P&G - Shave Care Drivers Analysis

Group 4
Avishek Singh Kruttika Dwivedi Prabhat Gupta Hemali Shah

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Executive Summary
Business Problem
The share of P&G brands in the Shave Care business has witnessed a decline with respect to major 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 activities and pricing & Distribution. Analyze this data and Identify key areas where P&G has lost share and areas where drivers have 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 the market 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 the only manufacturer declining distribution points in the smaller markets

Recommendations
MMM analysis is recommended to gauge the effectiveness of promotions of different P&G products and discount effectiveness study to understand the response to discounts Price deductions have worked in major markets. It is recommended to continue with this 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

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Scope
Market: United States Male Shave Care Period: FY 10/11 and FY 11/12 Mega Category: 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 be accounted 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 the drivers, the impact data is available and hence it is assumed that the amount of Price reductions and Promotional activity is equally proportional
No hierarchy given for channels and hence we can assume that they are mutually exclusive 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 terms of value sales Volumes have declined for all the segments apart from Disposable Blades which have witnessed marginal increase in volume sales. \The decline in value sales in the same category suggests that although there has been an increase in volumes, loss of pricing power has occurred in the segment. Two markets, Total US xAOC and Total US FDMx account for almost 55% sales across all categories and segments.

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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 fastest growing 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.

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

The volumes data depict the same information, with P&G losing market share gradually.
The decline in value share of P&G has been more pronounced in the disposable blades segment.

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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 of the market share has been captured by BIC hybrid which was launched 2 years ago mainly due to the steep price difference.

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

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Distribution Overview

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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 also increased significantly YoY vis--vis the other manufacturers. While if we look at the Dollar TA market, it loses market share to primarily Private Label and BIC. Here, these manufacturers have increased their distribution points while P&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 growth rate (value and volume terms both) for the manufacturers. Thus, we can conclude 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.

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Distribution Overview

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 in sales velocity while P&G was stagnant during the last year which can be accounted for the sheer amount of sales while BIC is a small player.
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Drivers Analysis

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Drivers Analysis
Percentage Change in sales due to Price deductions and promotions has risen over the last 2 years for P&G across markets This has happened when the Average Selling Price has increased for all the manufacturers across markets uniformly. However, the lift in sales due to price deductions has been uniform in major markets but the small markets where promotional activity has brought in a higher percentage and more uniform increase in sales

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Recommendations
MMM analysis is recommended to gauge the effectiveness of promotions of different P&G products Price deductions have worked in major markets. It is recommended to continue with this 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

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Appendix

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