A PROJECT REPORT

ON

MARKETING STRATEGIES OF PROCTER AND

GAMBLE (PANTENE)
Submitted to University of Mumbai in
Partial fulfilment
Of the requirement of the Degree of
M.COM (BUSINESS MANAGEMENT) PART 1.
Under guidance of
S.N.CHITALE
SUBJECT
STRATEGIC MANEGEMENT
VPM S
K.G Joshi College of Arts
N.G Bedekar College of Commerce
Thane (W)
Academic Year: 2014-15
BYAMRITA UPENDRANATH BHAT
Roll No.15
1

VIDYA PRASARAK MANDAL, THANE

K. G. JOSHI COLLEGE OF ARTS &

N. G. BEDEKAR COLLEGE OF COMMERCE

CERTIFICATE
OF
PROJECT WORK
This is certify that
Mr. / Ms.

_______________________________________________ Of

M.Com. ( Advanced Accountancy ) Part.: ____ Semester

:_____ Roll No. : _____ has undertaken & completed the
project work titled ___________________
______________________________ during the academic year
__________
under the guidance of Mr. / Ms.
___________________________________
Submitted on _____________ to this college in fulfillment
of the curriculum of MASTER OF COMMERCE
( ADVANCED ACCOUNTANCY )
UNIVERSITY OF
MUMBAI .
This is a bonafide project work & the information
presented is True & original to the best of our
knowledge and belief .

PROJECT GUIDE

EXTERNAL EXAMINER

DECLARATION

I am AMRITA UPENDRANATH BHAT studying in MCOM Part-1

hereby declare that I have done a project on reference to
STRATEGY OF MCDONALDS.

MARKET

As required by the university rules, I state

that the work presented in this thesis is original in nature and to

the best my knowledge, has not been submitted so far to any
other university.
Whenever references have been made to the work of others, it is
clearly indicated in the sources of information in references

Student
(AMRITA
UPENDRANATH BHAT)

Place: Thane
Date

ACKNOWLEDGEMENT

It gives me great pleasure to declare that my project on MARKETING STRATEGIES OG

PROCTER AND GAMBLE (PANTENE) have been prepared purely from the point of view
of students requirements.
This project covers all the information pertaining to MARKETING STRATEGIES OF
PROCTER AND GAMBLE (PANTENE) I had tried my best to write project in simple and
lucid manner. I have tried to avoid unnecessary discussions and details. At the same time it
provides all the necessary information. I feel that it would be of immense help to the students
as well as all others referring in updating their knowledge.
I am indebted to our principal Dr. Mrs. Shakuntala A. Singh Madam for giving us such an
awesome opportunity. I am also thankful to our coordinator Mr. D.M. Murdeshwar Sir and also
librarian and my colleagues for their valuable support, co-operation and encouragement in
completing my project.
Special thanks to Prof. S.N.CHITALE my internal guide for this project for giving me
expert guidance, full support and encouragement in completing my project successfully.
I take this opportunity to thanks my parents for giving guidance and for their patience and
understanding me while I am busy with my project work.
Lastly I am thankful to God for giving me strength, spirit and also his blessings for
completing my project successfully.

INDEX
SR
NO
.
1.

CONTENTS

PAG
E
NO.

INTRODUCTION
6

2.

COMPANY PROFILE
11

3.

HISTORY

4.

PURPOSE AND MISSION

13
1
6
5.

4 PS ANALYSIS OF PANTENE

2
0

6.
7.

MARKETING
ANALYSIS
AND
STRATEGIES ADOPTED BY P&G
MARKETING STRATEGIES

3
1
3
4

8.

SWOT ANALYSIS

3
3

9.

PESTLE ANALYSIS

10.

CHALLENGES

4
0
4
1

11.

RECOMMENDATION

4
2

INTRODUCTION
What is marketing strategy?
Marketing strategy is the goal of increasing sales and achieving a
sustainable competitive advantage. Marketing strategy includes all basic and longterm activities in the field of marketing that deal with the analysis of the strategic
initial situation of a company and the formulation, evaluation and selection of
market-oriented strategies and therefore contribute to the goals of the company and
its marketing objectives.
Marketing strategies serve as the fundamental underpinning of marketing
plans designed to fill market needs and reach marketing objectives. Plans and
objectives are generally tested for measurable results. Commonly, marketing
strategies are developed as multi-year plans, with a tactical plan detailing specific
actions to be accomplished in the current year. Time horizons covered by
the marketing plan vary by company, by industry, and by nation, however, time
6

horizons are becoming shorter as the speed of change in the environment increases.
[4]
Marketing strategies are dynamic and interactive. They are partially planned and
partially unplanned. See strategy dynamics. Marketing strategy needs to take a
long term view, and tools such as customer lifetime value models can be very
powerful in helping to simulate the effects of strategy on acquisition, revenue per
customer and churn rate.
Marketing strategy involves careful and precise scanning of the internal and
external environments. Internal environmental factors include the marketing
mix and marketing mix modeling, plus performance analysis and strategic
constraints External environmental factors include customer analysis, competitor
analysis, target market analysis, as well as evaluation of any elements of the
technological, economic, cultural or political/legal environment likely to impact
success. A key component of marketing strategy is often to keep marketing in line
with a company's overarching mission statement.
Once a thorough environmental scan is complete, a strategic plan can be
constructed to identify business alternatives, establish challenging goals, determine
the optimal marketing mix to attain these goals, and detail implementation. A final
step in developing a marketing strategy is to create a plan to monitor progress and
a set of contingencies if problems arise in the implementation of the plan.
Types of marketing strategies :
Strategies based on market dominance - In this scheme, firms are classified
based on their market share or dominance of an industry. Typically there are four
types of market dominance strategies:

Leader

Challenger

Follower

Nicher

According to Shaw, Eric (2012). "Marketing Strategy: From the Origin of the
Concept to the Development of a Conceptual Framework". Journal of Historical
Research in Marketing., there is a framework for marketing strategies.

