Changing along with the market
As one of the largest daily consumer goods manufacturers in the world, P&G is one of the leading brands in producing washing products and owns series of sub-brands in washing product series, including Rejoice, Head and Shoulders, Shuang, Pantene, Ascend, Sassoon , Clairol, safeguard, and Wella etc (Annual report of P&G, 2015).
Since every product has its own life cycle and developing stage and the competition in the consumer goods market is full of uncertainties, how can P&G adopt some flexible strategic to adapt to the change of market environment and consumer demand?
Accordingly, I will introduce the BCG matrix to analyze the market position of the washing products of P&G and find out the future strategic development planning of P&G.
The big family of P&G’s washing product series
P&G have many world famous sub-brands in washing products, such as Safeguard, Rejoice, Pantene, and Head & Shoulders. As a result of strong targeted advertisements and the intrinsic consistency of the product assortment, different washing products of P&G have their unique characteristics although they may be the competitive brands.
- Head & Shoulders is famous for dandruff
- Sassoon is professional for salon brand
- Pantene a kind of nutrient for caring hair
- Rejoice is a kind of smooth combo
- Ascend is suitable for black hair
- Clairol is good for its herbal formulas
According to the BCG matric, there are four kinds of products, namely star products, cash cow products, problems products and dog products. Therefore, based on the BCG matrix, what are the present market position and the future strategic alternatives of these washing product?
The bright future of the Star
Among the washing products of P&G, Sassoon is a typical stat product with a very high market share and market penetration and has become one of the strong sub-brand of P&G.
As the star, Sassoon has a potential for gaining more growth and profits for a long time, meanwhile, its substantial investment since its consumers are crucial for the development of P&G (Bloomberg, 2015).
Consequently, as a Star, the strategic marketing strategies of Sassoon is to search for more market opportunities and economic scale based on the long-term objectives to obtain more market share and become the leading brand in the washing product area.
Managing the Cash Cow
The cash cow, just as its name implies, is the product with low growth rate and high market share, this kind of product is in the matured stage of the life cycle. In terms of P&G, Rejoice, Head & Shoulders, Pantene are the Cash Cow, whose market shares are reached 34.8%, 16.3% and 15.6% respectively. Apparently, since the Cash Cow has many sales and profits, these caws can provide P&G many funds for future development. In fact, the Cow need not to invest too much since the growth rate is stable, so that P&G can use the recycle funds for other product development.
Nevertheless, in the long term, the declining of most Cash Cow’s market share seems to be irresistible, therefore, P&G can adopt the harvesting strategy for its Cash Cow products Rejoice, Head & Shoulders, and Pantene, which means P&G can invest some resources for the current benefits of these products to gain the maximum profits and adopt the business unit managing style to continue its operation.
Finding the way for the Question marks
Question products, also called question marks, which have high growth rate and low market share, which means the market outlook is excellent while there are many problems existing now. One of the question marks of P&G is Clairol, which has beaten the competitive brands from Unilever and German Henkel and has mainly positioned itself as hair coloring product (Malviya, 2015). Generally, Clairol is the new sub-brand of P&G, however, this product has not emphasized it as the sub-brand of P&G and cannot take the advantage of P&G’ brand superiorities for promotion. As its target market is the area that P&G has not entered before, the risk is increasing and the possible negative effects may affect the whole brand of P&G. Thus, Clairol is a problem mark.
For a problem mark like Clairol, P&G can choose the selective investment strategy for the strategic management. P&G can support the development of problem mark for some time and cultivate it to be a Star through huge investment in the future. Meanwhile, P&G can arrange talented and risk seekers to manage the development of the problem mark.
Does the Dog has a future?
The Dog belongs to the recession product group, which is abandoned because of its low growth rate and market share. As for the washing product categories of P&G, Ascend is a kind of typical dog product since it confronts with a rat race and its profits are pitiful and is futureless.
As for the Dog like Ascend, P&G can choose the divestiture strategy, just as the strategy of ZEST, which has been weeded out (Nathan, 2012). Since the P&G has been aware of the prospect of the Dog, it ought to narrow the scope of business of the Dog and attempt to weed out from the business quickly.
Published By CHENGXU ZHANG 216057786
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Bloomberg (March 16, 2015) P&G mulls sale, IPO of some beauty products in one deal: Reports.http://articles.economictimes.indiatimes.com/2015-03-16/news/60174980_1_pantene-beauty-products-head-shoulders (Acceded on: 23 July, 2016)
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Nathan, N. (October 22, 2012) How Head & Shoulders pattern differs from triple top & ways to benefit from it. http://articles.economictimes.indiatimes.com/2012-10-22/news/34653554_1_triple-top-pattern-shoulders-middle-peak (Acceded on: 23 July, 2016)
P&G (July 23, 2016) the introduction of the products of P&G http://us.pg.com/ (Acceded on: 23 July, 2016)