Strategic management
Report on:
Business plan of proctor and gamble shampoos
Submitted To:M. Ekhlaque Ahmed
Submitted by:Idrees warisNazia sahar
Romana ashfaque
PROCTER & GAMBLE SHAMPOOS
BUSINESS SCOPE
Nineteen years ago Procter and gamble started the journey in Pakistan to provide the world
famous quality brands to Pakistani consumers. Procter and Gamble Corporation have been well
known in the eyes of customers for serving the needs in fast moving consumer’s goods. Proctor
and gamble has a mission to improve the lives of consumers wherever it operates.
REGIONS:
WHERE WE ARE OPERATING?
Islamabad Karachi Lahore Rawalpindi Quetta Sialkot
P & G operates in all major cities of Pakistan and their expansion plan is to cater the rural area as well.
Internationally they are in the markets of 190 countries.
FUNCTIONS AND APPLICATION:
People have become more conscious about their hair problems and they want solution and better
results. Different customers have different problems related to their hair like dandruff, splinted
hair, fizzy hair, hair fall etc. Now Proctor and gamble is providing different products with
solution for almost every hair problem. The demand of hair care shampoos keep on increasing.
As it have different ranges, head and shoulder have seven varieties and Pantene is available in 5
varieties.
Head and shoulder is anti-dandruff and Pantene is beauty hair care.
Anti-Dandruff shampoos
Shampoos for smooth and strong hairs
Shampoos for deep black hairs
Shampoos for anti hair fall
Shampoo for Dry/damaged hair
Shampoo cum conditioner.
Hair care shampoo for milky extra treatment
CUSTOMERS AND USERS:
The user of proctor and gamble shampoo are 15 to 35 years old people and they are using
more shampoo and more conscious about their hairs. Students are having more demand of
shampoo. Demand of shampoo in house wives and older age people is relatively less then
others. Procter & Gamble considers the different factors while choosing its primary users.
The primary users of Procter & Gamble are mentioned below.
1. Young adults
2. Middle-aged adults
3. Families belonging to SEC (socio-economic class) A to C.
4. Beauty saloons
5. Cosmetic shops
6. Hotels
VALUE ADDITION
Recently proctor and gamble introduced new Pantene with the power of oil; it will help in
addressing the toughest hair issues of Pakistani consumers with in just 14 days i.e. due to
breakage and Split it caused to hair fall of the hair. The shampoo in the name of New Pantene
that combines oil benefits which helps to nourish hairs and it also helps to address the issue of
hair fall and split ends and in just 14-days. The shampoo contain the natural herbs that provide
the oil benefits which not only helps to nourish the hair but it also helps to tangle free and makes
your hair healthy and strong.
CONSIDERATIONS:
Currently the company has following variants in shampoo, each catering to a different segment which is mentioned below:
Hair fall defense Guaranteed 100%* Dandruff gone and a solution for hair fall
Refreshing Cleans your hair and refreshes your scalp.
Smooth and Sleek It contains the amino Pro-V complex which makes hair glowing finish, and sleek.
Sheer Volume Specially designed for shining and body.
Daily Moisture Renewal it helps to protect your hair from polluted environment
Color Revival Specially designed for maintaining the true color of your hair
Classic Care Help in balancing the hair and to give shine and health look to your hair.
Full and Thick Specially made for the thin hair to make your hair full of body.
Classic clean Makes your scalp cleanses and regenerates your gorgeous hair
INTENDED BUSINESS:
They want to penetrate in existing market and also planning for distribution extension.
But these all are segmented according to the general needs of customer. The company doesn’t
have the specific segmentation of shampoo for men.
Today the shopping trends of customers are change and they are very specific in selecting their
personal care products. So in order to expand its business in future, the company needs to come
up with different varieties which will fulfill the needs of customers. Men usually prefer to
Shampoos which address their problems like dandruff, hair fall and fizzy hairs.
