The Olay Brand Called Olay Evolution Marketing Essay

The Olay Brand C solelyed Olay Evolution Marketing EssayINTRODUCTIONThe Procter Gamble Company (PG) is one of the worlds largest consumer goods companies. It grocery stores to a greater extent than 300 signs in the beauty, health, fabric, home, baby, family, and personal c atomic number 18 proceeds categories. The order operates in the Americas, Europe and Asia. It is headquartered in Cincinnati, Ohio, and employs about 135,000 people.CORPORATE OBJECTIVESThe objective of Procter Gamble is that They provide issue branded products and services of superior quality and honour that improve the lives of the worlds consumers, now and for generations to come. As a result, consumers will reward us with leadership gross revenue, profit and survey creation, allowing our people, our shareholders and the communities in which we live and work to prosper. (http//www.uk.pg.com/ ships social club/aboutPG/purposeValuesPrinciples.html)CORPORATE STRATEGYProcter Gamble (PG), one of the world s largest consumer goods companies is as well a pioneer in the use of mass media. The family has used revolutionaryspaper advertisements, radio and soap operas to advertise its popular brands like Crest, Pampers, Pantene and Folgers. During 1990-2000, however,its rate of outgrowth took a plunge. When AG Lafley took over as CEO in 2000, he gave PG a complete makeover with the focus on innovation and advertising. Since 2000, PG has been increasingly embracing targeted, viral and on-line marketing. (http//www.uk.pg.com/company/aboutPG/purposeValuesPrinciples.html)PROPOSED PRODUCTolayLogo87_Jul06.jpg EvolutionOlay is a cosmopolitan leader in undress care and have been trusted by women for fifty years. Graham Wulff, an innovative and entrepreneurial South African chemist unquestionable the original formula at the beginning of the 1950s. Olay has eight global product lines offering a multiple of product. Product such as Olay professional pro-X, Olay Definity, Olay Regenerist, Olay marrow effect, Olay complete, Olay hydrate cleanse, Olay clarity, Olay body lotion, Olay touch of sun and Olay body cleansing (http//www.docstoc.com/docs/14719894/Oil-Of-Olay-Products).Skin care is evolving faster than ever with in unfree clinical trial and new standards in natural and constituent(a) cosmetics. Olay evolution will be a combination of Olay total effects (7 seven powerful anti-ageing in one) and Olay Definity (fight wrinkles, brown spot and discolouration). umpteen consumers want products that offer more than one benefit. So this product is expected to moisturize, fight free radicals and give the struggle a more youthful appearance. This product would offer the beumer an ideal combination of the world most powerful skin care solution.Anti-aging is the fastest-growing skin segment, standing at $567.6 million, now representing the biggest division in skin care, surpassing facial cleansers which stand at $559.2 million. (http//www.all crease.com/population-demogra phics/demographic-groups/5517853-1.html)product-landing-definity_v6.jpg product-landing-total-effects.jpgWomen are very particular when dealing with their face. They need to be convinced the product will deport all the promised benefits. Women are willing to try new things and spend more money to look better and younger. Skin care attracts customers from all income level as most women like to take care of their appearance. The cast up number of women working equates women with more money to spend and skin care is one of the favourite avenues for their spending.establish on Procter Gamble F4Q10 (Qtr End 06/30/2010) Earnings Call Transcript, Female Skin Care grew volume double digits with positive share trends. In the U.S., Olay all-outlet value share of the Facial Moisturizer segment was up almost 2 points behind the continued strength of the Olay Pro-X line and the Olay Regenerist Roller ball Eye Treatment innovation. Olay overly had strong results in developing markets, more t han doubling shipments in India, Saudi Arabia and the Philippines. Organic sales increased 5%, driven by 8% organic volume growth. (http//seekingalpha.com/article/218380-procter-gamble-f4q10-qtr-end-06-30-2010- recompense-call-transcript)Rate of Global skin care market 2002 and 2007Country2002 (M)2009 (M)US6,752.28,059.2FRANCE2,391.14,368.0GERMANY1,975.13,239.3ITALY1,440.02,340.4SPAIN956.41,897.9UK1,612.72,937.6Source Euro monitor internationalBelow are the analyses of the business environment to back up the proposal.ANALYSIS OF BUSINESS ENVIRONMENTEvery Business operates within an environment, these environments directly and indirectly affects the way those businesses function. Competition in the skin care manufacture tends to be more intense and there are many changes that can be regarded as threat and opportunity that it is important for managers to heading with.MACROPoliticalThe political environment Relates to the pressures and opportunities brought by changes of the governme nt and their views toward the skin care