Procter & Gamble is one of the fastest and largest growing consumer market. Case Study examines journey of P&G for Light Duty liquid Detergents in various aspects like promotion and development.

2. Company Profile
 Procter & Gamble Co., also known as P&G, is
an American multinational consumer goods
company headquartered in downtown
Cincinnati, Ohio, U.S., founded by William
Procter and James Gamble.
 World's producer of household and hygiene
products.
 By 1981 P&G operated in 26 countries.

3.  Sales totaled $11.4 billion of which 70% were made of United states with 90 consumer and industrial
products in the United States, including three of the leading LDL brands: Ivory liquid, Dawn and Joy.
Product Divisions
1. Packaged soap and Detergents
2. Bar soap and Household Cleaning products
3. Toilet Goods
4. Paper products
5. Food products
6. Coffee
7. Food service and Lodging products
8. Special products
Divisional
Management
The divisions used
centralized corporate staff
groups for advertising
services, distribution and
purchasing.

4. LIGHT-DUTY
LIQUID
DETERGENTS
• $850 million factory sales and volume of 59 million cases in
1981.
• The average U.S consumer had 1.5 LDL brands at home at
one time.
• 0.6 fluid ounces was used per sinkful of dishes
• Washed an average of 12 sinkful each week.
• Average purchase cycle was three to four weeks.

5. Division of Market
 on the basis of product benefit market was divided into-
Performance segment
(37% cleaning benefit)
Mildness segment
(35% mildness to
hands)
Price segment (28%
benefit of low cost)
 included 7 brands whose primary benefit was low cost.
 three companies sold 75% of LDL with P&G holding 42% share of Market. Colgate
Palmolive company was holding a 24% share, Lever Brothers (the US Subsidiary of Unilever)
was holding a 7% share.
 The remaining 27% of the market consisted mainly of generic and private-label brands.

6. Promotion of P&G Established products
 P&G's three brands accounted for 30% of the dollar sales volume and profit of the PS&D
division.
Ivory Liquid was the leading brand in 1981 with a 15.5% share of the LDL category.
Since Ivory had the highest trial levels in the category, the brand's primary sales
promotion strategy was continuity of purchase trial among younger women and
heavy LDL users.
Dawn was introduced nationally in 1976 as a performance brand. In two years Dawn
rose to the No. 2 position in the LDL category, and by 1981 it held a 14.1% market
share. Dawn’s sales promotion strategy was trial-oriented, with two-thirds of Dawn's
promotion events being trial-oriented coupon events supported by trade
allowances, while the remaining one-third were price packs.

7. Contd..
Joy ranked third in the LDL category, with a 12.1 % market share in 1981. Its product
benefit was to deliver "shiny dishes." Joy had the lowest trial level of P&G's three
LDLs. To strengthen Joy's appeal, an improved "no-spot" formula was scheduled for
national distribution by September 1982. The new formula caused water to "sheet"
off dishes when they were air drying, leaving fewer spots than other brands. In
addition, the improved formula reduced the cost of goods sold by about $3 million
per year. The brand manager hoped to increase Joy's volume by 10% with the
introduction of Joy's improved product.

8. The Development of H-80
 A research revealed that 80% of U.S households scour and scrub their dishes once a week and the removal
of burnt or baked-on foods was considered the toughest cleaning job by more consumers,
 The advertising department concluded that there was consumer need for a high-performance LDL.
 H-80 was a high-performance LDL that combined suspended non abrasive scrubbers with a highly effective
detergent system to provide superior cleaning.
 The H-80 formula was completely homogenous and did not require shaking.
 H-80 emerged from the development process as a rich, green opalescent liquid that felt slightly gritty to the
touch.
 H-80 was thicker than that of other LDLs, and its herbal fragrance was unique.
 Package was bright green and shaped like an arrowhead.
 The label carried an endorsement from the American Fine China Guild that read, "Safe for all fine china.”
 Capital investment is less ($20 million) for H-80.
 Based on P&G LDL category experience, Garner expected to promote all sizes in the first year.

