Laundry Products Suppliers In The Middle East

Marketing 7.1

Competing with Itself—and

Winning

Procter & Gamble is one of the world's premier consumer-goods companies. Some 99 percent of all U.S. households, for example, use at least one of P&G's 86 U.S. brands. Around the world, 156 P&G brands touch the lives of people some three billion times a day.

P&G sells six brands of laundry detergent in the United States (Tide, Cheer, Gain, Era, Dreft, and Ivory). It also sells six brands of bath soap (Ivory, Safeguard, Camay, Olay, Zest, and Old Spice); five brands of shampoo (Pantene, Head & Shoulders, Aussie, Herbal Essences, and Infusium 23); four brands of dishwashing detergent (Dawn, Ivory, Joy, and Cascade); three brands each of tissues and towels (Charmin, Bounty, and Puffs) and skin care products (Olay, Gillette Complete Skincare, and Noxzema); and two brands each of deodorant (Secret and Old Spice), fabric softener (Downy and Bounce), cosmetics (Cover Girl and Max Factor), and disposable diapers (Pampers and Luvs).

Moreover, P&G has many additional brands in each category for different international markets. For example, it sells 16 different laundry product brands in Latin America and 19 in Europe, the Middle East, and Africa. (See P&G's Web site at www.pg.com for a full glimpse of the company's impressive lineup of familiar brands.)

These P&G brands compete with one another on the same supermarket shelves. But why would P&G introduce several brands in one category instead of concentrating its resources on a single leading brand? The answer lies in the fact that different people want different mixes of benefits from the products they buy. Take laundry detergents as an example. People use laundry detergents to get their clothes clean. But they also want other things from their detergents—such as economy, strength or mildness, bleaching power, fabric softening, fresh smell, and lots of suds or only a few. We all want some of every one of these benefits from our detergent, but we may have different priorities for each benefit. To some people, cleaning and bleaching power are most important; to others, fabric softening matters most. Still others want a mild, fresh-scented detergent. Thus,

Differentiated marketing: Procter & Gamble markets six different laundry detergents, including Tide—each with multiple forms and formulations— that compete with each other on store shelves. Yet together, these multiple brands capture four times the market share of nearest rival Unilever.

each segment of laundry detergent buyers seeks a special combination of benefits.

Procter & Gamble has identified at least six important laundry detergent segments, along with numerous subsegments, and has developed a different brand designed to meet the special needs of each. The six brands are positioned for different segments as follows:

• Tide "knows fabrics best." It's the allpurpose family detergent that "gets to the bottom of dirt and stains to help keep your whites white and your colors bright."

• Cheer is the "color expert." "Dirt goes. Color stays." It helps protect against fading, color transfer, and fabric wear, with or without bleach. Cheer Free Is "dermatologist tested . . . contains no irritating perfume or dye."

• Gain, originally P&G's "enzyme" detergent, was repositioned as the detergent that gives you "excellent cleaning power and a smell that says clean."

• Era is "a powerful laundry detergent that is tough on stains." It's "the power tool for stain removal and pretreating that helps combat many stains that families encounter."

• Ivory Is "Ninety-nine and forty-four one-hundredths percent pure." It provides "mild cleansing benefits for a gentle, pure, and simple clean."

• Dreft is specially formulated "to help clean tough baby and toddler stains." It

"rinses out thoroughly, leaving clothes soft next to a baby's delicate skin."

Within each segment, Procter & Gamble has identified even narrower niches. For example, you can buy regular Tide (in powder or liquid form) or any of more than 40 different formulations, including the following:

• Tide Powder helps keep everyday laundry clean and new. It comes in original and special scents: Tide Mountain Spring ("the scent of crisp mountain air and fresh wildflowers"), Tide Clean Breeze (the fresh scent of laundry line-dried in a clean breeze), Tide Tropical Clean (a fresh tropical scent that soothes, relaxes, and refreshes), and Tide Free ("has no scent at all—leaves out the dyes or perfumes").

• Tide Liquid combines all the great stain-fighting qualities you've come to expect in Tide powder with the pretreating ease of a liquid detergent. Available in original and Mountain Spring, Clean Breeze, Tropical Clean, and Free scents.

• Tide with Bleach helps to "clean even the dirtiest laundry without the damaging effects of chlorine bleach." Keeps "your family's whites white and colors bright." Available in Clean Breeze or Mountain Spring scents.