industry. Each government always have a mandate to perplex the use on non organic ingredients in most skin care product.EconomicThis Refers to economic factors and structures and such variables like the stock exchange, interest and inflation rates, the nations economic policies and performance, exchange rates, etc. Although PG is based in the US, it earns revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the US dollar. As a result, increases or decreases in the value of the US dollar against other major currencies will affect the companys net operating revenues, operating income and the value of balance sheet items denominated in contrasted currencies.SocialMiddle-aged women are very interested in skin care items that help them retain a more youthful appearance and complexion. spy social factors helps musical arrangements maintain their reputation among stakeholders.TechnologicalChanges in t echnology can affect a company warring line. Industries merge new strategic groups place currents products improve and the cost of production gets reduced by process innovation. Because the skin care industry is very competitive, the company necessitate taking advantage of the current technology and new substances to create new product in order to maintain customers interest and loyalty.EnvironmentalWith global warming and carbon foot prints universe big concerns, governments and scientists are encouraging companies and individuals to be more environmentally aware. PGs policy is to Ensure its products, packaging and operations are safe for their employees, consumers and the environment. Reduce or continue the environmental impact of products and packaging in their design, manufacture, distribution, use and disposal whenever possible. They support the sustainable use of resources and actively encourage reuse, recycling and composting.MICROBuyer advocateConsumer products compa nies face weak buyer power because customers are disjointed and have little specify on price or product. But considering the buyers of consumer products to be retailers kinda than individuals, then these firms face very strong buyer power. matchless good example is the business relationship between wall-mart and PG (see swot analysis).Supplier Power the company could face some amount of supplier power simply because of the costs incurred when switching suppliers. Notwithstanding, suppliers that do large amount of business with the company also are somewhat obliged to their customers nonetheless, negociate power for both the firms and their suppliers is probably limited.Threat of New EntrantsGiven the amount of capital investment needed to enter the skin care industry, the assumption is that threat of new entrants will be fairly low.Threat of SubstitutesWithin the skin care industry, brands thrive in helping to ground a competitive advantage, but even the pricing power of brands can be scoured with substitutes. Threats to this product may arise from other anti-aging products such as Avotone, Revitol, Ceramide C etc.Degree of Rivalry Skin care industry is a very competitive market, taking advantage of the latest technology and revolutionary substances to create new product in order to maintain customers interest and loyalty will be very important. In doing so it will increase the companys competitive advantage over other top brands like Avon and Nivea Visage.INTERNALThe internal environment constitutes variables and forces within the control of the organisation. These variables are conditions, entities,events, andfactorswithin an organization whichinfluenceitsactivitiesandchoices, its philosophy, particularly thebehaviour of theemployees. Other variables include theorganisation mission statement,leadership style, and itsculture.SWOT Analysis this is a planning method use to evaluate the strength, weaknesses, opportunities and divvy up to a business. It inv olves specifying objectives of a business at the same time identifying the internal and external elements that will affect the business both positive and negative in the race to attain its stated objectives.StrengthsWeaknessesLeading market position geared on a strong brand portfolio.Significant RD and market investment.Robust coin productivityIncrease instances of product recall.Excessive dependant on Wal-mart.High product prices translated into sales volume decline and market share loss.OpportunitiesThreatsFuture growth plans- Increase concentration on its core attractive businesses and enhancing its customer base.Increase investment in manufacturing capacity in developing countries.Acquisitions to thrive portfolioCounterfeit goods. changing global retail scenario and rise of private labels.Commodity cost and currency exchange rate.Rising cost of energy pricesEconomic slowdown in US and Euro zone.