Palmolive Case Analysis

PMPC BA 115 A pillow slip Title Palmolive Naturals wash Connecting with the Consumers Point of View Ms. Gigi Alv arz Senior Product passenger vehicle of Palmolive lave The Problem Ms. Gigi Alvarez, senior produce manager of Palmolive lave, need to groom grocerying plan for Palmolive wash in five-spot days to be presented to the Marketing Review. Objective To prepare a trade plan for Palmolive wash in five days to be presented to the Marketing Review. Areas of Consideration 1. ) conjunction land The present c both(prenominal)er-up, Colgate-Palmolive, is an $8. billion consumer harvest-tides company that serves people around the world with known filths that render consumers lives healthier and much(prenominal) enjoyable. Truly global in scope, its gross revenue come from its international operations. The company foc occasions on five core businesses literal Care, Personal Care, Household Surface Care, Fabric Care, and Pet Nutrition. Now, it has execute a champi oning marketer if non a leader in near product categories it competes in. The parent company has research and development (R&D) operations in Piscata itinerary, youthful-fashioned Jersey, scarce when it in any case established a regional R&D base in the Philippines. . )The lave industry In 1996, at that place were three major shampoo compensaters in the Philippines. The category leader was Procter and stake with five shampoo prints (Pantene, Rejoice, Head & Shoulders, Ivory, and Vidal Sasson), Unilever (Sunsilk, Lux, and Organics), and Colgate-Palmolive (Palmolive Naturals, Palmolive Optima, and Gard). The three manufacturing businesss control ab stunned 91 percent of the shampoo market. More than one hundred former(a) shampoo brands compete for the re of importing nine percent. The shampoo industry was long dominated by Colgate-Palmolive and Unilever.Colgate-Palmolive was very strong during the 1960s-1970 while Unilever besidesk over the leadership in short during the late 1970s. Procter and Gamble entered the shampoo market by introducing Prell, quit the market and then re-entered the market through Rejoice in the late 1980s. Palmolive was shut up the brand leader nationwide because of good diffusion and popular price. However, in Metro Manila, Procters Pantene was number one in some studies. Procter with five shampoo brands became the shampoo category market leader in 1995. 3. )Marketing intermixture ElementsIn 1996, at that place were five variants of Palmolive Naturals lave each catering to a peculiar(prenominal) bull type. Palmolive Naturals utilized a translucent plastic bottle with a label and full fliptop cap. Each had unique label and closure cover. Palmolive Naturals is the cir cumstances market shampoo of Colgate-Palmolive and was positioned as a shampoo made from native ingredients that are hiyang (roughly translated, compatible). In 1990, Palmolive Optima 2-in-1 shampoo plus conditioners was launched with a hair scientist de monstrating the instruct benefits of the shampoo to hair. Colgate-Palmolive too had a strong antidandruff shampoo brand in Gard.Product life cycles for shampoo brands are becoming shorter and news ab step to the fore a brand must be had at least every 2 years. Just recently, Procter and Gamble started importing shampoos from its subsidiary in Thailand. Colgate-Palmolive and Unilever continued to manufacture shampoo in the Philippines. Colgate-Palmolive had a good distribution system that matched the capabilities of its deuce competitors. Its relationship with its wholesalers and wide retailers was quite strong. Allowances and trade support were adequate and competitive. Wholesalers and big retailers then supply the gnomisher account, mostly sari-sari (provision) storeowners.To win the shampoo struggle the brand must put on extensive coverage. To correct a brand ubiquitous it must be carried by the sari-sari stores. However, company support for the small sari-sari- stores was weak and some regions in Visayas and Mindanao have poor coverage. Palmolive Naturals was priced 5 to 10 percent lower than Palmolive Otima and some other brands of Procter and Unilever. The market commode be carve up into three gibe segments, namely economy price, medium set, premium pricing. When Palmolive Naturals was launched, forage Salonga was its protrude model and celebrity subscriber. The first of the series of commercials was aired in December 1989.It was shot in London and it was one of Leas first television commercial appearances in the Philippines. The scat mettlesomelighted Palmolive wash as being specially formulated for Asia long, black hair and it was called the Palmolive shampoo with Conditioner picky Care for Asian fuzz campaign. Palmolive aired several commercials with Lea Salonga. The campaign was aired on television and radio, and printed in newspapers. These were supplemented by campus tours where Palmolive promo girls distributed free Palmolive s hampoo and soap, and flyers and catalogues featuring Lea Salonga.Palmolive was non to be left behind in the hair salons. They obtained the services of hairdresser, Ricky Reyes, as an endorser and also sponsored his Beauty School confirming educational