1. Procter & Gamble:
Always Russia
or
What Women Want in 1998
Presented by Special thanks to
Ekaterina Melnikova Ekaterina Ladogina
Tatiana Rukavitsyna
Alexander Belenky
2. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 2 -
Understanding Women
A man walking along a California beach was deep in prayer. All
of a sudden he said out loud, "Lord, grant me one wish."
Suddenly the sky clouded above his head, and in a booming
voice the Lord said, "Because you have TRIED to be faithful to
me in all ways, I will grant you one wish." The man said, "Build
a bridge to Hawaii so I can drive over anytime I want to.“
The Lord said, "Your request is very materialistic. I can do it, but it is
hard for me to justify your desire for worldly things. Take a little
more time and think of another wish, a wish you think would honor
and glorify me."
The man thought about it. Finally he said, "Lord, I wish that I could
understand women. I want to know how they feel inside, what they are
thinking when they give me the silent treatment, why they cry, what they
mean when they say 'nothing,' and how I can make a woman truly happy."
3. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 3 -
3. One strategy for
1 CEE region and
which strategy must
be implemented?
Sustainability Issue
Key Issues: What Do Women Want and Think?
1. How much will women
want to pay for
ALWAYS in Russia?
5. How to Solve
Gray Market issue?
4. What should be P&Gs‘
strategy in Russia: How can
usage of the product be
increased, How can the
market for the product be
increased, How should P&G
try to increase market share
2. Do Russian
Women Want More
in the FemPro
portfolio? Extension
Issue
5. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 5 -
Where do we stand?
Market positions as of 1998
Always
Libresse
Carefree
Kotex
Bella
Veronika
0
2
4
6
8
10
12
14
16
0 50 100 150
Price Index
MarketShare,%
6. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 6 -
Product Usage
0
10
20
30
40
50
60
70
80
90
100
Russia Hungary Poland
Total Pads Pantiliners Tampons
7. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 7 -
Strategic Position and Action Evaluation = SPAcE
Always is
The premium flagship brand positioned as best-
performing product available
Backed up by continuous advertising support
Own distribution system gives great competitive
advantage
The highest rate in consumer value perception
Greatest share of the shelf space and the best
assortment
High growth but high uncertainty
ask for more SPAcE
8. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 8 -
Understanding the most beautiful consumers
Social
taboo
Concerns
over
tampons
Prepared
to spend
Trade down
favorite
brand
Loyal
Try new
products
Shop
around
Test
Products
feature
Very
rational
Russian
consumer
9. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 9 -
External Environment
Political & economic
Market liberalization (slowed
reforms + weakness of Eltsyn)
Inefficient tax collection system
High levels of state debt
Asian financial crisis
Increasing pressure on the ruble
Income growth - Increase in
retail sales
Depressed state of distribution
infrastructure
10. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 10 -
Regional organization
EMEA
CEE
Unit volume increase of 25%
Fastest growth
Middle
East
Africa
RUSSIA – key
emerging market
12. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 12 -
Increase Market Share: 4Ps
Price: premium Always, a new mid-priced brand
Place:
develop pharmacy channel by establishing close collaboration
with pharmacy chains, sales at mini-markets, kiosks, paid WC
to increase a number of SKUs on the shelf space
to respond to market trends - switch shelf placement priority
from Always Classic to Always Plus
Product: FemPro expansion: Tampax, Alldays, night pads
Promotion: ATL&BTL: sampling, generate trial by offering
individual pads for sales, Internet promo-sites
Perception Building: Market Communication - focus on Always
and Tampax, extensive testimonials, Ads on TV, Russian
adopted format
13. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 13 -
Price: Pricing measures
Price reduction via
downsizing quantity of pads
per pack (from 10 to 9 = 10%
price reduction)
Introduce large-size economy
pack
Consider the introduction of
a mid-priced brand to
compete with Bella
Bella is #2 fastest growing
brand after Always
To keep Gross Margin: margin % from revenue
Local production, cost-optimization policy (no individual
pack etc)
To keep absolute margin as volumes increase
14. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 14 -
Place: Occupy the shelf space share
The more the better, but HOW?
