Head & Shoulder Pakistan.

“I never knew you had dandruff”…….

Strategic Marketing Plan

Submitted by: Course: Advance Strategic Marketing MS(Management Sciences) Submitted to: Sir ArifVaseer

1|Page Mohammad Ali Jinnah University Islamabad

ACKNOWLEDGEMENT

In the name of Allah who blessed us to learn and gain knowledge. He is the beneficent and gracious to all mankind. We would like to extend gratitude to Management of Muhammad Ali Jinnah University Islamabad and our supervisor Sir ARIF VASEER who afforded us the opportunity to explore our knowledge regarding the subject Advance strategic marketing. Words are very few to express enormous humble obligations to our affectionate Parents for their prayers and strong determination to enabling us to accomplish this report. We also appreciate the cordial co-operation from all our group members of the Project and Sir ArifVaseer for providing us requisite information and knowledge for compilation of our complete report.


Serial No.

Contents

Pg #

01

Executive summery

04

02

Introduction of company

06

03

Procter & Gamble

07

04

Vision & mission statement

08

05

History & introduction of H & S

11

06

Customer and competitive competitive analysis

13

07

Total sales & market share

15

08

SWOT analysis

18

09

Internal resource analysis

23

10

Strategies

27

11

External environmental environmental analysis

31

12

Structural analysis

35

Porter five forces 13

Value chain analysis

38

14

References

42


Executive Summary:

This project report is about “strategic marketing plan” of Head & shoulders.it shoulders.it is part of our course “advance strategic marketing” which is compulsory to complete our course work. The purpose of this report is to provide an opportunityto the students to observe the practical application of marketing strategies in the business. In this report we have given brief b rief history of industry, company (P&G) and product (H&S). 

Customer analysis



Competitor analysis



Market analysis



Environmental analysis



Strategic development


INDUSTRY OVERVIEW

The hair care market is one of those sectors in Pakistan, which has been making rapid impressive progress. A number of these products are also competing successfully in the international markets. The shampoo product manufacturing sector of hair care sector in Pakistan was newly developing and in growth stage of their life. Most companies are offering thebest thebest hair shampoos for every type of hairs. The competition between companies to provide best hair shampoo is really tough. Today, in shampoo market the situation is basically different, because of the fact that internationally known products, are manufactured here. The ranges of products of shampoo are very wide. The bulk of the market share of shampoos in Pakistan is held by two big companies, P&G Pakistan and Unilever Pakistan. They control about 50 to 60 percent share of the total market. The total consumption of shampoo in the country is around 100,000 tones per annum, but the local manufacturers are losing market share gradually due to the easy availability of imported shampoos. The multinationals involved in manufacturing shampoos in Pakistan are Unilever Pakistan and Proctor & Gamble Pakistan. In addition, a local company - Kala Kola - is also manufacturing a product named Bioamla.The Bioamla.The shampoo‟s companies can be divided into two major groups, those catering to the masses and those catering exclusive to taste of the elite and upper middle classes. Competition always exists in the market. Shampoo Market in Pakistan which is very crowded and becoming competitive day by day, as there exists many shampoo in the market such asHead & Shoulders, Pantene pro-v,Sunsilk, Dove , and have a tuff competition between them. Head & Shoulder is ever best hair shampoo which helps to reduce dandruff especially Head & Shoulder Green is proven as a great acne & dandruff removal as it contains anti bacterial ingredients and Pyrithione Zinc. Clean & Clear also best for dandruff and hair fall. Sunsilk is also listed in Pakistani shampoos and providing best hair shampoos for all hair types. Pantene is good to prevent hair loss. Although it does not stop total hair falling but its special hair fall formula gives nourishment to reduce hair fall. Dove is another company whose hair products are getting huge popularity recently in Pakistan and consider as best hair shampoo. Dove is offering shampoos for all hair types. One of its types gives the freedom of color. Fiber Actives & Protein Micro Moisturizer Serum protects hair from


damaging and helps in reconstruction of hairs. Dove can be a best hair shampoo from hair breakage and split ends & its moisturizer serum gives nourishment and softness softness to your hairs. Hair care market can be divided into the following broad categories, 

Hair Oil



Shampoo/ Conditioners



Styling Product



Herbal remedies

INTRODUCTION OF THE COMPANY

Proctor and Gamble of Pakistan is a subsidiary of Procter and Gamble USA established in1990 and started production in 1991.The P&G Company were founded in 1837 in Cincinnati, Ohio and from the very beginning have been a leading manufacturer and marketer of the consumer goods. Company sells more than 250 brands in more than 130 countries coun tries and its operations are in more than 70 countries. It is therefore also rated in the top 25 of the FORTUNE 500 companies. Procter and Gamble is actually the name of two persons William Procter and James Gamble. Both of them wives were sisters and their father in-law asked them to become partners. In the start Procter‟s business was candle making and Gamble‟s business was soap making. The Partnership year 1837 was a difficult time to start the business although Cincinnati was a bustling market place; the nation was gripped by financial panic. Hundreds of banks were closing around the country. In the 1850s, despite rumors of an impeding civil war in the US, they built a new plant to sustain their growing business. Later they pioneered one of the nation‟s profit sharing sharing programs and were among the first in American industry to invest in the research laboratory. By 1890, the fledgling partnership between the Procter and Gamble had h ad grown into multi million dollar corporation .Television . Television in USA introduced in 1939and P&G is the only company that commercialize its product just after five months .With the passage of time P&G acquire different other companies to enhance the business. In 1980, as it approached its 150th anniversary, P&G was poised for a most dramatic period of growth in its history. Company Compan y serves 106000employees allover the world. P&G is a recognized leader in the development, manufacturing and marketing of superior fabric & home care, baby care, feminine care,& towel, beauty care, health care, and food.