(www.datamonitor.com)STRENGTHSLeading market position garnered on a strong brand po rtfolioWith revenues of $79,029 million, PG is the worlds largest consumer products manufacturer, with its products reaching 4 jillion people worldwide. PG is the 20th largest company in sales and the 9th largest company in profit among the Fortune 500 companies. The companys market capitalization in 2009 was roughly $150 billion, making it one of the 10 most semiprecious companies in the US. PG holds leading global market shares in a variety of categories, including baby care (33%), blades and razors (70%), feminine protection (37%), and fabric care (33%). The companys leadership position is built on its strong brand portfolio. Strong brand portfolio enables the company to achieve economies of scale in distribution and retain a strong bargaining position with retailers. Leading market position provides PG with significant competitive advantage as well as stabilizes the companys financial growthSignificant RD and market investment. macrocosm a consumer products company, PG relies heavily on innovation and continued marketing investments in order to establish a significant competitive advantage. As a result, the company has made significant investments in RD and marketing. oer the last decade, PG has invested more than $2 billion in consumer and market research (nearly twice that of its closest competitor, Unilever and equal to the unite total of its other major competitors Avon, Clorox Company, Colgate-Palmolive Company, Energizer Holdings, Henkel, Kimberly-Clark, LOreal, and Reckitt Benckiser). Virtually, all the organic sales growth delivered by PG in the past nine years has come from new brands and new or improved product innovation. PG also involves external innovation partners to boost its internal innovative capability, an approach it calls Connect and Develop. Currently, more than half of all product innovation coming from PG includes at least one major component from an external partner. PGs strong RD capabilities and a marketing-driven understanding of consumer needs are approve by significant marketing investments. The company invests more than $7 billion in advertising annually, consistently making PG one of the worlds largest advertisers. Strong focus on research and development allows PG to renew its product line at regular intervals, which boosts customer loyalty and revenue growth. Significant marketing investments to support its brands and a big product portfolio help PG to remain at forefront in a competitive market.Robust cash productivityPGs cash productivity the percentage of earnings converted into cash has averaged over 100% since 2001, consistently among the very best in the industry. This is primarily due to PGs strong focus on productivity, working-capital management and cost reduction. Furthermore, PG is equally rigorous about managing costs. The company has reduced overhead costs as a percentage of sales by more than 300 soil points since 2001. The cash productivity allows PG to maintain the companys excel lent credit rating, to pay strong dividends, and to have the flexibility to invest in the business organically or by means of mergers and acquisitions. Therefore, robust cash productivity ensures that PG has the flexibility and the resources to invest in growth even in the most challenging environments.WEAKNESSESPG has been registering increasing instance of product recalls. One case in point is in November 2009, the company voluntarily recalled three lots of its Vicks Sinex nasal spray in the US, Germany and the UK. The recall was a precautionary tempo after finding the bacteria B. cepacia in a small amount of product made at its plant in Gross Gerau, Germany. In blemish 2010, PG voluntarily recalled its Pringles Restaurant Cravers Cheeseburger potato crisps and Pringles Family Faves Taco Night potato crisps in response to a recommendation from the Food Drug Administration (FDA) to the food industry to protect consumers from potential Salmonella exposure. Most recently in June 2010, PG voluntarily recalled a small percentage of 1-liter bottles of Scope Original Mint and Scope Peppermint mouthwash with malfunctioning child-resistant caps in the US and Canada. Recurrent product recalls could affect the brand anatomy of the company, which would lead to low customer loyalty and brand equity.Excessive hooklike on Wal-MartPG is heavily dependent on Wal-Mart Stores (Wal-Mart) and its affiliates for generating major part of its revenue. Sales to Wal-Mart and its affiliates represented approximately 15% of its total revenue since 2006. High dependence upon a Wal-Mart reduces the bargaining power of the company. Also, Wal-Mart could use its bargaining power to impose unfavourable terminations on the company. Any decrease in revenue from Wal-Mart could have a negative impact on the companys businesses. Hence, the loss of this customer will lead to a sharp decline in PGs revenues and also a loss of its market share.OPPRTUNITIESFuture growth plansIn order to grow i n a highly competitive environment, PG is pursuing a clearly drafted strategy with focus on two areas increasing concentration on its core attractive businesses and enhancing its customer base. The company is sharply focusing on its core