CASE STUDY

Procter & Gamble

Going Global in Cosmetics

Q1. Critically review the current marketing situation facing P&G.

Company, which wants to grow, develops ambitious aims and a plan to achieve it. A feasible plan is based on an analyse of the strengths and weaknesses of the company (the internal analyse) and opportunities and threats (the external analyse). Together it is called the situation analyse.

Marketing Audit

Internal analyse

The financial opportunities of P&G are very good according to the annual report. It has bought important cosmetic lines, like Max Factor, Cover Girl and Clarion to gain more market. One can talk about a blue-ship company. The used product technology is of high quality. The capacity of the representatives and the reputation of the company are very positive by its customers.

However, the quality of the marketing department and the composition of the assortment are weak. Those internal factors of a situation analyse are controllable variables for the business.

External analyse

In the external environment, we are especially looking for opportunities, which have not been, took yet by other businesses. Those can proceed from changes of Social, Legal, Economical, Political or technological factors. P&G have already a good production technology. More important, is the social environment. Because it changes very fast and rapidly under young women. The company must be aware of using the four Pís in a right way. For example, if P&G want to sell its cosmetics in a Moslem country, the products should not consist alcohol. Another social factor is the age of the target group. It must be aware of composition of the population. In Japan for example, there is no problem such as a growing grey. That is a good choice of a country to operate in. This because P&G target group is an especially young woman now.

Swot-analyse

Internal analyse External analyse

Strengths Opportunities

The brand name Expansion of the assortment

Distinguished capacity Set foot on new markets

Good name by its buyers Contacts with competitors

Possibilities for scale benefits Fast growing market

Abilities for product innovation Vertical integration

Weaknesses Threats

Lack of experience/expertise in the Growing competitive press

Cosmetic industry Fast changing wishes and

Complex strategic direction needs of buyers

Limited assortment Possible entrance of new

Insufficient marketing knowledge competitors

Deficiency on particular skills Threat of demographically

Changes

Increasing sales of substitutes

When we take off the strengths against the opportunities in the environment and against the weaknesses of the competitors, we can see the competitive advantages of P&G.

Confrontation matrix

Strengths Weaknesses

Opportunities Exploit Improving (e.g. mar-

Growing keting department)

Bend into strengths

Threats Defence Avoid or retreat

Compete with strongest Searching for co-operation

Recommendations

To compete successfully, P&G has to improve its marketing skills and expand its assortment to provide in the different and fast changing needs of the consumers. They have the possibilities to achieve this.

Q2. Propose an international marketing strategy for P&G.

It is very important to use correctly the four P′s. if one companies sales are decreasing, it has to look and consider adapting one or all of the four P′s.

Marketing Mix

Product

Cosmetics are convenience products. To make it available of those products, at many places is very important for the marketer. To expand its assortment, the company could use the strategy of ĎTrading upí; add products of high quality to the existing assortment. The aim of this is to improve the image of the total assortment. Customers find the brand name, reputation of the manufacturer, the guarantee definitions and the offered service very important. What P&G should do in order to achieve a much better brand name is the following:
 Keep the brand name short, easy and easy to spell
 Easy to recognise and remember
 One way pronunciation of the brand name
 International useful

A product strategy is the adaptation of the product. P&G could take off the articles out of the market, which are not providing in the needs of the consumer anymore. Like, the product Betrix, the sales decreased enormously. It can change the packaging of other cosmetics. Like they did before with the packaging of Max Factor. More styling and elegant. The packaging has also other functions such as:
 Recognisable and attractive
 Emotional appeal, the packaging can achieve a certain position for the product

It can develop new and better guarantee definitions and the giving service. One of the most important services is to keep an expanded assortment.

1. In the introduction phase (1993-1995)
 The product is just introduced
 The gross margin and growth is limited
 Adoption and diffusion