MARKETING.....1,2,3.4

1.

CASE 2: P&G (Proctor and Gamble)

P&G Notches Gain In Market Share

by: Serena Ng,Oct 26, 2013

Procter & Gamble Co. PG +0.08% reported an 8% rise in profit for its first quarter under returned Chief Executive A.G. Lafley and notched a rare win in sales growth over rivalUnilever ULVR.LN -0.16% PLC.

The Cincinnati, Ohio, maker of Tide detergent, Gillette razors and Pampers diapers said sales for the three months to September rose 4% excluding the impact of currency movements, acquisitions and divestments. Including foreign-exchange impacts, sales were up 2% to $21.2 billion, slightly above what Wall Street analysts were expecting.

P&G, struggling to catch up with faster-growing rivals like Unilever and Colgate, brought Mr. Lafley back to the top job in May. The 66-year-old CEO has been tightening the company's focus on its biggest brands and is trying to speed up cost savings to improve its bottom line.

Those efforts appear to be paying off. In the quarter, P&G said it maintained or increased its share in businesses representing 2two thirds of its global sales, a bit better than the prior quarter.

Meanwhile Unilever, which sells a range of packaged food and household products, reported its worst quarterly sales since the height of the financial crisis this week, and Chief Executive Paul Polman in part blamed competitive activity by a rival that employed what he called "irrational" promotions to win market share. He didn't name the rival, but people familiar with the matter said it was P&G.

Jon Moeller, P&G's chief financial officer, denied the company spent heavily on discounts and promotional activities during the quarter to win market share in areas like hair care and deodorants.

Mr. Moeller said the percentage of P&G products in the U.S. that were sold on promotion fell in the quarter from a year ago, "so promotion levels were down."

"We're not going to be the ones that will lead promotional escalation," he said, adding that the company is planning to launch a slate of new beauty products in the coming months and there will be promotions around those.

Firms in the heavily competitive consumer products business, which often forces a trade-off between market share and profits, regularly complain about rivals' discounting at investor conferences and on earnings calls.

Mr. Lafley sat out Friday's earnings call. P&G's shares were down 0.8% Friday at $80. Unilever's American depositary receipts fell 0.8% to $39.61.

In the recent quarter, P&G's hair care business, which includes Pantene shampoo, maintained its market share while the overall beauty segment, which generates more a fifth of P&G's revenue, reported a 1% increase in organic sales growth. But sales at the Olay skin care brand slipped again.

For the quarter ended Sept. 30, P&G reported net profit of $3.03 billion, up from $2.81 billion a year earlier, on sales of $21.21 billion. The company said it still expects 7% to 9% growth in earnings per share and 3% to 4% growth in organic sales in the year that ends in June.

QUESTIONS:

A.Explain why there can be a tradeoff between gaining market share and profitability.

B.Are all markets characterized by the kind of market share issues that exist in consumer products or are conditions explained by the number and market power of competitors, the kinds of products or both?

C.Recent earnings were positive for P&G. Why was that important and what does it signal about the company?

D.Evaluate P&G's performance as compared to rivals Unilever and Colgate

E.Explain and evaluate the business strategy of the reappointed CEO, A.G. Lafley. Refer to your text.

F.How might the external environment affect the financial performance of a company like P&G? Refer to your text.

G.What recommendations would you have for this company and why?

2.

Instruction: Read below case carefully, and give your opinion based relevant ethical theories. Case Study: Neuromarketing Tool Research Method Outcome Revealed A camera and infrared Eye Tracking technology monitor eye Tracks visual attention in reaction to predetermined movements, in terms of speed and duration of attention areas of interest Sensors placed on fingertips Core measure heart rate, skin Gauges the depth of Biometrics conductance (sweat), motion, emotional engagement and respiration Functional Brain scanner measures change Pinpoints specific deep brain Magnetic in oxygenated blood flow to activity beyond surface cognitive Resonance reveal regional activation during function (e.g., empathy and Imaging (fMRI) a task or experience reward) (Source : Temple and OIG Analysis). A marketing manager at Vavabola company decided to redesign their packaging as part of their marketing exercise to increase annual sales. He knew that by studying consumers' neuro responses toward their new packaging will allow them to make a better decision. Hence, they decided to collaborate with a Professor from University of Malaya to run a neuromarketing experiment using neuromarketing tools as in the table above. During the experiment, some neurological markers information such as eye movement, heart rate, and skin moisture was recorded as they were exposed to logo designs, ads, and the product itself. The finding of this experiment enable them to understand on how to increase consumers' actual purchase behaviour. Question: 1. Would it be ethical to conduct such experiment? 2. Would it be ethical to participate as respondents in such experiment as you are allowing yourself to be studied in order for them to understand bigger population?In your new role as quality manager of the high-tech unit of a large national company, you identify a problem which is typified by the two internal memos shown below. MEMO 1 From: Marketing Manager To: Managing Director Cc: Production Director Works Manager Date: 4th January 2020 We have recently carried out a customer survey to examine how well we are doing in the market. Regarding our product range, the reactions were generally good, but the 750 W microwave oven is a problem. Without exception everyone we interviewed said that its quality is not good enough and could potentially be hazardous. Although it is not yet apparent, we will inevitably lose our market share to our rivals if we do not swiftly address this issue. Also, we will not want our customers to report these issues to the Ghana Standards Authority (GSA), as we are aware of the grave implications, given they have emphasized the possibility of bodily harm using our product. As a matter of urgency, therefore, will you please authorize a complete redesign of this product, and the possibility to recall the product category? MEMO 2 From: Works Manager To: Production Manager CC: Managing Director Marketing Manager Date: 6th January 2020 This really is ridiculous! I have all the QC records for the past ten years on this product. How can there be anything seriously wrong with the quality when we only get O.1 per cent rejects at final inspection and less than 0.01 per cent returns from customers?Case study Flu Medical Equipment Company is US. based company and its main objective is to produce medical equipment for hospitals. During COVID 19, Flu medical equipment company producing disposable Personal Protective Equipment (PPE kit) and selling to different countries. In order to earn more prot, the company is willing to invest in stock market also. Suppose you are nancial advisor of Flu Medical Equipment Company and currently your client is only investing in U.S stock market. Now the company is considering diversifying in U.K. stock market also. Assume that during current scenario, there are neither restriction nor barriers to invest in U.K. stock market. Your client would like to know the benets if the company is investing in U.K. stock market also. Discuss following questions with appropriate answers. Answers should connected with the scenario of case study. a. Using the Modern Portfolio Theory (MPT) how the maximum benets can be earn in the company