Scribd Logo
Upload

Welcome to Scribd!

  • 457 views

    P&G Value Pricing

    Uploaded by

    Sojanu
    P&G was considering implementing a value pricing strategy for two of its products, Light Duty Liquids and Coffee, to increase profitability. This would involve reducing coupon promotions and distribution channels while increasing advertising. The goals were to improve logistical efficiency, boost brand loyalty over time by cutting deals and raising brand awareness, and create strong brand franchises. However, this contrarian approach risked reducing customer credibility and brand loyalty if price cuts were too large. P&G had to decide on list price reductions and marketing budgets with some risk to sales and success depending on execution. A recommendation was made to measure both short-term profit and long-term market share impacts of the value pricing strategy.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd

    P&G Value Pricing

    Uploaded by

    Sojanu
    457 views9 pages
    P&G was considering implementing a value pricing strategy for two of its products, Light Duty Liquids and Coffee, to increase profitability. This would involve reducing coupon promotions and distribution channels while increasing advertising. The goals were to improve logistical efficiency, boost brand loyalty over time by cutting deals and raising brand awareness, and create strong brand franchises. However, this contrarian approach risked reducing customer credibility and brand loyalty if price cuts were too large. P&G had to decide on list price reductions and marketing budgets with some risk to sales and success depending on execution. A recommendation was made to measure both short-term profit and long-term market share impacts of the value pricing strategy.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    P&G was considering implementing a value pricing strategy for two of its products, Light Duty Liquids and Coffee, to increase profitability. This would involve reducing coupon promotions and distribution channels while increasing advertising. The goals were to improve logistical efficiency, boost brand loyalty over time by cutting deals and raising brand awareness, and create strong brand franchises. However, this contrarian approach risked reducing customer credibility and brand loyalty if price cuts were too large. P&G had to decide on list price reductions and marketing budgets with some risk to sales and success depending on execution. A recommendation was made to measure both short-term profit and long-term market share impacts of the value pricing strategy.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    457 views9 pages

    P&G Value Pricing

    Uploaded by

    Sojanu
    P&G was considering implementing a value pricing strategy for two of its products, Light Duty Liquids and Coffee, to increase profitability. This would involve reducing coupon promotions and distribution channels while increasing advertising. The goals were to improve logistical efficiency, boost brand loyalty over time by cutting deals and raising brand awareness, and create strong brand franchises. However, this contrarian approach risked reducing customer credibility and brand loyalty if price cuts were too large. P&G had to decide on list price reductions and marketing budgets with some risk to sales and success depending on execution. A recommendation was made to measure both short-term profit and long-term market share impacts of the value pricing strategy.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 9

    Presented By Ernest Sundar Shyam.A Sojan Jose Sreehari.

    Case Objective
    Value pricing strategy - reduce coupon promotion,

    distribution channel and increase advertising.


    Long term changes in pricing and promotion strategy due

    to value pricing.
    Brand loyalty and customer & competitor response. Impact of market share.
    2

    P&G Products in case


    Light Duty Liquids ( performance, mildness, low price) Competitors Colgate Pamolive & Level brothers

    Coffee (roasted, decaffainated, instant) Competitors General Food Corps, Nestle Co.

    Goals of Value Pricing


     Improve Logistical efficiency (price pack, swings in price and

    production)
     Increase brand loyalty in short and long term run cut coupons and

    deals, boost product and brand awareness with technology and value message
     Create strong brand franchise by creating strong consumer loyalty

    Contrarian strategy as against competitors increase in promotion (15%) and decrease in advertising (20%)
    5

    Marketing and Pricing decision


     How to increase market share while increasing profit.  How much to reduce in list price of products.  Smaller cut in price is less risky restoring price parity with competitors.  Bigger cuts would reduce customer credibility there by impacting

    brand loyalty.

    RG - Toothpaste Market Review ~1993

    Conclusion
     Both products had significant marketing plans which could have

    positive impact on the company.


     Time available was very less to experiment/market test or perform

    detailed data analysis.


     P&G had to go with the both products proposal on list prices and

    budget changes with certain risks and success depending on sales force and customer s action.
    7

    Recommendation
     P&G s value pricing is a major policy change affecting brand and

    successful by measures of profit (short term)


     P&G, a company that traditionally measured success by volume

    (market share) its value pricing strategy had a large enough adverse impact. (long term)

    Thank You
    9

    You might also like