Revise category management (priorities change
from Classic (2,9%) to Ultra (5,2%)). Justified
by market trend of Ultra growth
To extend the product line increasing
number of “FacingS”
Laying-out aimed at switching from Bella brand
WHAT FOR? To occupy more shelf space share &
drop competitors OUT
15. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 15 -
Product: FemPro segment expansion
Develop “night” pads
Stay in premium segment
Strong ATL support
Develop Alldays
Stay in premium segment
No strong ATL support, just presence on
the shelf
Develop Tampax
Stay in premium segment
Develop positive Ad communications to
reduce negative perception of customers
Drive tampon category grow
New special-purpose pack
Travel Pack for business ladies (Tooth-paste, deo,)
Teens line (military, pink, …)
Sport line
Family line (mom and daughter)
16. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 16 -
Promo: Long-term marketing communication
To shift the accent from functionality
to emotionality (taboo)
Tailored messaging based on age
groups meeting physiological &
psychological sophistication of each
(10-13, 14-19,20-25,26-35 etc)
ParaPharmacy
Health education (schools and etc)
Gynecologist, polyclinics
17. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 17 -
Sustainability strategy mix
P&G Global
Sustainability
Strategy
P&G Global
Sustainability
Strategy
Local marketing
addressing
Russian
sophistication
Local marketing
addressing
Russian
sophistication
P&G Regional
Strategy in Russia
as a part of CEE
P&G Regional
Strategy in Russia
as a part of CEE
18. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 18 -
Gray Market Issue ALWAYS exists in Russia
How significant is this issue?
Creates P&G Regions competition,
product presentation, quality
maintenance, breaks pricing.
May lead to P&G Russia business loss
and as a result marketing spend reduction
Audit data are not relevant
How did it develop?
Unregulated character of open market coverage (thru
wholesalers)
Large wholesalers buy and distribute Polish Always
Actions to solve the problem:
To level prices in the whole CEE region (to determine whether to
increase in Poland and reduce in Russia at a Global Meeting)
Setting cooperation with customs to close illegal customs
clearance (thru AmCham)
P&G Polish Division tightens control over sales channels in
accordance with global P&G corporate policy to prevent product
20. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 20 -
Pricing Strategy: Justifications
To remain in Premium segment. To SUSTAIN:
market leadership,
technological leadership (innovations),
marketing support,
pads market development
High quality
Higher margin rate
Russian customers specifics
To consider introduction of a mid-priced brand to
compete with Bella
Bella is #2 fastest growing brand after Always
Good value for money perception despite premium
pricing:
consumer value perception –78%
highest among competitors
21. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 21 -
FemPro Expansion: Product & Promo
Product line: Tampax,
Alldays, night pads
Market share increase
Product usage increase
New Product
Introduction
Increase usage of products
Increase market share of P&G
Promotion
Functionality worn out
To reduce social taboo: to
invert negative perception
into positive
As market matures it requires a
more differentiated approach
22. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 22 -
Russia as a part of CEE - Sustainability
Poland CRITERIA Russia
WE Premier brands MID
Brand Value
perception
HIGH
certain adaptations YES Market adjustment YES
Investing YES Local Production YES
Emergent market YES Fast growth YES
Distribution underdeveloped level destroyed
“McVan Model” applicability YES successful YES
Perception NO Social Taboo YES
Market conditions westernization DIFFERENT underdeveloped
24. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 24 -
Alternatives
To acquire Veronica
Cross functional usage
(стелька рыбака)
Anti-climax campaign
Live longer (sex until late 80)
Pad with bluetooth/RFID sensor + ladies
phone or watch (innovation!)
Mandatory manufacturing certification (ISO
9000)
26. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 26 -
Strategy Implementation: Action Plan
1998
Market conquest
Selected SKUs
Establishing infra
Exclusive geo
partners
Perception creation
ActI
ActII
ActIII
2010
Build to last
Complete line
Local production
Across the board
partnership
Mind share owned
2004
Keep momentum
Extending products
offering
Mature infra
Broad channels
coverage
Brand of choice
27. 26 Nov 2005 AIBEc case competition: P&G Always Russia - 27 -
Summary: Never say never – Always say
Act I is over
Early entry on a big scale
Best products and technology
Build systems and processes
Invested extensively
No competition in tampons
category in Russia
Act II is to keep momentum going
To broaden distribution channels to
penetrate pharmacies
To fight gray market
Adjust strategy as market matures
To introduce “night pads”
Win consumers mind share
Market expansion by everyday-use
pads
If you do not change direction, you
may end up where you are heading.
Lao Sun Tzu
28. Thank you
26 Nov 2005AIBEc case competition: P&G Always Russia - 28 -
