1. Introduction
The report provides a marketing analysis of Procter and Gamble (P&G) in the global business environment. The marketing analysis considers two markets that include the home market, UK and the host market, India. It applies various strategic tools to determine how the company performs in the global business environment and how it should improve its operations. In the report, only Gillette Razor which is a major brand of the P&G Company is considered. The report is divided into four sections that discuss various issues and include the analysis of the macro environmental factors, the micro factors, marketing strategies analysis of segmentation, targeting and positioning, and market strategy analysis of promotional activities.
2. Environmental Analysis in UK & India
2.1. The Political Factors
The political factors within a given country can have a significant influence on the long-term profitability of the company. The company sells many products and thus exposes itself to different political factors and risks.
The UK political environment is stable and this forms the major strength of the company. The stability in the political environment attracts many foreign direct investments and other foreigners such as tourists, students, and sports personality. As a result, it enjoys high customer base that enhances the demand of Gillette Razors. However, the future of the UK after Brexit is surrounded by uncertainties in the political environment. For instance, as seen in Appendix 1, many companies’ could implement changes due to Brexit (Market Inspector 2018). Therefore, this could be a challenging setback for Gillette.
In India, the political situation can be argued to be stable. It has federal republic democracy which typically is composed of the effective government policies and political stability. The country has reduced the level of political interference in the leadership and management of businesses and this has contributed to improved productivity and efficiency of businesses.
2.2. Economic Factors
The UK is considered as the 6th largest economy in the world in terms of gross domestic product in 2017 as shown in figure 1 (Statista, 2017). Although the 2008 global recessions put the economy of UK in financial trouble, the government developed effective strategies that help the economy to recover. The country is facing challenges associated with increasing prices of goods and services, weakening of the British pound, rising costs of imports and relatively unchanged salary improvement which can be seen in Appendix 2 (Market Inspector 2018). These factors contribute to the low purchasing
Figure 1 power of the consumers.
In India, it is evident that its economy has been relatively stable after the government introduced reform policies in the industrial sector. The industrial reform policies have led to a decline in the industrial licensing and the liberalization of the foreign capital among others. These policies have resulted in an improvement of the Indian's economy. The country has been enjoying continuous growth in its gross domestic products. Currently, it is considered one of the emerging markets with huge market potential for goods and services. As a result, Gillette Razor can experience a high demand in the Indian's market thus improves its revenue and profitability.
2.3. The Social Factors
The UK has a large consumer market based on its huge population. The Office of National Statistics indicates that the population in the United Kingdom was approximately 66 million in 2016 (Wheelen et al. 2017). In addition, the birth rates in the country outnumber the death rates and this suggests that the population is steadily increasing. Another important demographic factor of the UK population is the increasing number of older people especially those above 65 years. These demographics factors indicate that the UK market for Gillette Razor is expanding in the UK as high population implies high demand for products and services. Also, the increasing population of the older people also creates demand for the Gillette Razor and thus a market opportunity for P&G in the UK.
The Indian population is seen to be aging where about 27.3% are below 14 years old while the 17.9% are between 15 and 24 years old and the remaining 54.8% are 25 years old and above (IndexMundi 2018). These statistics indicate a high percentage of the Indian's population is working (41.1% raging from 25 to 54) and thus able to purchase the goods and services provided by the companies. The population distribution of India based on ages also demonstrates that it has the high demand for the personal health and beauty products for adults such as Gillette Razor. As a result, it has a huge potential for improving the growth of Gillette Razor demand in India.
2.4. Technological Factors
The UK is one of the technologically advanced nations in the global market. Specifically, London is a great city for both technological and financial institutions. This enabled businesses operating in the UK to regularly develop new technologies that help provide the customers with the best solutions. The enhanced infrastructure provides P&G an opportunity to perform its business in the country and experience improved efficiency and productivity (Hill et al. 2014). The high level of technological progress can help the company to increase its sales through the use of online sales avenues as well as reduce cost due to the improved efficiency of its operation (Schlegelmilch 2016).
India has both the 3G and 4G which has played a critical role in facilitating several technology projects initiated in the country. The technological advancement in India has also made many businesses to cut down their cost and improve their efficiency. This eventually leads to an increase in the profit margin of organizations.
2.5. Environmental Factors
The environmental factors in the UK can be anti-P&G business growth. The country has strict laws that govern the activities of organizations with regards to environmental pollution. The manufacturing companies such as P&G are required to limit their waste disposal and greenhouse gas emission to a given level. Failure to do so can expose the company to heavy penalties and fines imposed by the Waste and Resources Action Programme (WRAP) (GOV.UK 2018).
India has brought several legal changes that include recycling, environment pollution policies and policies to govern greenhouse warming and climatic change. The quality of the environment in India has been adversely affected by urbanization and industrialization. Due to this, the government has established several environmental pressure groups, regulations, and noise controls to help protect its environment.
