Background and Problem Definition

CASE BRIEF - PROCTER & GAMBLE, INC.

Background and problem definition: Scope is a brand of Procter and Gamble in the market of mouthwash. P&G is one of the most successful consumer goods companies in the world with presence in 140 countries and net earnings of $1.6 billion in 1990. Scope has a market share of around 33% and is lately threatened by a new Entrant Plax which has certain added advantages to it. Brand manager needs to develop a strategy that would ensure the continued profitability of Scope. A three year marketing plan needs to be prepared and there are few alternatives available.

Industry and market analysis: Scope, a green, mint-tasting mouthwash, is positioned as a great-tasting, mouth-refreshing brand that provided bad-breath protection. It was the first brand that offered both effective protection against bad breath and a better taste than other mouthwashes. Some other competitors to Scope were Listermint, Cepacol, Colgate Flouride Rinse and Plax. The major competitor to Scope was Plax, which called itself a "pre-brushing rinse" and it focused more on removal of Plaque and strengthening of gums, rather than breath freshness. In 1990, 78% of Canadian households used one or more mouthwash brands, and on an average the usage was 3 times per week for each adult member in the family. Moreover market of the users could be broadly segmented into three categories- heavy users, medium users and light users (refer exhibit 1).

Evaluation:

Alternative 1: Maintain status quo

Scope is a market leader having 32.3% of total market share in a market that was growing and moreover 80% of the people used mouthwash for basic oral hygiene and get rid of bad breath whose need was catered by Scope. Thus they can just stick around with their formula to capture the market share. (Refer exhibit 2)

Alternative 2: Extend the product line under Scope name

It would offer direct competition to other brands and will also help in long term profit maximization but product testing would cost around $20,000 and market research has shows that new product could cannibalize 2 to 9 percent of Scope's market share. Further, it would take two years to get 6.5% of total mouthwash and "rinse" market on an ongoing basis. This alternative would give the status of "drug" which