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“I never knew you had dandruff”……. Strategic Marketing Plan

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Advance Strategic Marketing Project about the Head & Shoulders. There is Review of the strategies about the Company and current status.

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Page 1: Head & Shoulder Pakistan

“I never knew you had dandruff”…….

Strategic Marketing Plan

Page 2: Head & Shoulder Pakistan

1 | P a g eMohammad Ali Jinnah University Islamabad

Page 3: Head & Shoulder Pakistan

Submitted by:

Course:

Advance Strategic Marketing

MS(Management Sciences)

Submitted to:

Sir ArifVaseer

ACKNOWLEDGEMENT

In the name of Allah who blessed us to learn and gain knowledge. He is the beneficent

and gracious to all mankind.

2 | P a g eMohammad Ali Jinnah University Islamabad

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We would like to extend gratitude to Management of Muhammad Ali Jinnah University

Islamabad and our supervisor Sir ARIF VASEER who afforded us the opportunity to explore our

knowledge regarding the subject Advance strategic marketing.

Words are very few to express enormous humble obligations to our affectionate Parents for their

prayers and strong determination to enabling us to accomplish this report.

We also appreciate the cordial co-operation from all our group members of the Project and Sir

ArifVaseer for providing us requisite information and knowledge for compilation of our

complete report.

Serial No. Contents Pg #01 Executive summery 04

02 Introduction of company 06

03 Procter & Gamble 07

04 Vision & mission statement 08

05 History & introduction of H & S 11

06 Customer and competitive analysis 13

07 Total sales & market share 15

08 SWOT analysis 18

3 | P a g eMohammad Ali Jinnah University Islamabad

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09 Internal resource analysis 23

10 Strategies 27

11 External environmental analysis 31

12 Structural analysis 35

Porter five forces

13 Value chain analysis 38

14 References 42

Executive Summary:

This project report is about “strategic marketing plan” of Head & shoulders.it is part of our

course “advance strategic marketing” which is compulsory to complete our course work.

The purpose of this report is to provide an opportunityto the students to observe the practical

application of marketing strategies in the business.

In this report we have given brief history of industry, company (P&G) and product (H&S).

Customer analysis

Competitor analysis

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Market analysis

Environmental analysis

Strategic development

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INDUSTRY OVERVIEW

The hair care market is one of those sectors in Pakistan, which has been making rapid impressive

progress. A number of these products are also competing successfully in the international

markets. The shampoo product manufacturing sector of hair care sector in Pakistan was newly

developing and in growth stage of their life. Most companies are offering thebest hair shampoos

for every type of hairs. The competition between companies to provide best hair shampoo is

really tough. Today, in shampoo market the situation is basically different, because of the fact

that internationally known products, are manufactured here. The ranges of products of shampoo

are very wide. The bulk of the market share of shampoos in Pakistan is held by two big

companies, P&G Pakistan and Unilever Pakistan. They control about 50 to 60 percent share of

the total market. The total consumption of shampoo in the country is around 100,000 tones per

annum, but the local manufacturers are losing market share gradually due to the easy availability

of imported shampoos. The multinationals involved in manufacturing shampoos in Pakistan are

Unilever Pakistan and Proctor & Gamble Pakistan. In addition, a local company - Kala Kola - is

also manufacturing a product named Bioamla.The shampoo’s companies can be divided into two

major groups, those catering to the masses and those catering exclusive to taste of the elite and

upper middle classes. Competition always exists in the market. Shampoo Market in Pakistan

which is very crowded and becoming competitive day by day, as there exists many shampoo in

the market such asHead & Shoulders, Pantene pro-v,Sunsilk, Dove , and have a tuff competition

between them.

Head & Shoulder is ever best hair shampoo which helps to reduce dandruff especially Head &

Shoulder Green is proven as a great acne & dandruff removal as it contains anti bacterial

ingredients and Pyrithione Zinc.

Clean & Clear also best for dandruff and hair fall. Sunsilk is also listed in Pakistani shampoos

and providing best hair shampoos for all hair types.

Pantene is good to prevent hair loss. Although it does not stop total hair falling but its special

hair fall formula gives nourishment to reduce hair fall.

Dove is another company whose hair products are getting huge popularity recently in Pakistan

and consider as best hair shampoo. Dove is offering shampoos for all hair types. One of its types

gives the freedom of color. Fiber Actives & Protein Micro Moisturizer Serum protects hair from

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damaging and helps in reconstruction of hairs. Dove can be a best hair shampoo from hair

breakage and split ends & its moisturizer serum gives nourishment and softness to your hairs.

Hair care market can be divided into the following broad categories, 

Hair Oil

Shampoo/ Conditioners

Styling Product

Herbal remedies

INTRODUCTION OF THE COMPANY

Proctor and Gamble of Pakistan is a subsidiary of Procter and Gamble USA established in1990

and started production in 1991.The P&G Company were founded in 1837 in Cincinnati, Ohio

and from the very beginning have been a leading manufacturer and marketer of the consumer

goods. Company sells more than 250 brands in more than 130 countries and its operations are in

more than 70 countries. It is therefore also rated in the top 25 of the FORTUNE 500 companies.

Procter and Gamble is actually the name of two persons William

Procter and James Gamble. Both of them wives were sisters and their father in-law asked them to

become partners. In the start Procter’s business was candle making and Gamble’s business was

soap making. The Partnership year 1837 was a difficult time to start the business although

Cincinnati was a bustling market place; the nation was gripped by financial panic. Hundreds of

banks were closing around the country. In the 1850s, despite rumors of an impeding civil war in

the US, they built a new plant to sustain their growing business.

Later they pioneered one of the nation’s profit sharing programs and were among the first in

American industry to invest in the research laboratory. By 1890, the fledgling partnership

between the Procter and Gamble had grown into multi million dollar corporation .Television in

USA introduced in 1939and P&G is the only company that commercialize its product just after

five months .With the passage of time P&G acquire different other companies to enhance the

business. In 1980, as it approached its 150th anniversary, P&G was poised for a most dramatic

period of growth in its history. Company serves 106000employees allover the world. P&G is a

recognized leader in the development, manufacturing and marketing of superior fabric & home

care, baby care, feminine care,& towel, beauty care, health care, and food.

