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Launching Old Spice in Greece
- 1. Lauren Rossi, Emily Jaroszewski, Julie Diberardinis GROUP 9
- 2. Agenda • Background • Current Situation in the U.S. • Product Launch • Legal Differences • Cultural Differences • SWOT Analysis • Target Customers • Competition • Marketing Mix (4 P’s)
- 3. Background • Introduced in 1938 • Marketed as the brand for authentic and masculine men • Purchased by Procter and Gamble in 1990 – Began producing deodorant sticks and body washes • Expanded to U.K., Australia, South America • Main Advertising Strategies – Theme of masculinity – Humorous advertisements targeted towards men – “Smell like a man, man”
- 4. Current Situation in the U.S. • New Advertising Campaign in 2002 – 1997 sales-$98 million – 2002 sales-$143 million • Sales of Old Spice increased by 107% in 2010 – New viral marketing campaigns • Facebook, Twitter, Youtube • “Mr. Spice” – Isaiah Mustafa – http://www.youtube.com/watch?v=owGykVbfgUE • Some advertisements targeted towards women – "The man your man could smell like" • Cultural attitudes towards personal hygiene in the U.S.
- 5. Introduction of Old Spice into Greece • Civilians greatly value their history and ancestors – Spartans • Good fit with brand image – Masculinity • Nautical Themed Trademark – Geography • Males make up 67% of the population
- 6. Legal Differences • No significant non-tariff trade barriers • $2.4 billion worth of U.S. exports in 2008 – Strong trade relations • No tariff barriers for members of the European Union, but has a common customs tariff for non- members
- 7. Cultural Differences • Language (99% of the population speak Greek) • Strong cultural heritage – Male-dominated society – Man as the main decision maker • Resistance towards change – Finally adopted Euro in 2002
- 8. SWOT Analysis Strengths Weaknesses Experience working with social media Language barrier (labeling) channels (Facebook, Youtube) Low brand awareness Experience working globally Low priced products for price-sensitive consumers Nautical themed trademark appealing to Greek Heritage Opportunities Threats Large male population Strong cultural heritage and resistance Tourist population towards change Strong American presence (brand Common customs tariff for non- awareness) European Union members Consumer spending has increased- Many established competitors already in economic growth market (i.e. Unilever-strong market No significant non-tariff trade barriers for leader) U.S. exports-good trade relations Fluctuation in exchange rates (economy) Geographic location-surrounded by water; high global trade High literacy rate
- 9. Target Customers • 15+ year-old men – Men who want to be viewed as very masculine – Men who want to be appealing to women • Those who fit with brand image • Males are the main decision makers in Greece • Must appeal to their needs
- 10. Competition • Unilever-owned brands (35%) – Axe – Dove Men Care – Rexona • Procter and Gamble (24%)-Parent Company – Noxzema • Beiersdorf Hellas SA (14%) • Thierry Mugler=23,60 Euros ($32.89)
- 11. Product • Global Brand – Tourism accounts for 79% of GDP – Bilingual (English as a second language) • Low-end product • Basic features – Low price • Variety of scents • Labeling – Increasing sailboat logo – Change label names
- 12. Place • Cost-effective – Low price • Limited amount of middlemen – Merchant middlemen – Control – Local distributors and manufacturers – High traffic cities • Transfer of goods is highly accessible • Shipping • Steady demand • Labeling/packaging – Economies of scale • Procter and Gamble • Discount/Convenience Stores • Internet
- 13. Price • Low price – Greeks are very price sensitive • Market Pricing Policy • Penetration Pricing Policy • High acceptance rate • Fast rate of diffusion • Must keep production costs low to reduce effects of price escalation • Basic Features • Limit amount of middlemen • Price between 4-6.75 Euros.
- 14. Promotion • Integrated marketing communications strategy • Advertising campaign – television and print media • Sales promotions • Convey idea of masculinity within the brand – Appeal to “warrior” aspect of Greek history – psychological attributes
- 15. Questions?
Editor's Notes
- We have chosen this brand because of its sustainability throughout the past decades and its recent surge of popularity in the United States.