• Tide Pure Essentials contains baking soda, "one of nature's symbols for cleaning,

Continued on next page

Real

Marketing 7.1 Continued brightening, and freshening. It also "leverages advances in science to offer long-lasting freshness." Tide Liquid with Bleach Alternative is the "smart alternative to chlorine bleach." It uses active enzymes in pretreating and washing to break down and remove the toughest stains while whitening whites. Tide Simple Pleasures is a collection of laundry detergents with naturally inspired scents for a "relaxing, refreshing, romantic, or uplifting experience." Tide with a Touch of Downy provides "outstanding Tide clean with a touch of Downy softness and freshness." Available in April Fresh and Clean Breeze. Tide Coldwater is specially formulated to help reduce your energy bills by delivering outstanding cleaning, even on the toughest stains, in cold water. Available

In both liquid and powder formulas and In two new cool scents—Fresh Scent and Mountain Spring.

Tide HE is specially formulated to unlock the cleaning potential of high-efficiency washers and provides excellent cleaning with the right level of sudsing. Available in Original, Free, and Clean Breeze scents. 2X Ultra Tide is double-concentrated to provide the same cleaning power as regular Tide. One small capful gets your whole wash clean. P&G now offers 2X Ultra versions of all of its major liquid Tide sub-brands.

By segmenting the market and having several detergent brands, Procter & Gamble has an attractive offering for consumers in all important preference groups. As a result, P&G is really cleaning up in the $3.6 billion U.S. laundry detergent market. Tide, by itself, captures a whopping 44 percent of the detergent market and growing. All P&G brands combined take an impressive 62 percent market share— forcing major competitors Unilever and Colgate to throw in the towel and sell off their laundry detergent brands in the U.S. market.

Sources: See Ellen Byron, "How P&G Led Also-Ran to Sweet Smell of Success; By Focusing on Fragrance, Gain Detergent Developed a Billion-Dollar Following," Wall Street Journal, September 4, 2007, p. B2; Jack Neff, "Why Unilever Lost the Laundry War," Advertising Age, August 6, 2007, p. 1; and information accessed at www.pg. com and www.tide.com, September 2008.

Concentrated (niche) marketing

A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches.

planning, and channel management. And trying to reach different market segments with different advertising campaigns increases promotion costs. Thus, the company must weigh increased sales against increased costs when deciding on a differentiated marketing strategy.

Concentrated Marketing

Using a concentrated marketing (or niche marketing) strategy, instead of going after a small share of a large market, the firm goes after a large share of one or a few smaller segments or niches. For example, Whole Foods Market has only about 275 stores and $6.5 billion in sales, compared with grocery-store giants such as Kroger (more than 3,000 stores and sales of $66 billion) and Wal-Mart (7,300 stores and sales of $379 billion).19 Yet the smaller, upscale retailer is growing faster and more profitably than either of its giant rivals. Whole Foods thrives by catering to affluent customers who the Wal-Marts of the world can't serve well, offering them "organic, natural, and gourmet foods, all swaddled in Earth Day politics." In fact, a typical Whole Foods customer is more likely to boycott the local Wal-Mart than to shop at it.

Through concentrated marketing, the firm achieves a strong market position because of its greater knowledge of consumer needs in the niches it serves and the special reputation it acquires. It can market more effectively by fine-tuning its products, prices, and programs to the needs of carefully defined segments. It can also market more efficiently, targeting its products or services, channels, and communications programs toward only consumers that it can serve best and most profitably.

Whereas segments are fairly large and normally attract several competitors, niches are smaller and may attract only one or a few competitors. Niching lets smaller companies focus their limited resources on serving niches that may be unimportant to or overlooked by larger competitors. Many companies start as nichers to get a foothold against larger, more-resourceful competitors and then grow into broader competitors. Enterprise Rent-A-Car began by building a network of neighborhood offices rather competing with the auto-rental companies Hertz and Avis in airport locations.

In contrast, as markets change, some megamarketers develop niche markets to create sales growth. For example, in recent years, Pepsi has introduced several niche products, such as Sierra Mist, Pepsi Twist, Mountain Dew Code Red, and Mountain Dew Live Wire. Initially, these brands combined accounted for barely 5 percent of Pepsi's overall soft-drink sales. However, Sierra Mist quickly blossomed and now is the number-two lemon-lime soft o2

Concentrated marketing: Web niching is paying off handsomely for Zappos and its CEO/Founder Tony Hsieh.

Micromarketing

The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups—includes local marketing and individual marketing.

