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International Business Presentation Analysis of personal hygiene market and the possibility of introducing a new product into Italy. *Presentation images were sources online and only used for educational purposes.
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Case Summary
Positive Income: Year 3 Target Demo: Men 16-34 Potential Market: >$100 M Launchpad to Western Europe
P&G Overview
Procter and GambleP&G: Touching Lives, Improving Life...
• 1837
• 175 years history
• Serves 4.8 billion people / Operation in 70 countries
• 50 Leadership brands/ 25 billion-dollar brands
• Beauty/ Baby, Feminine and Family Care
• Fabric and Home Care/ Health and Grooming
Financial Highlights
Profitability P&G Industry
Gross Margin 49.59 52 ROA 8.33 8.64ROE 17.38 22.21
Solvency P&G Industry
Debt/Equity .47 .85Interest Coverage 23.25 13.60
Efficiency P&G IndustryInventory Turnover 6.23 4.85Receivables Turnover 13.39 10.06Asset Turnover .62 .82
Financial Performance
Liquidity P&G Industry
Current Ratio .80 .88Quick Ratio .41 .53
2013 Net Sales
Developed Markets
Beauty
Country Analysis
Italy Country Analysis
Population
61.5 MGrowth Rate
0.34%
Urban Pop.
68%
Male Age 15-355.1 M
Government & Political direction Corruption & Organized crime Judicial system Ranked 102nd- Institutional environment
Political Factors
Economic Factors
GDP$2.014 T
GDP per capita$33,115
Europe5th largest economy
Italy is part of a monetary union, the Eurozone (dark blue), and of the EU single market.
World10th largest
economy
GDP Growth Rate
Social Factors
Fashion Conscious First Impressions Face-to-Face contact Expressive Communicators Sports Low Labor Efficiency
Appearance
Technology
Highly educated workforce Sophisticated work process Long tradition in science & technology Advanced medical care
Bologna University is the oldest academic institution of the world, founded in 1088.
Environmental Factors
Good infrastructure Education and Training Programs Electricity and Telecommunications is good Highly sophisticated business environment High Tax Rate, Ranks #4
Infrastructure
Most Problematic Factors
Italian Personal Hygiene Industry
Industry Definition
Bath & Shower Products Oral Care Deodorants Grooming
Industry Opportunities
Export Growth Global Distribution Organic Product Youthful New Target Markets The “Italian Man
Market Growth
Hygiene Market$1,513 M
Market Volume
-2%
Growth Forecast
0.8%
Growth by Value
Growth by Units
Geography Segmentation
Category Segmentation
Personal Hygiene Market Share
Fading Traditions
Growing Industry Traditional belief: “Human Smell” Marketing Push by Manufacturers The “Italian Man”
Porter’s Analysis Summary
Analysis Summary
Barriers To Entry
Supplier Power
Buyer Power
Rivalry From Competitors
Rivalry From Substitutes
SWOTSTRENGTHS WEAKNESSES
● Leading market position garnered on a strong brand portfolio
● Significant R&D and marketing investments
● Strategic acquisitions expanded P&G’s product portfolio
● Increasing presence in the developing markets
● Robust cash productivity
● Increasing instances of product recalls
● Weak brand presence in Italian hygiene industry
OPPORTUNITIES THREATS
● Growing men’ s grooming industry Initiatives to improve productivity
● Growing personal care and home care markets
● Rising input cost inflation● Counterfeit goods
Deodorants
Deodorants Company Shares
Italy Deodorants Brand/Parent Share
Parent Brand % Share Parent Brand % Share
Artsana, Gruppo Lycia 6.8 Mirato Nuova SpA Malizia 6.5
Avon Products Inc Avon 1.7 Mirato Nuova SpA Intesa 5.7