PROCTER AND GAMBLE IN PAKISTAN:

P&G started its operations in Pakistan in 1991. First it introduces its brand of Head& Shoulder After that it gave brand of Vicks and Olay oil. Now company has eleven brands in Pakistan .The yearly sales consistently doubled during the past three years. P&G Pakistan establish local manufacturing base.Although Pakistan is a relatively small consumer goods market for in the context of the global operations, almost all the products marketed by P&G here in Pakistan have been successful to become a house. Always feminine protection napkins, Oil of Ole, Clairol skin care, Safeguard and Camay bar soaps. P&G's stress on R&D has helped it develop products which enjoy inherent edge over the competitors. Compared to its global operations, which employ over 106,000 persons worldwide and annual global sales of $ 82 million, P&G's Pakistan operation is relatively small and yet it has been successful to improve the lives of consumers here in Pakistan, like elsewhere in the world. It has served over 140 million consumers in Pakistan, which equals the entire population of the country since its operations 21 years ago.


VISION STATEMENT

“To be a leading l eading consumer goods company and toim prove the li ves ves of world wor ld consum consume er s by providi ng valuable and in novative products” .

MISSION STATEMENT

We will provide products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. These are the Principles and supporting behaviors, beh aviors, Which flow from their Purpose and Values? 

They show respect for all individuals



The interests of the company and the individual are inseparable.



They are strategically focused in their work.



Innovation is the cornerstone of their success.



They are externally focused



They value personal mastery



They seek to be the best.



Mutual interdependency is a way of life


GOALS 

Think globally act locally



Build major global brands through strong programs based on local understanding.



Improve the environmental quality of its products, packaging and operations around the world.



Produce quality products at very competitive costs.



Build superior relationships with all the parties who contribute to fulfilling their corporate purpose, including their customers, suppliers, universities universities and government.

OBJECTIVES 

Bring together transactional activities such as accounting and order management in a single organization to provide services to all p&g units at best in class.



Remains on the cutting edge of the industry.



To be a thought leader within each corporate function.



To be the first consumer goods company in Pakistan.



Be competitive with other high quality companies in order to help, attract, motivate and retain the talent needed to lead and grow P&G‟s business.



Strive to be best in all areas of strategic importance to the company.

ANALYSIS OF VALUES & PRINCIPLES

Organization‟s culture is a pattern of basic assumption invented, developed by a given group as it learn to cope with its problem of external adoption and internal integration. Values, principles, policies, and structure of the organization are the main miles stones to analyze the company‟s strength.


CORE VALUES

P&G is its people and the Core Values by which they live.

P&G PEOPLE: They attract and recruit the finest people in the world. They build their

organization from within, promoting and rewarding people without regard to any difference unrelated to performance. They act on the conviction that the men and women of Procter & Gamble will always be their most important asset.

LEADERSHIP : They are all leaders in their area of responsibility with a deep commitment to

deliver leadership results. They have a clear vision of where they are going. They focus their resources to achieve leadership objectives and strategies. They develop the capability to deliver their strategies and eliminate organizational barriers.

OWNERSHIP: They accept personal accountability to meet the business needs, improve their

systems and help others improve their effectiveness. They all act like owners, treating the Company‟s assets, as they‟re own and behaving with the Company‟s long-term long-term success in mind.

INTEGRITY: They always try to do the right thing. They are honest and straightforward with

each other. They operate within the letter and spirit of the law. They uphold the values and principles of P&G in every action and decision. They are data based and intellectually in tellectually honest in advocating proposals, including recognizing risks.

PASSION FOR WINNING : They are determined to be the best at doing what matters most.

They have a healthy dissatisfaction with the status quo. They have a compelling desire to improve and to win in the marketplace.

TRUST: They respect their P&G colleagues, customers, and consumers and treat them, as they

want to be treated. They have confidence in each other‟s capabilities and intentions. They believe that people work best when there is a foundation of trust.

10 | P a g e Mohammad Ali Jinnah University Islamabad

PRINCIPLES

These are the principles and supporting behaviors, which flow from their Purpose and Core Values. 

They show respect for all individuals.



The interests of the Company and the individual are inseparable:



They are strategically focused in their work:



Innovation is the cornerstone of their success



They are externally focused:



They value personal mastery:



They seek to be the best:



Mutual interdependency is a way of o f life:

HISTORY AND INTRODUCTION OF HEAD & SHOULDER

Head & Shoulders is a brand a brand of anti-dandruffshampoo anti-dandruffshampoo produced produced by b y Procter & Gamble.The Gamble.The idea for Head & Shoulders dates back to about 1950 when Procter & Gamble research determined that consumers were not completely satisfied with the then existing anti-dandruff shampoos. After 10 years of research, research, P&G scientists found an new and effective effective ingredient against dandruff that that really worked — Pyrithione Pyrithione Zinc. In 1960, P&G P&G tested the the product and by the spring of 1961, the shampoo was given its name, Head & Shoulders, and Procter & Gamble started to work on the packaging, displays, advertising, advertising, and marketing programs. programs. Head & Shoulders was introduced to the public with the original product, which was a blue-green cream shampoo in a white glass jar and was “clinically proven to reduce dandruff.” Over the last 50 years, Head & Shoulders has significantly evolved offering a variety of shampoos and conditioners to meet consumers‟ hair and scalp needs. Head & Shoulders shampoo is the most popular brand in anti-dandruff shampoos and is provided by P&G. It is considered as the world‟s no. 1 anti dandruff shampoo. It is highly recommended by the users and a major highlighted brand as anti dandruff niche. It comes in different categories like: 

Classic clean shampoo & conditioner.



Dry scalp.



Ocean lift. 11 | P a g e

Mohammad Ali Jinnah University Islamabad



Smooth and silky.



Refreshing menthol.



Intensive treatment.



Extra volume



Active support.



Clinical strength.



Restoring shine.

