Proctor and Gamble Scope Case Analysis
1) What significant changes have occurred in the Canadian mouthwash market in the past three years?
The mouthwash market had grown on an average increase of 3% per year for 12 years. Then in 1987, with the introduction of new flavors it shot up 26%, and after that it continued at a steady increase of 5% per year. Originally, Listerine was the market leader. It positioned itself as a germ killing mouthwash that eliminated bad breath. Scope was introduced in 1967 as a green, mint-tasting mouthwash that was mouth refreshing and provided bad breath protection. Scope branded itself not only protection to bad breath, but also that it tasted better than the ...view middle of the document...
Scope was below average in consumers perceptions of killing bad breath, removing plaque, and healthier teeth and gums. In Brand users that actually use Scope, they only perceived that Scope reduces bad breath as above average of other brands of mouthwash.
In food stores, Scope held a 42% market share, whereas in drugstores, it only held a 27$ market share. This is significant because drugstores are where 65% of mouthwash sales come from, and only 25% of sales come from food stores. Scope is priced slightly below average at food stores and 16% below average at drugstores. Listerine and Listermint are priced above average at food stores and slightly below average at drugstores.
Overall, Scope has a strong presence in the market for mouthwash. It has the leading market share in the Canadian market. Consumers that purchase Scope do so because it is better tasting than other mouthwashes that prevent bad breath. Scope excels in food stores, but has room to increase sales in drugstores because that is where most mouthwash purchases occur. With the introduction of Plax, Scope’s market share could potentially be threatened. The market is shifting towards health related benefits of mouthwash and not just fresh breath and good taste.
3) What are the pros and cons of the options available for Scope?
A) Do nothing:
One option available for Scope is to remain status quo. Scope is already the leading market shareholder in mouthwash in the Canadian market. The cost of Scope is below market averages and is already perceived as a quality product. Two of the most important reasons for consumers to buy a mouthwash include to get rid of bad breath and that it kills germs, both of which Scope is known for. With remaining status quo, Scope does not have to worry about canalization of itself.
The negatives of doing nothing would be not to recognize how the market is changing. The competition of Plax could take an effect on Scope. Scope would then be left behind in the changing market of mouthwash. If Scope chose to do nothing, they are also not taking the opportunity to increase their market share.
B) Flanker Brand:
Another option available for Scope is to introduce a Flanker Brand. Scope could create a product that is very similar to the successful Plax mouthwash. This could lead to increased profits and be able to have a mouthwash that is positioned differently than scope. It would help protect the Scope name by not trying to change the current position of Scope. Having a flanker brand can create direct competition to Plax.
Cons of having a flanker brand would include very expensive marketing costs of a...