Launching a new product for P&G in Nigeria - Coursework Example

Marketing Pitch for Launching a New Product for P&G in Nigeria Table of Contents Implications of Segmentation Demographic Segmentation 3 Psychographic Segmentation 5 Behavioural Segmentation 6 Implication of Targeting 7 Implication of Positioning 9 Recommendations 11 Conclusion 12 References 14 Implications of Segmentation Market segmentation can be considered as an important strategic marketing tool that needs to be engaged by each and every organisation before developing a marketing plan for a particular product or service in a specific marketplace. Market segmentation can be defined as a particular marketing strategy that divides a widespread target market into small subsets of group of consumers depending upon the needs, priorities and characteristics of those consumers. P&G is one of the leading consumer goods producing and distributing organisations across Nigeria (Hamilton and Webster, 2012, p.318). The organisation has adopted and implemented three different market segmentation strategies such as demographic, psychographic and behavioural segmentation. It is always important for a shampoo manufacturing and distributing organisation to determine a target market according income, gender and age group of target customers. Therefore, the implication of demographic segmentation will be effective. Demographic segmentation will help the management of P&G to Launch Aussie Shampoo in Nigerian market according to the income level and average age group of people. On the other hand, management of a consumer goods organisation should try to determine the attitude of target customers towards the product. Evaluation of the usage rate of similar products will help the management to predict the product sales growth rate in future. From the year 2000 to 2010 the usage rate has increased from 1.6% to 11.6% (Ciuci, 2011, p.7a). It is quite impressive for the consumer goods industry players. Behavioural segmentation will be effective as it can help the management of the organisation to identify major benefits that customers search in a particular product. Lastly, the organisation has adopted psychographic segmentation, as it will help the organisation to develop a product and promotional marketing mix according to the consumer lifestyle. This part of marketing plan will conduct a market segmentation plan for P&G’s Aussie shampoo. Demographic Segmentation Demographic segmentation can divide a marketplace into different groups according to gender, age and income (Dibb and Simkin, 2013). Different Segmenting Group Statistics Age 65% (68.25 million) people aged between 15 and 35; 35–40% (36.75) people aged between 35 and 55 out of 105 million people (CIA, 2011, p.32a). Income 25% (26.25 million) middle class, 35% (36.75 million) upper-middle class and 40% (42 million) upper class out 0f 105 million people (CIA, 2011, p.32b). Gender 75% (71.25 million) female and 25 (23.75 million) male out of 95 million people (CIA, 2011, p.33c). In terms of age, Aussie Shampoo should be segmented for young adults, teenagers and middle aged people. Aussie shampoo should be segmented for people aged between 15 and 55. 168.1 is the total population of Nigeria. Among them 105 million people used to consume and utilize shampoo in their daily life (Peter and Olson, 2011, p.97). The organisation is trying to target people of young generation and middle aged individuals for newly launched Aussie Shampoo as social demand for these differentiated shampoo products is significantly increasing among the target customers. Therefore, the organisation is targeting these 105 million potential Nigerian consumers for their newly launched Aussie Shampoo. In terms of the gender segment, the organisation should segment both male and female customers as the organisation has differentiated its product line according to the characteristics and taste of people of both genders. There are near about 95 million consumers aged between 15 and 55 use shampoos. Among those consumers, 75 percent are the females and 25 percent are males. Females generally focuses on different segments in shampoo such as moisturiser shampoo, silky and real volume etc. On the other hand, 25 percent male consumers in Nigeria generally focus on quantity and quality of products. The male consumers generally tend to buy products that are large in quantity. In terms of the income segment, the organisation should segment people of middle class, upper-middle class and upper class income segments for Aussie Shampoo due to urbanisation and rise of the middle class income earner. Shampoo is not a necessary product. Therefore, it is quite important for people to possess at least middle class or upper-middle class income level in order to consume shampoos. According to a report of Population Bureau, almost 74.2 million people of Nigeria are currently living in cities and urban areas. In last 10 years (Ciuci, 2011, p.5b), Nigeria has attained a positive GDP growth rate. Moreover, number of Upper-middle class and upper class income level people has increased significantly. In last five years, the number of upper class income level people has increased by 25%. This favourable statistics will help the management of the organisation to segment people of middle class, upper-middle class and upper class income group. Psychographic Segmentation Psychographic segmentation also can be called as lifestyle segmentation. This market segmentation process can be measured by determining interests, opinions and activities of consumers. By