3. Industry Analysis in UK & India
The industry analysis of the two countries considers Porter's Five Force model which can be seen in Appendix 3. The Porter's five forces model is a strategic tool used to analyze five major elements that include the bargaining power of consumers, the bargaining power of suppliers, the threat of new entrants, the threat of the substitute products and the competitive rivalry within the industry (Armstrong and Taylor 2014). Each of these five micro environmental factors can have a significant influence on the organization. In essence, the factors can either facilitate or hinder the performance of the company in the business environment. Although the there are five factors that should be considered under Porter’s Five Force’s model, the analysis of the industry attractiveness of P&G will primarily focus on two factors that include the competitive rivalry and the bargaining power of the buyers.
3.1. The Bargaining power of Buyers
The bargaining power of buyers in an industry can determine the ability of the buyers to negotiate for low prices of goods and thus reduce the profit margin of the company. The bargaining power of buyers can be assessed by considering various factors that include the number of consumers and the number of sellers in the market.
In the UK the bargaining power of the buyers is relatively low given that there are many buyers of the Gillette Razor given the aged population in the country. Ideally, P&G can target specific market segments to ensure that it improves its sales. In addition, the relatively low bargaining power of consumers is due to the high reputation and image of P&G in the UK market.
In the Indian market, the bargaining power of the buyers is relatively low given that the country has a huge population that is aged and uses Gillette Razor. The relatively low bargaining power of the buyers in India makes it possible for the company to determine the prices that can enable it to make a profit margin.
3.2. The Competitive Rivalry
The competitive rivalry in an industry is concerned with the number of firms that manufactures and sells similar products in the market (Jenkins and Williamson 2015). The competitive rivalry in the market can reduce market share and profitability of a company.
In the UK market, the P&G faces competition mainly from Unilever. However, several small and startup companies are entering the market and this can reduce the market share of Gillette Razors and lead to a decline in its profitability. The similar situation is also evident in the Indian market where the company major competitor is the Unilever shaving products.
4. Marketing Strategy Analysis: STP
The P&G Company through its brand Gillette Razor marketing strategy can be analyzed by considering three factors that include segmentation, targeting, and positioning. P&G should typically consider the three factors when designing an effective marketing strategy to ensure the success of its Gillette Razor.
4.1. Segmentation
The first element that the company should consider is concerned with the market segmentation. P&G should identify the bases for its market segmentation and determine the characteristics of each market. Ideally, P&G operates in different market segments. The Gillette Razor targets individuals specifically aged 18 years and older. Specifically, the company targets mostly male individuals with its products.
4.2. Targeting
Market targeting is concerned with the evaluation and the selection of the target market segments (Fleisher and Bensoussan 2015). Choosing the appropriate target market, Gillette should consider many factors such as the demand, the income level and behavior of consumers and competitors. Based on the industry analysis it is evident the level of competition is intense in the shaving industry. Therefore, Gillette should focus on one specific market segments that include male individuals aged 18 years and above.
4.3. Positioning
The market position is another aspect that should be considered when developing an effective strategy for P&G. The market positioning is concerned with the identification of the proposition for each market segments (Dälken 2014). In these regards, P&G should consider its product as high quality as compared to others and charge premium prices. This can make it differentiated from the many emerging companies coming with low-priced products. Due to its reputation, the customers will develop a notion that it offers the best products in terms of quality and thus justify its premium pricing.
5. Marketing Strategy Analysis: Promotional Activities
Although P&G is known to offer competitive products in the market, there is a need to improve on it's marketing strategies to enjoy sustainable growth and development in the industry. They need to improve its marketing strategies in some areas where it is not performing well such as customer acquisition and retention strategies. The acquisition of new customers can enable the company to expand its market share and improve its profitability (Weinstein 2016). In order to achieve this, P&G should introduce new marketing techniques such as online marketing. In the current business environment, many companies have introduced online marketing techniques to improve their sales and profit margin. Introducing online sales can enable the company to improve its market share and increase its sales.
They should also emphasize on creating a good customer experience by ensuring the quality of its products. The implementation of premium marketing strategy can enable the customers to remain loyal to the company and thus facilitates retention of the existing customers (Li 2017). The creation of customer loyalty can also be achieved by designing products that suit the domestic market. This includes integrating the cultural needs of the local customers when designing marketing strategies.
6. Recommendations
Gillette brand needs to assess its business environment to establish appropriate marketing strategies that can provide sustainable growth and profitability in the global business environment.
Introduce online marketing avenues to help increase its market share.
The company should align its marketing strategies with the prevailing culture in the business environment where it operates.
Create products for a wider market through conducting a market research and determine the demands of the consumer
Beware of their startup competition as they could be more innovative, therefore, they must increase their research and development department to eliminate the chance of other companies entering the market.
7. Conclusion
It is evident that P&G through its brand Gillette Razor has experienced rapid growth in both the UK and the Indian markets due to its effective marketing strategies. The company continues to enjoy a high reputation and image in the market given its experience, quality products, and effective market strategies. However, as the level of technology changes coupled with a dynamic business environment, the company is seen to face a number of challenges that can affect its performance. As a result, the recommendations suggested above can ensure that it is accepted by the local customers thus facilitates customer loyalty.