MARKETING MANAGEMENT BUS506

Case Study Analysis: Procter & Gamble, Inc.: Scope

Mela Hadrović, Mirza Dedić

International Burch University, Sarajevo

MARKETING PROBLEM DEFINITION

Scope is green, mint-tasting mouthwash is one of the leading brands of Procter and Gamble Inc. This
brand became market leader in Canadian mouthwash market in 1976 and until 1990 it has enjoyed the
greatest market share. Plax was introduced in Canada in 1998 on a different platform from the traditional
mouthwashes. Plax is the only player in the market segment of plaque fight. Generally, Canadian
mouthwash market is growing at an annual rate of five percent, and plaque fighting segment represent 10
% of this market.

Since Scope is not operating in plaque-fighting segment, key issue is development of strategy for Procter
and Gamble to enter this market segment and to fight Plax.

COMPANY OVERVIEW

Procter and Gamble is one of the most successful costumer companies in the world, It markets its brand
in more than 140 countries. Their purpose is to provide branded products of superior quality ad value that
improve the lives of the world’s customer for now and next generations. By providing such offerings thy
can get reward from customer in terms of sales and leading brand name in the market.

Procter and Gamble operates in five operating divisions: Paper products, Food and beverages, Beauty
care, Health care and Laundry and cleaning.

Scope

Scope represents green, mint-tasting mouthwash and it is leading brand of the health-care division of
P&G. It was first introduced in 1967 and was positioned as great tasting, mouth refreshing product that
provides bad breath protection. This brand became market leader in 1976 and since then it has enjoyed
the position of market leader.

INDUSTRY OVERVIEW

Prior to launching of Scope, leader of Canadian mouthwash market was Listerine, a germ-killing
mouthwash that protects from bad breath. When Scope was introduced, it has taken leading position
soon because beside bad breath protection it offered great taste. However, in 1988 Plax was introduced
as “pre-brushing” rinse and it was the first mouthwash to fight plaque. Plax established new segment
within mouthwash market, segment of plaque-fighting and gained 10 % of total market.
For the period 1989-1990, mouthwash market has grown by 5%, while Scope has started losing its
market share which has dropped from 33% to 32.3%.

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CONSUMER ANALYSIS
According to the data from the market research, around 75% of Canadian population are using
mouthwash brands, and on average, usage is three times per week for each adult household member.
Furthermore, market can be segmented according to the frequency of usage:
 “heavy” users (once per day or more) – 40%
 “medium” users (two to six times per week) – 45%
 “light” users (less then once per week) – 15%
Most important reasons for usage of mouthwash are as follows:
 It is part of my basic oral hygiene – 40%
 It gets rid of bad breath – 40%
 It kills germs – 30%
 It makes me feel more confident – 20%
 To avid offending others – 25%

Regarding the distribution channels, Scope is mostly selling in food stores and that is why their share in
food stores is 42%, while in drugstores 27%, and approximately 65% of all mouthwash sales went
through drugstores.

COMPETITION POSITIONING
Listerine – “germ-killing mouthwash that eliminates bad breath”
Capacol – positioning close to Listerine, germ-killing mouthwash
Listermint – positioned as direct competitor to Scope (“good tasting mouthwash that fights bad breath)
Colgate – “it fights cavities and has a mild taste that encourage children to rinse longer and more often”
Plax – “rinsing with Plax, than brushing alone, removes up to three times more plaque than just brushing
alone”

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SWOT ANALYSIS

POSITIVE NEGATIVE

STRENGTHS WEAKNESSES

 Scope was long experience in the oral  Distribution channel do not well
INTERNAL FACTORS

hygiene industry. developed

 Taste or flavor better than other  Lack of canning and packaging
mouthwashes  Undifferentiated products or services
 High-quality product with other competitive
 Quality processes and procedures
 First rating in mouthwash market
share
OPPORTUNITIES THREATS
EXTERNAL FACTORS

 Brand for a healthy oral  Too many competitor in this industry

 Moving into new market that offer  Price wars with other competitors
improved profit  Competitor can duplicate the product
 Internet as a developing market
 More distribution channels to create

AVAILABLE ACTIONS

In order to resolve presented problem, Procter and Gamble Inc. has to find out the best way to capitalize
on the emerging market segment of plaque-fighting. Available alternatives are as follows:

 Modifying and repositioning – trading up of the offering by adding new ingredients to Scope which
will enable it to fight plaque and then reposition it as “plaque fighting mouthwash”.
 Marketing improvement – do not change the product, but concentrate on better marketing of
existing product.
 Development of new offering – Launching a new product which will be positioned closed to Plax

POSSIBLE OUTCOMES (costs and benefits)

 Modification and repositioning – adding new ingredients to fight plaque is viable solution because
it will save current market share, but it will not provide additional sales, Further, if retailers do not
find the product uniquely different from existing Scope, it might drop its shelf-facing and create
huge expenses for SKU.

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  Marketing improvement – until now, in marketing campaigns focused on “breathe refreshment
and good tasting”. However, some health benefits of Scope could be emphasized in the future
commercials. However, this might have contra-effect because it is difficult to communicate two
different ides in one commercial.

 Development of new offering – since P&G has traditionally launched products that focus on
unmet customer needs, this option fits well because new product would not only fight plaque, but
also provide better taste. Drawbacks of this option are that product testing would cost around
$20,000 and market research has shows that new product could cannibalize 2 to 9 percent of
Scope’s market share. Further it would take two years to get 6.5% of total mouthwash market.

SOLUTION

When all three alternatives are carefully considered, we are able to develop final proposal. According to
the above presented analysis of possible alternatives, we would recommend Procter and Gamble Inc. :

 To develop new offering by launching new product which would be differentiated from the Plax by
adding better taste and in such a way position themselves directly against Plax.
 Since new product is going to fight plaque and it has good taste, it will be suitable for different
profile customers. (For those who look for health benefits, but also for those who look for mint-
tasting mouthwash)
 As shown in Exhibit 9. of the case study, Plax price per unit is $65.09, so the price of new P&G
product could be set close to $65 per unit.
 Product should be given different name, in order to prevent confusion of Scope’s customers.
 Marketing cannot be left out, because aggressive marketing campaign is required in order to give
correct message to customers (Message that new product is unique because it fights plaque, but
also has good taste)
 Brand building – advertising and promotion (media, magazines, etc), create health awareness,
and build customer trust.
 Although new product will cause additional expenses for testing and will cannibalize some of
Scope’s market, it has perspective to be highly profitable in the
 Additionally, establish a R&D group that will work solely on innovation and improvement of this
product.