MKT 306 Strategic Marketing: P&G's Ariel - Strategy & Analysis

This report provides a comprehensive analysis of Procter & Gamble's (P&G) marketing strategy for its Ariel detergent product. It begins with an in-depth examination of the external and internal environments using PESTLE and SWOT analyses, respectively. The report then evaluates Ariel's Unique Selling Proposition (USP) and the differentiation strategies employed by P&G to achieve growth. Promotional strategies and the segmentation, targeting, and positioning (STP) approaches used by the company are discussed, highlighting the focus on the household sector. Finally, the report recommends objectives and goals for Ariel, along with corresponding marketing mix strategies to enhance the product's market performance. The analysis considers factors such as competitive pressures, economic conditions, and technological advancements impacting the FMCG market.

Marketing strategy

Marketing strategy
Executive summary
Procter and Gamble (P&G) is one of the largest consumer products and detergent company. The
discussion in this paper will be on the Ariel product which is one of the popular products of
P&G. in the first phase of the report the emphasis on the in-depth analysis in which PESTLE
AND SWOT ANALYSIS is considered. The next phase of the report evaluates the USP concept
in relation to the Ariel product. The differentiation advantage is considered by the company so
that growth can be achieved. The next part highlights the strategies considered by the company
to promote the products. The next part of the paper elaborate about the different segments that
P&G has targeted and it is observed that the company has mainly focused on targeting people
who are engaged in the household sector. The last phase of the paper provides recommendation
about objectives and goals of the company and the strategies related to marketing mix.
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Marketing strategy
Table of Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................2
Task 1..........................................................................................................................................................2
External and internal environment...............................................................................................................2
PESTLE ANALYSIS OF P&G...............................................................................................................2
SWOT ANALYSIS.................................................................................................................................5
Organizations competitive edge (USP)....................................................................................................6
Evaluation of the current strategy............................................................................................................7
Pricing strategy....................................................................................................................................7
Promotional strategy............................................................................................................................7
Task 2..........................................................................................................................................................8
Segmentation targeting and positioning.......................................................................................................8
Segmentation and targeting for P & G:....................................................................................................8
Positioning strategy...............................................................................................................................10
Recommended objectives and goals......................................................................................................10
Objectives from the product..................................................................................................................10
SMART goals........................................................................................................................................11
Recommended strategies...........................................................................................................................11
Conclusion.................................................................................................................................................12
References.................................................................................................................................................13
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Marketing strategy
Introduction
In this paper, the discussion will be made on Procter and Gamble (P&G). The company is one of
the largest American multinational consumer goods company. Headquarter of the company is in
Downtown Cinicinnat, Ohio, United States. Procter and Gamble was founded on 1837 by British
American William Procter and Irish American James Gamble (P&G,2019). There are many
subsidiaries of the company such as Gillette, Braun and the art of shaving. The founders of the
company were William Procter and James Gamble. The company is also involved in marketing
of the detergent products such as Ariel and Tide. Ariel and Tide are the popular detergent
products offered by Procter and gamble in the market. Ariel is known as the laundry detergent
which is launched in the market (P&G,2019).
Task 1
External and internal environment
PESTLE ANALYSIS OF P&G Political factor
It has been observed that P&G political action committee is considered as the voluntary,
nonpartisan political action committee. The company has to comply with the US Federal and
state laws that consist of Lobbying Disclosure Act and Honest leadership and Open government
Act. According to this act, the company has to report on the Lobbying activities and also with the
certification with the congressional gift rules (P&G,2019). In 2017, the company reported the
US lobbying expenditure of $3.3 Million in the Lobbying disclosure reports and it is observed
that the reports are filed with the clerk of the U.S house of representative in the U.S states. In
2015-2016, P&G reported the lobbying activity approximately of € 6, 00,000 to € 7, 00,000 on
the European Union level under the guidelines that are given by the EU Commission and also by
European Parliament. The company has to consider the legislative and public policy issues that
affect the bottom line and also the long term business interests (P&G,2019).
