p & g shave care analysis

7/29/2019 P & G Shave Care Analysis

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P&G - Shave Care Drivers Analysis

Group 4

Avishek Singh

Kruttika Dwivedi

Prabhat Gupta

Hemali Shah


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2Confidential | Copyright Fractal 2013

Executive Summary

Business Problem

The share of P&G brands in the Shave Care business has witnessed a decline with respect tomajor competitors and new players.

Objectives

Understand the Shave Care market performance for the last 2 years

Analyze the performance of P&G brands with respect to competitor brands

Critically analyze the drivers (Price Deduction & Promotional activities) given for this segment

against competition Recommend methods to regain share by way of the drivers hence analyzed

Method

The data available talks about sales (Value/Volume), Impact on sales due promotional activitiesand pricing & Distribution.

Analyze this data and Identify key areas where P&G has lost share and areas where drivershave had a significant impact


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Executive Summary

Key Observations

The matured US Shave Care market was valued at US $ 3.11 bn by the end of FY 11/12 with themarket growing @ 3.76% Y-o-Y

P&Gs growth is less than the overall market growth rate leading to loss of market share

A majority(85%) of the sales comes from the blades category

P&G is the only major player which has witnessed a drop in Vol. sales of Razors.

Distribution acts as the key differentiator between Market winners and losers with P&G being theonly manufacturer declining distribution points in the smaller markets

Recommendations

MMM analysis is recommended to gauge the effectiveness of promotions of different P&Gproducts and discount effectiveness study to understand the response to discounts

Price deductions have worked in major markets. It is recommended to continue with thisstrategy.

Also, P&G has to increase its distribution in the smaller markets, because thats where

distribution is affecting the sales of P&G products the most.

P&G has no product at BIC Hybrids price point which has captured significant market share

within 2 years of launch in disposable blades segment


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Scope

Market: United States Male Shave Care

Period: FY 10/11 and FY 11/12

MegaCategory: Blades & Razors

Category: Blades/Razors

Segments:

Blades :Cartridges, Disposable Blades, Double Edge

Razors :Double Edge Razors, System Razors

Manufacturers: Procter & Gamble, Energizer Holdings, BIC and Private Label

Other data fields: $ Sales, Volume Sales, Distribution (Distribution/Total Distribution

points), Promotions (% lift $ due to promotion,% lift volume due to distribution)


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Assumptions

Shave care market has seasonality with spikes in the 3rd month of every quarter.However, it is across all brands and products and no particular reason can beaccounted for this from the data. Hence, we have analysed the data at annual level.

The Drivers available are Price deductions and Promotional activity. For both thedrivers, the impact data is available and hence it is assumed that the amount of Pricereductions and Promotional activity is equally proportional

No hierarchy given for channels and hence we can assume that they are mutuallyexclusive

Sales Velocity = Value sales / distribution points

Data is authentic


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Overall Category & Market Performance

Sales of all major categories and segments plateau off in the last three years,

with the double blade segment actually declining over the last year in termsof value sales

Volumes have declined for all the segments apart from Disposable Bladeswhich have witnessed marginal increase in volume sales.

\The decline in value sales in the same category suggests that althoughthere has been an increase in volumes, loss of pricing power has occurred inthe segment.

Two markets, Total US xAOC and Total US FDMx account for almost 55%

sales across all categories and segments.


7/167Confidential | Copyright Fractal 2013

Overall Category & Market Performance

P&G is the dominant player in all the major markets.

Its in the smaller markets where Private Label, BIC and Energizer Holdings

are displaying more significant growth.

Family Dollar TA is the fastest growing market where P&G is the fastestgrowing player.

In all the other markets like Dollar General TA, BJs Total TA and CVS & Albs& Long Corp, its the Private Label which shows maximum growth.



P&G Performance

P&G has clearly lost market share in both the categories, blades and razors,

despite the overall market increasing, albeit marginally over the last threeyears.

Blades are obviously the major category here and all the other players, i.e.Energizer Holdings, Private Label and BIC have increased their market sharewith the former increasing the most

The volumes data depict the same information, with P&G losing marketshare gradually.

The decline in value share of P&G has been more pronounced in the

disposable blades segment.



P&G Performance

New brands like BIC Hybrid and Gillette Fusion have shown growth.

Older brands like Mach 3 and sensor excel are on a decline.

Also note that regular brands under BIC have normal growth while most ofthe market share has been captured by BIC hybrid which was launched 2years ago mainly due to the steep price difference.

The overall volume and value share graphs suggest that the average sellingprice (ASP) of P&G is the highest while that of BIC is the lowest



Distribution Overview




Distribution is playing a major role here. P&G witnesses sharp increase in

market share in Family Dollar TA YoY. In this market, its distribution has alsoincreased significantly YoY vis--vis the other manufacturers. While if we lookat the Dollar TA market, it loses market share to primarily Private Label andBIC. Here, these manufacturers have increased their distribution points whileP&G has decreased.

However, in the bigger markets like Total US xAOC and Total US FDMx,

there is little change in the distribution numbers of all the manufacturers.Thus, it does not explain the significant difference in market share growthrate (value and volume terms both) for the manufacturers. Thus, we canconclude that P&G has to increase its distribution in the smaller markets,because thats where distribution is affecting the sales of P&G products the

most. Also, small increase in distribution can result in significant percentage

increase in sales though in absolute terms the increase might be small.




Sales Velocity

Razors increase sharply Segment wise, Double edge has taken a hit while system razors have the maximum

growth

Manufacturer wise, P&G stands 2nd to BIC which has shown double the growth insales velocity while P&G was stagnant during the last year which can be accountedfor the sheer amount of sales while BIC is a small player.



Drivers Analysis



Drivers Analysis

Percentage Change in sales due to Price deductions and promotions has risen overthe last 2 years for P&G across markets

This has happened when the Average Selling Price has increased for all themanufacturers across markets uniformly.

However, the lift in sales due to price deductions has been uniform in major marketsbut the small markets where promotional activity has brought in a higher percentageand more uniform increase in sales



Recommendations

MMM analysis is recommended to gauge the effectiveness of promotions of differentP&G products

Price deductions have worked in major markets. It is recommended to continue withthis strategy.

Also, P&G has to increase its distribution in the smaller markets, because thats where

distribution is affecting the sales of P&G products the most.

P&G has no product at BIC Hybrids price point which has captured significant market

share within 2 years of launch in disposable blades segment



Appendix

p & g shave care analysis

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