Marketing Audit of Procter & Gamble's Daz Detergent

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Individual Report
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Executive Summary
In this study the market strategies of P&G is explained. The market presence and its existence
in the market share are found to be 5.2% among the detergents in UK. The analysis of the
internal and external marketing audits is emphasized to know about the strengths and
weaknesses of the company. It is necessary to explain the internal and internal structure as
this provides useful knowledge about the products presence in the market, which is important
for analyzing market strategies. It is found that Daz is one of the popular brands of P&G
Company. it delivers and produces variety of detergents useful for consumers. It uses organic
ingredients to attract customers. Lastly, recommendation is done so that the marketing
strategies of the company can improve in order to reach customers effectively and serve the
target customers with satisfaction.
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Table of Contents
Part 1..........................................................................................................................................4
Part 2........................................................................................................................................13
Conclusion................................................................................................................................20
Bibliography.............................................................................................................................21
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Part 1
Introduction
Organisations use marketing strategies to combine all its goals and objectives of business into
single comprehensive plan. Marketing strategy enables the business to focus on the market
research of products by applying marketing mix in order to get maximum profit. In this study,
a marketing audit of P&G will be prepared by analysing the internal as well as external
environment of the organisation. A marketing strategy will be prepared for Daz, one of the
popular brands of P&G.
P&G is a multinational consumer goods corporation, its headquarter is in Downtown
Cincinnati in ohio. Willian Procter and James Gamble found it in the year 1837. David S.
Taylor is the chairperson and president of the company. The total revenue of the company is
$67.684 billion and total number of employees are 97,000 in 2019 (pg.co.uk, 2019). Products
sold by the company are personal care, Beauty care, Cleaning agents, health care products
and diagnostics.
Situational analysis by applying PESTEL and SWOT model
PESTEL Analysis
Factors Elements Analysis
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Political  Brexit The effect of Brexit has led to reduced
interaction between UK and other EU nations.
This has resulted in higher labor and other
overhead costs, draining away potential
benefits of organizations. Therefore,
occurrence of Brexit would negatively affect
the profits of P&G.
Economical  Inflation rate
 GDP growth
 Corporate tax Rate
British economy is one of the most stable
economies. Inflation rate in UK fell in August
2019 to 1.7% from its last estimate of 2%
(bbc.com, 2019). The rate of inflation over the
years in UK has been maintained at low
levels, leaving a higher level of disposable
income in the hands of consumers. This
Would pose a positive effect on the sales of
P&G. On the other hand, GDP growth of the
British economy is lower in global comparison
and stands at 1.4%.
It is further expected to fall to 1.3% in the next
year (pwc.co.uk, 2019). The lower GDP
growth rate in UK may pose a threat to P&G
in its functioning. Corporate tax structure in
UK is helpful in promoting businesses with a
low corporate tax of 19% on overall profits. It
is lower as compared to other developed
nations of the world, for instance, corporate
taxes in US is 35%. Thus, it would pose a
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positive impact on the profits of P&G.
Social  Household
disposable income
 Population growth
The average level of disposable income in
households of the UK was estimated to be
£28,400 in the year 2018 (ons.gov.uk, 2019).
Higher levels of disposable income would
help P&G in establishing larger demands for
its product. However, the population rate in
UK is 0.6%, which is far lower to help P&G in
the creation of large markets for its product.
Technological  Technological
advancements UK is the fourth most technologically
advanced country in the world. There is ample
availability of high-tech equipment and
advanced modern technologies, developing a
behaviour of Internet of Things (IoT) to make
everything available on the internet
(pwc.co.uk, 2019). This process will increase
consumer awareness and their interaction with
P&G. Technological advancements within the
country will lay a positive influence in the
production and marketing processes of P&G.
Environmenta
l
 Pollution levels
 Weather conditions The pollution levels in UK are maintained at
low rates. Thus, pollution control in the
country will not be stringent in restricting the
activities of detergent production. However,
weather conditions in UK are uncertain.
