1.

EXECUTIVE SUMMARY

1.1 THE PRODUCT : Vicks

COMPANY : Procter & Gamble

1.2 TARGET MARKET : 1. Kids

2. Adult

3. Sinus patients

1.3 WHY THE TARGET MARKET NEEDS THIS PRODUCT:

The target market needs this product due to the following reasons:

They want to feel better:

 Alleviate symptoms from 4 primary conditions

 Cure to cause

Low price sensitivity:

 Generics are 30% to 50% cheaper and have less than 10% share

 No true differentiation : suggests customers should be price sensitive

 There is perceived differentiation: This reduces customers price sensitivity

Convenience:

 Purchase from nearest store.

It gives information about which product to use.

2. COMPANY BACKGROUND:

2.1 BRIEF COMPANY HISTORY:

Proctor and Gamble Corporation is a Fortune 500 American multinational

Corporation headquarted in Downtown Cincinnati, Ohio that manufactures a wide
range of consumer goods. It is fifth in Fortunes most admired Companies 2011 list.

William Proctor, a candle maker and James Gamble, a soap maker immigrants
from England & Ireland respectively, who had settled earlier in Cincinnati formed the
company initially on October 30, 1837.
In 1858 – 1859 the sales reached $1 million. In 1880’s P&G began to market a new
product, an inexpensive soap that floats in water. So the company is called the soap
ivory. The company’s leaders began to diversify its products as well and 1911 began
producing Crisco, a shortening made of vegetable oils rather than animal fats.

The company moved into other countries, both in terms of manufacturing and
product sales, becoming an international corporation with its 1930 acquisition of
Thomas Hedley Co. Numerous new products and brand names were introduced over
time, and P&G began branching out into new areas. P&G acquired a number of other
companies that diversified its product line and significantly increased profits.

In 1994, the company made headlines for big losses resulting from leveraged
positions in interest rate derivatives, and subsequently sued bankers Trust for fraud,
this placed their management in the unusual position of testifying in court that they
had entered in to transactions that they were not capable of understanding.

In 1996, P&G again made headlines when the Food and Drug Administration
approved a new product developed by the company, Olestra. It is a lower – calorie
substitute for fat in cooking potato chips and other snacks that during its development
stages is known to have caused anal leakage and gastrointestinal difficulties in
humans.

In January 2005 P&G announced an acquisition of Gillete, forming the largest

consumer goods company and placing HUL into second place. P&G’s dominance in
many categories of consumer products makes its Brand Management decisions
worthy of study. On August 24th, 2009 the Irish – based pharmaceutical company
Warner Chilcott announced they had bought P&G’s prescription-drug business for
$3.1 billion.

KEY DATES:

1837 William Proctor & James Gamble form P&G,

a partnership in Cincinatti, Ohio to
manufacture and sell candles and soaps.

1851 Company’s famous moon and stars symbol is

created.

1878 P&G introduces white soap, soon renamed

Ivory.

1890 The P&G Company is incoroporated.

1911 Crisco, the first oil vegetable shortening

1931 Brand management system introduced.

1946 P&G introduces Tide detergent.

1955 Crest toothpaste makes it debut.

1957 Charmin paper Company is acquired.

1961 Test marketing of pampers disposable diapers

begins.

1963 Company acquires the Folgers coffee brand.

1982 Norwich – Eaton pharmaceuticals is

acquired.

1985 P&G purchased Richardson-Vicks company,

owner of the Vicks, Nyquil, and Oil of Olay
brands.

1988 Noxell Corporation, maker of Noxema

products and cover girl cosmetics, is
acquired.

1991 Max Factor and Betrix cosmetic and

fragrance lines are bought form Revlon
incorporation.

1992 Pantene pro vitamin shampoo is introduced.

1993 Major restructuring is launched, involving

13,000 job cuts and 30 plant closures.

1997 Company acquires Tam brands incorporation,

maker of the Tam packs line of Tam pons.

1998 Organization 2005 restructuring is launched.

1999 Premium pet food maker lams company is

purchased.

2001 P&G acquires Clairol hair care business from

Bristol Myers squibb Company.

2002 Jif peanut butter and Crisco shortening

brands are divested.

2003 Company acquires a controlling interest in

German hair care firm Wella AG.

2005 Acquisition of Gillete

2008 Branched in to record business of Tag

 records.

