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Procter & Gamble Case Study

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Procter & Gamble Case Study
Rational for introducing a new brand in Pricing benefit segment

Business objectiveVolume growth in PS&D divisionRationale * Consumer behavior factors: * Depressed state of economy leading to price sensitivity. * 46% of heavy LDL users are under $15000 yearly income (exhibit 8). These users being heavy users require more ounces of fluid which is more than a 32oz bottle per month consumption. (15 sink full washes per week; 0.6oz per sink; 2.04$ avg. retail price) * 63% of heavy LDL users are unemployed (exhibit 8) again indicating price sensitivity * 53% of the consumers who did not report ADW usage in past 7 days are in the “No name/Plain label” (exhibit 8) brands which is highest in the price benefit segment. This indicates this segment is still not penetrated by ADW. * As per the company research, top attributes of LDL are orienting towards performance and price (exhibit 2) * Performance – Cuts grease, makes long lasting suds, does a good job on pots and pans, don’t have to use much * Price – Is economical to use * Market and competitors assessment * 3 major players taking ~72% of the market share and significantly into performance and mildness segment. Market is consolidated in performance and mildness segments. Only one new premium brand is introduced every 2.5 years indicating that the market is saturated in these segments. Both lever and Palmolive only introduced only 1 new brand in past 10 years. * Pricing benefit market segment is fragmented with companies which do not have loyal customers indicating market share growth opportunities in this segment. * Most price brand segments were not of a good value opening up an opportunity for P&G to introduce a brand in this segment with greater value-add. * These “No name/plain label” brands have very

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