Beiersdorf AG Nivea 14.9 Other (<1%) 15.9
Bolton Group, The Roberts 11.9 Paglieri SpA Azzurra 1.5
Bolton Group, The Borotalco 2.5 Private Label 3.1
Dibra Spa Hanorah Breeze 1.5 Procter & Gamble Co, The Infasil (divested) 8.5
Henkel AG & Co KGaA Neutromed 1.8 Procter & Gamble Co, The Gillette 0.4
L'Oréal Groupe Vichy 1.8 Unilever Group Dove 13.2
Unilever Group Axe/Lynx/Ego 2.3
Deodorants Brand Shares
P&G - ItalyShaving Deodorant Skin & Hair Soap/Body Wash/
ShampoosGillette + FusionBraunVenusMach3
GilletteInfasil (divested)
SebastianHerbal EssencePantene OlayKoleston
Head & ShouldersHerbal Essence Gillette
Perfumes Colognes Teeth/Oral care Medicines Makeup
Laura BiagiottiPuma Hugo BossDolce & GabbanaLacosteReplayGucci
AZFlucarilParogencylOral BKukident
Vicks (Nyquil/Dayquil)
Dolce & GabbannaMax FactorWellaSebastian
OLD SPICE
Products
Product Types Fragrance Variations Total Products
7 22 96*
Value Proposition
Masculinity - Maturity - ConfidenceProduct: Innovative and masculine
Targeted female viewers, despite the product's target market being male
A Product for Your Hygiene Problem
4 D’s of Marketing
Distinct Desirable
Defendable Deliverable
Entry Model1. Introduce
2 product types, 3 scentsTarget: men’s market
2. Utilize Existing manufacturing capacity in GermanyImport to Italy
3. Ally Italian PR company and advertisers
4. Share Distribution channel with GilletteExpand channels corresponding to growth
Entry Model
Introduce
Utilize
Ally
Share
Marketing Mix Implementation
Product
Fragrance from market research Vibrant Packaging
Target Males 16-34 Position Gillette Males 35+
Single package:- 2.35oz (80ml) stick- 5oz (150ml) spray
Brand:Classic, dapper
masculinity
Price€ Stick Spray
Low Cost 2-3 2-4Super-Premium 19-25 22-35
Old Spice as mid-premium
pricing
Stick Spray
6 7
PlaceSuper/Hyper
MarketsOnline
RetailersDenseCities
Conad eBay Milan
Coop Amazon FlorenceEssalunga NaplesPanorama Rome
Personal Hygiene Distribution
● Social Media○ Outsource viral marketing to
local PR firm○ Satellite to sales
● Scented Magazine Ads ● Television Networks● Athletic Sponsoring
○ 2014 World Cup○ 2016 Olympics
● Promotional Special Events
Promotion
Product Manager (From Old Spice American
Parent company)
Sales Manager (Italian/ Local)
Marketing Manager (From Old Spice +
local)
Outsourcer (local marketing
agency & advertisers)
Operation Manager
Administrative Manager
Human Resources
• Start investing from the first quarter of 2014
• The initial investment in 2014 is $12.85 million.
• Direct investment from the P&G American parent company
Finance Source
$$$$$Finance Source
Invest: First Quarter 2014
Initial investment $12.85 million
Direct investment from parent company
Market Outlook
Market Volume Forecast
Financial Projections
1.50% 2014 2015 2016 2017 2018
Italian Deodorant Market 569.41 577.95 586.62 595.41 604.35
Old Spice Market Share 2.00% 2.40% 2.88% 3.60% 4.32%
Projected Revenue (M) 11.39 13.87 16.89 21.43 26.11
COGS 2.28 2.77 3.38 4.29 5.22
Gross Income 9.11 11.10 13.52 17.15 20.89
SG&A 2.85 3.47 4.22 6.43 7.83
Extra Marketing 10.00 8.00 6.00 3.00 3.00
Total Expenses 12.85 11.47 10.22 9.43 10.83
Operating Income -3.74 -0.37 3.29 7.72 10.05
Taxes -1.17 -0.12 1.03 2.42 3.16
Net Income -2.56 -0.25 2.26 5.29 6.90
Net Profit Margin -22.51% -1.84% 13.37% 24.70% 26.42%
Next Steps
Expansion1. Old Spice bodywash and soap2. Italian women’s market3. France and Spain
ExitIf the project cannot reach or beat P&G general net profit margin in year three, suspend the project and reposition the brand
Works Cited
OUTLINE