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PROCTER AND GAMBLE IN PAKISTAN:

P&G started its operations in Pakistan in 1991. First it introduces its brand of Head& Shoulder

After that it gave brand of Vicks and Olay oil.

Now company has eleven brands in Pakistan .The yearly sales consistently doubled during the

past three years. P&G Pakistan establish local manufacturing base.Although Pakistan is a

relatively small consumer goods market for in the context of the global operations, almost all the

products marketed by P&G here in Pakistan have been successful to become a house. Always

feminine protection napkins, Oil of Ole, Clairol skin care, Safeguard and Camay bar soaps.

P&G's stress on R&D has helped it develop products which enjoy inherent edge over the

competitors.

Compared to its global operations, which employ over 106,000 persons worldwide and annual

global sales of $ 82 million, P&G's Pakistan operation is relatively small and yet it has been

successful to improve the lives of consumers here in Pakistan, like elsewhere in the world. It has

served over 140 million consumers in Pakistan, which equals the entire population of the country

since its operations 21 years ago.

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VISION STATEMENT

“To be a leading consumer goods company and

toimprove the lives of world consumers by

providing valuable and innovative products”.

MISSION STATEMENT

We will provide products and services of superior quality and value that improve the lives of the

world's consumers.

As a result, consumers will reward us with leadership sales, profit and value creation, allowing

our people, our shareholders, and the communities in which we live and work to prosper.

These are the Principles and supporting behaviors,

Which flow from their Purpose and Values?

They show respect for all individuals

The interests of the company and the individual are inseparable.

They are strategically focused in their work.                    

Innovation is the cornerstone of their success.

They  are externally focused

They value personal mastery

They seek to be the best.

Mutual interdependency is a way of life

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GOALS

Think globally act locally

Build major global brands through strong programs based on local understanding.

Improve the environmental quality of its products, packaging and operations around the

world.

Produce quality products at very competitive costs.

Build superior relationships with all the parties who contribute to fulfilling their corporate

purpose, including their customers, suppliers, universities and government.

OBJECTIVES

Bring together transactional activities such as accounting and order management in a

single organization to provide services to all p&g units at best in class.

Remains on the cutting edge of the industry.

To be a thought leader within each corporate function.

To be the first consumer goods company in Pakistan.

Be competitive with other high quality companies in order to help, attract, motivate and

retain the talent needed to lead and grow P&G’s business.

Strive to be best in all areas of strategic importance to the company.

ANALYSIS OF VALUES & PRINCIPLES

Organization’s culture is a pattern of basic assumption invented, developed by a given group as it

learn to cope with its problem of external adoption and internal integration. Values, principles,

policies, and structure of the organization are the main miles stones to analyze the company’s

strength.

CORE VALUES

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P&G is its people and the Core Values by which they live.

P&G PEOPLE: They attract and recruit the finest people in the world. They build their

organization from within, promoting and rewarding people without regard to any difference

unrelated to performance. They act on the conviction that the men and women of Procter &

Gamble will always be their most important asset.

LEADERSHIP: They are all leaders in their area of responsibility with a deep commitment to

deliver leadership results. They have a clear vision of where they are going. They focus their

resources to achieve leadership objectives and strategies. They develop the capability to deliver

their strategies and eliminate organizational barriers.

OWNERSHIP:  They accept personal accountability to meet the business needs, improve their

systems and help others improve their effectiveness. They all act like owners, treating the

Company’s assets, as they’re own and behaving with the Company’s long-term success in mind.

INTEGRITY: They always try to do the right thing. They are honest and straightforward with

each other. They operate within the letter and spirit of the law. They uphold the values and

principles of P&G in every action and decision. They are data based and intellectually honest in

advocating proposals, including recognizing risks.

PASSION FOR WINNING: They are determined to be the best at doing what matters most.

They have a healthy dissatisfaction with the status quo. They have a compelling desire to

improve and to win in the marketplace.

TRUST: They respect their P&G colleagues, customers, and consumers and treat them, as they

want to be treated. They have confidence in each other’s capabilities and intentions. They believe

that people work best when there is a foundation of trust.

PRINCIPLES

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These are the principles and supporting behaviors, which flow from their Purpose and Core

Values.

They show respect for all individuals.

The interests of the Company and the individual are inseparable:

They are strategically focused in their work:

Innovation is the cornerstone of their success

They are externally focused:

They value personal mastery:

They seek to be the best:

Mutual interdependency is a way of life:

HISTORY AND INTRODUCTION OF HEAD & SHOULDER

Head & Shoulders is a brand of anti-dandruff shampoo produced by Procter & Gamble.The idea

for Head & Shoulders dates back to about 1950 when Procter & Gamble research determined

that consumers were not completely satisfied with the then existing anti-dandruff shampoos. 

After 10 years of research, P&G scientists found an new and effective ingredient against

dandruff that that really worked—Pyrithione Zinc.  In 1960, P&G tested the product and by the

spring of 1961, the shampoo was given its name, Head & Shoulders, and Procter & Gamble

started to work on the packaging, displays, advertising, and marketing programs.  Head &

Shoulders was introduced to the public with the original product, which was a blue-green cream

shampoo in a white glass jar and was “clinically proven to reduce dandruff.”  Over the last 50

years, Head & Shoulders has significantly evolved offering a variety of shampoos and

conditioners to meet consumers’ hair and scalp needs.

Head & Shoulders shampoo is the most popular brand in anti-dandruff shampoos and is provided

by P&G. It is considered as the world’s no. 1 anti dandruff shampoo. It is highly recommended

by the users and a major highlighted brand as anti dandruff niche. It comes in different categories

like:

Classic clean shampoo & conditioner.

Dry scalp.

Ocean lift.

Smooth and silky.

12 | P a g eMohammad Ali Jinnah University Islamabad

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Refreshing menthol.

