Question:
Discuss about the Marketing Plan For Procter & Gamble.
Procter and Gamble Co. or P & G is a multinational organization of American origin which provides consumer goods. The headquarter of the company is located in downtown Cincinnati, Ohio and was established in the year 1837 by Irish American James Gamble and British American William Procter. The company specializes in personal care products and a wide range of the various cleaning agents (Us.pg.com, 2018).
The report will be mainly based on the international expansion related plans of Procter & Gamble in another country in order to compete with the other well-known organization operating in the same industry including, Loreal and Unilever. The major aim of the company is to increase its revenues by increasing its international presence in the various areas of the world. The country that is chosen for the expansion related plans of P & G is Nepal and the brand that is decided to be launched is Pantene.
The major marketing related objectives of Procter & Gamble related to production of Pantene in Nepal are as follows,
- International growth of the organization in Nepal so that it can successfully compete with the shampoo based products manufactured by its competitors, Unilever and Loreal. Obtain about 20% of the entire retail market share of Nepal.
- The other goal which is related to the marketing plan of the organization is to increase its global presence and focus on every segment of the market with the help of its famous brand Pantene (Aliouche 2015). Achieve at least 3 types of hair products for each of the consumers in Nepal.
- The target of the organization is to achieve total revenues of more than Re. 30 lacs. The total profits that are aimed to be achieved by the organization is more than Re. 10 lacs in the first year of its operations in Nepal.
Market segmentation of P & G – The market has huge number of buyers and the wants and the desires of the buyers are also different from each other. The market segmentation related process of P & G aims to divide the large heterogeneous market of the organization into numerous smaller segments which can further help the organization in reaching the customers easily and in an efficient manner (Basnet 2014). The important strategies related segmentation that can be used by P & G in its target market Nepal are as follows,
Consumer based market segmentation – The process of market segmentation based on the consumers of the company consist of major variables which are,
- Demographic segmentation – This process of segmentation is based on various demographic variables like, age, sex, family size, income and occupation. These variables will affect the choice of products that is made by the consumers.
- Geographic segmentation – Other major segmentation process of the consumers is geographic segmentation. This process consists of other variables like, climate region of the world, density of the population. The weather and climate of Nepal will affect the choice of the different types of shampoos provided by its brand Pantene (Baral et al. 2016).
- Psychographic segmentation – This is another method which divides the various consumers into group based on life style and social class. The consumers who belong to the same demographic group can have different psychographic preferences. The consumers of Nepal are divided into various social classes even though they belong to the same demographic area. The Pantene brand provides shampoos of various ranges and the choice of the suitable product depends on this factor (Kim and Aguilera 2016).
- Behavioural segmentation – This method of segmentation can be used by P & G to divide the consumers based on the attitudes, knowledge, uses and the responses that they provide to the product. The behaviour related variables are crucial for the easy segmentation of the markets (Chaisse and Bellak 2015).
Target market – The marketing strategy of P & G mainly involves targeting the market which can be used to evaluate segments of a company that has been developed. The target market of P & G can be selected by using the following strategies,
- Undifferentiated market – This strategy is used by P & G when the company wishes to ignore the various segments that are present in the market and further target the entire market. This strategy can also be termed as mass marketing strategy. The products which will be offered under this strategy are therefore targeted towards all the market segments. This strategy is related to the offering of general products to the consumers of all the different groups of P & G. The products that are offered with the help of this strategy are the different kinds of shampoos provided under the brand of Pantene (Deresky 2017).
- Differentiated market strategy – This marketing strategy involves the significance that is given to the various target market segments of the consumers. Under this strategy P & G targets the specific products to the target market which is based on the segmentation related techniques that has been used earlier. The products will be targeted according to the needs of the various consumers. For example, Pantene offers products which belong to the higher range which are targeted to the consumers belonging to the upper level of the society. The mixes of benefits of the various products that are desired by the consumers are also quite different. The products of P& G that will be offered with the help of this strategy are the premium shampoos manufactured under the brand of Pantene (Ghimire, Sexton and Rigatti 2017).