- Old Spice was first introduced to the market in 1938 by Shulton Company as a cologne and aftershave for men. The brand had a nautical theme and was marketed as the brand for authentic and masculine men throughout the decades. It was then purchased by Proctor and Gamble in 1990, in which they soon began to produce deodorant sticks, body washes, and scents under the original Old Spice name. A commercial ad from the 1970’s ended with the slogan “Girls like it, is there a better reason to like old spice?” Recent advertisements have gotten a lot of attention for their creative ways to appeal to men in a humorous way yet still contain a masculine message.
- The Old Spice brand has grown substantially within the past decade. In 2002, U.S. sales for the deodorant line alone reached $143 million compared to $98 million five years earlier. Recent advertisements created in 2010 have made sales sky rocket to even much higher levels. "The man your man could smell like" is the sales driving slogan that is not only aimed towards the female population, but also provokes men's desire to appeal to women. Its recent awareness is mainly due to television advertisements and the face of Mustafa Isaiah, the lead in many of their newer commercials. However, this brand is also marketed through social networks such as Facebook and Twitter thus reaching a major amount of the population. During the summer of 2011, it launched the fastest growing online viral video campaign (“Mr. Spice”) reaching 6.7 million views after only 24 hours. This Youtube blitz led to a resurgence of the brand and led to a 107% sales increase within one month in 2010. Success strongly stems from the cultural attitudes towards personal hygiene. In fact, 89 percent of people from the U.S. believe that everyone should use a deodorant.
- Civilians greatly value their history and ancestors.Ancient Greeks, such as Spartans, were known for their intense masculinity and warrior personas. Although modern day gender roles in Greece have somewhat leveled out, their past ideals are still deeply rooted in their society. We believe that marketing Old Spice deodorant to the men of Greece as a masculine brand would prove to be highly profitable based on their cultural values. Additionally, The Old Spice brand has a nautical theme with sailing ships as their trademark. Since Greece is mainly surrounded by water we believe that this brand will be easily relatable to the Greek culture. Males make up 67 percent of the population (large potential market)
- According to the U.S. Department of State, there are no significant non-tariff trade barriers regarding U.S. exports. In fact, there were $2.4 billion worth of U.S. exports in 2008. The U.S. and Greece have a strong history of positive trade relations. These are all opportunities because Greeks value established personal and business relationships. Greece does not have any tariff barriers for members of the European Union, but has a common customs tariff for non-members. Many of the tariffs the Greeks impose on imports are due to infant industries trying to expand. This presents a small threat that will effect our pricing strategies and cost of goods sold. In addition, broadcasting is not regulated and many television stations are not licensed. There is a lot of flexibility regarding promotions and advertising.
- Greeks are becoming busier in their daily lives. This reflects the desire for more health care and personal hygiene. According to Euromonitor International, because of this new trend, deodorants will soon be known as a main commodity in Greece. The Greek language is spoken by 99 percent of the population, indicating the strong cultural heritage still present today. According to Kwintessential, a recent study found that “Greek surpassed the ethnic satisfaction of every other European nation”. Greek civilians greatly value their history and past culture. This will help present our image to this new market. The Greek are also resistant towards change. This presents a threat that we cannot control. For example, after a long struggle, they finally accepted to change their former currency, the Drachma, to the Euro in 2002.
- Males make up 67 percent of population
- Although this age segment is very wide, the Old Spice brand can be easily translated into a product that is necessary for younger men and older men because its positioning is based on the idea of masculinity, which is a concept that does not change with age. In the U.S., however, some of the Old Spice advertisements are targeted towards women to get their man to buy the product. This would not work as effectively in Greece because the husband is the decision-maker in the buying process. Greeks value hierarchy and depend on the man of the household to be the “backbone” of the family unit.
