A PROJECT REPORT

ON

MARKETING STRATEGIES OF PROCTER AND GAMBLE (PANTENE)

Submitted to University of Mumbai in

Partial fulfilment

Of the requirement of the Degree of

M.COM (BUSINESS MANAGEMENT) PART 1.

Under guidance of

S.N.CHITALE

SUBJECT

STRATEGIC MANEGEMENT

VPM’ S

K.G Joshi College of Arts

N.G Bedekar College of Commerce

Thane (W)

Academic Year: 2014-15

BY-

AMRITA UPENDRANATH BHAT

1

Roll No.15

VIDYA PRASARAK MANDAL, THANE

K. G. JOSHI COLLEGE OF ARTS &

N. G. BEDEKAR COLLEGE OF COMMERCE

CERTIFICATE

OF

PROJECT WORK

This is certify thatThis is certify that

Mr. / Ms. _______________________________________________ OfMr. / Ms. _______________________________________________ Of

M.Com. ( Advanced Accountancy ) Part.: ____M.Com. ( Advanced Accountancy ) Part.: ____ Semester :_____ Roll No. : _____ has undertaken &Semester :_____ Roll No. : _____ has undertaken &

completed the project work titled ___________________completed the project work titled ___________________

______________________________ during the academic year______________________________ during the academic year ____________________

under the guidance of Mr. / Ms.under the guidance of Mr. / Ms. ______________________________________________________________________

Submitted on _____________ to this college in fulfillmentSubmitted on _____________ to this college in fulfillment of the curriculum of of the curriculum of MASTER OF COMMERCEMASTER OF COMMERCE

( ADVANCED ACCOUNTANCY ) UNIVERSITY( ADVANCED ACCOUNTANCY ) UNIVERSITY OF MUMBAI .OF MUMBAI .

This is a bonafide project work & the informationThis is a bonafide project work & the information presented is True & original to the best of ourpresented is True & original to the best of our

knowledge and belief .knowledge and belief .

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PROJECT GUIDE EXTERNAL PROJECT GUIDE EXTERNAL EXAMINER

DECLARATION

I am AMRITA UPENDRANATH BHAT studying in MCOM Part-1 hereby declare that

I have done a project on reference to MARKET STRATEGY OF MCDONALDS. As required by

the university rules, I state that the work presented in this thesis is original in

nature and to the best my knowledge, has not been submitted so far to any other

university.

Whenever references have been made to the work of others, it is clearly indicated

in the sources of information in references

Student

(AMRITA UPENDRANATH BHAT)

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Place: Thane

Date

ACKNOWLEDGEMENT

It gives me great pleasure to declare that my project on MARKETING STRATEGIES OG PROCTER AND GAMBLE (PANTENE) have been prepared purely from the point of view of students requirements.

This project covers all the information pertaining to MARKETING STRATEGIES OF PROCTER AND GAMBLE (PANTENE) I had tried my best to write project in simple and lucid manner. I have tried to avoid unnecessary discussions and details. At the same time it provides all the necessary information. I feel that it would be of immense help to the students as well as all others referring in updating their knowledge.

I am indebted to our principal Dr. Mrs. Shakuntala A. Singh Madam for giving us such an awesome opportunity. I am also thankful to our coordinator Mr. D.M. Murdeshwar Sir and also librarian and my colleagues for their valuable support, co-operation and encouragement in completing my project.

Special thanks to Prof. S.N.CHITALE my internal guide for this project for giving me expert guidance, full support and encouragement in completing my project successfully.

I take this opportunity to thanks my parents for giving guidance and for their patience and understanding me while I am busy with my project work.

Lastly I am thankful to God for giving me strength, spirit and also his blessings for completing my project successfully.

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INDEX

SR NO.

CONTENTS PAGE NO.

1. INTRODUCTION 6

2. COMPANY PROFILE 11

3. HISTORY 13

4. PURPOSE AND MISSION 16

5. 4 P’S ANALYSIS OF PANTENE 20

6. MARKETING ANALYSIS AND STRATEGIES ADOPTED BY P&G

31

7. MARKETING STRATEGIES 34

8. SWOT ANALYSIS 33

9. PESTLE ANALYSIS 40

10. CHALLENGES 41

11. RECOMMENDATION 42

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INTRODUCTION

What is marketing strategy?

Marketing strategy is the goal of increasing sales and achieving a sustainable competitive advantage. Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives.

Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases.[4] Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics. Marketing strategy needs to take a long term view, and tools such as customer lifetime value models can be very

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powerful in helping to simulate the effects of strategy on acquisition, revenue per customer and churn rate.

Marketing strategy involves careful and precise scanning of the internal and external environments. Internal environmental factors include the marketing mix and marketing mix modeling, plus performance analysis and strategic constraints External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.

Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.

Types of marketing strategies :

Strategies based on market dominance - In this scheme, firms are classified

based on their market share or dominance of an industry. Typically there are four

types of market dominance strategies:

Leader

Challenger

Follower

Nicher

According to Shaw, Eric (2012). "Marketing Strategy: From the Origin of the

Concept to the Development of a Conceptual Framework". Journal of Historical

Research in Marketing., there is a framework for marketing strategies.

Market introduction strategies

"At introduction, the marketing strategist has two principle strategies to choose

from: penetration or niche" (47).

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Market growth strategies

"In the early growth stage, the marketing manager may choose from two additional

strategic alternatives: segment expansion (Smith, Ansoff) or brand expansion

(Borden, Ansoff, Kerin and Peterson, 1978)" (48).

Market maturity strategies

"In maturity, sales growth slows, stabilizes and starts to decline. In early maturity,

it is common to employ a maintenance strategy (BCG), where the firm maintains

or holds a stable marketing mix" (48).