The target of P & G in Nepal will be therefore decided based on the wants and the needs of the consumers of the country. P & G is also planning to add some new shampoos and body wash products to the already existing product line of the Pantene brand. The products will be offered based on the variations of choices of the various consumer groups and the ways by which they behave in the market (Elsey et al. 2016). The age of the customers who will be major part of the target segment of P & G in Nepal will be within the range of 20 and above. The product Pantene is targeted towards both the male and the female customers present in the segment.
Market positioning – P & G has been a consumer product giant and the main aim of the organization is to maintain its position in the market based on the competition that is provided by other organizations like, Loreal and Unilever. The expansion plan of the organization will help it in achieving this faster (Kim and Aguilera 2016).
International expansion plan in Nepal
Procter & Gamble or P & G is a leading multinational FMCG company which a wide range of products including, grooming, beauty and personal care. The product portfolio of the company that will be offered in its new market segment is as follows,
The various hair and skin care related products of P & G brand will be offered to the consumers in the beauty segment. The brands which fall under the segment of beauty are Pantene oil replacement shampoo, the Pantene Gold series. The company will offer other products in the category of shampoos and conditioners that can be used by the consumers belonging to the various age groups (Halperin 2016). The company will further aim at targeting a niche segment of aged people with the product named Pantene Moisture Boost Shampoo for women who belong to the age above 30. The company will also offer various products that are required for grooming of males and females. The brands or the products that will be offered by P & G in this segment are, male shampoos which will be able to control hair-fall related issues in tough situations and climates (Hindman 2014). The products belonging to this segment are sold under the brand name, Pantene Men. This brand of P & G already holds the top position in the market and is able to cater to the consumers belonging to different age groups and belonging to different social class (Karki Nepal 2016). P & G offers products related to baby care which include, baby shampoos and body washes. These products will be marketed in Nepal under the brand name of Pantene. The label of the product that will be marketed in Nepal is Pantene Shampoo.
The products that will be provided by P & G in Nepal under the brand name of Pantene can be divided according to the values perceived by the customers.
- Core benefit – The best quality products will be provided under the various categories in the product portfolio of P & G.
- The actual products – The shampoos are made by using high quality raw materials which can further help in improving the hair quality of the customers in Nepal (Hotchkiss, Godha and Do 2014).
- Augmented products – The products that will be manufactured for the market of Nepal will be based on the climate and the weather conditions. The hair quality of the people will depend on the areas in which the customers stay. The retailers will also be provided special training so that they are able to offer the products to customers according to their specific needs (Lane and Milesi-Ferretti 2018).
The pricing policy of the various brands that are offered by P & G are different and vary from market to market. The price of the products mainly depends on the quality of products and the value that is held by the brands. The policy that is applied related to the pricing of different products is mainly based on the ways by which the company aims at gaining the shares in the market and further generate revenue. The various pricing strategies that are used in this case are penetrating pricing, competitive pricing and the process of premium pricing. The brand of the company whose sale can be affected by many competitors is offered under the strategy of competitive pricing (Paudel 2016). The company will decrease the prices so that it can successfully compete with the other organizations already operating in the industry. The brands of the company for which a new consumer base needs to be created are placed under the penetrating strategy of pricing. The prices of the products that are related to the penetrating pricing strategy are generally quite low as new market area needs to be captured for an entirely new product. The high quality products of the company mainly fall under the premium pricing category. The products which fall under this category are of high quality and the reduction of prices are not possible (Pierce 2015). The premium and high quality products of the company include, Pantene Gold Series. The company is also planning to launch some new products under the beauty category which will fall under the penetrating pricing strategy. It is evident from the discussion that P & G will apply all the three pricing strategies to use create a market base in Nepal. These will further help the organization in creating a different position in the new market area and provide high levels of competition to the other organizations (Paudel 2016).
Marketing objectives for Pantene in Nepal
The competitors of P & G in Nepal are mainly Loreal, Garnier, Lotus Herbals. The price of female products of Loreal range from Re. 500 to Re. 1200. The prices of the male shampoos range from Re. 200 to Re. 1000. The female products of P & G will be priced at Re. 300 to Re. 1000 and the male shampoos will be priced at Re.200 to Re. 800.
