41Running head P&G MARKETING PLAN47P&G MARKETING PLAN.docx

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Running head: P&G MARKETING PLAN
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P&G MARKETING PLAN
CMP Final Draft:
Procter & Gamble’s Downy Magic! Five-Year Marketing Plan
Captain Kangaroo, Mr. Green Jeans, Dancing Bear, Bunny
Rabbit, and Mr. Moose
BUSI 330_B02 Liberty University Online
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Running head: DOWNY MAGIC! MARKETING PLAN
DOWNY MAGIC! MARKETING PLAN40
October 31, 2012
Table of Contents
Executive Summary (Mr. Moose) 5
Company Description (Mr. Moose)7
Strategic Focus and Plan8
Mission (Bunny Rabbit) 8
Vision (Bunny Rabbit)8
Goals (Mr. Green Jeans)8
Nonfinancial Goals9
Financial Goals 10
Core Competency (Dancing Bear)11
Sustainable Competitive Advantage (Captain Kangaroo)12
Situation Analysis13

SWOT Analysis (Bunny Rabbit)14
Industry Analysis (Mr. Moose)17
Competitor Analysis (Mr. Green Jeans) 19
Company Analysis (Captain Kangaroo)20
Customer Analysis (Dancing Bear) 22
Consumer Characteristics 23
Environmental and Health Concerns 24
Market-Product Focus 25
Marketing Objectives (Captain Kangaroo) 24
Current Markets24
Prospective Markets25
Product Objective (Bunny Rabbit) 26
Target Markets (Mr. Moose)27
Points of Difference (Dancing Bear) 30
Positioning (Mr. Green
Jeans)…………………………………………………….31
Marketing Program 32
Product Strategy (Bunny Rabbit)32
Unique Product Line 32
Unique Product Quality32
Unique Packaging33
Price Strategy (Captain Kangaroo)34
Promotion Strategy (Dancing Bear)35
Point of Purchase Display 35
Samples35
Cents-Off Coupons35
Place/Distribution Strategy (Captain Kangaroo)36
Financial Data & Projections (Mr. Green Jeans) 37
Past Sales Revenue 38
Break-Even Analysis 38
Five Year Projections39
References 42
Procter & Gamble’s Downy Magic! Five-Year Marketing Plan
Executive Summary (Mr. Moose)
For the past 174 years, Procter & Gamble has enjoyed a well-

earned reputation for innovation: improving, expanding and
continually touching the lives of more people with greater
frequency and in a more environmentally responsible manner.
P&G’s research facilities conduct over 20,000 research studies
in nearly 100 countries per year (P&G, 2011), resulting in
P&G’s consistent delivery of products desired by consumers.
P&G, generally considered the industry leader in the fabric care
market (P&G, 2010), already provides numerous laundry care
products as part of their fabric and home care segment, which
had an annual revenue of $23,805 million in 2010 (P&G, 2010).
One of P&G’s long-term objectives is to apply environmentally-
sensitive principles in new-product development strategies.
Therefore, as an addition to their well-established group of
laundry care products, P&G desires to provide consumers with a
100% organic, dissolvable dryer sheet.
P&G has shown an unwavering conviction to provide continual
improvement in their products and business methods and
improve the lives of both present consumers and consumers to
come by using its earnings to steward the protection of the
planet’s resources (P&G, 2010).P&G’s mission with the
introduction of an organic, eco-friendly, dissolvable dryer sheet
is to achieve 48% of the market share in the fabric care and
home care segments.
Two main categories comprise P&G’s keys to success with this
new product introduction: internal factors and external
(business environment) factors.
Procter and Gamble’s emphasis on quality leadership has
resulted in its reputation for possessing a highly experienced
management, staff, global leadership council, and board of
directors (P&G, 2010). This reputation is bolstered by strong
financial markers, including its 2010 organic growth of 3%
(P&G, 2010), which is 1-2% above global market growth rates.
Overall growth, management expertise and free cash flow are all
strong internal factors that will support the success of the
Downy Magic! product launch as an extension of the Downy

line, a product line already familiar to consumers.
As a leader in the retail industry, Procter and Gamble’s brand is
repeatedly ranked as “most important to retailers” (P&G, 2011,
para 4). This preferred supplier status is a strong external
factor that will support this new product launch, as well as
P&G’s approximate 56% share in the U.S. market. Many other
home care companies have made attempts at various “green
products” in this market (Shannon, 2008). However, no other
dryer sheet on the market displays the product features of
Downy Magic!
Procter & Gamble, with a well-earned reputation for bringing
quality products to the market, will utilize research and
development capabilities to produce, market, and sell the
Downy Magic! product. This is with the intent of providing
consumers with an organic and environmentally-friendly choice
in dryer sheets and with the goal of achieving a return on
investment on the new Downy Magic! product within a five-
year period. Unique product quality and packaging, and
considerable benefits from P&G’s ability to mount an
aggressive ad and product giveaway campaign, will all
contribute to the success of Downy Magic!.
Company Description (Mr. Moose)
Competing with other soap and candle makers in the midst of a
financial crisis in the United States may not seem an auspicious
beginning, but in 1837 this is how William Procter and James
Gamble founded Procter & Gamble (P&G). From these humble
beginnings in Cincinnati, Ohio an international powerhouse was
born, fulfilling today’s company objective to better the lives of
present and future generations (Procter & Gamble, 2010).
During the year 2000, P&G experienced one of the greatest
challenges in its history after missing its earnings commitments
(P&G, 2010): P&G stock declined, resulting in a loss of almost
$50 billion in market capital. A. G. Lafley, the CEO hired in
June 2000, helped refocus the company to its mission (P&G,
2010). In the ensuing years, this refocus and much hard work

has resulted in P&G having established itself as one of the ten
most valuable companies in the world. Overall net sales have
increased each year since 2006, with 2010 net sales of $78.9
billion (P&G, 2010).
Two main tenants of P&G’s success have been innovation and a
focus on leadership brands. P&G has a strong global innovation
program; in 2010 they invested nearly $2 billion in research and
development (P&G, 2010). P&G’s dedication to innovation is
driven by the desire to continue improving, expanding and
therefore touching and improving more lives, with greater
frequency. P&G’s focus on sales of its 50 leadership brands has
resulted in 90% of its sales and profits from these same
leadership brands (P&G, 2010). The company believes this
approach allows them to continue to create future opportunities,
as well as continue their growth.
Strategic Focus and Plan
This section includes: (1) the mission, (2) the vision, (3) goals,
(4) core competency, and (5) sustainable competitive advantage
of Procter & Gamble. These aspects assist P&G in attaining
strategic direction and desired success in market-planning
pursuits.
Mission (Bunny Rabbit)
P&G’s convictions to safeguard the preservation and growth of
consumers, products, values, services, employees, shareholders,
profits, and the global community will forever remain
unwavering. P&G may improve the lives of both present
consumers and consumers to come by using its earnings to
steward the protection of the planet’s resources (P&G, 2010).
Vision (Bunny Rabbit)
P&G willlead the consumer products industry in developing and
manufacturing environmentally safe products by using advanced
technologies to decrease global pollution (P&G, 2010).
Goals (Mr. Green Jeans)
Procter & Gamble’s organizational purpose or goal is to reach
people and make lives better through innovative products and
by providing value to stakeholders by recognizing and meeting