All Pakistan shampoo is 18%.
Urban areas 67%
Rural areas 23%
A-C segment is the fastest growing segment in Pakistan.
COMPETITORS AND THEIR BUSINESSES:
There are many local and multinational direct competitors operating in Pakistan which are
mentioned below:
1. Sunsilk, (Uniliver)
2. Clear (Uniliver)
3. lifebuoy (Uniliver)
4. Garnier
5. Samsol by Samsol International Private Limited
6. Medicam by Marriana International
7. Bio amla
Proctor and gamble:
It is expected that the usage of shampoo in rural areas will rise in 2011, So P&G have a plan to
expand in rural areas where they are behind unilever shampoo, prices are relatively low as
compared to P&G, but we are focusing on the quality. However, the demand in urban areas
would be the key growth driver over the long term. Also, increase in the urban population, along
with increase in income levels and the availability of new categories, would help the urban areas
maintain their position in terms of consumption.
1. EXTERNAL ANALYSIS
Market structure
Applications Anti-dandruff Beauty (shine, healthy,
straight, smooth and
silk)
Herbal
User & products Head and shoulder (P&G)
Lifebuoy Anti Dandruff (unilever)
Selsun anti- dandruff shampoo
Sun silk Anti – Dandruff (unilever)
Life buoy (unilever)
Sun silk for shinny
hair(unilever)
Decrease(unilever)
Pantene smooth & strong
(P&G)
Lifebuoy anti-hair fall
(unilever)
Dove (unilever)
Organics
Flex
Selsun Blue for Itchy Dry
Scalp
Bio Amla
Garnier frutcis
Herbal essence
(p &g)
Darbar vatika
(Dabar)
Household Consumer
DISTRIBUTION STRUCTURES
It is showing that from factory floor it reaches to agility warehouse of the company then it moves
to distributor (abu dawood) the only distributor, then from distributor to global customers,
modern stores, high frequency stores and the wholesaler who directly buy from distributors. it
will move to the distributor premises as well as to wholesalers. They forward inventory to the
GENERAL STORES MEDICAL STORES UTILITY STORES
RETAILER
WHOLESALER
GLOBAL CUSTOMERS MODERN RETAIL
DISTRIBUTORS
WAREHOUSE
MANUFACTURING PLANTS
retailers. the retailer sells the products to utility stores, medical stores and general stores and final
consumers as well.
GLOBAL CUSTOMERS:
Our global customers are metro and macro. There are five metros in Pakistan, two are in Lahore,
and 1 is in Karachi, Islamabad, and Faisalabad. And out of five macros, three are in Karachi and
two are in Lahore.
MODERN RETAILS:
In modern retail we have Naheed, Aghas, and Imtiaz.
HIGH FREQUENCY STORES:
High frequency stores include.
Wholesaler
Retailer
General stores
Medical stores
Utility stores
Cosmetic shops
Beauty saloons
Market Size
31%
26%
14%
11%
18%
market shareProctor & Gamble28 Unilever Bio AmlaGarnier Others
Analysis
Market share of the shampoo companies are shown above, which is indicating that Procter and gamble has 31% market share in shampoo industry, unilever 26%, bio amla 14%, garnier 11% and remaining 18% are the other local and international companies. Proctor and gamble shampoos are anti-dandruff, beauty and herbal. Procter and gamble capturing the major share in market due to high share in anti-dandruff segment, which is providing the world No.1 anti-dandruff shampoo. Unilever shampoos stand in second position and it has 26% market share but the share of unilever in beauty segment is more than Procter and gamble, so proctor and gamble need to focus more on beauty segment.