Market introduction strategies

"At introduction, the marketing strategist has two principle strategies to choose
from: penetration or niche" (47).

Market growth strategies

"In the early growth stage, the marketing manager may choose from two additional
strategic alternatives: segment expansion (Smith, Ansoff) or brand expansion
(Borden, Ansoff, Kerin and Peterson, 1978)" (48).

Market maturity strategies

"In maturity, sales growth slows, stabilizes and starts to decline. In early maturity,
it is common to employ a maintenance strategy (BCG), where the firm maintains
or holds a stable marketing mix" (48).

Market decline strategies

At some point the decline in sales approaches and then begins to exceed costs. And
not just accounting costs, there are hidden costs as well; as Kotler (1965, p. 109)
observed: 'No financial accounting can adequately convey all the hidden costs.' At
some point, with declining sales and rising costs, a harvesting strategy becomes
unprofitable and a divesting strategy necessary" (49).
Early marketing strategy concepts were:

Borden's "marketing mix"

"In his classic Harvard Business Review (HBR) article of the marketing mix,
Borden (1964) credits James Culliton in 1948 with describing the marketing
executive as a 'decider' and a 'mixer of ingredients.' This led Borden, in the early
1950s, to the insight that what this mixer of ingredients was deciding upon was a
'marketing mix'" (34).
8

Smith's "differentiation and segmentation strategies"

"In product differentiation, according to Smith (1956, p. 5), a firm tries 'bending
the will of demand to the will of supply.' That is, distinguishing or differentiating
some aspect(s) of its marketing mix from those of competitors, in a mass market or
large segment, where customer preferences are relatively homogeneous (or
heterogeneity is ignored, Hunt, 2011, p. 80), in an attempt to shift its aggregate
demand curve to the left (greater quantity sold for a given price) and make it more
inelastic (less amenable to substitutes). With segmentation, a firm recognizes that it
faces multiple demand curves, because customer preferences are heterogeneous,
and focuses on serving one or more specific target segments within the overall
market" (35).

Dean's "skimming and penetration strategies"

"With skimming, a firm introduces a product with a high price and after milking
the least price sensitive segment, gradually reduces price, in a stepwise fashion,
tapping effective demand at each price level. With penetration pricing a firm
continues its initial low price from introduction to rapidly capture sales and market
share, but with lower profit margins than skimming"

Forrester's "product life cycle (PLC)"

"The PLC does not offer marketing strategies, per se; rather it provides an
overarching framework from which to choose among various strategic alternatives"
(38).
There are also corporate strategy concepts like:

Andrews' "SWOT analysis"

"Although widely used in marketing strategy, SWOT (also known as TOWS)

Analysis originated in corporate strategy. The SWOT concept, if not the acronym,
is the work of Kenneth R. Andrews who is credited with writing the text portion of
the classic: Business Policy: Text and Cases (Learned et al., 1965)" (41).
9

Ansoff's "growth strategies"

"The most well-known, and least often attributed, aspect of Igor Ansoff's Growth
Strategies in the marketing literature is the term 'product-market.' The productmarket concept results from Ansoff juxtaposing new and existing products with
new and existing markets in a two by two matrix" (41-42).

Porter's "generic strategies"

Porter generic strategies strategy on the dimensions of strategic scope and

strategic strength. Strategic scope refers to the market penetration while strategic
strength refers to the firm's sustainable competitive advantage. The generic strategy
framework (porter 1984) comprises two alternatives each with two alternative
scopes. These are Differentiation andlow-cost leadership each with a dimension
of Focus-broad or narrow. ** Product differentiation ** Cost leadership

Market segmentation

Innovation strategies This deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is on
the cutting edge of technology and business innovation. There are three types:

Pioneers

Close followers

Late followers

Growth strategies In this scheme we ask the question, "How should the
firm grow?". There are a number of different ways of answering that question,
but the most common gives four answers:

Horizontal integration

Vertical integration
10

Diversification

Intensification

These ways of growth are termed as organic growth. Horizontal growth is whereby
a firm grows towards acquiring other businesses that are in the same line of
business for example a clothing retail outlet acquiring a food outlet. The two are in
the retail establishments and their integration lead to expansion. Vertical
integration can be forward or backward. Forward integration is whereby a firm
grows towards its customers for example a food manufacturing firm acquiring a
food outlet. Backward integration is whereby a firm grows towards its source of
supply for example a food outlet acquiring a food manufacturing outlet.
A more
detailed
scheme
uses
the
categories:Miles,
Raymond
(2003). Organizational Strategy, Structure, and Process. Stanford: Stanford
University Press. ISBN 0-8047-4840-3.

Prospector

Analyzer

Defender

Reactor

Marketing warfare strategies This scheme draws parallels between

marketing strategies and military strategies.

11

COMPANY PROFILE
Three billion times a day, P&G brands touch the lives of people around the world.
This is the company which is rooted in the principles of personal integrity, respect
for the individual and doing what's right for the long-term. Before analyzing the
company on various parameters lets first have a view of the company profile.
Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500, American
multinational corporation based in Cincinnati, Ohio, that manufactures a wide
range of consumer goods. It is a brand behemoth. The world's number one maker
of household products courts market share and billion-dollar brands. As of 2008,
P&G is the 6th largest corporation in the world by market capitalization and 14th
largest US company by profit. It is 10th in Fortune's Most Admired Companies list
(as of 2007). P&G is credited with many business innovations including brand
management, the soap opera, and "Connect & Develop" innovation.
According to the Nielsen Company, in 2007 P&G spent more on U.S. advertising
than any other company; the $2.62 billion it spent is almost twice as much as
General Motors, the next company on the Nielsen list. P&G was named 2008
Advertiser of the Year by Cannes International Advertising Festival. est company
in the world in Fast Moving Consumer Goods (FMCG) industry.
It manufactures nearly 300 brands (such as: Ariel, Blend-a-Med, Bonux,
Head&Shoulders, Pampers, Always, Fairy, Gillette, Wella) to nearly five
billion customers, competing in 160 marketplaces. More than 130 000 employees
in more than 80 countries worldwide work everyday to provide products of
superior quality and value to the world's consumers. As the companys global
involvement, commitment and operations have grown, it has continually analyzed
and adapted the way it does business.

