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
Proctor and Gamble is one of the most successful consumer goods companies in the world
Proctor and Gamble known to provide products that fulfill consumer needs at superior quality and value
Leader in Canadian market with 33 percent market share and market expanding
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
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