2009 P&G sold their prescription-drug business for

$3.1 billion to Irish based pharmaceutical
Company.

2.2 MISSION STATEMENT

3. SITUATION ANALYSIS :

3.1 ENVIRONMENTAL ANALYSIS

3.1.1 Social Environment:

P&G’s Live, Learn and Thrive has improved life more than 300 million
children. Some of other social responsibilities they involve are :

 PAMPERS AND UNICEF :

Pampers and Unicef are working together to vaccinate women and children around
the world from Maternal and neonatal tetanus.

 ALWAYS AND TAMPAX :

Protecting futures works with other organizations to help vulnerable girls stay in
school.

 P&G and Hope schools :

Thanks to P&G Hope schools, children now have better access to education in
poverty stricken rural areas of China.

 P&G and Shiksha :

India has the World’s largest number of Uneducated children – but P&G’s Shiksha
(Hindu for “education”) is dedicated to fighting that Trend.

 P&G and feeding America :

Everyday, 13 million children in the United states risk going hungry. But P&G is
helping to change that.

 Safeguard / Escudo :

Establishing good hygiene habits early is essential to protecting children from disease. So
Safeguard/Escudo engages school children in China, Mexico and beyond as effective agents
for change.
ECONOMIC ENVIRONMENT

P&G economic development is as follows :

 Share holder value

 Employment

 Taxes, fees and and Contributions

POLITICAL ENVIRONMENT:

P&G guided by their Purpose, Values and Principles, P&G participates in the
political process to help shape public policy and legislation that has a direct impact on the
Company. This engagement ensures that the interests of their employees, consumers and their
shareholders are fairly represented at all levels of Government around the world. They are
committed to being transparent about their political involvement globally.

P&G’s public policy and legislative priorities are reviewed regularly with
senior business leaders and annually with the Governance and Public Responsibility
Committee of the Board of Directors.

Lobbying Activity:

 P&G’s Global Government Relations team(P&G GGR) represents the Company’s point
of view in Washington, D.C, in U.S state capitals and in key country capitals around the
world.

 Working with the businesses, P&G GGR focuses on legislative and public policy issues
that impact the company’s bottomline and long-term business interests.

U.S Corporate Political Activity :

P&G engages in the political process by providing financial support to selected state ballot
initiatives and issue advocacy campaigns that have a direct impact on the business. P&G’s
involvement in these campaigns is overseen by a multifunctional team comprised of
representatives from Global Government Relations, Legal, Human resources, Corporate
Communications and other functions related to the specific issue under consideration.

P&G Political Action Committee (P&G PAC)

The P&G PAC is a voluntary, nonpartisan political action committee. Registered as the
P&G Good Government Committee with the U.S.Federal Election Commission and
appropriate state offices, the PAC allows P&G employees to poolpersonal, voluntary
financial contributions to support candidates at the federal, state and local level, who
 support issues important to the business and the quality of life in the communities in which
we live an work.

TECHNOLOGICAL ENVIRONMENT:

SWOT ANALYSIS:

STRENGTHS: WEAKNESSES:

 Leading market position  Quality control problem

 Diversified and Innovative  Reduced revenues in their Northeast
product portfolio Asian market.
 Strong finances in past years

OPPURTUNITIES: THREATS:

 Developing markets  Competitors

 Demographic trends across the world  Rising cost of energy prices
 New Regulations
GENERAL PRODUCT MARKET CHARACTERISTICS:

Vicks is a product that is more than 50 years old. It is the leading brand in
Fast Moving Health goods (FMHG). FMHG Industry in India is worth around 4500 crores.
This market is dominated by products like Rubs & Balms, medicated skin treatments, skin
treatments, cough syrup and drops, digestives and health supplements.

Vicks brand was launched in India in 1951. It was manufactured by Vicks

Products ltd. Later in 1964, Richardson Hindustan Ltd was formed to manufacture the
product. In 1985 RHL became the affiliate of P&G. In 1989 RHL became P&G hygiene &
health care.

Vicks in India is known for its Vaporub & Coughdrops. Globally Vicks brand
is worth around 3000 crores. Vicks Vaporub is the market leader in this segment with the
share of 50%.

Vicks action 500 has been in the market for more than 25 years. Launched in
1979 this is the first advertised OTC (allowed to be sold over the counter, without the
prescription of a Registered Medical Practioner) brand in India. Over these years the brand
has carved a position for itself for around 40% market share in the category. This brand
which is now relaunched talks about its ability to provide relief about cold related symptoms.