Intensive treatment.

Extra volume

Active support.

Clinical strength.

Restoring shine.

There are so many other available options for both men and women especially designed

according to their needs. The formula of Head & Shoulders shampoo is especially designed to

target the customers with dandruff, dry and damaged hair in all age groups.

The Head & Shoulders shampoo intensive solutions available are formulated to treat, itching,

flaking, irritation, dryness and redness caused by dandruff with medicated formula that also

helps to protect hair against damage. It removes dandruff and prevents further flaking. Its

formula provides better scalp protection and coverage to get rid of dandruff flakes up to 100%. It

gives you soft beautiful and dandruff free hair with the use of just one product. It is no.1 anti-

dandruff shampoo that is recommended by most of the dermatologists. With its regular use you

can have healthy scalp and flake free hair. The rich formula is gentle enough for daily use even

on the colored hair. Head & Shoulders treated hair remains soft and manageable as it deeply

cleanses, moisturizes and nourishes scalp and hair both. It is available for different hair types and

textures and these work best for frizzy, damaged hair.

The benefits of using Head & Shoulders will be:

Continuous fight against dryness

Calms itching with zinc based actives to comfort scalp

Reduces the flakes and prevents dandruff from coming back

Relives irritation

Makes hair look more beautiful and dandruff free

This product gives the best solution for the people who suffer from dandruff, irritable scalp and

itching. Making dandruff and its symptoms a history from life is easy with the use of Head &

Shoulders shampoo range and conditioners. The Head & Shoulder formulas are clinically proven

to get maximum protection right from the first wash.

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CUSTOMER AND COMPETITIVE ANALYSIS:

Target market:

The target market for the Head & Shoulder is the Higher middle class people who are brand

conscious, early adaptors and who care about the overall health of their hair.

Female: 16- 40 years

Male: 16-30years

Consumer Profiling:

Head and Shoulder in Pakistani customer are offer different kinds of shampoo

brand according to their needs.

Major Segmentation:

Marketing is one of the most important functions in business. It is the discipline required to

understand customers' needs and the benefits they seek. Market segmentation is the identification

of portions of the market that are different from one another. Segmentation allows the firm to

better satisfy the needs of its potential customers. Once the market is broken into segments,

companies can develop advertising programs for each segment, focus advertising on one or two

segments or niches, or develop new products to appeal to one or more of the segments.

The market can be divided into segments by using four "segmentation basis": Psychographic,

behavioral, geographic, and demographic basis. The basic criteria for segmenting a market is are

customer needs. To find the needs of the customers in the market .

Geographic:

Geographic segmentation of head and shoulder is worldwide. Now head and

shoulder i s s e rv ing more t han 180 coun t r i e s i nc lud ing Pak i s t an . Head and

shoulder in Pakistan mainly used in urban and semi urban area .Head and shoulder

in Pakistan’s geog raph i c s egmen ta t i on i s t he deve loped c i t i e s l i ke in Lahore,

Karachi, Islamabad, Faisalabad, Hyderabad, Multan, Peshawar, Sialkot, and Rawalpindi head

and shoulder is available on all provincial capitals of Pakistan.

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Demographic:

Head and shoulder’s general market segment is younger generation. But t h e y g o

w i d e i n t h i s t h i n g . T h e y s e g m e n t h i g h i n c o m e s a n d u p p e r class families

which can spend money on the best product quality in t he ma rke t .

Psychographic:

Head and shoulder’ s p sychog raph i c s egmen ta t i on i nc ludes peop l e w i th having

good attitude about beauty sense especially upper status regular group, potential user and non-

user.

Behavioral:

Head and shoulder’s behavioral segment is the class where people love to spend money on

high quality product. That’s why in Pakistan, head and shoulder is the firsts l a rge s t

shampoo b rand i n Pak i s t an and have 65 % marke t sha r e i n an t i dand ru f f

shampoo .

MAJOR EXISTING AND POTENTIAL COMPETITOR

Sunsilk

Lifebuoy

Pantene

Bioamla

Dove

Medicam

Clear

DaburVatika,

TOTAL SALE, MARKET SHARE AND PROFIT OF HEAD & SHOULDER

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Procter & Gamble, one of the world's premier consumer goods companies.Head & Shoulders

shampoo is the most popular brand in anti-dandruff shampoos and is provided by P&G. It is

considered as the world’s no. 1 anti dandruff shampoo. It is highly recommended by the users

and a major highlighted brand as anti dandruff niche. 20% of total net sales of proctor and

gamble came from hair care porduct like head & shoulder and pentene, both are capture 50%

share of total shampoo market in pakistan. P&G's market share has been consistently increasing

in the past five years as Procter & Gamble has put an increased emphasis on establishing its

products in this markets. P&G has created products designed specifically to target developing

nations. Research & Development focuses both inside and outside the company in 2010, P&G

spent approximately $2.04 billion on Research & Development, nearly $1 billion more than its

closest competitor, Unilever. The two most important factors in P&G's innovation process are its

practice of consumer demand research and its "Connect and Develop" R&D structure. First,

when entering new markets, P&G sets up in-home visits with consumers in order to fully

understand the needs and desires consumers have for household and personal products. This

way, P&G gets directly to its customers and is able to cater to their needs. P&G also incorporates

consumers' input into the R&D process through its "Connect and Develop" initiative.

18%

30%

24%

9%

15%

4%,

Sales %

Baby CareFabric CareBeautyGroomingHealth CareSnacks Care

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16%

26%

24%

14%

18%

2%

Earning %

Baby CareFabric CareBeautyGroomingHealth CareSnacks Care

COMMODITY PRICES

A diversified consumer products manufacturer, P&G depends heavily on a wide basket of global

commodities for manufacturing its goods. Higher commodity costs subtracted 0.5% from gross

margin growth. Nearly half of the company's cost of goods is directly related to commodity

goods. The company has increased prices due to higher costs of oil and other raw materials. P&G

instituted broad price adjustments in Q1 2010 to close widening price gaps in several businesses,

Analysts believe pricing adjustments are largely behind P&G as of Q2 2010, with an impact on

about 10% of P&G's products. As the market leader, the company does benefit from pricing

power and can moderate commodity inflation better than its competitors.

