The Marketers Consulting

• Dursun Nas

- Executive Director

• Barry Luong

- Program Executive

• Erguen Aldeniz

- Finance Director

• Richard Ching

- Graphics Director

• Ann Smalley

- Sales Director

• Lily Cooc

- Consumer Analyst

• Juny Kim

- Marketing Director

Chris Wright Dilemma

• Introduction of a new brand

• Product Improvement

• Increased marketing expenditures

Product Improvement

• Add H-80 to Dawn Liquid

- Customer preference

- High NPV

- Low Cannibalization

• Restage Joy with the new “no-spot” formula

- Customer preference

- Quick return of investment

Procter & Gamble

• Quality Goods

• Honesty

• New-product development

• Dedicated and talented resources

• Prudent and conservative management

• Innovative products

• Marketing expertise

Consumer Preference

• Top five attributes

• Feelings on dishwashing

• Wants and Needs

• Initial capital investment and cost

• Time to introduction to marketplace

• Cannibalization

• Net present value

Why Not a New Product?Why Not a New Product?

Net Present Value of a New ProductNet Present Value of a New Product

New Brand Introductionin $000,000's

1982 1983 1984 1985 1986

Revenue21 99.8 101.5 103.4 105.8 108.3COGS2 50.9 51.7 52.7 54.0 55.2Gross Margin 48.9 49.7 50.7 51.9 53.1GM% 49% 49% 49% 49% 49%

General, Selling & Administrative1,2 10.0 10.1 10.3 10.6 10.8Distribution 7.0 7.1 7.2 7.4 7.6Marketing Expenditures 20.3 20.7 21.2 21.7Operating Margin 32.0 12.2 12.4 12.7 13.0Operating % 32% 12% 12% 12% 12%

Initial Investment Exp 20.0Marketing 60.0

Cash Flow (48) 12 12 13 13

Net Present Value6 ($8)($12)($12)

Why Not More Marketing?Why Not More Marketing?

• Cannibalization

• Break Even Analysis

Break-Even AnalysisBreak-Even Analysis

Break-Even

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

0 800,000 1,600,000

Units

Cost

Var Cost

Fix Cost

Why Product ImprovementWhy Product Improvement

• H-80 Formula

• $20 Million Initial Investment

• $10 Million Incremental Marketing

• Time To Market

Which Product to Improve UponWhich Product to Improve Upon

IIVORY VORY LIQUIDLIQUID

DAWDAWNN

Financial Analysis – Ivory LiquidFinancial Analysis – Ivory Liquid

Ivory in $000,000's

1982 1983 1984 1985 1986

Revenue2 182.5 183.7 184.7 186.8 187.7COGS2 93.1 93.7 94.2 95.3 95.7Gross Margin 89.4 90.0 90.5 91.5 92.0GM% 49% 49% 49% 49% 49%

General, Selling & Administrative1,2 18.3 18.4 18.5 18.7 18.8Distribution 12.8 12.9 12.9 13.1 13.1Marketing Expenditures 36.5 36.7 36.9 37.4 37.5Operating Margin 21.9 22.0 22.2 22.4 22.5Operating % 12% 12% 12% 12% 12%

Initial Investment Exp 20.0Marketing 10.0

Cash Flow (8) 22 22 22 23

Net Present Value6 $62

•Consumer preferenceConsumer preference• ThrillThrill

JoyJoy

• No-Spot Formula

• Financial Analysis

Financial Analysis - JoyFinancial Analysis - Joy

Joy with "no-spot" re-launchin $000,000's

1982 1983 1984 1985 1986

Revenue2 143.6 145.8 147.7 150.7 153.8COGS2 70.4 71.4 72.4 73.8 75.4Gross Margin 73.3 74.4 75.3 76.8 78.4GM% 51% 51% 51% 51% 51%

General, Selling & Administrative1,2 14.4 14.6 14.8 15.1 15.4Distribution 10.1 10.2 10.3 10.5 10.8Marketing Expenditures 28.7 29.2 29.5 30.1 30.8Operating Margin 20.1 20.4 20.7 21.1 21.5Operating % 14% 14% 14% 14% 14%

Initial Investment Exp

Marketing 10.0

Cash Flow 10 20 21 21 22

Net Present Value6 $70$70$70

DawnDawn

• Performance Enhancement

• Consumer Preference

• Financial Analysis

Financial Analysis - Dawn

Dawn with HD-80 formula without test market delayin $000,000's

1982 1983 1984 1985 1986

Revenue2 173.1 177.8 184.7 191.6 199.8COGS2 88.3 90.7 94.2 97.7 101.9Gross Margin 84.8 87.1 90.5 93.9 97.9GM% 49% 49% 49% 49% 49%

Incremental Revenues from Price increase

General, Selling & Administrative1,2 17.3 17.8 18.5 19.2 20.0Distribution 12.1 12.4 12.9 13.4 14.0Marketing Expenditures 34.6 35.6 36.9 38.3 40.0Operating Margin 20.8 21.3 22.2 23.0 24.0Operating % 12% 12% 12% 12% 12%

Initial Investment Exp 20.0Marketing 10.0

Cash Flow (9) 21 22 23 24

Net Present Value6 $62

Implementation Plan

• Commercial campaigns on day-time and prime-time television

• Publications

• Rebates/coupons

• Direct mailer

Conclusion

• Combined NPV

• Consumer preference maximized

• Continuity of Procter & Gamble corporate philosophy