Two Familiar Brands Competing in the local Marketplace - Essay Example

?Two Familiar Brands Competing In the Local Marketplace Marketing strategies play a vital role in promoting and selling a brand. The marketing program of each brand is different from one another even if the brands are from same parent company. The paper compares two brands i.e. Tide and Gain which are the detergent products from Proctor and Gamble, well renowned as P&G. Tide and Gain both have strong presence in the market of USA and each brand have their own identities. Where Tide is known for its cleaning capability, Gain is popular for good smell. The paper will evaluate these two brands with respect to globalization, segmentation, purchasing structure, distribution, advertising and promotion, ethics, environmental aspects and relationship with other brands of the parent company, P&G. Table of Contents Introduction 4 Literature Review 4 Globalization 5 Relationship with Other Functions and Brands of Organization 5 Segmentation 6 Geographic Segmentation 7 Psychographic Segmentation 7 Environmental Issues 8 Purchase Decision Structure 9 Channels of Distribution 10 Promotion and Advertising 11 Pricing 12 Ethics 14 Conclusion and Recommendation 15 References 16 Introduction Proctor & Gamble (P&G) is recognized as one of the leading multinational organizations dealing with consumer products in various segments from beauty to house-keeping. It is an Ohio based company headquartered in USA. The parent company is engaged with the marketing of above 300 brands which include beauty products like shampoo, soaps and household products like detergent, toothpaste etc. P&G has strong market share in the segment comprising of detergent and laundry products. This paper will make a comparison between two competing brands Tide and Gain which have strong presence in the local market of USA (IBS Case Development Centre, 2010). Literature Review P&G has considered huge expansion in its product line over the past few years. It operates in almost every nation in the world. Its international business operation includes developing new market. The products of P&G are available in five geographical regions which are USA, Latin America, Asia, Western Europe, and Middle East countries. Their international business services deliver technology, procedures and other tools for understanding the customers better. In the most urbanized market, P&G offers around 35 brands. P&G has almost 4.2 billion customers worldwide who purchase the products rendered for around 40 billion times annually [1] (Procter & Gamble, 2011). Globalization Each brand of P&G is affected by globalization which also includes Tide & Gain. The marketing programs are different and both brands have different price levels depending on the consumer demand. The price levels range from super premium for top selling products to lower priced products that offer basic advantages only. Tide and Gain are available in majority of retail stores of USA. Tide has international presence while Gain is served only in the local market of USA. Thus, the prices of Tide vary according to the high and low concentration of global market [1] (Procter & Gamble, 2011). Relationship with Other Functions and Brands of Organization Tide and Gain has competitive relationship with other detergent brands of P&G. Under detergent category, P&G has six sub-brands which operate in the local market of USA. Around 99% customers use minimum of one P&G brand regularly. Hence, it can be stated that P&G does not focus on one brand. Rather, it emphasizes on many brands under the detergent segment. The reason is that customers’ motives for purchasing detergent brands are different and P&G incorporates different functions for their brands. In one brand, bleaching might be the main priority where in other brands cleaning might be the chief priority. Thus, though parent company is same but Tide and Gain both have their unique identities (Pearson Education, 2011). Segmentation Market includes customers and they differ in several ways for example needs, resources, locations, buying activities, and patterns. By the help of market segmentation, an organization can split big diverse market into smaller divisions which can be reached more competently and effectually with products that fulfill the requirements of those divisions. Market segmentation can provide several benefits. It assists the organization to market their products more proficiently by tuning the cost, size with the requirements of defined divisions. Tide and Gain of P&G are sold in the market of United States. Besides these two brands, there are other six brands in detergent category and which compete with each other. Tide and Gain both are designed to fulfill specific market segment (Procter & Gamble, 2011). Tide is basically aimed for those people who work hard and make clothes very dirty. It is suitable for people who have small kids in their family. Gain is intended for the people who work in schools or offices and do not make clothes much dirty. Thus, both provides specific customer requirement. As majority of customers become selective about a particular brand, the market segmentation provides organization to identify target customer and develop product according to customer’s choice. The market of Tide and Gain can be segmented by two ways for example: Geographic Segmentation In this segmentation, organizations split the market into several geographical components like nations, districts, states, areas, and capitals. It is the company which decides where it will conduct the business operations. Organizations