Unpredictable rain and wind movement in the
region could act as a barrier in transportation
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of raw materials and final products.
Legal  The Consumer
Protection Act,
1987
 Protection from
Harassment Act,
1997
The Consumer Protection Act 1987 requires
the company to protect the welfare of its
employees. P&G must ensure the prevention
of violent conflicts and harassment within the
workplace to avoid legal involvement in the
company (Shears, 2016). The Protection from
Harassment Act protects the rights of
employees against any harassment based on
race, color, sex and religion. Occurrence of
such harassments to the employees at
workplace will be legally charged against the
company.
Table 1: PESTEL Analysis of Persil
(Source: Created by Learner)
SWOT analysis
Strengths ● One of the major strengths of P&G is the brand equity. It own
famous brands such as Gillette, which has top valuation in the
market. P&G is a parent umbrella brands for famous brands such
as vicks, Olay that has fabulous valuation in the market.
● The second strength of Daz that is the popular brand of P&G has
economies of scale. As the company has renowned brands under
its portfolio such as Daz it has wider range in market share. These
brands shares accounts, factories in its operation which rises with
time therefore the economies of scale also increases.
● As mentioned by Ragan and Dreher (2019), Excellence in
research and development field enables the company to invent
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new products. P&G has profound excellence in research and
development field due to which the company has innovated and
generated new products in the market which produces high return
to the company.
Weaknesses ● P&G has faced loss of its brands due to closure of its operation in
the market. The brands derived almost 95% of the overall
portfolio. This made the company to suffer loss of capitals.
● Decision making process of the company is slow due to having
old organisational structure.
● The rise in the beauty and personal care products in the market
derives high market demand for new products (De Mooij, 2019).
P&G produces same product with no new variation that becomes
weakness of the company.
● Online presence of P&G is limited which makes the company to
lag behind. The advancement in technologies enables the
organisations to operate online to raise its product sales. Online
presence of P&G is limited to US that they can diversify
worldwide to get better return.
Opportunity ● One of the challenges of any company is to get access to the rural
market where the people are price sensitive and impulsive to
advertisement (Halseth, 2016). P&G has the opportunity to expand
its business in rural market.
● P&G has the opportunity to increase its organic growth. The
company can invent new techniques to improve its market
strategies to develop organic ingredients to draw customer’s
attraction due to its presence. This can be done by promising
growth of organic products in the company that can serve future
benefits.
● The company has an opportunity to merge with other renowned
brands in order to improve its distribution channels and eliminate
competitions.
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Threats ● As explained by Chong and Hashim (2016), one of the major
threats faced by any organisation is the competition level with
other companies in the market. The competitive threat of P&G is
constantly growing with HUL. The two companies have the same
product lines, which makes them to face competition rivalry.
● The private labels of the company is a threat as many players of
the industry are offering products with lower cost as compared to
the market because they have low distribution expenses price.
This generates threat for the P&G products and decreases its
overall sales.
● Trade barriers can become a threat to the company as it reduces
the chances of global growth (Fiorini and Lebrand, 2016). Some
countries have trade barriers that restrict imports; this can becomes
threat to P&G, as it cannot trade machines and equipment
necessary for production.
Table 2: SWOT analysis
(Source: created by learner)
Competitive advantage (USP)
● The generic strategy used by the P&G Company makes it to achieve competitive
advantage in the market for consumer goods and services. According to the generic
strategy, the main emphasis is on the quality of products and goods (Waringo, and
Muturi, 2018). In case the quality of the product is not up to the mark to satisfy
consumers need it may deteriorate the brands name. The focus of the company is to
maintain the higher quality of goods and products to satisfy the consumer’s need.
● The distribution strategy of the company is to make its products available for end-to-
end distribution through its resources or other party makes companies to have
competitive advantage (Ramamurti and Williamson, 2019). It helps in building
flexible distribution network of Daz products.
