Procter & Gamble

Europe :Vizir Launch

Partha Pritam Chowdhury - PGP/17/099

Pragati Srivastava - PGP/17/104

Suhani Doshi - PGP/17/182

Divya - PGP/17/205

Archana S - PGP/17/261

Siddharth Dohare - PGP/17/344

 Company Background
Corporate Values
 Established. 1837
 Fundamental belief- Company’s interests inseparable from its
employees
 Management norms-
• Hire people of high character
• Treat as individuals with individual talents & life goals
• Work environment encouraging & rewarding individual
achievement
 General Managers evaluated in 3 areas- Volume, Profit and
People
 Promotions made from within
 Top management chosen from career P&G people
 Company Background
Management Policies

 Reputation as a premier consumer marketer

 Basic policy-
• provide “superior total value”
• meet “basic consumer needs”
 Market research objective- “to spot a new trend early, then lead
it”
 Extensive product and market testing for major brand decisions
 Brands managed through
• continual product development
• close tracking of consumer needs and preferences
 Company Background
Organization Practices
 1931- Brand management system
 Provided each brand with
• Management focus
• Expertise
• Drive at a low level
 Reinforced internal competition restricted lateral communication
 Vertical communication well established
 Top management involved in most large decisions to minimize
risk
 Proposals committed to paper
• Encouraged thoroughness & careful analysis
• Objectivity and rationality
 European Operations
1960’s – subsidiaries
1956- Belgian Plant
1926 - Acquired English Soap opened in Germany, 1963 - European
opened ;Late 1950’s -
Company,1954 – Acquired French Austria, Greece,Spain Technical Centre (ETC) in
operations in Holland &
Detergent Company and Scandinavian Brussels
Italy
countries

• Washing Machine penetration rate approached 85% by mid 1970’s

• Volume growth at 2% by late 1970’s
• Europe represented 15% of P&G’s $11 billion worldwide sales
• Breakup of European revenues – UK-20%,Germany – 20%,France + Italy – 30%,Belgium, Holland, Spain ,Austria &
Switzerland – 30%
 Differences between US and European Markets
Particulars
Washing Temperature
Washing Machines
Water capacity of Washing
machines
Washing frequency
Penetration of Washing Machines
Consumption of detergent
Point of Sale
Ability to Advertise products
through the television
National Legislations
U.S
Lower washing temperatures than
in most European countries
Agitator action in top loaded
machine
12 to 14 gallons
Average 4 to 5 times
Higher
Lower dosage per load
Hypermarkets , 5 largest chains
accounted for only 15% of the
retail volume
Unlimited
Differed from those in Europe
Europe
Boil Wash (over 600C) in most
countries except UK, Spain and
Italy
Front loading with horizontal
rotating drum
3 to 5 gallons
Average 2 to 3 times
Lower
Higher dosage per load, overall
30% higher than US
Germany- Grocery Retailers,5
largest chains accounted for 65%
of retail volume, Italy –
Independent corner stores
Expensive and Limited
Differed for every country in
Europe
 European Structure
• Strong national subsidiaries- Each a
miniature P&G (own brand management, product
development capability, Advertising agencies &
manufacturing)

Structure • Attacked the basic detergent and soap business

differently in National market
• Subsidiary GM/ Country GM- selects profit
opportunities, best volume from 200 products
• GM responsible for contacting the ETC if problems
arose

Initial structure- Multi-Domestic

• Tom Bower- Head P&G European operations

Leadership • Background- Entrepreneur and Motivator

• Focus on selecting driven, creative and entrepreneurial
country GMs
• GMs have free reign- No interference in the GM’s work
 Market Scenario
From1960s to early 1970s- rapid growth in
profits
Increased penetration, new markets and
new products- growth drivers

In mid 1970s growth slowed

Intensified competition, weakening prices,
declining margins and dipping profits

Narrowing differences in consumer’s

practices and preferences across nations
Focus on Cost reduction
 European Structure
• Shift of focus from national subsidies to ETC in R&D
• European Technical teams(1977)- Multiple market
potential products
• Long term approach to product development

Structure • ETC developers- subsidiaries testers

• Key Products- Lead countries concept
• Lack of cooperation initially hence transfer of staff b/w
ETC and subsidiaries
• Tussle for power between subsidiaries and ETC