attractive businesses (the beauty and health market segments and several household care categories) as these are fast-growing businesses. For instance, the global market for personal care products has annual sales of over $39.5 billion and is growing at a rate of around 5% annually. PG intends to increase its customer base by acquiring under served and unserved consumers. In line with this, the company is targeting developing markets extending its distribution systems and expanding its brand and product portfolio. Developing and emerging economies are expected to account for 90% of the worlds population by 2010, and this is expected to drive study for fast moving consumer goods.Increased investment in manufacturing capacity in developing countriesP G is planning the biggest increase in its manufacturing capacity in order to expand into categories and countries where it doesnt have a brand presence. The company is investing 4% of sales in capital spending, including funding for new manufacturing capacity to support future growth. Over the next five years, PG plans to add 20 new manufacturing facilities. Almost all of these facilities are in developing markets, and almost all will be multi-product category facilities. By focusing on developing markets, the company would reduce the cost of serving these markets while also being closer to regions with the greatest long term growth potential.Acquisitions to expand portfolioPG has made significant acquisitions in the recent past. For instance, in June 2009, the company acquired the Zirh skincare brand. Zirh is a leading super premium, male grooming brand available in high-end department stores, specialty outlets and online. Later in May 2010, PG entered into an agreement to acquire Natura Pet Products, a privately-held pet food business. Most recently, in July 2010, the company concluded its purchase of the Ambi Pur Brand from Sara Lee Corporation. Ambi Pur is a leading global air care brand with presence in 80 countries, and also has several toilet care products, with strong presence in Western Europe and Asia. These kinds of acquisitions will strengthen PGs presence across a range of categories and in turn augment its top line and bottom-line.THREATSChanging global retail scenario and rise of private labelsPGs products are sold in a highly competitive global marketplace which is experiencing an increased trade concentration and the growing presence of large format retailers and discounters. With the growing trend toward retail trade consolidation, it is increasingly dependent on key retailers. Some of these retailers have a greater bargaining strength than PG. They may use this leverage to demand higher trade discounts, allowances or slotting fees, which cou ld lead to reduced sales or profitability. Commodity cost and currency exchange rate instability places tremendous pressure on PGs business. Not to intimate the unexpected and dramatic devaluations of currencies in developing or emerging markets reduce profits.Counterfeit goodsTrade of counterfeits and pass-offs products is negatively affecting the growth of FMCG companies like PG. The top two brands within any category be it cosmetics, detergents, or soaps are effected the most by counterfeit. It is estimated that the loss due to counterfeit products convert into around 6 billion ($8.5 billion). Furthermore, with the advent of digital channels there has been a surge in the sale of counterfeit products and online sales of these products increased by 9% in 2009. Besides revenue losses, counterfeits and pass-offs also affect the companys brand as they are unsafe.(Swot analysis Source www.datamonitor.com )The best strategies accomplish an organisation mission by exploiting an organisa tion opportunity and strength, while neutralizing its treat and avoiding its weakness.Ansoff matrixAnsoff matrix highlight four possible market strategy for the propose product.ansoff_matrix-124013-1.jpeg(http//www.brothersoft.com/ansoff-matrix-124013.html).Product development as this is a new product in the range, much emphasis will be to offer the product to the active customer base. Using the competitive advantages and brand image of previous products to lunch the propose product. With the companys focus on advertising, (worlds largest advertisers) it can use the advertising power to push the product to recognition. Sixty percent (60%) of the strategy will be on product development.Diversification One of the opportunities available to the company is launching into new markets and developing economies. Forty percent (40%) of the strategy will be to launch the propose product in an entirely new market.Market Penetration this occurs when the company sells its existing product in it s existing market, perhaps through greater promotional efforts. As this is a new product this strategy might be considered in the future.Market Development this occurs when the company tries to sell it existing products in new and emerging markets. This strategy as well might be for future considerations.