can either localize their products or globalize them. With respect to Tide and Gain, P&G has globalized the Tide brand and has localized the Gain brand. Tide is available in the market of United States, India, Morocco, Saudi Arabia, China and many other countries whereas Gain is available in the local markets of America (reComparison, 2011). Psychographic Segmentation In psychographic segmentation, organization splits market on the basis of variables like social status, lifestyle, or behavior characteristics. Customer belonging in the same demographic group might not have same physiognomies. Thus, Tide and Gain have also segmented on the basis of psychographic variable because some people use detergent products only for cleaning the clothes. But there are variances among people for choosing detergents like cost, leniency, smell, etc. For some people, cleaning is most important while others think cloth softening is vital, and some seek good fragrance after washing. Meanwhile Tide provides user with cleaning and care for apparel garments. It stresses on reaching to the bottom of grime and keep the clothes clean without compromising the color. On the other hand, Gain positioned itself with efficient cleaning ability but not as strong enough as Tide. In addition, it offers with good scent in the clothes. Therefore, consumers who do not make the clothes too dirty can use Gain detergent (Pearson Education, 2011). Environmental Issues Detergent products include ingredients which can pose harm to the environment. The chemical materials of detergent not only damage the environment but also can impact on health of living beings. Some of the ingredients of detergent which can damage the environment are as follows: Surfactants: Surfactants is one of the detergent elements which eliminate dust and stain from clothes. This element comprises of components like Nonylphenol Ethoxylate (NPE) and Linear Alkylbenzene Sulphate (LAS) which arises from gasoline products. Thus, it can pollute the air and water while producing and disposing detergent products. Phthalates: Phthalates is used in incorporating color and smell in some of the detergent products. This ingredient is also recognized as ‘hormone – disruptors’ and can result in fertility problems in human body. It has the potential to harm DNA and at times result in extreme feminization of man. Phosphorous: Phosphorous is another ingredient which is debarred in many nations. Phosphorous is used in making detergent products but it is harmful in the sense that, once it mixes in the watercourses, it can cause extreme progress of algae and other water foliage. High level of foliage in water diminishes oxygen and destroys the vegetation and plants. Thus, this ingredient contributes to water pollution (Beach, 2010). P&G always attempt to seek for fresh, hygienic, nontoxic component in their detergent products. The environmental policy of P&G is secured by internally levied principles of worldwide operation. The obligation of P&G for secure operation is instigated by proper environmental program and supported by specialized staff organizations. According to ‘Environmental Quality Policy’ of P&G, the organization continually attempts to develop the environmental aspects in their products [2] (Procter & Gamble, 2011). The commitment of safety is replicated in using the ingredients to produce Tide and Gain. Tide and Gain fulfill the rules and regulations of market where it is being sold. There are less environmental impacts of Tide and Gain as the production, the packaging, the distribution and the positioning are scientifically conducted. For instance, the Tide HE (High Efficiency) Detergent uses less water than other detergents. Tide is three-layered, bio gradable, and there is no phosphate. Gain LE is not popular with respect to environmental impact like Tide HE but it is inexpensive than Tide. Gain includes several ingredients for making smell in the clothes which can harm on human health. For example, Gain Original includes chemicals like ‘Sodium Carbonate’ and ‘Liner Alkyl Sulfonate’. Excessive inhalation of these ingredients can cause breathing sensitization or indicative reactions (Docstoc, 2007; ConsumerSearch, 2010). Purchase Decision Structure Purchasing of consumer products are generally conducted by housewives who act as a purchasing agent for all members of family. In detergent product like Tide or Gain, purchasing decision is relatively independent though the consumption is meant for whole family. Here, female consumers apply their fondness while purchasing. The social status of family, purchasing role alignment in a family, relative significance of purchase, and time stresses are a few of the aspects that determine the purchase decision structure of detergent brand. Tide and Gain, both brands’ purchasing decision structure are autonomous in nature and the buying function is affected by a specific family member’s tendency towards a brand (Sheth, n.d.). Channels of Distribution Distribution channel is essential to reach the target market. To select the proper distribution channel there are several aspects that need to be considered like choice of place, where products will be marketed, and several channels which are required to take the product in the target segment. The distribution channels comprise of warehousing, packaging and carriage, and are directly related with wholesalers, retailers, brokers, manufactures, and target customers. Organization selects the most suitable distribution channel which is appropriate for target customer. With respect to warehousing, there is need for