Local marketing

Tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, and even specific stores.

drink behind Sprite, and Code Red and LiveWire have revitalized the Mountain Dew brand. Says Pepsi-Cola North America's chief marketing officer, "The era of the mass brand has been over for a long time."20

Today, the low cost of setting up shop on the Internet makes it even more profitable to serve seemingly miniscule niches. Small businesses, in particular, are realizing riches from serving small niches on the Web. A Consider Zappos:

Zappos began by selling shoes online—only shoes and only online. What gives this online nicher an edge? First, Zappos differentiates itself by its selection: Click to the Zappos site and you can pick through some 3.2 million items representing 950 shoe brands—more inventory than any brick-and-mortar shoe peddler could dream of offering. Zappos also gives you convenience: The warehouse is open 24/7, so you can order as late as 11:00 p.m. and still get next-day delivery. Most important, Zappos has a near-fanatical devotion to pleasing its customers. "We offer the absolute best selection of shoes available anywhere," boasts the company, "but much more important to us is offering the absolute best service." Shipping and return shipping are free and you just can't beat the company's heartfelt returns policy: "If the shoe fits, wear it. If not, ship it back at our expense." All this adds up to a host of satisfied customers. "With Zappos, the shoe store comes to you," says Pamela Leo, a customer "I can try the shoes on in the comfort of my own home. I can tell if the shoes I want will really work with a particular suit. It's fabulous." And if the shoes aren't just right, she can click on a Zappos-supplied link to print out a prepaid return shipping label. Web niching is paying off handsomely for Zappos. Zappos is now the Web's number-one shoe seller. Thanks to happy customers like Pamela, sales have soared from "almost nothing" in 1999 to an estimated $1 billion this year. And based on its success in shoes, Zappos is now launching into clothing and other lines.21

Concentrated marketing can be highly profitable. At the same time, it involves higher-than-normal risks. Companies that rely on one or a few segments for all of their business will suffer greatly if the segment turns sour. Or larger competitors may decide to enter the same segment with greater resources. For these reasons, many companies prefer to diversify in several market segments.

Micromarketing

Differentiated and concentrated marketers tailor their offers and marketing programs to meet the needs of various market segments and niches. At the same time, however, they do not customize their offers to each individual customer. Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations. Rather than seeing a customer in every individual, micromarketers see the individual in every customer. Micromarketing includes local marketing and individual marketing.

Local Marketing. Local marketing involves tailoring brands and promotions to the needs and wants of local customer groups—cities, neighborhoods, and even specific stores. For example, Wal-Mart customizes its merchandise store by store to meet the needs of local shoppers. Wal-Mart's store designers create each new store's format according to neighborhood characteristics—stores near office parks, for instance, contain prominent islands featuring ready-made meals for busy workers. Then, using a wealth of customer data on daily sales in every store, Wal-Mart tailors individual store merchandise with similar precision. For example, it uses more than 200 finely tuned planograms (shelf plans) to match soup assortments to each store's demand patterns.22

Advances in communications technology have given rise to a new high-tech version of location-based marketing. By coupling mobile phone services with GPS devices, many marketers are now targeting customers wherever they are with what they want.23

Location. Location. Location. This is the mantra of the real estate business. But it may not be long before marketers quote it, too. "Location-based technology allows [marketers] to reach people when they're mobile, near their stores, looking to make a decision," says one marketing expert. "When customers get information—even advertising information—linked to their location, research shows that's often perceived as value-added information, not as an advertisement." AFor example, Starbucks recently launched a store locator service for mobile devices, which allows people to use their phones and in-car GPS systems to search for the nearest Starbucks shop. A consumer sends a text message to "MYSBUX" (697289) including his or her postal code. Within 10 seconds, Starbucks replies with up to three nearby store locations. Starbucks plans to expand the service to include a wider range of text-messaging conversations with local customers that will "showcase Starbucks as a brand that truly listens." Such location-based marketing will grow astronomically as the sales of GPS devices skyrocket.

Local marketing: By coupling mobile phone services with GPS devices, marketers like Starbucks are now targeting customers wherever they are with what they want.

Local marketing has some drawbacks. It can drive up manufacturing and marketing costs by reducing economies of scale. It can also create logistics problems as companies try to meet the varied requirements of different regional and local markets. Further, a brand's overall image might be diluted if the product and message vary too much in different localities.

Still, as companies face increasingly fragmented markets, and as new supporting technologies develop, the advantages of local marketing often outweigh the drawbacks. Local marketing helps a company to market more effectively in the face of pronounced regional and local differences in demographics and lifestyles. It also meets the needs of the company's first-line customers—retailers—who prefer more finely tuned product assortments for their neighborhoods.

Individual marketing

Tailoring products and marketing programs to the needs and preferences of individual customers—also labeled "one-to-one marketing," "customized marketing," and "markets-of-one marketing."

Individual Marketing. In the extreme, micromarketing becomes individual marketing— tailoring products and marketing programs to the needs and preferences of individual customers. Individual marketing has also been labeled one-to-one marketing, mass customization, and markets-of-one marketing.

