ENVIRONMENTAL ANALYSIS NATURE OF THE ENVIRONMENT P&G Safeguard is operating in a complex and stable environment, complex because there

is a number of factors in its environment, about which less information, stable, because the changes in these factors is predictable factors, which makes its environment complex are: RETAILERS A group having strong influence over the opinion of the consumers regarding which soap should be purchased. This group is becoming more and more concern to their own incentives/margin. LOCAL PRODUCERSS Small soap manufacturing units, having no or very low overhead charges, under fix tax system or hidden units evading tax and growing like mushroom, involve in the low price soap war, exploiting consumers through retailers. REFERENCE GROUP People having social influence on their neighbors also affect on the sale of soap. TECHNOLOGY

Moderate changes in the technology of soap manufacturing decrease the PLC of soap. URBANIZATION Increase in rate of urbanization especially in Pakistan has made the environment more complex of soap industry.


which are affecting the business activities. along with this. TECHNOLOGICAL innovations is required so that the product does not become obsolete. Also there is terrorism prevailing in the important cities of the country like Karachi and Afghan War. SOCIAL people to use standardized product and people are diverting from the beauty soap to anti bacterial soap. product. ECONOMIC FORCES dropping people from high price soap to low price soap and providing more fuel for expansion of local Producers. the uncertainty in business activities. increasing inflation in the country have made it difficult for soap industry to transfer the whole increased cost at the consumer. . thus forcing the industry to operate at a very low margin. Policies about taxes are changing continuously due to changing government. SWOT ANALYSIS STRENGTHS plan for safeguard.POLITICAL AND LEGAL FORCES Rapid changes in the political scenario of the country along with the uncertain policies of the Government have made the whole business community as uncertain.

-lowest lost Workday Rate for employees. -lowest Injury/Illness Rate for employees. d manufacturing facility. they cannot reduce production cost of the safeguard. -established and renowned distributors. WEAKNESSES is 75 gm. . -income market. Price is especially very high towards lower income groups. enthusiastic sales team of the company.stomers. One Plant start production since 10th of April. -lowest property loss. But now expansion is being made in hub plant to increase production of safeguard.

the soap market is growing at an annual rate of 9.8%. because they are providing low price soaps and try to penetrate in their local market by replacing the branded products. . Due to this growing market. The main reasons for this growth are: advancements. there are lots of opportunities for P&G to exploit this growing market by introducing new soaps. purchasing power of consumers.OPPORTUNITIES information obtained by Chamber of Commerce and Industry Lahore. because they are already involved in different related businesses and providing raw material for soap production to different manufacturing companies like Colgate Palmolive. etc. Therefore. it is a good opportunity to capture this segment through efficient marketing practices. THREATS soap industry. the soap industry by introducing multiple brands of soaps because they have already different soaps in their international health and beauty care product line.

Substitute of the anti bacterial soap is beauty soap. the competitors are. In the case of soap industry. So competition is very tight. the threat of new entrants is low but not zero.8% per annum. Due to these reasons. Also the available soaps have a strong image among consumers and it is very difficult for new comers to break that image. Rivalry is greater between these three firms due to their equal sizes. which is 9. the industry is considered to be secure and attractive. Because to capture the high market share. it is very difficult for new comers to enter into the soap industry. THREAT OF NEW ENTRANTS It is generally said that the industry where the threat of new entrants is low. Danger of rivalry is greater when the competitors are of equal size. certain questions like what are the strengths of these pressures. an organized distribution channel is required for this industry which carry heavy cost. Because. In the soap industry. Since the quality of these substitutes . what type of competition is prevailing and what future competitive conditions will be included. there are chances that ICI may enter into the soap industry. THREAT OF SUBSTITUTES Substitute means a product which can perform the same functions as the original product can perform. the barriers to new entrants are large initial capital requirements and product differentiation as well. In the structure analysis. Anyhow. there are five forces which affect the competitive position in an industry and these forces are as follows:1) Competitive rivalry 2) Buyer’s power 3) Supplier’s power 4) Threat of new entrants 5) Substitute products COMPETITIVE RIVALRY Competition is concerned with the degree of rivalry within the industry. It seems that it offered very lucrative business opportunities but these opportunities also carry threats with them. Generally. -Palmolive Ltd. Soap industry shows growth rate..STRUCTURAL ANALYSIS PORTER MODEL Structural analysis helps to analyze the competitive process as well as the sources of competitive pressure.