There are so many other available options for both men and women especially designed according to their needs. The formula of Head & Shoulders shampoo is especially designed to target the customers with dandruff, dry and damaged hair in all age groups. The Head & Shoulders shampoo intensive solutions available are formulated to treat, itching, flaking, irritation, dryness and redness caused by dandruff with medicated formula that also helps to protect hair against damage. It removes dandruff and prevents further flaking. Its formula provides better scalp protection and coverage to get rid of dandruff flakes up to 100%. It gives you soft beautiful and dandruff free hair with the use of just one product. It is no.1 antidandruff shampoo that is recommended by most of the dermatologists. With its regular use you can have healthy scalp and flake free hair. The rich formula is gentle enough for daily use even on the colored hair. Head & Shoulders treated hair remains soft and manageable as it deeply cleanses, moisturizes and nourishes scalp and hair both. It is available for different hair types and textures and these work best for frizzy, damaged hair. The benefits of using Head & Shoulders will be: 

Continuous fight against dryness



Calms itching with zinc based actives to comfort scalp



Reduces the flakes and prevents dandruff from coming back



Relives irritation



Makes hair look more beautiful and dandruff free

This product gives the best solution for the people who suffer from dandruff, irritable scalp and itching. Making dandruff and its symptoms a history from life is easy with the use of Head & Shoulders shampoo range and conditioners. The Head & Shoulder formulas are clinically proven to get maximum protection right from the first wash.


CUSTOMER AND COMPETITIVE ANALYSIS:

Target market:

The target market for the Head & Shoulder is the Higher middle class people who are brand conscious, early adaptors and who care about the overall health of their hair. Female:

16- 40 years

Male:

16-30years

Consumer Profiling:

Head and Shoulder in Pakistani customer are offer different kinds of shampoo bra b ra n d ac co rd in g to th ei r n e ed s . Major Segmentation:

Marketing is one of the most important functions in business. It is the discipline required to understand customers' needs and the benefits they seek. Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers. Once the market is broken into segments, companies can develop advertising programs for each segment, focus advertising on one or two segments or niches, or develop new products to appeal to one or more of the segments. The market can be divided into segments by using four "segmentation basis": Psychographic, behavioral, geographic, and demographic basis. The basic criteria for segmenting a market is are customer needs. To find the needs of o f the customers in the market .

Geographic:

Geographic segmentation of head and shoulder is worldwide. Now head and shoulder is serving more than 180 countries including Pakistan. Head and shoulder in Pakistan mainly used in urban and semi urban area .Head and shoulder in Pakistan‟s g e o g r a p h i c s e g m e n t a t i o n i s t h e d e v e l o p e d c i t i e s l i k e i n L a h o r e ,


Karachi, Islamabad, Faisalabad, Hyderabad, Multan, Peshawar, Sialkot, and Rawalpindi head and shoulder is available on all provincial p rovincial capitals of Pakistan.

Demographic:

Head and shoulder ‟s ‟ s general market segment is younger generation. But t h e y g o w i d e i n t h i s t h i n g . T h e y s e g m e n t h i g h i n c o m e s a n d u p p e r cl class families which which can spend spend money money on the best best product product quality quality in t h e m a r k e t .

Psychographic:

Head and shoulder ‟ s p s y c h o g r a p h i c s e g m e n t a t i o n i n c l u d e s p e o p l e w i t h having good attitude about beauty sense especially upper status regular group, potential user and nonuser. Behavioral:

Head and shoulder‟s behavioral segment is the class where people love love to spend money on high quality product. That‟s why in Pakistan, head and shoulder is the firsts largest shampoo brand in Pakistan and have 65 % market share in anti dandruff shampoo.

MAJOR EXISTING AND POTENTIAL COMPETITOR 

Sunsilk



Lifebuoy



Pantene



Bioamla



Dove



Medicam



Clear



DaburVatika,


TOTAL SALE, MARKET SHARE AND PROFIT OF HEAD & SHOULDER

Procter & Gamble, one of the world's premier consumer goods companies.Head & Shoulders shampoo is the most popular brand in anti-dandruff shampoos and is provided by P&G. It is considered as the world‟s no. 1 anti dandruff shampoo. It is highly recommended by the users and a major highlighted brand as anti dandruff niche. 20% of total net sales of proctor proctor and gamble came from hair care porduct like head & shoulder and pentene, both are capture 50% share of total shampoo market in pakistan. P&G's market share has been consistently increasing in the past five years as Procter & Gamble has put an increased emphasis on establishing its products in this markets. P&G has created products designed specifically to target developing nations. Research & Development focuses both inside and outside the company in 2010, P&G spent approximately $2.04 billion on Research & Development, nearly $1 billion more than its closest competitor, Unilever. The two most important factors in P&G's innovation process are its practice of consumer demand research and its "Connect and Develop" R&D structure. First, when entering new markets, P&G sets up in-home visits with consumers in order to fully understand the needs and desires consumers have for household and personal products. This way, P&G gets directly to its customers and is able to cater to their needs. P&G also incorporates consumers' input into the R&D R&D process through its "Connect and Develop" initiative.


Sales % 4%, 18%

15%

Baby Care Fabric Care Beauty

9%

Grooming 30%

Health Care Snacks Care

24%

Earning % 2% 16% 18%

Baby Care Fabric Care Beauty Grooming

14% 26%

Health Care Snacks Care

24%

COMMODITY PRICES

A diversified consumer products manufacturer, P&G depends heavily on a wide basket of global commodities for manufacturing its goods. Higher commodity costs subtracted 0.5% from gross margin growth. Nearly half of the company's cost of goods is directly related to commodity 16 | P a g e Mohammad Ali Jinnah University Islamabad

goods. The company has h as increased prices due to higher hi gher costs of oil and other raw materials. P&G instituted broad price adjustments in Q1 2010 to close widening price gaps in several businesses, Analysts believe pricing adjustments are largely behind P&G as of Q2 2010, with an impact on about 10% of P&G's products. As the market leader, the company does benefit from pricing power and can moderate commodity inflation better than its competitors.