needs. In the fabric care and home care segment, comprised of
a variety of products that enhance lives and utilize the latest
technologies, P&G implements values one household at a time.
These products range from soaps, including laundry detergents
and cloth enhancers to home care products, including
dishwashing liquids and detergents, surface cleaners and air
fresheners to batteries. In fabric care, P&G is generally the
industry leader in the markets in which they compete and have
excellent name recognition and product awareness amongst
consumers (P&G, 2010). With the introduction of new eco-
friendly dissolvable dryer sheets later this year, P&G’s goal
over five years is a 48.3% market share in the fabric care and
home care segments. A 10% growth rate per year is quite
feasible given this revolutionary step forward in not only
product development, but also responsiveness to an increase in
consumer environmental awareness.
Procter and Gamble will measure company performance by
reflecting on the following goals over the next five years (P&G,
2010):
Nonfinancial goals (Mr. Green Jeans)
1. To improve customer base through technology that people
appreciate and utilize.
2. To increase unit volume 6% over the coming 5 years.
3. To cut down on waste, both tangible and intangible.
4. To create an environment that acknowledges and respects
customers, employees, vendors, suppliers and the world.
5. To shape the future with those having a stake in P&G in a
manner that recognizes P&G’s values in the long run.
6. To research and develop innovative and intuitive products
which exceed customer expectations.
7. To reduce energy costs and emissions by 13% over the next
five years.
8. To enable 3 million children to receive vaccinations and
needed medicine to love, work, and play.
9. P&G’s after-school programs in developing countries will
continue to teach families skills needed to develop the potential

of the next generation.
Financial goals (Mr. Green Jeans)
1. To increase net sales from $78.9 billion by 6% per year to
over $100.70 billion in 2016.
a. To increase organic sales by 12% per year over the next 5
years.
2. To increase net earnings by 3% to $14.64 billion in 2016.
a. Net earnings will increase from continuing operations by 2%
to $11.118 billion behind sales growth and operating margin
expansion.
b. With the introduction of the new product, organic dissolvable
dryer sheets, P&G’s fabric care and home care segment will
experience growth of 10%.
c. P&G’s net sales last year were $23,805 million and net
earnings were $3,339 million. Research indicates the
introduction of P&G’s newest product could increase sales in
P&G’s organic product division by 12% (Trefis, 2010). This
will increase net sales in this segment to $41,953 million and
net earnings to $7,061 million (Trefis, 2010).
Figure 1. P&G Fabric Care and Home Care Net Sales in
Millions. Adapted from “What P&G could look like in 5 years”
as cited in 2010 by the Trefis website:
https://www.trefis.com/company?hm=PG.trefis&from=widget:sl
ideshow&ovd_urlid=490925#/PG/n-
0557/0278?from=rhs&article=57176&c=top

3. To increase diluted net earnings per share by at least 2% per
year over the next five years.
4. To increase core earnings per share by at least 4% per year
over 5 years.
5. To increase free cash flow from $13.0 billion to $17.5 billion
and to raise overall cash flow from operating activities from
$16.1 billion to $20.8 billion over 5 years.
Core Competency (Dancing Bear)
In terms of competency, Procter & Gamble seeks to provide a
new, innovative eco-friendly dissolvable dryer sheet to the
existing family of products. This distinctly different product
translates consumer desires for environmental protection and
adheres to P&G’s willingness to sustain the environment (P&G,
2010). The investment of time and financial resources into the
desires of the consumer assists in pinpointing the focus of
opportunities for innovation (P&G, 2011).
Figure 2. To achieve national recognition, P&G introduces this
ad that will be featured with a coupon both online and in
Sunday papers.
Using a “global network” of external research and innovation
partners, P&G is able to direct the use of advanced technologies
toward the creation of a high-quality consumer and
environmentally friendly product (P&G, 2010, p. 5): This
market-leading product will then be globally distributed using
existing resources and global distribution practices.
The efficiency and effectiveness of current resources enables
P&G to drive the cost down while exceeding the expectation of
value to our customer. As a trusted leader in the household care
industry, P&G has the brand recognition and consumer loyalty
to successfully launch the revolutionary concept of a
dissolvable dryer sheet (P&G, 2011).
As discussed in further depth below, Procter & Gamble’s core
competencies will be translated into sustainable competitive

advantages by continuing to work closely with the same trusted
supply and distribution lines that have enabled P&G to nourish
a key leadership position within the household care industry.
Sustainable Competitive Advantage (Captain Kangaroo)
Procter & Gamble is able to positively affect the firm’s
competitive advantage by presenting its wide array of household
brands as one company, rather than as individual products
(P&G, 2011). This, in turn, helps firmly hold P&G’s present
market saturation and current financial position if ever the
market growth rate of any one particular product is either low or
uncertain (Kerin, et al., 2011, p. 31). P&G acting as one
company, with its wide assortment of brands, also allows for the
allocation of P&G resources to be both strategic and resourceful
(P&G, 2011).
As leader in the retail industry, Procter and Gamble is
repeatedly categorized as “preferred supplier” (P&G, 2011, para
4). P&G brands have also consistently been ranked “most
important to retailers” (P&G, 2011, para 4). P&G has been
classified as having the clearest and strongest business
strategies, fundamentals, and innovative marketing programs in
the consumer packaged goods industry (P&G, 2011). In fact, no
other company has invested more into market research than has
P&G (P&G, 2011). Conducting over 20,000 research studies in
nearly 100 countries per year helps P&G better understand and
serve consumer needs (P&G, 2011).
P&G’s dedication to intentionally acting upon the discovery of
local consumer and market desires has indeed leveraged P&G’s
abovementioned core strengths (P&G, 2011). In addition,
Procter and Gamble’s emphasis on brand-building and quality
leadership has resulted in a future-focused organization that
makes possible P&G’s company objective to better the lives of
present and future generations (P&G, 2010). Using such
strategies has rewarded P&G with customer satisfaction and
consumer loyalty – a competitive advantage that can scarcely be
measured (P&G, 2010; Kerin, et al., 2011, p. 11).
P&G once again acts in response to the beckoning of consumer

voices: For this century it is said that business and conservation
have become allies (Underhill, 2008, p. 98). Across the globe,
increased consumer environmental and health awareness has led
to such business efforts as compostable packaging; reduction in
industrial waste; and environmental sustainability of
manufacturing and research and development facilities (DuPont,
n.d.; European Environment Agency, n.d.; Johnson & Johnson,
n.d.; P&G, 2010; Sun Chips, n.d.; Williams, 2010). The
introduction of P&G’s newest product, 100% organic
dissolvable dryer sheets:
…meets the needs of the consumer and [also adheres to P&G’s
goal] to manufacture "green" solutions to protect the [world’s
resources] for [the sake of] generations to come. The new
product will dissipate via the [dryer sheet’s] molecular formula
reacting to the heat exchange produced by the dryer. The dryer
sheet will not stick to fabric, internal dryer parts, nor will it
pollute the earth. It [softens fabrics] then dissolves like cotton
candy – It's Magic! (Lynch, W., personal communication, May
10, 2011).
Situation Analysis
Procter and Gamble’s (P&G) situation analysis first provides a
SWOT (internal strengths and weaknesses, and external
opportunities and threats) analysis that is the basis for P&G’s
management strategies. Following the SWOT overview,
discussions laden in intricate research will appraise and assess
trends in the fabric and home care industry, amongst
competitors, in the company itself, and in present and
prospective consumers.
SWOT Analysis (Bunny Rabbit)
Positive
Negative
Internal
Strengths
· Technology innovation (P&G, 2010)

