as a benefit of the Pert Plus product.

17. Long-term marketing objective Open the new markets as the shampoo that offered attractive hair in a convenient way. It’s Pert Plus formula that combined a mild shampoo with a fully effective conditioner and decide to introduce BC-18 to the people in the European market. Continue to build on the time saving benefit to the product and participate in field marketing to bring the product directly to the consumer.

18. Question 3 Would you undertake a ‘roll-out’ launch, and if so in what country order? What are the decision criteria for this order? In answering this question you should take into account the expected sales volumes as well as the given capacity restrictions.

19. Our group roll-out plan will be launched in West Germany, Great Britain and France.

20. The decision criteria : Three Big market size : Shampoo and conditioner awareness countries in Europe The size of population In Germany: 82,329,758 In Great Britain: 61,612,300. In France: 65,073,482 The European market was even more crowded than U.S. market , undoubtedly the function of different nationalities.

21. Speaking English countries The advertising can be well promoted through region to region, city to city. Save lead times: With the same language, we can use the exiting packages and designs.

22. Question 4 Taking the country with the highest priority, which principles would you use in order to budget media spending? Set out a rough media plan for the first twelve months, with proposals for promotion activities in the first year. How should media and promotion activities be budgeted for the following years?

23. Taking the country with the highest priority, which principles would you use in order to budget media spending?

24. Set out a rough media plan for the first twelve months, with proposals for promotion activities in the first year Media Plan Advertising is the best tool to give information about your product but the media plans for the different years show a higher media spending on sampling and TV advertising in the year of introduction to convince customers of the superiority of the new product and to explain its new technology. Over the following two years, sampling will go down to 10% but should be raised again for the new marketing cycle when decline begins. TV advertising should be used in the same way, at the beginning to introduce the product and to gain a significant market share in the first year. It should also be used to maintain the growth of market share in the second year but can be reduced in the third year when the product reaches its mature stage

25. Media Plan for 1st year Strongly using TVC and Print Ad focus on the benefit of “2 in 1 formula” and the convenience to use the shampoo Give sampling and make activities at public places such as subway station, central park and a big hypermarket Using the testimonial of people who use “2 in 1 formula” shampoo on Special Ad (in woman magazine)

26. Media Plan for Following Years Introduce the product to other European countries such as France ,Scandinavian and Benelux with using the same activities as West Germany and Great Britain (TVC, Print Ad, Sampling)

27. How should media and promotion activities be budgeted for the following years? As can be seen in the expected sales exhibit and in the media plans, P&G has losses over the first two years. Great Britain and Germany are already profitable after the first year but with the introduction in the other countries. In the second year, the gain in Great Britain and Germany will not compensate the losses of the first year and the losses due to the introduction in those countries.

28. How should media and promotion activities be budgeted for the following years? In the third year, all countries will make profits and the company will break even with a total profit of 16.248.900 DM. In France P&G should try to increase the use of conditioner in general to generate a bigger market and to gain a higher market share. France has the potential and the profits could be higher then shown in the 3th year media plan. The fourth year will also be profitable but it remains to be seen if the extension of the life cycle in Great Britain and Germany will be successful or not.

29. Question 5 Examine the cost and revenue implications of the Europe-wide introduction program. Is there any loss to be expected in the first years? Does this require a modification of the order of local market entries?

30. Because the European market was even more crowded than the US market. In Exhibit 12, we can easily recognize , Vidal Sassoon in West Germany, Great Britain and Scandinavia budget for advertising and sale promotion are higher than other (14.00 in England compare with 6.00 in France). However, it can not make profit (-0,25 in Great Britain compare with 1.00 in France).

31. Overview economic/ profit

32. Overview economic/ profit

33. It was assumed that working at higher capacity would not generate lower costs because of the special production technology. To determine total costs it was necessary to consider also advertising and sales support budgets, which depended on the individual countries and their chosen introduction program.

34. Strategy Recommendations

35. Strategy Recommendations P&G should build upon their brand management competence to improve recognition and awareness of the Pert Plus brand. As seen in Asia, this brand may not always be the appropriate name or image necessary for success. Pert Plus is marketed as Rejoice shampoo plus conditioner in most Asian countries – where it also enjoys success and market share.