Case Study

2954 words - 12 pages

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 ...view middle of the document...

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

• Known for great taste and giving fresh breath

• Has been the market leader in Canada since 1976

• Great strength in the food stores

Scope’s Weaknesses

• Market share decreased in 1990 from 33% to 32.3%

• Scope is known for taste and fresh breath, but the market is moving towards health-related mouthwashes

• Does not have the endorsement of any dental association

• Weaker performance than the competition in drug stores, the largest segment of the market

• Positioned in only one segment of the market (fresh breath and good taste)

Scope’s Key Competencies

• Great taste and makes breath fresh

• High quality and value of product

Opportunities, Threats, and Key Success Factors

Possible Opportunities are:

• New market segment opening in “prebrushing” mouthwash

• Consumers are becoming more interested with health related mouthwashes

• Opportunity to gain endorsement from Canadian Dental Association

Possible Threats are:

• Consumers are becoming more interested with health related mouthwashes

• Plax, a plaque fighting mouthwash, is quickly gaining market share

• Regulations of different health regulatory agencies

• Cannibalization of current product if a new product is released

• New product could result in lost shelf space

• Increasing competition

Key Success Factors are:

• Maintain current hold in market, the new opportunities should not harm Scope’s current position or market strength

• Do not confuse or scare away current customers

• 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:

• Already market leader at 32.3% and total market growing

• Product offers superior quality and value as low cost to competitors

• 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)

• Target market of fresh breath; cosmetic sector and Plax competition is focused on health benefits

• Avoids heavy regulatory requirements of health targeted product or even advertising

• Avoids cannibalization of Scope brand. Analysis indicates at lowest cannibalization rate would not be able to recover upfront costs to introduce new product line, even though total contribution dollars would be higher

• Previous market examples of Listermint and Colgate Fluoride Rinse indicate new product would cannibalize current product, not grow market share after initial gains and ultimately may not survive

• Taste favored by...

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