Procter and Gamble Case Study

Asli Avcioglu, Kyle Denham

Nora Kantor, Lutao Ning,
Steven Tamayo

11/29/2001
 Outline
• ETC
• Skip Micro
• Product
• Pricing
• Conclusion
 ETC of Today
• Local GM’s Report to Regional VPs that
are in the ETC
• VPs are largely US expatriates
• Local GM’s, who have been accustomed to
having a large amount of power before the
reorganization of the ETC no longer have
the same control as before
 Why Form an ETC
• Create a united European front
• Lower costs by ordering in bulk
• Standardize prices
• Turn the European system into something
similar to the American system, which has
worked well for P&G for years
 Problems With ETC
• Culture Clash
• GM’s Negative Perceptions
– GM’s have diminished power and thus
diminished roles in the company
– GM’s have less of a voice in the decision
making process
– Such perceptions lead to lowered motivation,
and thus less commitment to the P&G cause
 Changes/Improvements
• GM Advisory Board
– Assist in the decision making process for the
entire European market
• Divergence Hypothesis
• Performance appraisals every 2 years
 Effects on P&G
• Create the united European front the ETC
was designed to achieve
• Develop an awards system to reward the
GM’s of profitable countries while
motivating the GM’s of less profitable
countries to work harder
• Give GM’s a voice in the European decision
making process
 Current Skip Micro Situation
• Unilever is releasing Skip Micro in France
before our Ariel Ultra
• The Skip Micro product is inferior to Ariel
Ultra as well as the non-compact detergents
• Skip Micro has a better promise: “2=5,”
something that we cannot hope to match
since our product is “2.2=5”
 Two Theories
• Destroying the compact market
– Skip Micro’s poor performance may deter
potential customers from buying compact
detergents altogether, thus protecting their own
regular detergent and destroying Ariel Ultra’s
chances at success
• First Mover
– Take the first mover advantage and then
develop a better product later
 What We Think
• We have a superior product
• Unilever’s advertisement, “2=5” is
inaccurate and deceiving
• Exposing them as frauds will allow us to
avoid direct competition with their product
while creating a corporate image for us as
being the “good guys”
 Delaying the Launch
• Expose their inferiority
– Advertisements showing Skip Micro’s
lackluster performance
– Frame them as frauds
• Lead on that P&G is developing a “real”
compact detergent
– Improve the Ariel Ultra product in the
meantime
 Delaying the Launch cont.
• Release Ariel Ultra in France Later
– Re-evaluate market situation after a month
– Pending favorable market response to our anti-
Skip Micro advertisement campaign
– Launch in another European market in the
meantime
• P&G’s brand recognition should give our
advertisements sufficient legitimacy
 Company Objectives with
Ariel Ultra
• Quality Product
• Corporate Image
• Environmental
 GM’s Role
• Empowerment
– GM’s have the option of creating their own
formula for detergent as long as it performs just
as well as the European standard and costs less
to produce
 Pricing
• 15% policy stays
 Conclusion
• Our plans integrate local GMs into the
decision making process
• Our product is superior to Skip Micro and
thus should have no problem competing
when we launch later than planned
• The United European Front shall bring
greater cohesiveness and expansion to the
European market