· Enhancing brand names (90% of sales and profits come from
established brand name products) (P&G, 2010)
· Market Research (20,000 research projects every year) (P&G,
2011)
· Strong Management/Company (operating since 1837) (P&G,
2010)
· Responds to customer needs via new and extended product
lines) (P&G, 2010)
· Year-to-year Return On Investment and shareholder equity
(P&G, 2010)
· Renewable energy to power plants (solar, wind, biomass,
tides, geothermal) (P&G, 2010)
· Free cash flow (102% in 2010) (P&G, 2010)
Weaknesses
· No private labeling of products to retail companies (Retail
Daily, 2010)
· Legal issues affecting profits and consumer confidence
(Jacobson, 2011)
· Commodity pricing and suppliers (P&G, 2010)
· Organic sales growth (pet products, grooming) flat or negative
growth (P&G, 2010)
· Animal testing (P&G, 2010)
· Local foreign management (learning P&G culture) (P&G,
2010)
· Slow to invest in the male organic grooming market (However,
P&G did acquire Zirh in 2009) (Wong 2009)
External
Opportunities
· High recognition for diversity (e.g. Black Enterprise, National
Association of Females) excellent for marketing and advertising
(P&G, 2010)
· Conservation conscience (Life Cycle Assessment – LCA &
zero waste to landfills) meets consumer concerns (P&G, 2010)

· Consumer name brand recognition – makes easier to sell new
products or enhance existing products (Kerin, et al., 2011, pp.
11, 105-106)
· Global market expansion (P&G, 2010)
· New products (P&G, 2010)
· Green products (P&G, 2010)
Threats
· Competition from Unilever, Johnson & Johnson, Colgate-
Palmolive, etc. for share of global markets (Hoovers, 2011)
· Generic products (Hoovers, 2011)
· Economic changes (Kerin, et al., 2011).
· Fluctuating exchange rates (P&G, 2010)
· Retail competition using private labels (e.g. Wal-Mart) (Trefis
Team, 2011)
· Environmental regulations (U. S. Environmental Protection
Agency, n.d.; European Environment Agency, n.d.)
· Legal or union issues (P&G, 2010)
· Civil Strife (Bloomberg, 2011)
Figure 3. P&G SWOT analysis. This figure illustrates internal
strengths and weaknesses as well as external opportunities and
threats affecting P&G market opportunities in the varying
markets within which P&G operates.
With regard to internal strengths, Procter and Gamble remains a
global leader in a variety of markets, perhaps as a direct result
of strong management teams and research facilities (P&G,
2011). Procter and Gamble has been able to remain number one
in several market industries based on a variety of key internal
factors. These factors include: 1) technology innovation; 2)
amount and diversity of products; 3) market research; 5)
advanced technologies; 6) an unwavering focus on
sustainability; 7) increased dividends per share; and 8)
increased free cash flow (P&G, 2011). Procter and Gamble is
an organization that plans to continue as a global leader in the
market based upon its goals, ability, and focus on understanding

the consumer; adapting to change; and forever “Touching &
Improving Lives” (P&G, 2011).
Debatably among unfavorable internal weaknesses, Procter and
Gamble (P&G) resists marketing private label or generic brand
products. Meanwhile, it is popularly thought that the private
label market is a pure opportunity for Procter and Gamble and
its shareholders (Trend Updates, 2009). It is reported that in
2009 the private label market grew 21.9% and several of P&G’s
main competitors (e.g. Unilver and L’Oreal) have jumped at the
opportunity and have increased sales revenue as a result (Trend
Updates, 2009; Retail Daily, 2010). Other internal weaknesses
may include: 1) animal testing and legal issues affecting profits
and consumer preference and confidence (Jacobson, 2011); 2)
commodity pricing and suppliers (P&G, 2010); 3) flat or
negative sales growth in pet grooming products (P&G, 2010); 4)
slow to invest in the male organic grooming market (Wong,
2009); and 5) local foreign management may, at times, be slow
to learn P&G culture (P&G, 2010).
Favorable external opportunities include an increasing consumer
importance placed on diversity in products and advertising as
well as on conservation and environmental sensitivity (Kerin,
Hartley, & Rudelius, 2011). P&G is arguably more equipped to
deal with such uncontrollable environmental changes than are
many other organizations (P&G, 2010). In addition, with trade
regulations moving in favor of market globalization, P&G is
granted opportunities to expand its business and sales globally
(Bloomberg, 2011; Kerin, et al., 2011).
External points of contention (threats) for P&G may include
dealing with international trade regulations, tariffs, and
fluctuating monetary exchange rates (Kerin, et al., 2011).
However, P&G is well staffed to manage such international
business details (P&G, 2010). Another issue all global
organizations face is being able to ensure products and business
operations adhere to local environmental and pollution
regulations (U. S. Environmental Protection Agency, n.d.;
European Environment Agency, n.d.). One other factor that

needs to be constantly and carefully monitored is civil attitudes
toward United States citizens and civil unrest that could stop or
temporarily halt distribution or production of products (Dutton,
2005). Supply chain management is also a key factor in the
future for all organizations due to the rapid growth and
consumption of raw materials that are needed to produce final
products (Gwartney, Stroup, Sobel, & Macpherson, 2011). It is
essential to have strong alliances with global suppliers (Kerin,
et al., 2011). Unforeseen legal, political, or union issues could
also present as negative external forces (P&G, 2010). Perhaps
most importantly, P&G competes directly with companies such
as Unilever, Johnson & Johnson, Colgate-Palmolive, generic
brands, and private labels for share in global and domestic
markets (Hoovers, 2011).
P&G boasts a wide range of products in varying markets. Thus,
the above SWOT analysis highlights and appraises internal and
external factors that affect P&G’s market opportunities in the
varying markets within which P&G operates. As shown in the
paragraphs to follow, management may then translate the SWOT
analysis to help better define necessary actions and marketing
strategies, in this case, specifically in the fabric and home care
market (Kerin, et al., 2011, p. 35).
Industry Analysis: Trends in Fabric and Home Care (Mr.
Moose)
Consumers undoubtedly place value in laundry detergents and
its related products such as fabric softeners: value of shipments
of this category of products increased 24% between 2002 and
2007, based on the 2007 polish and other sanitation goods
manufacturing category (U.S. Census Bureau, 2007). P&G is an
already-established force in the fabric and home care industry,
with annual revenues in its fabric and home care segment
reaching $23,805 million in 2010 (P&G, 2010). In 2010, annual
revenues for the global household and personal products
industry, of which P&G plays a major role, showed total
revenues of $717.7 billion, with a forecast of reaching 3.5%
growth and $853.1 billion by the end of 2015 (PR-Inside, 2011).