MARKET SIZE (PAST)
Volume in msu (million in state unit)
Market Segment
2006 2007 2008 2009 Growth P.A
Anti-dandruff483.760 500.691 550.259 604.774 2.7%
Beauty 683.760 744.715 818.332 914.076 6.9%
Herbal 305.190 316.482 336.736 360.644 5.6%
Overall growth5.06%
Value in millions
Market Segment 2010 2011 2012 2013 Growth P.A
Anti-dandruff665.856 721.122 774.485 837.218 2.7%
Beauty 1016.452 1126.228 1239.977 1382.574 6.9%
Herbal 389.13 412.208 433.636 462.689 5.6%
Overall growth 5.06%
MARKET SIZE(PAST)
MARKET SIZE (FUTURE)
Volume in msu (million in state unit)
Market Segment
2010 2011 2012 2013 Growth P.A
Anti-dandruff649 662 695 718 2.1%
Beauty 1068 1149 1214 1306 7.8%
Herbal 394 438 481 514 6.3%
Overall growth5.4%
MARKET SIZE (FUTURE)
Volume in msu (million in state unit)
Market Segment
2010 2011 2012 2013 Growth P.A
Anti-dandruff892 921 956 998 2.1%
Beauty 1468 1548 1636 1709 7.8%
Herbal 508 583 678 756 6.3%
Overall growth5.4%
MAJOR CHANGES FOR SALES INCREASE
• Population is keep on increasing with an average annual rate of 1.6% and the problem of dandruff and hair fall is increasing day by day and the women have become more conscious about their hair style.
• Constant innovation and aggressive marketing by hair care companies also lead sales trends upward of almost all segments. As Procter and gamble has vast array of advertising campaign.
• Delight the consumer with sustainable innovations that improve the environmental profile and sales of our products.
• Increasing awareness of hair care issues and the growing influence of western lifestyle trends and consumption habits were the main factors that extend the consumption of the shampoos.
• P&G Shampoos sale can also be increase if they provides the extra benefits to the customers like if they provide the more solutions in one product
• ASSUMPTIONS FOR FUTURE GROWTH (2010 onward)
• Due to intense competition in FMCG industry, P&G should place strong emphasis on innovation across all functions and activities.
• Head & shoulder safeguard and Pantene are the leadings products of P&G and they are catering the 20% markets of dandruff they should also focus upon the hair falling by doing the more research .
• Still people has hair falling problem in our society so p&g should be take more concern on the shampoo and insert those quality which protects customers from hair falling
• They should build separate brands for men as men has also become style conscious about their hair.
• In rural area, people are still unaware about hair care problems and their solutions. As per our research during 1950-2008, Pakistan's urban population expanded over sevenfold and it corresponds to 32.34%. This shows that majority of our population is living in the rural area so it is huge segment which need to be cater in future.
PRODUCT LIFE CYCLE STAGE:
REPRESENT INDUSTRY
Market
Segment
Introductory Growth Maturity Decline
Anti- Dandruff
Beauty
Herbal
Analysis
Antidandruff market of P& G has achieved the position in the minds of consumer and now it is on the maturity stage while the industry is growing.
In beauty P&G is behind the industry because its competitor is already on the top of the mind of
customers.
Herbal shampoos are also on the growing segment in both the industry and Proctor and Gamble
product herbal essence is in the induction stage.
COMPETITION MATRIX
Competition
Overall
Anti dandruff
Beauty Herbal
1.P&G 24% 66% 10% 100%
2.GARNIER - 33% 67% 100%
3. UNILEVER 19% 65% 16% 100%
4. Bio Amla 12% 25% 63% 100%
Historical Growth 2.7% 6.9% 5.6%
Projected Growth 2.1% 7.8% 6.3%
Company Profitability
14% 12% 8%
ANALYSIS:
As Unilever is having neck to neck competition with P&G. So P&G needs improvement in hair care products, personal care products specially they should keep focus upon the men hair care product. Because men have also become more style oriented as compare to the previous year. But the overall business of P&G is in profit. Rural market is the best segment to capture more market share along with the new segment identification which is targeting all the customers.