The various products that are offered by P & G are popular and liked by the consumers in the world. The organization is planning for international expansion and the promotional strategies hold a lot of importance in this case. The communication related tactics that are used by the company are mainly related to reaching its target consumers (Shrestha 2016). The organization uses mainly five types of advertising strategies in this case which are described as follows,
- Advertising – The process of advertising serves as the major communication related tactics of P & G. The various media that will be used by P & G to advertise the products in Nepal are, radio, television, online media and print media. The digital media based marketing will be the best option that can be used by P & G in the market. The reach of the brand will increase and the customer base will also be formed in a proper way (Sunam and McCarthy 2016). This strategy is aimed towards the consumers belonging to the age group of 20 to 60.
- The direct marketing related process mainly involves the communication takes place between the organization and its corporate clientele. The communication that P & G will have with the distributors in Nepal is also a part of direct communication (Shrestha 2016). This strategy is aimed towards to the consumers of the age group between 30 to 55.
- Sales promotion – The process of sales promotion will be used by P & G for products like, soaps, detergents and many more.
- Personal selling will also be used for the purpose of successfully selling products which are related to the current usage of the consumers (Vernuccio and Ceccotti 2015). The personal selling will be done by the local employees who will appointed and further trained by the company regarding the various products of the brand and its benefits. This strategy will be applicable for the housewives who find it convenient to shop products from the salespeople who visit their homes.
- Public relations are based on the sponsorships that are provided by the company. This strategy will also be applied by P & G in the new market area of Nepal to increase the awareness of its brands among the consumers (Wieners, Neuburger and Schickhoff 2015). The sponsorships will be helpful to increase the sales of the company and awareness of the brand among the customers.
The online media based promotional strategy of P & G is the area where it capitalises. The organization aims at attracting the consumers towards the organization with the help of its effective online strategies. The creative advertisements of the products and the endorsements that are done with the celebrities is a major strength of the company. The organization will mainly take the help of marketing channels like, television, media, newspaper advertisements to create awareness of the brands among the prospective consumers. The company will aim at making tie-ups with various websites so that it can capture the market easily (Shrestha 2016).
The mission and the vision statement of P & G mainly deals with the products that are provided to the consumers. This also involves the guiding the endeavours of the organization for the major element of the marketing mix (Vernuccio and Ceccotti 2015). The distribution of goods is related to various entities which are discussed as follows,
- Retailers – The retailers in the new market area are considered to be main venue where the organization aims to reach the target consumers. P & G searches for retailer stores that are located in a strategic manner and can be helpful in increasing the revenues. The accessibility of the products by the consumers is also an important factor that will help in increasing the profitability of
P & G (Paudel 2016). - The company further needs to create a group of authorised distributors so that it can distribute its products in such a manner by which it can reach the consumers. The distributors are third parties which cater to various needs of business organizations like Procter & Gambled which plan for international expansion in new countries (Pierce 2015).
- The most effective distribution strategy which will be used by P & G in Nepal will be the opening up of stores that are operates solely by the company. An e-commerce website is the easiest way by which the organization will be able to reach more number of people within less amount of time. This will be helpful for P & G to achieve its target of increasing its international presence and revenues at the same time. The e-commerce website that is operated by the company is mainly focussed on the needs of the American market.
P & G has to therefore make significant changes in the offerings of the website so that it is able to cater to the needs of the consumers of Nepal (Elsey et al. 2016). This will be helpful for the company to create its base in the country and further increase its revenues to compete with the other giant companies in the FMCG sector. All the three distribution strategy that are discussed above will be therefore useful for the profitable operations of P & G in the market area of Nepal which is new to the organization (Chaisse and Bellak 2015). - The products of P & G will be transported to the various stores with the help the efficient logistics system that is maintained by P & G in many countries.
