The "Procter & Gamble Company". Consumer behavior in the tissue and towel business

Essay , 2017 , 10 Pages

Business economics - Trade and Distribution

The objective of this report is to provide a clear understanding of relevant consumer behavior in the tissue/towel business inclusive of any additional relevant information about consumer behavior. The report will further offer other market research methods that can be used to in addition to the one in the situation provided. Eventually, the report will provide a SWOT analysis, inclusive of the set SMART objectives for the tissue/towel business.

The Procter & Gamble Company was established in in the year 1837 with the aim of producing and distributing paper products such as pampers, tissue paper, bathroom tissue. Its formation occurred when two immigrant candle and soap makers decided to form a partnership. The Procter & Gamble Company became a corporation in 1890, and since then it managed to expand and double its sells in U.S. market. The success of P&G Company can be attributed to its undisputable reputation for strong marketing, conservative management, high-quality products and high integrity.

The company managed to exhibit successful expansion through acquisition of major companies both locally and internationally. The proprietor technology, use of total quality methods, value-added products, high media weight inclusive of successful advertising themes were used the key strategies to gain competitive advantage and obtain a substantial market share for its products. The initial stage to initiate an expansion occurred in 1991 when it was clear that Charmin, Bounty, and Puffs had succeeded in obtaining a significant market share in the US. P&G thus decided to acquire Facelle Co. which deal with bathroom tissue, paper towels and facial tissue inclusive of the Royale, Florelle, Pronto, Dove, Facettes, and Festival brands.

From the Procter & Gamble: Facelle Division Tissue case study, it can be deduced that absence of strategies for global collaboration, lack of or insufficient innovation and technology, transportation cost and sophisticated communication channels are the key challenges facing many companies. Recommendations for a better environment to conduct business include clear communication, access to innovation and technology, an improvement in performance and reliable return on investment.

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Executive Summary

The Procter & Gamble Company was established in in the year 1837 with the aim of

producing and distributing paper products such as pampers, tissue paper, bathroom tissue. Its

formation occurred when two immigrant candle and soap makers decided to form a partner-

ship. The Procter & Gamble Company became a corporation in 1890, and since then it man-

aged to expand and double its sells in U.S. market (Craig-Lees, and Maulana). The success of

P $ G Company can be attributed to its undisputable reputation for strong marketing, con-

servative management, high-quality products and high integrity.

The company managed to exhibit successful expansion through acquisition of major

companies both locally and internationally. The proprietor technology, use of total quality

methods, value-added products, high media weight inclusive of successful advertising themes

were used the key strategies to gain competitive advantage and obtain a substantial market

share for its products. The initial stage to initiate an expansion occurred in 1991 when it was

clear that Charmin, Bounty, and Puffs had succeeded in obtaining a significant market share

in the US. P&G thus decided to acquire Facelle Co. which deal with bathroom tissue, paper

towels and facial tissue inclusive of the Royale, Florelle, Pronto, Dove, Facettes, and Festival

brands.

From the Procter & Gamble: Facelle Division Tissue case study, it can be deduced

that absence of strategies for global collaboration, lack of or insufficient innovation and tech-

nology, transportation cost and sophisticated communication channels are the key challenges

facing many companies. Recommendations for a better environment to conduct business in-

clude clear communication, access to innovation and technology, an improvement in perfor-

mance and reliable return on investment.

Introduction

Solomon, Russell-Bennett, and Previte, in their book, `Consumer behavior', defined

consumer behavior as a field of study of the processes consumers undergo when selecting,

purchasing, using or disposing of ideas, services, or even experience with the aim of satisfy-

ing their desires and needs. Consumer behavior is, therefore, the activities undertaken by con-

sumers especially in a marketplace setting inclusive of their original motives for specific ac-

tions. The objective of this report is to provide a clear understanding of relevant consumer

behavior in the tissue/towel business inclusive of any additional relevant information about

consumer behavior. The report will further offer other market research method that can be

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used to in addition to the one in the situation provided. Eventually, the report will provide a

SWOT analysis, inclusive of the set SMART objectives for the tissue/towel business.

Consumer Behavior in the Tissue/Towel Business

Consumer behavior is practically affected by the aspects such as advertising, consum-

er promotion, and pricing. Each element tends to create significant influence towards the ac-

tions the consumer is bound to make. They affect the desire and the need for an individual as

far as a commodity is concerned. Industries are usually consumer sensitive, and therefore a

more significant percentage of the decisions made are traditionally consumer-oriented (Lin,

Lee, and Cheng, 2014 p. 47). Tissue/towel business is not exceptional since one has to set a

competitive price, conduct consumer promotions or even invest heavily in the advertisement

(Manifold, et al. 2016, p. 5). The understanding of the consumer behavior in the tissue and

towel business is essential to consider evaluation the aspects mentioned above (advertising,

consumer promotion, and pricing).