obeying the environmental regulations of storage location. The distribution management must be updated. Enactment of Just – in – time (JIT) approach in distribution system can help organization to create a sound supply network with customers, producers, dealers and other stakeholders. Tide is regarded as an international brand, and its distribution channel is different from Gain. Tide put much emphasis in retail distribution. As Tide fulfills the immediate washing requirement of people, it is always available in almost all the retail stores. Tide sells the product in an atmosphere where people buy in bulk amount. With its clever line extension approach, Tide has successfully conquered over other detergents. Tide’s distribution is very rigorous and for this reason it sells more compared to other detergent brands. The distribution of Tide is developed in order to reach more target customers (Vanier College FirstClass Server, 2007). On the other hand the distribution channel of Gain is focused on US local market. As detergent products are mainly purchased by women customer, Gain uses the e-business channel to distribute the product directly to customers. Though Gain is only sold in the USA, it is also one of the top selling brands of P&G. The distribution channel of Gain is also developed to fulfill the needs of African Americans and Hispanics customer segments (Target Market News, 2007). Promotion and Advertising Promotion is one of the vital aspects for an organization to market any brand. With respect to advertising, P&G spends huge money to promote the brands. It is known as one of the largest advertisers globally. Advertisements of Tide can be seen in television, magazine and newspaper. The advertisement is targeted towards the household people. In the retail market, P&G promote the Tide brand in the form of offering coupons. The main aim of those coupons is to generate an impression that Tide is superior compared to other detergent because it costs high. Tide always wishes for strong promotional plan and every advertisements of Tide are targeted towards particular customer segment. Tide’s advertisement illustrates that it is much stronger than other detergents with respect to removing dirt. This high quality awareness of Tide is generated because of good advertising strategy. Tide products are also advertised on internet (Vanier College FirstClass Server, 2007). The advertising of Gain is ordinary, but extremely effective. The advertisement of Gain is targeted for household and price sensitive customers. The advertisement depicts that Gain gives sweet and long lasting fragrance. The advertising strategy of Gain is effective in illustrating stable flow of customers. Gain shows their advertisement in television, magazine and internet. The internet promotion of Gain is much advanced than Tide. Gain provides promotional coupon through their website. Unlike coupons of Tide, Gain’s coupons offer customers discount on product purchase. The website of Gain provides several purchasing deals, as well as free samples. People can register in the ‘Gain Fan Club’ and enjoy coupons, free samples and attractive deals regularly (P&G, 2010). Pricing Pricing is one of the most important tools for organizations to sell products. Organizations can use the pricing strategies to increase the sales of product, to limit the sales of product, to control the demand of any product in market, to make other competitive product less attractive and to appeal customer to purchase a brand. The pricing strategies of P&G are very effective that not only attract customers but also make the rivals’ products less attractive. P&G conducts proper marketing research and use appropriate pricing according to target customers’ preferences. For high sensitive customer, P&G provides discounts to make its product more economical, and for less sensitive segment P&G focuses on product attribute to develop a positive brand image (Procter & Gamble, 2011). The pricing strategies of Tide are very competitive in the local market and thus the products of Tide have grown tremendously. Tide is now in the maturity phase of product life cycle (PLC) and its pricing provides customers with a message about high quality. Tide is expensive compared to Gain but it does not impact on the sales of this brand. Tide is one of the successful brands of P&G. Tide is regarded as a high quality product with strong pricing strategy (Vanier College FirstClass Server, 2007). Pricing of Gain is fairly economical. Though the prices of Tide and Gain vary, sometimes both brands are sold in similar prices. Gain is in the growth stage of product life cycle and recently it is attaining popularity. Gain Liquid has already captured almost 5% share in the USA local market. It has become one of the most bestselling homecare brands of P&G [1] (Procter & Gamble, 2011). Price Comparison of Tide and Gain: With respect to Tide HE Liquid Laundry Detergent, it costs almost 30 cents for 1 load. In the official website of Tide, the consumers have rated this product 4.1 star out of total 5 because of its cleaning capacity and freshness. The Gain HE Liquid Detergent costs almost 19 cents for 1 load. It has been given 4.2 star ranks out of total 5. In the official website of Gain, customers have stated that Gain is useful for removing sweat aromas and make cloth smell fresh (ConsumerSearch, 2010). Ethics Ethical issues have become much important for any organization to be concerned. Ethics denote the guidelines, morals, philosophies that direct the organizational affiliates and impact on marking decisions. Ethical marketing