9. Promotion Strategy
H-80 was an outstanding dishwashing liquid for cleaning tough-to-remove food from
dishes.
Targeted at female heads of larger households, those aged 18 to 35.
Target audience should be the heavy LDL user.
Advertising
strategy
Reviewing past LDL promotions - Garner realized that he would probably not be
able to achieve the same results for H-80 if he simply copied the Dawn plan.
Minimizing cannibalization - Garner wanted to avoid the simultaneous promotion of
two or more of the company's LDLs.
Choosing most effective promotion mix - Garner planned for promotion mix such
as trial size represented the best purchase incentive for a consumer who had never
tried a brand
Promotion
issues for H-80

10. Sales Promotion Alternatives- by Garner
A trade allowance of $2.70/statistical case, in the first three months on all sizes was given. Also
Garner could not go below $1.80/statistical case as trade allowance, as this is the allowance
that was offered for other LDL brands of P&G and it would be of no benefit if allowance below
this would be offered
Trade
allowances
Sampling
Couponing
Garner considered only mailed samples, as door-to-door delivery of samples by specially
recruited crews was more expensive.
five types of coupon programs was examined
Special pack
promotions
• Trial size - low-risk, low-cost method
• Pre priced packs- low-risk, low-cost method (smallest salable size)
• Price packs - to retain current users and encourage repeat purchasing,special
displays of price packs
• Bonus packs - low-cost distribution, a strong purchase incentive to the consumer
who had purchased and liked the product before. Suggested for second half of the
introductory plan

11. Premiums
high-value refund supported by point-of-purchase display material could generate significant
trade and consumer interest.
Refunds
• Premiums were believed useful in attracting attention at the point-of-sale. There were four
major
• methods of premium distribution and types.
• On-in-pack premiums, Near-pack premiums, free-in-mail premium
Sweepstakes/
Contests
P&G Scheduled to run a Group promotion four months following the introduction of H-80.
Garner wondered if a new brand might get lost among P&G's established brands
Sales Promotion Alternatives- by Garner

12. 1st Option: New product development
Pros:
• H-80 was a high-performance LDL
that combined suspended non
abrasive scrubbers with a highly
effective detergent system.
Cons:
• The new brand would require $20 million
of investment to cover additional
production. And it would require $60
million for first year introductory
marketing expenditures.
• The new product will take 3 years, it
indicated that the profit return will be long
term investment.

13. 2nd Option: Product development on existing brand
Pros:
• Product improvement such as
Introduction of H-80 formula to on one
of the current LDL brands require less
investment. It would cost $20 million
for improvement and $10 million for
incremental marketing expenditures.
• And Joy brand could cut its Cost of
goods sold $3 per year means
improve Joy with no-spot formula,
would cost $10 million in marketing
expense with no capital investment.
Cons:
• The new product will take 3 years, it
indicated that the profit return will be long
term investment. Which increases
marketing expenditures on existing
brand.
• Not sure that the change of formula
would attract new customers and retain
existing customers

14. 3rd Option: Increase marketing expenditures on
Existing brands
Pros:
• Overall profits may increase by
promoting and advertising strategies.
Cons:
• For some segments such as price bands,
increasing advertising and promotion
would not increase
• Sales and market share if the price didn’t
decrease accordingly.

15. Conclusion
 The recommendation was to go with combined feature of having both long-term
and short-term investment.
 The introduction of the new product appeared to be a costly investment. In such a
depressed state of the economy, it was not a smart decision to invest $ 80 million
for the new product.
 Out of $80 million, $60 million was only used to cover the cost of the first year. The
product would require 3 years in order to be introduced in the market.
 Recommendation would be to go with Option 2 by combining Option 3 could
increase the sales volume with minimum investment.