12

It is a company whose actions reflect its ethics and whose people live their values,
As a build from within organization, it sees over 90% of our people start at an
entry level and then progress and prosper throughout the organization. This means
it invests heavily in talent, through training and development opportunities.

13

HISTORY
William Procter, a candlemaker, and James Gamble, a soapmaker, formed
distinct companies. The two men, immigrants from England and Ireland
respectively who had settled earlier in Cincinnati, might never have met, had they
not married sisters, Olivia and Elizabeth Norris.[6]
Since both their industries used similar resources, the Panic of 1837 caused intense
competition between the two and as a result it led to discord with the family.
Alexander Norris, their father-in law decided to call a meeting where he convinced
his new sons-in-law to become business partners. On October 31, 1837, as a result
of the suggestion, a new enterprise was born: Procter & Gamble.
The company prospered during the nineteenth century. In 1859, sales reached one
million dollars. By this point, approximately eighty employees worked for Procter
& Gamble. During the American Civil War, the company won contracts to supply
the Union Army with soap and candles. In addition to the increased profits
experienced during the war, the military contracts introduced soldiers from all over
the country to Procter & Gamble's products. Once the war was over and the men
returned home, they continued to purchase the company's products.
In the 1880s, Procter & Gamble began to market a new product, an inexpensive
soap that floats in water. The company called the soap Ivory. In the decades that
followed, Procter & Gamble continued to grow and change. The company became
known for its progressive work environment in the late nineteenth century. William
Arnett Procter, William Procter's grandson, established a profit-sharing program
for the company's workforce in 1887. He hoped that by giving the workers a stake
in the company, they would be less inclined to go on strike.
Over time, the company began to focus most of its attention on soap, producing
more than thirty different types by the 1890s. As electricity became more and more
common, there was less need for the candles that Procter & Gamble had made
since its inception. Ultimately, the company chose to stop manufacturing candles in
1920.

14

In the early twentieth century, Procter & Gamble continued to grow. The company
began to build factories in other locations in the United States, because the demand
for products had outgrown the capacity of the Cincinnati facilities. The company's
leaders began to diversify its products as well and, in 1911, began producing
Crisco, a shortening made of vegetable oils rather than animal fats. In the early
1900s, Procter & Gamble also became known for its research laboratories, where
scientists worked to create new products. Company leadership also pioneered in
the area of market research, investigating consumer needs and product appeal. As
radio became more popular in the 1920s and 1930s, the company sponsored a
number of radio programs. As a result, these shows often became commonly
known as "soap operas".
Throughout the twentieth century, Procter & Gamble continued to prosper. The
company moved into other countries, both in terms of manufacturing and product
sales, becoming an international corporation with its 1930 acquisition of the
Newcastle upon Tyne-based Thomas Hedley Co. Procter & Gamble maintained a
strong link to the North East of England after this acquisition. In addition,
numerous new products and brand names were introduced over time, and Procter
& Gamble began branching out into new areas. The company introduced "Tide"
laundry detergent in 1946 and "Prell" shampoo in 1950. In 1955, Procter &
Gamble began selling the first toothpaste to contain fluoride, known as "Crest".
Branching out once again in 1957, the company purchased Charmin Paper Mills
and began manufacturing toilet paper and other paper products. Once again
focusing on laundry, Procter & Gamble began making "Downy" fabric softener in
1960 and "Bounce" fabric softener sheets in 1972. One of the most revolutionary
products to come out on the market was the company's "Pampers", first testmarketed in 1961. Prior to this point disposable diapers were not popular, although
Johnson & Johnson had developed a product called "Chux". Babies always wore
cloth diapers, which were leaky and labor intensive to wash. Pampers simplified
the diapering process.

15

Over the second half of the twentieth century, Procter & Gamble acquired a
number of other companies that diversified its product line and increased profits
significantly. These acquisitions included Folgers Coffee, Norwich Eaton
Pharmaceuticals, Richardson-Vicks, Noxell, Shulton's Old Spice, Max Factor, and
the Iams Company, among others. In 1994, the company made headlines for big
losses resulting from leveraged positions in interest rate derivatives, and
subsequently sued Bankers Trust for fraud; this placed their management in the
unusual position of testifying in court that they had entered into transactions they
were not capable of understanding. In 1996, Procter & Gamble again made
headlines when the Food and Drug Administration approved a new product
developed by the company, Olestra. Also known by its brand name Olean, Olestra
is a substitute for fat in cooking potato chips and other snacks that during its
development stages is known to have caused anal leakage and gastro-intestinal
difficulties in humans.
Procter & Gamble has expanded dramatically throughout its history, but its
headquarters still remains in Cincinnati. {Source, Ohio History Central.}
In January 2005 P&G announced an acquisition of Gillette, forming the largest
consumer goods company and placing the Anglo-Dutch Unilever into second
place. This added brands such as Gillette razors, Duracell, Braun, and Oral-B to
their stable. The acquisition was approved by the European Union and the Federal
Trade Commission, with conditions to a spinoff of certain overlapping brands.
P&G has agreed to sell its SpinBrush battery-operated electric toothbrush business
to Church & Dwight. It also divested Gillette's oral-care toothpaste line,
Rembrandt. The deodorant brands Right Guard, Soft & Dri, and Dry Idea were
sold to Dial Corporation.[7] The companies officially merged October 1, 2005.
P&G's dominance in many categories of consumer products makes its brand
management decisions worthy of study. [8] For example, P&G's corporate
strategists must account for the likelihood of one of their products cannibalizing
the sales of another

16

PURPOSE AND MISSION:

The company has its mission statement as follows-:
We will provide branded products and services of superior quality and value that
improve the lives of the world's consumers, now and for generations to come. 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.