20% shampoo users are using Head & Shoulder as they are dandruff conscious people. 99% of the people
are influenced by the advertisement of Head & Shoulder on daily use to get rid of dandruff and more over
they are getting the promised results. They have targeted both males and females due to which they have
got more number of shares in market Beauty wise .Pantene is the strongest hair care product of P&G both
formula and advertisement wise. Pantene has 35% market share in beauty.
Areas to be focused
P&G has to focus more on growing market of beauty segments.
Areas of new opportunities
P&G is almost present in all segments and the competitors are following P&G.
Distribution structure:
% SHAMPOO MARKET
2009 2013
HIGH FREQUENCY
STORES
78% 60 %
MODERN RETAILS 13% 23%
GLOBAL CUSTOMERS 9% 17%
100 % 100%
ANALYSIS:
The above mention distribution structure shows that how hair cares industry transfers their goods to the end user. P & G has only one distributor across Pakistan through which the product of P&G Company reaches to end user. Further the company is divided into high frequency stores, modern retails, and global customers.
The trend which is mentioned in the distribution structure shows that the consumers are moving towards the key accounts and modern trade because the standard of living is increasing day by day so every segment is increasing their sales through key accounts and modern trades.
In 2009 78% sales of shampoos is being done by the high frequency stores as P&G provides
transportation facilities to its distributors and retailers which attract these distributors and retailers to buy
The P&G’s shampoo as compared to Lever Brothers Pakistan Limited’s one.
As already explained they are giving top incentive to retailers and distributors. P&G sales staff pays more visits to their retailers and stores to check the shelf space of their shampoo. Thus due to these efforts they were getting 78% of market share.
TOP KEY EXTERNAL TRENDS
TREND POTENTIAL
IMPACT
Proctor and gamble Unilever Bio Amla Garnier
Technological
Trends
Increase in cost
Increase in
efficiency
Yes Yes Yes Yes
Bargaining
power of
supplier due to
inflation
Customer
might
compromise on
quality and not
willing to pay
higher prices.
yes yes NO Yes
Growth of
rural markets
and focus of
companies on
this area
Increasing
competition,
Price Erosion
No Yes Yes No
Application
segmentation
Customization Yes Yes No Yes
Political-Legal Forces
Economic ForcesSocial & Culture Forces
Technological Forces
Internal Environment Proctor and gamble
Social Interest Groups
GovernmentSuppliers
Industry Customers
Competitors
ANALYSIS:
Current trends in the market bring opportunities as well as threats for the organization so it is the
company’s competency how to cope up the external trends. Proctor and gamble is one of the top
company in Pakistan their main focus is to uplift the shampoo industry by changing products
with changing demands. Proctor and gamble is willing to avail all the opportunities present in the
external environment and cope up with the threats through its strengths.
DRIVING FORCES
Political forces
The changes occurring due to uncertain political situation have made the businesses uncertain for
its survival in the country and also terrorism prevailing in the important cities of the country like
Karachi, Peshawar, swat, Quetta and Lahore which are affecting the business activities. Policies
about taxes are changing continuously due to changing government. The shampoo market is very
much dependant on Political & Legal forces. In other words we can say that Political & Legal
forces can dictate the sales and profitability of the shampoo selling firms. Taxes and Excise duty
are of real importance to these organizations because it directly affects the prices which affect
the consumers buying decision.
Economic Forces
The rate of inflation reaches its peak level and it is affected the purchasing power of consumers
due to which consumers are shifting towards the low price local products and its adding fuel to
local business man to enter into the market of shampoos. The imports duty and excise duty on
the other hand become the cause of increased in the prices of raw materials which is ultimately
bear by the consumers. The shift in prices in consumers’ product will force them to switch for
low priced shampoos.
Technological Forces
Technology is also connected with proctor and gamble to benefit the consumer. Proctor and
gamble newly introduced the shampoo with the power of oil but there is a need of rapid
breakthrough in the technology of shampoo and their manufacturing process to produce the
shampoos which keeps eyes lenses safe from harmful chemicals.
