BRAND MANAGEMENT ASSIGNEMENT :

“PROCTER AND GAMBLE COMPANY (A)”

SUBMITTED TO : -

Prof . Ashish Sadh

GROUP NUMBER 8

Submitted by :-

Jaynesh Choudhary (2018pgpm020)

Prithvi Rentapalli (2018pgpm038)
Sumit Datye( 2018pgpm047)
Suraj Gavhane(2018pgpm048)
Varun D R (2018pgpm052)
 1. Explain Characteristics of the organization (processes, structure and systems)

The organization was broadly divided into 8 divisions based on the type of the product. Each
division had its own brand management, sales, finance, manufacturing and product development
line management team.

The structural organization chart of proctor an gamble is as follows: -

Divisional manager

Advertising manager

Associate advertising
manager

Brand Manager

Assistant Brand
Manager

Assistant Brand
Manager
Processes which Proctor and gamble used:-

The most important process was planning which was carried out by the brand group. Their
responsibilities were as follows: -

● Development of marketing plan

● Volume targets
● Strategies and tactics for the coming year
● Marketing support levels
The planning process progressed in the following order as follows: -

1. Business review: - Its purpose was to identify which elements of the marketing mix are
affecting the brand’s business and develop clear guidelines and actions to improve the
results
2. Competitive forecast: - Its purpose was to forecast competitive volume and marketing
expenditures
3. Preliminary forecast: - It enabled brand managers to calculate the advertising and
promotion expenditures required for the coming year.
4. Promotion review: - It helped to gain agreement for the proposed promotion plan from
advertising and sales team
5. Media plan: -This includes broad scale media efforts and testing activities. This media
plan was also included in the budget proposal.
6. Budget proposal: - Brand group prepared a budget proposal which included estimated
volume share and marketing plans and detailed media and promotion plans.
7. Budgeting meeting: - Brand group and advertising agency present the proposed budget
plan to senior management of P&G and gain agreement from them.

Systems which Proctor and gamble followed are stated below: -

1. Top line department in any division was advertising department. They followed a system
in which this department worked closely with 4 line departments which helped them to
implementation of their marketing plans
2. Sales team system comprised of sales representatives and sales managers. These people
were well trained and bringing good productivity, they will also bring business building
ideas
3. In this system, brand groups worked closely with the sales force to develop optimal sales
promotion plan along with appropriate merchandising aids.
4. Brand groups worked closely with PDD (product development department ) to ensure the
continued development of brands equity via Research and development
5. The brand group also worked closely with the Manufacturing department. The brand group
discussed labelling and packaging changes to determine the most efficient production
methods. Manufacturing department provided ongoing manufacturing costs and provided
with cost-saving ideas to brand group.
6. Based on volume and marketing expenditure forecasts provided by brand groups, the
finance department developed and fed back the brand profit and cost analysis as well as
profit and rate of return forecasts on new product and promotion.
2.Buying behavior analysis leading to STP:

1. Initial research indicated that powdered laundry detergent to wash dishes were harsh on
hands, as a result, P&G introduced light duty liquid in 1949.
2. Based on benefit can be divided into 3 segments:
3. Performance segment (35% of category volume) provided primarily a cleaning benefit.
4. Mildness segment (37% of category volume) provided the benefit of being gentle to hand.
5. Price segment (28% of category volume) benefit of low price.
6. Based on attribute importance ratings from market research grease cutting and pot cleaning
were of high importance which showed that the performance segment was expected to
grow.
7. The price segment is expected to be stable due to the increase in price sensitivity due to the
economic slowdown.
8. Based on the market research the most important attributes are time is taken, grease
removal, pots, pans and skillets cleaning and milder to hands LDL.

3. Decisions related to a new brand introduction (criteria / guiding principles)

The brand introduction should be a very critical decision and should be taken in a well-informed
manner. Basics criteria which should be included in the introduction of a brand are as follows:
1. Timing: - it is very important that the brand is launched on a suitable date and time. It’s
also suggested looking at more micro and macroeconomic factors while deciding when to
launch the brand.
2. Customer perceived value should be precisely calculated: - It is very important to
calculate what is customer perceived benefits and customer perceived costs i.e. what image
does a brand form in the minds of the customer and what is the cost perceived by him/she
which includes search cost, perceived monetary cost, acquisition cost, usage and
maintenance cost, salvage cost.
3. Packaging: - packaging should be welcoming to the human eye and should also be
customer friendly
4. Product name: - Many times, it's the name that connects with people of that region where
we are going to launch the brand. The name should carefully be decided before launching
a new brand
5. Promotion channels: - define your marketing channels carefully. P&G should identify
possible channels through which the product can be promoted and marketed.
6. Identify the competition: - deep industry research and analysis is required in order to
identify the competitors. Also, P&G should establish a benchmarking system which will
help them to rate their product on several factors against their competitors
 7. Identify the segments in which brand should be launched: - P & G should do STP analysis
in order to know where their brand fits the best. The decision of whether to launch the same
product in multiple variants in warm or cold channels should be identified
8. Substantial testing of the brand: - before launching any brand, P&G should carry out
tests on a select group of people in selected geographies. Test suites should comprise of
factors like:
a. Yearly income
b. Population density
c. Geographic area
d. Age
e. Number of people in the family
9. Feedback collection and analysis: - It is important for a company to capture the feeling
of an individual regarding the value and benefits derived from the product. Also, it's
important to seek an individual’s suggestion regarding the improvements which can be
brought into the product
10. Possibility of cannibalization: - it's very important for P & G to identify whether the brand
which they are about to launch will would acquire the market from its competitors or would
it cannibalize their own brand. Also, the extent to which cannibalization might happen
should be studied

