Procter and Gamble Case Study

1
Procter and Gamble Case Study

• Asli Avcioglu, Kyle Denham
• Nora Kantor, Lutao Ning,
• Steven Tamayo
• 11/29/2001

2
Outline

• ETC
• Skip Micro
• Product
• Pricing
• Conclusion

3
ETC of Today

• Local GMs Report to Regional VPs that are in the
  ETC
• VPs are largely US expatriates
• Local GMs, who have been accustomed to having a
  large amount of power before the reorganization
  of the ETC no longer have the same control as
  before

4
Why Form an ETC

• Create a united European front
• Lower costs by ordering in bulk
• Standardize prices
• Turn the European system into something similar
  to the American system, which has worked well for
  PG for years

5
Problems With ETC

• Culture Clash

• GMs Negative Perceptions

• GMs have diminished power and thus diminished
  roles in the company
• GMs have less of a voice in the decision making
  process
• Such perceptions lead to lowered motivation, and
  thus less commitment to the PG cause

6
Changes/Improvements

• GM Advisory Board
• Assist in the decision making process for the
  entire European market
• Divergence Hypothesis
• Performance appraisals every 2 years

7
Effects on PG

• Create the united European front the ETC was
  designed to achieve
• Develop an awards system to reward the GMs of
  profitable countries while motivating the GMs of
  less profitable countries to work harder
• Give GMs a voice in the European decision making
  process

8
Current Skip Micro Situation

• Unilever is releasing Skip Micro in France before
  our Ariel Ultra
• The Skip Micro product is inferior to Ariel Ultra
  as well as the non-compact detergents
• Skip Micro has a better promise 25, something
  that we cannot hope to match since our product is
  2.25

9
Two Theories

• Destroying the compact market
• Skip Micros poor performance may deter potential
  customers from buying compact detergents
  altogether, thus protecting their own regular
  detergent and destroying Ariel Ultras chances at
  success
• First Mover
• Take the first mover advantage and then develop a
  better product later

10
What We Think

• We have a superior product
• Unilevers advertisement, 25 is inaccurate and
  deceiving
• Exposing them as frauds will allow us to avoid
  direct competition with their product while
  creating a corporate image for us as being the
  good guys

11
Delaying the Launch

• Expose their inferiority
• Advertisements showing Skip Micros lackluster
  performance
• Frame them as frauds
• Lead on that PG is developing a real compact
  detergent
• Improve the Ariel Ultra product in the meantime

12
Delaying the Launch cont.

• Release Ariel Ultra in France Later
• Re-evaluate market situation after a month
• Pending favorable market response to our
  anti-Skip Micro advertisement campaign
• Launch in another European market in the meantime
• PGs brand recognition should give our
  advertisements sufficient legitimacy

13
Company Objectives with Ariel Ultra

• Quality Product
• Corporate Image
• Environmental

14
GMs Role

• Empowerment
• GMs have the option of creating their own
  formula for detergent as long as it performs just
  as well as the European standard and costs less
  to produce

15
Pricing

• 15 policy stays

16
Conclusion

• Our plans integrate local GMs into the decision
  making process
• Our product is superior to Skip Micro and thus
  should have no problem competing when we launch
  later than planned
• The United European Front shall bring greater
  cohesiveness and expansion to the European market