Before conducting any advertisement, a tissue/towel is bound to perform an intensive

research to understand the current consumer behavior. Consumer behavior usually determines

the best marketing strategy which the advertisement personnel ought to apply to reach a

broader base of potential customers. Information concerning consumer behavior can be ob-

tained from survey reports (O'guinn, Allen, Semenik, and Scheinbaum, 2014, p. 16). Alterna-

tively, one can study the consumer behavior from sales history, the internet, and the market-

ing databases.

Promotions and advertisements usually influence an individual's consumption pattern.

The decision to buy one type of brand and discard another is controlled entirely by the pro-

motion and advertisement made by the relevant business (Lin, Lee, and Cheng, 2014 p. 69).

One of the key functions of promotion and advertisement is to convey relevant information to

the consumer as far as a tissue brand is concerned. However, it should be noted that the data

(facts) relayed to an individual creates a curiosity rather than evoking the need to buy. The

consumer, therefore, resolves into an intellectual response initiated by rational thinking and

analyzing of the product's features. Consumer alienation or loyalty is created through inten-

sive advertisement and promotion of a tissue brand (O'guinn, Allen, Semenik, and

Scheinbaum, 2014, p 3).

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Many of the contemporary consumers (Millennials) are more conscious of their well-

ness and health. Many organizations and companies are therefore initiating programs for fit-

ness to their employees. To sustain the wellness program paper products are needed. Tissue/

towel businesses are consequently are necessary to provide hygiene oriented sanitation tools

such as tissues, towels, and wipers. Since the millennial generation is more sensitive to hy-

giene, the business responsible for supplying sanitary towels ought to use the modern tech-

nology to provide high-quality products that meet the consumer's needs. The behavior of the

modern consumer is therefore sensitive due to the improved accessibility of information via

the internet.

According to Weil and Maher (2005, p. 14), the cost of delivering a product can shift

away from the nexus between suppliers and the customers. Towel and tissue businesses can

use the information about the delivery cost to negotiate prices and influence consumer behav-

iors towards purchasing and using the end product.

Consumer behavior in the towel and tissue business can, therefore, be understood

from a promotional, pricing, and advertising perspective. Firms cannot underestimate the

behavioral patterns of their consumers since the actions of the consumer determines the abil-

ity of the business to obtain a significant share of the market (Draganska, and Vitorino, 2017,

p. 7).

Competitor Analysis Research Procter & Gamble

Competitor analysis refers to the identification of competitors to the company and

evaluating the strategies which they undertake and determining their weaknesses and

strengths. Therefore, Procter & Gamble can learn where its brand stands in comparison to its

competitors (Hoffman & Bateson, 2017, p. 6). Procter & Gamble will consequently establish

what makes its products unique and what to improve in regards to their service delivery so

that the company can outdo its competitors (Eades, et. al, 2017 p. 5). It will also assist in de-

fining the opportunities which exist in the market for Procter & Gamble.

PESTLE

This is a marketing framework which will assist the company in tracking the external

environment it is undertaking its operations. The framework entails the analysis of the politi-

cal, economic, sociological, technological, legal and ecological factors which affect the oper-

ations of Procter & Gamble (Hoffman & Bateson, 2017, p. 32). Undertaking this kind of re-

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search will be imperative in that it serves as the pivot to strategic management, which does

not only define what the company should do but also the organizational strategies and goals

strung to them.

Market segmentation

Marketing segmentation will involve the process of potential grouping customers

based on their diverse characteristics. The segments created are composed of customers who

have a similar response to the marketing strategies, and they also possess same traits, like

similar locations, needs, and interest. This kind of research is essential as it will allow Procter

& Gamble to precisely reach customers with specific wants and needs (Hoffman & Bateson,

2017, p. 43). The company, in the long run, will benefit in that it will be in a position to uti-

lize its corporate resources more efficiently and come up with more viable strategic market-

ing decisions.

Positioning

The research involves determining the place that the brand of the company occupies

in the customer's mind and how it is differentiated from the competitor's products (Dinnie,

2015, p. 10). The study will be essential in determining whether Procter & Gamble's products

have distinguishing features on their brand and how it may try to create a suitable image

through the market mix. If Procter & Gamble achieves a strong brand position, it will be dif-

ficult for the competitors to reposition it (Schmitt, 2011, p. 21). The company will also be

aware of how to communicate the attributes of its products to the customers, based on the

competitive pressures, customer needs, and the available communication channels.

Product life cycle (PLC)

This is an imperative marketing concept. The concept involves the description of the

various stages that a product must pass through from its introduction into the market, up to

when it exits the market. Research on the concept is essential as the company will be in a

position to know what to expect in the market in regards to a given product (Schmitt, 2011, p.

4). The product life cycle concept can be utilized as a forecasting tool and can help the com-

pany in making viable marketing decisions when dealing with the different stages in the PLC

(Gmelin, and Seuring, 2014, p. 5).

• Author: James Muthanga (Author)
• Publication Year: 2017
• Pages: 10
• Catalog Number: V388556
• ISBN (eBook): 9783668626188
• ISBN (Book): 9783668626195
• Language: German
• Tags: procter, gamble, company, consumer