Market researchers suggested that Hearst look at other benefits or alternatives beyond just a “plaque reassurance on scope” or a “a better tasting pre-brushing rinse” Whereas the point of view from finance, on one hand Plax had a high price so a new rinse might be a profitable option, on the other hand they were concerned about the capital and marketing costs which would increase. The purchasing manager estimated that the cost of the new ingredients of a line extension would increase by $ 2.55 and the packaging would cost $0.30. As for the advertising agency it favored a line extension, since adding any new claim for scope is a huge strategic shift for the brand that would confuse the consumer and decrease the market share, because relating 2 different ideas is very difficult (breath refreshment & good tasting) (removes plaque).
Hearst and the business team have two options, on one hand a line extension or new product positioned against Plax could be introduced into the market and in the other hand doing nothing and just looking at claims other than “breath” instead of adding a new product. Launching a new product “new pre-brushing rinse” would cannibalize a part of Scope sales, also the delivery, marketing and capital costs of P&G will increase if a new rinse was launched and the user of Scope would be confused since he/she saw in the old scope a breath refreshment, taking into consideration that the new rinse is not any better than Plax in reducing plaque, but at the same time it may increase the market share of P&G and increase its profit. Whereas adding a new claim for Scope would not increase the volume of sales, but it could prevent current users of Scope to switch and it would stabilize the business, and even though the advertising agency thinks that it’s hard to relate two different claims, it should try to relate them in order to make an effective advertising that includes both “breath” and “plaque” claims. Since adding plaque reduction to breathe refreshment and good tasting is an additional benefit that the scope consumer can benefit from and it may attract the potential users that scope aim at. Also P&G has to collect more information to see what the consumer needs and improve it within the same product; especially that it is based on a philosophy of satisfying the customer needs. Scope was positioned around two benefits that are refreshing breath and good tasting, and it should stick to this position with other additional claims or benefits if it can, so it should not launch a new product that confuses the customers but stick to this position that it has in the market place and that is considered to be its competitive advantage. It’s better to protect the business that P&G is already in for many years and just add a plaque claim, than launching a completely new entry that is not secured.
Questions:
1) How will P&G develop a strategy that will ensure the continued profitability of Scope despite competition?
2) Should P&G take risk of introducing the completely new product for 3 years plan? Discuss the advantage and risk involved.
3) How will P&G maintain their profit and make sure that the Scope brand is always the first mouthwash product ranking among consumers in Canada?
Listerine was invented in 1879, and has been marketed specifically as a mouthwash since the 1920s.