 Economic factor
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Marketing strategy
The market environment in which the company operates is highly competitive. The major effect
faced by the company relates with the European free trade policy that also adversely affect the
market share of the company. The recent economic recession has changed the pattern of buying
of the customers and this has enhanced the pressure on the FMCG companies to reduce the
prices of the products (P&G,2019). The Grand view research report reveals that in UK, the
customers have the tendency to enhance the market share in relation to the detergent products
such as Ariel. The global economic growth in 2017 was estimated at 2.7% and the economic
growth rate remained stable at 2%. Also, with the onset of the digital revolution, the online
retailing as been prospered and it focuses on the need for the P&G Company to invest in online
retailing and advertising (Cavusgil et al., 2018).
 Social factor
It has been observed that the customer base of the company belong from young and middle aged
people. The customers are concerned about the ingredients of the products and they emphasize
on purchasing the products with high quality. The company considers the sponsored program
that attracts the attention of the target audience and also marketing and advertisement are used to
generate brand loyalty over the other brands (McGuigan, 2015). In 2010, it is examined that
company has spent approximately $9.3 Billion on marketing of the products so that it could be
easy to compete with the competitors present in the market. P&G also emphasizes on
considering the different cultures, languages and ethnicity that has also resulted in the high
market share and also in the increase in the demand of the products in developing countries
(P&G,2019).
 Technological factor
P&G has considered the latest technologies to invent new products and also to boost the
production. This has also enhanced the market share in 1950’s. It is seen that the company has
set the record of spending more than $2 Million dollars on the research and development sector
and also the focus is given on minimizing the cost of the products with efficient technology. The
company focuses on considering the latest technologies so that it could be easy to boost the
innovative approach in the market (P&G,2019).
 Environmental factors
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Marketing strategy
The awareness of green consumerism and also ethical issues has been enhanced in the market. It
is examined that P&G is focusing on maintaining the goal of 100% packaging that will be
recyclable or reusable (P&G,2019). The company considers the concept of packaging through
combination of the material choice and package design that assist in creating the innovative
solutions for boosting more sustainable products (Niyonzima, 2019). P&G has planned to come
with the commercial innovation in 2013 that will help to build the trust among the customers.
One of the goals of P&G is to protect and enhance the forests and in this context the wood pulp
is used in relation to the rigorous policies. The main aim is to offer the products according to the
set standards and the company planned to collaborate with the companies to enhance the global
area of the certified forests (Ozkan, 2015).
 Legal factor
The company considers the legal regulations so that it could be easy to manage the activities in
the market effectively. The main focus of the company is on the human rights in which the
support is given to the U.N guiding principles of business and human rights. The company pays a
specified amount of taxes to the government in the form of the employment, sales and excise
taxes. In year 2018, the operations of the company resulted in the tax receipt in which $8.5
Billion was paid by the company to the government. The basic tax principles considered by the
company is related with the robust tax stewardship and governance and also the company
emphasize on maintaining transparency in the relations with the governments and tax
administrations (Jain and Sharma, 2018).
SWOT ANALYSIS Strength
Brand equity is one of the strength of the company in which the company has its own brands.
The company owns Ariel and Tide that are the brands of the company and it comes under top
500 brands. P&G has a good command in R&D due to which the company has attained large
market share in the competitive market. One of the positive factors related with the company is
its presence in the market. The company has wide presence and in more than 180 countries the
activities are managed. Also, there are 65 brands in which they have their own product line. It is
important for the company to have effective distribution channel so that it could be easy to
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Marketing strategy
manage the activities. Same applies with the company, it has been examined that P&G has a
good distribution channel in Rural, Urban and on the online platform. Due to the effective
channel of distribution, the products are supplied in the market by the company. The company
also emphasizes on the effective sponsorships such as lifestyle events which assisted the brand in
building the connection with the people. Ariel product offered by the company guarantee to
remove the stains and also the products was introduced with a concept of sweet smells and
fragrances that attracted the customers towards products. Ariel also holds the good market share
that boost the growth of the business (Puente‐Díaz and Cavazos‐Arroyo, 2017).
