Proctor and Gamble is serving customers in over 180 countries with their massive market capitalization. They have a purpose to live up to for their consumers in all of those 180 countries. They provide services and branded products that are of superior quality and great value which will improve the consumers’ lives in the world now and forever. As stated on their website, “Our purpose works to unify us in a common cause and growth strategy. It is powerful because it promotes a simple idea to improve the lives of the world’s consumers every day.
P$G grows by touching and improving more consumers’ lives in more parts of the world…more completely. ” The company has multiple SBU’s that are broken up into two categories which consist of household care and beauty & grooming. The household category houses products with names such as Bounce, Mr. Clean, Luvs, and Pepto-Bismol. And the beauty & grooming category houses products like Crest, Gillette, Old Spice, and Tampax. Each of these product brands are an SBU.
They have over eight different kinds of laundry detergent that are in the U. S. and six brands of the shampoo and hand soap each. P&G also has toothpaste, paper towels, and tissue that fall in that four brand category with the dishwashing detergents. And then there are the deodorants, floor cleaners and skin care potions which each have three brands. I’ve chosen to analyze the Dawn which is a dish detergent. Dawn is in competition with some of the other household care products as well which are Joy, Ivory, and Cascade.
They are all in the dish detergent category but some consumers prefer one over the other. The target market for this product is anyone in the household that does the dishes, whether it be the mom, dad or teenager that does the dish washing chores. The product is position in the market to be better than some of the dish detergents that are developed by other companies and even the store brand detergent. P&G positions this so that segments that include families are aware of this detergent and most likely they will become loyal customers.
A person living alone will most likely not care what type of detergent they purchase at any given time but a single family household will usually stick to buying patterns. The price of P&G’s detergent is positioned to be somewhat similar to that of its’ competition so that the person buying it will chose the name brand product over a store brand or one that is not advertised as much to the public. Market Size The market size is tremendous because there are a lot of people that still rely on hand to do the dishes versus using a dish washer.
Each market may have their own taste as to which of the detergents they prefer over the other. I think that Dawn, Joy, Ivory, and Cascade all work to get the job done but the target market for each will be somewhat similar while the individual preferences of the consumers will vary. Market Growth Rate As household care will remain a big part of society, the household products will continue to sell so P&G should be sure to keep up-to-date products that work for the consumers on the shelves.
The beauty & grooming unit will also stay in business because there are so many products that are best sellers from this unit that people are faithfully purchasing for their households on a daily basis. As long as P&G continues to provide great quality and price efficient products, they will profit because they provide products that work and that people need. They don’t want the product life cycle to run its course when it comes to specific products. Market Profitability The buyer power for their products seems to be steady and so does the supplier power.
With P&G being present in 180 countries there seems to be no real barrier to entry that can’t be overcome. They have some competition from other companies that offer dishwashing detergents which can be seen as a threat of substitute products. There is definitely a presence of rivalry from other competitors including the store name brand detergents that are shelved next to P&G’s product. Industry Cost Structure The cost structure is different in each market and country. It is based off of the economy in a certain market so that it’s affordable and economical to the consumers there.
Cost structure must be carefully studied so that the product doesn’t fail and remain on the shelf while others priced more reasonably sell. Distribution Channels P&G has several distribution channels that help them to get their product out to the consumers. There are stores like Wal-Mart, Target, Dollar General, and a number of grocery stores that sell the products. You can even purchase the product online from a number of retailers. Market Trends P&G must keep up with any changes that occur in their target market.
This can pose either threats or opportunities depending on the change that occurs. They need to be cautious of price sensitivity and whether there is a new demand for variety. Also there can be changes that are regional that they need to keep an eye out for. Key Success Factors With their success, P&G seems to have the essential unique resources needed to provide quality products to their consumers. They have consistently met the economies of scale in the industry and have lots of access to the various distribution channels that they need. They need to be aware of any changes that happen over time during the life cycle of the product.
Enterprise Rent-A-Car supported development of this case. Auto Rental News also provided information. This case is adapted from a longer case with the same title authored by Lew Brown, Gary Armstrong, and Philip Kotler, available from Enterprise. http://gmx. xmu. edu. cn/ews/business/pmarketing/chapter07. htm P&G company website. http://www. pg. com/en_US/index. shtml