EVALUATION OF OPTIONS

 Option1 : New Product Offering

 Option2 : Product Improvement
 Option3 : Increase marketing Expenditure
ARGUMENTS FOR NEW
PRODUCT LAUNCH
 Underlying Case Facts
REASONS FOR P&G’s SUCCESS
 (4) Innovative product offerings with superior benefits at competitive prices.
 In 1981,President : John Smale quoted importance in R&D
 Brand Managers were evaluated on their ability to build brand business

UNDERLYING NUMBERS
• PS&D Division spent $30 million on R&D in 1981
• PS&D Division spent $20 million on Consumer and Market Research
 CONSUME
MARKET
R
DYNAMICS
DYNAMICS

Market Indicators 1981 House-hold indicators

Market Value ($) $850 million Average brand/HH 1.5
Market Volume Average annual
(ounce) 18290000000 consumption (ounce) 374.4
Market Volume Average annual
(cases) 59 million
frequency of purchase 13
Category Growth COMPETIT
by Volume 1%
House Hold OR
Growth 1.50% DYNAMICS
Segment Indicators Lever Phoenix 1980Gained 10% MS in test
1981 CAGR(%) Colgate Dermassage 1974
Mildness 21.83 -2.21
Performance 20.65 7.02
Price 16.52 -3.05