television show. He was also featured in commercials cum public relations in caring for the Asian hair and the Palmolive Hair Crime News campaign. Alternative Courses of Action The first alternative is to brace a marketing plan ground on the Price Strategies of Palmolive Shampoo. Advantages fetching pricing decision is one of the critical factors of business for Palmolive Shampoo.To take the pricing decision a proper research necessitate to be carried out such as on the product availability, competitors pricing strategy, clients perceived pricing, clients entrustingness to pay the price of the product, demand factor etc. The pricing decision influences the demand of the product in the market, the pricing strategy of the competi tors, the profitableness of the company and the most important is the guest decision on purchasing the product such as which brand product to spoil and which non, which will give the major satisfaction to the customer by rendering the towering value at the lesser price then the competitors.Palmolive Shampoo whitethorn indulge in skimming strategy, which allows the company to often start with a high price for their unique products. . For customers, who buy the product first, it is a view symbol & these customers are willing to pay a very high price. So the company can skim the market. Later, the company has to make a price reduction to cling to a greater extent customers. With this price reduction, Palmolive Shampoo can give contrastive discounts to their customers. A customer who smart sets a life-sized measuring rod on an item may receive a quantity discount.A electrical distributor who gives marketing information to the company or takes on other tasks of the compa ny, for example, the transport, may receive a trade discount. The company can give a patronage discount for a customer who buys at this company for a long succession or it offers a bonus if the customer buy a large amount during one year. Customers who pay cash may be given a cash discount. And the company can also give an employee discount for its own employees. Part of the price policy of Palmolive Shampoo is to decide who receives a discount.This makes it difficult for customers to compare prices of different companies. If Palmolive Shampoo pauperisms to cut through a market, it starts with a low price. With this penetration strategy, Palmolive Shampoo wants to win a plenteousness of customers and it often wants to beat the competitors with the low price. This is called a low-price strategy. Later Palmolive Shampoo tries to raise the prices to make to a greater extent than profit. After penetrating the market, Palmolive Shampoo, capturing strategy comes in if a company offer s products which are linked in some way it can use different prices strategies for the different products.Disadvantages The primary disadvantage to the company that engages in competition based pricing is that they are not pricing based on the value reelected to customers orless optimallyon the basis of their cost. Thus, they are unable to effective manage revenue to a target, creating a chaotic income stream, with all the disruptions in management and customer fuck that may entail. Additionally, competition based pricing is an efficient way to social movement profit out of the entire industry.Once a single company responds to a competitor with a price change, it is very difficult for other companies not to respond with price changes of their own. Almost always, those price changes are discounts, and expire a race to the bottom. Another disadvantage is that Palmolive Shampoo would have fixed cost. The belief of fixed cost means that these be never change. Rent and salaries are fixed cost. If the company produces and trades a thousand more products one month and sells fewer the next months, the fixed costs dont change.That means if costs is the important factor in pricing, then the pricing should fluctuate from month to month. naked as a jaybird materials and sales commission are variable costs or costs that change from period to period. Consumers can be sceptical of pricing fluctuations and it erodes brand trust. If costs of production decrease, cost plus pricing suggests that pricing should decrease. Then, you Palmolive Shampoo would lose on profits, this would mean that Palmolive Shampoo is not efficient in their pricing. It works the opposite if production costs increase. Cost plus pricing doesnt inspire efficiency.As long as customers are paying production costs you dont have any incentive to lower costs or fuck off faster, cheaper and more effective ways of producing products. Its easy for a company to become complacent. Meanwhile, competitors are taking steps to produce a better product faster, which allows them to steal market share. The second alternative is to make a marketing plan based on the Distribution (Place) Strategies of Palmolive Shampoo. Advantages If merchandising directly from the producer to the consumer was always the most efficient methodology for doing business, the need for channels of distribution would be obviated.Intermediaries, however, supply several benefits to both Palmolive Shampoo and consumers improved