B

1. What are the possible moves that shall be proposed by Ismail to his top management to
counter Simplywhite? How each of these moves shall be met by McBride and Colgate team?

Move

a) Challenge Colgates claim in NAD and approach television channels

Positives:

1. b* value--They can leverage on the digital imaging technique of measuring the whiteness using
the b* component of whitening products. They are quite confident on this new methodology and
therefore can fight on their findings against the claim of colgate simply white product.
2. Faster decisionThis channel is a relatively faster means to take down their competitors claim
of equivalent productivity as the decisions of NAD are normally made within 60 business days of
the filing of initial complaint.
3. Minimal charges- This method is an economical way of proving the claim of the competitor to
be false as the fee for filing the complaint is as meager as 2500 dollars.
4. Trust factor- If they win they will be able to regain its lost market share.

Negatives:

1. Unreliability of b* test-This can turn out to be counterproductive since the b value test is still
not universally accepted
2. Backfire-If the decision goes in the favor of Colgate then they can further leverage on it and
increase the market share of simply white.
3. Reputation: If they lose to colgate and make it public then it can hamper PnGs reputation and
thus affecting their other brands markets.

b) Increase in media weights for P&G;s current ad campaign

Positives:

1. Opportunity to influence- This can be an attractive channel to influence the costumers by

showcasing their effectiveness of their whitening product.

Negatives:

1. Expensive- This channel is quite expensive which might unnecessarily increase their
advertisement cost
2. No effect in Visibility: The problem is not with the visibility of the product as it was able to
capture 80% of the market in the initial 2 years of their launch.

c) Comparative advertisement campaign

Positive

Customer perception: Comparative advertisement could improve customer perception of the

brand if rightly done. It could also show PnG as confident brand in front of customers.
Leverage on Proprietary methods: Digital imaging could be used to influence consumers and
show customers the lead PnG has over Colgates product.
 Negative

Guerilla Marketing: Comparative advertisement would start an ad war which could expatiate
the ad wars and result in large monetary spends thus decreasing already low (15-16%) operating
margins.

d) A drop in price
The following is the analysis for drop in price

Positive:

Assumption:

1) Operating margin hit accepted- 5-7%

Lowering price by $15 and lowering operational margin to small extent the brand can capitalize
on market expansion, thus gaining some market share back.
Negative:

Negative brand perception: Lowering prices could indicate quality issues to customers and
thus hit the brand and lower creditability.
Sales not increasing: This could lead to negative operational margins thus failing the purpose of
lowering prices and increasing market share.

The projected financials show negative operating margin due to wrong pricing and no increase in market
share.

e) A increased use of coupons

Positive

Customer retention: Use of coupons is one of the best customer retention channel. Providing
coupons inside the white strip packets so that they can offer discounts would be perceived well by
customers and thus ensure long standing relations with the brand.
Attractiveness: Use of coupons turns out to be a good attractive channel for new customers and
$spend/acquisition would decrease. This will result in competitive advantage over Colgate.
Negative
 Operational margins: Introduction of coupons would result in higher operational spend thus
causing operational margins to go down.
High transactions expenses: Generally a very low costing channel but introductory expenses are
high considering the operational and execution costs (tracking needed in coupons distributed).
Packaging: There might be a requirement for packaging change thus increasing the costs. This
would also result in negative brand perception among existing customers.
Counter Strategy by Colgate:

1. Going public: If colgate is sure about uniqueness of its product then they can defame PnG and
challenge its claim by going out in public
2. Global market: Already captured nearly 50 % of the US market and therefore will concentrate
on the marketing campaign in other geographic locations like Asia-Pacific, Europe.
3. Counter ad campaign: Colgate should come up with its own ad campaign focusing more on
their uniqueness effectively.
4. Combo offer: Colgate will provide a combo offer of simply white and simply white night at a
price of 28 dollars.

2. What will you do if you were in place of Ismail?

As Ismail, the suggestion would be to go for combination of comparative advertisements and
increase in media weights. This would facilitate ad war and an opportunity to show the consumers
the quality and brand of PnG. Fighting cost leadership is not easy and best way to tackle it is focus
on your core competency that is quality and brand (intangible).

Other options should be rejected based on the analysis done in previous question:

P&G should avoid attacking Colgate directly by filing a complaint with NAD considering the risk
associated.
Pricing change is risk building and the environment could negatively perceive the brand pricing
strategy which would hit the brand, company and profits
Coupons is generally a channel which a low cost product like oral product would not be able to
sustain.