Vicks inhaler was launched in 1951 created and owns the inhaler category is
one of the first products launched in India from Vicks. Vicks recently ventured in to 550
core cough syrup market with its Formula 44 in October 2003. The brand’s usp (unique
selling proposition) is 8 hrs relief from cold and targeted at kids.

Vicks is a brand that is enjoying tremendous equity in the market. It has

established its trust with the customers. FMHG market calls for umbrella branding since it is
difficult and expensive to create trust for individual brands in that category. That is the
reason behind Vicks extending its equity across the various categories. Vicks had used
careful branding and packaging for promoting the products.

PRODUCT LIFE CYCLE:

The stage through which individual products develop over time is commonly
known as “product life cycle”.

Vicks has reached the maturity stage (i.e) most profit is earned by the market
as a whole. At this stage Research and Development is likely to be restricted to product
modification and improvement and perhaps to improve production efficiency and quality.

TYPE OF PRODUCT:
 Vicks is a health care product.

POSSIBLE MARKET SEGMENTS:

DEMOGRAPHIC SEGMENTATION:

AGE: Vicks is used by almost all ages of people.

GENDER: Vicks is used by both Male and Female.

INCOME: People of low income to people of high income can all afford Vicks.

RACE: Asian, Hispanic, Black and white are all can use Vicks.

BEHAVIORAL SEGMENTATION:

Vicks are often used by people on special occasions when they are suffering from
cough, cold, flu, chest cold, chest congestion, and sinus symptoms.

APPROACHES TO SEGMENTATION:

Approach and Reasoning for it:

The segmentation is based on demographic and behavioural characteristics. The basis for the
segmentation is

 These segments have enough profit potential

 The segmented consumer needs are homogenous (Relief from cough, cold, flu, chest
cold, chest congestion). Because people of all age group are likely to be affected by
the said problems.

SELECTION OF TARGET MARKET:

 Vicks was initially targeted at children but later the company found that it is used
mostly by adults.

 Sinus patients are also the target market for Vicks.

Vicks vaporub is positioned along Mother’s love platform. Vaporub pioneered the
concept of “Touch theraphy” linking it to the rubbing of vapour on the child’s chest.
Vaporub advertises itself as having 6 key benefits.

1.Clearing blocked nose

2. Cough relief

3. Body ache relief.

4. Head ache relief.

5. Relaxing muscle stiffness

6.Easing breathing difficulty.

The recent ad campaign also involves father in to the picture. The ad shows a father
taking care of the child using Vaporub when mother is away. The smart positioning and
campaigns has ensured the brand retaining the top position in the market.

STRATEGIC FOCUS AND PLAN

CORE COMPETENCIES:

 Consumer understanding:

Uncovers the unarticulated needs of consumers.

 Innovation:

Translates consumer desires in to new products

 Brand – building:

Shapes purpose – inspired, benefit driven brands

 Go – to – market capabilities:

Reaches retailers and consumers at the right place and time

 Scale:

Drives, efficiency and consumer value.

SUSTAINABLE COMPETITIVE ADVANTAGE:

 Its competitive advantage over the other products in the market is that it provides
liquid based colds care products.

 A key differentiation that Vicks is seeking is to create a remedy that is useful for more
than just flu season.

 They produce non greasy products which has a competitive advantage over its major
competitor Iodex.

GENERAL MARKETING STRATEGIES:

A profitable venture of Proctor & Gamble, Vicks Vaporub has established itself as
market leader in vaporub segment and gives tough competition to certain products in other
segments also. The distinct niche it has created in the market is because of the fact that the
company realizes its position as market leader and thus the formulation of policies
accordingly. To speak of them, it is important to appreciate its inherent advantage as a
Procter & Gamble product. The fact is that P&G believes in exploiting its resources and
putting them to their maximum usage. Their entire marketing strategy is based upon its
principle and thus they have only one marketing channel for all its products. This is to say
that the same set of dealers for its products who market them all and thus the cost of
marketing each product is saved in terms of distribution cost.

It is also noted that the market of vicks vaporub is not concentrated to India alone.
Vicks Vaporub exports to markets such as Japan, Australia and the rest of Asia.