and distribution channel. which became the lot selling soap. They company offers 6% profit margin to retailers on retail price. Also no discount is available on bulk purchases. they have maximum power. No bonus is given to retailers.is not comparable. They introduced soap with the name Lifebuoy Gold 1997. while lifebuoy 140gms is high price quality product for upper class. Distributor’s full force reaches almost every retailer irrespective of the size and delivers the product to him or her. Mostly they are following Pull Strategy. SUPPLIER’S POWER Supplier’s power is less because they are having support from their parent company for raw material and technological assistance. the buyers are the distributors. So the buyers have no handsome power to interrupt or interfere in the Soap industry. There is no scheme for retailers of any kind. Competitors in organized sector 2. COMPETITOR’S ANALYSIS Competitors of Safeguard can be categorized into two segments:1. to whom bulk amount of products is sold and this sale is maximally on the cash basis. It is operating in Pakistan since its independence. For example. then in this case. LEVER BROTHERS LIMITED Lever Brother Limited is the oldest company in Pakistan. There is a campaign started . middle class and lower class. Distributors also distribute the products to villages also after taking into consideration the budget as well as the business level of that village. Lever Brothers Limited emphasizes on the direct approach to the consumer and they have wellestablished sales force. Their target market is upper class. So there is low threat of substitute to the soap. threat of the substitute of high price soap like Safeguard is gradually increasing. Competition with local Producers COMPETITORS IN ORGANIZED SECTOR One other major competitor is doing excellent business in soap industry along with safeguard that is direct competitors of Safeguard. But due to rise in inflation in the country. But in the case of soap industry. BUYER’S POWER When there are a few number of buyers those purchase the large portion of a company’s sale. lifebuoy with 95gms is a lower price product for lower income people. They have produced products for each class with respect to different prices.

etc. COMPETITORS IN LOCAL MARKETS As local Producers of the soap industry.by company in order to cover the rural population. using promotional tools. Marketing resources include following ingredient: - P&G is doing concentrating efforts on the best quality growth opportunity in the whole soap market. BREATH AND DEPTH OF PRODUCT LINE . So. An organization with worthwhile marketing resources can fetch high sales and profit. as most of the population lives in the villages. For this purpose. They display their product brochures at every retailer. The company has strong financial background and has much excess budget for launching a new product. it’s difficult to isolate the major firms of this segment. INTERNAL RESOURCES AUDIT MARKETING RESOURCES Marketing resources are very critical for every organization because it leads to the performance of a company. there is large number of producers and each producer has a minor share in total share of the local Producers. They have heavily advertised their products on mass media. which cannot be used by the firms in organized sector. because their market share is maximum in soap industry and they are carrying marvelous profits. Therefore. are the firms under the protective tax policy of the government and even most of them are not paying tax. instead of this. they are offering small monetary incentive to the retailers. we can see the overall characteristics of this segment. they have made rural cluster zones.

Large institutions and mutual funds. Human Resources ensure that P&G has the employees. employee and shareholder value. they have different product depths are available providing by P&G as compared to their competitors in case of soap. and using new alternative test methods so we can reduce our need to do animal testing. In the depth they have:- rd Beige HUMAN RESOURCES P&G Pakistan is determined to create a way of working that release the energy and talents of everyone in the company and strips away everything that stifles creativity. and in order to enable their employees to achieve what is expected of them. P&G has 1. retirement programs. validating.P&G has launched one soap in the market of Pakistan in 1997. named safeguard. has the freedom to take initiatives. is accountable for the results and is properly rewarded for success. It is available only in two weight sizes. They work to increase the value of P&G stock for all their shareholders in a variety of ways.” SHARE HOLDERS Shareholders are important stakeholders at P&G. with nearly 20 percent held by employees and retirees. At present more than 300 employees are employed in P&G Pakistan. 14/* 125 grams Rs. They measure for tracking their success for . and our ultimate goal is to eliminate it. including growing the company’s sales and earnings each year. organizational design and work culture to deliver business productivity and to continually improve consumer. 21/- Therefore. the company has a well established program for the training and a system for the measurement of their performance. It aims to be a company in which very employee knows what is expected of them. * 75 grams Rs.3 billion shares of stocks outstanding. RESEARCH AND DEVELOPMENT “It is our policy to continue pushing the envelope when it comes to developing. individual investors and employees throughout the world own these shares. Individuals hold approximately 50 percent of their shares.