The Marketing Budget of Procter and Gamble for its expansion plan to Nepal has been given as follows:
|
CAMPAIGN TYPE |
QTY |
PROJECTED COST PER UNIT |
PROJECTED SUBTOTAL |
|
|
National Marketing |
SUBTOTAL |
Re. 25000.00 |
||
|
Banner Ads |
5 |
Re. 5000.00 |
Re. 2,5000.00 |
|
|
Re. – |
||||
|
Re. – |
||||
|
Local Marketing |
SUBTOTAL |
Re. 60000.00 |
||
|
Newspaper |
5 |
Re. 6000.00 |
Re. 30000.00 |
|
|
In-Store Marketing |
5 |
Re. 4000.00 |
Re. 20000.00 |
|
|
POP |
2 |
Re. 5000.00 |
Re. 10000.00 |
|
|
Re. – |
||||
|
Public Relations |
SUBTOTAL |
Re. 10000.00 |
||
|
Public Events |
Re. – |
|||
|
Sponsorships |
Re. – |
|||
|
Press Releases |
10 |
Re. 1000.00 |
Re. 10000.00 |
|
|
Webinars |
Re. – |
|||
|
Conferences |
Re. – |
|||
|
Client Events |
Re. – |
|||
|
Re. – |
||||
|
Content Marketing |
SUBTOTAL |
Re.180000.00 |
||
|
Sponsored Content |
Re. – |
|||
|
Landing Page |
15 |
Re. 12000.00 |
Re. 180000.00 |
|
|
White Papers / eBooks |
Re. – |
|||
|
Re. – |
||||
|
Social Media |
SUBTOTAL |
Re. 80000.00 |
||
|
|
20 |
Re. 1000.00 |
Re. 20000.00 |
|
|
|
20 |
Re. 1000.00 |
Re. 20000.00 |
|
|
Interest |
20 |
Re. 1000.00 |
Re. 20000.00 |
|
|
|
10 |
Re. 1000.00 |
Re. 10000.00 |
|
|
Google+ |
5 |
Re. 1000.00 |
Re. 5000.00 |
|
|
|
5 |
Re. 1000.00 |
Re. 5000.00 |
|
|
Online |
SUBTOTAL |
Re. 50000.00 |
||
|
Blog |
5 |
Re. 8000.00 |
Re. 40000.00 |
|
|
Website |
Re. – |
|||
|
Mobile App |
Re. – |
|||
|
Mobile Alerts |
10 |
Re. 1000.00 |
Re. 10000.00 |
|
|
Email Newsletter |
Re. – |
|||
|
Re. – |
||||
|
Advertising |
SUBTOTAL |
Re.125500.00 |
||
|
Online |
4 |
Re. 25000.00 |
Re. 100000.00 |
|
|
|
3 |
Re. 8500.00 |
Re. 25500.00 |
|
|
Outdoor |
Re. – |
|||
|
Radio |
Re. – |
|||
|
Television |
Re. – |
|||
|
Re. – |
||||
|
Re. – |
||||
|
Web |
SUBTOTAL |
Re. 74000.00 |
||
|
Development |
1 |
Re. 64000.00 |
Re. 64000.00 |
|
|
Pay-Per-Click Marketing |
1 |
Re. 10000.00 |
Re. 10000.00 |
|
|
SEO |
Re. – |
|||
|
Re. – |
||||
|
Re. – |
||||
|
Market Research |
SUBTOTAL |
Re. 68000.00 |
||
|
Surveys |
6 |
Re. 8000.00 |
Re. 48000.00 |
|
|
Impact Studies |
2 |
Re. 10000.00 |
Re. 20000.00 |
|
|
Re. – |
||||
|
Sales Campaigns |
SUBTOTAL |
Re.119000.00 |
||
|
Campaign A |
1 |
Re. 59000.00 |
Re. 59000.00 |
|
|
Campaign B |
1 |
Re. 60000.00 |
Re. 60000.00 |
|
|
Campaign C |
Re. – |
|||
|
Campaign D |
Re. – |
|||
|
Campaign E |
Re. – |
|||
|
Re. – |
||||
|
Other |
SUBTOTAL |
Re. 333000.00 |
||
|
Premiums |
3 |
Re. 78000.00 |
Re. 234000.00 |
|
|
Corporate Branding |
Re. – |
|||
|
Business Cards |
18 |
Re. 5500.00 |
Re. 99000.00 |
|
|
Signage |
Re. – |
|||
|
Re. – |
||||
|
Total |
Re. 1124500.00 |
The projected Profit and Loss Income Statement has been given as follows:
|
Year 1 |
|||
|
Revenue |
|||
|
Gross revenue |
Re.5,000,000 |
||
|
Cost of goods sold |
Re.1,840,000 |
||
|
Gross margin |
Re.3,160,000 |
||
|
Other revenue [source] |
Re.34,000 |
||
|
Interest income |
Re.0 |
||
|
Total revenue |
Re.3,194,000 |
||
|
Operating expenses |
|||
|
Sales and marketing |
Re.1124500 |
||
|
Payroll and payroll taxes |
Re.20,000 |
||
|
Depreciation |
Re.0 |
||
|
Maintenance, repair, and overhaul |
Re.10,000 |
||
|
Total operating expenses |
Re.1154,500 |
||
|
Operating income |
Re.2039500 |
||
|
Interest expense on long-term debt |
Re.0 |
||
|
Operating income before other items |
Re.2039500 |
||
|
Loss (gain) on sale of assets |