INTERNAL ANALYSIS:
SWOT ANALYSIS
STRENGTHS:
Financially strong company.
Social & corporate image of P&G.
Focus on total quality management.
Direct contact with customers.
Good Relationship with the supplier.
Worldwide research and technology, engineering and manufacturing.
Highly energetic sale force
Extraordinary promotional plan for shampoos.
WEAKNESSES
Unwilling to serve low-income market.
Prices of the shampoos are high
Weak coverage in rural areas of Pakistan
OPPORTUNITIES
There are opportunity for P&G to cater more market share, the main reasons for this growth
are:
Growing population
Increase in the rate of urbanization.
Increase in awareness
Growing rural market
THREATS
Local and Foreign competition.
New entrance in shampoo industry
Country’s inflation rate is high.
The prices of electricity increasing.
Changing policies of the government.
Threats and Weaknesses which could be converted into Opportunities and Strength
Analysis
P&G is weak in serving low income groups while competitors have the ability to serve the low
income peoples. Through capturing in rural markets they can avail the opportunities in terms of
more customers.
THE CUSTOMER : BASIS OF PROCTOR AND GAMBLE BUSINESS
Opportunities Threats Strength weakenesses
Major players are still weak in rural areas
High urbanization Increased awareness
about new advancements
Covering all variants in shampoos through R & D
Don’t serve low income market.
External Analysis Internal Analysis
WHAT MOST IMPORTANT ASPECTS ?
1. Affordability2. Availability3. Variety4. Convenient Packaging5. Use of Natural Herbs6. Good Foam7. Prevent from hair damage8. Shine 9. Fragrance 10. support hair growth
DO YOU REALLY KNOW THAT ?
Yes
HOW DO WE SCORE ?
1. Variety2. Prevent hair damage 3. Availability 4. support hair growth5. Convenient Packaging6. Affordability 7. Use of Natural Herbs
HOW DO COMPETITORS (UNILEVER& BIO AMLA) SCORE ?
1. Variety 2. Availability3. Affordability 4. Prevent hair damage 5. Use of Natural Herbs6. support hair growth7. shine
WHAT DOES CUSTOMER WANT ?
Customer wants to have strong, healthy, shiny, smooth, anti dandruff and anti-hair fall all the time at an economical price. The factors which consumers want in shampoos are given below.
Use of natural herb, Affordability, Availability, Convenient Packaging, Brand name, Variety, good foam, no side effect, compatible with hard water, no irritation to the eyes
RELATIVE IMPORTANCE OF FACTORS
HOW DO WE SCORE ?
1. Variety2. Prevent hair damage 3. Availability 4. support hair growth5. Convenient Packaging6. Affordability 7. Use of Natural Herbs
HOW DO COMPETITORS (UNILEVER& BIO AMLA) SCORE ?
1. Variety 2. Availability3. Affordability 4. Prevent hair damage 5. Use of Natural Herbs6. support hair growth7. shine
Factors
Absolutely Critical
Very Important
Quite Important
Nice to HaveNot significant
5 4 3 2 1
Variety
Availability
Prevent hair damage
support hair growth
Convenient Packaging
Affordability
Use of Natural Herbs
Fragrance
Shine
Good foam
RATING AGAINST CUSTOMERS BUYING CRITERIA
Quality & Price Proctor and gambleUnilever
Bio Alma
Non-Price attributes Affecting Customer Choice
% Weight
Product - Related
Variety 17% 16% 16% 6%
Prevent hair damage 15% 9% 11% 12%
Availability 14% 12% 12% 9%
support hair growth 13% 12% 12% 13%
Convenient Packaging 6% 4% 3% 2%
Affordability 14% 9% 10% 12%
Use of Natural Herbs 10% 6% 6% 9%
Good form 4% 3% 4% 4%
Shine 5% 5% 5% 4%
2% 2% 2% 1%
Total 100% 78% 81% 72%
Has quality gone up/down (+/-) In past 4 years
+ + +
Relative Price today 135 125 110
Relative Price 4 years ago 100 100 100
CUSTOMER BUYING CRITERIA: PRICE AND QUALITY ATTRIBUTES
Keep it upQuestion its Cost
Improve FastDo Not Sweatat
Least 5% Most 20%
What strategic issue does the company face?