This being the general and overall view of the strategy of vicks, we have to take an
insight into the specific areas of the marketing strategy of the vicks. The strategy
followed by Vicks for the marketing of the product may be understood as follows :

 Vicks Vaporub or for that matter no product of Vicks does not have a separate market
channel for itself. All products marketed by one single marketing channel, organized
and regulated by one company namely, Proctor & Gamble Hygiene Products Ltd.

 Another factor in this distribution channel is the presence of hoarders. Now these
hoarders are none else but what we call as black marketers and they are not specific to
vicks but in general hoard all products in the commodity segment especially the
FMCGs. These cause great problems in the assessment of real demand of the
consumers and the real consumption of the products. They store the goods in great
bulks and lead to artificial scarcity of products, thus raising the prices. P&G has found
an effective reply to this situation by the designing of their super distributor system.
They being aware of the local peculiarities, effectively deal with the hoarding effect
and do not allow the company to suffer on these counts.

 The collection of order from the local dealers is a task left upon the MRs (Medical
Representatives) who collect orders and report to the distributors, who also employ
them for this purpose. The advantage of being an non prescribed drug, the cost of
giving samples to the doctors is saved considerably.

 Vicks does not count solely upon its share as market leader. It is aware of the
presence of other competitors and thus it has not remained static in terms of its
promotional strategy and has also simultaneously been incumbent upon increasing its
market share by indulging into intensive promotions strategies such as free vicks
Inhaler along with Vicks Vaporub, discounts, 20% extra on each pack of 50g. Each
and other offers. Thus it has constantly tried to lure the consumers to stay with it
while penetrating the market deeper.

MARKET RESEARCH PLAN:

QUESTIONAIRE:

We are students from SSN School of Management and Computer Applications. You are
requested to participate in the survey that would help us in performing our research as per our
curriculum. Thank you very much for the time and support.

1. Are you aware of brand Vicks?

Yes

No

2. How long you can recall Vicks brand?

Since 1952

Since 1970

Since 1980

Since 1990

Since 2000

3. Which slogan of Vicks you can recall first?

Khich – khich door karo

Haan bhai haan

Touch therapy

Happy birthday mummy

Vicks khich khich door kartha hai

4. Which product of Vicks first come to you mind?

Vicks Action 500+

Vicks Vaporub

Vicks Coughdrop

Vicks formula 44 Cough drop syrup

Vicks inhaler

5. How does the logo of Vicks appear to you?

Poor
 Average

Good

Better

Best

6. Why do you prefer Vicks

Less greasy

Smells better

Fast relief

Long lasting relief

All of the above

7. When do you use Vicks?

Blocked Nose

Cough

Body ache

Head ache

Breathing difficulty

8. How will you rank Vicks on the scale of 5? (5- Best, 1- Worst)

9. Is Vicks most trusted brand?

Yes

No

10. If Vicks is not available to you nearby shops, what will you do?

Choose another brand

 Go to another shop

RESPONSES:

MARKETING PROGRAM

POSITIONING:

 It is a tool to differentiate different brands by the consumer in their own way.

 Vaporub was initially targeted at children but later the company found out that it is
used mostly by adults. Vicks Vaporub is positioned along Mother’s Love platform.
Vaporub pioneered the concept of “Touch therapy” linking it to the rubbing of
Vaporub on the child’s chest.

 The ad campaign also involves “Father” in to the picture. The ad shows a father
taking care of the child using Vaporub when the mother is away. The smart
positioning and campaigns has ensured the brand retaining the top position in the
market.

 Vicks Cough drop produced the catchy character “Kitch Kitch”.

 With unique shape and the long lasting positioning “Vicks ki goli lo Kitch Kitch door
karo”.
  The campaigns of Vicks-Honey also strengthens the time tested positioning of the
brand.

 The unique shapes of cough drops, inhaler and caplet are examples of using product
form as a differentiating factor.

PRODUCT STRATEGY:

BRAND NAME”

 A Brand name is a living memory in buyers mind Like Vicks.

 Vicks got its name on the name of its manufacturer.

 Name is a tool for communication.

 Vicks got its name through following series of events:

• First it was manufactured by Vicks Products Ltd.

• In 1964, Richardson Hindustan Ltd. took over it.

• In 1985, RHL became the affiliate of P&G.

• In 1989, RHL became P&G hygiene and health care.

FEATURES AND BENEFITS: