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Each option is analyzed as follows:
New Brand Introduction:
Pros:
* P&G’s current LDL played a leading role in the market place. The success of its Dawn brand clearly indicated a likelihood of another new brand with a distinctive benefit could increase further P&G’s LDL Volume. * Wright saw new product potential in all three market segments (performance, mildness, and price brands) * For performance brand, market research indicated that 80% of U.S. households scour and scrub their dishes at least once a week. H-80 invented by new technology as a high-performance product which can fulfill a clear consumer need based on research. The 4-week blind in house use test of H-80 and established competitive LDL, was a strong indicator of its potential success. * For mildness segment, a new brand which differentiates its mildness benefit can help the declining segment recapture the …show more content…
It would cost $20 million for the improvement and $10 million as incremental marking expenditures, which was $50 million less than a new brand. * On top of it, Joy brand could cut its cost of goods by $3 million per year if this new formula was introduced. The brand relaunch would cost $10 million in marketing expense with no capital investment.
Cons:
* Although there is a data supporting how H-80 formula would capture the market, there was lack of data of the introduction of H-80 formula to the existing current LDL brands. * If consumers have already established a certain image of Joy brand group, can the change of formula attract new consumers and retain the existing consumers? * The introduction of new product would take about one year plus two year if test market was needed. So three years indicated that the profit return would be a long-term investment.
Increase Marketing Expenditures on Existing Brands
Pros:
* Since the market has been static with the LDL category, Wright might avoid increasing the capital investment and reduce investment
New Brand Introduction:
Pros:
* P&G’s current LDL played a leading role in the market place. The success of its Dawn brand clearly indicated a likelihood of another new brand with a distinctive benefit could increase further P&G’s LDL Volume. * Wright saw new product potential in all three market segments (performance, mildness, and price brands) * For performance brand, market research indicated that 80% of U.S. households scour and scrub their dishes at least once a week. H-80 invented by new technology as a high-performance product which can fulfill a clear consumer need based on research. The 4-week blind in house use test of H-80 and established competitive LDL, was a strong indicator of its potential success. * For mildness segment, a new brand which differentiates its mildness benefit can help the declining segment recapture the …show more content…
It would cost $20 million for the improvement and $10 million as incremental marking expenditures, which was $50 million less than a new brand. * On top of it, Joy brand could cut its cost of goods by $3 million per year if this new formula was introduced. The brand relaunch would cost $10 million in marketing expense with no capital investment.
Cons:
* Although there is a data supporting how H-80 formula would capture the market, there was lack of data of the introduction of H-80 formula to the existing current LDL brands. * If consumers have already established a certain image of Joy brand group, can the change of formula attract new consumers and retain the existing consumers? * The introduction of new product would take about one year plus two year if test market was needed. So three years indicated that the profit return would be a long-term investment.
Increase Marketing Expenditures on Existing Brands
Pros:
* Since the market has been static with the LDL category, Wright might avoid increasing the capital investment and reduce investment