Market decline strategies

At some point the decline in sales approaches and then begins to exceed costs. And

not just accounting costs, there are hidden costs as well; as Kotler (1965, p.  109)

observed: 'No financial accounting can adequately convey all the hidden costs.' At

some point, with declining sales and rising costs, a harvesting strategy becomes

unprofitable and a divesting strategy necessary" (49).

Early marketing strategy concepts were:

Borden's "marketing mix"

"In his classic Harvard Business Review (HBR) article of the marketing mix,

Borden (1964) credits James Culliton in 1948 with describing the marketing

executive as a 'decider' and a 'mixer of ingredients.' This led Borden, in the early

1950s, to the insight that what this mixer of ingredients was deciding upon was a

'marketing mix'" (34).

Smith's "differentiation and segmentation strategies"

"In product differentiation, according to Smith (1956, p. 5), a firm tries 'bending

the will of demand to the will of supply.' That is, distinguishing or differentiating

some aspect(s) of its marketing mix from those of competitors, in a mass market or

large segment, where customer preferences are relatively homogeneous (or

heterogeneity is ignored, Hunt, 2011, p. 80), in an attempt to shift its aggregate

demand curve to the left (greater quantity sold for a given price) and make it more

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inelastic (less amenable to substitutes). With segmentation, a firm recognizes that it

faces multiple demand curves, because customer preferences are heterogeneous,

and focuses on serving one or more specific target segments within the overall

market" (35).

Dean's "skimming and penetration strategies"

"With skimming, a firm introduces a product with a high price and after milking

the least price sensitive segment, gradually reduces price, in a stepwise fashion,

tapping effective demand at each price level. With penetration pricing a firm

continues its initial low price from introduction to rapidly capture sales and market

share, but with lower profit margins than skimming"

Forrester's "product life cycle (PLC)"

"The PLC does not offer marketing strategies, per se; rather it provides an

overarching framework from which to choose among various strategic alternatives"

(38).

There are also corporate strategy concepts like:

Andrews' "SWOT analysis"

"Although widely used in marketing strategy, SWOT (also known as TOWS)

Analysis originated in corporate strategy. The SWOT concept, if not the acronym,

is the work of Kenneth R. Andrews who is credited with writing the text portion of

the classic: Business Policy: Text and Cases (Learned et al., 1965)" (41).

Ansoff's "growth strategies"

"The most well-known, and least often attributed, aspect of Igor Ansoff's Growth

Strategies in the marketing literature is the term 'product-market.' The product-

market concept results from Ansoff juxtaposing new and existing products with

new and existing markets in a two by two matrix" (41-42).

Porter's "generic strategies"

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Porter generic strategies – strategy on the dimensions of strategic scope and

strategic strength. Strategic scope refers to the market penetration while strategic

strength refers to the firm's sustainable competitive advantage. The generic strategy

framework (porter 1984) comprises two alternatives each with two alternative

scopes. These are Differentiation andlow-cost leadership each with a dimension

of Focus-broad or narrow. ** Product differentiation ** Cost leadership

Market segmentation

Innovation strategies – This deals with the firm's rate of the new product

development and business model innovation. It asks whether the company is on

the cutting edge of technology and business innovation. There are three types: Pioneers Close followers Late followers

Growth strategies – In this scheme we ask the question, "How should the firm

grow?". There are a number of different ways of answering that question, but

the most common gives four answers:

Horizontal integration

Vertical integration

Diversification

Intensification

These ways of growth are termed as organic growth. Horizontal growth is whereby

a firm grows towards acquiring other businesses that are in the same line of

business for example a clothing retail outlet acquiring a food outlet. The two are in

the retail establishments and their integration lead to expansion. Vertical

integration can be forward or backward. Forward integration is whereby a firm

grows towards its customers for example a food manufacturing firm acquiring a

food outlet. Backward integration is whereby a firm grows towards its source of

supply for example a food outlet acquiring a food manufacturing outlet.

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A more detailed scheme uses the categories:Miles, Raymond

(2003). Organizational Strategy, Structure, and Process. Stanford: Stanford

University Press. ISBN 0-8047-4840-3.

Prospector

Analyzer

Defender

Reactor

Marketing warfare strategies – This scheme draws parallels between marketing

strategies and military strategies.

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COMPANY PROFILE

Three billion times a day, P&G brands touch the lives of people around the world. This is the company which is rooted in the principles of personal integrity, respect for the individual and doing what's right for the long-term. Before analyzing the company on various parameters let’s first have a view of the company profile.

Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500, American multinational corporation based in Cincinnati, Ohio, that manufactures a wide range of consumer goods. It is a brand behemoth. The world's number one maker of household products courts market share and billion-dollar brands. As of 2008, P&G is the 6th largest corporation in the world by market capitalization and 14th largest US company by profit. It is 10th in Fortune's Most Admired Companies list (as of 2007). P&G is credited with many business innovations including brand management, the soap opera, and "Connect & Develop" innovation.

According to the Nielsen Company, in 2007 P&G spent more on U.S. advertising than any other company; the $2.62 billion it spent is almost twice as much as General Motors, the next company on the Nielsen list. P&G was named 2008 Advertiser of the Year by Cannes International Advertising Festival. est company in the world in Fast Moving Consumer Goods (FMCG) industry.

It manufactures nearly 300 brands (such as: Ariel, Blend-a-Med, Bonux, Head&Shoulders, Pampers, Always, Fairy, Gillette, Wella) to nearly five billion customers, competing in 160 marketplaces. More than 130 000 employees in more than 80 countries worldwide work everyday to provide products of superior quality and value to the world's consumers. As the company’s global involvement, commitment and operations have grown, it has continually analyzed and adapted the way it does business.

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It is a company whose actions reflect its ethics and whose people live their values, As a “build from within” organization, it sees over 90% of our people start at an entry level and then progress and prosper throughout the organization. This means it invests heavily in talent, through training and development opportunities.

