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The Analysis of P&G International Marketing Strategy in Sweden

In: Business and Management

Submitted By jhlim93
Words 3138
Pages 13
Contents 1.0 Introduction 1 1.1 Procter and Gamble (P&G), as a whole 1 1.2 Procter & Gambles Sverige AB 1 2.0 Marketing Campaign 2 2.1 Overview 2 2.2 Campaign Impact 3 3.0 Marketing Strategy 3 3.1 Analysis of Advertisement in Sweden 3 3.1.1 Root Cause Analysis (RCA) 4 3.1.2 Proposed Solutions and Possible Outcomes 4 3.2 Barriers of Communication 4 4.0 SWOT Analysis of P&G Sverige AB 6 4.1Strength 6 4.2 Weakness 6 4.3 Opportunity 6 4.4 Threats 6 4.5 SWOT Matrix Analysis 7 5.0 Marketing mix analysis 7 5.1 Product analysis 7 5.2 Price Analysis 8 5.3 Place/Distribution Analysis 9 5.4 Promotion Analysis 9 6.0 Conclusion 9 7.0 Appendices 10

1.0 Introduction
1.1 Procter and Gamble (P&G), as a whole
The Procter & Gamble Company (also known as P&G) initiated a partnership agreement between William Procter and James Gamble, at the year of 1837. The small business was initially a soap and candle shop, but now an American Multinational Company (MNC) for Fast Moving Consumer Goods (FMCG).
P&G who has never neglected the importance of human capital and being passionately develop talents that show great curiosity, appreciation towards diversity, and flexibility in tackling tricky problems. With that, P&G has been rated as the Top 7 in the World’s Top Employers for New Grads at the year of 2014 (refer Figure 1).
Comparing between Procter and Gamble (P&G), Colgate-Palmolive (CL), and Unilever, P&G is ranked the second most reputable companies in the world (refer Figure 2). P&G also managed to score an average score RepTrak Pulse Score of 71.0, which represents that P&G having strong branding reputation. This respective pulse score represents the ranking for World’s Most Reputable Companies.
P&G has achieved several milestone and consistently breaking the boundaries in gaining more sales and revenues. At the year of 2015, P&G generated a revenue of $93 billion with its advertising expenditure of $8,290 million. This may be due to the effects from the corporate strategy of Procter & Gamble to “Think Globally and Act Locally” by expanding the business Central Europe, Eastern Europe, Middle East, Africa and so on. Figure 3 illustrated a detail view of P&G operation around the world.
Such globally involved business operation has opened a new platform for P&G to understand the local communities through adaption. The eagerness of P&G in cultural adaptation could be seen when they established the first Consumer Relations Department to correspond with consumers at the year 1941.

1.2 Procter & Gamble Sverige AB
In Sweden, the business operation of P&G (also known as P&G Sverige AB) are regionalize into the Nordic region, merging and managing the business operations of 4 countries, which are the Sweden, Finland, Denmark and Norway. P&G Nordic region head offices is located at Stockholm, Sweden. Procter & Gamble Sverige AB founded at 1969 and became one of the famous name in Sweden with around 200 employees and recorded sales of $52.56 million annually.
Starting of the year 1969, the Swedish has begun to gain access to various P&G’s reliable brands through the large network of retail outlets in Sweden, such as grocery stores, pharmacies, electronic stores, cosmetics shops, and barber shops.
For P&G in the Nordic region, P&G has a very simple goal – to keep what our brand promised and make consumers happy with their product selection. This goal is align with the culture at its regional head office, which rights between individuals are highly respected. This is because such cultures have been assimilated into the regional goal and made P&G to be consumers-orientated rather than performance-orientated.
Most of the brands of P&G Sverige AB aimed to provide easier life for their consumers from the perspective of both beauty and wellness. Several established brands, such as Head and Shoulders, Olay, Oral-B and Pantene Pro-Vare are examples of P&G’s brands for household goods, personal and beauty care products.
Besides, P&G Sverige AB also approached the consumer through innovation. This is because P&G believed that innovation is the key to drive growth by reducing costs and delivering values. But the main emphasis of its products innovation is to answer “what’s needed” with “what’s possible” by the consumers.