Values:
P&G

is

its

people

and

the

values

by

which

we

live.

P&G attracts and recruits the finest people in the world. It has built the
organization from within, promoting and rewarding people without regard to any
difference unrelated to performance. It acts on the conviction that the men and
women of Procter & Gamble always will be their most important assets.
Integrity
Proctor & Gamble
always tries to do the right thing.
is honest and straightforward with customers and employees
upholds the values and principles of P&G in every action and decision.
is data-based and intellectually honest in advocating proposals, including
recognizing risks.

17

Passion for Winning

Proctor & Gamble

Is determined to be the best at doing what matters most.

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

Leadership
The employees are all leaders in our area of responsibility, with a deep
commitment to delivering leadership results.
The company has a clear vision of where it is going.
The focus is on achieving leadership objectives and strategies.
Capabilties are developed to deliver the strategies and eliminate organizational
barriers.

18

Trust
There is mutual respect among the colleagues, customers and consumers,
Employees have confidence in each other's capabilities and intentions.
The company believes that people work best when there is a foundation of trust.

19

Ownership

20

The organization accepts personal accountability to meet the business needs,

improve the systems and help others improve their effectiveness.

21

Procter & Gamble brands

24 of P&G's brands have more than a billion dollars in net annual sales and
another 18 have sales between $500 million and $1 billion.
Billion dollar brands
Always is a brand of feminine hygiene products, including maxi pads,
pantiliners (sometimes called Alldays), and feminine wipes.
Ariel is a brand of washing powder/liquid, available in numerous forms and
scents.
Actonel is brand of Osteoporosis drug Risedronate co marketed by SanofiAventis.
Bounty is a brand of paper towel sold in the United States, Canada and the
United Kingdom
Braun is a small-appliances manufacturer specializing in electric razors,
coffeemakers, toasters, and blenders.
Crest is a brand of toothpaste.
Dawn is a brand of dishwashing detergent.
Downy/Lenor is a brand of fabric softener.
Duracell is a brand of batteries and flashlights.
Fusion is a brand of mens wet shave razors, and is the quickest P&G brand
to have reached $1 billion in annual sales
Gain is a brand of laundry detergent and fabric softeners.
Gillette is a safety razor manufacturer.
Head & Shoulders is a brand of shampoo.
High Endurance is a deodorant by Old Spice
Ivory is a soap
Nice 'n Easy is a hair color product.
22

 Olay is a brand of women's skin care products.

Oral-B is a brand of toothbrush.
Pampers is a brand of disposable diapers
Pantene is a brand of haircare.
Prilosec OTC is a brand of heartburn medicine co-marketed by
AstraZeneca.
Pringles is a famous brand of potato chips.
Puffs is a type of facial tissue.
Secret is a deodorant
Tide is a brand of laundry detergent.
Vicks is a brand of over-the-counter medicines
Wella is a brand of hair care (shampoo, conditioner, styling, hair color).
Whisper is a brand of pantyliners

23

24

4 PS ANALYSIS OF PANTENE
PRODUCT:
Clearly, Shampoo is more than just shampoo when P&G sells it. P&Gs great
success in the rough-and-tumble shampoo world comes from developing an
innovative product concept. An effective product concept is the first step in
marketing-mix planning.
Philip Kotler defines product as Anything that can beoffered to a market for
attention, acquisition, use or consumption that might satisfy a -want or need. It
includes physical objects, services, persons,places, organizationsand ideas.
Product planners need to think about the product on three levels. The most basic
level is the core product, which addresses the question: What is the buyer really
buying?

Theodore Levitt has pointed out that buyers 'do not buy quarter-inch drills; they
buy quarter-inch holes'. Thus when designing products, marketers must first define
the core of benefits that the product will provide to consumers.
The product planner must next build an actual product around the core product.
Actual products may have as many as five characteristics: a quality level, features,
styling, a brand name and packaging.
product is more than a simple set of tangible features. Consumers tend to see
products as complex bundles of benefits that satisfy their needs.

25

Form
It is available in the both premium bottle pack as well as satchets.
FEATURES:
The Pantene has whole range of shampoos with different features. These are
Volume Care, Smoothing Care, Color Care, Curl Care and Basic Care, anti
dandruff, anti-hair fall etc.
SIZE OF PACKAGE
Available in 100 ml,200 ml and 400 ml sizes
BRAND:

Pantene Pro-V continues to create a line of products that transforms dull, dry, limp
hair into healthy, shiny hair. Their slogan: Hair so healthy, it shines! Each of the
pro-vitamin essentials has been formulated to meet a special hair care need, in
particular panthenol.

26

Pantene has recently been awarded Asias favorite Shampoo in the Readers
Digest Super Brands Survey.

Pantene is currently facing issues with intense competition, but their unique ProVitamin ingredient makes hair strong and healthy. P&G is now one of the worlds
largest beauty companies (P&G Annual report). P&G states that Pantene is the
worlds largest hair care brand and that it grew in double digits over the last twoyears. P&G claims that this success is due in part to their unsurpassed hair
conditioning technology.
The global retail hair care market is a $34 billion industry. P&G has annual sales of
more than $4.5 billion with leading brands like Pantene. Pantenes position in the
market is by attribute, claiming Hair so Healthy it Shines and their latest is a hair
care challenge saying, Healthier Hair in just 10 Days. Guaranteed. Pantene uses
price to slightly separate itself from its in-store competitors. The price for Pantene
products is slightly higher, identifying it as a better product. Pantene is also
positioned around the product user. It has recently done commercials with actresses
like Katrina Kaif,Sushmita Sen,Lara Dutta. Lastly Pantene is positioned by the
competitor. It is perceived as a product that maintains great hair and according to
the sales figures it is perceived as a better product by consumers.

