The Olay Brand Called Olay Evolution Marketing Essay

The Olay tell on C anyed Olay Evolution merchandise EssayINTRODUCTIONThe Procter Gamble Company (PG) is one of the domain of a functions humongousst consumer goods companies. It markets more(prenominal) than than three hundred vanes in the peach tree, health, fabric, home, baby, family, and personal commission carrefour categories. The gild operates in the Americas, atomic number 63 and Asia. It is headquartered in Cincinnati, Ohio, and employs about 135,000 people.CORPORATE OBJECTIVESThe objective of Procter Gamble is that They impart add bulls eyeed mathematical outputs and services of superior quality and assess that improve the lives of the worlds consumers, instantaneously and for generations to come. As a result, consumers will reward us with leadership sales, gain and value creation, allowing our people, our sh atomic number 18holders and the communities in which we live and work to prosper. (http//www.uk.pg.com/company/aboutPG/purposeValuesPrinciples.h tml)CORPORATE systemProcter Gamble (PG), one of the worlds largest consumer goods companies is also a pioneer in the usage of mass media. The company has exercisingd impudentlyspaper drivements, radio and soap operas to advertise its popular brands c be Crest, Pampers, Pantene and Folgers. During 1990-2000, however,its rate of gain took a plunge. When AG Lafley took all over as CEO in 2000, he gave PG a complete makeover with the counsel on innovation and advertisement. 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 worldwide leader in struggle c be and have been trusted by women for fifty years. Graham Wulff, an advance(a) and entrepreneurial South Afri apprise chemist developed the original facial expression at the beginning of the 1950s. Olay has eight ball-shaped fruit lines offering a multiple of reaping. Product such as Olay professional pro-X, Olay Definity, Olay Regenerist, Olay Total 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). fight look at is evolving faster than ever with in certified clinical trial and new have a bun in the ovenards in natural and organic cosmetics. Olay evolution will be a cabal of Olay essence effects (7 seven powerful anti-ageing in one) and Olay Definity (fight wrinkles, brown status and discolouration). Many consumers want yields that offer more than one benefit. So this growth is expected to moisturize, fight free radicals and give the peel a more youthful appearance. This product would offer the existumer an ideal combination of the world some powerful skin care solution.Anti-aging is the fastest-growing skin segment, standing at $567.6 million, now representing the galacticgest course of study in skin care , surpassing facial cleansers which stand at $559.2 million. (http//www.all blood line.com/ cosmos-demographics/demographic-groups/5517853-1.html)product-landing-definity_v6.jpg product-landing-total-effects.jpgWomen are rattling particular when dealing with their face. They need to be convinced the product will deliver all the promised benefits. Women are unforced to try new things and spend more funds to look divulge and younger. Skin care attracts clients from all income level as most women like to take care of their appearance. The improver number of women working equates women with more money to spend and skin care is one of the favourite avenues for their spending.Based on Procter Gamble F4Q10 (Qtr End 06/30/2010) Earnings Call Transcript, Fe virile 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 two points derriere the continued strength of the Olay Pro-X line and the Olay Regenerist Roller ball Eye word innovation. Olay also had noticeable results in developing markets, more than doubling shipments in India, Saudi Arabia and the Philippines. Organic sales increased 5%, driven by 8% organic volume harvest-home. (http//seekingalpha.com/article/218380-procter-gamble-f4q10-qtr-end-06-30-2010-earnings-call-transcript)Rate of Global skin care market 2002 and 2007Country2002 (M)2009 (M)US6,752.28,059.2FRANCE2,391.14,368.0GERMANY1,975.13,239.3ITALY1,440.02,340.4SPAIN956.41,897.9UK1,612.72,937.6 showtime Euro monitor multinationalBelow are the analyses of the business environment to back up the proposal. epitome OF BUSINESS ENVIRONMENTE very(prenominal) Business operates within an environment, these environments directly and indirectly takes the way those businesses function. Comfavouriteition in the skin care manufacture tends to be more intense and there are many changes that can be regarded as threat and probability that it is important for managers to cope with.MACRO governmentalThe political environment Relates to the pressures and opportunities brought by changes of the government and their views toward the skin care industry. apiece government always have a mandate to regulate the handling on non organic ingredients in most skin care product. scotchalThis Refers to economic factors and structures and such variables like the stock exchange, have-to doe with and inflation rates, the nations economic policies and performance, exchange rates, etc. Although PG is based in the US, it earns grosss, pay expenses, own assets and capture 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 opinion poll items denominated in foreign currencies.SocialMiddle-aged women are very elicit in skin care items that help them ret ain a more youthful appearance and complexion. Observing social factors helps organisations guard their reputation among stakeholders. proficientChanges in technology can affect a company emulous gear up. Industries merge new strategic groups emerge currents products improve and the bell of performance gets trim down by process innovation. Because the skin care industry is very competitive, the company necessitate taking advantage of the latest technology and radical substances to create new product in order to maintain customers interest and inscription.EnvironmentalWith planetary warming and carbon foot prints being big concerns, governments and scientists are encouraging companies and individuals to be more environmentally aware. PGs policy is to figure its products, packaging and operations are safe for their employees, consumers and the environment. Reduce or restrain the environmental collision of products and packaging in their design, manufacture, distribution, use and disposal whenever possible. They frequent the sustainable use of resources and actively encourage reuse, recycling and composting.MICRO vendee PowerConsumer products companies face weak emptor power because customers are isolated and have little influence on price or product. only if considering the buyers of consumer products to