It is thought that there is an increasing desire on the part of
consumers to purchase items that are either made from recycled
products, are organic in nature, or are environmentally sound,
even if this means paying more to do so (Milmo, 2006; Gupta,
2007). This is particularly so when a product is considered to
function superiorly to its existing counterparts (Kerin, et al.,
2011). Albeit, it is duly noted that – thanks in part to scientific
advances – eco-friendly fabric care products are not only
comparable to traditional fabric care products in price, but also
in utility (Shannon, 2008). This is beneficial for the fabric care
industry in times of macroeconomic recession (affecting not
only the fabric care industry, but all industries) when
discretionary and disposable incomes decline and consumers are
compelled to be especially price conscious (Kerin, et al., 2011,
pp. 66-67).
Consequently, for each industry and product, “going green”
occurs in its own way and at its own rate, however, “going
green” is undoubtedly a huge opportunity in the fabric and home
care industries (Bloomberg, 2006). The same consumers who
are expected to expand the organic foods section of
marketplaces by 20% annually are the consumers who are also
purchasing items such as dryer sheets (Bloomberg, 2006). As
consumers become more aware of organic options (such as in
groceries) they tend to desire organic options in other product
areas as well (Milmo, 2006).
About 2% of the fabric softener market in Europe is made up of
dryer sheets, compared with greater than 30% in the U.S (Neff,
2010). However, considering the world population is expected
to expand to 9.35 billion by 2050, population growth will, in
general, drive increased demand for home care products at a
significant rate (Kerin, et al., 2011, p. 61). This population
increase will positively affect general home care product sales
both within the U.S. and in many other nations outside the U.S.
(Gupta, 2007). For P&G specifically, increased sales will be a
direct reflection of the changing dynamics of world trade and
global consumerism in the home care industry (Kerin, et al., pp.

138-141).
Population growth will also drive increased demand for organic,
eco-friendly and green products within the home care industry.
As it is, many consumers are currently using eco-friendly
laundry detergents and additives (Shannon, 2008). The eco-
sustainability movement in home care products is now deeply
entrenched and P&G has tapped into this market by extending
product lines to meet the preferences of eco-sensitive
consumers (P&G, 2010; Kerin, et al., 2011, p. 190). In
addition, organic consumers will likely increase as Generation
Y becomes a larger spending force in these categories.
Upcoming generations such as Generation Y have an undeniable
passion for the environment; in addition, Generation Y already
has considerable spending influence over their parents’ income
(Kerin, et al., 2011, p. 63).
Competitor Analysis(Mr. Green Jeans)
The worldwide fabric care market represents about $48.5 billion
dollars as of 2010 (Global Industry Analysts, 2008,
Introduction). Procter and Gamble (P&G) has an approximate
30% worldwide market share with about 250 brands in six main
categories (Trefis Team, 2011, p. 1). The U. S. market share
represents about $5 billion as of 2007. Procter and Gamble has
an approximate 56% share in the U.S. market (De Guzman,
2007).
Competitors to Procter and Gamble (30%) specifically in the
worldwide fabric care market share include Unilever (16%),
Colgate-Palmolive (2.7% and sells detergents to Phoenix
Brands), Henkel (6%), Oxi-Clean, Phoenix Brands, private
labels and domestic brands, and consumer-designed alternatives
(Trefis Team, 2011). A more intricate look at the competitive
field reveals only one main competitor in the dryer sheet
portion of the fabric and home care market – the Purex
Complete 3-in-1 laundry dryer sheet made by Henkel. By
combining “detergent and fabric softener for the washer with a
fabric softener sheet for the dryer,” Purex Complete boasted

over $100 million in sales from 2009-2010 (Neff, 2010).
Although many other home care companies have responded to
consumer environmental sustainability concerns with a variety
of “green products” (Shannon, 2008) – from its eco-friendly
packaging, to a 100% natural composition that completely
dissolves – there is presently no other dryer sheet on the market
that displays the environmental benefits of the Downy Magic!
dryer sheet. Also, although organic and “green” fabric care
products may have once proved to be more expensive than their
traditional counterparts, eco-friendly fabric care products are
now not only comparable in price, but also in effectiveness
(Shannon, 2008).
Another major disadvantage competitors face is that of
consumer name-brand recognition (Kerin, et al., 2011). In
addition, brand-name loyal consumers who have thus far
experienced consistently superior products from P&G’s Downy
product line represent a large number of potential consumers in
the dryer sheet portion of the fabric and home care market
(Kerin, et al., 2011, pp. 11, 30, 105-106; P&G, 2010). Thus,
generic products, private labels, and other less well-known
product brands will find it difficult to compete with P&G’s
already established and successful name-brand products (P&G,
2010). For these combined reasons, for the past 15 years P&G
has produced more successful new products than its top
competitors combined (P&G, 2010, p. 12).
Company Analysis (Captain Kangaroo)
Providing leadership brands since 1837, Procter and Gamble is
known for its highly experienced management, staff, global
leadership council, and board of directors (P&G, 2010). Over
these 174 years, Procter and Gamble’s emphasis on quality
leadership has resulted in an overall extensive understanding of
sustainability, advanced accounting techniques, efficiency,
inventory valuation, and productivity. In this way, P&G is able
to supplement its growth by minimizing general production and
operating expenses (P&G, 2010).
This steady decrease in the cost of goods sold compels P&G to

seek ever-greater ingenuity, technological innovation, and
environmental sustainability. Thus, P&G’s strategic goals and
choices not only grant P&G the opportunity to create future
prospects in the way of company growth but also in areas of
social responsibility (P&G, 2010, p. 3). Most recently, P&G
has been able to actively respond to an increasing consumer
demand for eco-friendly products, operations, and services
(P&G, 2010, p. 3; Kerin, et al., 2011, p. 63).
Procter & Gamble’s already established and successful brand
name products account for over 90% of P&G profits (P&G,
2010). The success of these brand products has allowed for
102% of P&G’s 2010 net earnings to be made available for
factors such as shareholder equity and “discretionary
investment” (P&G, 2010, p. 46). For investors valuing P&G’s
stocks, increased earnings per share make stocks more attractive
to investors since growing dividend per share is thought to
signify that the company’s management can sustain P&G growth
(The Motley Fool, n.d.; Gitman, 2009, p. 14). For 54
consecutive years, P&G has increased shareholder dividends by
approximately 9.5% annually (P&G, 2010, p. 78). Meanwhile,
free cash flow and increases in outside investment allow P&G to
devote funds to new innovations such as the soon-to-be-
launched organic, dissolvable Downy Magic! dryer sheet
(Kerin, et al., 2011, p. 31; P&G, 2010).
As it stands, the fabric and home care segment of P&G makes
up approximately 30% of the global market share, 28% of P&G
net sales, and 30% of P&G net earnings (P&G, 2010, pp. 34-
35). P&G is able to sustain growth and develop future growth
by increasing sales and consumer base. P&G does so by
actively engaging in market development, product development,
diversification, and market penetration (Kerin, et al., 2011, p.
33). Specifically:
· Market Development – From Africa to India, China, Mexico,
and beyond, P&G continues to expand its business into new
markets worldwide (P&G, 2010, p. 33). P&G’s disaster relief
programs and partnerships with local education and health

organizations around the globe not only help improve lives but
also help facilitate P&G’s presence and brand names in new
geographies. P&G currently sells products in more than 180
countries and 34% of P&G’s 2010 net sales are the direct result
of global operations (P&G, 2010, pp. 35-37 & 57).
· Product Development – By using innovative technology and
responding to market research and consumer demands, P&G is
able to successfully market and sell new products in existing
markets (P&G, 2010). Advancing the positive experience
consumers have with existing brands also lends to brand-name
loyalty (Kerin, et al., 2011, pp. 11, 105-106) and, thereby,
increased earnings (P&G, 2010). Conducting over 20,000
research studies in nearly 100 countries per year, P&G is able to
boast of enhanced product performance and consumer value
(P&G, 2010). For 15 years, P&G has annually produced more
successful new products than its top competitors combined
(P&G, 2010, p. 12).
· Diversification – Introducing and selling new products in new
markets around the world helps drive P&G’s profit growth.
P&G is able to successfully develop such a strategy for brands
via market research that helps pinpoint consumer needs in a
given region. For example, to meet the needs of the 80% of
fabric care consumers that wash laundry by hand in India, P&G
launched Tide Naturals, a mild detergent in the low price range
that is gentle on the hands, containing a unique scent and
natural oils adapted to the Indian consumer’s favorability (P&G,
2010, p. 16). Since its introduction in 2009, the product has
been made available in over 600,000 stores in India (P&G,
2010, p. 16).
· Market Penetration – Through improved promotion and
distribution strategies, P&G is able to increase sales of existing
brand name products in existing markets. Despite global
macroeconomic recessionary trends, between 2009-2010
continued operations increased P&G’s net sales by 3% and
increased sales by 5% in the fabric and home care segment
(P&G, 2010, pp. 35 & 51).