27

PRICE:
As mentioned above the 200 ml bottle was available for Rs 98 and 100 ml for Rs
51.But very recently Pantene had reduced the prices and now the same 200 ml
bottles are available for Rs 89 and 100 ML FOR Rs 41.
P&G has basically adopted Geographical pricing strategy for Pantene.They have
set different prices for Pantene in different countries.This is a very good strategic
method as it captures the local conditions as well as purchasing power of the local
population.
When Pantene launched Lively Clean,it adopted Promotional Pricing for it and
launched it at an introductory price of R78 for 200 ml bottle
It has also introduced Bundle Pricing where it has clubbed two or more products
and sold them at a reduced price.But this strategy has not been very successful as it
eroded the premium image of the Shampoo and gave the impression of desperation
of the company.

28

Around 2 years back in 2006 P&G reduced the rates of Pantene by 16%. By this
way what P&G did was cutting its bottle's premium over sachets. At the same time
P&G is reducing the price gaps between its own brands. While Pantene and Head
& Shoulders were sold at nearly similar price points, bringing down Pantene prices
placed it between Rejoice (Rs 39 for 100 ml) and Head & Shoulders (Rs 64 for 100
ml) and thereby segment P&G's shampoo brands at different price points. This
strategy is known as Product Line Pricing.
Very recently Pantene has changed its pricing approach and experimented with
Value Pricing Strategy. In this Procter & Gamble made dramatic and long-term
changes in its pricing and promotion strategy during which it boosted
advertising while simultaneously curbing its distribution channel deals (instore displays, trade deals), and significantly reducing its coupon promotions.
It is interesting to note that P&G's value pricing strategy regarding Pantene is quite
a misnomer. During this period many stores were switching to EDLP (every day
low pricing) policies, which meant that consumers would save on their overall
purchase without having to deal shop. In contrast, P&G strategy essentially was a
disguised price increase; coupons were cut by 50%, which contributed to an
increase in the customer's price paid by 20%. It is possible that P&G lowered their
wholesale price, but the retailer only enjoyed higher margins and did not pass the
savings on to the customer. Another possibility is that retailers lowered retail prices
consistently, following P&G's decrease in wholesale price, but once promotional
trade deals are factored in those everyday lower wholesale prices did not result in a
lower total price paid. For example, if P&G's old price was Rs20, but gave deals of
Rs15, at which price 90% of purchases were made, the wholesale price equaled
Rs15.7 (.90*15 + .10*20). If P&G set a "Value Price" point of Rs18, but 100% of
purchases we were made at that price, the retailer enjoyed no cost savings-only a
cost increase. If P&G had truly offered price cuts their results may have been much
different.

29

PROMOTION:

The promotional strategy of Pantene is highly useful and effective. 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 to their target audience.
Pantenes use of advertising with different ethnicities, hair types, and ages has
proven to be a critical factor because they are now developing specific hair care
line for different types of ethnicities; they were voted Asias number one shampoo,
and they are a highly marketable product in Europe.
Without promotion this 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 Pantene and P&G are built around what consumers want.
o Public Relations is a large aspect of the P&G/Pantene promotional mix. Proctor &
Gamble does things like raising funds for children who suffer from malnutrition in
India and Pantene recently put on the Condition for a Cause campaign, donating
money to heart disease research. Sales Promotion is also alarge factor for Pantene,
they use marketing and business techniques to try and improve consumers 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 Pantene.

30

Personal selling is not an aspect of Pantenes promotional selling and it would not
be wise to incorporate it. Personal selling often comes off as a sleazy salesmans
cheap and last minute effort. Pantenes print and TV advertisements are enough for
Pantene to bring in new customers and frequently remind its loyal customers that it
is still in the stores and going strong. Personal Selling would also be a pricey move
that would hinder rather than aid Pantenes efforts. Lastly, advertising is an
enormous part of Pantenes promotional mix. Without the current advertising
strategies and past ones as well, Pantene wouldnt be the widely known and the
highly used brand that it is today

The distributor needs to be aware of the brands state in the market, they
should have information on the product in order to decide if they want to be
associated with that product and if so, they will need to know enough about
the product to aid customers in finding a shampoo that is best for the them.
The idea would be to establish a relationship with as many retailers as
possible to make the brand the recommended one. Consumers need to know
as much as possible about the product. They do not want to feel as if the
company is hiding something from them and they want to be able to trust the
products they are using. Information like the ingredients, different products
the brand carries, efforts made by the brand to help others and humanity are
all factors that could affect a sale. Distribution as much information as
possible is a good idea for the company.
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 important as
the message we are providing.

31

 Pantene also gives out free samples to anyone. When visiting their website there
will be a small box of information about samples to the right, when the online
visitor clicks on that they will find that if they provide Pantene with information
about themselves they will be sent free samples. Pantene has recently run out of
free samples and leads the consumer to an apology page which in turn directs the
consumer to the page for their most recent sweepstakes.

Endorsers: global celebs like Hollywood stars Kirsty Alley, Rachel Hunter, Liv
Tyler, Angie Everhart and Kelly Lebrock, among others have endorsed Panteen In
India, Sushmita Sen, Katrina Kaif, Bipasha Basu, Shilpa Shetty, Sonali Bendre and
Simone Singh are among the brand ambassadors. Lara Dutta is the most recent
celebrity who has got associated with the brand.A noticeable thing about pantene
advertisements is that always Asian women are shown who have thick,long,dark
hair.
In response to the change in appearance and types of product Pantene has said
that this change was for the better and it is easier than ever to choose which
product is best for the individual consumer. Simply pick the Pantene version that
names how you want your hair to look: Volume Care, Smoothing Care, Color
Care, Curl Care and Basic Care.

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 consumers desired style, they claim to have improved their
technologies.
Pantene also claims that its products have ingredients that set it apart from the
competition. They state that each line of products in their collections has the right
combination to give customers the benefit that is spelled out in the name of the
product.

32

 Validity: We conduct extensive scientific research and laboratory testing, as well

as in-home and clinical testing, to make sure our advertising claims are factual.
Because of the competitive nature of our business, though, we're unable to provide
details to individuals about the specific research we perform.

