MKT540: Strategic Marketing Analysis of P&G Skin Care in Australia

This report provides a comprehensive marketing analysis of Procter & Gamble's (P&G) skin care segment in Australia. It begins by introducing the overall theory of strategy, including strategic thrusts, the role of Strategic Business Units (SBUs), portfolio tools, and strategic development tools. The analysis covers industry maturity, competitive positioning, and product/market strategy, focusing on operational excellence, product leadership, and customer intimacy. A BCG matrix is developed to assess the product portfolio, categorizing products as cash cows (Fairy, Gillette), stars (Downy, Herbal Essences), dogs (SK-II, Olay), and question marks, evaluating their market share and growth potential. The report also discusses strategic development tools such as benchmarking and Total Quality Management (TQM) to enhance P&G's competitive advantage in the Australian market. Desklib offers similar solved assignments and resources for students.

Running head: MARKETING ANALYSIS OF P&G
MARKETING ANALYSIS OF P&G
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1MARKETING ANALYSIS OF P&G
Table of Contents
1.Introduction.................................................................................................................2
2. Market Strategy..........................................................................................................3
2.1 Industry analysis...................................................................................................3
2.2 Competitive positioning.......................................................................................5
3. Portfolio Analysis.......................................................................................................6
4. Strategic Development Tools...................................................................................10
4.1 Strategic tools benchmarking.............................................................................11
4.2 Total Quality Management................................................................................13
5. Summary..................................................................................................................15
6. Reference List..........................................................................................................17

2MARKETING ANALYSIS OF P&G
1.Introduction
A business strategy can be defined as the ways by which the organizations can aim at
achieving the objectives that are set for them in the market. This process can also be defined
as the long-term business process that is followed by the companies for the purpose of
achieving success in the industry. The business strategies are developed based on the
operations of the company over a period of three to five years (Andreeva & Kianto, 2016).
The business strategy is thereby based on the major resources that are which are required for
the achievement of the organizational goals. The strategies are also based on the decisions
that need to be taken related to the resources that need to be allocated to the products and
services offered to the customers. The scope of various business activities is based on the
ways by which they produce (Chen, Delmas, & Lieberman, 2015).
The concept of strategic thrusts can be defined as the ways with the help of which the
high-level initiatives that can arise from the strategic vision of the company and they are able
to guide various action plans for the achievement of the goals. This process thereby helps in
obtaining maximum amount of information from various resources in the firm for the
competitive advantage. This is a broad statement that is based on the intended actions based
on the strategy of the company. The strategic thrusts of the company help in the creation of
the competitive advantage for an organization in the industry (Durand, Grant, & Madsen,
2017).
The organization which has been considered for this analysis is Procter & Gamble Co.
which is an American multinational organization that has operates in the sector of consumer
goods retailing. The headquarter of the company is located in Ohio and Procter & Gamble
was founded in the year 1837. The company mainly specializes in a large range of personal
care and hygiene based products along with cleaning agents. The product portfolio of Procter

3MARKETING ANALYSIS OF P&G
& Gamble in the different areas of its operations include, beverages, snacks and foods as
well. The organization has recorded sales of 83.1 billion dollars in the year 2014. The
analysis in the report will be based on the skincare based segment of the company in its
operations in Australia.
2. Market Strategy
2.1 Industry analysis
The craze of retail industry in the soil of Australia is undoubtedly high. Procter &
Gamble would have to face immense competitors’ market threat while establishing their
business in Australian market (Dalken, 2014). However, Procter & Gamble would have to
make effective industry analysis to get in-depth overview about the competitors’ power.
Supplier’s power The supplier’s power of FMCG products in Australian
market is low due to the existence of large number of
distributors. Therefore, Procter & Gamble has opportunity to
bargain with the distributors.
Buyers’ power As suppliers’ power in the FMCG industry of Australia is low
the buyers’ power is high. Purchasers have immense opportunity
to bargain with the company regarding price. While launching
their business Procter & Gamble would have to e concerned
while deciding product price.
Threat from the
substitute
Australia is already established with large number of retail
brands such as JB Hi-Fi, Woolworths, Coles, The Iconic who are
introducing their own manufacturing FMCG products. Therefore,
while establishing business in the market of Australia, Procter &
Gamble would have to face immense threats from its substitutes.