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HISTORY

William Procter, a candlemaker, and James Gamble, a soapmaker, formed distinct companies. The two men, immigrants from England and Ireland respectively who had settled earlier in Cincinnati, might never have met, had they not married sisters, Olivia and Elizabeth Norris.[6]

Since both their industries used similar resources, the Panic of 1837 caused intense competition between the two and as a result it led to discord with the family. Alexander Norris, their father-in law decided to call a meeting where he convinced his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, a new enterprise was born: Procter & Gamble.

The company prospered during the nineteenth century. In 1859, sales reached one million dollars. By this point, approximately eighty employees worked for Procter & Gamble. During the American Civil War, the company won contracts to supply the Union Army with soap and candles. In addition to the increased profits experienced during the war, the military contracts introduced soldiers from all over the country to Procter & Gamble's products. Once the war was over and the men returned home, they continued to purchase the company's products.

In the 1880s, Procter & Gamble began to market a new product, an inexpensive soap that floats in water. The company called the soap Ivory. In the decades that followed, Procter & Gamble continued to grow and change. The company became known for its progressive work environment in the late nineteenth century. William Arnett Procter, William Procter's grandson, established a profit-sharing program for the company's workforce in 1887. He hoped that by giving the workers a stake in the company, they would be less inclined to go on strike.

Over time, the company began to focus most of its attention on soap, producing more than thirty different types by the 1890s. As electricity became more and more common, there was less need for the candles that Procter & Gamble had made since its inception. Ultimately, the company chose to stop manufacturing candles in 1920.

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In the early twentieth century, Procter & Gamble continued to grow. The company began to build factories in other locations in the United States, because the demand for products had outgrown the capacity of the Cincinnati facilities. The company's leaders began to diversify its products as well and, in 1911, began producing Crisco, a shortening made of vegetable oils rather than animal fats. In the early 1900s, Procter & Gamble also became known for its research laboratories, where scientists worked to create new products. Company leadership also pioneered in the area of market research, investigating consumer needs and product appeal. As radio became more popular in the 1920s and 1930s, the company sponsored a number of radio programs. As a result, these shows often became commonly known as "soap operas".

Throughout the twentieth century, Procter & Gamble continued to prosper. The company moved into other countries, both in terms of manufacturing and product sales, becoming an international corporation with its 1930 acquisition of the Newcastle upon Tyne-based Thomas Hedley Co. Procter & Gamble maintained a strong link to the North East of England after this acquisition. In addition, numerous new products and brand names were introduced over time, and Procter & Gamble began branching out into new areas. The company introduced "Tide" laundry detergent in 1946 and "Prell" shampoo in 1950. In 1955, Procter & Gamble began selling the first toothpaste to contain fluoride, known as "Crest". Branching out once again in 1957, the company purchased Charmin Paper Mills and began manufacturing toilet paper and other paper products. Once again focusing on laundry, Procter & Gamble began making "Downy" fabric softener in 1960 and "Bounce" fabric softener sheets in 1972. One of the most revolutionary products to come out on the market was the company's "Pampers", first test-marketed in 1961. Prior to this point disposable diapers were not popular, although Johnson & Johnson had developed a product called "Chux". Babies always wore cloth diapers, which were leaky and labor intensive to wash. Pampers simplified the diapering process.

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Over the second half of the twentieth century, Procter & Gamble acquired a number of other companies that diversified its product line and increased profits significantly. These acquisitions included Folgers Coffee, Norwich Eaton Pharmaceuticals, Richardson-Vicks, Noxell, Shulton's Old Spice, Max Factor, and the Iams Company, among others. In 1994, the company made headlines for big losses resulting from leveraged positions in interest rate derivatives, and subsequently sued Bankers Trust for fraud; this placed their management in the unusual position of testifying in court that they had entered into transactions they were not capable of understanding. In 1996, Procter & Gamble again made headlines when the Food and Drug Administration approved a new product developed by the company, Olestra. Also known by its brand name Olean, Olestra is a substitute for fat in cooking potato chips and other snacks that during its development stages is known to have caused anal leakage and gastro-intestinal difficulties in humans.

Procter & Gamble has expanded dramatically throughout its history, but its headquarters still remains in Cincinnati. {Source, Ohio History Central.}

In January 2005 P&G announced an acquisition of Gillette, forming the largest consumer goods company and placing the Anglo-Dutch Unilever into second place. This added brands such as Gillette razors, Duracell, Braun, and Oral-B to their stable. The acquisition was approved by the European Union and the Federal Trade Commission, with conditions to a spinoff of certain overlapping brands. P&G has agreed to sell its SpinBrush battery-operated electric toothbrush business to Church & Dwight. It also divested Gillette's oral-care toothpaste line, Rembrandt. The deodorant brands Right Guard, Soft & Dri, and Dry Idea were sold to Dial Corporation.[7] The companies officially merged October 1, 2005.P&G's dominance in many categories of consumer products makes its brand management decisions worthy of study. [8] For example, P&G's corporate strategists must account for the likelihood of one of their products cannibalizing the sales of another

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PURPOSE AND MISSION:

The company has its mission statement as follows-:

“We will provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.”

Values:

P&G is its people and the values by which we live.

P&G attracts and recruits the finest people in the world. It has built the organization from within, promoting and rewarding people without regard to any difference unrelated to performance. It acts on the conviction that the men and women of Procter & Gamble always will be their most important assets.

Integrity

Proctor & Gamble

always tries to do the right thing.

is honest and straightforward with customers and employees

upholds the values and principles of P&G in every action and decision.

is data-based and intellectually honest in advocating proposals, including recognizing risks.

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Passion for Winning

Proctor & Gamble

Is determined to be the best at doing what matters most.

has a healthy dissatisfaction with the status quo.

Has a compelling desire to improve and to win in the marketplace.

Leadership

The employees are all leaders in our area of responsibility, with a deep commitment to delivering leadership results.

The company has a clear vision of where it is going.

The focus is on achieving leadership objectives and strategies.

Capabilties are developed to deliver the strategies and eliminate organizational barriers.

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Trust

There is mutual respect among the colleagues, customers and consumers,

Employees have confidence in each other's capabilities and intentions.

The company believes that people work best when there is a foundation of trust.

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Ownership

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The organization accepts personal accountability to meet the business needs, improve the systems and help others improve their effectiveness.

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Procter & Gamble brands

24 of P&G's brands have more than a billion dollars in net annual sales and another 18 have sales between $500 million and $1 billion.

Billion dollar brands

Always is a brand of feminine hygiene products, including maxi pads, pantiliners (sometimes called Alldays), and feminine wipes.

Ariel is a brand of washing powder/liquid, available in numerous forms and scents.

Actonel is brand of Osteoporosis drug Risedronate co marketed by Sanofi-Aventis.

Bounty is a brand of paper towel sold in the United States, Canada and the United Kingdom

Braun is a small-appliances manufacturer specializing in electric razors, coffeemakers, toasters, and blenders.

Crest is a brand of toothpaste.

Dawn is a brand of dishwashing detergent.

Downy/Lenor is a brand of fabric softener.

Duracell is a brand of batteries and flashlights.

Fusion is a brand of mens wet shave razors, and is the quickest P&G brand to have reached $1 billion in annual sales

Gain is a brand of laundry detergent and fabric softeners.

Gillette is a safety razor manufacturer.

Head & Shoulders is a brand of shampoo.

High Endurance is a deodorant by Old Spice

Ivory is a soap

Nice 'n Easy is a hair color product.

Olay is a brand of women's skin care products.

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Oral-B is a brand of toothbrush.

Pampers is a brand of disposable diapers

Pantene is a brand of haircare.

Prilosec OTC is a brand of heartburn medicine co-marketed by AstraZeneca.

Pringles is a famous brand of potato chips.

Puffs is a type of facial tissue.

Secret is a deodorant

Tide is a brand of laundry detergent.

Vicks is a brand of over-the-counter medicines

Wella is a brand of hair care (shampoo, conditioner, styling, hair color).

Whisper is a brand of pantyliners

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4 P’S ANALYSIS OF PANTENE

PRODUCT:

Clearly, Shampoo is more than just shampoo when P&G sells it. P&G’s great success in the rough-and-tumble shampoo world comes from developing an innovative product concept. An effective product concept is the first step in marketing-mix planning.

Philip Kotler defines product as Anything that can beoffered to a market for attention, acquisition, use or consumption that might satisfy a -want or need. It includes physical objects, services, persons,places, organizationsand ideas.

Product planners need to think about the product on three levels. The most basic level is the core product, which addresses the question: What is the buyer really buying?

Theodore Levitt has pointed out that buyers 'do not buy quarter-inch drills; they buy quarter-inch holes'. Thus when designing products, marketers must first define the core of benefits that the product will provide to consumers.

The product planner must next build an actual product around the core product. Actual products may have as many as five characteristics: a quality level, features, styling, a brand name and packaging.

product is more than a simple set of tangible features. Consumers tend to see products as complex bundles of benefits that satisfy their needs.

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Form

It is available in the both premium bottle pack as well as satchets.

FEATURES:

The Pantene has whole range of shampoos with different features. These are Volume Care, Smoothing Care, Color Care, Curl Care and Basic Care, anti –dandruff, anti-hair fall etc.

SIZE OF PACKAGE

Available in 100 ml,200 ml and 400 ml sizes

BRAND:

Pantene Pro-V continues to create a line of products that transforms dull, dry, limp hair into healthy, shiny hair. Their slogan: “Hair so healthy, it shines!” Each of the pro-vitamin essentials has been formulated to meet a special hair care need, in particular panthenol.

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Pantene has recently been awarded “Asia’s favorite Shampoo” in the Readers Digest Super Brands Survey.

Pantene is currently facing issues with intense competition, but their unique Pro-Vitamin ingredient makes hair strong and healthy. “P&G is now one of the world’s largest beauty companies” (P&G Annual report). P&G states that Pantene is the world’s largest hair care brand and that it grew in double digits over the last two-years. P&G claims that this success is due in part to their unsurpassed hair conditioning technology.

The global retail hair care market is a $34 billion industry. P&G has annual sales of more than $4.5 billion with leading brands like Pantene. Pantene’s position in the market is by attribute, claiming “Hair so Healthy it Shines” and their latest is a hair care challenge saying, “Healthier Hair in just 10 Days. Guaranteed.” Pantene uses price to slightly separate itself from its in-store competitors. The price for Pantene products is slightly higher, identifying it as a better product. Pantene is also positioned around the product user. It has recently done commercials with actresses like Katrina Kaif,Sushmita Sen,Lara Dutta.” Lastly Pantene is positioned by the competitor. It is perceived as a product that maintains great hair and according to the sales figures it is perceived as a better product by consumers.

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PRICE:

As mentioned above the 200 ml bottle was available for Rs 98 and 100 ml for Rs 51.But very recently Pantene had reduced the prices and now the same 200 ml bottles are available for Rs 89 and 100 ML FOR Rs 41.

P&G has basically adopted Geographical pricing strategy for Pantene.They have set different prices for Pantene in different countries.This is a very good strategic method as it captures the local conditions as well as purchasing power of the local population.

When Pantene launched Lively Clean,it adopted Promotional Pricing for it and launched it at an introductory price of R78 for 200 ml bottle

It has also introduced Bundle Pricing where it has clubbed two or more products and sold them at a reduced price.But this strategy has not been very successful as it eroded the premium image of the Shampoo and gave the impression of desperation of the company.

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Around 2 years back in 2006 P&G reduced the rates of Pantene by 16%. By this way what P&G did was cutting its bottle's premium over sachets. At the same time P&G is reducing the price gaps between its own brands. While Pantene and Head & Shoulders were sold at nearly similar price points, bringing down Pantene prices placed it between Rejoice (Rs 39 for 100 ml) and Head & Shoulders (Rs 64 for 100 ml) and thereby segment P&G's shampoo brands at different price points. This strategy is known as Product Line Pricing.

Very recently Pantene has changed its pricing approach and experimented with Value Pricing Strategy. In this Procter & Gamble made dramatic and long-term changes in its pricing and promotion strategy during which it boosted advertising while simultaneously curbing its distribution channel deals (in-store displays, trade deals), and significantly reducing its coupon promotions. It is interesting to note that P&G's value pricing strategy regarding Pantene is quite a misnomer. During this period many stores were switching to EDLP (every day low pricing) policies, which meant that consumers would save on their overall purchase without having to deal shop. In contrast, P&G strategy essentially was a disguised price increase; coupons were cut by 50%, which contributed to an increase in the customer's price paid by 20%. It is possible that P&G lowered their wholesale price, but the retailer only enjoyed higher margins and did not pass the savings on to the customer. Another possibility is that retailers lowered retail prices consistently, following P&G's decrease in wholesale price, but once promotional trade deals are factored in those everyday lower wholesale prices did not result in a lower total price paid. For example, if P&G's old price was Rs20, but gave deals of Rs15, at which price 90% of purchases were made, the wholesale price equaled Rs15.7 (.90*15 + .10*20). If P&G set a "Value Price" point of Rs18, but 100% of purchases we were made at that price, the retailer enjoyed no cost savings-only a cost increase. If P&G had truly offered price cuts their results may have been much different.

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PROMOTION:

The promotional strategy of Pantene is highly useful and effective. Using magazine print advertisements and commercials allows for the opportunity to segment their advertisements by specific magazines, specific TV shows, and specific time slots. These strategies provide Pantene with the opportunity to wisely advertise to their target audience.

• Pantene’s use of advertising with different ethnicities, hair types, and ages has proven to be a critical factor because they are now developing specific hair care line for different types of ethnicities; they were voted Asia’s number one shampoo, and they are a highly marketable product in Europe.

• Without promotion this brand would be relatively unknown and its popularity would not be near what has been established with promotion. Many times when a consumer sees a product in the store that they have not heard of they will browse over it and choose a product they know. Consumer and market knowledge are prevalent because Pantene and P&G are built around what consumers want.

o Public Relations is a large aspect of the P&G/Pantene promotional mix. Proctor &

Gamble does things like raising funds for children who suffer from malnutrition in India and Pantene recently put on the “Condition for a Cause” campaign, donating money to heart disease research. Sales Promotion is also alarge factor for Pantene, they use marketing and business techniques to try and improve consumer’s lives. They are always finding new and better ways to reach their consumers and between their PR campaigns and advertising they are constantly appealing to consumers and causing them to trust Pantene.

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Personal selling is not an aspect of Pantene’s promotional selling and it would not be wise to incorporate it. Personal selling often comes off as a sleazy salesman’s cheap and last minute effort. Pantene’s print and TV advertisements are enough for Pantene to bring in new customers and frequently remind its loyal customers that it is still in the stores and going strong. Personal Selling would also be a pricey move that would hinder rather than aid Pantene’s efforts. Lastly, advertising is an enormous part of Pantene’s promotional mix. Without the current advertising strategies and past ones as well, Pantene wouldn’t be the widely known and the highly used brand that it is today

The distributor needs to be aware of the brands state in the market, they should have information on the product in order to decide if they want to be associated with that product and if so, they will need to know enough about the product to aid customers in finding a shampoo that is best for the them. The idea would be to establish a relationship with as many retailers as possible to make the brand the recommended one. Consumers need to know as much as possible about the product. They do not want to feel as if the company is hiding something from them and they want to be able to trust the products they are using. Information like the ingredients, different products the brand carries, efforts made by the brand to help others and humanity are all factors that could affect a sale. Distribution as much information as possible is a good idea for the company.

The purpose in using aspects of the promotional mix is to build brand equity, brand awareness, and frequently put our advertisements and name into the public to be seen. The frequency in which the ads are seen is as important as the message we are providing.

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Pantene also gives out free samples to anyone. When visiting their website there will be a small box of information about samples to the right, when the online visitor clicks on that they will find that if they provide Pantene with information about themselves they will be sent free samples. Pantene has recently run out of free samples and leads the consumer to an apology page which in turn directs the consumer to the page for their most recent sweepstakes.

•Endorsers: global celebs like Hollywood stars Kirsty Alley, Rachel Hunter, Liv Tyler, Angie Everhart and Kelly Lebrock, among others have endorsed Panteen In India, Sushmita Sen, Katrina Kaif, Bipasha Basu, Shilpa Shetty, Sonali Bendre and Simone Singh are among the brand ambassadors. Lara Dutta is the most recent celebrity who has got associated with the brand.A noticeable thing about pantene advertisements is that always Asian women are shown who have thick,long,dark hair.

• In response to the change in appearance and types of product Pantene has said that this change was for the better and it is easier than ever to choose which product is best for the individual consumer. Simply pick the Pantene version that names how you want your hair to look: Volume Care, Smoothing Care, Color Care, Curl Care and Basic Care.

Each collection includes a shampoo, conditioner, treatment and styling products that helps the consumer achieve their unique look. Not only did they change their products to match the consumer’s desired style, they claim to have improved their technologies.

Pantene also claims that its products have ingredients that set it apart from the competition. They state that each line of products in their collections has the right combination to give customers the benefit that is “spelled out in the name of the product.”

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• Validity: “We conduct extensive scientific research and laboratory testing, as well as in-home and clinical testing, to make sure our advertising claims are factual. Because of the competitive nature of our business, though, we're unable to provide details to individuals about the specific research we perform.”

• Hair care companies are building on the desire for women to maintain a young, natural, and fresh look. Marketers are also beginning to key onto teenage girls more. Girls ages 15-19 increased sales 6.9% from 1995- 2001.

• Pantene’s promotional tactics are ideal and we feel they are approaching the target audience well.

PLACE:

Placement (or distribution): refers to how the product gets to the customer; for example, point-of-sale placement or retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or service is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales.

Pantene has an undoubtedly amazing design & distribution channel and this can be supported

by the fact Pantene is one of the most easily available brands in the industry.

In 1998-1999. Pantene launched global corporate restructuring program called Organization 2005,

and made several changes in structure, work processes and culture to generate greater stretch, innovation and speed to help its products reach the market faster.

Pantene retails through Spencers,Reliance Fresh,More,RPG group and wide variety of Kirana stores spread all over the country.

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COMPETITIVE ADVANTAGE

Under the marketing concept, companies gain competitive advantage by designing offers that satisfy target-consumer needs better than competitors offers. They might deliver more customer value by offering consumers lower prices than competitors for similar products and services, or by providing more benefits that justify higher prices. Marketing strategies must consider the strategies of competitors as well as the needs of target consumers. Some of the main points that constitute the competitive advantage of P&G in general and Pantene in specific are:

P&G is one of the largest FMCG companies in the world. Its main competition is with Unilever which has almost equal presence in the world. Procter and Gambles

sales as of November 21st, 2003 reached $44,776 million. Below are some of the company’s key statistics for the year 2007

Pantene is known worldwide. It was the best selling hair care line in 1995. Pantene is known to create healthy, shiny hair.

It has Panthenol or Pro-Vitamin B5 which has the qualities to make hair shiny and strong.

It has a very strong distribution network.Wal Mart. K-mart,Spencers,Reliance Fresh,More etc are among its retailers.Apart from these it hasn’t neglected the small stores or Mom and Pop stores. They are equally important component of its supply chain and distribution network.

It is cheaper than other elite brands(Estee Lauder,L’oreal,Revlon,Salons) but always counted among the good brands in the market.

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P&G has one of the largest advertising expenditures in the whole world.Following is the Proctor& Gamble’s advertising expenditures: In 1998 P&G’s advertising expense reached $3,801 and dropped a little to $3,639 in 1999. From 1999 to 2002 the advertising expenditures level off from 3,600 to 3,780. In 2003 advertising expenditures rose from 3,773 to 4,373. Out of this, expenditure on Pantene was $1342.

P&G is known for its innovation.It has a large diverse portfolio of products.It has got several awards for innovation and that comes alive into its Pantene product range as well.

Pantene ‘s customer base is also its very significant competitive advantage.It targets women and girls and they constitute its loyal customer base.

Pantene has a good Brand Equity and there are always new kinds of hair types that it markets to. P&G intends to build brand equity by developing distinctive products that stand for something and that have a definite position in the market. They want to communicate the products benefits as compared to the competitor, with a brand that is so amazing, appealing, and reliable that the consumer begins to trust the brand.

As per the report by Wachovia Corporation on Economics,Pantene is the most favored brand worldwide.This gives a boost to its image and strengthens it further.

“Pantene Pro-V care collections are formulated to meet the styling needs of people from all ethnicities.All the customers can gain personalized guidance from the experts at the website.

Pantene appeals to a wide variety of nationalities, and not all nations feel the same about hygiene as the American culture. Many women may find choosing the right shampoo a limited-decision making process and other an extended decision-making process. All women are different and with extensive reach Pantene strives for it is difficult to pinpoint one concept.

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MARKET ANALYSIS AND STRATEGIES ADOPTED BY P&G FOR PANTENE

Market Analysis:

• Market size: As far as market share is concerned P&G was 15.4% higher than its nearest competitor. In 1999 P&G recorded a market share value of 30.1%. From all the graphs we found, P&G continues to grow to 43,337 million in net sales, 5,186 million in net earnings and 3.69 in net earnings per share all in 2007. Pantene is in the mature stage of the product life cycle. With all the new products and product developments, it is likely that itcould elevate back to the competitive stage.

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Financial Objectives

Increase the amount of retail products sold by 10% per year. Grow the profit margin by 3% per year. Profitability by year one.

Target Marketing

Pantene shampoo will target three different market segments:

Men:

Men will typically make up 70%-75% of the clientele. The reason for this is that men have shorter hair requiring a faster, simpler job.

Women Who Cannot Afford an Upscale Salon:

Women tend to favor a female specific upscale shampoo if they can afford it. There is not often a difference in quality of an upscale salon relative to a family hair shampoo other than a upscale shampoo will tend to pamper you more, only accepts appointments. Someone who is fiscally responsible as opposed to someone who likes opulence will favor a family shampoo.

Young Mothers with Children:

Pantene shampoo will target each of the three groups separately. The males will be targeted by offering a best product, convenient, and good service of shampoo. Because men have shorter hair, they tend to require shampoo more often. Pantene shampoo will cater to males with costly product because they often used the shampoo. Generally females prefer the allure of upscale shampoo; however, not everyone can afford this luxury.

For this reason Pantene will provide the same quality hair shampoo, just without the expensive price. Pantene will target these customers by emphasizing the sophisticated hairs by using Pantene shampoo.

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Positioning

Pantene will position itself as a convenient, full service, family hair shampoo.

Pantene will offer one-stop service offerings. Pantene will leverage its competitive edge to achieve its desired positioning:

Pantene' competitive edge is based on superior customer service.

Pantene recognizes that the hair shampoo market is crowded so

It is difficult to stand out. Pantene will be able to by providing superior customer attention. This is particularly IMPORTANT for Pantene to Operates in because margins are lower and the goal of a quick shampoo market to crank through a large number of people each day.

Pantene will invest time and money into training to ensure that clients receive the best experience possible making it is easier to turn them into a long-term customer. By providing superior customer service, Pantene will be able to effectively compete against and outlast larger chains and independent competitor.

Strategy Pyramids

The single objective is to position Pantene as the premier, full service, family shampoo in the Shaker Heights area. The marketing strategy will seek to first create customer awareness regarding the product offered, then develop the customer base, and finally work toward building customer loyalty and referrals.

The message that Pantene will seek to communicate is that the entire family can be served quickly, professionally, with superior product at reasonable rates. The message will be communicated through various methods. The first is in-store and storefront displays. This will be a convenient method to attract people that walk past general store front. The other method of communication is advertisements in two local newspapers. These newspapers are widely read and will reach a large base of peoplE

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MARKETING STRATEGIES

When visiting www.pantene.com the viewer will find a list of countries worldwide; each web visitor is expected to select their country in order to be taken to a Pantene web page corresponding with their country and language).. Pantene has recently added two new hair care lines to target to a more diverse group of women. In July 2003 Pantene launched its “Pantene Long Black” line specifically for Indian women whose culture values hair as a beautiful feature on a woman. The formula darkens each strand uniformly from root to tip through intense moisturizing as well as reducing damage. Pantene has recently been awarded “Asia’s favorite Shampoo” in the Readers Digest Super Brands Survey. Also on the shelf next to the pearly white

Pantene has sponsored many Beauty Contests and Bollywood events. And T.V programs like NACH BALIYE 4 .

It is also associated with many corporate social initiaitives like Indian Heart Association for “condition for a Cause.

It has come up with many offers for women where in they can meet a celebrity and get pampered like one.

Pantene markets to women and girls. They market to all ages, races, social classes, and economic standings.

On Pantene’s website there is a list of frequently asked question. The customers can become the member of the Pantene family and can have their log in ids using which they can access the website and also make use of all the facilities available

There is also a feature of expert’s advice on the website where users can seek solutions for all of their hair problems.

Their retailers are stores like, Wal-Mart, K-Mart,and Target worldwide and Reliance Fresh.Spencers,More etc in India Pantene can be found in all sorts of discount stores, drugstores, and supermarkets

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Apart from this they have adopted Value Pricing strategy at different times to adjust with the local conditions and purchasing power parity of the country.In thisProcter & Gamble made dramatic and long-term changes in its pricing and promotion strategy during which it boosted advertising while simultaneously curbing its distribution channel deals (in-store displays, trade deals), and significantly reducing its coupon promotions.

It is interesting to note that P&G's value pricing strategy regarding Pantene is quite a misnomer. During this period many stores were switching to EDLP (every day low pricing) policies, which meant that consumers would save on their overall purchase without having to deal shop. In contrast, P&G strategy essentially was a disguised price increase; coupons were cut by 50%, which contributed to an increase in the customer's price paid by 20%. It is possible that P&G lowered their wholesale price, but the retailer only enjoyed higher margins and did not pass the savings on to the customer. Another possibility is that retailers lowered retail prices consistently, following P&G's decrease in wholesale price, but once promotional trade deals are factored in those everyday lower wholesale prices did not result in a lower total price paid. For example, if P&G's old price was Rs20, but gave deals of Rs15, at which price 90% of purchases were made, the wholesale price equaled Rs15.7 (.90*15 + .10*20). If P&G set a "Value Price" point of Rs18, but 100% of purchases we were made at that price, the retailer enjoyed no cost savings-only a cost increase. If P&G had truly offered price cuts,its sales would have been more.

Pantene uses a large amount of TV advertising to generate awareness of the brand and its benefits. This communication is focused on their unique pro-vitamin hair repair formula. Furthermore, local well-known celebrities are used to help consumers feel more involved and connect emotionally with the brand. From an active consideration point of view, the brand does very little to ensure it is “on the list” of potential hair brands women wants to buy.Once the purchase has been made, the brand does very little in terms of relationship building and advocacy. Thus, it relies very much on the user having a positive experience due to the sophistication of the formula

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SWOT ANALYSIS

Strengths

P&G: P&G is one of the largest consumer goods company in the world. The company is strongly focused on research and development and owns one of the best marketing team that helps the company remain leading market position. Pantene might also enjoy collaboration with other P&G brands such as Olay, as mentioned aboveunde r“Collaborators”.

Awareness: Pantene enjoys wide global exposure, and often uses campaigns that feature local

celebrities; this helps Pantene to create strong brand awareness, build strong brand equity and achieve high degree of attention and recall for consumers, eventually leading to higher sales.

Product line-up: Pantene has an extensive product line that meets most of the customer’s needs.

Such products are divided to four main categories: fine, medium-thick, curly and coloured hair. Pantene is focusing on every type of hair, creating product extensions addressing customer needs. Pantene’s selling point is the vitamin that nourishes hair. This differentiates Pantene from other brands in the market and creates a competitive advantage.

Hair repair: Customers strongly prefer Pantene to the competition, if their major concern is hair

repair. The survey shows that 47% of the customers focus on this specific function of the shampoo.

Distribution:

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Weaknesses

Lack of customer loyalty: Pantene heavily relies on mature markets that offer a wide range of hair-care

products, in which customers switch very easily from one brand to another and the brand suffers from lack of customer loyalty (75% of the surveyed customers who know Pantene stopped using it

Brand perception: Pantene is perceived as a normal brand found in every store, fashionable but with

lower quality (3 out of 4 surveyed persons compare Pantene with the lower cost clothing store Zara

Low potential for growth: Pantene’s products are available in supermarkets, which represent a saturated

market offering a wide choice of products from the same tier, makingchoice for the customer tough.

No natural line: Pantene’s products focus mainly on hair repair and have been less proactive in the

natural and organic category, which seems to be gaining momentum in the market.

Price: Pantene’s middle ranged price is vulnerable to cheap brands that offer similar

products. Pantene is not very expensive but not the cheapest. Consumers doubtful about Pantene’s quality can easily go for other, cheaper brands

Lack of differentiation in ads: Pantene’s TV commercials often use celebrities and they lack of differentiation

from its competitors such as L’Oreal.