So this is beneficial for the safeguard in each segment. Because just providing quality products are not enough. P&G has developed a marketing information system. Moreover. with the help of this system. COMPANY IMAGE P&G is a multinational company and is using its corporate image as a marketing resource. If they got a chance to see the advertisement of P&G’s safeguard customer satisfaction and environmental safety are emphasized. all is useless. P&G gets market information. sales force of P&G is served as source of information about the market in different segments because its sales force has direct contact with the customers. and especially in soap industry. they have to make it excellent. but it has implemented different strategies to improve its image in future. So providing needs. They track TSR against 29 companies in similar industries. which leads to better marketing planning. they have the motto of cleanliness and protection from the germs. listen to shareholder feedback and provide perspective on Company decisions. . P&G tracks performance to compensate key managers based on how well they increase shareholder value. TSR measures how much value their investors receive as a result of owning P&G stock. which is a renowned distribution company in Pakistan and they have their distribution network in all major cities of the country. MARKETING INFORMATION SYSTEM Success of marketing plan depends upon the marketing information system of the organization. which will lead to a better corporate image of the company in future. P&G itself has no distribution channel for safeguard rather they are distributing the safeguard through International Brands Limited (IBL). At present. P&G is famous for its quality product. For environmental safety. Their Shareholder Relations team is available every day to answer questions. such as consumer. They have to show concern for their P&G has adopted all its ways to achieve this aim. DISTRIBUTION CHANNEL Distribution channel of a company is a very important for its survival. because if they will not make it easily available to the consumer.shareholders is total shareholder Return (TSR). In this way MIS servers as a critical resource of any organization. health care and beauty products. satisfying goods at the right place is very important.

P&G personnel take children to the seashore and arrange different amusement programs and deliver lectures how to dispose waste and how to promote cleanliness in the environment. P&G is spending millions of dollars in R&D worldwide. they followed two methods. RESEARCH AND DEVELOPMENT With respect to R&D. PROMOTION AND ADVERTISEMENT P&G has launched a new promotional program for safeguard. i) Health education programs in schools. ii) SEASHORE PROTECTION PROGRAM According to this program. i) HELATH EDUCATION PROGRAMS IN SCHOOLS According to this program. The company sets out to deliver the customers the right science with the right processes at the right place. These R&D cells are responsible to identify the technological breakthrough.As explained above that company image can be used as marketing resource. P&G Pakistan has a strong back from the P&G worldwide network of research and development P&G’s innovations is a major competitive strength and is driven by the market place. people are attracted to P&G. P&G hires doctors who go to schools and address children regarding cleanliness and germ protection through safeguard. taking place in these countries. That’s why market helps the sales force to persuade the customers. P&G is emphasizing only on urban areas. because their target market is middle and upper class and this class is mostly located in urban areas. P&G is using corporate image as a marketing resource. In this way. Therefore. while rural areas are neglected. They are mostly . Due to the image. due to their product features. For this purpose. It must be seen to provide a quality of service. while they have R&D cells in the countries in which the operations of business are going on. their market coverage is better. ii) Seashore protection. MARKET COVERAGE As far as safeguard is concerned. which is the best in the market.