2.0 Marketing Campaign
2.1 Overview Title | : | Thank You, Mom | URL | : | | Advertiser | : | Procter and Gamble Global | Advertising Channel | : | 1. YouTube Videos 2. TV Commercials 3. Official Facebook Page 4. Twitter (#ThankYouMom, #BecauseOfMom) | Objective | : | 1. Increase attention to various products. 2. Introduce themed packaging. 3. Seek to sell emotional association with their brands. 4. Associate products with families and childhood. 5. Provide personal care products for athletes and families during their stay in Sochi. |

Result | : | 1. More than 2,800 of total media placement 2. Approximate 2.6 billion social media engagement 3. $100 million incremental sales, as of 2010 4. About $500 million sales, as of 2013 (32% from Europe) |

2.2 Campaign Impact The Thank You Mom movement in social media is to celebrate the most special bond with mankind – mom and children. This campaign was kick-started by celebrities and athletes, and finally achieved a consolidated 5.2 billion media impressions. The number of impressions has exceeded 4.7 billion of impressions from the proposed target of 426 million to target reached of 5.2 billion.
With this movement, P&G managed to attract 1.4 million fans to connect with their Facebook Page, together with approximately of 14.4% of social media engagement on Facebook.
This Thank You Mom has gained a natural success on social media by being the most engaged, liked and valued social media campaign regardless of its regions. And it marks a success for this campaign with its high engagement rate.

3.0 Marketing Strategy
3.1 Analysis of Advertisement in Sweden
Procter and Gamble (P&G) is a huge advertising spender. The top management in the U.S. Headquarters bluntly declared that they do not really care whether people like their adverts, it is just the perception towards the name of the product. With that, the Swedes have come to a question of which why P&G does not invest in sponsorship signs, instead. But certainly no answer should address to this matter from P&G, as the corporate philosophy of P&G is not to answer any questions, unless it is critical issues.
P&G Sverige AB also faced an issue for being a poor advertiser that creates poor advertising environment, of which people would instantly zap away the advertising block after encountering frequent adverts. This do help in getting rid of its competitors and the other giants because they just could not bear with the advertising frequency of P&G, since P&G buy more time as the time moves on.

3.1.1 Root Cause Analysis (RCA) Case | Types of Causes | | Physical | Human | Organizational | The Swedes do not really understand the adverts, due to cultural differences. | Less attractive and relevant adverts to attract customers. | Being bluntly ignorant when working on a decision. | The headquarters do not really care on the perception of public towards adverts. | P&G being a poor advertisers for maximizing advertising blocks. | Similar or same TV Commercial Advert all along the time. | Less efforts and initiatives taken to bring in attractive commercial in Sweden. | The headquarters constantly purchase advertising blocks and maximizing the advert frequency. |

3.1.2 Proposed Solutions and Possible Outcomes
To minimize the effects from the RCA Analysis above, P&G Sverige AB should focus on the following: 1. P&G Sverige AB should make an official statement to answer the queries of people in Sweden, since less locally dubbed and attractive adverts target on the Swedes. 2. P&G Sverige AB should either select to maximize the frequency by substituting it with different short adverts for the advertising blocks, or choose to pick only peak hours for its products’ targeting to minimize adverse effect.

3.2 Barriers of Communication
The following are some kinds of barriers to effective communication in Sweden:

I. Legal constraints Sweden pushes its ban on children’s advertisements. In fact, Stockholm has prohibited all TV advertising directed at children below the age of 12 since 1991, so the decision wasn’t all that radical. The prohibition was based on the research that indicates children can’t fully distinguish between advertising and programming until about age 10. This is because they have not acquired the knowledge to see through all the commercial message. This is generally accepted view in Swedish society when has led to laws that protect children so that they do not have to be dependent on the good will of the advertiser.

II. Linguistic limitation
Language is one of the major barriers to effective communication through advertising. In Sweden, all advertisements were translated into English. Swedish TV commercials were dubbed by one native speaker with Swedish as mother language and the other Swedish speaker with Swedish as a second language. Additionally, most P&G products in Scandinavia have multi-language labels, so the language of labels does not constitute a barrier to cross-border trade.

III. Cultural limitation
Procter and Gamble Company plans to use Sweden as a regional test market for a more sophisticated style of sensual advertising for its feminine hygiene brand Always. The unstated message is that Always users feel so secure they are unconscious about this product. For example, the TV sport devised in Stockholm features a woman sitting in bar fantasizing about being “picked up” by a man. Additionally, P&G has one global diversity strategy with a consistent set of standards, but it also encourages customization at the regional level. For example, in Western Europe the regional leaders focus on generational issues and an aging population.