Proctor and gamble faces the following strategic problems.
RELATIVE
PERFORMAN
ATTRIBUTES IMPORTANT TO CUSTOMERS
Shine
Variety
Convenient Packaging
Prevent hair damageAffordabilityUse of Natural Herb
1. Proctor and gamble is planning to capture the market share of rural area but they might face huge threat from local competitors because people in rural areas are quite cost conscious rather than quality and brand image. So this is difficult for proctor and gamble to market their product with such approach where they can target the majority of people.
2. Proctor and gamble needs to invest a large sum of amount to promotional activities in rural areas and launch their product in rural areas.
3. Economy play a vital role and Pakistan economy show a constant pace of inflation every year so they must need to curtail the prices of product in a competitive environment and need to stream line their operation in a cost effective manner
SUGGESTED:
VISION
To be the most trusted and preferred consumer goods company which look forward to their
needs and act to create value in the eyes of consumers.
MISSION
Our mission is to provide consumers the supreme, high-quality products and to be leading the
industry by doing innovations.
OBJECTIVES
• Expanding distribution network to all over Pakistan.
• To increase continuously offering of new and unique products at affordable prices for all
segments.
• To increase the market shares in rural area by 20% till 2013.
• To grow by 15% year by year for the next four years.
• To increase the number of outlet coverage by providing commission based incentives to retailers.
KEY ISSUES:
Weak distribution resulting in missed sales usually in rural areas.
Increase in input cost due to ingredients imported from foreign companies.
No separate brand for men and children.
Increase in import duties
More fragmented market segments
Increase in inflation
Shortage of electricity
2. ACTION PLAN ( FOR NEXT YEAR)
WHAT HAS TO BE REFERENCES HOW RESULT
DONE
Customer Complain Weak network in
rural area
Should develop
customer complain
centre in rural area to
address the issue of
customers.
Customer satisfaction/loyalty
Enhance company reputation
Increase in sale
Identification of new needs of
customers
Increase the number
of distributors
Distribution
matrix
Competition
matrix
Should increase the
number of
distributors and
Improve relationship
with the distributors
in rural areas and
seek new distributors
Increase sales and value for
company in rural areas because
product will be available
everywhere.
Improve
communication with
external customers
Market structure
SWOT analysis
More advertisements
and promotional
activities.
Will become top of the mind
Brand awareness
Decrease Operating
Costs to cope up with
inflation.
Production
Managers.
By controlling
wastage and efficient
and effective
utilization of
resources to achieve
maximum output.
Cost decreases and revenue
increases
Increase Production to
capture rural market.
Procurement and
Production
Managers along
By master production
scheduling of all
production processes
and operations and by
Profitability will increase
Will be helpful for achieving
economies of scale.
with workers. truly forecasting the
required demands.
Expand Customer
Base
Senior and
Middle
management
(Marketing)
Adopt market
penetration policy
Sales will increase.
Increase in market share by
capturing the competitors share
and penetrating to unmet
segments.
Continuously
improvement in
Research and
Development
R & D
Department
Creating synergy in
value chain by
making new variant
of shampoos from
same manufacturing
plants.
New market segment
Innovation
New products
Build separate brands
for men and children
Brand
management,
Senior
management
Coming up with new
brand for children
and men segment to
cater the needs by
providing more
customized shampoos
with different
variants and
combinations.
Market share will increase
Increase in sale and
Profitability will increase.