Individual Mid-Term

Principle Of Marketing
Project
HCM University Of Banking Word Count: 1610 words

Course name : Principle Of Marketing

Course code : MKE308_2312_K4D2
Lecture name: Ms. Dinh Thu Quynh
Assignment : Analysing & Answering Company Case - Chapter 6
Student name: Nguyen Nhat Minh
Student ID : 120604220052
1.Question: 6-18 Compare and contrast the nature of the business market structu
re and demand relative to consumer market structure and demand for a specific P
&G product.

P&G's main business market structure clients are large retail companies like Wal
mart, Walgreens, and Dollar General. These companies are complicated, have thousan
ds of stores, and bring in billions of dollars annually. These corporate clients place a str
ong emphasis on customer satisfaction, supply chain optimization, and cost effectivenes
s. In this market, P&G's clients are likewise well-educated and in need of multifunctional
support.

In contrast, P&G sells its products directly to individual customers through a varie
ty of retail outlets in the consumer market. Customers have different tastes and are influ
enced by branding, advertising, and their own preferences when making purchases. Co
mparing the consumer and business markets, the former is less complex and more frag
mented.

2.6-19 For the same product, discuss the differences in the types of decisions an
d the decision process for business and consumer markets.

For the same P&G product, such as laundry detergent (e.g., Tide), the decision-making
process and types of decisions differ between business and consumer markets:

Business Market:

- Decision-Makers: In the business market, decisions are made by procurement manag

ers and retail category buyers.

- Type of Decisions: The decisions primarily revolve around supply chain efficiency, cos
t-effectiveness, and the creation of value for the retailer's customers. These decisions in
volve bulk purchases, negotiations on pricing, and delivery schedules.

- Decision Process: The decision process is more formalized, involving vendor assessm
ents, cost-benefit analyses, and contract negotiations. It may take longer to finalize a de
al as it often requires input from various departments within the retailer.

Consumer Market:

- Decision-Makers: In the consumer market, individual consumers or households make

purchasing decisions.
- Type of Decisions: Consumer decisions are influenced by brand reputation, advertisin
g, product features, scent, packaging, and personal preferences. The focus is on produc
t quality and how it meets their needs.

- Decision Process: The decision process is more personal and emotional, driven by fac
tors like product reviews, recommendations, and in-store promotions. It's a relatively qui
ck decision based on individual preferences and needs.

6-20 This case covers the various members of a P&G Customer Business Develo
pment team. For a P&G corporate client, illustrate how the different roles of the b
uying center might interact with that CBD team. Be specific.

A P&G Customer Business Development (CBD) team interacts with the buying center of
a corporate client, such as Walmart. The buying center typically includes various roles:

1. Procurement Manager (Decision Maker): The procurement manager is responsible fo

r making the final purchasing decision. They interact with P&G's account executives to n
egotiate pricing, contract terms, and delivery schedules. The CBD team collaborates wit
h this role to ensure a mutually beneficial agreement.

2. Retail Category Buyers: These buyers are experts in specific product categories. P&
G's account executives interact with them to discuss category management, product as
sortment, and promotional strategies. The CBD team works closely with category buyer
s to optimize product placement and sales.

3. Marketing Specialists: P&G's CBD team includes marketing specialists who collabora
te with the client's marketing team to create in-store promotions, advertising strategies,
and consumer engagement initiatives.

4. Logistics and Operations Specialists: P&G's logistics and operations specialists work
with the client's operations team to optimize supply chain efficiency, ensure timely delive
ries, and manage inventory effectively.
5. Finance Specialists: P&G's finance specialists collaborate with the client's finance de
partment to negotiate payment terms, resolve financial matters, and ensure a profitable
partnership.

6. Information Systems Specialists: These specialists ensure seamless data exchange

between P&G and the client for efficient order processing, inventory management, and
performance tracking.

7. Human Resources Specialists: HR specialists might work with the client's HR team o
n matters related to staffing, training, and organizational development.

The CBD team's multifunctional structure allows it to engage with each member of the b
uying center, offering tailored solutions and addressing specific needs. By doing so, P&
G aims to align its strategy with the client's objectives, create demand, optimize supply,
and enable the organization to maximize business results.

6-21 Discuss some ways that P&G’s CBD structure is more effective than a single
sales rep.

P&G's CBD structure is more effective than a single sales rep in several ways:

1. Multifunctional Expertise: The CBD team consists of specialists in various fields, such
as marketing, logistics, operations, and finance. This collective expertise allows them to
provide comprehensive solutions to the client's complex needs, which a single sales rep
cannot offer.

2. Collaborative Problem-Solving: The multifunctional nature of the CBD team enables t

hem to collaborate and address a wide range of issues faced by the client. They can qui
ckly access the right experts within the team to resolve challenges, leading to more effe
ctive problem-solving.