MARKET SHARE:

The good companies are offering the best hair shampoos for every type of hairs. The competition between companies to provide best hair shampoo is really tough. We can get shampoo in Pakistan for every hair type The total consumption of shampoo in the country is around 100,000 tonnes per annum, but the local manufacturers are losing market share gradually due to the easy availability of imported shampoos. The market for hair care in Pakistan increased at a compound annual growth rate of 9.9% between 2010 and 2011. The shampoo category led the hair care market in Pakistan, accounting for a share of 51.6%. At present, two multinational companies are manufacturing four international brands in Pakistan: Pantene, Head & Shoulder, Pert Plus and Sunsilk. Another brand, DaburVatika, is also sold in the market. The multinationals involved in manufacturing shampoos in Pakistan are Unilever Pakistan and Proctor & Gamble Pakistan. In addition, a local company - Kala Kola - is also manufacturing a product named Bioamla. The market share of Head& Shoulder in Pakistan is almost 65% in anti dandruff shampoo.

CURRENT STRATEGY:

Major international brands turned up their focus on dandruff control and hair strength in their marketing campaigns to target the specific and most common hair problems in 2011. The strategy was employed by major players such as Unilever Pakistan and Procter & Gamble to retain their brands‟ visibility and remain a preferred choice for consumers. Promotional messages had a scientific ring to them as scientific evidence such as a dermatologist‟s support or information on the ingredients of the hair products continued co ntinued to be the major theme. 17 | P a g e Mohammad Ali Jinnah University Islamabad

The focus of these two major international players in hair care in Pakistan continued to focus on marketing and advertising campaigns during 2010 as these leading players strive to maintain brand image and consumer loyalty. In a bid to retain and boost their value shares, leading manufacturers continue to focus on building brand perception by offering added value. In order to achieve this, many leading multinational companies are involved in establishing a strong media presence not only through the electronic and print media but also through below-the-line marketing, engaging in activities including free product sampling and events which target specific

consumer

groups

such

as

young

urban

dwellers.

COMPETITIVE LANDSCAPE AND GROWTH TRENDS

“P&G is now one of the world‟s largest beauty companies” (P&G Annual report). P&G states that Head & Shoulder Shoulder is the world‟s largest hair care brand and that it grew in double digits over the last two-years. P&G claims that this success is due in part to their unsurpassed hair conditioning technology. Procter & Gamble Pakistan led led hair care during 2010 with a 44% value value share through its brands Head & Shoulders, Pantene Pro-V, Herbal Essences and Pert Plus. These brands have a long-standing presence in the country as well as a high degree of visibility in the media and widespread availability throughout Pakistan. Hair care is expected to increase increase in constant value at a CAGR CAGR of 9.9% over the last few period, with this positive but moderate performance reflecting the slow pace of recovery in the Pakistani economy as a whole and the lingering negative effects of the devastating floods which hit Pakistan during 2010. These floods caused a significant amount of damage to Pakistan‟s rural areas, although the major consumers of hair care include affluent urban consumers, who were largely unaffected by the floods. Value growth during the forecast period will depend on the high degree of inflationary pressure impacting manufacturers and distributors, the factors which have the greatest influence on the overall retail selling price of hair care products.

SWOT ANALYSIS OF HEAD AND SHOULDER Strength: 

Shampoo market leader.



Beast anti dandruff in Pakistan.



Most admired brand in Pakistan. 18 | P a g e




Sale in small pack.



Easily available in market.



Focused on the frizzy and dry hair caused by hair color or curling hair dryer.



Product are constantly developing such as changing packaging to modern and modify the formula etc. It is well known in the market.



Weakness: 

The most expensive as compare to competitors.



Targeting only high middle and upper class income.

Opportunity: 

Growth in the hair care market can be morethan 9.9 %.



It can capture the more market share in the rural areas.

Threat: 

High shampoo market competitive.



Consumer is not loyal, influence of switch brand easily. e asily.



High price as compare to competitor.

MARKET/SUBMARKET ANALYSIS:

FORCES THAT REDUCING PROFITABILITY IN MARKET

Political and legal forces:

Rapid changes in the political scenario of the country along with the uncertain policies of the Government have made the whole business community as uncertain. Also there is terrorism prevailing in the important cities of the country like Karachi and Afghan War, which are affecting the business activities. Policies about taxes are changing continuously due to changing government.


Economic forces: 

Increasing inflation in the country, persistently reducing the purchasing power of the people and dropping people from high price shampoo to low price shampoo and providing more fuel for expansion of local Producers.



Increased import duties on the finished goods and raw material have increased the price of the product, along with this, increasing inflation in the country have made it difficult for shampoo industry to transfer the whole increased cost at the consumer, thus forcing the industry to operate at a very low margin.



Sanctions imposed by the developed nations on Pakistan due to nuclear experimentation create the uncertainty in business activities.

Social forces:

The greater the tendency towards urbanization in Pakistan, the living standard which is forcing the people to use standardized product and people are diverting from the beauty shampoo to specially feature shampoo.

Technological changes:

There are a number of major and rapid breakthrough in the technology of shampoo and their manufacturing process, but innovations is required so that the product does not become obsolete.


COMPETITIVE ADVANTAGE

Competitors are an essential part of any product‟s scheme of operations. The strategies adopted by competitors decide the operation plans for the product. Under the marketing concept, companies gain competitive advantage by designing offers that satisfy target-consumer needs better than competitors offers. They might deliver more customer value by offering consumers lower prices than competitors for similar products and services, or by providing more benefits that justify higher prices. Marketing strategies must consider the strategies of competitors as well as the needs of target consumers. Some of the main points that constitute the competitive advantage of P&G in general and Head & Shoulder in specific are: P&G is one of the largest FMCG companies in the Pakistan and world. Its main competition is with Unilever which has almost equal presence in the Pakistan and world. Procter and Gambles sales $ 82 billion in worldwide. Head & Shoulder is known worldwide. It was the best selling hair care line in 1991. Head & Shoulder is known to create healthy, shiny hair. P&G has one of the largest advertising expenditures in the whole world. Following is the Proctor& Gamble‟s advertising expenditures: In In 2011 P&G‟s advertising expense reached $2 billion. P&G is known known for its innovation. It has a large diverse portfolio of products. Head &Shoulder„s customer base is also its very significant competitive advantage. It targets women and girls and they constitute its loyal customer base. Head & Shoulder has a good Brand Equity and there are always new kinds of hair types that it markets to. P&G intends to build brand equity by b y developing distinctive d istinctive products that stand for something and that have a definite position in the market. They want to communicate the products benefits as compared to the competitor, with a brand that is so amazing, appealing, and reliable that the consumer begins to trust the bran