Customer Analysis (Dancing Bear)
In terms of customer analysis, this section will describe (1) the
consumer characteristics of those expected to purchase Downy
Magic! dissolvable dryer sheets and (2) environmental and
health concerns regarding the product today:
Consumer Characteristics.
In terms of demographics in U.S. markets, consumers
representing a diverse socioeconomic range and broad
geographic locations purchase fabric care products. Downy
Magic! will be purchased mainly by households with a high-
school education or higher and whose income averages $55,974
annually (U.S. Census Bureau, 2009). The households
purchasing dryer sheets generally consist of two to four people.
Households containing more than the national average of 2.6
people purchase dryer sheets more often (U.S. Census Bureau,
2009). Married women with children will represent the largest
consumer share. Though women are the majority buyers of
dryer sheets, both married and single men will sustain a sizeable
portion of the market (U.S. Census Bureau, 2009).
Downy Magic! dissolvable dryer sheets offer a faster and
simpler laundry experience. Its users will range from the
environmentally savvy consumer concerned with chemical use
and effects on the environment to those searching for a fast,
easy-to-use solution to issues involving laundry softening,
wrinkle-resistance, static control, and fabric freshening.
Affordable pricing will also allow for a broader range of
consumers. Potential buyers range from 23 to 58 years of age
and are scattered around the USA, but tend to be more abundant
in colder climates where fabrics are more likely to be dried
using electronic heat dryers (U.S. Census Bureau, 2009).
In addition, although P&G’s marketing intent will first take
advantage of dryer sheet consumers in U.S. markets, potential
consumers might later be found in existing non-US markets.
Such markets may include developing countries where
"ecological" and/or "organic” ingredients are popularly used in
place of chemicals (Milmo, 2006, p. 24); in markets displaying

increased environmental awareness (Gupta, 2007); and where
heat-drying mechanisms are becoming more prevalent (Neff,
2010). This is to be discussed in greater detail under P&G’s
“Market-Product Focus” section to follow.
Environmental and Health Concerns.
Environmentally conscious consumers are concerned with the
impacts humans are having on the environment in regards to
sustainability and preservation. Additionally, the next up-
coming generation to impact spending habits worldwide is
Generation Y; a generation that has a real passion for the
environment (Kerin, et al., 2011, p. 63). The Downy Magic!
dryer sheet leaves no environmental debris due to its ability to
completely dissolve in the laundry drying cycle. The use of low
environmental impact packaging made with 100%
recyclable/compostable packaging and 35% post-consumer
waste will also add to the appeal of environmental protection,
and fit well with Procter & Gamble’s social responsibility goals
in waste reduction and environmental sustainability.
The consumer’s appeal has trended toward natural products as
shown in P&G’s 3% growth in organic products (P&G, 2010)
and will be fulfilled by using chemical-free anti-cling
techniques to control buildup of electric potential – the cause of
static electricity. The Downy Magic! dryer sheet will also
augment the chemical-sensitive consumer’s appeal for chemical-
free products by replacing highly allergenic fragrances,
chemicals, and petroleum products with natural oils from fruit
and nut extracts. This will also expand into the market of fabric
care for young children by satisfying the need for a chemical-
free product. As the dryer sheet avoids the use of petroleum-
based products, it will also allow flame-retardant fabrics to
retain their fire protection capabilities, allowing for use on
children’s clothing and military uniforms, also greatly
expanding the consumer base. Using natural products to control
static, soften material, encourage wrinkle resistance, and add
fragrance for fabric freshness will allow Downy Magic! to be
extremely competitive in pricing while dominating the dryer

sheet area in the fabric and home care market with additional
features desirable to consumers.
Market-Product Focus
This section of P&G’s five-year marketing plan explains P&G’s
marketing intent for its Downy Magic! product line. These
objectives are detailed in the areas of marketing objectives,
product objectives, target markets, points of difference, and
positioning below:
Marketing Objectives (Captain Kangaroo)
Current Markets.
In promoting the Downy Magic! line, during the first five years
P&G will focus its aggressive marketing and promotion
programs to target U.S. consumers and current U.S. retail
distribution modalities. This direct focus will help minimize
the possibility of profit loss in the event of new-product failure
and also assist in maximizing distribution efficiency (Kerin,
Hartley, & Rudelius, 2011, pp. 234-256). A U.S. market focus
will also help P&G to elicit the proper consumer response to the
new product line for maximization of U.S. market share prior to
competitor attempts to launch similar products (Kerin, et al.,
2011, pp. 235-241).
P&G will also utilize the newly launched P&G eStore to grow
its online shopping markets. In this fashion, P&G is able to
utilize its own warehouse(s) as distribution channels, offering
lower prices with “direct-to-consumer sales” and minimal
shipping costs that range between $0-$5 (Silverstein, 2010, para
4). The P&G e-commerce store also offers consumer amenities
aside from lower prices: These conveniences include tools that
recommend products that the shopper may be interested in based
on consumer purchasing patterns (Silverstein, 2010);
customized applications for assistance in product selection;
integrations with social media websites; and an upcoming
mobile phone app that will allow consumers to explore P&G
product information and make purchases using mobile phones
(Wauters, 2010).
E-commerce opportunities not only provide easy access for

consumers, but also expand selling and promotion opportunities
for P&G. Perhaps more importantly, features offered on P&G’s
eStore website give P&G direct access to consumer purchasing
patterns and consumer product surveys and ratings (The Procter
and Gamble Company, 2011). This provides insight into which
product categories consumers value, like, want, and need
(Silverstein, 2010) – a priceless tool during P&G’s Downy
Magic! launch. In order that the benefits of the site may expand
to P&G distribution partners in a similar way, P&G also plans
to communicate with distributors all research findings gained
from eStore consumer purchases (Wauters, 2010).
Prospective Markets.
By the end of year five P&G will utilize its ongoing
buyer/supplier relationships with existing retailers around the
globe (PGSupplier, 2009). For example, Brazil, Russia, India,
and China (BRIC) are dynamic markets that make up over 36%
of the world’s population and are notably increasing in middle
class consumer purchasing power (Fijol, 2009). Expansive P&G
penetrated markets such as these will provide great opportunity
with respect to potential consumer base for the Downy Magic!
dryer sheet line (P&G, 2010; PGSupplier, 2009). As previously
stated, from the introduction of the Downy Magic! eco-friendly,
dissolvable dryer sheet, P&G expects an increase in general
home care product sales from non-US developing markets where
"ecological" and/or "organic” ingredients are popularly used in
place of chemicals (Milmo, 2006, p. 24); in markets displaying
increased environmental awareness (Gupta, 2007); and where
heat drying mechanisms have become more prevalent (Neff,
2010).
Being that more developed locations such as Western Europe
and Canada also boast of advanced laundry technologies and
environmental awareness, P&G will expand its Downy Magic!
line using existing distribution channels (e.g. mass
merchandisers, grocery stores, drug stores and pharmacies,
neighborhood stores, department stores, etc.) in more developed
non-US areas as well (Neff, 2010).