Final structure- Global

• Ed Artz-Head P&G European operations

• Cost cutting- strengthened the role of Finance
Leadership manager
• Remove the duplication of marketing and admin
functions in subsidiaries
• Wahib Zakri-R&D Manager, ETC
• standardization, effective utilization of resources
 Outcomes/Implications

• Coordination and planning- Centralized with ETC

• Day to day operations and management- decentralized with subsidiaries

• 1980- Charlie Ferguson- Executive VP

• Concept of Centralized marketing
• Europeanization- Eurobrand
• Vizir- Important Key
 VIZIR - Product development

Inspired by Era, which was launched in the US in 1974,HDL

concept transferred to Europe

Blind testing failed due to the different washing habits of the

European market

Eventually, P & G invented a enzyme – bleach mixture in

liquid form which resulted in better test results

HDL brand group established in Germany under Wolfgang

Berndt

By 1979,the focus shifted to product aesthetics and with it came

the successful blind test confirming its superiority
Porter’s Five forces Analysis
HDL Industry Europe

Threat of
new
entrants-
High

Rivalry
Bargaining among Buyer
power of Power-
suppliers- existing Moderate
NA firms-Low- to high
moderate

Threat of
substitutes-
Moderate-
High
 VIZIR - Product development

Ansoff Matrix Apprehensions regarding VIZIR Product

Existing New

New Market Diversification

Development
Patent for a Market Preemptive
Positioning liquid share of opposition
of Vizir was detergent existing from
MARKETS such that it would not products competitors
would be an made even during
cannibalize effective market initial
Market Product Ariel’s barrier opportunity testing
Penetration Development sales against for Vizir period of
Existing competition doubtful Vizir

Products & Service

 The Eurobrand Decision
Objective is to have at a Globalized brand which works across Europe as the time is “ripe” for a
common European laundry detergent

European Managers’ apprehension: Reduces their control on deciding what & when works in the local
market

Threat of imitation of No such thing as a Euro

Differences in washing
habits outweighed
similarities.
Also differences in
television access,
legislation on promotion
etc
the product by
customer. Consumption
competitors. patterns in Holland is
For Eg: Pampers-
different from that of
Calline; Downy-Lenor France.
Gambling on
Metaphor: Building a
subsidiary’s profitability Rolls Royse that nobody
with a risky launch wants

Anti
Eurobrand
 Question 1

As Charlie Ferguson, P&G’s European

VP, would you authorize Wolfgang
Berndt’s third request to launch Vizir in
Germany?
 Product Decision
Pros Cons DECISION

Launch the product subject to

the following
• Completion of 1 year testing
as per P&G norms
• Market it as a premium
product, specialized to
remove greasy stains
• Capitalize on changing
consumer behaviour
 Question 2

What would you think of the Eurobrand

proposals? What concerns do you have?
How would you resolve them?
 Concerns
Local Controls diminished
• Subsidiary managers can’t decide when and what to launch in what form
Different washing habits
• Some preferred top loading washers, some predominated with natural fibre
clothing, low vs. high temperature wash
Different Market structures
• Some Television access, National Legislation on product promotion, competitive
behaviour
Imitation by Competitors
• For eg: Pampers was imitated as Calline and Downy as Lenor
Same Set up of Subsidiary as Profit Centre
• Forcing the decision on the subsidiary to accept the Eurobrand decision and
generating profits with only decisions of volumes and pricing
No such thing as a Euro customer
• Standardization difficult as Consumer behaviour, regulations are different
across
 Resolving Concerns
Continue Centralized R&D

Capture market intelligence before manufacturing a generic product

Try to incorporate the suggestions , feedback received from

subsidiaries but keep Marketing, Product planning at national
subsidiary level

Increase communication & coordination amongst subsidiaries to

replicate success in each others markets
 Question 3

How should P&G organize to manage the

proposed Eurobrand Concept?
 Organizational Structure:
Global Matrix CEO

Legal Finance HR legal supply External relations R &D

Group VP Group VP Group VP Group VP Europe

Region 1 Region 2 Region 3

GM GM France GM Italy GM
Germany Austria

GM Product
Category 1

GM Product
Category 2

GM Product
Category 3
 The structure is aimed to:
• Increase coordination among the
subsidiaries
• R&D responsibility lies with the Global
product category VP
THANK YOU!