1. Between 1987 and 1990, worldwide sales for P&G had increased by $8 billion and net earnings by $1.3 billion. This success was due to variety of factors, including the ability to develop truly innovative products to meet consumers’ needs. Of the many products introduced throughout the 3 years, Scope, mouthwash, held 34% of the Canadian mouthwash market. Although there was success, there had been concerns with competition and the major changes happening in the mouthwash market. Up until 1988, most mouthwash was marketed primarily on a “bad-breath” strategy. However, Listerine introduced a plaque and inflamed gums preventing mouthwash. New flavors were introduced by a number of brands and it greatly expanded the market in 1987. In 1988 Colgate launched a mouthwash that included fluoride to fight cavities with a mild taste that encouraged children to rinse longer and more often. Finally, Pfizer launched a “prebrushing” rinse called Plax. Although P&G’s Scope held over 30% of the market share in 1990, they recognized that the industry was changing. The market was indefinitely moving towards healthier alternative.
2. Scope’s performance during the past three years can be considered extremely successful. Although it is marginal, in 1988, Scope’s market share was 33% but by 1990 the percentage fell to 32.3%. During the slim decline, Plax’s market share jumped from 1% to 10% in two years. Therefore, the sudden growth in Plax’s sales should be a concern for P&G’s Scope.
3. There are currently two options available for Scope to react to the changing market.
a. First is plaque reassurance on current Scope (that is, “Now Scope fights Plaque”). By adding reassurance, P&G sees that at best it will stabilize the business but would not grow it.
b. Second option available was introducing “Better-Tasting Prebrushing Dental Rinse” product. The product offered a better flavor