Will P&G's retail stores be successful

Will P&G's retail stores (brick n' mortar & click n' pick) be successful? Defend your position in terms of whether or not P&G has the expertise to move into this channel of distribution versus its current methods of distributing products and whether or not sales though this channel will cannibalize sales from its current methods of distribution.

The Situation

P&G is vertically integrating. It is buying specialty stores that sell its products. It is also trying to divest itself of poorly performing acquisitions.

Expectations

In answering the question make reasonable assumptions, (clearly you won't have the same information available to you as the actual manager, e.g. about competitors, but make some assumptions and follow through in your analysis).

You should also bear in mind that a fundamental goal, as with all the cases you build in MKT501, is to stimulate your learning. Your answers should therefore aim to demonstrate that learning.

In preparing your CASE3, ensure that you demonstrate your learning of the marketing concepts and frameworks for analysis outlined in the modular learning objectives. In CASE4, what should be P&G's target market(s) for its direct retail operation(s)? Hint, how should its packaging (e.g. size) reflect those target markets? Should its product(s) be priced higher or lower than competitive products? Should it advertise more or less than competitive products? Defend your positions on any and all of the issues you tackle. In other words, in answering the question, ensure that you demonstrate your understanding of channels and factors affecting channel success, as well as your learning from previous modules.

Note that this assignment does NOT require you to prepare a detailed essay. Instead use section headings for each of the topics you address in your paper followed by a discussion of that topic.

Case-related articles in the popular press

McCracken, Jeffrey and Byron, Ellen (2009, October 29). P&G Considers Booting Some Brands. Wall Street Journal Eastern edition (New York, N.Y.). B1. Available via ProQuest on 29 October 2009 at
http://proquest.umi.com/pqdweb?did=1888565571
&Fmt=3&clientId=29440&RQT=309&VName=PQD

Facing mounting pressure to boost sliding sales and recalibrate his company, P&G CEO Robert McDonald is stepping up the hunt for acquisition and divestiture candidates, people close to the company said. Since assuming the chief executive role in July, Mr. McDonald has been trying to shake-up P&G's slow, process-heavy culture.

Holthaus, David (2009, July 17). P&G expands direct retail. Cincinnati.com(Beta). Cincinnatti Enquirer

Marino, Jonathan (2009, June 22). P&G Makes Another Shaving Buy. Mergers & Acquisitions Report. New York. 22(25). 14. Available via ProQuest on 11 November 2009 at
http://proquest.umi.com/pqdweb?did=1756505341
&sid=1&Fmt=3&clientId=29440&RQT=309&VName=PQD

Proctor & Gamble has purchased Zirh, a high-end men's shaving accessories maker and distributor. This comes on the heels of P&G's Art of Shaving buy for $60 million; the Miami-based high-end retailer sells razors for as much as $300 apiece. In 2005, P&G made its first major move into the space with its buy of the Gillette and Braun brands.

Marino, Jonathan (2009, June 22). Art of Shaving Dealt to P&G. Mergers & Acquisitions Report. New York. 22(23). 15. Available via ProQuest on 11 November 2009 at
http://proquest.umi.com/pqdweb?did=1750965261
&sid=1&Fmt=3&clientId=29440&RQT=309&VName=PQD

After a two-year stay in Capital Resource Partners' portfolio, the Art of Shaving has been traded up to Proctor & Gamble. The 13-year-old high-end grooming products supplier was sold for about $60 million, less than a month after listed, Missouri consumer company Energizer Holdings, already an owner of personal hygiene products, spent $275 million to buy Edge and Skintimate shave assets from SC Johnson & Son.