efficiency, a better intermixture of products, routinization of minutes, and easier searching for goods as well as customers. Intermediaries provide a second benefit by bridging the gap between the assortment of goods and services generated by Palmolive Shampoo and those in demand from consumers. Palmolive Shampoo typically produce large quantities of a few similar products, while consumers want small quantities of many different products.In order to smooth the flow of goods and services, intermediaries fare such functions as sorting, accumulation, allocation, and creating assortments. In sorting, intermediaries take a supply of different items and sort them into similar groupings, as exemplified by graded agricultural products. ingathering means that intermediaries bring together items from a number of different sources to occasion a larger supply for their customers. Intermediaries allocate products by breaking mess a homogeneous supply into smaller units for resale.A third base benefit provided by intermediaries is that they help snip the cost of distribution by making transactions routine. Exchange relationships can be tiredized in terms of lot size, frequency of delivery and payment, and discourses. Seller and buyer no longer have to bargain over every transaction. As transactions become more routine, the costs associated with those transactions are rock-bottom. With these advantages, this could strengthen the distribution strategy of Palmolive Shampoo. And it would greatly improve the companys poor market in the Visayas and Mondanao region.Disadvantages The main disadvantage of direct distribution is that Palmolive Shampoo typically lack retail expertise, this greatly contribute to the poor coverage of the company in Visayas and Mindanao areas. The Company with a good product to offer the market may not be good at marketing it. By using other distribution channels to distribute their product, they are able to make use of the expertise of dedicated retailers and wholesalers. Not only that, the period that a manufacturer spends in retailing activities is time that might be better exhausted on production-related activities.Another downside is the cost factor. Costs associated with selling directly to the consumers are high compared with using intermediaries for the same level of sales. This includes costs of hiring and training salespeople, travel and transportation, peal and postage costs. In addition, the overheads of opening a nd maintaining retail outlets and hiring work force to count after such operations are high. With cost come to hand, time would be another factor. With Palmolive Shampoo researching on new customers and visiting them to sell the products consumes much time.The salespeople spend most of their time haggling with customers over the price. Additionally, time is also spent following up on the existing customers to image repeated buying in future. Palmolive shampoo will most apt(predicate) focus on the sales volume quite a than targeting customer needs and their satisfaction. Additionally, the salespeople are driven by the need to earn large bonuses at the expense of customer satisfaction. Customer loyalty and poor brand image will result leading to declining sales in the long run. The third alternative is to make a marketing plan based on the Promotions Strategies of Palmolive Shampoo.Advantages Promotion is a form of corporate communication that uses various methods to impinge on a targeted audience with a certain message in order to achieve specific organizational objectives. Nearly all organizations, whether for-profit or not-for-profit, in all types of industries, must engage in some form of onward motion In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response.Marketing communication decisions include Promotional strategy (push, pull, etc. ), Advertising, Personal selling & sales force, Sales promotions, Public relations & publi city, Marketing communications budget. New customers might learn to love Palmolive Shampoos product and become semipermanent clients. Such efforts may range from multinational firms spending large sums on securing high-profile celebrities to serve as corporate spokespersons the benefit of using celebrities to endorse your brand is you can capitalize on the goodwill t hey elicit from the public.Palmolive Shampoo having Lea Salonga promote their Shampoo products, Ricky Reyes also an endorser to the company there is no question why consumers purchases of Palmolive Shampoo went up. Disadvantages An obvious disadvantage to a promotional strategy is its potential for failure. Worse, the long-term benefits of Palmolive Shampoo might not offset the costs of the promotion. Careful research and expert advice from a marketing consultant can help maximize Palmolive Shampoos chances for success, but nothings guaranteed.The longer a sales promotion lasts, the more likely Palmolive Shampoo will decrease the perceived value of their product. For example, if a restaurant offers a steep discount for childrens shampoo to get families, parents might balk at paying more after they get used to the low prices. Palmolive Shampoo should keep promotions short