The primary purpose of this study is to depict the information about the marketing strategies that help in boosting revenue and returns in the global market. P&G Company has been taken in the task as an example to expand activities and operations globally. The brand or product which has been chosen in the task is Ariel. P&G is popular consumer goods company that wants to be a leader in FMCG industry. The paper further outlines that how the organization uses marketing strategies, Pestle analysis and resources and capabilities to build and develop a dynamic image and position in the global market. A brief overview about marketing mix that helps in selling the Ariel product in Kuwait has been discussed in the task. Kuwait country has been taken to explore the business activities and actions globally. More detail of the task has been presented below.
Procter & Gamble Company is an American multinational Corporation which was formulated in 1837 in downtown Cincinnati, Ohio United States (Pginvestor, 2018). The company provides consumer goods like consumer health and personal care products, hygiene products, home care products and baby products. P&G is one of the biggest and leading consumer goods companies across the world. The main purpose of P&G is to touch and enhance the lives of consumers now and for generations for attaining competitive benefits globally. The passion, insight and innovation of talented teams has helped P&G grow into a global company that is governed ethically, responsibly that is transparent, effective and open (Pginvestor, 2018).
Environmental analysis plays a significant and crucial role in analyzing and identifying the challenges, threats and risks of the market. Without analyzing and measuring the opportunities and threats of the market, the company cannot expand and flourish the business actions and activities internationally (Radojevic and Bashkin, 2007). SWOT analysis and pestle analysis are done to measure the threats and obstacles of the market.
There are enormous factors that can affect the profitability and revenue of P&G Company in Kuwait while conducting business activities to a large extent. Macro environment consists various external factors such as political, economic, environmental, social, technological and legal factors. Thus, pestle analysis is done to overcome and manage these factors and challenges. The pestle analysis of both the countries is elaborated below.
Political factors: UK is considered political stable country as it is one of the biggest strengths of the company. Along with this, it is a well known and popular destination for FDI hence, P&G takes ample of benefits while functioning (David, 2018). On the other hand, political condition of Kuwait is not stable and effective thus, various challenges can be faced by P&G for introducing Ariel product in such market. Their economy is not as vibrant as Saudi Arab’s and it is extremely dependent on export of oil (Adamkasi, 2015).
Economy factors: It is studied that UK is 5th biggest economy across the world measured by nominal GDP. The current minimum wage for people aged 25 and over is £7.50 per hour and inflation rate was 3.1% measured in November 2017 (David, 2018). Along with this, exchange rate and employment rate also affect the progress of P&G in home country. In Kuwait, the government supported maximizes and improve in life style through infrastructure investment and increase is salaries. In addition, growth rate would also increase from 0.8 to 3% per year. Thus, the company will have to face ample of issues and challenges while functioning (Adamkasi, 2015).
Social factors: It is noted that UK has a biggest consumer market across the world. P&G has developed variety of new products. The income level and education of the customers in UK are high and strong. Therefore, the firm takes plenty of benefits. On the other hand, Kuwait is considered hub for expatriates who come from foreign countries to earn and maximize their living in this region of the world where salaries are extremely high and unique. Thus, the company lures more and more customers in the competitive market (Adamkasi, 2015).
Technological factors: It is investigated that UK uses advanced and innovative technology for conducing the business operations and functions. Technology sector is a primary participator to the UK economy along with this, huge investment is done by the country to use advanced technology. Hence, P&G takes ample of benefits while working at international level. On the other hand, Kuwait is also using innovative strategies and technology to attract more companies for entering into the market. Certain incentives are also rendered by the government for establishing industries in government suggested fields like import free duties, tax holidays, ease of financing and security of investment etc. Therefore, the sale of Ariel products can be increased in Kuwait market by using advanced technology (Adamkasi, 2015).
Environmental factors: UK is reducing negative impact of environmental factors to increase and enhance the sale of the products. Although, UK sometimes faces challenging weather conditions and climate change issue but the government is making unique policies and strategies to overcome the environmental issues (Thompson, 2017). On the other hand, Kuwait is facing various environment issues such as air pollution, weather, climate change and water pollution issues. P&G needs to focus on the environment issues to launch Ariel product in such country.
Legal factors: The employment act 1996, minimum wage, sick pay and maternity and paternity leave are legally protected in UK (David, 2018). It helps the company to maximize market share and profitability in the global market whereas in Kuwait, there are no taxes on wages and salary. However, other acts and rules have to be strictly abided. P&G can attract and retain majority of customers by offering Ariel product in this market.
The micro environment analysis for P&G has been discussed below.
Consumers: The performance in the consumer goods sector is highly dependent upon the behavior and the lifestyle of the consumers. Among 67 percent of the population is young in the Middle East region and inclined towards hygiene (Oxford Business Group, 2018). Therefore, the product Ariel is a good pick to expand beyond the existing boundaries.
Suppliers: There is quite low switching cost for the suppliers both globally and locally and therefore it is a key industrial factor (Fleisher and Bensoussan, 2015).
Media: Positive media capturing about the events like revamping the old products; focus on health and wellness, crowd sourcing and partnerships with the consumers, and more, are some of the news through which the entity engages with media (Dixon et al, 2013).