915 2001 358.7% 8 times 34. The impressive growth recorded by the soap industry enabled it to make this contribution.2% 8. This is due to increase in sales of safeguard in 1999.525 A financial analysis for the last three years is: Year Operating Profit Margin Asset Turnover Return on Assets Increase in Sales Increase in Assets 1999 6.6.3% of the company’s profit. corporate name is at its back as sound credit worthiness for any borrowed fund. in 000) Year 1999 Sales 276.9% 6. FINANCIAL RESOURCES The safeguard business accounts contribute nearly 6. times 32% 112% 128% Along with this internal resource generation.3 times 35% 60% 120% 2000 6.558 2000 308.4% 50% 125% 2001 5.customer oriented for which they test the products in the market and then introduce it to the whole target market. SALES VOLUME (Rs. PROBLEM STATEMENT P & G is facing the problems in the following areas: .

great competition in the local Producers due to low price soap and also great competition in the organized sector due to equal size of the competitive organizations.. Other competitors in the soap industry are serving in each class with respect to different prices & their target market is upper class. distribution network which is a renowned distribution company. Safeguard’s Price is especially very high towards lower income groups. . This way they create awareness and demand for the safeguard. Regarding the commercials on TV. They also advertise these practices on television. P&G gives high media coverage to Safeguard. MARKETING STRATEGIES PROMOTIONAL STRATEGIES P&G gives high emphasis on direct approach to customers. they follow the policy that their commercials will not be executed right before and after the commercial of competitors. They involve children and house wises in their campaign and then asks them to give comments. DISTRIBUTION STRATEGIES As described earlier that P&G is distributing safeguard through International Brands Ltd. They try to satisfy the customer at the spot and then sell a small size of 75 gm pack for trial basis. -income market. In each IBL office. EXISTING STRATEGIES OF P&G for SAFEGUARD P&G is following different strategies in different marketing practices for safeguard. each class with respect to different prices. there is an Area Sales manager of P&G who is responsible to watch the activities of IBL regarding distribution of Safeguard and make direct contact with customers to obtain the complaints. This is also the reason for the high price. middle class and lower class. often sponsors famous plays on dramas on TV. neglected. channel for safeguard rather they are distributing the safeguard through International Brands Limited (IBL). Its sales teams visits schools after schools along with the medical practitioners and demonstrate experiments of hand and face washing in comparison with other soaps.

21 for 125 gm pack. The above analysis shows that safeguard is a question mark in soap industry. question mark or dog. So they are now spending $ 3 million to expand the Hub plant where safeguard is manufactured. BOSTON CONSULTANT GROUP MATRIX Market Share The BCG Matrix tells about the position of the products either as star. cash cow. the market growth rate of soap business is faster than general economy. The two dimensions of this matrix are the relative market share and on y –axis industry growth rate. This is due to increasing population and urbanization in the country. PRODUCT STRATEGIES Safeguard is quality product as described earlier and P&G do not compromise on quality. they are following differentiation strategy.8% per annum. There are the marketing strategies of safeguard but there are a group of strategies.PRICING STRATEGIES P&G always emphasizes safeguard as quality product and they try to differentiate it as compared to competitors. Second. . which determine the strategies of company regarding a product. But they have set the price of 125 gm of Safeguard Rs. Therefore. The market share of safeguard (P&G) in soap industry is lower than their competitors because of price sensitivity and its market share is increasing. P&G have resources to move it towards star. From the 10th of April another production unit has started production for safe guard to meet the expanding marketing needs. Therefore. which is 9. company should seek out new opportunities. we can say they are somewhat following competitive price strategy. 21 which is equal to the major competitor product Detol soap having price of Rs. in product strategy. It is recommended for question mark to follow growth-oriented strategies and more investment. For growth strategy.

5 11.GENERAL ELECTRIC COMPANY MATRIX General Electric Company (GEC) Matrix uses the dimensions of industry attractiveness and business strengths to identify the current position of the company and suggests which type of strategy should be used.5=Medium 0=Low 1 .50 FACTORS Weight Score MARKET SIZE AND GROWTH RATE INTENSITY OF COMPETITION PROFITABILITY CAPITAL REQUIREMENT OPPORTUNITIES AND THREATS BARRIERS TO ENTRY AND EXIT TOTAL 30 20 10 15 15 10 100 30 18 6 10.75 . In soap industry.60 .90 . following factors are applicable: INDUSTRY ATTRACTIVENESS Rating 1=High .25 5 80.75 . certain factors are selected.70 . To measure each dimension.

