Procter & Gamble Company

Examining Product Decisions

PGP1-Group 4 members :

Sree Sai Ganesh : 1810002

Chintam Tarun : 1810018
R. Vighnesh : 1810037
Sayali Batle : 1810045
Srikanth : 1810047
Product Positioning Arrived
Psychological

Ivory
(Mildness Joy
)

Mildness Strength

Ivory
Dawn
(Value)

Performance
Consumer Behavior pertaining to LDL
1. According to exhibit 7, the rating was highest for cutting grease and improving quality.
2. Which meant consumers highest preference was performance.
3. With rise of ADW’s market share the buying patterns of LDL will be affected.

Calculations :
4. On an average, each household uses 0.6 ounces of LDL for a sinkful of dishes.
5. Average household has 12 sinkfuls for a week.
6. Usage/year = 0.6*12*52 =374.4
7. 310 ounces = 1 case, so each household used, (374.4/310) 1.2 cases .
8. According to 1980 data in Table B, the LDL penetration was 90% of 79 million which is
71.1 million households.
9. The ADW penetration was 36% of 79 million which is 28.44 million households.
10. Assuming that ADW households are within the LDL, households using only LDL’s
comes to 42.66 million which equates to 51.192 million cases/year.
11. For ADW users who use half of it, the no. of cases equals 17.064 million cases/year.
12. The total volume is 68.256 million cases of which 72.25% was sold at $17/case by
the branded companies which comes to 837 million USD.
13. The non labelled comes to 141 million USD. Total market is 978 million USD in 1981.
14. The market revenue for LDL would have been 1225 million USD if ADW was not there.

Thus the consumer behaviour was stable and the market was expected to have the
meagre growth of 1 %
Product enhancement of Dawn
• Consider the case when H80 is used to enhance the performance of Dawn.
• Since Performance is the most preferred attribute, this is a viable option.
• The enhancement will take 6-12 months to come into the market
• Cost involved in improving this product is 20 million USD for capital and 10
million USD for market expenditure.
• The estimated market share for Dawn should increase by 8.57%
Siril: New LDL for ADW
• The market penetration ADW had steadily increased and reached to 44%
household by 1990.
• Thus bringing out a new LDL product solely targeting ADW users.
• The expenditure is 80 million USD with a target market of 40 million
households.
• 80 million as a percentage of 168 equals to 47.6%.
• So the new product should capture at least 47.6% of the non-P&G market
to gain profits which would take at least 2 years.
• This seems more difficult given the current market situations.
Product enhancement of Joy
• Consider the case when “no spot” formula is used to enhance the shiny
characteristic provided by Joy.
• Since the shiny characteristic is not much preferred as compared to
performance, this option can be considered as secondary.
• Cost involved in improving this product is 10 million USD for market
expenditure but no capital expenses.
• Using no spot formula reduced Joy’s cost of goods by 3 million USD.
• Therefore the net cost involved in enhancing Joy is 7 million USD.
• The estimated market share for Joy should increase by 2%.
Increasing marketing expenditure for Ivory
• Since Ivory is in the mildness segment, P&G can increase marketing
expenditure in order to make small profit margins.
• However, the mildness segment is in the decline.
• Cost for additional marketing is 4 million.
• The estimated market share for Ivory should increase by 1.14%
Conclusion
• We feel that dawn should be enhanced with H80 formula because prefer
performance
• 8.57 % increase is the expected increase in revenue.