Slide 1

Megan Eisenbrown, Juliet Levine, Hillary Pond and Rachel Woloszynski Slide 2 Agenda IntroductionIndustry StructureAdvertising Strategies Analysis & Recommendations Slide 3 Why Soaps & Detergents? Regularly and frequently purchased products Brand loyalty to household products Key players stand out High advertising-to- sales ratio Slide 4 Soap & Cleaning Compound Manufacturing in the United States Slide 5 Industry Overview Definition: Substances that loosen and remove soil from a surface for personal hygiene, sanitization or cleaning clothes, linens, and furnishings. Major products: Soaps and detergents, polishes and other sanitation goods, surfactants and finishing agents Major functions: Prepare, manufacture, and package cleaning compounds Slide 6 Soaps & Detergents Overview Slide 7 ProductProducer Cost Consumer Cost: Average Retail Price Laundry Detergent Ingredient costs are 35- 40% of wholesale price Labor costs absorb 20% of total costs High initial capital expenditures for plants and technology $5 Soap$2.50 Dishwashing Detergent $2 Slide 8 Demand Drivers World Price of Crude Oil Per Capita Disposable Income Drive/stifle industry growth Slide 9 Demand Drivers FY13: The increase in per capita disposable income is expected to drive growth in the industry in 2013. Slide 10 International Trade Industry exports generate $8.6B annually, or 15.4% of industry revenue. Core Market Expansion Opportunity Slide 11 International Trade Slide 12 Market Segmentation Commercial Sales Food Service Establishments Healthcare Providers Lodging Establishments Household Sales Supermarkets and Mass Merchandisers Convenience Stores Independent Retailers Soaps and detergents are sold directly from the wholesaler to commercial businesses and through retail outlets for the everyday, average consumer Slide 13 Market Segmentation Slide 14 Barriers to Entry Factors affecting entry Mature Life Cycle Government Regulation High Competition High Marketing Costs High Capital Costs Medium Concentration Overall difficulty of entry: Medium Slide 15 Competitive Landscape Companies: 1,964 Major Players: 4 HHI: 541.71 The top 50 companies hold about 90% of the market. -FirstResearch Slide 16 Major Players Ecolab Market Share: 5.9% FY12 Profits: $3.2B 5-Year Growth Rate: 6.7% Brands: Ecolab S.C. Johnson Market Share: 9.5% FY12 Profits: $15.2B 5-Year Growth Rate: 2.9% Brands: Pledge, Glade, Windex, Ziplox Colgate-Palmolive Market Share: 5.7% FY12 Profits: $3.1B 5-Year Growth Rate: 2.4% Brands: Colgate Toothpaste, Irish Spring, Palmolive Procter & Gamble Market Share: 19.6% FY12 Profits: $10.7B 5-Year Growth Rate: 3.4% Brands: Tide, Cascade, Charmin, Crest Slide 17 Industry Trends Employment Fewer workers due to increased automation Decrease in production costs Emerging Markets The U.S. market is stagnant Increased of acceptance of products and per capita income in undeveloped nations Increasing Regulation Further the green movement within the industry Slide 18 Strategies and Analysis Slide 19 Product Differentiation Slide 20 Differentiated Packaging Slide 21 Cross Promotion Slide 22 Online Advertising & Social Media Add pictures Slide 23 Informative Slide 24 Ad Characteristics Observations Frequency of Characteristics Mentioned: High Average Number of Characteristics Mentioned: 3 Common Trends: cleaning power, concentration Frequency of Characteristics Mentioned: Medium Average Number of Characteristics Mentioned: 2 Common Trends: freshness, clean boost, scent Frequency of Characteristics Mentioned: Low Average Number of Characteristics Mentioned: 0-1 Common Trends: clean, color enhancement Slide 25 Sales Promotion Slide 26 YouTube Slide 27 Celebrity Endorsement http://www.youtube.com/watch?v=fxVUPe2 nQj8 Slide 28 Humor Advertising Slide 29 Comparative Advertising Slide 30 Sustainability Initiative Slide 31 Social Responsibility Slide 32 Sponsorships Slide 33 Brand Loyalty Thats my Tide. Whats Yours? Get Irresistibly Fresh Its All Good Slide 34 Brand Equity Goodwill (2012) In Billions Procter & Gamble53.773 Colgate-Palmolive Co. 2.5 Johnson & Johnson 22.424 Slide 35 Comparing the Top 3 Companies in the Industry Slide 36 Total Advertising Expenditure by Company Slide 37 Advertising-to-Sales Ratio Slide 38 Analyzing Raw Data Slide 39 Spending per Media Type Slide 40 Spending per Network Slide 41 Spending per Program Type Slide 42 Advertising Expenditure by Product Slide 43 Spending per Network Slide 44 Spending per Program Type Slide 45 Spending per Week Day Slide 46 Spending by Day Part Slide 47 Product Spending on Prime Daypart Total Ad Spending Percent of Total Spending on Prime All$8,228,173$19,878,16041% Gain$3,719,908$8,898,49942% Tide$29,486,556$67,277,10244% Ad Spending on Primetime Slide 48 Ad Observations: Key Findings High frequency of characteristics Limited to no comparative advertising No celebrities, humor, or emotion Demographic: children Gain Repetition of the word Freshness References to that other stuff in indirect comparison Money back guarantee Humor was evident in almost all cases Tide Library of commercials was extensive Humor and emotion was evident in almost all cases Demographic: parents Thats my Tide. Whats yours? All Slide 49 Ad Observation: Spanish Demographic Slide 50 Industry and Advertising Analysis Slide 51 Investment Barrons Slide 52 Procter & Gamble Co Slide 53 Advertising Strategy Exploring less saturated markets globally Promoting sustainable side Expanding the target demographic Innovation Slide 54 Questions?