Additionally, P&G’s products are offered within over 180
nations, with on-the-ground operations in excess of 80 countries
(P&G, 2010, p. 33); P&G expects that its e-commerce / online
shopping center will have been expanded into locations outside
of the U.S. by year five (The Procter and Gamble Company,
2011). E-commerce and internet users in the developing
countries of Argentina, Chile, Costa Rica, Colombia, and Brazil
are said to be key for organizations looking to expand internet-
based operations (GoECart, 2011).
Product Objective (Bunny Rabbit)
As previously stated, P&G’s five-year marketing goals place a
unique focus on re-engineering and marketing a new line of
Downy dissolvable dryer sheets. P&G’s long-term objective is
to apply environmentally-sensitive principles in new-product
development strategies; and Downy Magic! dissolvable dryer
sheets help achieve this goal. P&G’s distribution channels are
firmly established in the market place and include retail and
grocery chain outlets worldwide (P&G, 2010). Further,
· Procter & Gamble is the world leader in the fabric and home
care market (P&G, 2010) and brand name equity provides P&G
the leverage to entice current distribution channels to carry its
new line of dissolvable dryer sheets, thereby, organically
increasing revenue (Kerin, et al., 2011).
· P&G’s marketing program aims to increase consumer
awareness within the target market by 30 percent during the
first year of product market introduction.
· Communicating and advertising the “go green commitment” as
an integral part of P&G’s strategic focus amongst the United
States population demonstrates P&G’s go green decree and
helps create additional consumer sensitivity to social
responsibility (P&G, 2010).
· P&G expects to increase net sales by 6% per year during the
next five years, with a net sales projection totaling 100/7 billion
by 2017. During this same period, the fabric and home care
segment is projected to add over $28,820 million in net sales
(based on 12% growth), inclusive of the Downy Magic! product

introduction. P&G projects an estimated $16,831 million of this
growth being attributable to Downy Magic! over this five-year
period.
· P&G expects to continue to test market new product concepts
using the Downy Magic! dryer sheet line. New potential
products may be brought to market in the growth and maturity
stage of the product’s life cycle – projected to be year 3 and 4
for the Downy Magic! product (Kerin, et al., 2011, pp. 234-
239). Product modifications (Kerin, et al., 2011, pp. 242-243)
might include imprinting cartoon characters and/or various
college mascots on dryer sheets.
Target Markets (Mr. Moose)
The primary target market for Downy Magic! includes mothers
whose households consists of two to four people and who live in
one of the top ten environmentally conscious states (Wingfield
& Marcus, 2007). This primary target market for Downy
Magic! has been determined based on both demographic and
psychographic market segmentation. A secondary market based
on behavioral market segmentation will also be targeted.
Market research has been used to determine the best
demographic region (household size); psychographic segment
(lifestyle); and behavioral marketing segment (product features)
(Kerin, et al., 2011, p. 193). Each of these categories has been
evaluated based on market size, expected growth and cost of
reaching the segment.
In demographic terms, the main market segment to target will
be households with two to four people. The national average of
people per household is 2.6 people (U.S. Census Bureau, 2009).
Households consisting of more than 2.6 people tend to purchase
more dryer sheets than those with fewer than 2.6 people.
Within the demographic market of household size, another
smaller group of individuals exists who are environmentally
savvy and are concerned with environmental concerns, health
concerns, and chemical usage in household products. Target
marketing focused on this “green” consumer market segment
will be accomplished by using data showing which areas within

the country tend to be most environmentally conscious, such as
the top 10 “green states” within the United States shown in
Figure 1 below. As data and major indicators change, with
green-related policy activity on the rise (Lombardi, 2011), P&G
research teams will gain from similar, regularly updated
secondary U.S. data (Kerin et al., 2011, p. 167).
Top 10 Green States in the U.S.
Rank
State
1
Vermont
2
Oregon
3
Washington
4
Hawaii
5
Maryland
6
Connecticut
7
New Jersey
8
Rhode Island
9
New York
10
Arizona
Figure 4. Top 10 Green States in the U.S. Adapted from
“America’s Greenest States,” by Wingfield & Marcus as cited in
Forbes website:
http://www.forbes.com/2007/10/16/environment-energy-
vermont-biz-beltway-cx_bw_mm_1017greenstates.html

Psychographic market segmentation for this product indicates
the need to target market the main purchasers of dryer sheets –
women with children. Buyers ranging from the age of 23 to 58
years of age are scattered throughout the 10 state regions
indicated by the demographic marketing (U.S. Census Bureau,
2009). However, the psychographic segmentation can be further
divided into a smaller category, based on further market
research. A group of women labeled “alpha moms” has come to
the attention of marketers nationwide (Palmer, 2007). This
group includes mothers who are inventive, technologically
savvy, rely on husbands who are hands-on, often work and have
flexible work schedules and are often environmentally
conscious – in short, mothers who effectively manage both
career and motherhood (Palmer, 2007). Marketing to this group
of mothers will be a key component of the target market.
Upon examining behavioral segmentation, P&G also discovers
that a secondary target market exists. Behavioral segmentation,
including determining what features are important to different
consumers (Kerin, et al., 2011, p. 193), leads P&G to market
Downy Magic! to those who utilize fire-resistant fabrics, such
as firefighters, the military, flight nurses, industrial workers,
amongst other professionals. The fire-retardant clothing needs
of these individuals lead to a consumer laundry challenge of
being unable to use dryer sheets to reduce static cling and help
deodorize uniforms. Specifically, laundry additives can create a
coating on fabrics that reduces the flame-resistant properties of
the fabric (Sullivan Uniforms, n.d.). Therefore, this market
segment would be open to the Downy Magic! product.
Each of these target markets would be simple and cost-effective
to target. There is increased potential for profit within each of
these target markets, and each group of buyers within each
target market has similar needs that can be targeted using the
Downy Magic! product.
Points of Difference (Dancing Bear)
The unique characteristics that set Downy Magic! apart from its
competitors, or “points of difference,” fall into five categories:

· Unique concept – Downy Magic! is the first dissolvable dryer
sheet that completely eradicates waste. The elimination of
waste adds to its convenience and lessens the environmental
impact, building upon the Environmental Protection Agency’s
stated benefits of reduction (U. S. Environmental Protection
Agency, 2011).
· All natural and eco-friendly ingredients – Inspired by nature,
Downy Magic! uses only natural oils to incorporate fragrance
into its fabric softener sheets. A combination of baking soda
and vegetable-derived agents are used to incorporate softness
into clothing. Static cling is also reduced using natural vinegar
that leaves no residual odor (Halverson, n.d.; Lion, n.d.;
Alleman, 2006). By using natural oils for fragrance, and by
also offering an alternative fragrance-free product, Downy
Magic! benefits the 30.5 percent of the U.S. population with
chemical fragrance sensitivities (Caress & Steinemann, 2009,
pp. 46-50).
· Safe – By avoiding the use of harsh chemicals, Downy Magic!
does not leave behind toxic residue, nor does it reduce flame
resistance on firefighter protective clothing, military uniforms
or children’s sleepwear. When tested, all competitors failed in
this category by neglecting to omit “at least one chemical
classified as toxic or hazardous” (Business News, 2010, p. 327).
· Premium “green” packaging – The use of simply designed
packaging that incorporates vegetable dyes helps communicate
the natural purity of the overall product. Downy Magic! is
packaged in 35 percent post-consumer waste packaging that is
also completely recyclable/compostable. This coincides with
Procter and Gamble’s commitment, along with other members of
the Grocery Manufacturers Association, to “reduce four billion
pounds of packaging by 2020” (Grocery Manufacturers
Association, 2011, p. 2).
· Multibranding strategy – As market leaders in the fabric care
industry, and with excellent shelf positioning in retail and
grocery stores, P&G is able to use strategies that lead to the
success of Downy and extending the product line. This product

line extension allows the transfer of the consumers’ favorable
attitude toward existing product (Kerin, et al., 2011, p. 249).
Positioning (Mr. Green Jeans)
Downy Magic! dissolvable dryer sheets are an opportunity to
mainstream a niche market product. Mainstream consumers will
be drawn by the brand strength, affordability, and convenience
of P&G’s Downy Magic!, while the niche eco-friendly and
health-aware consumers will find the 100% natural and carbon-
neutral product irresistible to solving laundry needs. Routine
Downy brand-name consumers will take pride in the disposable
features of Downy Magic! dryer sheets and the comfort that a
brand name backed by Procter & Gamble implies (Kerin, et al.,
2011, pp. 142 & 248). Designed to be carbon-neutral, Downy
Magic! non-toxic, dissolvable dryer sheets will also satisfy the
niche of demanding health-conscious and eco-sensitive
consumers by eliminating a generally toxic, household
hazardous waste byproduct (Adams, 2004) and replacing it with
an 100% natural, biodegradable product (Holistic Interior
Designs, n.d.).
Being a global brand that markets the same name in several
countries (Kerin, et al., 2011), Procter and Gamble Downy is a
market leader with excellent shelf positioning in retail and
grocery stores (P&G, 2010). In addition, as U.S. consumers
increasingly equate organic options with well-being, the overall
trend amongst consumers is progressively toward products
composed of natural ingredients (Milmo, 2006, p. 24). The
following positioning statement for Downy Magic!’s U.S.
markets will help synchronize and align the efforts of P&G’s
internal and external marketing departments, research and
development teams, and/or advertising agencies over the next
five years (Kerin, et al., 2011, p. 203): For the price-savvy
consumer who desires a hassle-free, health-conscious, and
environmentally-sensitive laundry experience, Downy Magic! is
an affordably-priced dryer sheet that offers an organic, eco-
friendly solution to laundry issues involving fabric softening,
wrinkle-resistance, static control, and fabric freshening.

Marketing Program
Procter and Gamble’s (P&G) marketing program is detailed by
the 1) product, 2) price, 3) promotion, and 4) place marketing
mix activities below:
Product Strategy (Bunny Rabbit)
This section summarizes Downy Magic!’s unique product line,
quality, and packaging.
Unique Product Line.
Procter & Gamble’s (P&G) Downy Magic! is an adaptation or
extension of the Downy product line (Kerin, et al., 2011, p.
153), yet based upon new technology. Inspired by nature,
Downy Magic! uses only natural oils to incorporate fragrance
into its fabric softener sheets. In the first five years, the
dissolving dryer sheet will include existing Downy natural
scents: Lavender Serenity, Orchid Allure, Spice Blossom Dare,
Citrus Spice Glow, and Sage Jasmine Thrill (Downy, 2011).
The Downy Magic! product will also be available as an
alternative fragrance free product, Downy Magic! Free and
Sensitive (Downy, 2011). P&G will emphasize the same great
freshness and fabric softening that Downy is known to add to
clothing.
Unique Product Quality.
As aforementioned under “Points of Difference,” by avoiding
the use of harsh chemicals, Downy Magic! does not leave
behind toxic residue, nor does it reduce flame resistance in
clothing. Downy Magic! uses only natural oils to incorporate
fragrance into its dryer sheets. A combination of baking soda
and vegetable-derived agents are used to incorporate softness
into clothing. Static cling is also reduced using natural vinegar
that leaves no residual odor (Halverson, n.d.; Lion, n.d.;
Alleman, 2006).
Downy Magic!’s real marketing flair is that no other
disappearing/dissolving dryer sheet product is currently
available in the consumer market. The new product will
dissipate via the dryer sheet’s molecular formula reacting to the
heat exchange produced by the dryer. The magic of this product

is that it will appeal to consumers that share the same values in
using products that will lessen environmental impact. It will
burn deep in consumer’s hearts that using Downy Magic!
satisfies a basic need or desire while also helping to preserve
the environment for the sake of future generations. Nothing
within these dryer sheets will have a pollutant effect on the
environment.
Unique Packaging.
The use of simply-designed packaging that incorporates
vegetable dyes helps to communicate the overall natural purity
of the product. Downy Magic! is packaged in 25 percent post-
consumer waste packaging that is also 100 percent
recyclable/compostable.
The package itself incorporates a lithographic design of a dryer
sheet as displayed in figure 5 below. Because of the
lithographic design, when the package moves, the dryer sheet
disappears. The package shape is as a three dimensional
pyramid, designed to be able to be stacked one on the other in
retail outlet store shelves, end-caps, and aisle displays.
Therefore, the image in Figure 5 will be displayed
proportionately on each dimension. The particular fragrance is
displayed by a unique color and design to the upper right of the
word “Downy” seen in Figure 5. Printed inside the perforated
package closure are different magic tricks that parents can learn
to have fun with children (or other adults) while waiting for
laundry to dry.
Figure 5. Downy Magic! Packaging. This figure illustrates two
dimensions of Downy Magic!’s three-dimensional, lithographic,
pyramid packaging.

Price Strategy (Captain Kangaroo)
Using both the demand-oriented “skimming” and “odd-even”
pricing approaches (Kerin, et al., 2011, p. 264), over the next
five years P&G will price Downy Magic! at $4.99 in U.S.
dollars (USD) for a package of 10 dryer sheets. This list price
is approximately $.09 USD higher than Downy Magic!’s
previously identified leading competitor, Purex Complete 3-in-1
laundry sheets (drugstore.com, 2011; Amazon.com, 2011). In
comparison to P&G’s many other dryer sheet offerings, Downy
Magic! is priced approximately $0.45 USD higher (The Procter
& Gamble Company, 2011). However, a price above customary
market pricing – and slightly higher, yet closely comparable to
the leading competitor – is justified by Downy Magic!’s novel
performance, premium quality, and superior ability to satisfy
consumer’s environmental and health concerns (Kerin, et al.,
2011, pp. 263-269; OnlyGreen4Me, 2008).
Promotion Strategy (Dancing Bear)
Procter & Gamble’s key promotion programs for Downy Magic!
will feature point-of-purchase displays, free samples and cents-
off coupons.
Point of Purchase Display (POP).
The Point of Purchase Display (POP) feature for product display
will be located in retail stores in key high-traffic areas. The
clean, minimal design will allow maximum consumer attention
toward the product. The POP display will also provide storage
for the product in the high-traffic areas allowing for the
additional product placement in the fabric care aisle to
maximize exposure.
Samples.
Samples will be provided in two ways:
· Samples will be provided in key urban and suburban
metropolitan areas through Valpak. Valpak (2011) is a national
in-home direct mail marketing provider that allows the
opportunity to zero in on the target market. One sample will be