 Weakness
Organization structure is one of the weaknesses of the company that affect the decision process
of the company. Due to old organization structure and also the company has many SBU’s that
negatively impacts the decision making process of the company. The major concern for the
company relates with the fake products sold under the name of their brand and due to this the
negative impact has been seen on the sales of the products. Also, the products of the company
have the high level of competition from the domestic players and also from the international
brands. P&G is also not enjoying fast growth in the recent years as it is evaluated that in 2014,
the sales of the company has been declined and from that time the revenue has kept on declining.
So, from the last 5 years, the revenue of the company has been falling and the growth of the
company is stagnated (DeVane, Wagner and Murch, 2016).
 Opportunities
The company has the opportunity to tap the rural markets and it has enhanced the penetration in
the urban areas. Mergers and acquisition should also be considered by the company as it will
assist to boost the brand image in the competitive market. By introducing the new products in the
market can help in boosting the growth opportunities for the company. The purchasing power of
the customers is also enhancing in the near future in relation to the economies (Shanthaseela and
Saravanan, 2015). So, the developing economies will help to maintain the market share in the
market and also it will help to target the right audience. Product innovation is also one of the
effective strategies that should be considered by the company as it can assist in brand
differentiation in relation to the products of the competitors. In the present scenario, the company
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Marketing strategy
has to face a stiff competition and due to this they are unable to boost the prices, so one of the
best options is of product innovation that will help to grow in the market (Bowen and Saini,
2015).
 Threats
The company is facing the intense competition with the FMCG companies and it has impacted
the market share of the company. The major competition faced by the company is related with
competition from the unbranded and local products. The competitors of the company are Marico,
Loreal, Nirma and Unilever. P&G is also the global brand and due to this reason the company
has to face the threats in terms of recessions, fluctuation in the dollar prices and also economic
crisis. These factors impact the operations of the company in the highly competitive market.
Regulatory pressure is also one of the major challenges that are faced by the consumer goods
brands. Due to the high level of political interference the company has high cost pressure on the
brands (Thomas, 2017).
Organizations competitive edge (USP)
It can be analyzed that Ariel is the detergent product of the company and it is present in the
market from many decades. The image in relation to the Ariel detergent product is created that
remove dirtiest and difficult stains from the clothes. One of the differential advantages attained
by the Ariel brand symbol is the brand symbol. It is related with one of the best brands in relation
to detergents. Ariel created the thinking in the mind of the targeted audience that there is no other
detergent that can remove the toughest stains better than Ariel. Corporate social responsibilities
have an essential role in enhancing the competitive advantage of the Ariel Company. It can be
stated that Ariel has achieved the market share of 175.6 m which is 16.4% in the UK market
(Ghosh, 2019). Therefore, it can be stated that company attained the competitive advantage of
differentiation advantages.
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Marketing strategy
(Source: Ghosh, 2019).
Evaluation of the current strategy
Pricing strategy
In the market of UK, Ariel is related with one of the best categorized of detergents and the
company is able to position itself in the market. The company is able to give tough competition
to the competitors by considering effective pricing strategy. Recently, the company introduced
the medium priced products to compete with the competitors who are offering the prices at low
cost. The main purpose of offer medium sized detergents is to complete with the competitors
present in the market (Lumpkin and Crawford, 2015).
Promotional strategy
It is observed that company focused on promoting the products by considering the different. To
maintain growth, it is seen that company is considering the promotional activities and
advertisements that helped to attain success. Social media marketing is one of the best
promotional strategies considered by the company to boost the sales of the products in less time.
With the help of social media marketing, the company posted the images and also the taglines on
the social media platform which has positively impacted the sales of the products (Brown and
Anthony, 2011).