4. Options in front of Mr. Wright?

The main question in front of Mr. Chris Wright was, how PS&D division could increase the
volume of light-duty liquid detergents (LDL) as this segment showed the signs of remarkable
growth in the coming years. The options in front of him are as follows
1. New Brand Introduction: - In order increase, the overall LDL volume, P& G though of
introducing a well-positioned new brand would capture 60% of its share from the
competitors and would cannibalize 40% of its own brand. There 3 alternatives which P&G
could go with as follows: -
a. High performance: - P&G’s research and development team developed a new
formula with highly effective detergent with superior cleansing capabilities. This
was totally a new development by PDD. market research estimated that 80% of US
house scour and scrub their dishes one time a week, Wright thought that it would
be a great opportunity for them to get into
b. Mildness segment: - P&G had expertise in mildness segment and hence wright
thought that they could capitalize on the same. he was of the opinion that mildness
segment can also be differentiated similar to their performance segment.
c. Price segment: - P&G did not have any LDL in this segment characterized by little
brand loyalty and high price sensitivity. Hence there was an opportunity according
to him, where P&G could leverage its marketing expertise in order to enter into the
 price segment and achieve parity performance benefits to existing brand
competition and achieve reasonable profits. There was a possibility that this could
lower the available funds for marketing expenditure and could also reduce profits.
2. Product improvement on existing brand: - wright wondered whether they should
introduce their new H-80 formula as a new product or introduce it as an improvement in
an existing product. Capital costs in both cases would be the same i.e. $20 million but
incremental marketing expenditures in the existing brand would only be $10 million as
compared to $60 million of the new brand. Also, they wanted to restage the JOY brand
with new “no-spot” formula. This formula would cut COGS by $3 million per year. And
relaunching the product would cost them $10 million in marketing expenses, but would
require no capital costs.
3. Increase marketing expenditure on existing brands: - Wright wondered, whether
overall profit might be higher if he invested in marketing of the existing brand and cut the
capital and marketing expenditure involved in other 2 options. He wondered whether this
option was suitable or not. If funds were allocated to improve the marketing of the existing
brand, they would use half of them to increase GRP levels from 360 to 365. Remaining
funds would be used for other purposes.

5. Evaluation of each of the options

Capital costs for the introduction of a new brand were the same in all 3 cases i.e. $20 million and
marketing expenditure was $60 million for the first year
1. Introduction of a new brand in the performance segment:-
a. Total market sale on LDL industry in 1981 =$850 million
b. The overall share of performance segment = 35% of $850 million = $297.5 million
c. Share of P&G brands
i. JOY= 12.1% of $297.5 million =$36 million
ii. DAWN =14.1% of $297.5 million = $42 million
d. Price per case in 1981 = $850 million/59 million =$14.4
e. Projected market sale in 1982= 59.4 million* $14.4= $855.7 million (from exhibit
6)
f. Similarly, market share in 1983 = 59.8 million * $15= $879 million ( price per case
increased from 14.4 to 15 in the middle of the second year)
g. For 1986 the market sale would be = $17 *61.1 million =$1038 million ( price has
been revised to $17 per case in 1986)
h. If we introduce a new brand, it will cannibalize the share of JOY and DAWN. we
already have 2 brands in the performance segment.
i. JOY’s market share is expected to increase from 12.1% to 12.7% in the next 5
j. And DAWN is expected to rise from 14.1 to 16.5%
2. Introduction of a new brand in mildness segment: -
 a. Share of mildness segment = 37% of $850 million = $314.5 million
b. Ivory’s market share =15.5% of 314.5 million =$48.75 million
c. According to exhibit 19 research indicated that when consumers were asked what
improvement they wanted the most in their current LDL, most stated milder to
hands than any other product benefit.
d. According to exhibit 6, the share of mildness segment in LDL industry is declining
steadily from 37% to 35% in the period of 1982 to 1986
3. Introduction of a new brand in Price segment: -
a. This was a new market for P&G with no presence at all
b. Price segment market share = 28% of $850 million = $238 million
c. There are no major brands in this segment
d. P&G could use its marketing expertise that could enable the company to capture
significant potion in this segment
e. P&G could become the first big brand to enter this segment
4. Product improvement on an existing brand:-
a. Capital expenditure =$20 million
b. Marketing expenditure= $10 million
c. Ivory is associated with mildness , hence adding H-80 formula in this is not
recommended as it would change its proposition.
d. In the case of dawn, according to exhibit 18, people give more importance to grease
removal than removing baked/burned/dried-on-food. Hence introducing H-80 in
dawn is not recommended
e. According to exhibit 7 people give more importance to “no-spot” formula more
than H80 formula. Hence introducing “no-spot” in joy is recommended and not H-
80
f. It does not require any capital investment hence $20 million is saved and only
expenditure remains is $10 millions of marketing expenditure
g. Also, no-spot formula saves COGS by about $3 million per year
5. Increasing marketing expenditure on existing products: -
a. Increase in number of cases sold from 1982 to 1986 in volume terms = 61.1/59 -1=
3.5%
b. Hence even if marketing expenditure is increased, there's not much scope for
growth in terms of volume over the next 5 years.
 6. Choice of Option?
From question number 5 our recommendation is to go with introduction of a new brand in a price
segment where the market is untapped by any major brands and mostly has private label players
with low market share and little brand loyalty. Our investment would be
 $20 million for capital investment
 $60 million marketing expenditure after the brand is launched, which will take 3
years.
We will also go for product improvement on JOY which will cost us $10 million for marketing
expenditure for first year, since initial cost is less and it will also decrease our OCGS by $3million
per year. Implementing this product improvement will take 1 year. Initially , JOY was expected to
increase only by 1% over 5 years but now due to this improvement it will ensure more growth.