MARKET SHARE:

The good companies are offering thebest hair shampoos for every type of hairs. The competition

between companies to provide best hair shampoo is really tough. We can get shampoo in

Pakistan for every hair type

The total consumption of shampoo in the country is around 100,000 tonnes per annum, but the

local manufacturers are losing market share gradually due to the easy availability of imported

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shampoos.

The market for hair care in Pakistan increased at a compound annual growth rate of 9.9%

between 2010 and 2011. The shampoo category led the hair care market in Pakistan, accounting

for a share of 51.6%. At present, two multinational companies are manufacturing four

international brands in Pakistan: Pantene, Head & Shoulder, Pert Plus and Sunsilk. Another

brand, DaburVatika, is also sold in the market. The multinationals involved in manufacturing

shampoos in Pakistan are Unilever Pakistan and Proctor & Gamble Pakistan. In addition, a local

company - Kala Kola - is also manufacturing a product named Bioamla. The market share of

Head& Shoulder in Pakistan is almost 65% in anti dandruff shampoo.

CURRENT STRATEGY:

Major international brands turned up their focus on dandruff control and hair strength in their

marketing campaigns to target the specific and most common hair problems in 2011. The

strategy was employed by major players such as Unilever Pakistan and Procter & Gamble to

retain their brands’ visibility and remain a preferred choice for consumers. Promotional

messages had a scientific ring to them as scientific evidence such as a dermatologist’s support or

information on the ingredients of the hair products continued to be the major theme. 

The focus of these two major international players in hair care in Pakistan continued to focus on

marketing and advertising campaigns during 2010 as these leading players strive to maintain

brand image and consumer loyalty. In a bid to retain and boost their value shares, leading

manufacturers continue to focus on building brand perception by offering added value. In order

to achieve this, many leading multinational companies are involved in establishing a strong

media presence not only through the electronic and print media but also through below-the-line

marketing, engaging in activities including free product sampling and events which target

specific consumer groups such as young urban dwellers.

COMPETITIVE LANDSCAPE AND GROWTH TRENDS

“P&G is now one of the world’s largest beauty companies” (P&G Annual report). P&G states

that Head & Shoulder is the world’s largest hair care brand and that it grew in double digits over

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the last two-years. P&G claims that this success is due in part to their unsurpassed hair

conditioning technology.  Procter & Gamble Pakistan led hair care during 2010 with a 44% value

share through its brands Head & Shoulders, Pantene Pro-V, Herbal Essences and Pert Plus.

These brands have a long-standing presence in the country as well as a high degree of visibility

in the media and widespread availability throughout Pakistan.

 Hair care is expected to increase in constant value at a CAGR of 9.9% over the last few period,

with this positive but moderate performance reflecting the slow pace of recovery in the Pakistani

economy as a whole and the lingering negative effects of the devastating floods which hit

Pakistan during 2010. These floods caused a significant amount of damage to Pakistan’s rural

areas, although the major consumers of hair care include affluent urban consumers, who were

largely unaffected by the floods. Value growth during the forecast period will depend on the high

degree of inflationary pressure impacting manufacturers and distributors, the factors which have

the greatest influence on the overall retail selling price of hair care products.

SWOT ANALYSIS OF HEAD AND SHOULDER

Strength:

Shampoo market leader.

Beast anti dandruff in Pakistan.

Most admired brand in Pakistan.

Sale in small pack.

Easily available in market.

Focused on the frizzy and dry hair caused by hair color or curling hair dryer.

Product are constantly developing such as changing packaging to modern and modify the

formula etc.

It is well known in the market.

Weakness:

The most expensive as compare to competitors.

Targeting only high middle and upper class income.

Opportunity:

Growth in the hair care market can be morethan 9.9 %.

It can capture the more market share in the rural areas.

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Threat:

High shampoo market competitive.

Consumer is not loyal, influence of switch brand easily.

High price as compare to competitor.

MARKET/SUBMARKET ANALYSIS:

FORCES THAT REDUCING PROFITABILITY IN MARKET

Political and legal forces:

Rapid changes in the political scenario of the country along with the uncertain policies of the

Government have made the whole business community as uncertain. Also there is terrorism

prevailing in the important cities of the country like Karachi and Afghan War, which are

affecting the business activities. Policies about taxes are changing continuously due to changing

government.

Economic forces:

Increasing inflation in the country, persistently reducing the purchasing power of the

people and dropping people from high price shampoo to low price shampoo and

providing more fuel for expansion of local Producers.

Increased import duties on the finished goods and raw material have increased the price

of the product, along with this, increasing inflation in the country have made it difficult

for shampoo industry to transfer the whole increased cost at the consumer, thus forcing

the industry to operate at a very low margin.

Sanctions imposed by the developed nations on Pakistan due to nuclear experimentation

create the uncertainty in business activities.

Social forces:

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           The greater the tendency towards urbanization in Pakistan, the living standard which is forcing

the people to use standardized product and people are diverting from the beauty shampoo to

specially feature shampoo.

Technological changes:

           There are a number of major and rapid breakthrough in the technology of shampoo and their

manufacturing process, but innovations is required so that the product does not become obsolete.

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COMPETITIVE ADVANTAGE

Competitors are an essential part of any product’s scheme of operations. The strategies adopted

by competitors decide the operation plans for the product. Under the marketing concept,

companies gain competitive advantage by designing offers that satisfy target-consumer needs

better than competitors offers. They might deliver more customer value by offering consumers

lower prices than competitors for similar products and services, or by providing more benefits

that justify higher prices. Marketing strategies must consider the strategies of competitors as well

as the needs of target consumers. Some of the main points that constitute the competitive

advantage of P&G in general and Head & Shoulder in specific are:

P&G is one of the largest FMCG companies in the Pakistan and world. Its main competition is

with Unilever which has almost equal presence in the Pakistan and world. Procter and Gambles

sales $ 82 billion in worldwide. Head & Shoulder is known worldwide. It was the best selling

hair care line in 1991. Head & Shoulder is known to create healthy, shiny hair. P&G has one of

the largest advertising expenditures in the whole world. Following is the Proctor& Gamble’s

advertising expenditures: In 2011 P&G’s advertising expense reached $2 billion. P&G is known

for its innovation. It has a large diverse portfolio of products.