4MARKETING ANALYSIS OF P&G
Threat of new entry As already stated the market craze of FMCG industry in
Australia is already high Procter & Gamble would have to face
competitive threats while entering in the new market. The
business experts would have to face challenges in grabbing the
attention of Australian consumers.
Competitive rivalry Blackmores, GrainCrops, Wesfarmers are the most recognizable
competitors of Procter & Gamble. In order to overcome market
threats the business experts would have to make effective
business strategy.
Table 1: Industry analysis for entering in Australian market
(Source: (Dobbs, 2014)
Image 1: Industry analysis for entering in Australian market
(Source: (Dobbs, 2014)

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2.2 Competitive positioning
An organization needs to segregate the target customers before positioning the brand
amidst large number of competitors (Wang, 2016). Target market segmentation and
positioning is one of the most significance business strategies and policies for getting in-
depth overview about the target customers of the brand and its suitable channels for reaching
the target customers. Competitive positioning is primarily constituted with four major steps
which includes
 Market profile
 Customer segment
 Competitive analysis
 Selecting proper channel for positioning the brand
As already stated the market profile of FMCG industry in Australia is larger which is
surrounded with recognizable brands like Blackmores, GrainCrops and Wesfarmers.
Therefore, in order to segment the target market Procter & Gamble would have to focus on
segregating the target consumers as per geographic, demographic and psychographic
perspective.
Competitive analysis is one of the most significant strategies before positioning the
brand in market. Based on the marketing strategies and policies of competitors Procter &
Gamble would have to make their marketing positioning plan. For an example, Wesfarmers
being one of the most prestigious brands of Australia depends on digital media marketing for
introducing their brands in global market (Sanfelice, 2014). Based on their positioning
strategy Procter & Gamble would have to select the proper media vehicle so that their
products can easily draw customers’ attention amidst large number of competitors.
In order to position the brand Procter & Gamble would like to select social media
challenges to draw the attention of customers belonging to various geographical boundaries

6MARKETING ANALYSIS OF P&G
Customer segment
Competitive
analysis
Market Profile
Channel of brand
positioning
of Australia. In addition, Australia is out an out advanced in technology. As a result, people
belonging to this country get constant update regarding new brands and products by using
advanced technology. Traditional media platform is not very compatible for drawing the
attention of target customers (Wang, 2016). Therefore, Procter & Gamble would have to
select new media for positioning the brand in Australian market.
Image 2: Competitive positioning
(Source: As created by the author)
3. Portfolio Analysis
The Procter & Gamble Company has a huge experience of operating in an effective
manner in the global market areas. The company has its successful operations in several areas
around the world. The operations of the company and its product offerings are based on
several areas which include, personal hygiene, home care and beauty. The analysis in the
report is mainly based on the skincare based products that are offered by the company in
Australia (Meyer, Neck, & Meeks, 2017). The four segments that are used for the analysis of
the company are as follows,

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Image 3: BCG Matrix model
(Source: (Meyer, Neck, & Meeks, 2017).
Cash Cows– The products that are a part of this category are able to provide
sustainable sources of income to the company and the financial stability of the
company is also ensured with the help of these products. The market presence of these
products is also quite strong which helps the company to further increase its shares in
the market with the success of the products. The financial support and the strong share
in the market thereby help these products to provide maximum amount of benefits to
the company (Michael, Storey, & Thomas, 2017). The cash cows are further able to
provide support in increasing the strength of the company in the industry. The cash
cows of the Procter & Gamble company also include the products like, Fairy and
Gillette. These two products of the company have a huge share in the market which
has helped in the creation of a stable financial position of P & G in the market
(Morschett, Schramm-Klein, & Zentes, 2015). The economic slowdown in different
countries and in Australia has slowed down the growth of Procter & Gamble.