- There are several large competitors who have already established their brands in Greece. Unilever was the leader in deodorants in Greece with a value share reaching 35% in 2010 by marketing brands such as Axe and Dove. The second player in value share ranking was Procter & Gamble, our parent company, with 24%, much of which was claimed by Noxzema. The third player for 2010 was Beiersdorf with Nivea Deodorant lines, with a 14% share of value sales. ($5-8)Axe ($6-8)Dove ($4-8)Rexona ($4-8)BeiersdorfHallas SA- Premium brand-expensive
- Although Greek is the national language in Greece, we feel that it is important to keep the name of “Old Spice” on the labels of all the deodorant products and market it as a global brand. Although 99% of Greeks speak the Greek language, nearly half of the population is bilingual in languages such as English, making it easier for some of the Greek population to recognize the Old Spice brand. Many tourists live in or travel to Greece, who will better be able to recognize the Old Spice name as well. In the U.S., Old Spice deodorant is sold as a low end product that men of all ages can easily afford. The prices for Old Spice deodorant typically ranges from $2.00-5.00 depending on the retailer it is sold through, as well as any in store promotions or manufacturer coupons. High debt in Greece, price sensitive. Quality across competition is constant. Differentiate with price and brand image. Although we believe it is important to keep the brand name of “Old Spice” the same when introduced into Greece, we believe it is important to change the names of some of the different scents of deodorant to cater more to the Greek heritage and slang. For example, some of the various scents of deodorants sold in the United States have names such as “Playmaker,” “Smooth Blast,” and “Swagger.” Currently the American Old Spice labels feature a very small picture of the Old Spice logo which is a picture of a sailboat. Since Greece is an island and water is a large part of many Greeks’ lives, we believe increasing the size of the sailboat logo on the label will create more brand attractiveness. Introduce only deodorant product, possible expansion to other products under brand name (test market scents with male and female population)-change labeling to Greek. U.S. sells 20 different kinds of deodorant, we want to start with something smaller, such as 5 different scents first. Don’t want to change entire line, but will make some small adjustments to adapt to Greek Culture.
- For our distribution strategy, we want our channels to be cost-effective in order to offset the lower prices being offered for our product. In order to do this, we don’t want to use a lot of middlemen. This short channel will allow us to gain control of the channel and lower costs. The use of local distributors and manufacturers will lower the overall costs. These distribution channels should be located in high traffic cities, where the transfer of goods is highly accessible. The standard product shipped to Greece can be altered slightly (labeling, packaging) by the local middlemen. This will standardize part of the manufacturing process and lead to economies of scale for products being manufactured in the U.S. This will also allow the middlemen in Greece to be in close contact with the market and cover a lot of area. To decrease costs further, we can use the current distributors of our parent company, Procter and Gamble, who already have standard distribution channels used for other products in the personal hygiene product category. This could lead to an opportunity to negotiate lower prices because of an established business relationship and increased purchasing power. Specifically we might want to use merchant middlemen because the Old Spice brand is already a powerful brand globally. This will transfer the risk to the middlemen, but still motivate them to sell to the retailers at a profit. Because consumers in Greece are price-sensitive due to the large amount of national debt acquired in past years, Old Spice will be most successful being sold in large retailers and discount stores such as Jumbo, the “Wal-mart of Greece”. Shipping-cost effective-high available due to geographic location. Steady demand-manage supply chain. Internet-increasing use in Greece, cut costs (procurement)-social media
- Setting a low price for Old Spice deodorant will be key because Greeks are very price sensitive due to the country’s high debt and current recession. We will be using a combination of a market pricing policy and penetration pricing in order to set a final price. A market pricing policy will be used to assess how our competitors’ personal hygiene and deodorant products are priced in Greece. This will then allow us to price our product lower in order to increase market share quickly. Because we want to keep our price low, it is essential to watch out for the effects of price escalation due to exporting. We will need to overcome the European Union tariffs as well as the administrative costs such as export and import licenses. We will also need to look at the exchange rate fluctuations of the euro and the dollar. Currently, 1 Euro equals 1.346 dollars meaning that the dollar is weaker compared to the euro. This means that the original price will be elevated even higher because of this exchange rate.Additional features such as labeling alterations will have to be done in Greece or another country in the European Union in order to lower the tariffs. Our distribution strategy will be created with a limited number of middlemen in order to decrease costs and achieve a competitive price. We will price our product between 4-6.75 euros. This will be lower than our competition during the introduction stage. Gradually we will be able to increase our price.
- Citizens of Greece mainly rely on television advertising for their source of information. According to BBC News, 78 percent of the people get their news from local television stations. With the increasing globalization of technology and the adoption of the Internet, we need to be cautious and adapt to potential changes. Similarly to the advertisements in the U.S., we will use a comedic story line emphasizing our brand’s image.