Hair care 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 6.9% from 1995- 2001.
Pantenes promotional tactics are ideal and we feel they are approaching the
target audience well.
PLACE:
Placement (or distribution): refers to how the product gets to the customer; for
example, point-of-sale placement or retailing. This fourth P has also sometimes
been called Place, referring to the channel by which a product or service is sold
(e.g. online vs. retail), which geographic region or industry, to which segment
(young adults, families, business people), etc. also referring to how the
environment in which the product is sold in can affect sales.
Pantene has an undoubtedly amazing design & distribution channel and this can be
supported
by the fact Pantene is one of the most easily available brands in the industry.
In 1998-1999. Pantene launched global corporate restructuring program called
Organization 2005,
and made several changes in structure, work processes and culture to generate
greater stretch, innovation and speed to help its products reach the market faster.
Pantene retails through Spencers,Reliance Fresh,More,RPG group and wide variety
of Kirana stores spread all over the country.
.

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COMPETITIVE ADVANTAGE
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 Pantene in specific are:
P&G is one of the largest FMCG companies in the world. Its main competition is
with Unilever which has almost equal presence in the world. Procter and Gambles
sales as of November 21st, 2003 reached $44,776 million. Below are some of the
companys

key

statistics

for

the

year

2007

Pantene is known worldwide. It was the best selling hair care line in 1995. Pantene
is known to create healthy, shiny hair.
It has Panthenol or Pro-Vitamin B5 which has the qualities to make hair shiny and
strong.
It has a very strong distribution network.Wal Mart. K-mart,Spencers,Reliance
Fresh,More etc are among its retailers.Apart from these it hasnt neglected the
small stores or Mom and Pop stores. They are equally important component of its
supply chain and distribution network.
It is cheaper than other elite brands(Estee Lauder,Loreal,Revlon,Salons) but
always counted among the good brands in the market.

34

P&G has one of the largest advertising expenditures in the whole world.Following
is the Proctor& Gambles advertising expenditures: In 1998 P&Gs advertising
expense reached $3,801 and dropped a little to $3,639 in 1999. From 1999 to 2002
the advertising expenditures level off from 3,600 to 3,780. In 2003 advertising
expenditures rose from 3,773 to 4,373. Out of this, expenditure on Pantene was
$1342.
P&G is known for its innovation.It has a large diverse portfolio of products.It has
got several awards for innovation and that comes alive into its Pantene product
range as well.
Pantene s customer base is also its very significant competitive advantage.It
targets women and girls and they constitute its loyal customer base.
Pantene 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 developing distinctive 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
brand.

As per the report by Wachovia Corporation on Economics,Pantene is the most

favored brand worldwide.This gives a boost to its image and strengthens it further.
Pantene Pro-V care collections are formulated to meet the styling needs of people
from all ethnicities.All the customers can gain personalized guidance from the
experts at the website.
Pantene appeals to a wide variety of nationalities, and not all nations feel the same
about hygiene as the American culture. Many women may find choosing the right
shampoo a limited-decision making process and other an extended decisionmaking process. All women are different and with extensive reach Pantene strives
for it is difficult to pinpoint one concept.

35

MARKET ANALYSIS AND STRATEGIES

ADOPTED BY P&G FOR PANTENE
Market Analysis:
Market size: As far as market share is concerned P&G was 15.4% higher than its
nearest competitor. In 1999 P&G recorded a market share value of 30.1%. From all
the graphs we found, P&G continues to grow to 43,337 million in net sales, 5,186
million in net earnings and 3.69 in net earnings per share all in 2007. Pantene is in
the mature stage of the product life cycle. With all the new products and product
developments, it is likely that itcould elevate back to the competitive stage.

36

Financial Objectives
Increase the amount of retail products sold by 10% per year.
Grow the profit margin by 3% per year.
Profitability by year one.
Target Marketing
Pantene shampoo will target three different market segments:
Men:
Men will typically make up 70%-75% of the clientele. The reason for this is
that men have shorter hair requiring a faster, simpler job.
Women Who Cannot Afford an Upscale Salon:
Women tend to favor a female specific upscale shampoo if they can afford it.
There is not often a difference in quality of an upscale salon relative to a
family hair shampoo other than a upscale shampoo will tend to pamper you
more, only accepts appointments. Someone who is fiscally responsible as
opposed to someone who likes opulence will favor a family shampoo.
Young Mothers with Children:
Pantene shampoo will target each of the three groups separately. The males
will be targeted by offering a best product, convenient, and good service of
shampoo. Because men have shorter hair, they tend to require shampoo more
often. Pantene shampoo will cater to males with costly product because they
often used the shampoo. Generally females prefer the allure of upscale
shampoo; however, not everyone can afford this luxury.
For this reason Pantene will provide the same quality hair shampoo, just
without the expensive price. Pantene will target these customers by
emphasizing the sophisticated hairs by using Pantene shampoo.

37

Positioning
Pantene will position itself as a convenient, full service, family hair shampoo.
Pantene will offer one-stop service offerings. Pantene will leverage its competitive
edge to achieve its desired positioning:
Pantene' competitive edge is based on superior customer service.
Pantene recognizes that the hair shampoo market is crowded so
It is difficult to stand out. Pantene will be able to by providing superior
customer attention. This is particularly IMPORTANT for Pantene to
Operates in because margins are lower and the goal of a quick shampoo
market to crank through a large number of people each day.
Pantene will invest time and money into training to ensure that clients
receive the best experience possible making it is easier to turn them into a
long-term customer. By providing superior customer service, Pantene will be
able to effectively compete against and outlast larger chains and independent
competitor.
Strategy Pyramids
The single objective is to position Pantene as the premier, full service, family
shampoo in the Shaker Heights area. The marketing strategy will seek to first
create customer awareness regarding the product offered, then develop the
customer base, and finally work toward building customer loyalty and referrals.
The message that Pantene will seek to communicate is that the entire family can be
served quickly, professionally, with superior product at reasonable rates. The
message will be communicated through various methods. The first is in-store and
storefront displays. This will be a convenient method to attract people that walk
past general store front. The other method of communication is advertisements in
two local newspapers. These newspapers are widely read and will reach a large
base of peoplE
38