INTERNAL RESOURCES ANALYSIS MARKETING RESOURCES

Marketing resources are very critical for every organization because it leads to the performance of a company. An organization with worthwhile marketing resources can fetch high sales and profit. Marketing resources include following ingredient: 

Breadth and depth of product line



Market share



Marketing information system



Distribution channel



Market coverage



Company image

P&G is doing concentrating efforts on the best quality growth opportunity in the whole shampoo market. BREATH AND DEPTH OF PRODUCT LINE

P&G has launched one shampoo in the market of Pakistan in 1991, named head & shoulder. Therefore, they have different product depths are available providing by P&G as compared to their competitors in case of shampoo. In the depth d epth they have:Head & Shoulders now comes in a new pack-design and logo in six variants:



Head & Shoulders Smooth & Silky



Head & Shoulders Refreshing Menthol



Head & Shoulders Clean and Balanced



Head & Shoulders Silky Black



Head & Shoulders Naturally Clean



Head & Shoulders Nourishing Aloe Vera


HUMAN RESOURCES

P&G Pakistan is determined to create a way of working that release the energy and talents of everyone in the company and strips away everything that stifles creativity. It aims to be a company in which very employee knows what is expected of them, has the freedom to take initiatives, is accountable for the results and is properly rewarded for success. At present more than 300 employees are employed in P&G Pakistan, and in order to enable their employees to achieve what is expected of them, the company has a well established program for the training and a system for the measurement of o f their performance. Human Resources ensure that P&G has the employees, organizational design and work culture to deliver business productivity and to continually improve consumer, employee and shareholder value. RESEARCH AND DEVELOPMENT

“It is our policy to continue pushing the envelope when it comes to developing, validating, and using new alternative test methods so we can reduce our need to do animal testing, and our ultimate goal is to eliminate it.” it.”

SHARE HOLDERS

Shareholders are important stakeholders at P&G. P&G has 1.3 billion shares of stocks outstanding. Large institutions and mutual funds, retirement programs, individual investors and employees throughout the world own these shares. Individuals hold approximately 50 percent of their shares, with nearly 20 percent held by employees and retirees. They work to increase the 23 | P a g e Mohammad Ali Jinnah University Islamabad

value of P&G stock for all their shareholders in a variety of ways, including growing the company‟s sales and earnings each year. They measure for tracking their success for shareholders is total shareholder Return (TSR). TSR measures how much value their investors receive as a result of owning P&G stock. They track TSR against 29 companies in similar industries, such as consumer, health care and beauty products. P&G tracks performance to compensate key managers based on how well they increase shareholder value. Their Shareholder Relations team is available every day to answer questions, listen to shareholder feedback and provide perspective on Company decisions.

MARKETING INFORMATION SYSTEM

Success of marketing plan depends upon the marketing information system of the organization. In this way MIS servers as a critical resource of any organization. P&G has developed a marketing information system. with the help of this system, s ystem, P&G gets market information, which leads to better marketing planning. Moreover, sales force of P&G is served as source of information about the market in different segments because its sales force has direct contact with the customers.

DISTRIBUTION CHANNEL:

Distribution channel of a company is a very important for its survival, and especially in shampoo industry, they have to make it excellent, because if they will not make it easily available to the consumer, all is useless. So providing needs, satisfying goods at the right place is very important. P&G itself has no distribution channel for head and shoulder rather they are distributing the head and shoulder through International Brands Limited (IBL), which is a renowned distribution company in Pakistan and they have their distribution network in all major cities of the country.

COMPANY IMAGE :

P&G is a multinational company and is using its corporate image as a marketing resource. So this is beneficial for the safeguard in each segment. At present, P&G is famous for its quality product, but b ut it has implemented imple mented different strategies to improve its image in future. Because just providing quality products are not enough. They have to show concern for their 24 | P a g e Mohammad Ali Jinnah University Islamabad



Society



Customers



Employees

P&G has adopted all its ways to achieve this aim, which will lead to a better corporate image of the company in future. If they got a chance to see the advertisement of P&G‟s head and shoulder customer satisfaction and environmental safety are emphasized. As explained above that company image can be used as marketing resource. Due to the image, people are attracted to P&G. That‟s why wh y market helps the sales force to persuade the customers. In this way, P&G is using corporate image as a marketing resource.

MARKET COVERAGE

As far as head and shoulder is concerned, P&G is emphasizing only on urban areas, while rural areas are neglected, because their target market is middle and upper class and this class is mostly located in urban areas. Therefore, due to their product features, their market coverage c overage is better.

RESEARCH AND DEVELOPMENT

With respect to R&D, P&G Pakistan has a strong back from the P&G worldwide network of research and development P&G‟s P&G‟s innovations is a major competitive strength and is driven by the market place. The company sets out to deliver the customers the right science with the right processes at the right place. It must be seen to provide a quality of service, which is the best in the market. P&G is spending millions of dollars in R&D worldwide, while they have R&D cells in the countries in which the operations of business are going on. These R&D cells are responsible to identify the technological breakthrough, taking place in these countries. They are mostly customer oriented for which they test the products in the market and then introduce it to the whole target market.

FINANCIAL RESOURCES :

The head and shoulder business accounts contribute nearly 15% of the company‟s profit. The impressive growth recorded by the shampoo industry enabled it to make this contribution. This is 25 | P a g e Mohammad Ali Jinnah University Islamabad

due to increase in sales on 20 % of head and shoulder in 2011. Along with this internal resource generation, corporate name is at its back as sound credit worthiness for any borrowed fund.

