Positioning for a Bigger Share of the Mouthwash Market Report (Assessment)

Introduction

The mouthwash market is a $1-billion-a-year sector of the oral hygiene industry in which the major players are Pfizer, Procter & Gamble and Colgate. Pfizer is first on the list because its Listerine brands of mouthwash dominates the global market with a 27 percent share, leaving the Scope line of mouthwash products from Procter & Gamble a 10 percent share of the market, and Colgate’s Plak an even smaller share. From the time Procter & Gamble launched its Scope in 1967, it has never overtaken Listerine as market leader, which has a longer history and was first on the market. Following an impressive growth in most of its business units, such as the P&G Beauty, P&G Household Care and P&G Health and Well Being, Procter & Gamble decides that it has grown tired of playing second best to Pfizer and now wants to increase its market share, sales volume and profitability for Scope. It can afford the expense that the plan entails since Procter & Gamble was adjudged by the Advertising Age as the world’s No. 1 advertiser with a global advertising expenditure of $8.5 billion in 2006. Obviously, the ambitious plan for Scope cannot be accomplished by maintaining the status quo. It has to reposition the product, develop a new product as brand extension or flanker product, or develop a new marketing plan for the existing product. This paper explores the marketing possibilities by which Procter & Gamble can lift the sales performance of Scope and grab a bigger share of the growing mouthwash market, at the end of which we propose the best strategy that the company can adopt.

The Company & the Product

Procter & Gamble is a giant in household products with annual revenues of $76.4 billion through its strong presence in the US, UK, France, India, Germany, Japan and in other European, Asian and Latin American countries. P&G set many marketing strategies that are now standard practice in the industry (Procter & Gamble, 2007). It was first to advertise direct to consumers and pioneered the soap opera concept by sponsoring radio-television dramas for women. It invented fluoride-based toothpaste Crest, apart from the first disposable baby diapers and synthetic detergents. Following a slump in the late 1990s caused by a global slowdown, P&G got back on track in 2002 after the acquisition of Clairol and Wella. This was followed by the acquisition of Gillette in 2005, after which the company was named the world’s No. 1 advertiser with global advertising expenditure reaching $8.5 billion in 2006. Among the best-selling products in the firm’s portfolio described as P&G Prestige Products are Gillette shavers, Pampers diapers, Tide and Ariel detergents, Tampax and Charmin sanitary napkins, Pantene shampoo, Olay bathroom soap, Wella beauty care products and Pringles snacks.

When P&G launched its Scope mouthwash in 1967, it carried the logo that says: “Gets your breath clean and fresh so you can have the confidence to get close.” The Scope brand of mouthwash was initially available only in mint flavour. Later, other flavours were added to the product portfolio: citrus, peppermint and cinnamon followed by the more recent Scope White. The citrus flavour was discontinued after it was found that the higher production cost did not justify the demand. When Scope entered the mouthwash market, it hinged its marketing strategy on serving as an alternative to Listerine, which was perceived as harsh on the mouth because of its antiseptic properties. Thus, Scope was positioned as a milder substitute for the strong astringent qualities of Listerine, such that while Listerine was strong, Scope was mild and can be rinsed off with a sip of water. The strategy apparently worked, although not to the extent of dislodging Listerine as the biggest mouthwash seller.

The Competition

Of the major competitors of Scope, Plax of Colgate is the least of P&G’s worries. Plax is marketed as an advanced formula plaque-loosening rinse and comes in original, mint sensation and soft mint flavours. Its main selling point is that Plax can be taken direct from the bottle without dissolving the formula in water. For best effect, consumers are advised to just put a portion in the cover and gurgle for 30 seconds or more. Some consumers use Colgate products all the way, from toothpaste and toothbrush to mouthwash after brushing. However, Colgate is so much identified with toothpaste and toothbrush that many consumers look at its Plax mouthwash products with suspicion and disinterest. This is not helped by the fact that Plax is also identified with Penn-Plax pet products, which are the best performers in this industry.

In the case of Listerine, the mouthwash products under this brand are notorious for strong flavours because of its high antiseptic content. The product was actually invented as a surgical antiseptic for use in oral care by dentists and until lately was sold as a preventive remedy for colds and sore throats. This marketing pitch was abandoned when the Federal Trade Commission in the US decided that there was no clinical basis for the claim. The brand name also suffered a setback in 2007 when a consumer group detected minute contaminants in Listerine Agent Cool Blue, such that 4 million bottles of the product were recalled. However, the brand quickly recovered and added Listerine Total Care to the product line, which now consists of eight different flavours. Listerine is thus marketed as the mouthwash with better tasting flavours and lower prices. It had been in the market ahead of the others such that Listerine has become synonymous with mouthwash and consumers have become comfortable with this brand.