The widespread use of mass marketing has obscured the fact that for centuries consumers were served as individuals: The tailor custom-made the suit, the cobbler designed shoes for the individual, the cabinetmaker-made furniture to order. Today, however, new technologies are permitting many companies to return to customized marketing. More powerful computers, detailed databases, robotic production and flexible manufacturing, and interactive communication media such as cell phones and the Internet—all have combined to foster "mass customization." Mass customization is the process through which firms interact one-to-one with masses of customers to design products and services tailor-made to individual needs.

Dell creates custom-configured computers. Hockey-stick maker Branches Hockey lets customers choose from more than two dozen options—including stick length, blade patterns, and blade curve—and turns out a customized stick in five days. Visitors to Nike's NikelD Web site can personalize their sneakers by choosing from hundreds of colors and putting an embroidered word or phrase on the tongue. At www.myMMs.com, you can upload your photo and order a batch of M&Ms with your face and a personal message printed on each little candy. Toyota even lets Scion owners design their own personal "coat of arms" online, "a piece of owner-generated art that is meant to reflect their own job, hobbies, and—um, okay— Karma." Customers can download their designs and have them made into window decals or professionally airbrushed onto their cars.24

Marketers are also finding new ways to personalize promotional messages. For example, plasma screens placed in shopping malls around the world can now analyze shoppers'

Individual marketing: MINI even uses personalized billboard messages to greet MINI drivers in selected major cities. The messages are triggered by personalized key fobs given to MINI owners.

faces and place ads based on an individual shopper's gender, age, or ethnicity. A Last year, MINI USA even began using personalized billboard messages to greet MINI drivers in four major cities. The messages are triggered by personalized key fobs given to new buyers. As the new MINI owner passes by, the fob contacts the billboard database, which then transmits a message such as "Motor on Jim!" or "Great day to be a lawyer in New York, Jim!"25

Business-to-business marketers are also finding new ways to customize their offerings. For example, John Deere manufactures seeding equipment that can be configured in more than two million versions to individual customer specifications. The seeders are produced one at a time, in any sequence, on a single production line. Mass customization provides a way to stand out against competitors.

Unlike mass production, which eliminates the need for human interaction, one-to-one marketing has made relationships with customers more important than ever. Just as mass production was the marketing principle of the past century, interactive marketing is becoming a marketing principle for the twenty-first century. The world appears to be coming full circle—from the good old days when customers were treated as individuals, to mass marketing when nobody knew your name, and back again.

The move toward individual marketing mirrors the trend in consumer self-marketing. Increasingly, individual customers are taking more responsibility for shaping both the products they buy and the buying experience. Consider two business buyers with two different purchasing styles. The first sees several salespeople, each trying to persuade him to buy his or her product. The second sees no salespeople but rather logs on to the Web. She searches for information on available products; interacts online with various suppliers, users, and product analysts; and then decides which offer is best. The second purchasing agent has taken more responsibility for the buying process, and the marketer has had less influence over the buying decision.

As the trend toward more interactive dialogue and less marketing monologue continues, marketers will need to influence the buying process in new ways. They will need to involve customers more in all phases of the product development and buying processes, increasing opportunities for buyers to practice self-marketing.

Choosing a Targeting Strategy

Companies need to consider many factors when choosing a market-targeting strategy. Which strategy is best depends on company resources. When the firm's resources are limited, concentrated marketing makes the most sense. The best strategy also depends on the degree of product variability. Undifferentiated marketing is more suited for uniform products such as grapefruit or steel. Products that can vary in design, such as cameras and automobiles, are more suited to differentiation or concentration. The product's life-cycle stage also must be considered. When a firm introduces a new product, it may be practical to launch only one version, and undifferentiated marketing or concentrated marketing may make the most sense. In the mature stage of the product life cycle, however, differentiated marketing begins to make more sense.

Another factor is market variability. If most buyers have the same tastes, buy the same amounts, and react the same way to marketing efforts, undifferentiated marketing is appropriate. Finally, competitors' marketing strategies are important. When competitors use differentiated or concentrated marketing, undifferentiated marketing can be suicidal. Conversely, when competitors use undifferentiated marketing, a firm can gain an advantage by using differentiated or concentrated marketing, focusing on the needs of buyers in specific segments.

▲ Socially responsible targeting: Victoria's Secret targets its Pink line of young, hip, and sexy clothing to young women 18 to 30 years old. However, critics charge that Pink is now all the rage among girls as young as 11.

Continue reading here: Socially Responsible Target Marketing

Was this article helpful?

+1 0