MARKETING STRATEGIES
When visiting www.pantene.com the viewer will find a list of countries worldwide;
each web visitor is expected to select their country in order to be taken to a Pantene
web page corresponding with their country and language).. Pantene has recently
added two new hair care lines to target to a more diverse group of women. In July
2003 Pantene launched its Pantene Long Black line specifically for Indian
women whose culture values hair as a beautiful feature on a woman. The formula
darkens each strand uniformly from root to tip through intense moisturizing as well
as reducing damage. Pantene has recently been awarded Asias favorite
Shampoo in the Readers Digest Super Brands Survey. Also on the shelf next to
the pearly white
Pantene has sponsored many Beauty Contests and Bollywood events. And T.V
programs like NACH BALIYE 4 .
It is also associated with many corporate social initiaitives like Indian Heart
Association for condition for a Cause.
It has come up with many offers for women where in they can meet a celebrity and
get pampered like one.
Pantene markets to women and girls. They market to all ages, races, social classes,
and economic standings.
On Pantenes website there is a list of frequently asked question. The customers
can become the member of the Pantene family and can have their log in ids using
which they can access the website and also make use of all the facilities available
There is also a feature of experts advice on the website where users can seek
solutions for all of their hair problems.
Their retailers are stores like, Wal-Mart, K-Mart,and Target worldwide and
Reliance Fresh.Spencers,More etc in India Pantene can be found in all sorts of
discount stores, drugstores, and supermarkets

39

Apart from this they have adopted Value Pricing strategy at different times to
adjust with the local conditions and purchasing power parity of the country.In
thisProcter & Gamble made dramatic and long-term changes in its pricing and
promotion strategy during which it boosted advertising while simultaneously
curbing its distribution channel deals (in-store displays, trade deals), and
significantly reducing its coupon promotions.
It is interesting to note that P&G's value pricing strategy regarding Pantene is quite
a misnomer. During this period many stores were switching to EDLP (every day
low pricing) policies, which meant that consumers would save on their overall
purchase without having to deal shop. In contrast, P&G strategy essentially was a
disguised price increase; coupons were cut by 50%, which contributed to an
increase in the customer's price paid by 20%. It is possible that P&G lowered their
wholesale price, but the retailer only enjoyed higher margins and did not pass the
savings on to the customer. Another possibility is that retailers lowered retail prices
consistently, following P&G's decrease in wholesale price, but once promotional
trade deals are factored in those everyday lower wholesale prices did not result in a
lower total price paid. For example, if P&G's old price was Rs20, but gave deals of
Rs15, at which price 90% of purchases were made, the wholesale price equaled
Rs15.7 (.90*15 + .10*20). If P&G set a "Value Price" point of Rs18, but 100% of
purchases we were made at that price, the retailer enjoyed no cost savings-only a
cost increase. If P&G had truly offered price cuts,its sales would have been more.
Pantene uses a large amount of TV advertising to generate awareness of the brand
and its benefits. This communication is focused on their unique pro-vitamin hair
repair formula. Furthermore, local well-known celebrities are used to help
consumers feel more involved and connect emotionally with the brand. From an
active consideration point of view, the brand does very little to ensure it is on the
list of potential hair brands women wants to buy.Once the purchase has been
made, the brand does very little in terms of relationship building and advocacy.
Thus, it relies very much on the user having a positive experience due to the
sophistication of the formula

40

SWOT ANALYSIS

Strengths
P&G: P&G is one of the largest consumer goods company in the world. The
company is strongly focused on research and development and owns one of the
best marketing team that helps the company remain leading market position.
Pantene might also enjoy collaboration with other P&G brands such as Olay, as
mentioned aboveunde rCollaborators.
Awareness:
Pantene enjoys wide global exposure, and often uses campaigns that feature local
celebrities; this helps Pantene to create strong brand awareness, build strong
brand equity and achieve high degree of attention and recall for consumers,
eventually leading to higher sales.
Product line-up:
Pantene has an extensive product line that meets most of the customers needs.
Such products are divided to four main categories: fine, medium-thick, curly and
coloured hair. Pantene is focusing on every type of hair, creating product
extensions addressing customer needs. Pantenes selling point is the vitamin that
nourishes hair. This differentiates Pantene from other brands in the market and
creates a competitive advantage.
Hair repair:
Customers strongly prefer Pantene to the competition, if their major concern is hair
repair. The survey shows that 47% of the customers focus on this specific
function of the shampoo.
Distribution:

Weaknesses

41

Lack of customer loyalty:

Pantene heavily relies on mature markets that offer a wide range of hair-care
products, in which customers switch very easily from one brand to another and
the brand suffers from lack of customer loyalty (75% of the surveyed customers
who know Pantene stopped using it
Brand perception:
Pantene is perceived as a normal brand found in every store, fashionable but with
lower quality (3 out of 4 surveyed persons compare Pantene with the lower cost
clothing store Zara
Low potential for growth:
Pantenes products are available in supermarkets, which represent a saturated
market offering a wide choice of products from the same tier, makingchoice for
the customer tough.
No natural line:
Pantenes products focus mainly on hair repair and have been less proactive in the
natural and organic category, which seems to be gaining momentum in the
market.
Price:
Pantenes middle ranged price is vulnerable to cheap brands that offer similar
products. Pantene is not very expensive but not the cheapest. Consumers doubtful
about Pantenes quality can easily go for other, cheaper brands
Lack of differentiation in ads:
Pantenes TV commercials often use celebrities and they lack of differentiation
from its competitors such as LOreal.
No improvements after usage:
Consumer survey also shows that with some past Pantene users, after using
Pantene products, their hair did not look as good as Pantenes TV ads suggested.
This, as well as the missing connection to the brand, seems to be the most
prompted reason to stop using Pantene among the surveyed persons
Uniform product appearance:
42