The Market

The marketplace is in a state of continuous flux. Everyday, the business environment changes its complexion with new and harder challenges posed by such factors as globalization, new technologies, increased competition, different market behaviour, stricter regulations, higher costs of labor and materials, pickier and more fastidious consumers, even social and economic upheavals (Balmer, 2001). Any of these factors is capable of limiting a company’s option to generate growth, let alone maintain its profitability. Despite the difficulties, the market for consumer goods and services continue to expand along with people’s buying power (Featherstone, 2002). Two of the major reasons are the rapid decline in birth rates and the changes in gender relations. With fewer children to support, families can splurge on consumer goods, while the greater number of women entering the workforce gives rise to households with two wage-earning spouses holding more spending money (Desmond, 2003). The market with the richest potential is composed of young people in the 18-25 age bracket, most of who are new entrants to the workforce, better educated and earn more than their predecessors. They are also highly susceptible to peer pressure, which is a strong influence on purchasing decisions (Gobe, 2001).

Despite the growth in purchasing power, studies show that only 50 percent of households use mouthwash because many are turned off by the burning sensation derived from the first mouthwash brands. This consumer behaviour provides Procter & Gamble a window of opportunity to reinforce its marketing pitch for Scope as the mouthwash that is effective but without that burning sensation. Sustaining the company’s initial success poses some problem because competition has tightened and the marketplace keeps pulling new surprises and challenges. This resulted in a situation where there are “too many companies, too many products, too much marketing noise (Ries & Ries, 2001).” Thus, in mounting a reinvigorated marketing campaign for Scope, P&G must consider not only its strengths and weaknesses but also those of its competitors. The possible source of strength for Scope is its long experience in the oral hygiene industry and its milder, better tasting flavours. The weakness that should be resolved is the lack of distribution channels that are as expansive as those of Listerine. It is also possible that there is little brand differentiations between Scope and other mouthwash products in the market. Brand differentiation has been found as the primary reason for the failure of as much as 80 percent of products launched in the market (Smith, 2006). Good marketing practice says that brands need to be relevant to come across as different from their competitors. On opportunities, the increase in people’s purchasing and the number of new entrants to the workforce present an opportunity. As for the threats, the existing price war and entry of new competitors could pose some problem in the future.

To overcome the threats and weaknesses while at the same time exploiting the opportunities and its strengths, Scope needs to reestablish a buyer-brand relationship by linking the brand to a particular need; associating it with a pleasant mood; appealing to subconscious motives; conditioning buyers to prefer the brand through rewards; penetrating perceptual and cognitive barriers to consumer preferences; and providing attractive models or celebrities for buyers to emulate (Charter & Tischner, 2001).

The choice of a strategy or combination of strategies depends mainly on the nature of the brand product or service, since the success of any marketing strategy relies on the marketer’s understanding of the preference building and bonding process (Alreck & Settle, 2002).

Positioning & Segmentation

For an effective segmentation and targeting of a firm’s target market, as well as positioning of its products, the marketing strategy needs to answer these questions: How did you get here? Where do you want to go from here? What do you need to do to get there? In providing answers to these questions, positioning plays a key role, which requires that the firm communicate its message in an “over-communicated” society (Ries & Ries, 2001). This refers to the din of marketing and advertising noise that assails the mind of modern-day consumers. In the US alone, the growth of per capita consumption of advertising is placed at $200 yearly. With too many products vying for consumers’ attention, the best way for companies to make their products connect with customers is to first identify a particular audience or market, then choose the medium that fits the message. This message must be based on such attributes of the target market as age, gender, income, civil status, number of family members, housing types, car ownership, hobbies, holiday preferences, and attitudes to the company’s product and its competitors (Lascu & Zinkhian, 2002; Gobe, 2001). The easiest way to get into a consumer’s mind is for P&G’s Scope to be there first, which refers to the first mover advantage in marketing theory (McKenna, 1991).

It is widely acknowledged in management and marketing circles that every product dies at some point after a successful launch and growth. Thus, product policy helps preserve a company’s profitability as it manages every stage of the product life cycle in a meticulous manner for the purpose of avoiding the “decline” phase common to products brought to market with less attention to such details (Charter & Tischner, 2001; White, 2005). A product policy is also useful to companies with a line of products if it includes an analysis of its product portfolio since this will help decide which article needs to be developed further and which should be abandoned. The product life cycle consists of the market introduction, growth, maturity and decline or stability stages. In the introduction phase, the product manager devises the best strategy in addressing the 4Ps of marketing. After the product launch, the next imperative is to build consumer preference for the brand and increase market share. In the maturity stage, any strong sales growth of a product is expected to decline so management should concentrate on defending the product’s market share in step with maximising profit. In the decline stage, the product manager needs to choose whether to maintain the product, add new features or find new uses. Other options are to reduce cost and offer the product to a niche segment of the market or sell the product to a firm willing to take it.

Conclusion & Recommendations

In marketing positioning, P&G has to decide whether to establish itself as market leader and challenger or follower to the current market leader, and then it positions its products accordingly. There is a need to present Scope as a product different from its competitors, not just in taste and flavour as it is now but also in packaging, price and other aspects. Consumers are shown in studies to be partial to products with unique characteristics. In effect, Scope has to demonstrate more aggressiveness in its marketing campaign. For example, it can create problems for Listerine in a subtle offensive strategy by alluding to the incident in 2007 when the Listerine Agent Cool Blue was ordered recalled from the market because of a harmful ingredient. This is a warfare approach similar to the flanking maneuver, which Scope can use by launching several mouthwash products with other new flavours in a design to outflank the competition.

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