No improvements after usage: Consumer survey also shows that with some past Pantene users, after using

Pantene products, their hair did not look as good as Pantene’s TV ads suggested.

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This, as well as the missing connection to the brand, seems to be the most prompted reason to stop using Pantene among the surveyed persons

Uniform product appearance: Most of Pantene products are in white bottles and look similar to each other,

though they have some variation in the product line-up (It can be treated as consistency and strength, but some of our survey participants actually felt Pantene has less variation in products).

Absence in digital media: Pantene’s does not use digital media often in Spain (Facebook page), and

therefore loses an opportunity to promote the brand and engage with consumers online.

Opportunities

Market extension opportunity: Marketing of product extensions should focus on segmentation of consumers that

need shampoo for different types of hair to gain loyalty of the new customer segmentation. With such focus on products that specialized in different types of hair and in natural and perhaps an organic category, Pantene can definitely gain more market share and increase sale.

More room for communication: Communication needs to be focused on segmentation of consumers that need

shampoo for different types of hair. Pantene could leverage social media for more innovative marketing techniques in Salamanca. One example could be a translation and recommendation app for people who do not speak Spanish fluently. The international students and expats in Salamanca are lost while buying the right shampoo. This is the perfect place to help and engage future customers.

Threats

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Environmental awareness: Increasing customer awareness for the environment generates demand for natural and organic products. Beauty shops and professional skin-care brands such as L’Occitane and Body Shop are creating their own brands, taking their loyal customers without leaving any room for Pantene due to low switching cost.

- Market saturation:

The market is saturated with new products from big local players and other international brands. Customers are spoiled with many choices and lack of loyalty for the Pantene.

- Price competition:

he consumer survey shows that the current shampoo market is flooded with competition, there are many brands that target the same customers as Pantene and competitor’s products also target the different needs of the consumers with cheaper prices. In some stores Pantene product is sold offering a second unit discount.

- Quality competition:

Consumers think that Pantene’s competitors’ products (usually high-tier, more expensive ones such as L’Occitane, Body Shop and Aveda) offer their hair better final look and results.

- Economic uncertainty:

Economic forecast showing that most of European countries facing stagnate economic growth including Spain, consumers are becoming more price sensitive when choosing daily consumer goods.

PESTLE ANALYSIS

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To understand the context of Pantene it is important to perform an analysis of this area regarding the political, economical, social and technological factors.

Political – The people of Salamanca are very conservative in relation to the population of Madrid or Spain in total. Around 72% of residents in Salamanca voted for the People’s Party (conservative) during the last elections. Consideration on how to communicate in Salamanca would be needed.

Economical – Salamanca in known for its expensive shopping streets like C/ Serrano and its huge shopping areas like the one around C/ Goya. Almost every known brand is represented with its own flagship store. Additionally all the usual supermarkets and department store have at least one (in generals much more) of its branches in the area. Numbers of diplomatic missions and high prices for real estate attract people with a higher income. Moreover big offices of Iberia, VIPS Group or Ogilvy and the top-ranked IE Business School bring people with a high purchasing power to the streets of Salamanca. Price sensitivity is not as high in Salamanca as in other areas of all Madrid and Spain. However, the current economic crisis should be addressed in marketing strategy.

Social – Approximately 150,000 residents with wealthy Spanish and international backgrounds live in the Salamanca area.

Technological –N/A

CHALLENGES

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Pantene faces brand deterioration, it was once viewed as a premium product and now it is an everyday shampoo that anyone can use; it has lost its main core strategy, which was fashion and prestige. Pantene still wants to fit in the fashion world spending millions of Euros in advertising and celebrity hiring. In supermarkets Pantene is viewed as a more expensive shampoo, while facing the actual crisis, some Spanish people (not necessarily in Salamanca) might turn their back on it, preferring a more economic shampoo.

Pantene has not been able to develop customer loyalty and it is very easy to substitute.

Additionally, women don’t connect with the problem of Pantene advertisers. What problems do face women with their hair? And how can Pantene create an ad and therefore product that addresses that? Since nobody, not even the users, connected to the problem. Therefore, the solution presented in the ad was irrelevant and inconsistent. Or, maybe the problem is fine, but the way the problem was communicated is not (with a celebrity, in black and white, so her hair looks worse than it is, even though everyone knows she has great hair).These questions can be answered by looking at the survey. Those who use Pantene do say that the main benefit they look for is hair repair. The brand is ubiquitous with hair repair. The results from our mind-reading focus group showed that this generates a lot of recognition, where the vitamins fill the hair up. Non-users don’t connect that image to their hair; what they are looking for is a brand for their specific type of hair, and their perception is that Pantene does not offer this. So the question is – what is the real problem women face with their hair?

RECOMMENDATION

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Currently Pantene offers a very wide line of products (13 types of solutions offering different products for each). This creates a “Choice Paradox”, confusing the customer in choosing the right type of product, which fits their hair type, without expert diagnosis. However, Pantene as well as other shampoo brands rarely use in-store communication to promote products, assist customers in choosing a tailed solution.

In addition, as mentioned before, Pantene non-users seem to not connect withthe message of Pantene ads, which does not address their main interest – type of hair. Thus, recommendations for Pantene to overcome its main challenges and revamp their brand perception are as follows:

Product: Create one wide line catering to different hair types, categorizing each product-line in accordance with the type of hair it fits to. Product-line should be narrowed according to past sales data to cater main customer needs and preferences. Also, when we say “hair type”, we recommend doing research into how consumers categorize their hair type, as we found the words they used to describe their hair type are not necessarily consistent with Pantene’s labeling.

Today all Pantene products’ looks are quite similar (white bottle with a colored label) and limit line differentiation; in the new categorization each line’s appearance should be distinct. This way, the products appearance will communicate clearly the type of hair to which it caters, decreasing customer confusion and dissatisfaction due to too much choice (regret about the decision made, escalation of expectation).

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