PROMOTION AND ADVERTISEMENT

PROMOTIONAL STRATEGY

Promotion tools 



Web marketing Networking



Contests



Advertising sponsorship



Social awareness

The promotional strategy of head and shoulder is highly highly useful and effective. Using Using magazine print advertisements and commercials allows for the opportunity to segment their advertisements by specific magazines, specific TV shows, and specific time slots. These strategies provide Pantene with the opportunity to wisely advertise adve rtise to their target audience. Without promotion the brand would be relatively unknown and its popularity would not be near what has been established with promotion. Many times when a consumer sees a product in the store that they have not heard of they will browse over it and choose a product they know. Consumer and market knowledge are prevalent because head and shoulder and P&G are built around what consumers want. Public Relations is a large aspect of the P&G/head and shoulder promotional mix. large factor for head and shoulder, they use marketing and business techniques to try and improve consumer‟s lives. They are always finding new and better ways to reach their consumers and between their PR campaigns and advertising they are constantly appealing to consumers and causing them to trust head and shoulder. The purpose in using aspects of the promotional mix is to build brand equity, brand awareness, and frequently put our advertisements and name into the public to be seen. The frequency in which the ads are seen is as a s important as the message we are providing. Endorsers: global celebs like Pakistan cricket player like shahid khan afridi. In indiakarina 26 | P a g e Mohammad Ali Jinnah University Islamabad

Each collection includes a shampoo, conditioner, treatment and styling products that helps the consumer achieve their unique look. Not only did they change their products to match the consumer‟s desired style, they claim to have improved their technologies. Hair care companies companies are building on the desire for women to maintain a young, natural, and fresh look. Marketers are also beginning to key onto teenage girls more. Girls ages 15-19 increased sales 12% from 20082011. Head and Shoulder‟s promotional tactics are ideal and and we feel they are approaching the target audience well.

STRATEGIES

PRICING STRATEGIES

P&G always emphasizes head and shoulder as quality product and they try to differentiate it as compared to competitors. But they have set the price of head and shoulder which is equal to the major competitor product Sunsilk and Dove . Therefore, we can say they are somewhat following competitive price strategy.

DISTRIBUTION STRATEGIES

As described earlier that P&G is distributing head and shoulder through International Brands Ltd., distribution network which is a renowned distribution company. In each IBL office, there is an Area Sales manager of P&G who is responsible to watch the activities of IBL regarding distribution of Safeguard and make direct contact con tact with customers to obtain the complaints.

PRODUCT STRATEGIES

Head and Shoulder is quality product and P&G do not compromise on quality. Therefore, in product strategy, they are following differentiation strategy. There are the marketing strategies of head and shoulder but there are a group of strategies, which determine the strategies of company regarding a product.



Market penetration



Market development



Product development 27 | P a g e


MARKET PENETRATION

Market penetration means to exploit the available consumer efficiently to achieve high market share. This is probably done for a product, which is at the growth stage. Market penetration can be done through heavy heav y advertisement and by providing products of different sizes and types for different consumers. For this purpose, highly extensive distribution channel should be used.

MARKET DEVELOPMENT

In market development strategy, organization should find the new uses of product, new segments and entering into new geographic areas. Still head and shoulder is being used for shining and germs protection purpose, focusing on urban areas and more emphasis on middle and upper class.

PRODUCT DEVELOPMENT

For product development, development of internal resources is emphasized. Therefore, P&G should acquire one more product or manufacturing plant for the production of head and shoulder to capture the wide market. For head and shoulder P&G is intensifying the efforts efforts to increase the market share in growing industry because shampoo industry is growing with an annual rate of 9.9%. Therefore, we can say they are following consolidation strategy for head and shoulder, because they are intensifying their efforts on advertisement and promotional activities. activities.

STRATEGIC PROBLEM

P & G is facing the problems in the following areas:



There is gradual increase in the substitution of Head and Shoulder due to its higher price. There is also great competition in the local Producers due to low price shampoo and also great competition in the organized sector due to equal size of the competitive organizations.



As far as Head and Shoulder is concerned, P&G is emphasizing only on urban areas, while rural areas are neglected.



P & G is Unwilling to serve low-income market. Other competitors in the shampoo industry are serving in each class with respect to different prices & their target market is 28 | P a g e


upper class, middle class and lower class, each class with respect to different prices. Head and Shoulder‟s Price is especially very high towards lower income groups. 

P&G itself has no distribution channel for Head and Shoulder rather they are distributing the Head and Shoulder through International Brands Limited (IBL). This is also the reason for the high price.

POINT OF DIFFERENT

We compare our product with other brands which has same product that is shampoo so it find out some point that are as under: Flavor:

Some people like many flavors in shampoo for example in Sunsilk and Pantene they have at least five flavor but we are six flavors in anti dandruff dand ruff head and shoulder

Extra feature:

Other brand of shampoo has some extra feature for example dandruff contrl and also help to long hair, but head and shoulder shampoo is only for dandruff control so our femail customer that are much conscious for their long hair switch to other. Price:

Price is the major factor that can help to retain and attract out customer, but the head and shoulder price is much higher to other.

Internal service quality:

In the internal environment of the company they can hire the more expert people and also trained the existing employees to make them more productive.

Market demand:

Market demand of head and shoulder in the market is very high if the price of the head and shoulder is increase very less then it is effect to much on its demand but if its price largly increase then it effect the demand.


Product design:

The design of the bottle head and shoulder is attractive for its customer.

Satisfy and loyal customer:

Due to the high quality of the product the Procter & Gamble is committed to providing products and services of superior quality and value that improve the lives of the world's consumers. The customer of P&G are fully satisfied with the product and they are also loyal to the company

Distribution:

The distribution channel of head and shoulder follows the conventional o route of FMCG marketing, factor to distribution to whole seller to retailer to consumer. Head and shoulder has the strong distribution channel, it can be available every where and customer can not find any difficulty to buying this product.