Re.0 |
||
|
Other unusual expenses (income) |
Re.0 |
||
|
Earnings before taxes |
Re.2039500 |
||
|
Taxes on income |
30% |
Re.924,456 |
|
|
Net income (profit) |
Re.1115044 |
||
|
Cumulative income |
Re.1115044 |
References
Aliouche, E.H., 2015. The impact of the global financial crisis on country attractiveness. Thunderbird International Business Review, 57(1), pp.63-83.
Baral, S., Basnyat, B., Khanal, R., Malla, Y., Gauli, K. and Grouwels, S., 2016. Efficacy of cross-sectoral platforms on strengthening sustainable business operation in Nepal.
Basnet, B.B., 2014. Economic Implications of Foreign Employment and Inward Remittance Business in Nepal.
Chaisse, J. and Bellak, C., 2015. Navigating the Expanding Universe of International Treaties on Foreign Investment: Creation and Use of a Critical Index. Journal of International Economic Law, 18(1), pp.79-115.
Deresky, H., 2017. International management: Managing across borders and cultures. Pearson Education India.
Elsey, H., Thomson, D.R., Lin, R.Y., Maharjan, U., Agarwal, S. and Newell, J., 2016. Addressing inequities in urban health: do decision-makers have the data they need? Report from the urban health data special session at international conference on urban health Dhaka 2015. Journal of Urban Health, 93(3), pp.526-537.
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Halperin, S., 2016. Modernity and the embedding of economic expansion. European Journal of Social Theory, 19(2), pp.172-190.
Hindman, H., 2014. The re-enchantment of development: creating value for volunteers in Nepal. Moral Encounters in Tourism, Ashgate, Surrey, pp.47-58.
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Kim, J.U. and Aguilera, R.V., 2016. Foreign location choice: Review and extensions. International Journal of Management Reviews, 18(2), pp.133-159.
Lane, P.R. and Milesi-Ferretti, G.M., 2018. The external wealth of nations revisited: international financial integration in the aftermath of the global financial crisis. IMF Economic Review, 66(1), pp.189-222.
Paudel, N.P., 2016. Financial Market in Nepal: Challenges of the Financial. Financial Market Regulations and Legal Challenges in South Asia, p.146.
Pierce, G., 2015. Beyond the strategic retreat? Explaining urban water privatization’s shallow expansion in low-and middle-income countries. Journal of Planning Literature, 30(2), pp.119-131.
Shrestha, S., 2016. Influencing factors on consumer buying behaviour of smart phones: a research on the buying behaviour of young consumer in Kathmandu, Nepal.
Sunam, R.K. and McCarthy, J.F., 2016. Reconsidering the links between poverty, international labour migration, and agrarian change: critical insights from Nepal. The Journal of Peasant Studies, 43(1), pp.39-63.
Us.pg.com. (2018). Home. [online] Available at: https://us.pg.com/ [Accessed 10 Apr. 2018].
Vernuccio, M. and Ceccotti, F., 2015. Strategic and organisational challenges in the integrated marketing communication paradigm shift: A holistic vision. European Management Journal, 33(6), pp.438-449.
Wieners, E., Neuburger, M. and Schickhoff, U., 2015. Adaptability of backcasting for sustainable development: a case study from Nepal. International Journal of Asian Business and Information Management (IJABIM), 6(3), pp.16-27.
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