is defined as clear and reliable business practices and exhibits honesty and impartiality towards the customers and the clients. It is based on the codes and principles which describe adequate behavior. Every organization is liable for unethical marketing practices. Ethical marketing activities and codes are the core of establishing trust and thus it help to gain a long term connection with customers. In present days, organizations can face many ethical problems with respect to selling, distribution or advertising (Ferrell, n.d.). Bad ethics can impact on the sales of products. In the year 1995, USA has recorded lower rank with respect to honesty. As ethical concern increases, organizations are integrating ethics in business performance (Schlegelmilch, 1998). P&G aims to maintain every ethical principle and avoids any kind of unethical practices. It provides products with superior quality and set reasonable value. The core principles of P&G are to maintain ethical relationship with customers. Tide has loyal customer platform that signifies sustainable customer satisfaction for the product. It has almost 800,000 users’ support in famous social networking site ‘Facebook’. The customers are attracted because of Tide’s strong hygienic methods and environment friendly ingredients (Martin, 2010). Pertaining to advertising, Tide avoids any unethical practices. The advertisement is made by abiding all principles and is targeted towards specific target group. Gain also has its own loyal customer base. The loyal customer base of Gain is regarded as ‘Gainiacs’. These are the hardcore customers who are satisfied with Gain’s cost and smell [3] (Procter & Gamble, 2011). Conclusion and Recommendation Tide and Gain are unique with respect to marketing plan. Tide and Gain both have strong presence in the local market of USA and each brand has their own loyal customer base. With comparison to Gain, Tide has better marketing program. The success of Tide is the result of its superior quality, appropriate appeal towards customer and substantial advertisements. But Gain can become more popular if it is expanded in other countries. Customers like the strengths of Gain i.e. its cleaning technique as well as the sweet fragrance. Thus, by proper promotion of Gain it might get accepted in other markets like Tide. The advertisements of Gain are concentrated mainly online. P&G needs to spend more on advertisement of Gain products to enhance its market. References Beach, E., (2010). Detergent Pollutants. Demand Media. Retrieved Online on September 10, 2011 from http://www.livestrong.com/article/153609-detergent-pollutants/ ConsumerSearch, (2010). Laundry Detergent for High-Efficiency Washers. Laundry Detergent: Full Report. Retrieved Online on September 10, 2011 from http://www.consumersearch.com/laundry-detergent/he-laundry-soap Docstoc, (2007). Material Safety Data Sheet. Gain Fluffy Granular Laundry Detergent. Retrieved Online on September 10, 2011 from http://www.docstoc.com/docs/7948142/Gain_Fluffy_Granular_Laundry_Detergent Ferrell, O. C., No Date. Nature and Scope of Marketing Ethics. The Robert O. Anderson School. Retrieved Online on September 10, 2011 from http://www.google.co.in/url?sa=t&source=web&cd=3&ved=0CDsQFjAC&url=http%3A%2F%2Fprideferrell.net%2FResources_files%2FMarketingEthics.doc&ei=mlFrTqnfLc7nrAexz-THBQ&usg=AFQjCNEtFw3fsU3EuexNZlhLInhtCHZXAA&sig2=bVxOjzK2jRDD81B_b_H1XQ IBS Case Development Centre, (2010). List of Case Studies on Marketing. Case Catalogues. Retrieved Online on September 10, 2011 from http://www.ibscdc.org/case-catalogues/Marketing_Case_Studies_Catalogues.pdf Martin, A., (2010). Smelling an Opportunity. The New York Times Company. Retrieved Online on September 10, 2011 from http://www.nytimes.com/2010/12/09/business/09tide.html P&G, (2010). The Gain fan Club. Gain Laundry. Retrieved Online on September 10, 2011 from http://www.ilovegain.com/gain_laundry_fanclub.do [1] Procter & Gamble, (2011). Innovating for Everyday Life. 2011 Annual Report. Retrieved Online on September 10, 2011 from http://www.pg.com/en_US/downloads/investors/annual_reports/2011/PG_2011_AnnualReport.pdf [2] Procter & Gamble, (2011). Our Values and Policies. Company. Retrieved Online on September 10, 2011 from http://www.pg.com/images/company/who_we_are/pdf/values_and_policies907.pdf [3] Procter & Gamble, (2011). Gain Dishwashing Liquid. 2011 Annual Report. Retrieved Online on September 10, 2011 from http://annualreport.pg.com/annualreport2011/innovating/gain.shtml Pearson Education, (2011). Customer-Driven Marketing Strategy. Designing a Customer-Driven Marketing Strategy and Integrated Marketing Mix. Retrieved Online on September 10, 2011 from http://www.prenhall.com/behindthebook/0132390027/pdf/Kotler_CH07.pdf reComparison, (2011). Tide vs. Gain: How Are They Different. Comparisons. Retrieved Online on September 10, 2011 from http://recomparison.com/comparisons/101307/tide-vs-gain-how-are-they-different/ Schlegelmilch, B. B., (1998). Marketing Ethics: An International Perspective. Cengage Learning EMEA. Sheth, J. N., (No Date). A Theory of Family Buying Decisions. Jagdish Sheth. Retrieved Online on September 10, 2011 from http://www.jagsheth.net/docs/A%20Theory%20of%20Family%20Buying%20Decisions.pdf Target Market News, (2007). Black Consumers Drive P&G’s Gain Detergent To Billion-Dollar Status. Story. Retrieved Online on September 10, 2011 from http://www.targetmarketnews.com/storyid09070701.htm Vanier College FirstClass Server, (2007). Is Tide Using a Proper Marketing Mix. Tide’s Marketing Concept. 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