Most of Pantene products are in white bottles and look similar to each other,
though they have some variation in the product line-up (It can be treated as
consistency and strength, but some of our survey participants actually felt Pantene
has less variation in products).
Absence in digital media:
Pantenes does not use digital media often in Spain (Facebook page), and
therefore loses an opportunity to promote the brand and engage with consumers
online.
Opportunities
Market extension opportunity:
Marketing of product extensions should focus on segmentation of consumers that
need shampoo for different types of hair to gain loyalty of the new customer
segmentation. With such focus on products that specialized in different types of
hair and in natural and perhaps an organic category, Pantene can definitely gain
more market share and increase sale.
More room for communication:
Communication needs to be focused on segmentation of consumers that need
shampoo for different types of hair. Pantene could leverage social media for more
innovative marketing techniques in Salamanca. One example could be a
translation and recommendation app for people who do not speak Spanish
fluently. The international students and expats in Salamanca are lost while buying
the right shampoo. This is the perfect place to help and engage future customers.

Threats
Environmental awareness: Increasing customer awareness for the environment
generates demand for natural and organic products. Beauty shops and professional
skin-care brands such as LOccitane and Body Shop are creating their own brands,

43

taking their loyal customers without leaving any room for Pantene due to low
switching cost.
- Market saturation:
The market is saturated with new products from big local players and other
international brands. Customers are spoiled with many choices and lack of loyalty
for the Pantene.
- Price competition:
he consumer survey shows that the current shampoo market is flooded with
competition, there are many brands that target the same customers as Pantene and
competitors products also target the different needs of the consumers with cheaper
prices. In some stores Pantene product is sold offering a second unit discount.
- Quality competition:
Consumers think that Pantenes competitors products (usually high-tier, more
expensive ones such as LOccitane, Body Shop and Aveda) offer their hair better
final look and results.
- Economic uncertainty:
Economic forecast showing that most of European countries facing stagnate
economic growth including Spain, consumers are becoming more price sensitive
when choosing daily consumer goods.

PESTLE ANALYSIS
To understand the context of Pantene it is important to perform an analysis of this
area regarding the political, economical, social and technological factors.
44

Political The people of Salamanca are very conservative in relation to the

population of Madrid or Spain in total. Around 72% of residents in Salamanca voted
for the Peoples Party (conservative) during the last elections. Consideration on how
to communicate in Salamanca would be needed.
Economical Salamanca in known for its expensive shopping streets like C/
Serrano and its huge shopping areas like the one around C/ Goya. Almost every
known brand is represented with its own flagship store. Additionally all the usual
supermarkets and department store have at least one (in generals much more) of its
branches in the area. Numbers of diplomatic missions and high prices for real estate
attract people with a higher income. Moreover big offices of Iberia, VIPS Group or
Ogilvy and the top-ranked IE Business School bring people with a high purchasing
power to the streets of Salamanca. Price sensitivity is not as high in Salamanca as in
other areas of all Madrid and Spain. However, the current economic crisis should be
addressed in marketing strategy.
Social Approximately 150,000 residents with wealthy Spanish and international
backgrounds live in the Salamanca area.
Technological N/A

CHALLENGES
Pantene faces brand deterioration, it was once viewed as a premium product and
now it is an everyday shampoo that anyone can use; it has lost its main core strategy,
which was fashion and prestige. Pantene still wants to fit in the fashion world
45

spending millions of Euros in advertising and celebrity hiring. In supermarkets

Pantene is viewed as a more expensive shampoo, while facing the actual crisis,
some Spanish people (not necessarily in Salamanca) might turn their back on it,
preferring a more economic shampoo.
Pantene has not been able to develop customer loyalty and it is very easy to
substitute.
Additionally, women dont connect with the problem of Pantene advertisers. What
problems do face women with their hair? And how can Pantene create an ad and
therefore product that addresses that? Since nobody, not even the users, connected to
the problem. Therefore, the solution presented in the ad was irrelevant and
inconsistent. Or, maybe the problem is fine, but the way the problem was
communicated is not (with a celebrity, in black and white, so her hair looks worse
than it is, even though everyone knows she has great hair).These questions can be
answered by looking at the survey. Those who use Pantene do say that the main
benefit they look for is hair repair. The brand is ubiquitous with hair repair. The
results from our mind-reading focus group showed that this generates a lot of
recognition, where the vitamins fill the hair up. Non-users dont connect that image
to their hair; what they are looking for is a brand for their specific type of hair, and
their perception is that Pantene does not offer this. So the question is what is the
real problem women face with their hair?

RECOMMENDATION
Currently Pantene offers a very wide line of products (13 types of solutions offering
different products for each). This creates a Choice Paradox, confusing the
46

customer in choosing the right type of product, which fits their hair type, without
expert diagnosis. However, Pantene as well as other shampoo brands rarely use instore communication to promote products, assist customers in choosing a tailed
solution.
In addition, as mentioned before, Pantene non-users seem to not connect withthe
message of Pantene ads, which does not address their main interest type of hair.
Thus, recommendations for Pantene to overcome its main challenges and revamp
their brand perception are as follows:
Product: Create one wide line catering to different hair types, categorizing each
product-line in accordance with the type of hair it fits to. Product-line should be
narrowed according to past sales data to cater main customer needs and preferences.
Also, when we say hair type, we recommend doing research into how consumers
categorize their hair type, as we found the words they used to describe their hair
type are not necessarily consistent with Pantenes labeling.
Today all Pantene products looks are quite similar (white bottle with a colored
label) and limit line differentiation; in the new categorization each lines appearance
should be distinct. This way, the products appearance will communicate clearly the
type of hair to which it caters, decreasing customer confusion and dissatisfaction
due to too much choice (regret about the decision made, escalation of expectation).

47

48