IV. Media limitation
Media plays a major role in communicating advertising messages across the audience. Sweden was the first country in the world to introduce freedom of the press law in 1766. Today, Swedes are mass consumers of media, with 87% of the population reading a daily newspaper, paper copy or online. Therefore, newspapers and electronic media have great freedom to present. In addition, an advertising could take place through various media. The most important Swedish rules concern TV advertising, but today’s internet is also the important source for advertising to children. Procter and Gamble use other sources for direct advertising as well as indirect marketing. As an example, the sources do not take into consideration are pamphlets, brochures, and personal selling.

4.0 SWOT Analysis of P&G Sverige AB
* In Sweden, Procter & Gamble has very strong brands to its name. This could be seen by which P&G has been consistently and widely recognized as the leading global company. * P&G is also good in cultural adaptability. Understanding that the Swedes care about product safety and healthcare, P&G has prepared and provided Safety Data Sheet (SDS) to customer to learn more information about their product before purchase. * In Sweden, Procter & Gamble is well positioned to take advantage of growth. They make a strong brand positioning that may contribute towards absolute.

4.2 Weakness * Swede are flexible hours and work-life balance. This however may lead to possible working delay and incomplete of work that may distort the operations. * The continuous rely on P&G towards mature markets. At the current moment, emerging markets has started to response aggressively to outperform the mature market over the forecast period putting P&G in a vulnerable position. * Low presence in online and social media. P&G does not focus on social media marketing that is currently at its hit at the current moment.

4.3 Opportunity * Sweden ranks 11 out of 189 countries in the World Bank’s 2015 Ease of Doing Business standings because of their open economy and firm legal context. Hence, this will encourage P&G Sverige AB growth in Sweden.

4.4 Threats * Change of government in Sweden. Social Democratic Party has been taken over as the main political party to form government in Sweden and any changes in policies would harm P&G Sverige AB advertising campaign. * Possible occurrence of competitive rivals. Unilever remains as significant threat in the developing market, whereas local market also acting fiercely in competing with P&G.

4.5 SWOT Matrix Analysis | Strength * Good cultural adaptability. | Weakness * Low presence in online and social media. | Opportunity * Stable economy condition and legal context. | Create promotional and advertising campaign to attract more local buyers and getting more people to accept them. | Network of distributors could react aggressively to address on the weaknesses from low presence in online and social media. | Threat * Possible occurrence of competitive rivals. | Competitive rivalry could be overcome by developing strong brand recognition that accommodate the local community. | To address on this matter, P&G could consider in expanding and establishing its online platform for customers’ convenience. |

5.0 Marketing mix analysis Marketing mix analysis that will be studied are the product analysis, price analysis, place/distribution analysis and promotion analysis.

5.1 Product analysis Relatively, P&G have numerous distinct brand that carried out different function and satisfy customer’s needs. In the global market, P&G has marketed 8 types of product categories, which are cosmetic products, skin care products, dishwashing products, feminine hygiene products, household products, healthcare products, hair care products and laundry detergent. In addition, P&G has developed different products with discretely attributes under the name of each brand extension.
In the context of Sweden, P&G Sverige AB has offered two types of products line which are beauty and personal care products and household goods. Figure 4 and 5 demonstrated a clear view on brands marketed in Sweden under P&G Sverige AB.

Following are the sorts of brand that has marketed by P&G in Sweden with regards to the types of products: Types of product | Brand | Beauty and personal care | Always, Clearblue, Gillette, Glide, Head & Shoulder, Hugo Boss, Olay, Old Spice, Oral B, Pantene Pro-V, Sebastian, Vicksburg, Wella, Max Factor, Shockwaves, Tampax | Household goods | Ariel, Braun, Duracell, Pampers, Swiffer, Yes, Vicks, Nioxin, Sassoon Professional, Professional Sebastian, SP, Wella Professional |

From the list of the brand which can be found in Sweden, Head & Shoulder, Joy, Ariel, Pantene, Pampers and Olay is regards as some of the P&G’s high demand products in international perspective which gives significant payback to the company. Hence, P&G Sverige also market these products in Sweden. Besides, the product strategy implemented by P&G is the continuous acquiring of new product that benefits the existing product of the company through the acquisition of new companies. Further strategy such as dropping off the marginal product, launching an innovative product through modification and developing new product to replace the old one was developed to gain competitive advantage in term of the Europe region.

5.2 Price Analysis There are several pricing strategies that P&G has utilized as part of the plan in assuring the positive sale of the product. Policies such as the skimming policy, penetration policy and discount policy was adopted as the way of implementing the pricing strategy. The strategy was implemented worldwide including in Sweden. Firstly, through the skimming policy, all the price of the new product would be hiked up around 30% about the previous product. As the time past, the price is then lower down. Secondly through penetration policy, the price of the new product is set at a much lower level as a way to lower the competitor capabilities in competing. Thirdly the discount policy encourages larger purchase through the offering of quantity discount.

5.3 Place/Distribution Analysis Particularly, P&G uses simple distribution channel in delivering the product to consumer i.e. manufacture, marketing agent, wholesaler, retailer and consumer. As P&G products serve as necessity goods, hence intensive distribution strategy was utilized in the effort to stimulate sales whereby the product are stocked in as many outlets as possible. Despite of brick and mortar strategy, customers can find information regard to P&G in P&G Sverige AB website which is a Swedish language website that for Swedes. However, P&G Sverige AB website does not carried out much of the online purchasing service and delivering.

5.4 Promotion Analysis
P&G offers both samples and coupons online for daily savings and to attract the consumers. An effort to receive the mentioned benefits is logging into P&G website (URL: Customers can find all latest promotion by P&G on the products and brands. This however creates some adverse effect because it does not apply to all the regions that P&G is operating its business operation.

6.0 Conclusion In a nutshell, P&G Sverige AB has become one of the prominent name that Swedes remember during these days. We can concluded that P&G Sverige AB provided service that align to P&G global vision and mission. Although there are only two products group that offered by P&G Sverige AB, but these two products are essential for local in daily life and important revenue sources to P&G. On the other hand, P&G need to emphasis on the quality of their advertisement and service regard advertisement issues. The general attention of Swedes towards P&G is considered low and need to be increase as P&G can increase their reputation and sales revenue. P&G also need to put more effort in developing a web page that useful for Swedes and take attention towards Sweden political environment.

7.0 Appendices

Figure 1: World's Top Employers for New Grads, by CNN Money, as of 2014

Figure 2: RepTrak 100 Pulse Score for P&G and Its Competitors, from Year 2011 to Year 2015.

Figure 3: Countries Involved in P&G Business Operation, by Region.

Figure 4: Beauty and Personal Care Brand under P&G Sverige AB Figure 5: Household Goods Brand under P&G Sverige AB…...

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...a. What strategy was Procter & Gamble pursuing when it first entered foreign markets in the period up until the 1980s? Procter & Gamble clearly used an international strategy for their expansion into foreign markets throughout a large portion of the 20th century. Not until they began to experience slower growth, profits and sales in the in the early 1990’s did they take a serious look into their business model for international expansion. But up to this pint they were unparalleled by any other competitor as the chart shows below. b. Why do you think this strategy became less viable in the 1990’s? • P&G’s costs were too high because of extensive duplication of manufacturing, marketing, and administrative facilities in different national subisidiaries. The duplication of assets made sense when national markets were segmented from each other by barriers to cross-border trade. (Products produced in one country could not be economically sold in another due to high tariff duties levied on imports to Germany for example). First, the changing global market created a better market for companies to expand and compete with less restrictive policies from host nations and more openness to foreign direct investment have all aligned to make the older strategy almost doomed to be defeated. Second, a combination of cheaper more efficient transportation of goods and markets more free for the import and export of materials aided to P&G losing some market share and......

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P&G Scope - Case Analysis

...Scope The problem for Procter & Gamble`s (P&G) “Scope” brand is that their share at mouthwash market is slightly going down while a new brand called “Plax” launched by Pfizer Inc. has gained a %10 market share in a very short time period which created a situation that left “P&G”s management team in dilemma for how to respond. P&G has some constraints to solve the problem (in fact, the situation is so complex that for some, no problem and threat exist). First of all, if they introduce a new product in the mouthwash market as a competitor against Plax; they are not sure if it will be really innovative or it will focus on unmet consumer needs. Another limitation is that introducing a new product to the market will cost a lot (even the test production costs $20,000. Capital costs, marketing costs, delivery costs, inventory costs, ingredients costs, packaging costs are other important costs which create concerns) and also will require an effective strategic management. After that, the new product is very similar to Plax and has no significant advantage except a better taste; on the other hand, sales department thinks that for success, the product must be seen as unique. So, P&G can not be sure about the future success of this product. Next, for the new product to gain reassurance, patience is needed. This can only be achieved in the long period. Following this, the new product will also reduce the sales of Scope. Additionally, P&G is not sure about the name of the product......

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