● Along with the generic strategy, the company focuses on the intensive growth strategy
as well which enables the organisation to have better market performance. Taking
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account of competition in the market for consumer goods is necessary for P&G to
consider intensive growth strategy.
● P&G is the oldest company, which has large numbers of brands. The company
considering these facts has applied intensive growth strategy, which makes it to grow
in the market for consumer goods and gain competitive advantage.
● The company is spread over 180 countries including fully owned organisation or in
joint ventures (pg.co.uk, 2019). This makes large distribution network of the company
that increases its market presence and help the company to reach large number of
customers.
● Varieties of products offered by the company can be beneficial to meet the
preferences of the customers to gain competitive advantage.
Evaluation of current marketing strategy
P&G is one of the largest and oldest companies providing varieties of products; this makes
the company to have competitive advantage in the market. The company has a diverse
product line. One of its brands is Daz detergents, which produces variety of washing capsules
and liquids. The generic strategy used by the company enables it to produce quality
products. This increases the sales in the market as the demand for quality products increases.
This behaviour of the company enables it to produce groomed products of fabrics and home
care. On the other hand, if the company does not maintain the products quality it becomes
threat for the company to meet the customers demand and it fails to survive in the market.
This can reduce the chance of growth in the market. In case the quality of product is
maintained in the company, it is easy to achieve higher leadership position in market of
consumer goods. In case of P&G, it applies generic strategy and maintains its product quality,
which makes this company to get competitive advantage.
According to news, it is seen that the advertisement by the P&G Company as a whole and its
brand such as Daz is famous and attractive. It is also seen that the company is investing more
on plans to improve its advertisement (Ft.com, 2019). This feature will generate positive
marketing strategy by making the company to gain advantage in the area of advertisement. It
will in addition expand online presence of the company. In case the company does not focus
on the improving its quality of advertisement it may lack behind in competitive levels. It is
stated in the news that the company is already facing thereat of big agencies by their digital
advertisement.
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The other market strategies used by the company is the intensive growth strategies in order
to improve the market performance of the company. In case the management of the company
does not perform the market research properly it becomes difficult to detect the competitive
nature of products and prevailing prices in the market. This can affect the productivity of the
company to produce reasonable products. Focusing on the current distribution strategy of the
company, it is seen that the company handles the end-to-end channel of distribution through
its own channel or by third party. This makes the products of P&G to be available vastly in
the market. On the other hand, the company is emphasising in building new network of
distribution that is flexible and faster.
The brand equity of the company enables it to have a positive word of mouth with
customers which generates customers satisfaction i.e. if the consumers uses the products and
it fulfills the need of the consumer it can create higher demand for the products which in turn
increases the productivity of the company (Nabwire et al., 2017). For instance, customers’
satisfaction of Daz detergents and liquids are up to the mark that makes P&G to produce
more of Daz products to meet the customer's demand. The Quality of the products and brand
equity along with the customer’s satisfaction by using the products makes the company to
have competitive advantage in the market.
Share market position
P&G is the most trusted brand and it holds up in the market for almost 181 years by offering
products as per the customers’ preferences worldwide. The company has applied innovations
and strategies to invent new products and generate high-income level. It has taken step to
shape the cultural behaviour of the employees in the organisation to provide sound workplace
environment. The purpose and objective of the company is to deliver quality products in
order to meet the customers’ needs. This deep-rooted values and ideas enable the business to
expand more and obtain valuable market share. One of the brands under P&G is Daz
detergent that has increased its productivity level to meet consumer demand as it serve
quality product.
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Figure 1: Market share of Detergents in UK
(Source: Campaignlive.co.uk, 2019)
The above pie chart represents the market share of detergents in UK. According to the
British Retail consortium-Nielsen shop price index it is seen from the chart, that total value of
detergent market in the UK is £1.1 billion. Under the total market, share their falls many
renowned brands one of the brands that falls under P&G is Daz. It has a market share of
£55.5 millions, which comes to across 5.2% of the total share which is an appreciable share
considering specific brand only (Campaignlive.co.uk, 2019).
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