capstone

Market Position Analysis: Procter and Gamble in India

Market position analysis responds to the ‘how’ and the ‘what’ of the operations of a company in a target market. This analysis looks at the ‘what’ and ‘how’ of Procter and Gamble (P&G) in its operations in the India subcontinent. The purpose of the analysis is to consider how the company has succeeded in touching and improving the lives of its consumers amidst the growing competition in the emerging market. It is asserted that thegrowth of the company and sustainability of its operations is a function of superior brand propositioning and delivery of consumer goods in the Indian market.

Target Customer for the Product/Service

P&G is among the largest and fastest growing company dealing with consumer goods in the Indian market. This market in India offers P&G a huge potential of growth as a fast-growing consumer market. Among other factors the target market is comprised of three important characteristics of consumers that P&G targets among its consumers:

· The growing youth in its demographic profile

· The rising in the middle class

· Rising level ofincome among the middle class in India

It is projected that by 2020, India will offer one of the largest middle class population of the consumer market in the world. This is augmented by the projected total consumer expenditure of about $13 trillion by the year 2030.

Specific Wants and Needs of Customer Segment

The consumers in the market have three broad needs: personal hygiene and grooming, dental care, and home care. Among the youth, it is common for them to seek products for their personal care and hygiene (Sharma, 2014). These include such products that deal with theirhealthcare, feminine hygiene, and personal care. These are similar needs and wants of the growing middle-class segment. As such, the female youth go for Whisper for their feminine hygiene. However, it is common for them to also consume Halo Shampoo (hair care) and Palmolive Charmis Cream (for skin care) from Colgate Palmolive. The middle class seem keen on class products. For instance, theirrazors and other shaving products, dental products and other tertiary products like batteries reveal a tendency towards class. This is how Gillette India has been able to market such class products like Gillette razors, Oral-B, and Duracell batteries as shown in Fig 1. These are product classes that the main competitor, Colgate Palmolive does not offer in the market.

Fig 1: Product ranges moved by P&G by percentage (Majumdar, 2007)

How the Products Satisfy Customer Wants and Needs

In its oral care product segment, P&G offers customers with the Oral-B brand as an alternative to the Colgate’s oral care products. To meet the needs of the different consumers, they offer the product in toothbrush as well as toothpaste categories. This could be the motivation of the recent speculation of a possible launch of Crest (its leading brand of toothpaste). However, the main problem hindering P&G to fully meet the needs and wants of the consumers is the way it handles its distribution network in the market. This has subjected it to strong competition from its main competitor Colgate in the oral care market. To increase its presence and win the trust of the consumers, P&G need to be more aggressive in its product innovation as well as in its brand promotion if its sales in India are to be increased.

Position of the Products In Relation To the Competition

Procter & Gamble together with Colgate-Palmolive are well placed in taking advantage of the current rise in the level of income in India’s middle class. This is an important ingredient that can drive the drive at global business. However, it is apparent that unless P&G does more to increase its market share, the competitor remains in the best position because of the advantage in the oral care segment. It is notable that P&G has made an attempt to increase its performance in India by increasing its distribution network from the current retail outlets to 1.3 million. As noted by Fleisher &Bensoussan (2015), this drive must be augmented with an aggressive product innovation and promotion of its brand in order to increase the sales especially with the highly diversified needs of the target customers.

Source of Competitive Advantage

The approach taken by P&G and its body care products is that innovation begins with the consumer. Therefore, they have the advantage of mingling and understanding the daily needs and lives of its consumers so that the products developed combine the needs identified with what is possible. The company’s investment in CSR makes P&G to consistently promote its research and enhance its overall understanding of product safety as needed in the target market. The on ongoing process of product innovation gives the company a leading edge in bringing new scientific knowledge in the diverse areas in body care product development including analytical chemistry and biostatistics.

Long-Term Sustainability of the Source of Differentiation and Competitive Advantage

A look at the Indian market among other global markets shows that the market has a significant growth in per capita consumption in oral and body care products as shown in Fig 2.

Fig. 2: Per capita consumption of toothpaste in grams/year (NPCS Team, 2014)

Being a growing market, P&G has a sustainable chance in curving out its share in the body care product segment.

Conclusion

In this analysis, we mainly looked at toothpaste product. By April 2015, the toothpaste segment had Colgate as the main competitor in the market with a 56.7% stake. However, P&G can take advantage of the growing need for class among the youth and the middle class to develop customized body care products.

References

Fleisher, C.S. &‎ Bensoussan, B.E. (2015). Business and Competitive Analysis: Effective Application of New and Classic Methods. New York, NY: FT Press.

Majumdar, R. (2007). Product Management in India. New Delhi: PHI Learning Pvt. Ltd.

NPCS Team. (2014). Market Research Report on Detergent Industry in India- Market Size, Opportunities, Comparative Financial Analysis, Demand-Supply Scenario, Outlook and Forecasts Upto 2017. New Delhi: Niir Project Consultancy Services.

Appendix: Comparison matrix