Procter and Gamble - Intoduction of New a Shampoo on the European Market
The media plans for the different years show a higher media spending on sampling and TV advertising in the year of introduction to convince customers of the superiority of the new product and to explain its new technology. Over the following two years, sampling will go down to 10% but should be raised again for the new marketing cycle when decline begins. TV advertising should be used in the same way, at the beginning to introduce the product and to gain a significant market share in the first year. It should also be used to maintain the growth of market share in the second year but can be reduced in the third year when the product reaches its mature stage.
As can be seen in the expected sales exhibit and in the media plans, P&G has losses over the first two years. Great Britain and Germany are already profitable after the first year but with the introduction in the other countries in the second year, the gain in Great Britain and Germany will not compensate the losses of the first year and the losses due to the introduction in those countries.
In the third year, all countries will make profits and the company will break even with a total profit of 16.248.900 DM. …
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