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Marketing strategy
Task 2
Segmentation targeting and positioning
For any company, it is essential to choose their market segment wisely. This is necessary for
improving their performance in the market. Making strategic marketing plans according to the
segments they have made for themselves is essential. This is because it will reduce the efforts of
the company and at the same time it will ensure that company do not fail in understanding the
demands of the people in the market. Segmentation is done by any company on the basis of
different kinds of variables. After the segmentation is done company evaluates that what
particular sort of strategies a company could introduce so as to target them efficiently. Based on
targeting, company must set their positioning strategy that enables them to create a better image
in the market (Davis, 2010).
Segmentation and targeting for P & G:
Since detergent is a product that is used by almost all the group of people hence they will be able
to segment people in larger numbers. Segmentation variables are used wisely so as to attract
people from different classes of the society. Women are the major segment in all the variables as
they are the primary consumers of the detergent product. This is because household activities
such as cleaning is generally taken care by women. Segmentation and targeting for detergent
product is illustrated below
Types of Segmentation Segmentation Criteria Hamburger target segment
Geographic Region International and local
Density Semi-Urban, Rural and
Urban
Demographic Age 17-50
Gender All the genders
Life cycle stage Married and Bachelors
Income Lower, middle and higher
income people from all
sections of the society.
Occupation People doing any kind of
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Marketing strategy
professional work or students
of different ages. Their more
focus will be on the people
that are associated with the
job of cleaning.
Behavioural Degree of loyalty Switchers as well as loyal
customers of the company
Benefits Sought People who seeks benefits in
terms of cost and time.
Personality Caring and careless. Main
focus will on people that are
cleaning conscious.
User status Regular users and Potential
users
Psychographic Social class From any class of the society
Life style Strugglers, achievers,
mainstream people as well as
people that are not in the
mainstream.
Ariel has been placed as premium class product when compared with other competitive products
in the market. In targeting they have adopted the market aggregation strategy and hence
including people from all segments of the society. Untapped rural market and washing machine
users are their primary target market (Bian and Veloutsou, 2017).
Positioning strategy
People want detergent products that are not very costly and do high level of cleaning. People
want higher value products that are capable of doing thorough cleaning. Since Ariel is able to
satisfy the needs of the people when it comes to use of detergents hence they can easily position
themselves in any market irrespective of the variables working in that industry. Ariel has been
positioned itself on the basis of both product based and value-based positioning. This has been
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Marketing strategy
done by the company to create the right set of imagery stimulus in the customer’s mind (Shah,
2012).
Recommended objectives and goals
It is also crucial for any company to set specific goals and objectives for their products. This is
essential for achieving the success in the market as all the stakeholders can move in one
direction. It also helps the organisation in aligning themselves in one frame where everyone
knows the common goals that company aims to achieve from their product. Checking the
situational analysis and the STP strategy used by P & G, done in the above section of the report,
there are certain kinds of objectives and goals that can be set by the company (Matanda and
Ewing, 2012).
Objectives from the product
 To become the leader in the detergent industry by doing heavy research on the demands
of the market and the products that are required by them.
 To become a name in the product segment that is capable of cleaning all the types of
stains.
 To improve the market image of the P & G products so as to give them competitive
advantage over the rivals by providing products that are of high quality.
 To capture the premium segment market that provides best of value for their products.
 To create a loyal customer base that is satisfied with the products such as Ariel hence
increasing the sales of the company will be easier.
 It is recommended that company should set an objective like increasing the market share
in the market.
SMART goals
It is always essential that company set goals for themselves that are SMART and are able to
improve the performance of the company or enhance the position of the company in the market.
At the same time, it must also evaluate the resources and capabilities that a company has so that
they can achieve the goals on time and effectively. SMART goals are as follows:
 Specific: Company needs to improve the profit margins by 20% in the detergent segment
in the next two years.
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