BRANDS IN PAKISTAN



Head & Shoulder



Pert Plus



Vicks



Pentene



Rejoice



Camay



Safeguard



Pampers



Always



Ariel

EXTERNAL ENVIRONMENTAL EXTERNAL ENVIRONMENTAL ANALYSIS


Nature of the environment

P&G head & shoulder is operating in a complex and stable environment, complex because there is a number of factors in its environment, about which less information, stable, because the changes in these factors is predictable factors, which makes its environmen t complex are:

Retailers

A group having strong influence over the opinion of the consumers regarding which shampoo should be purchased. This group is becoming more and more concern to their own incentives/margin.

Local producers

Small head & shoulder shampoo manufacturing units, having no or very low overhead charges, under fix tax system or hidden units evading tax and growing like mushroom, involve in the low price shampoo war, exploiting consumers through retailers.

Reference group

People having social influence on their neighbors also affect on the sale of shampoo.

Technology:

Moderate Moderate changes in the technology of shampoo manufacturing decrease the ……………...

Urbanization:

Increase in rate of urbanization especially in Pakistan has made the environment more complex of shampoo industry.


SWOT ANALYSIS OF P&G STRENGTHS 

Heavy and impressive promotional plan for head and shoulder.



Product innovation



Strong social & corporate image of P&G.



Strong financial position of company.



Strong customer loyalty.



Strong brand image.



More concern towards total quality management.



Highly health caring product.



Diversified business structure.



Direct contact with customers.



P&G‟s good relations with the supplier.



Strong emphasis on environmental prosperity.



Worldwide research and technology, engineering and manufacturing.



Well-established and renowned distributors.



Highly enthusiastic sales team of the company.

WEAKNESSES 

Unwilling to serve low-income market. Price is especially very high towards lower income groups.



Increasing promotional spending to keep healthy sales.



Customer concentration



Reductions in cash flow levels



Mature Markets



High customer concentrations


OPPORTUNITIES 

The shampoo market is growing growing at an annual rate of 9.9%. The main reasons for this growth are: Rapid growth in population, High urbanization, Increase in awareness among people about new advancements. Due to this growing market, there are lots of opportunities for P&G to exploit this growing market by introducing new shampoo brand.



Due to rising awareness among people, switching trend toward health hair care shampoos is high. Therefore, it is a good opportunity to capture this segment through efficient marketing practices.



Selling direct to the customer.



Better product experience.



Good growth potential in the Health andBeauty segment



Growth potential of domestic retailers

THREATS 

Increasing market share of local Producers. The local Producers are playing an important role in shampoo industry, because they are providing low price shampoos and try to penetrate in their local market by replacing the branded products.



Increasing cost of raw material



Substitute brand that have a cheaper price.



Increasing inflation in the country is also a major threat of P&G because it is reducing the purchasing power of consumers.



High levels of competition



Raw material and energy price increases

MAJOR STRATEGIES:

Business-level Strategy


P&G, with the largest product portfolio in the consumer products industry, faces significant challenges maintaining cost efficiency and scale economies while creating innovation and differentiation. The company is divided into in to four pillars: 1- Global Business Units 2- Market Development Organizations 3- Global Business Services 4- Corporate Functions, Each working separately and together to bring competitive advantage to P&G. As competition from other major global and small local companies are vying for market share, a sound business strategy, with a focus on flexibility and responsiveness, is required to maintain and grow their leadership position. P&G's business strategy focuses on large-scale operations, strong product branding, and product innovation to develop competitive advantage. advanta ge. P&G is the global leader in its four core categories, Baby Care, Feminine Care (35%), Fabric Care (approximately 30%), and Hair Care (greater than 20%). To achieve sustainability and continued growth, P&G's strategy is to continue to innovate and sell products that appeal to retail trade customers and consumers, providing pricing and product that adds value for the customer, while improving imp roving efficiencies in sales and operations with their ongoing restructuring and technology enhancements, and quickly responding to competitive advancements. Their comprehensive research network and $2B of research spending annually support their innovative focus. And are technology innovators for improving efficiencies and reducing costs, such as with bar coding and wireless technologies. With their market knowledge and focus on efficiencies. They excel at "demand chain planning," identifying their "target market's requirements and designing the supply ch aining backward from that point.

Global Strategy

P&G has made substantial investments globally, and used acquisitions, joint ventures, and alliances to expand their market understanding and reach. Key to expansion are three competencies P&G has developed: 1- understanding of the foreign marketplace 34 | P a g e Mohammad Ali Jinnah University Islamabad

2- ability to manage people in foreign markets 3- skills at managing foreign subsidiaries. Their global strategy includes innovation, increasing market share on base business while focusing on each business as well as on each industry, and investing in the developing marketplace. P&G has gained substantial market knowledge, has innovative databases including over 100 million consumers across 30 countries, utilizes a blend of local and expatriate managers, and provides training, global resource centers, and partnerships and alliances for managing foreign subsidiaries, all successful activities that promote local acceptance and a climate enabling knowledge transfer. Overall, P&G has a well-developed knowledge base and global mindset, and with innovation a key component of their global strategy, they have created the ability to implement distribution systems that can move innovations across borders.

Corporate Strategy

P&G markets over 300 products in 160 different countries. P&G groups its business into two categories, 1- foundation business 2- higher growth business.

P&G is aware of their core products and business foundation, but also understands that the development of new products through innovation, research and development is the key to maintaining its competitive advantage. P&G should continue its current successful strategy.

STRUCTURAL ANALYSIS

Porter model. Structural analysis helps to analyze the competitive process as well as the sources of competitive pressure. In the structure analysis, certain questions like what are the strengths of these pressures, what type of competition is prevailing and what future competitive conditions will be included. Generally, there are five forces which affect the competitive position in an industry and these forces are as follows:1)

Competitive rivalry

2)

Buyer‟s power 35 | P a g e Mohammad Ali Jinnah University Islamabad

3)

Supplier‟s power

4)

Threat of new entrants

5)

Substitute products

COMPETITIVE RIVALRY 

Competition is concerned with the degree of rivalry within the industry. Danger of rivalry is greater when the competitors are of equal size. In the shampoo industry, the competitors are;



Sunsilk



Lifebuoy



Pantene



Bioamla



Dove



Medicam



Clear



DaburVatika,

So competition is very tight. Rivalry is greater between these three firms due to their equal sizes. Shampoo industry shows growth rate, which is 9.9% per annum. It seems that it offered very lucrative business opportunities but these opportunities also carry threats with them. Because to capture the high market share, an organized distribution channel is required for this industry which carry heavy cost.