psychographic segmentation, P&G has divided its group of consumers into different individual groups. For example, the organisation has launched Mega Aussie Shampoo for those customers who tend to use shampoo in daily life. Especially, this particular product line has been segmented for households. On the other hand, the organisation has launched Moist Aussie Shampoo for those customers who tend to concern about their dryness of hair. Therefore, it is clear that the management of the organisation has segmented two different products according to two different psychographic parameters. The first one is quantity segment and the second one is a quality segment. Therefore, the management of the organisation should also try to use this brand image in case of Aussie Shampoo in the Nigerian market as it will help to attract those individuals who believe that P&G is the symbol of lifestyle (Fyall and Garrod, 2005, p.104). Behavioural Segmentation Behavioural segmentation generally divides the consumers into several groups according to consumers’ attitude towards and knowledge of the response to or the utilization rate of a particular product. P&G can be considered as a successful and popular global brand name. The brand has also attained high brand recall and high brand recognition in the Nigerian market (Pringle, 2008, p.32). The management of P&G is launching Aussie Shampoo in a differentiated product portfolio in order to meet the demand of consumers of differentiated products. The organisation has differentiated its shampoo according to size, volume, ingredients and features. The organisation has launched Mega Shampoo for households Moist Shampoo for both males and females Real Volume Shampoo for young women Tip Mender + Dual Personality Root Cleanser Shampoo for both males and females. Different behavioural patterns with respect to product characteristics and needs of consumers have influenced the organisation to launch differentiated shampoo products. Needs of customers generally vary due to several aspects, such as volume of shampoo, price and quality. Generally, households tend to buy large volume mega shampoos. On the other hand, skin sensitive single and young women tend to buy real volume shampoo to make their hair strong and silky. These are the specific consumer needs that are considered by organisation during the implementation of behavioural segmentation. The organisation should use the attitude of target customer towards the brand name, the high usage rate of other products, and the positive response towards the brand. It can help Aussie Shampoo to implement behavioural segmentation effectively (Devashish, 2011, p.118). Implication of Targeting The organisation can target potential customers based on the nature of the market and demand of the customers. The nature of market demand is to consume shampoo high quality shampoo products in economic price level. Moreover, the households in Nigeria are trying to consume shampoo products in large volume in order to support their purchasing power. It is apparent from the above discussion that the social needs of high quality and differentiated shampoo products is increasing significantly among the target customers (Havaldar, 2005, p.92). Nigeria’s consumer market is growing significantly. Demand for consumer goods has increased by 10 percent in last 10-12 years, which is quite impressive. Therefore, it will help the organisation to maintain its market share in the Nigerian market quite effectively. P&G never compromises the quality of the products. Target Customer Parameters Target Groups Age People Aged between 15 and 55. Income Middle, upper-middle and upper class. Gender Male and female. Near about 105 million people of Nigeria are aged between 15 and 55. Among those 105 million people, 95.8 percent individuals use shampoo in their daily life. Among this 95.8 percent people, 75% consumers are female and rest are male. According to income segment, the percentage of middle-class, upper-middle class and upper class income group has increased significantly in last 10 years due to urbanisation. The income status of almost 75 million people has improved in last 10 years. Among total population 75 million people are middle class, 40 million people are upper middle class and almost 20 million people are Upper class individuals. Moreover, the organisation has adopted and implemented a cost based premium pricing strategy for Aussie Shampoo in the Nigerian market (Mohr, 2010, p.18). It is clear from above mentioned facts and statistics that the percentage of population income is increasing due to increase in urbanisation and number of upper class income level people. Based on these facts, the optional price for a shampoo should be 200 Nigerian Naira. Therefore, the organisation should target people of the upper class and upper-middle class income segment of this shampoo. Last but not least, the organisation should try to target both male and female customers as the organisation has manufactured differentiated its products in the same product line in order to target both genders. Implication of Positioning It is clear from above discussion that P&G has adopted and implemented a cost based premium pricing strategy for Aussie Shampoo in the Nigerian market. The management of the organisation never wants to compromise the quality of the product. Therefore, the management has ensured high quality business resources and effective competence of the research and development team in order to offer high quality and differentiated products for several