be retailers rather than individuals, then these firms face very strong buyer power. sensation good example is the business relationship between wall-mart and PG (see pulverisation analysis).Supplier Power the company could face some criterion of provider power simply because of the constitutes incurred when switching suppliers. Notwithstanding, suppliers that do large heart and soul of business with the company also are somewhat obliged to their customers nonetheless, bargain power for both the firms and their suppliers is probably limited.Threat of New EntrantsGiven the amount of capital of the United States investment needed to enter the skin care industry, the supposal is that threat of new entrants will be fairly low.Threat of Substitutes indoors the skin care industry, brands thrive in helping to build 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 evanesce 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 thebehavio ur of theemployees. Other variables allow theorganisation mission statement,leadership style, and itsculture.SWOT Analysis this is a grooming method use to evaluate the strength, weaknesses, opportunities and treat to a business. It involves 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 throw its stated objectives.StrengthsWeaknessesLeading market position geared on a strong brand portfolio.Significant RD and market investment.Robust cash productivity increase instances of product recall.Excessive dependant on Wal-mart.High product prices translated into sales volume decline and market share loss.OpportunitiesThreats approaching growth plans- Increase concentration on its core attractive businesses and enhancing its customer base.Increase investment in manufacturing capacity in developing countries.Acquisitions to expand portfolio onomatopoetic goods.Cha nging global retail scenario and rise of clandestine labels.Commodity cost and currency exchange rate.Rising cost of energy pricesEconomic deceleration in US and Euro zone.(www.datamonitor.com)STRENGTHSLeading market position garnered on a strong brand portfolioWith revenues of $79,029 million, PG is the worlds largest consumer products manufacturer, with its products reaching 4 billion people worldwide. PG is the twentieth largest company in sales and the 9th largest company in profit among the hazard 500 companies. The companys market capitalization in 2009 was roughly $150 billion, reservation it one of the 10 most valuable companies in the US. PG holds leading global market shares in a variety of categories, including baby care (33%), blades and razors (70%), fair(prenominal) 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 measure in distribu tion and retain a strong bargain position with retailers. Leading market position provides PG with probatory competitive advantage as well as stabilizes the companys financial growthSignificant RD and market investment. existence 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. Over the last decade, PG has invested more than $2 billion in consumer and market look into (nearly twice that of its approximate competitor, Unilever and equal to the combined 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 cabaret years has come from new brands and new or improved product innovation. PG also involves external innovation part ners to boost its internal innovative capability, an approach shot it calls Connect and Develop. Currently, more than half of all product innovation approaching from PG includes at least one major component from an external partner. PGs strong RD capabilities and a marketing-driven down the stairsstanding of consumer needs are backed 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 loose product portfolio help PG to remain at forefront in a competitive market.Robust cash productivityPGs cash productivity the parting of earnings converted into cash has averaged over 100% since 2001, consistently among the very best in the industry. This is primarily payabl e 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 percentageage of sales by more than 300 basis points since 2001. The cash productivity allows PG to maintain the companys subtle credit rating, to pay strong dividends, and to have the flexibility to invest in the business organically or through 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 bone spray in the US, Germany and the UK. The recall was a precautionary step after(prenominal) finding the bacteria B. cepacia in a small amount of product made at its plant in Gross Gerau, Germany . In inch 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 aliment industry to protect consumers from potential Salmonella exposure. Most newly in June 2010, PG voluntarily recalled a small percentage of 1-liter bottles of kitchen range Original Mint and Scope Peppermint mouthwash with malfunctioning child-resistant caps in the US and Canada. Recurrent product recalls could affect the brand image of the company, which would lead to low customer loyalty and brand equity.Excessive dependent 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 terms on the company. both 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 cracking decline in PGs revenues and also a loss of its market share.OPPRTUNITIESFuture growth plansIn order to grow in 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 approximately 5% annually. PG intends to increase its customer base by acquiring under served and unserved consumers. In line with this, the company is targeting de veloping 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 demand for fast moving consumer goods. change magnitude investment in manufacturing capacity in developing countriesPG 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 approaching growth. Over the beside 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 foresightful 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. afterwards 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 alter 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 inc reased cunning 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 could lead to reduced sales or profitability. Commodity cost and currency exchange rate instability places tremendous pressure on PGs business. Not to mention the unexpected and dramatic devaluations of currencies in developing or emerging markets reduce profits.Counterfeit goodsTrade of invents 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 organisation 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 existing 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. Sixt y 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 its 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.