SPACE MATRIX Strategic Position and Action Evaluation Matrix is useful for determining the current strategic position of the organization with reference to its environment and helps deciding the strategy profiles for the company. In the context of P&G. the factors considered and intensity of their influence is given below: - COMPETITIVE ADVANTAGE Rating 6=Low 0=High -4 -1 -3 -2 -1 -3 -1 -15 - FACTORS Market share Product quality Customer loyalty Control over distributors and suppliers Promotional activities Product price TECHNICAL KNOW-HOW TOTAL .

Average -2.5 +4 FACTORS Growth potential Profit potential Financial stability .14=-2 ENVIRONMENTAL STABILITY Rating 6=Low 0=High -3 -2 -3 -1 -5 -3 -17 -2.83=-3 - FACTORS Technological changes Rate of inflation Barriers to entry into market Competitive pressure Demand variability Price elasticity of demand Total Average INDUSTRY STRENGTH Rating 0=Low +6=High +5 +3.

5 +4 +24 +4 ES The direction vector points towards the aggressive quadrant. which is at the growth stage. Market penetration can be done through heavy advertisement and by providing products of different sizes and types for different consumers. Therefore. new segments and entering into new geographic areas. organization should find the new uses of product. This is probably done for a product. For this purpose. MARKET DEVELOPMENT In market development strategy. highly extensive distribution channel should be used. Still safeguard is being used for germs protection . the suitable strategies for P&G safeguard are:Market penetration Market development Product development MARKET PENETRATION Market penetration means to exploit the available consumer efficiently to achieve high market share.Technological know how Resources utilization EASE OF ENTRY INTO MARKET TOTAL Average SCORE ON X=AXIS Competitive Advantage = -2 Industrial Strength = +4 Total Score on x-axis = -2(+(+4)=+2 SCORE ON Y-AXIS Financial Strength = +5 Environmental Stability = -3 Total Score on y-axis = -3 +(+5) = +2 Coordinates (+2_+2) +5 +2.

For safeguard P&G is intensifying the efforts to increase the market share in growing industry because soap industry is growing with an annual rate of 9. they should identify the new such as for crockery purpose and explore the new and potential customers. Therefore. which is also a big market for soaps like safeguard. . PRODUCT DEVELOPMENT For product development. Therefore. safeguard can fetch the customers of competitors and will be successful in building new customers. because they are intensifying their efforts on advertisement and promotional activities. they should efficiently utilize their Marketing Information System to collect information about the demand and attitudes of the people in these areas. PRODUCT DEVELOPMENT STRATEGY It describes to develop new products or modify the existing products with respect to size. Therefore. All these problems require following strategies: MARKET DEVELOPMENT STRATEGY P&G is emphasizing on urban areas while it has neglected the suburban areas. color. focusing on urban areas and more emphasis on middle and upper class.8%. etc.purpose. packaging. we can say they are following consolidation strategy for safeguard. P&G should acquire one more product or manufacturing plant for the production of safeguard to capture the wide market. For this purpose. development of internal resources is emphasized. PROPOSED STRATEGIES The practice of incomplete market coverage should not be followed because you cannot hijack other company’s customers and new customers as well. By using this strategy.

which cannot satisfy the demand of every segment. Therefore. As far as launching of new product is concerned. While the products of the competitors are available in multiple sizes which provide abundant choices for purchases to customers for example Lifebuoy Gold has 140gm and 95gm and Medicame has 80gm soap available in the market This provide an opportunity to the customer to have multiple choices. they will require taking this step as well because they have some other soap like ivory.Safeguard is a well-perceived product among the customers. 75gm and 125gm. This is what they have analyzed through market survey. it is available in two sizes. but in future. On the other hand. it is more useful to supplement this idea with existing safeguard or introduce safeguard into different pack sizes especially for capturing the female customers. and at this moment. Therefore. it is not necessary for P&G at this moment. it is necessary that safeguard should be available in maximum possible sizes to meet the selection criteria of the customer. in case of safeguard the choice to customer is very limited. It can be a threat for the market share of safeguard. we have analyzed through its product formula. MARKET PENETRATION STRATEGY It describes that a company tries to sell more of its product by introducing new supplementary uses. This characteristic. and zest which are very famous in international market. which contains such chemicals useful for beauty care as well. Safeguard is that product. .