to prevent long-term damage to their overall pricing strategy. If Palmolive Shampoo promotions occur in a predic table pattern, potential customers might wait for a sale rather than buy the product or service at full price.For example, if a retail clothing store offers a sizable discount on most holidays, sales will be low between holidays, and comparatively few customers will ever pay full price. Another, consumer might fury as soon as the promotion is over and continue to follow for bargains. Converting bargain hunters to permanent customers depends on developing brand loyalty. For example, if your excellent customer service or high-quality products impress them, they are more likely to bear with you after prices return to normal levels. The fourth alternative is to make a marketing plan based on the Product Strategies of Palmolive Shampoo. Advantages Product strategy marketing deals with the tools, technology and methodologies a business uses to distinguish its products. With sound marketing, Palmolive shampoo may receive more attention for its efforts to woo customers and make its Shamp oo products more desirable. With Palmolive Shampoo consistently comes up with sound product outlines and adeptly markets its merchandise is the darling of investors and securities exchange players.Effective product strategy marketing enables Palmolive Shampoo to depend potential cost and performance attributes for their products, as well as determine which attributes could spur profitability down the road. The goal for Palmolive Shampoo is to find out features that customers like and how much it will cost to add them to products, while holding in mind profitability goals top leadership has set. This concept helps a business chart a product strategy compatible with other parts of its marketing plan meaning Palmolive Shampoo must make sure it designs goods it effectively can sell, promote and distribute.Disadvantages One of the disadvantages that Palmolive Shampoo would chance is the higher(prenominal) cost of products. Related to the increased staff requirements are higher costs commonly associated with a product specialization strategy. Not only are there usually increased labour costs, but costs to customize products and research particular needs of each given customer market are expensive as well. Salespeople that sell to multiple markets also typically have to travel farther, which increases time spent travelling and costs associated with making sales.These higher costs mean the companies must generate more sales and charge higher prices to net profit When Palmolive Shampoo uses a product specialization strategy, it is inherent for branding that the development and marketing of the product remains consistent across all customer markets. If the company fails to deliver an effective product solution to a particular market segment, the invalidating damage to the brands image can have effects across all of the companys customer markets.Thus, Palmolive Shampoo needs to maintain a consistent standard of quality and durability to maintain brand image. Anothe r challenge of a product specialization approach is that Palmolive Shampoo can be too focused on product research and development and fail to play off promptly to changes in customer demand and interest. With more customer-centric approaches to targeting customers, Palmolive Shampoo is more likely to keep up with changes within the marketplace to know how to shoot products and market them in a way that satisfies marketplace expectations.Recommendation/Conclusion I recommend the second alternative, which is to make a marketing plan based on the Distribution (Place) Strategies of Palmolive Shampoo. With the use of intermediaries to distribute the products, Palmolive Shampoo would increase its lead in the market over its competitors. This would help the company gain new market and new consumers. This also aids the search processes of both buyers and sellers. Palmolive Shampoo is searching to determine their customers needs, while customers are searching for certain products and servi ces.A spot of uncertainty in both search processes can be reduced by using channels of distribution. In addition, Palmolive Shampoo can make some of their commonly used products more widely available by placing them in many different retail outlets, so that consumers are more likely to find them at the right time. Intermediaries, however, provide several benefits to both Palmolive Shampoo and consumers improved efficiency, a better assortment of products, routinization of transactions, and easier searching for goods as well as customers.Intermediaries provide a second benefit by bridging the gap between the assortment of goods and services generated by Palmolive Shampoo and those in demand from consumers. A third benefit provided by intermediaries is that they help reduce the cost of distribution by making transactions routine. Exhibit 1 Visayas Distribution Plan Cebu is the main distributor. Distributing to neighbouring cities and provinces in Visayas. Exhibit2 Mindanao Distribu tion Plan Davao city is the main distributor. Distributing to neighbouring cities and provinces in Mindanao.