Case#1 SCOPE Faizal Gillani
Summary:
The case is about Procter & Gamble, Inc. It is one of the most successful consumer goods company. There are many recognized and successful brands under the name of P&G. Scope being one of them is the lead to this case. Scope, with its superior quality and value that fits the consumer’s needs, is one of the leading products in Canada dominating 32% of the total market.
Gwen Hearst, the brand manager of Scope was responsible for maximizing the market share, value, and profitability. She was to plan a marketing strategy for the next three years to ensure continued profitability of Scope. This plan was to be presented to the senior management in March of 1991. She had been observing, Plax, a new company, that looked like a threat to Scope, gaining a 10% share of the total market within two years of its existence and segmenting the market with a pre-brushing mouthwash that had the benefit of a plaque fighter.
In Canadian market, Scope was positioned for its taste and mouth refreshing mouthwash with its closest competitor Listerine positioned for the same. Listerine later shifted its strategy in 1988 promoting the benefits Plax came up with, moving towards plaque fighting, and preventing inflamed gums by plaque. It was approved by American Dental Association but did not receive a seal of approval in Canada. Then they added fluoride to the listermint and received the dental association seal on it for preventing cavities. There were many companies that followed the same segment of the market. Colgate came into action with a new Colgate fluoride rinse that fights cavities with a mild taste segmenting the market by targeting the kids. This improved their share by 2 % and then declined the next year. During the same year in 1988 Cepacol came into agreement with Strategic brands, a company that markets variety of household consumer products. They focused on higher distribution through price promotion. Additionally Plax’s launch on a different platform had gained success immediately surprising other industries.
It was a pre brushing mouth which was a unique propaganda as most of the mouth wash industries had after brushing use. It claimed that “rinsing with Plax, then brushing normally removes up to three times more plaque than just brushing.” Later turned out that they claimed it on the basis of brushing without using toothpaste for 15seconds for which they had to change their claim. Hearst was in a dilemma on what would be the best option that will keep the continued profitability for Scope. She had two thoughts in her mind: to add a product under Scope or come up with a separate product line to increase the holdings. She extended her thought within different departments of the company to know different prospects of the decision to finally come to a conclusion.
Assumptions:
· Looking at claims other than ‘breath’ if used for Scope.
· Adding a product under the brand name of Scope.
· Impact on credibility with dental professionals
· Fear of losing loyal customer
Limitation:
There was lack of information about the competitor’s strategy that improved their sales every year. Like, Listerine had been improving its hold on the market every year. The details of adding a product cost and manufacturing details were lacking, when it took into consideration the fact of adding a product. Estimated investment for the new product would have given a better picture to the decision.
Main Concern: The main concerns were developing strategies that would ensure the continued profitability in the phase of the competitive threats and launching a new product under the name of scope or creating a new product line.
Vantage Points:
The launch of a new product under the brand name of Scope will be a good idea, as the company is recognized and might not need a lot of promotion to create brand awareness among people. Furthermore, it would save the additional cost of registering a new product line and this new product will give rise to Scope’s birth in a new segment of mouthwash. The product idea may be coming up with a mouthwash combining plaque fighting formula and preventing bad breath. Highlighting this with no alcohol would make it superior from other brands, as my research tells me most of the companies use alcohol in their product. Plax used alcohol to destroy the bad breath which has been proven wrong by many researchers and dentists. Research shows that it is not really the bacteria that needs to be killed, but the compounds known as “volatile sulfur compounds” produced by this and alcohol has not been effective destroying them, instead it is supposed to harm the oral health consumption of alcohol more than many . Projecting the non-alcoholic formula may seek attention of many families and may be beneficial towards its success.
Price Promotion strategy may be applied to attract customers to experiment the product. As the company name is very familiar amongst consumers, it will create a market in itself.
Diagnosis:
If the company decides to add a product to its name it might increase the total market holding of the company, as customers will try the product on the brand recognition of Scope and if it really makes a difference it would extend credibility and people might switch from other brands. Price promotion will be one of the important factors to higher sales. The company may improvise a new strategy by providing sample size product with the dentist to recommend the consumers as they did for Plax. Looking at the survey done in 1990 about consumers perception of brand images, Scope in its attributes was below average for many cases except among its brand user it had an ‘+’ which defined it’s above average performance in bad breath reduction. By this we understand that the consumers were switching products that benefitted them to healthier teeth. This was the reason we see that the market share for Scope in Canada had a decline from a consistent 33.0% in 1988 and 1989 to 32.3% in 1990.It closest competitor had been constantly growing starting a 15.2% in 1988 through 16.6% in 1990.This was a really good platform for Scope to add a product to its name that had more benefits than just ‘bad breath ‘reduction. The competitive market data of advertising expenditure revealed that Scope’s expenditure was 1700(000’s) even though it had a market share of 32.3%. Whereas its competitor holding, 16.6%. It had an advertizing expense of 1600(000’s) which might have been the reason for Listerine’s steady progress from the past years. Listerine had been gaining its market stake by promoting the benefits of its mouthwash that reduced plaque and gingivitis. Having said that it was really important for Scope to come up with a product as beneficial as listerine to create a positive vibe among consumers and change the market perception of the company.
Cons: The task and risky factor to Scope is that the product might not have to expend on brand awareness but research on the formula and taste to keep up with the brand recognition.
Prescription:
I believe the best decision for P&G would be adding a product under the name, as it will target the new market segment, increase the sales and market value of the company. Marketing the new product defining its benefits should be an individual venture, to create consumer awareness that will differentiate this drug category from its actual Scope cosmetic category.
Implementation Table:
| Time Line | Model or Strategy | Resource | Tactics |
| Week 1 | Product Development Strategy | Who have the knowledge about the formulations Researchers, Pharmacist HPB and CDA | To give better quality and beneficial output. |
| Week 2 | Promotional Alliance | Marketing Companies | To reach the targeted segment at a large scale. |
| Week 3 | Differentiation | Media | To portray a clear picture of the segment and avoiding miscommunication of the generic product. |