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However, due to the huge market presence of these products the company has been
successful in maintaining its competitive position in the industry. Gillette not only has
a huge market presence in Australia, the product has a huge market base all over the
world. This quality has enabled these two products to provide the maximum profits to
Procter & Gamble over the years of its operations in the market (Popkova, Abramov,
Ermolina, & Gandin, 2015).
Stars– The products of the company which have a strong financial position and also
have further potential of growth in the market. These products are able to gain share
in the market with the help of various qualities that are present. The products that
belong to the segment of stars have the ability to turn into cash cows in the future.
These are products offered by the company which have shown the potential of huge
amount of growth in the future (Sakas, Vlachos, & Nasiopoulos, 2014). The products
of Procter & Gamble which can be easily placed under this category are, Downy and
Herbal Essences. These two products have been offered by the company in Australia.
They have shown huge potential of growth in the market which has been a positive
point for the operations of Procter & Gamble in the country (Shah, Jamil, Shah, &
Kazmi, 2015).
Dogs – The products of the companies that can be placed under the category of Dogs
are those which have a huge potential for growth in the future. These products are not
able to add any financial value to the company in the process. The products belonging
to this category are thereby not able to add value to the company. The market
presence of these products is also quite low as compared to the other products that are
offered by the company in the portfolio (Simon, Fischbach, & Schoder, 2014). The
decision makers of the company are thereby most likely to remove these products
from the portfolio of the organization. The resources of the company are invested in

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the development of the products so the decision makers of organization need to take
decisions regarding the continuation of the products. The products of Procter &
Gamble that belong to the dogs based segment of the company are, SK-II, Olay
(Slater, 2015). These products are not able to the create a strong financial base of the
company in the industry. Olay belongs to the premium products range of the company
and the investment on resources is also high. The returns that are expected by P & G
from this product is thereby high.
Question Mark – The products offered by the company which belong to this segment
are those which are based on uncertainties. These products can drop rise to become a
star and on the other there are chances of the products to drop to the dog segment. The
products thereby are needed to be kept under constant analysis which will help the
company to decide their future. The product of P & G is quite strong and none of the
products belonging to this range can be placed under this quadrant (Simon, Fischbach,
& Schoder, 2014).
The BCG matrix is a major tool that can be used for the purpose of business portfolio
analysis. The major benefits that are provided to the analysts by the BCG matrix are as
follows,
The tool is quite simple in using and further explaining the various parts of the
business that fall under the different categories.
This model has a strong reputation in the industry and is quite robust in nature as well.
This has also helped in causing some significant changes in the environment.
The BCG model has proved to be important for the allocation of resources and the
ways by which the organization is able to pursue the goals.

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The organizations are provided with a base with the help of which they are able to
allocate the resources in a proper manner (Morschett, Schramm-Klein, & Zentes,
2015).
The matric is usually developed with the help of previous information that is available
to the analysts. However, this method helps the company in taking important
decisions based on the future of the company.
This matric has thereby proved to be much more beneficial for the companies which
have production on a large scale basis (Hubbard, Rice, & Galvin, 2014).
The BCG analysis of the skincare range of Procter & Gamble has thereby proved that
the company was successful in creating a different position in the market with the help of the
products that belong to different groups or quadrants. The difference in the quadrants has
thereby been able to depict the position of the particular products in the portfolio of the
company (Sakas, Vlachos, & Nasiopoulos, 2014).
4. Strategic Development Tools
The first tool that has been discussed in this case is the experience curve concept.
This tool cam be used for the purpose of analysing the experience of the companies. The
main advantage that has been provided by this tool is based on the ways by which the
organization can use the huge amounts of data that is available for the analysis by the
company and the formation of decisions based on this data. The profit impact of marketing
strategy is another tool that can be used by the company for the purpose if studying the
strategic experience that is provided by the profit based organizations (Michael, Storey, &
Thomas, 2017). This framework is quite beneficial for the organization as it is able to provide
consistent and realistic method based on the returns that are received by the company. The
process of value based planning helps the organizations to measure the actual worth of

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various marketing strategies. The strategies are judged for enhancement of the values of the
shareholders. The game theory is mainly used by the companies so that they are able to
respond rapidly to the changes that have taken place in the technologies, the prices and the
products (Chen, Delmas, & Lieberman, 2015). The Delphi technique on the other hand is
used by the companies for the purpose of creating expert opinions. The trend impact analysis
provides the major benefit to the company based on the ways by which the future trends of
the company can be proposed with the help of the past behaviour and data that is present. The
process of cross impact analysis is also beneficial for the organizations so that they are able to
examine the impacts of various future trends on each other (Popkova, Abramov, Ermolina, &
Gandin, 2015).
4.1 Strategic tools benchmarking
Benchmarking is a strategy tool that marketers used to compare the performance of
the processes in the business and developed in for comparing the best performances of other
companies internally and externally (Dobbs, 2014). Benchmarking used by the companies are
of three types- strategic, performance and process and the approach to accomplish the same
approach is done through internal analysis, competitive, external, functional and generic
(Dalken, 2014).