Competitors: The entity has global competitors like Unilever, Amazon and the local players. Thus, theexpansion in form of the partnerships and merger activities with the local producers is the key to grow and get par the competition. The most recent acquisition of the entity is of the First Aid Beauty products (Robin, 2018).
Employees: Just like the suppliers, the employees have also low switch cost and high turnover because of the number of opportunities. There is a recent restructuring in the organisation, which is aimed at prompt response to the industry and less bureaucratic burdens (Monk, 2018).
The resources and the capabilities of the company include dedicated employees (around 95000 in 2017), efficient financial resources, and the umbrella of leading brands. In addition, the entity has wide presence in UK. Thus, the introduction or growth of the products like Ariel is relatively easy in terms of the economies of scale and brandname. The entity has strong share in terms of the products like diapers and the shampoo, however, the new market entrants and the global competitors in the consumer goods sector is posing a tough competition (Coleman Lochner, 2018). In terms of the Kuwait set in the Middle East region, in order to achieve the sustainable growth rate for the company P&G, the entity must improvise the return policies to increase consumer confidence. In addition, retail infrastructure and e-commerce facilities must be improved.
Segmentation strategy is essential to divide the entire market into the different units on the basis of geographic, demographic, psychographic and behavioral basis. By using this strategy, the company is able to identify and analyze the needs, choices and preferences of the customers. Along with this, it uses targeting strategy to penetrate the entire target audience (Bailey, 2014). P&G targets the every households especially the upper and middle class and women who prefer to buy Ariel products to a large extent. In addition, the firm uses value based and product based positioning strategy to create the right and unique set of imagery stimulus in the minds of the customers (Mbaskool, 2018).
The marketing mix for P&G has been discussed below.
Product: P&G is one of the growing and leading corporations across the world. It is a global leader rendering various beauty products, personal care, grooming and healthcare products. In home market UK, the company is providing various innovative products. Now the company is making planning to start launch Ariel product in Kuwait market (Mbsskool, 2018).
Price: P&G follows different pricing approach for multiple brands under it. The price of P&G products mainly depend on the quality and quantity of the products and its brand value. In domestic market, the company uses three types of pricing, premium pricing and penetrating pricing strategy. If the company initiates its business activities in Kuwait then it needs to lower pricing strategy to increase and enhance the sale of Ariel product in such market. By using this strategy, the company can attract lower and middle class people in Kuwait (Mbsskool,2018).
Place: P&G has a significant and effective distribution system and therefore is able to reach a larger consumer requirements and needs. It sells its products through retailer outlets, stores chemist shops and super markets. It uses unique and effective place strategy in home country to improve the productivity and efficiency. On the other hand, P&G needs to deals with authorized dealers that cater to the requirements and need of these business and offers them Ariel product in a large quantity. The products can be sold through company’s website but this service is only available in few countries (Schlegelmilch, 2016).
Promotions: It is studied that P&G promotes its products and brands through various sources like digital marketing, direct marketing, advertising, personal selling and public relations. Online channels are also used by P&G in home country while functioning. The company needs to use celebrity endorsements for advertisements in the international market for promoting the Ariel products. Direct marketing, TV and social media channels can also be used to launch new product in the new market (Mbsskool, 2018).
Process: It has been investigated that P&G uses innovative and unique process, strategies and policies in home country as well as international market. It will focus on the leadership style and management to compete with rivals in the international market.
Physical evidence: Physical evidence is collected by the firm while selling the Ariel product in the home country. Some specific policies related physical evidence need to be made by P&G to overcome the competitors in Kuwait market (Baker, 2014).
People: The employees are considered as lifeblood for any company. Therefore, the organization focuses on the management team to conduct business activities at international level. By focusing on the leaders and employees, P&G could able to beat the competitors in the new country Kuwait (Mbsskool, 2018).
For customer acquisition and retention, the company uses innovation strategies in the international market. Some of the strategies are discussed below.
Conclusion
It is concluded from the above mentioned discussion that P&G is one of the biggest brands in UK that offers consumer products and services to the customers. The paper analyzes that pestle analysis, marketing strategies, resources and capabilities play a major role in expanding and exploring the business activities in the international market. By focusing on these factors, the firm can further achieve desired targets and goals at minimum cost. Along with this, marketing mix strategies are used by the firm to grow and flourish the business internationally. It is recommended that P&G should focus on the market development and product development strategy to differentiate its products from the competitors. Moreover, Market penetration strategy shall be used by P&G to grab the entire market internationally.
References
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Baker, M.J., 2014. Marketing strategy and management. Macmillan International Higher Education.
Coleman Lochner, L. (2018) P&G Languishes as New Rivals Amazon, Kroger Hurt Momentum. [online] Available from: https://www.bloomberg.com/news/articles/2018-07-31/p-g-falters-as-relentless-competition-hurts-its-sales-momentum [Accessed on: 18/11/2018].
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Monk, D. (2018) Procter & Gamble Co. shakes up management structure, CEO promises ‘a more engaged, agile’ organization. [online] Available from:https://www.wcpo.com/news/insider/procter-gamble-co-shakes-up-management-structure[Accessed on: 18/11/2018].
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