included and attached to a 35-cents off coupon encouraging trial
and repurchase.
· Samples will also be included in the P&GbrandSampler®
packages through the PGEveryday
Solution
s.com website (P&G, 2011b). This will be a 3-pack sample of
Downy Magic! that includes a 35-cent coupon.
Cents Off Coupons.
With 89 percent of consumers using coupons (Kerin et al,
2011), offering coupons in various forms will allow opportunity
to introduce the revolutionary Downy Magic! to the consumer
taking advantage of wide distribution through various sources.
Coupons initiating trial use and repeat use will be offered in the
following ways:
· In Sunday Newspaper Inserts. Downy Magic! will hold a front
page feature in the P&GbrandSaver® insert in Sunday papers.
This national distribution will include a 35-cents off coupon and
offer opportunity for a brief product introduction (P&G, 2011a).
· Valpak. This direct in-home marketing campaign will feature a
35-cent off coupon along with a free sample.
· In packaging. A coupon will be included on the inside
packaging to promote future use. This will be a larger 50-cents
off coupon encouraging continual repurchase.
· Text coupons. P&G will team with Target stores and include a

cents-off coupon to subscribers of the Target Mobile text
coupon program for use in Target stores nationwide (Target,
2010).
Figure 6. Downy Magic! Sunday Newspaper Insert includes a
35-cents off coupon and a brief product introduction.
Place/Distribution Strategy (Captain Kangaroo)
P&G manufactures and warehouses its consumer-packaged
goods and thereafter distributes, displays, promotes, and prices
its products using retail cooperative network relationships
(Gartner, 2002; Kerin, et al., 2011, p. 296). P&G products are
presently distributed in domestic and global markets via in-store
and non-store retail intermediaries (P&G, 2010; Kerin, et al.,
2011, pp. 313-320). Expanding from corner stores, to mega
supermarkets, to online retailers such as amazon.com (2011)
and drugstore.com (2011); each retailer plays a role in
successfully distributing P&G products into existing markets
(Kerin, et al., 2011, pp. 313-320).
With access to P&G’s web-based order management services,
retailers are able to promptly meet consumer demand for P&G
products (Cisco Systems, 2002). Smart-chip tracking
technology also helps ensure on-time product deliveries (Cisco
Systems, 2002). Such cooperative logistics assist P&G in
optimizing production response to consumer demand; allows for
retailers to stock increasingly differentiated P&G products; and

minimizes delivery and transport expenses for P&G and P&G
retailers (Gartner, 2002; Kerin, et al., 2011, p. 301).
Meanwhile, P&G also assumes direct-to-consumer wholesale
functions through its U.S., newly operating e-commerce store
(The Procter and Gamble Company, 2011; Kerin, et al., 2011, p.
328). With full-service manufacturing, warehousing, customer
service, promotion, and sales performed directly by P&G,
P&G’s eStore transactions require no distribution intermediary.
As aforementioned in the Marketing Objectives section above,
features offered on P&G’s eStore website give P&G direct
access to consumer purchasing patterns and consumer product
surveys and ratings (The Procter and Gamble Company, 2011).
This provides insight into which product categories consumers
value, like, want, and need (Silverstein, 2010). As P&G
communicates research findings gained from eStore consumer
purchases with distributors (Wauters, 2010), a shift to
increasing P&G eStore sales has the potential of further
improving not only P&G online distributions but also the
distribution efficiency of P&G retailers.
Financial Data and Projections (Mr. Green Jeans)
The following sections summarize the revenue and expense
effects of P&G’s marketing program described above. This
section will first review P&G’s past sales revenue and thereafter
delve into the revenue and expense projections of Downy
Magic! for the next five years. Afterward, the break-even

analysis chart displays an approximation of when the Downy
Magic! product will begin to make a profit.
Past Sales Revenue for P&G Fabric and Home Care Sector
Historically, P&G’s fabric and home care sector has
experienced solid growth from 2004-2010 with 7.87% averaged
growth in the past five years (P & G, 2010; P & G, 2009; P &
G, 2008; P & G, 2007; P & G, 2006; P & G, 2005; P & G,
2004). In the financial meltdown during 2009, growth
plummeted to negative 2.78%, but rebounded in 2010 to
positive growth. 2011 data is ongoing.
Figure 7. Procter & Gamble (P&G) fabric and home care net
sales from 2004-2010. This figure illustrates the yearly percent
in growth over the past 5 years. Adapted from P&G 2004-2010
annual reports.
Break-Even Analysis
The breakeven analysis chart in Figure 7 displays an
approximation of when (in terms of units sold per year) the
Downy Magic! product will no longer incur an operating loss
for P&G. The labeled breakeven point shows that, when Downy
Magic! is priced at $4.99 per box of 10 dryer sheets, operating
profit for the Downy Magic! product reaches exactly $0 when
P&G sells approximately 11,411,068 units of Downy Magic in
any given year. At the proposed price of $4.99, when cost of

goods sold and operating expenses are considered, all per-year
sales below this breakeven point do not earn profit for P&G,
while per-year sales above this breakeven point do earn profit
(Kerin, et al., 2011, pp. 273-274).
Figure 7. Downy Magic! Break-Even Analysis. This figure
illustrates the impact of Downy Magic! sales volume on P&G’s
Downy Magic! profits. The break-even point is where per-year
expenses associated with product production exactly meet per-
year revenue from sales.
To summarize, if annual Downy Magic! sales are greater than
approximately 11,411,068 units, P&G will make a profit from
the Downy Magic! product in that given year (Kerin, et al.,
2011, p. 274). All per-year revenue that is generated from
Downy Magic! sales before this point are only enough to go
toward P&G’s additional yearly expenses from investing in the
Downy Magic! project. The discussion on Downy Magic!’s five
year financial projections below further explains reasons the
Downy Magic! product will not be able to expand sales enough
to reach the breakeven point, and therefore not incur profit,
until year four (2015) and after.
Five Year Projections
Five year financial projections for Downy Magic! appear below.
These projections are based on 1) target households that are
earning over $50,000 in the U.S., being 57,754,627 households

as of 2009 (U.S. Census Bureau, 2009); 2) established rates of
growth in terms of penetration being 2.5% for Innovators,
13.5% for early adopters, and 34.0% for the early majority per
year directed to this customer base (Kerin, et al., 2011, p. 240);
and 3) repeat customer buying per year placed at 20%, 25%,
30%, 35%, and 40% respectively.
Operating profit is the measure of dollars remaining from
Downy Magic! sales once all costs and expenses have been paid
(excluding interest and taxes) (Gitman, 2009, p. 451). As
displayed in Figure 8 below, operating profit for Downy Magic!
is not achieved until year four (2015). This is due in part to
extensive research and development efforts, an aggressive ad
campaign, and an overwhelming number (approximately
25,000,000) of Downy Magic! product giveaways. At year four
(2015) P&G is projected to sell approximately 18,517,575 units
of Downy Magic! and thereby earn an operating profit of
$18,494,738 USD. In year five (2016) P&G is projected to sell
approximately 27,491,200 units of Downy Magic! and earn an
operating profit of $41,779,498.
Figure 8. Downy Magic! Five-year Financial Projections. This
figure illustrates that Downy Magic! begins to penetrate the
market enough (increases in per year product output or sales
enough) to begin incurring a profit for P&G at year four (2015).

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