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was positions as a great tasting mouth refreshing brand that provided bad breath protection. Scope held 32% share of the Canadian market for 1990. In 1970 Scope became the market leader in Canada, with many competitors, such as Listerine mouthwash that was launched by Warner Lambert in 1977 and it was a direct competitor to Scope, it had nearly the same characteristics as Scope with a 12% of the market share during that time. But the major competitor for Scope was Plax, a brand by Pfizer Inc, which was launched in Canada in 1988 on a platform quite different from the traditional mouthwashes, and gained a 10% share since launched. Plax detergents were supposed to help loosen plaque to make brushing effective. Before the entry of Plax, brands in the mouth wash market were positioned around two major benefits that are fresh breath and killing germs, whereas Plax was positioned around a new benefit as a plaque fighter and claims Plax removes up to three times more plaque than just brushing alone. In studying the current situation and preparing for a strategic plan, Gwen Hearst reviewed the available information and surveys for the mouthwash market and Scope showed that 75% of Canadian household use 1 or more mouthwash brands. The company’s market research revealed that users could be segmented to “heavy” users that comprised 40% of all users and to “medium” users that comprised 45% of all users and to light users that comprise 15%. The company also made a research on why consumers use mouthwash, and the results were: consumer’s basic hygiene, it gets rid of bad breath, it kills germs and many other reasons. Also surveys were conducted of mouthwash user’s image of the major brands based on several attributes such as, reducing bad breath, killing germs, removing plaque and others. Plax achieved a strong image on removing plaques and healthier teeth and gums, whereas scope scored a weaker image on those attributes. In analyzing the Canadian mouthwash market share the data showed that Scope had the highest market share among all brands, but there was a big difference in the share held by Scope in food stores 42%, versus drug stores 27%. Competitive data were also collected for advertising expenditures, and the results were that most of the advertising expenditures were of Scope, Listerine and Plax accounting for 90% of all advertising. As for the retail prices, both Listerine and Plax had the highest prices among other brands in food stores, whereas Scope, Listerine and Listermint had the highest prices in drug stores. And in comparing Scope market share between Canada and USA, the results showed that Scope in Canada takes 33% of the market share, while USA Scope’s market share was 21.6% that came after Listerine, where Listerine held 28% of the mouth wash market share in America. After the introduction of Plax by Pfizer Inc whereby P&G were loosing market share, and after studying the current situation and making several surveys and market researches, Hearst challenge was to the 1st problem which is to develop strategy that ensures the
continued profitability of Scope in face of competitive threats and especially by Plax that gained 10% share of the product category. So her specific task was to prepare a marketing plan for P&G mouthwash business for the next 3 years. The 2nd problem is how will P&G maintain their profit and make sure that the Scope brand is always the first mouthwash product ranking among consumers? The mouthwash market is changing everyday with the emergence of new products and product features. As a result, P&G wants their Scope brand to be the first choice among consumers. In the case of product development, PDD has demonstrated that Scope reduced plaque better than brushing alone because of the antibacterial ingredients in it. So the (Product Development) PDD has recently developed a new pre-brushing rinse product that performed as well as Plax but didn’t work any better than Plax in removing plaque. The key benefit of this recently launched product is that it tastes better than Plax. However, PDD’s preference was to not launch a new product, but instead to add plaque reduction claims to Scope. Since the basic argument was that it is better to protect the business that P&G was already in, than to launch a completely new entry. As for the case of sales, the sales people had noticed that Plax sales were increasing in the market place, and believed Scope should respond quickly, so they suggested that a brand must be unique and different enough from the competitors in order to be listed in the store shelves, or otherwise the category sales volume would spread over more units. Market researchers suggested that Hearst look at other benefits or alternatives beyond just a “plaque reassurance on scope” or a “a better tasting pre-brushing rinse” Whereas the point of view from finance, on one hand Plax had a high price so a new rinse might be a profitable option, on the other hand they were concerned about the capital and marketing costs which would increase. The purchasing manager estimated that the cost of the new ingredients of a line extension would increase by $ 2.55 and the packaging would cost $0.30. As for the advertising agency it favoured a line extension, since adding any new claim for scope is a huge strategic shift for the brand that would confuse the consumer and decrease the market share, because relating 2 different ideas is very difficult (breath refreshment & good tasting) (removes plaque). Hearst and the business team have two options, on one hand a line extension or new product positioned against Plax could be introduced into the market and in the other hand doing nothing and just looking at claims other than “breath” instead of adding a new product. Launching a new product “new pre-brushing rinse” would cannibalize a part of Scope sales, also the delivery, marketing and capital costs of P&G will increase if a new rinse was launched and the user of Scope would be confused since he/she saw in the old scope a breath refreshment, taking into consideration that the new rinse is not any better than Plax in
reducing plaque, but at the same time it may increase the market share of P&G and increase its profit. Whereas adding a new claim for Scope would not increase the volume of sales, but it could prevent current users of Scope to switch and it would stabilize the business, and even though the advertising agency thinks that it’s hard to relate two different claims, it should try to relate them in order to make an effective advertising that includes both “breath” and “plaque” claims. Since adding plaque reduction to breathe refreshment and good tasting is an additional benefit that the scope consumer can benefit from and it may attract the potential users that scope aim at. Also P&G has to collect more information to see what the consumer needs and improve it within the same product; especially that it is based on a philosophy of satisfying the customer needs. Scope was positioned around two benefits that are refreshing breath and good tasting, and it should stick to this position with other additional claims or benefits if it can, so it should not launch a new product that confuses the customers but stick to this position that it has in the market place and that is considered to be its competitive advantage. It’s better to protect the business that P&G is already in for many years and just add a plaque claim, than launching a completely new entry that is not secured.
Questions: 1) How will P&G develop a strategy that will ensure the continued profitability of Scope despite competition?
2) Should P&G take risk of introducing the completely new product for 3 years plan?
Discuss the advantage and risk involved.
3) How will P&G maintain their profit and make sure that the Scope brand is always the first
mouthwash product ranking among consumers in Canada?
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