THREAT OF NEW ENTRANTS

P&G possess a significant amount of market share in Pakistan. It is generally said that the industry where the threat of new entrants is low, the industry is considered to be secure and attractive. In the case of shampoo industry, the barriers to new entrants are large initial capital requirements and product differentiation as well. Also the available shampoos have a strong image among consumers and it is very difficult for new comers to break that image. Due to these reasons, the threat of new entrants is low but not zero. Because, there are chances that ICI may enter into the shampoo industry. Anyhow, it is 36 | P a g e Mohammad Ali Jinnah University Islamabad

very difficult for new comers to enter into the shamp00 industry. To compete P&G, a competitor must have a large sums of capital for heavy marketing and R&D. THREAT OF SUBSTITUTES

Substitute means a product which can perform the same functions as the original product can perform. Substitute of the head and shoulder anti dandruff is Dove, and Clear and clean shampoo. Since the quality of these substitutes is not comparable. So there is low threat of substitute to the shampoo. But due to rise in inflation in the country,threat of the substitute of high price shampoo like head and shoulder is gradually increasing.

BUYER’S POWER

When there are a few number of buyers those purchase the large portion of a company‟s sale, then in this case, they have maximum power. But in the case of shampoo industry, the buyers are the distributors, to whom bulk amount of products is sold and this sale is maximally on the cash basis. So the buyers have no handsome power to interrupt or interfere in the Shampoo industry.

SUPPLIER’S

Supplier‟s power is less because they are having support from their parent company fraw material and technological assistance. assistance. Supplier of P&G need key customer for profitability profitability revenue generation and will have little bargaining power. Rising interest rate and decaling availability of credit ultimately should not affect P&G‟s P&G‟s relationship with is supplier.


Value Chain Analysis, P&G

Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength strength of the business. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best outsourced. It suggests that the activities of a business could be 1. primary activities 2. supporting activities. c reating and delivering a product 1. Primary Activities- Those that are directly concerned with creating (e.g. 38 | P a g e Mohammad Ali Jinnah University Islamabad

Component assembly). Sourcing and Procurement (sourcing, supply planning, materials procurement)

Relating this model to P&G‟, it could be implied that H&S raw materials are sourced and or procured from all over the world, wherever it would be cost-effective. cost-effective. It is thus no surprise that for a number of years it had focused on ways to improve supply chain efficiency and costs. It now has a powerful industrial network linking electronically to major suppliers and customers. This is to the extent that it changed companies when efforts to reduce inventory levels only produced marginal improvements. Operations (assembly, branch operations)

P&G‟s operations had four business units: health and beauty, babies, snacks and beverages, and fabric and home care. It offered more than 300 products including major brands like Tide. It has been aggressively using product lifecycle management software since 2000 for new product development. The company uses MatrixOne software for mechanising and automating the knowledge components, and flow components, within the bringing-a-product-to market phases. Outbound Logistics (warehousing, shipping, fulfilment)

P&G‟s largest customer was Wal-Mart Wal -Mart that had a reputation for requiring suppliers to coordinate their supply chain processes with its powerful just-in-time continuous inventory replenishment system. A database is used to hold information about work processes vital for creating, reviewing, approving, and distributing products. This enabled the company to lower its costs on item such as pigments and chemicals, and to reduce development time.


Sales and Customer Service (sales, order processing, customer supportaccording to the WalMart was P&G‟s largest customer, accounting for nearly 20 percent of its sales and could be responsible for one-third of P&G global sales by 2010. Wal-Mart capitalised on this position to force P&G to sell wares to them at the cheapest prices possible. 2. Support Activities

It is rare for a business to undertake all primary and support activities. Financial Management (financing, planning, investor relations)

This is because it was able to perform p erform “what“what-if” Analyses on inventory levels, in-store stock outs, and transportation costs to find out alternate rules to Existing ones being analyzed, such as ordering and shipping frequencies or product allocation in distribution centers. It was discovered that trucks should be often dispatched before fully loaded. Although transportation costs would be higher using partially loaded trucks because of both driver Time and fuel to deliver fewer goods, the simulation showed that retail store stockouts would occur Less often, thus reducing the amount of lost sales which would make up for the higher distribution costs. Research and Development (product design, testing, process design, material research)

P&G came to be seen as unimaginative, even stodgy. It seemed weak in developing new products, and had developed just one product in 15 years. This gave the chance for traditional competitors and makers of generic versions of their branded products to grab market share. It established an Intranet called Innovation Net, which was used to bring people together who are working on similar problems in order to generate synergy for new product ideas and product development. dev elopment. Using the same Intranet, P&G allows outsiders like research scientists and entrepreneurs to search for new, innovative products worldwide.


Human Resource Management (recruiting, training, compensation ) P&G began to use information systems to support how learning occurred within the company. It created an intranet through which new employees could network with experts, learn from projects and receive answers to pertinent questions. This system encouraged experts to share their knowledge with ‘newbies’ through an implicit compensation or reward system. Further, human resource was

provided with tools they needed to enhance their trade. t rade. For example, marketing personnel were given Marketing and Advertising The company employed the use of knowledge systems to manage marketing. It also uses a very small information. Using information technology in marketing had been ignored in the past because they saw it as complex. P&G’s vari ous brands, product lines, customers, and even different marketing groups each

used their own independent software for some functions, including email and marketing campaign management.


References:  www.head&shoulders.com  www.answer.com  www.p&g.com  www.google.com


Head & Shoulder Pakistan.

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