3. Strategic Partnership: The CBD team is focused on building enduring relationships wi

th clients and collaborating on strategic development. This approach goes beyond basic
selling and fosters long-term partnerships based on mutual success, which is challengin
g for a single sales rep to achieve.

4. Tailored Solutions: With a team structure, P&G can provide customized solutions that
match the specific requirements and objectives of each client. A single sales rep may str
uggle to offer this level of customization.

5. Efficient Resource Allocation: The CBD team ensures that the right resources are allo
cated to meet the client's needs. For instance, if a client requires help with in-store prom
otions, the team can easily engage marketing specialists, optimizing resource allocation.

6-22 Why have P&G’s competitors not been able to duplicate its customer relation
ship strategy?

P&G's competitors have struggled to duplicate its customer relationship strategy for sev
eral reasons:

1. Pioneering Advantage: P&G was a pioneer in developing the Customer Business Dev
elopment (CBD) structure, giving it a first-mover advantage. This allowed them to establi
sh strong relationships with clients and build a reputation for collaboration.

2. Scale and Resources: P&G is a large and financially robust company, allowing it to in
vest in a massive sales force and a multifunctional CBD team. Smaller competitors may
lack the resources to replicate this structure effectively.

3. Long-Term Commitment: The foundation of P&G's strategy is a dedication to endurin

g customer connections. It is possible that rivals are more concerned with making quick
money than making large, long-term investments.

4. Comprehensive Strategy: P&G's CBD strategy encompasses all aspects of the custo
mer's business, including supply chain optimization, marketing, and financial collaborati
on. Competitors may struggle to offer such a comprehensive approach.

5. Trust and Reputation: By being truthful and transparent in its business practices, P&
G has gained the trust of clients. Competitors may not have the same level of trust and r
eputation in the market.

6. Multifunctional Expertise: P&G's CBD structure, with specialists in various fields, offer
s a holistic approach that competitors may find challenging to replicate.
7. Cultural and Organizational Shift: Implementing P&G's strategy may require significan
t cultural and organizational shifts that some competitors may be reluctant to undertake.

8. Client Focus: P&G's primary goal is to help the customer win, even if it means recom
mending a competing brand. This client-centric approach might be contrary to the intere
sts of some competitors.

6-23

P&G's divestment of 100 brands was a strategic move to focus on a smaller portfolio of i
ts strongest-performing brands, which accounted for a significant portion of its revenues
and profits. Whether this divestment will pay off depends on several factors, and it appe
ars to have both advantages and potential risks:

Advantages of Divestment:

1. Focus on Core Brands: By concentrating on the most profitable and market-leading b

rands, P&G can allocate more resources and attention to these products. This focused
approach can lead to improved innovation, marketing, and overall brand performance.

2. Streamlined Operations: Reducing the number of brands simplifies the company's op

erations, supply chain, and distribution, potentially leading to cost savings and greater o
perational efficiency.

3. Profit Maximization: The retained brands are high-performing and profitable. P&G can
leverage its customer relationships and resources more effectively for these brands, pot
entially driving increased sales and profits.

4. Enhanced Customer Relationships: Focusing on a smaller brand portfolio aligns with

P&G's strategy of deepening its customer relationships and providing tailored solutions t
o its key clients.

Potential Risks:
1. Loss of Revenue: Divesting numerous brands means giving up some revenue stream
s. While P&G aims to focus on more profitable brands, the loss of revenue from diveste
d brands may impact the company's top-line growth.

2. Market Competition: Relying on a smaller number of brands can make P&G more vul
nerable to market fluctuations and competition. Diversification can provide some protecti
on against changes in consumer preferences or market dynamics.

3. Integration Challenges: Managing a large-scale divestment and ensuring a smooth tr

ansition can be complex. Challenges may arise in terms of employee transitions, contra
ctual obligations, and the sale of brands.

4. Strategic Mistakes: Picking the right brands to divest is critical. Selling off a brand that
later becomes highly successful could be a strategic mistake. The retained brands must
continue to perform well to offset any such losses.

5. The Balancing Act: P&G needs to find a happy medium between selling off underperf
orming brands and holding onto those with room to grow. Excessive dedication to a sma
ll number of brands may carry additional risks.

P&G's ability to use its advantages—such as solid customer relationships, operational e

ffectiveness, and capacity for brand development—to propel growth and profitability in t
he brands it has retained will determine how well its divestment plan performs. Addition
ally, it will rely on how well P&G's plan handles any possible risks related to divesting.

It is unclear what this strategy will result in in the long run as of January 2022, when I la
st updated my knowledge. To truly determine how the divestment will affect P&G's busin
ess, more recent financial reports and performance data must be taken into account.