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.
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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%)
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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.
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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
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