potential target customers in Nigeria. The following positioning perceptual mind map will help to determine the market position of Aussie Shampoo in the Nigerian market. It is clear from the above perceptual map that the organisation should be positioned in the high-price and high-quality quadrant due to its implementation of cost based premium pricing and high quality of the shampoos (Blythe, 2012, p.138). It is clear from above statistics that almost 75 million people come under middle class income group (Meti, 2010, p.13). Therefore, majority of Nigerians cannot afford premium priced products. Recent economic slowdown has reduced purchasing power of people of middle class and upper-middle class income group. A 100 ml shampoo bottle priced 2.5 USD can be considered as a premium priced product in Nigeria. Therefore, this product can be located in high price quadrant. It is true that several other organisations within the Nigerian consumer goods industry are involved in price war with their potential competitors in order to secure a competitive market position in the Nigerian market. The potential competitors of P&G are HUL, GlaxoSmithKline, GSK and PZ. These organisations are adopting discounting pricing strategies and sales promotional strategy in order to gain competitive advantages over the products of P&G. Adoption of product differentiation and effective quality control of the products can justify the mentioned position of Aussie Shampoo in the above perceptual positioning map. Recommendations It is true that the organisation adopted and implemented several unique strategies in the Nigerian market, such as cost based premium pricing strategy and business diversification strategy. It is also clear from above discussion that Aussie Shampoo may face economical, environmental and legal issues. The following recommendations will help the organisation to overcome possible future issues. First of all, the management of the organisation should try to focus on the adoption and implementation of cost leadership strategy in the business operation process. It is obvious from the above discussion that the recent global economic crunch affected the economic environment of Nigeria. Low disposable income and limited purchasing power are compelling people to reduce expensive consumer goods. Implementation of cost leadership strategy will help the organisation to reduce business operation costs (Armstrong, 2002, p.217). It will help to implement economical pricing of products. Therefore, the organisation can sell high quality Aussie Shampoo in the economic price range across Nigeria according to the market demand. Secondly, P&G should try to implement sustainable business strategies in the business operation process. The organisation should try to minimise the carbon emission level during manufacturing and logistics activities. Limitation in consumption of natural business resources and several oil and gas resources will help to maintain environmental sustainability (Proctor, 2014, p.190). Last but not least, the management of P&G should try to follow each and every developed legal policy. Several organisations in Nigeria are facing legal issues regarding violation of employment policies. Therefore, the management of P&G should try to implement a democratic leadership style in order to take care of the needs of employees. It will automatically help the organisation to reduce the possibilities of legal issues regarding employment policy (Kotler, 2008, p.199). Conclusion It is evident from the proposed marketing plan that Nigeria can be considered as an emerging and potential marketplace for consumer goods. P&G is a familiar brand name within the global consumer goods industry. Therefore, it would be effective to target the Nigerian market for one of its quality product lines named ‘Aussie Shampoo’. However, a favourable political, social and technological environment can influence the management of P&G to implement a business expansion strategy in the Nigerian market. Yet, the inadequate economic environment and several legal or environmental issues can create critical challenges for business performance. The organisation is segmenting its target market demographically, psychographically and behaviourally based on the target customers. High quality products in the cost-based premium price range are the major business mantra of Aussie Shampoo. Moreover, its cost-based economic pricing strategy also can pose challenges for the organisation during this era of economic crunch. It will be effective for the organisation to consider cost leadership strategy in the business operation process as it will help the management of P&G to offer products in the economical price range, which can support the affected purchasing power of common people. Moreover, the management of the company should try to maintain environmental sustainability as the government has developed several strict policies for business firms. Finally, the organisation should try to maintain good relationships with the employees as it will help to influence several important stakeholders to take interest in the business activities of P&G. References Armstrong, G., 2002. Global Marketing Management. New Jersey: Pearson. Blythe, J., 2012. Strategic Marketing. London: Kogan page. Devashish, D., 2011. Tourism Marketing. Stamford: Cengage Learning. Dibb, S., and Simkin, L., 2013. Market Segmentation Success. London: Routledge. Fyall, A., and Garrod, B., 2005. Marketing: A Collaborative Approach. 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