Head &Shoulder‘s customer base is also its very significant competitive advantage. It targets

women and girls and they constitute its loyal customer base. Head & Shoulder has a good Brand

Equity and there are always new kinds of hair types that it markets to. P&G intends to build

brand equity by developing distinctive products that stand for something and that have a definite

position in the market. They want to communicate the products benefits as compared to the

competitor, with a brand that is so amazing, appealing, and reliable that the consumer begins to

trust the bran

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INTERNAL RESOURCES ANALYSIS

MARKETING RESOURCES

Marketing resources are very critical for every organization because it leads to the performance

of a company. An organization with worthwhile marketing resources can fetch high sales and

profit. Marketing resources include following ingredient: -

Breadth and depth of product line

Market share

Marketing information system

Distribution channel

Market coverage

Company image

P&G is doing concentrating efforts on the best quality growth opportunity in the whole shampoo

market.

BREATH AND DEPTH OF PRODUCT LINE

P&G has launched one shampoo in the market of Pakistan in 1991, named head & shoulder.

Therefore, they have different product depths are available providing by P&G as compared to

their competitors in case of shampoo. In the depth they have:-

Head & Shoulders now comes in a new pack-design and logo in six variants:

Head & Shoulders Smooth & Silky

Head & Shoulders Refreshing Menthol

Head & Shoulders Clean and Balanced

Head & Shoulders Silky Black

Head & Shoulders Naturally Clean

Head & Shoulders Nourishing Aloe Vera

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HUMAN RESOURCES

P&G Pakistan is determined to create a way of working that release the energy and talents of

everyone in the company and strips away everything that stifles creativity. It aims to be a

company in which very employee knows what is expected of them, has the freedom to take

initiatives, is accountable for the results and is properly rewarded for success.

At present more than 300 employees are employed in P&G Pakistan, and in order to enable their

employees to achieve what is expected of them, the company has a well established program for

the training and a system for the measurement of their performance.

Human Resources ensure that P&G has the employees, organizational design and work culture to

deliver business productivity and to continually improve consumer, employee and shareholder

value.

RESEARCH AND DEVELOPMENT

“It is our policy to continue pushing the envelope when it comes to developing, validating, and

using new alternative test methods so we can reduce our need to do animal testing, and our

ultimate goal is to eliminate it.”

SHARE HOLDERS

Shareholders are important stakeholders at P&G. P&G has 1.3 billion shares of stocks

outstanding. Large institutions and mutual funds, retirement programs, individual investors and

employees throughout the world own these shares. Individuals hold approximately 50 percent of

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their shares, with nearly 20 percent held by employees and retirees. They work to increase the

value of P&G stock for all their shareholders in a variety of ways, including growing the

company’s sales and earnings each year. They measure for tracking their success for

shareholders is total shareholder Return (TSR). TSR measures how much value their investors

receive as a result of owning P&G stock. They track TSR against 29 companies in similar

industries, such as consumer, health care and beauty products. P&G tracks performance to

compensate key managers based on how well they increase shareholder value. Their Shareholder

Relations team is available every day to answer questions, listen to shareholder feedback and

provide perspective on Company decisions.

MARKETING INFORMATION SYSTEM

Success of marketing plan depends upon the marketing information system of the organization.

In this way MIS servers as a critical resource of any organization. P&G has developed a

marketing information system. with the help of this system, P&G gets market information, which

leads to better marketing planning. Moreover, sales force of P&G is served as source of

information about the market in different segments because its sales force has direct contact with

the customers.

DISTRIBUTION CHANNEL:

Distribution channel of a company is a very important for its survival, and especially in shampoo

industry, they have to make it excellent, because if they will not make it easily available to the

consumer, all is useless. So providing needs, satisfying goods at the right place is very important.

P&G itself has no distribution channel for head and shoulder rather they are distributing the head

and shoulder through International Brands Limited (IBL), which is a renowned distribution

company in Pakistan and they have their distribution network in all major cities of the country.

COMPANY IMAGE :

P&G is a multinational company and is using its corporate image as a marketing resource. So

this is beneficial for the safeguard in each segment. At present, P&G is famous for its quality

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product, but it has implemented different strategies to improve its image in future. Because just

providing quality products are not enough. They have to show concern for their

Society

Customers

Employees

P&G has adopted all its ways to achieve this aim, which will lead to a better corporate image of

the company in future. If they got a chance to see the advertisement of P&G’s head and shoulder

customer satisfaction and environmental safety are emphasized.

As explained above that company image can be used as marketing resource. Due to the image,

people are attracted to P&G. That’s why market helps the sales force to persuade the customers.

In this way, P&G is using corporate image as a marketing resource.

MARKET COVERAGE

As far as head and shoulder is concerned, P&G is emphasizing only on urban areas, while rural

areas are neglected, because their target market is middle and upper class and this class is mostly

located in urban areas. Therefore, due to their product features, their market coverage is better.

RESEARCH AND DEVELOPMENT

With respect to R&D, P&G Pakistan has a strong back from the P&G worldwide network of

research and development P&G’s innovations is a major competitive strength and is driven by

the market place. The company sets out to deliver the customers the right science with the right

processes at the right place. It must be seen to provide a quality of service, which is the best in

the market. P&G is spending millions of dollars in R&D worldwide, while they have R&D cells

in the countries in which the operations of business are going on. These R&D cells are

responsible to identify the technological breakthrough, taking place in these countries. They are

mostly customer oriented for which they test the products in the market and then introduce it to

the whole target market.

FINANCIAL RESOURCES :

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The head and shoulder business accounts contribute nearly 15% of the company’s profit. The

impressive growth recorded by the shampoo industry enabled it to make this contribution. This is

due to increase in sales on 20 % of head and shoulder in 2011. Along with this internal resource

generation, corporate name is at its back as sound credit worthiness for any borrowed fund.

PROMOTION AND ADVERTISEMENT

PROMOTIONAL STRATEGY

Promotion tools

Web marketing

Networking

Contests

Advertising sponsorship

Social awareness

The promotional strategy of head and shoulder is highly useful and effective. Using magazine

print advertisements and commercials allows for the opportunity to segment their advertisements

by specific magazines, specific TV shows, and specific time slots. These strategies provide

Pantene with the opportunity to wisely advertise to their target audience.

Without promotion the brand would be relatively unknown and its popularity would not be near

what has been established with promotion. Many times when a consumer sees a product in the

store that they have not heard of they will browse over it and choose a product they know.

Consumer and market knowledge are prevalent because head and shoulder and P&G are built

around what consumers want.

Public Relations is a large aspect of the P&G/head and shoulder promotional mix. large factor

for head and shoulder, they use marketing and business techniques to try and improve

consumer’s lives. They are always finding new and better ways to reach their consumers and

between their PR campaigns and advertising they are constantly appealing to consumers and

causing them to trust head and shoulder.

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The purpose in using aspects of the promotional mix is to build brand equity, brand awareness,

and frequently put our advertisements and name into the public to be seen. The frequency in

which the ads are seen is as important as the message we are providing.

Endorsers: global celebs like Pakistan cricket player like shahid khan afridi. In indiakarina

Each collection includes a shampoo, conditioner, treatment and styling products that helps the

consumer achieve their unique look. Not only did they change their products to match the

consumer’s desired style, they claim to have improved their technologies. Hair care companies

are building on the desire for women to maintain a young, natural, and fresh look. Marketers are

also beginning to key onto teenage girls more. Girls ages 15-19 increased sales 12% from 2008-

2011. Head and Shoulder’s promotional tactics are ideal and we feel they are approaching the

target audience well.

STRATEGIES

PRICING STRATEGIES

P&G always emphasizes head and shoulder as quality product and they try to differentiate it as

compared to competitors. But they have set the price of

head and shoulder which is equal to the major competitor product Sunsilk and Dove . Therefore,

we can say they are somewhat following competitive price strategy.

DISTRIBUTION STRATEGIES

As described earlier that P&G is distributing head and shoulder through International Brands

Ltd., distribution network which is a renowned distribution company. In each IBL office, there is

an Area Sales manager of P&G who is responsible to watch the activities of IBL regarding

distribution of Safeguard and make direct contact with customers to obtain the complaints.

PRODUCT STRATEGIES

Head and Shoulder is quality product and P&G do not compromise on quality. Therefore, in

product strategy, they are following differentiation strategy. There are the marketing strategies of

head and shoulder but there are a group of strategies, which determine the strategies of company

regarding a product.

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Market penetration

Market development

Product development

MARKET PENETRATION

Market penetration means to exploit the available consumer efficiently to achieve high market

share. This is probably done for a product, which is at the growth stage. Market penetration can

be done through heavy advertisement and by providing products of different sizes and types for

different consumers. For this purpose, highly extensive distribution channel should be used.

MARKET DEVELOPMENT

In market development strategy, organization should find the new uses of product, new segments

and entering into new geographic areas. Still head and shoulder is being used for shining and

germs protection purpose, focusing on urban areas and more emphasis on middle and upper

class.

PRODUCT DEVELOPMENT

For product development, development of internal resources is emphasized. Therefore, P&G

should acquire one more product or manufacturing plant for the production of head and shoulder

to capture the wide market. For head and shoulder P&G is intensifying the efforts to increase the

market share in growing industry because shampoo industry is growing with an annual rate of

9.9%. Therefore, we can say they are following consolidation strategy for head and shoulder,

because they are intensifying their efforts on advertisement and promotional activities.

STRATEGIC PROBLEM

P & G is facing the problems in the following areas:

There is gradual increase in the substitution of Head and Shoulder due to its higher price.

There is also great competition in the local Producers due to low price shampoo and also

great competition in the organized sector due to equal size of the competitive

organizations.

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As far as Head and Shoulder is concerned, P&G is emphasizing only on urban areas,

while rural areas are neglected.

P & G is Unwilling to serve low-income market. Other competitors in the shampoo

industry are serving in each class with respect to different prices & their target market is

upper class, middle class and lower class, each class with respect to different prices. Head

and Shoulder’s Price is especially very high towards lower income groups.

P&G itself has no distribution channel for Head and Shoulder rather they are distributing

the Head and Shoulder through International Brands Limited (IBL). This is also the

reason for the high price.

POINT OF DIFFERENT

We compare our product with other brands which has same product that is shampoo so it find out

some point that are as under:

Flavor:

Some people like many flavors in shampoo for example in Sunsilk and Pantene they have at least

five flavor but we are six flavors in anti dandruff head and shoulder

Extra feature:

Other brand of shampoo has some extra feature for example dandruff contrl and also help to long

hair, but head and shoulder shampoo is only for dandruff control so our femail customer that are

much conscious for their long hair switch to other.

Price:

Price is the major factor that can help to retain and attract out customer, but the head and

shoulder price is much higher to other.

Internal service quality:

In the internal environment of the company they can hire the more expert people and also trained

the existing employees to make them more productive.

Market demand:

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Market demand of head and shoulder in the market is very high if the price of the head and

shoulder is increase very less then it is effect to much on its demand but if its price largly

increase then it effect the demand.

Product design:

The design of the bottle head and shoulder is attractive for its customer.

Satisfy and loyal customer:

Due to the high quality of the product the Procter & Gamble is committed to providing products

and services of superior quality and value that improve the lives of the world's consumers. The

customer of P&G are fully satisfied with the product and they are also loyal to the company

Distribution:

The distribution channel of head and shoulder follows the conventional o route of FMCG

marketing, factor to distribution to whole seller to retailer to consumer. Head and shoulder has

the strong distribution channel, it can be available every where and customer can not find any

difficulty to buying this product.

BRANDS IN PAKISTAN

Head & Shoulder            

Pert Plus               

Vicks

Pentene                             

Rejoice                 

Camay

Safeguard                         

Pampers              

Always

Ariel

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EXTERNAL ENVIRONMENTAL ANALYSIS

Nature of the environment

P&G head & shoulder is operating in a complex and stable environment, complex because there

is a number of factors in its environment, about which less information, stable, because the

changes in these factors is predictable factors, which makes its environment complex are:

Retailers

A group having strong influence over the opinion of the consumers regarding which shampoo

should be purchased. This group is becoming more and more concern to their own

incentives/margin.

Local producers

Small head & shoulder shampoo manufacturing units, having no or very low overhead charges,

under fix tax system or hidden units evading tax and growing like mushroom, involve in the low

price shampoo war, exploiting consumers through retailers.

Reference group

People having social influence on their neighbors also affect on the sale of shampoo.

Technology:

Moderate changes in the technology of shampoo manufacturing decrease the ……………...

Urbanization:

Increase in rate of urbanization especially in Pakistan has made the environment more complex

of shampoo industry.

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SWOT ANALYSIS OF P&G

STRENGTHS

Heavy and impressive promotional plan for head and shoulder.

Product innovation

Strong social & corporate image of P&G.

Strong financial position of company.

Strong customer loyalty.

Strong brand image.

More concern towards total quality management.

Highly health caring product.

Diversified business structure.

Direct contact with customers.

P&G’s good relations with the supplier.

Strong emphasis on environmental prosperity.

Worldwide research and technology, engineering and manufacturing.

Well-established and renowned distributors.

Highly enthusiastic sales team of the company.

WEAKNESSES

Unwilling to serve low-income market. Price is especially very high towards lower

income groups.

Increasing promotional spending to keep healthy sales.

Customer concentration

Reductions in cash flow levels

Mature Markets

High customer concentrations

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OPPORTUNITIES

The shampoo market is growing at an annual rate of 9.9%. The main reasons for this

growth are:  Rapid growth in population, High urbanization, Increase in awareness

among people about new advancements. Due to this growing market, there are lots of

opportunities for P&G to exploit this growing market by introducing new shampoo

brand.

Due to rising awareness among people, switching trend toward health hair care shampoos

is high. Therefore, it is a good opportunity to capture this segment through efficient

marketing practices.

Selling direct to the customer.

Better product experience.

Good growth potential in the Health andBeauty segment

Growth potential of domestic retailers

THREATS

Increasing market share of local Producers. The local Producers are playing an important role

in shampoo industry, because they are providing low price shampoos and try to penetrate in

their local market by replacing the branded products.

Increasing cost of raw material

Substitute brand that have a cheaper price.

Increasing inflation in the country is also a major threat of P&G because it is reducing the

purchasing power of consumers.

High levels of competition

Raw material and energy price increases

MAJOR STRATEGIES:

Business-level Strategy

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P&G, with the largest product portfolio in the consumer products industry, faces significant

challenges maintaining cost efficiency and scale economies while creating innovation and

differentiation.

The company is divided into four pillars:

1- Global Business Units

2- Market Development Organizations

3- Global Business Services

4- Corporate Functions,

Each working separately and together to bring competitive advantage to P&G. As competition

from other major global and small local companies are vying for market share, a sound business

strategy, with a focus on flexibility and responsiveness, is required to maintain and grow their

leadership position. P&G's business strategy focuses on large-scale operations, strong product

branding, and product innovation to develop competitive advantage. P&G is the global leader in

its four core categories, Baby Care, Feminine Care (35%), Fabric Care (approximately 30%), and

Hair Care (greater than 20%). To achieve sustainability and continued growth, P&G's strategy is

to continue to innovate and sell products that appeal to retail trade customers and consumers,

providing pricing and product that adds value for the customer, while improving efficiencies in

sales and operations with their ongoing restructuring and technology enhancements, and quickly

responding to competitive advancements. Their comprehensive research network and $2B of

research spending annually support their innovative focus. And are technology innovators for

improving efficiencies and reducing costs, such as with bar coding and wireless technologies.

With their market knowledge and focus on efficiencies. They excel at "demand chain planning,"

identifying their "target market's requirements and designing the supply chaining backward

from that point.

Global Strategy

P&G has made substantial investments globally, and used acquisitions, joint ventures, and

alliances to expand their market understanding and reach. Key to expansion are three

competencies P&G has developed:

1- understanding of the foreign marketplace

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2- ability to manage people in foreign markets

3- skills at managing foreign subsidiaries.

Their global strategy includes innovation, increasing market share on base business while

focusing on each business as well as on each industry, and investing in the developing

marketplace. P&G has gained substantial market knowledge, has innovative databases including

over 100 million consumers across 30 countries, utilizes a blend of local and expatriate

managers, and provides training, global resource centers, and partnerships and alliances for

managing foreign subsidiaries, all successful activities that promote local acceptance and a

climate enabling knowledge transfer. Overall, P&G has a well-developed knowledge base and

global mindset, and with innovation a key component of their global strategy, they have created

the ability to implement distribution systems that can move innovations across borders.

Corporate Strategy

P&G markets over 300 products in 160 different countries. P&G groups its business into two

categories,

1- foundation business

2- higher growth business.

P&G is aware of their core products and business foundation, but also understands that the

development of new products through innovation, research and development is the key to

maintaining its competitive advantage. P&G should continue its current successful strategy.

STRUCTURAL ANALYSIS

Porter model.

Structural analysis helps to analyze the competitive process as well as the sources of competitive

pressure. In the structure analysis, certain questions like what are the strengths of these pressures,

what type of competition is prevailing and what future competitive conditions will be included.

Generally, there are five forces which affect the competitive position in an industry and these

forces are as follows:-

1)                Competitive rivalry

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3)                Supplier’s power

4)                Threat of new entrants

5)                Substitute products

COMPETITIVE RIVALRY

Competition is concerned with the degree of rivalry within the industry. Danger of rivalry

is greater when the competitors are of equal size. In the shampoo industry, the

competitors are;

Sunsilk

Lifebuoy

Pantene

Bioamla

Dove

Medicam

Clear

DaburVatika,

So competition is very tight. Rivalry is greater between these three firms due to their equal sizes.

Shampoo industry shows growth rate, which is 9.9% per annum. It seems that it offered very

lucrative business opportunities but these opportunities also carry threats with them. Because to

capture the high market share, an organized distribution channel is required for this industry

which carry heavy cost.

THREAT OF NEW ENTRANTS

P&G possess a significant amount of market share in Pakistan. It is generally said that the

industry where the threat of new entrants is low, the industry is considered to be secure and

attractive. In the case of shampoo industry, the barriers to new entrants are large initial capital

requirements and product differentiation as well.

Also the available shampoos have a strong image among consumers and it is very difficult for

new comers to break that image. Due to these reasons, the threat of new entrants is low but not

zero. Because, there are chances that ICI may enter into the shampoo industry. Anyhow, it is

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very difficult for new comers to enter into the shamp00 industry. To compete P&G, a competitor

must have a large sums of capital for heavy marketing and R&D.

THREAT OF SUBSTITUTES

Substitute means a product which can perform the same functions as the original product can

perform. Substitute of the head and shoulder anti dandruff is Dove, and Clear and clean

shampoo. Since the quality of these substitutes is not comparable. So there is low threat of

substitute to the shampoo. But due to rise in inflation in the country,threat of the substitute of

high price shampoo like head and shoulder is gradually increasing.

BUYER’S POWER

When there are a few number of buyers those purchase the large portion of a company’s sale,

then in this case, they have maximum power. But in the case of shampoo industry, the buyers are

the distributors, to whom bulk amount of products is sold and this sale is maximally on the cash

basis. So the buyers have no handsome power to interrupt or interfere in the Shampoo industry.

SUPPLIER’S

Supplier’s power is less because they are having support from their parent company fraw

material and technological assistance.  Supplier of P&G need key customer for profitability

revenue generation and will have little bargaining power. Rising interest rate and decaling

availability of credit ultimately should not affect P&G’s relationship with is supplier.

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Value Chain Analysis, P&G

Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best outsourced. It suggests that the activities of a business could be

1. primary activities

2. supporting activities.

1. Primary Activities- Those that are directly concerned with creating and delivering a product (e.g.

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Component assembly).

Sourcing and Procurement (sourcing, supply planning, materials procurement)

Relating this model to P&G’, it could be implied that H&S raw materials are sourced

and or procured from all over the world, wherever it would be cost-effective. It is thus no surprise

that for a number of years it had focused on ways to improve supply chain efficiency and costs. It now

has a powerful industrial network linking electronically to major suppliers and customers. This is to the

extent that it changed companies when efforts to reduce inventory levels only produced marginal

improvements.

Operations (assembly, branch operations)

P&G’s operations had four business units: health and beauty, babies, snacks and beverages, and fabric

and home care. It offered more than 300 products including major brands like Tide. It has been

aggressively using product lifecycle management software since 2000 for new product development.

The company uses MatrixOne software for mechanising and automating the knowledge components,

and flow components, within the bringing-a-product-to market phases.

Outbound Logistics (warehousing, shipping, fulfilment)

P&G’s largest customer was Wal-Mart that had a reputation for requiring suppliers to coordinate their

supply chain processes with its powerful just-in-time continuous inventory replenishment system. A

database is used to hold information about work processes vital for creating, reviewing, approving, and distributing products. This enabled the company to lower its costs on item such as pigments and chemicals, and to reduce development time.

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Sales and Customer Service (sales, order processing, customer supportaccording to the Wal-Mart was P&G’s largest customer, accounting for nearly 20 percent of its sales and could be responsible for one-third of P&G global sales by 2010. Wal-Mart capitalised on this position to force P&G to sell wares to them at the cheapest prices possible.

2. Support Activities

It is rare for a business to undertake all primary and support activities.

Financial Management (financing, planning, investor relations)

This is because it was able to perform “what-if”

Analyses on inventory levels, in-store stock outs, and transportation costs to find out alternate rules to Existing ones being analyzed, such as ordering and shipping frequencies or product allocation in distribution centers. It was discovered that trucks should be often dispatched before fully loaded. Although transportation costs would be higher using partially loaded trucks because of both driver

Time and fuel to deliver fewer goods, the simulation showed that retail store stockouts would occur Less often, thus reducing the amount of lost sales which would make up for the higher distribution costs.

Research and Development (product design, testing, process design, material research)

P&G came to be seen as unimaginative, even stodgy. It seemed weak in developing new products, and had developed just one product in 15 years. This gave the chance for traditional competitors and makers of generic versions of their branded products to grab market share. It established an Intranet called Innovation Net, which was used to bring people together who are working on similar problems

in order to generate synergy for new product ideas and product development. Using the same

Intranet, P&G allows outsiders like research scientists and entrepreneurs to search for new, innovative

products worldwide.

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Human Resource Management (recruiting, training, compensation)

P&G began to use information systems to support how learning occurred within the company.

It created an intranet through which new employees could network with experts, learn from projects and receive answers to pertinent questions. This system encouraged experts to share their knowledge with ‘newbies’ through an implicit compensation or reward system. Further, human resource was

provided with tools they needed to enhance their trade. For example, marketing personnel were given

Marketing and Advertising

The company employed the use of knowledge systems to manage marketing. It also uses a very small

information. Using information technology in marketing had been ignored in the past because they saw it as complex. P&G’s various brands, product lines, customers, and even different marketing groups each used their own independent software for some functions, including email and marketing campaign management.

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References:

www.head&shoulders.com

www.answer.com

www.p&g.com

www.google.com

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